th Annual Report 2016 - 1714th Annual Report 2016 - 17 . Contents . General Information 2 14th AGM Notice 3 ... GMR Hyderabad International Airport Limited 14th Annual Report 2016-17

GMR Hyderabad International Airport Limited

14th

Annual Report 2016 - 17

Contents

General Information 2

14th AGM Notice

3

14th Board’s Report

28

Auditors’ Report on Standalone Financial Statements

69

Standalone Financial Statements

80

Auditors’ Report on Consolidated Financial Statements

154

Consolidated Financial Statements

162

Financial Information of Subsidiaries / Associates (Form AOC-1)

246

General Information

Company’s CIN U62100TG2002PLC040118

Board of Directors Mr. G. M. Rao, Chairman

Mr. Srinivas Bommidala, Managing Director

Mr. Grandhi Kiran Kumar

Mr. K. Ramakrishna Rao, IAS

Mr. Jayesh Ranjan, IAS

Mr. Venkatramana Hegde

Mr. I. N. Murthy

Datuk Badlisham bin Ghazali

Mr. R.S.S.L.N. Bhaskarudu, Independent Director

Mr. N.C. Sarabeswaran, Independent Director

Ms. Siva Kameswari Vissa, Independent Director

Mr. P. Vijay Bhaskar, Independent Director

Mr. H. J. Dora

Mr. C. Prasanna

Key Managerial Personnel Mr. Srinivas Bommidala, Managing Director Mr. S.G.K. Kishore, Chief Executive Officer Mr. Rajesh Arora, Chief Financial Officer Mr. Anup Kumar Samal, Company Secretary

Statutory Auditors Joint Auditors

M/s. S. R. Batliboi & Associates LLP Chartered Accountants [Firm Registration No.101049W/E300004] The Oval Office 18, iLabs Centre Hitech City, Madhapur Hyderabad -500 081, Telangana

M/s. Brahmayya & Co. Chartered Accountants [Firm Registration No.000515S] Khivraj Mansion 10/2, Kasturba Road Bengaluru- 560 001, Karnataka

Bankers Abu Dhabi Commercial Bank Axis Bank Limited ICICI Bank Limited Yes Bank Limited

Registered Office GMR Aero Towers

Rajiv Gandhi International Airport Shamshabad, Hyderabad 500 108, Telangana

Website www.hyderabad.aero

Registrar & Share Transfer Agent (Operations Office)

Karvy Computershare Private Limited Karvy Selenium ,Tower-B, Plot Nos.31 & 32 Gachibowli, Financial District Nanakramguda, Serilingampally Hyderabad- 500 032, Telangana

Page No. 2GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 General Information

GMR Hyderabad International Airport Limited CIN: U62100TG2002PLC040118

Regd. Office: GMR Aero Towers, Rajiv Gandhi International Airport Shamshabad, Hyderabad 500 108, Telangana, India

Tel: +91 40 6739 4099 / 6739 5000, Fax: + 91 40 6739 3043 Website: www.hyderabad.aero

NOTICE TO THE MEMBERS OF THE

FOURTEENTH ANNUAL GENERAL MEETING OF THE COMPANY

Notice is hereby given that the Fourteenth Annual General Meeting of the Members of GMR Hyderabad International Airport Limited will be held on

Monday, August 21, 2017 at 12.00 Noon at GMR Aero Towers, Rajiv Gandhi

International Airport, Shamshabad, Hyderabad 500108, at a shorter notice, to transact the following business:

ORDINARY BUSINESS

1. To consider and adopt the standalone audited financial statements of the

Company for the financial year ended March 31, 2017 together with the

reports of the Board of Directors and Auditors thereon.

2. To consider and adopt the consolidated audited financial statements of the

Company for the financial year ended March 31, 2017 and Auditors‟ Report thereon.

3. To declare dividend of Rs.2.50 per equity share of face value of Rs.10/- each (i.e. 25%) for the financial year 2016-17.

4. To appoint a Director in place of Mr. Grandhi Kiran Kumar [DIN: 00061669],

who retires by rotation and eligible for re-appointment.

5. To appoint a Director in place of Mr. Venkatramana Hegde [DIN: 06689221],

who retires by rotation and eligible for re-appointment.

6. To consider and, if thought fit, to pass with or without modification(s), the

following Resolutions as Special Resolutions:

A) Reappointment of M/s. S. R. Batliboi & Associates LLP, Chartered

Accountants, as the Joint Statutory Auditors of the Company:

“RESOLVED THAT pursuant to the provisions of Section 139 (2), 142 and

other applicable provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or

re-enactment(s) thereof, for the time being in force), M/s. S. R. Batliboi &

Associates LLP, Chartered Accountants [Firm Regn.No.101049W /E00004] be

and are hereby reappointed as one of the joint statutory auditors of the Company for a term of two (2) consecutive years, to hold office from the

conclusion of the 14th Annual General Meeting (AGM) of the Company till

conclusion of the 16th AGM to be held in the year 2019, subject to ratification by the Shareholders in 15th AGM, at such remuneration plus applicable taxes

and reimbursement of out-of-pocket expenses in connection with audit as

may be decided by Board of Directors of the Company."

Page No. 3GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 AGM Notice

B) Appointment of M/s. K. S. Rao & Co, Chartered Accountants, as the Joint

Statutory Auditors of the Company:

“RESOLVED THAT pursuant to the provisions of Section 139 (2) and other

applicable provisions of the Companies Act, 2013 and the Companies (Audit

and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force), M/s. K. S. Rao & Co.,

Chartered Accountants [Firm Regn.No.003109S] be and are hereby

appointed as one of the joint statutory auditors of the Company for a term of five (5) consecutive years, to hold office from conclusion of the 14th Annual

General Meeting (AGM) of the Company till conclusion of the 19th AGM to be

held in the year 2022, subject to ratification by the Shareholders of the Company at every AGM till the 18th AGM, at such remuneration plus

applicable taxes and reimbursement of out-of-pocket expenses in connection

with audit as may be decided by Board of Directors of the Company."

SPECIAL BUSINESS:

7. To consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 148 and other applicable provisions of the Companies Act, 2013 and the Companies

(Audit and Auditors) Rules, 2014 (including any statutory modification(s)

or re-enactment thereof for the time being in force), the remuneration of

Rs.4,00,000/- (Rupees Four Lakhs only) plus applicable taxes and reimbursement of out of pocket expenses, payable to M/s. Narasimha

Murthy & Co., Cost Accountants [Firm Regn No. 000042], Cost Auditors,

for conducting the audit of cost records of the Company for the financial year 2016-17, be and is hereby ratified.”

8. To consider and if thought fit, to pass, with or without modification(s), the

following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 160 and other applicable provisions of the Companies Act, 2013 read with the Companies

(Appointment and Qualification of Directors) Rules, 2014, Mr. Jayesh

Ranjan, IAS [DIN: 00003692] who was appointed as an additional Director of the Company by the Board of Directors with effect from

January 20, 2017 and holds office upto the date of the 14th Annual

General Meeting of the Company, pursuant to Section 161 of the

Companies Act, 2013, be and is hereby appointed as a Director of the Company and that he shall be liable for retirement by rotation."


following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 160 and other

applicable provisions of the Companies Act, 2013 read with the Companies

(Appointment and Qualification of Directors) Rules, 2014, Mr. I. N. Murthy


[DIN: 07752535] who was appointed as an additional Director of the

Company by the Board of Directors with effect from March 14, 2017 and holds office upto the date of the 14th Annual General Meeting of the

Company, pursuant to Section 161 of the Companies Act, 2013, be and is

hereby appointed as a Director of the Company and that he shall be liable

for retirement by rotation."


following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 149, 150 and

152 read with Schedule IV and other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification

of Directors) Rules, 2014, Mrs. Siva Kameswari Vissa [DIN 02336249], be

and is hereby reappointed as an Independent Director of the Company for

a term of 5 years commencing from the date of the 14th Annual General Meeting up to the date of the 19th Annual General Meeting, to be held in

the year 2022.”

11. To consider and, if thought fit, to pass, with or without modifications, the following resolution as a Special Resolution:

“RESOLVED THAT in accordance with the provisions of Sections 196,

197, 198 and 203 read with Schedule V and other applicable provisions of

the Companies Act, 2013 (including any statutory modifications(s) or re-enactment thereof) and the provisions of the Articles of Association of

GMR Hyderabad International Airport Limited („GHIAL‟ or „the Company‟)

based on the recommendation of Nomination and Remuneration Committee and the Board of Directors and subject to the approval the

Central Government, consent of the Shareholders of the Company be and

is hereby accorded for the payment of remuneration to Mr. Srinivas

Bommidala (DIN 00061464), Managing Director of the Company, on the following terms and conditions (as already approved by the Board of

Directors of the Company at its Meeting held on 23/01/2012 and the

Shareholders at its Extra Ordinary General Meeting held on 21/02/2012) for the below mentioned period :

1) Basic Salary: Rs.9,42,000/- per month – (Rupees Nine Lakhs and

Forty Two Thousand only)

2) Special Pay: Rs.9,833/- per month (Rupees Nine Thousand Eight

Hundred and Thirty Three only)

Financial

Year

For the Period No. of

days

Salary per

annum (Rs.)

Salary for the

period (Rs.)

2014-15

April 01, 2014 to

January 22, 2015

297 days

1,91,66,000/-

1,55,95,348/-


3) Allowances & Perquisites:

Category – A:

(i) Housing:

House Rent Allowance upto @ 40% of Basic Salary or Rent Free

Unfurnished Accommodation at a cost not exceeding 40% of Basic Salary

per month.

(ii) Club Fees:

Membership Fees in any two clubs not being admission and Life

Membership fees.

(iii) Medical Reimbursement:

Reimbursement of medical expenses incurred on self and / or family not

exceeding Rs.1,00,000 per annum.

(iv) Group Insurance Plans

Group insurance Plans cover for self and family, the premium not

exceeding Rs. 67,000/- per annum.

Category – B:

1) Contribution to Provident Fund, Superannuation fund or annuity fund

as per the applicable provisions of the relevant statutes. Gratuity payable should not exceed half month‟s salary for each completed

year of service.

2) Encashment of leave as per Company‟s rules.

Category – C:

Provision of car for use on Company‟s business and telephones at residence for official purposes. Personal long distance calls on telephones

and use of car for private purpose shall be billed by the Company.

The valuation of perquisites shall be as per the provisions of the Income Tax Act.

RESOLVED FURTHER THAT the detailed salary break up as enumerated above, may be interchanged as may be agreed by and between Mr.

Srinivas Bommidala and the company, within the overall remuneration

limit of Rs.191.66 lakhs per annum.

RESOLVED FURTHER THAT the proposed remuneration is not in addition

to the remuneration previously approved by the Shareholders vide its vide

resolution passed in its Extra Ordinary General Meeting held on 21/02/2012, but is a confirmation of the same pursuant to the provisions

of the Companies Act 2013.


RESOLVED FURTHER THAT the Chief Executive Officer; Chief Financial

Officer and the Company Secretary of the Company be and are hereby severally authorised to make necessary applications to the Central

Government / to the Ministry of Corporate Affairs and to sign necessary

documents, undertakings, statements, e-forms and to all such acts,

deeds, things and matters, as may be required for this purpose."

By Order of the Board

Sd/-

Date : July 19, 2017 Anup Kumar Samal

Place: Hyderabad Company Secretary


Notes:

1. A Member entitled to attend and vote at the Annual General Meeting is

entitled to appoint a proxy to attend and vote in his stead and such proxy

need not be a member of the Company. Proxies, in order to be effective, must

be deposited at the Registered Office of the Company not less than forty eight hours before the commencement of the meeting.

2. All the documents referred to in the Notice along with explanatory statement in respect of special business, Annual Report as well as Annual Accounts of

the subsidiary companies and Register of Directors‟ and Shareholding are

kept open for inspection by the Members of the Company, during the business hours on all working days at the Registered Office of the Company,

upto the date of this Annual General Meeting.

3. Corporate members intending to send their authorised representative(s) to attend the Meeting are requested to send to the Company a certified copy of

the Board Resolution authorising their representative to attend and vote on

their behalf at the Annual General Meeting.

4. The relevant Explanatory statement under Section 102 of the Companies Act,

2013 in respect of Special business is annexed hereto.

5. This meeting is being convened at a shorter notice. The Members are

requested to kindly accord their consent for holding this meeting at shorter

notice.

6. In terms of the requirements of the Secretarial Standards - 2 on General

Meetings issued by the Institute of the Company Secretaries of India, Route

Map for venue of the meeting is enclosed.


ANNEXURE TO NOTICE

Explanatory Statement pursuant to Section 102 of the Companies Act, 2013

Item No. 6A&B:

Presently, M/s. S. R. Batliboi & Associates LLP, Chartered Accountants [Firm

Regn.No.101049W /E00004] and M/s. Brahmayya & Co., Chartered Accountants

[ICAI Firm Regn. No.000515S] are the Joint Statutory Auditors of the Company.

Pursuant to the provisions of Section 139 of the Companies Act, 2013, and the Companies (Audit and Auditors) Rules, 2014, the Board of Directors, on

recommendation of the Audit Committee, decided to follow the rotation of

auditors in such a manner that both of the Joint Auditors do not complete their term in the same year.

Further, as per the provisions of section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the term available for the

appointment of the existing Auditors of the Company, is as detailed below:

First Date of Appointment as

Statutory Auditor

Duration as Statutory

Auditor till date

Eligibility for further term of appointment

Brahmayya & Co

Board Meeting: March 14, 2009 EGM : March 18, 2009

9 Years

(from FY 2008-09 onwards)

One year

Upto FY 2017-18

S R Batliboi & Associates LLP

Board Meeting: July 15, 2009 AGM : August 13, 2009

8 Years

(from FY 2009-10 onwards)

Two years

Upto FY 2018-19

While M/s. S. R. Batliboi & Associates LLP have expressed their willingness to be

reappointed as joint statutory auditors of the Company and confirmed their eligibility to the effect that their reappointment, if made, would be within the

prescribed limits under Section 141 of the Companies Act, 2013 and that they

are not disqualified for reappointment. However, M/s. Brahmayya & Co, have expressed their unwillingness to be reappointed as joint statutory auditors of the

Company.

The Company, based on its internal assessment, identified M/s. K.S. Rao & Co., Chartered Accountants [ICAI Firm Regn. No. 003109S] as one of the Joint

Statutory Auditors of the Company in place of M/s. Brahmayya & Co. Further,

M/s. K.S. Rao & Co., have expressed their willingness to be appointed as one of the joint statutory auditors of the Company and confirmed their eligibility to the

effect that their appointment, if made, would be within the prescribed limits

under Section 141 of the Companies Act, 2013 and that they are not disqualified for appointment.

The Board at its Meeting held on July 19, 2017, as recommended by the Audit

Committee at its meeting held on July 19, 2017, have approved and recommended to the Shareholders, the reappointment and appointment of joint

statutory auditors by virtue of the provisions of section 139(2) and 142 and

other applicable provisions of the Companies Act, 2013, as detailed below:


reappointment of M/s. S. R. Batliboi & Associates LLP for a term of two (2)

years [i.e. from the conclusion of ensuing 14th Annual General Meeting (AGM) till the conclusion of the 16th AGM to be held in the year 2019]

appointment of M/s. K.S. Rao & Co., for a term of five (5) years [i.e. from

the conclusion of ensuing 14th AGM till the conclusion of the 19th AGM to be

held in the year 2022];

The Board commends the Special Resolutions as set out in Item No. 6A&B of this

Notice for your approval.

None of the Directors, Key Managerial Personnel of the Company or their

respective relatives are, in any way, concerned or interested, financially or

otherwise, in the said resolutions.

Item No. 7

The Board of Directors of the Company, on recommendation of the Audit

Committee, reappointed M/s. Narasimha Murthy & Co., Cost Accountants [Firm Regn No. 000042], as Cost Auditors of the Company for the financial year 2016-

17, at a remuneration of Rs.4,00,000/- plus applicable taxes and reimbursement

of out of pocket expenses.

In terms of the provisions of Section 148(3) of the Companies Act, 2013 read

with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the

remuneration payable to the Cost Auditors is to be ratified by the Members of the Company. Accordingly, the Resolution as set out in Item No. 7 as an

Ordinary Resolution for ratification by the members.

The Board recommends the resolution as set out in Item No.7 for your approval

as an Ordinary Resolution.

None of the Directors or Key Managerial Personnel of the Company or their

respective relatives is concerned or interested in the Resolution.

Item No. 8

Mr. Jayesh Ranjan, IAS aged 49 Years, is a member of the Indian Administrative Service (IAS) of the 1992 batch and presently, he is the Principal Secretary of

the Information Technology (IT) Department, Government of Telangana and also

the Principal Secretary, Industries and Commerce Department, Government of

Telangana (Full Additional Charge).

He holds a Master‟s Degree in Psychology from Delhi University, a degree in

Business Management from the Indian Institute of Management, Calcutta, and a Master's in Public Management from Lee Kuan Yew School of Public Policy,

National University of Singapore.

He is the All-India topper of his IAS batch of 1992. He was awarded World

Bank‟s Social Capital Visiting Scholarship in 2002 and the British Government‟s

Gurukul Chevening Scholarship in 2005.


He has done international consultancy assignments for the World Bank,

UNESCAP, Sedatu project of Mexico, and for international NGOs working for Youth Issues like YES, Inc of the USA and NMC from Italy.

He is a part of the National Pool of Trainers in Leadership constituted by the

Government of India, and is involved in training and mentoring newly recruited Civil Servants.

Mr. Jayesh Ranjan was appointed as an additional Director of the Company with effect from January 20, 2017. Mr. Jayesh Ranjan is representing Director of

Government of Telangana on the Board of Directors of the Company. Pursuant to

Section 161 of the Companies Act, 2013, Mr. Jayesh Ranjan holds his office up to the date of the 14th Annual General Meeting. The Company has received a

Notice under Section 160 of the Companies Act, 2013, proposing the candidature

of Mr. Jayesh Ranjan as the Director of the Company.

Mr. Jayesh Ranjan does not hold any shares in the Company and he is not

related to any Director or Key Managerial Personnel of the Company.

Details of Mr. Jayesh Ranjan‟s Directorships and Committee memberships in

Companies are as follows:

SNo Name of the Company (Directorship) Committee Chairmanship /

Membership

1 GMR Hyderabad International Airport Limited Member: CSR Committee

2 T-Hub Foundation --

3 Photonics Valley Corporation --

4 Telangana State Technology Services Limited --

5 Telangana State Trade Promotion Corporation Limited

--

6 Andhra Pradesh Industrial Development

Corporation Limited

--

7 Telangana State Industrial Development Corporation Limited

--

8 Telangana State Aviation Corporation Limited --

9 Telangana State Mineral Development

Corporation Limited

--

10 Telangana Industrial Health Clinic Limited --

11 Telangana State Leather Industries Promotion

Corporation Limited

--

12 Nizam Sugars Limited --

13 Telangana State Industrial Infrastructure

Corporation Limited

--

The Board recommends the Resolution as set out in Item No. 8 for approval of the members, as an Ordinary Resolution.


Except Mr. Jayesh Ranjan and his relatives, none of the Directors or Key

Managerial Personnel of the Company or their respective relatives, are concerned or interested in the resolution.

Item No. 9

Mr. Indrakanti Narasimha Murthy aged about 55 years, has been nominated by

Airports Authority of India as Director on the Board of the Company.

Currently, Mr. I.N. Murthy is the Member Board (Operations) of Airports

Authority of India (AAI). He is a Post Graduate in Physics (Electronics) and joined as Aerodrome Officer in August, 1985 in Civil Aviation Department,

Government of India which subsequently became Airports Authority of India.

Mr. I. N. Murthy has 32 years of long experience in aviation sector by serving different positions in Directorate of Air Traffic Management, Directorate of

Aerodrome Planning, Airport Management & Operations of AAI. Prior to taking

over the charge of Member (Operations), he served as Regional Executive Director (Southern Region) at Chennai and Executive Director (Air Traffic

Management) in Air Space Management Directorate at Corporate Headquarter of

AAI.

Mr. I.N. Murthy was appointed as an additional Director of the Company by the

Board with effect from March 14, 2017. Mr. I.N. Murthy is representing Director

AAI on the Board of the Company.

Pursuant to Section 161 of the Companies Act, 2013, Mr. I.N. Murthy holds his

office up to the date of the 14th Annual General Meeting. The Company has received a Notice under Section 160 of the Companies Act, 2013, proposing the

candidature of Mr. I.N. Murthy as the Director of the Company.

Mr. I. N. Murthy does not hold any shares in the Company and he is not related

to any Director or Key Managerial Personnel of the Company.

Details of Mr. I. N. Murthy‟s Directorships and Committee memberships in Companies are as follows:

SNo Name of the Company (Directorship) Committee Chairmanship / Membership

1 GMR Hyderabad International Airport

Limited

Member: Nomination and

Remuneration Committee

Member: Share Allotment and Transfer Committee

The Board recommends the Resolution as set out in Item No. 9 for approval of

the members, as an Ordinary Resolution.

Except Mr. I.N. Murthy and his relatives, none of the Directors or Key Managerial Personnel of the Company or their respective relatives, are

concerned or interested in the resolution.


Item No. 10

Mrs. Siva Kameswari Vissa aged 53 years and is a Chartered Accountant having

more than 25 years of experience comprising of management consultancy and

industry experience. Her sector experience includes automotive, light & heavy

engineering, process industries such as chemicals, petrochemicals, life sciences, FMCG, financial services, infrastructure, IT/ ITES and retail. She has significant

experience in the areas of Business Strategy, Corporate Planning, Performance

Improvement, Activity Based Costing, Supply Chain, Strategic Cost reduction, IT strategy and Implementation. At present, she is an independent management

consultant and also offers financial advisory services as part of her portfolio.

Mrs. Siva Kameswari Vissa was appointed as an independent director at the 12th

Annual General Meeting of the Company held on September 30, 2015 for a term

of two years and her term of appointment ends at the ensuing 14th Annual

General Meeting. The resolution proposing her re-appointment for another term of 5 years from the date of 14th Annual General Meeting (AGM) is being placed

for approval of Shareholders.

Mrs. Siva Kameswari Vissa meets the criteria of independence as provided under

section 149 (6) of the Act. A declaration to this effect has also been furnished by

Mrs. Siva Kameswari Vissa.

As per the provisions of section 149 of the Companies Act, 2013, Mrs. Siva

Kameswari Vissa being an Independent Director is not liable to retire by rotation.

Mrs. Siva Kameswari Vissa does not hold any shares in the Company and she is

not related to any Director of Key Managerial Personnel of the Company.

Details of Mrs. Siva Kameswari Vissa‟s Directorships and Committee

memberships in Companies are as follows:

SNo Name of the Company (Directorship) Committee Chairmanship /

Membership

1 GMR Hyderabad International Airport Ltd. Member: Audit Committee

2 GMR Infrastructure Limited Member: Audit Committee

3 Delhi International Airport Ltd. Member: Audit Committee Member: Nomination and Remuneration Committee Member : Sub-Committee of Board of Selection of Power Supplier

4 GMR Krishnagiri SEZ Limited Member: Audit Committee Member: Nomination and

Remuneration Committee

5 Delhi Duty Free Services Private Limited Member: Audit Committee

6 GMR Airports Limited Member: Audit Committee

7 VST Tillers Tractors Limited Member: Audit Committee

8 L&T Valves Limited Member: Audit Committee

Member: Nomination and Remuneration Committee Member: CSR Committee

9 Madura Micro Finance Limited Member: Audit Committee


The Nomination and Remuneration Committee considered and reviewed the proposed re-appointment of Mrs. Siva Kameswari Vissa as an independent

Director. The Board is of the opinion that, her rich and varied management

experience would immensely benefit the Company and that she meets the

criteria of an Independent Director.

The Directors recommend the resolution as set out in Item No.10 for approval

by the members as a Special Resolution.

None of the Directors or Key Managerial Personnel or their respective relatives of

the Company, except Mrs. Siva Kameswari Vissa and her relatives, are concerned or interested in the resolution.

Item No. 11

Mr. Srinivas Bommidala is the Managing Director (MD) in both GMR Hyderabad

International Airport Limited (“GHIAL or the Company”) and Delhi International

Airport Limited (“DIAL”). He was initially appointed as the MD of GHIAL for a period of 5 years from 23/01/2012 till 22/01/2017, at a remuneration of Rs.

1,91,66,000/- per annum for a period of 3 years from 23/01/2012 till

22/01/2015, as per the approval of the Board of Directors (“the Board”) of the Company at its Meeting held on 23/01/2012 and shareholders at its Extra

Ordinary General Meeting held on 21/02/2012.

Application to the Central Government / Ministry of Corporate Affairs (“MCA”) for the aforesaid appointment and payment of remuneration to the MD, was filed by

GHIAL on 06/03/2012 and the approval of the MCA was received on 07/01/2014

for appointment for a period of 5 years and remuneration for a period of 2 years only as under:

Rs.1,77,72,767/- for the period (from 23/01/2012 to 22/01/2013) to be paid by both DIAL and GHIAL or anyone of them;

Rs.2,04,38,682/- for the period (from 23/01/2013 to 22/01/2014) to be

paid by both DIAL and GHIAL or anyone of them;

However, the MCA did not make any mention about the remuneration to be paid

during the period January 23, 2014 to January 22, 2015, being the third year of approval sought.

For FY 2012-13 and 2013-14, since both DIAL and GHIAL were having profits,

remuneration of Rs.1,91,66,000/- p.a. was actually paid by GHIAL to the MD as per the Companies Act, 1956 (keeping in view the maximum permissible limits

of 5%) as approved by the Board (dtd 23/01/2012) and shareholders (dtd

21/02/2012). The aforesaid information was communicated to the MCA vide GHIAL‟s letter dated July 26, 2013.

For the remaining period (i.e. from 01/04/2014 till 22/01/2015), in absence of

any specific approval from the MCA, as indicated above, GHIAL has paid the minimum remuneration of Rs.93,13,690/- for the FY 2014-15 to the MD, based


on its effective capital (as contained in Schedule V of the Companies Act, 2013)

and the balance amount will be paid upon receiving the approval from the MCA. Since the MCA‟s initial approval i.e. dated 07/01/2014, the Company had been

following up with the MCA, for the approval of MD‟s remuneration, for the

remaining period of 01/04/2014 till 22/01/2015, without any response.

Further, when the Company‟s representatives met the MCA officials, they

advised the Company to file once again Form No. MR-2 seeking the Central

Government‟s approval for payment of remuneration to the MD for the remaining period from April 01, 2014 to January 22, 2015. Accordingly, the

Company had filed Form No. MR-2 on February 22, 2017 and against the same,

the Company had received the first query letter from the MCA on May 22, 2017 asking the Company to submit the necessary documents and the Company also

had submitted its responses along with the supporting documents to the MCA on

May 31, 2017.

When the officials made a follow up on the above matter with the MCA, it was

informed that MCA took an internal stand that for all matters (post April 01,

2014 periods), the Resolutions of the Nomination & Remuneration Committee, the Board, the Shareholders and other documents are to be submitted by GHIAL

under the Companies Act, 2013 for their further processing. In this regard, the

Company had also received communication from the MCA on June 20, 2017 asking the Company to submit all the Board / Committee / Shareholders

Resolutions / Newspapers Advertisement by complying the provisions as per the

Companies Act, 2013.

Therefore, as desired by the MCA, it was proposed to seek the permission of the Board for payment of remuneration to the Managing Director, for the previous

period from April 01, 2014 to January 22, 2015, subject to the approval of the

shareholders and Central Government.

It may please be noted that the remuneration proposed to be approved, is not in

addition to the remuneration previously approved by the Board vide its

resolution dated 23/01/2012 but is a confirmation of the same pursuant to the provisions of the Companies Act 2013.

Profile of Mr. Srinivas Bommidala seeking payment of remuneration for the previous period from April 01, 2014 to January 22, 2015 at the 14th

Annual General Meeting, pursuant to Clause 1.2.5 of the Secretarial

Standard 2 (General Meeting):

Name of Director Mr. Srinivas Bommidala

DIN No. 00061464

Age (Years) 54

Qualification Graduate in Commerce

Experience 35 years

Remuneration Details Payment of previous remuneration of Rs.

1,55,95,348/- to the Managing Director for the period from April 01, 2014 to January 22,

2015 (as already approved by the

Shareholders at their Extra-ordinary General

Meeting held on 21/02/2012) and is being placed before the Shareholders for approval.


Date of first appointment on

Board

a) From 08-07-2006 to 22-01-2012 as

Non-Executive Director. b) From 23-01-2012 to till date as

Managing Director

Shareholding in the Company Nil

Relationship with other Directors, Manager & KMPs

Son-in-Law of Mr. GM Rao, Chairman

No. of Board Meetings

attended

1 out of 4 in FY 2016-17

Other Directorships Sno Name of the Company Designation

1 GMR Infrastructure Limited

Director

2 GMR Aerospace Engineering Limited

Director

3 GMR Airports Limited Director

4 Delhi International

Airport Limited

Managing

Director

5 GMR Aviation Private Limited

Chairman

6 Kakinada SEZ Limited Director

7 Delhi Duty Free Services Private Limited

Chairman

8 GMR Sports Private Limited

Director

9 AMG Healthcare Destination Private Ltd.

Director

10 Bommidala Tobacco Exporters Pvt. Ltd.

Director

11 Bommidala Exports Pvt. Ltd

Director

12 BSR Holdings Private Ltd Director

14 GMR Varalakshmi Foundation

Director

15 Bommidala Tobacco Threshers Private Ltd. (Under the process of striking off)

Director

16 GMR Goa International Airport Limited

Director

17 İstanbul Sabiha Gökçen Uluslararası Havalimanı Yer Hizmetleri A.Ş., (Ground Handling Company)

Vice Chairman

18 GMR Male' International Airport Pvt. Ltd.

Vice Chairman & Director

19 GMR Megawide Cebu Airport Corporation, Philippines

Director

Committee Chairmanships / Memberships

Member of Share Allotment, Transfer and Grievance Committee in Delhi

International Airport Limited

Member of Audit Committee in GMR


Aviation Private Limited

Member of Management Committee in GMR Infrastructure Limited

Member of Debenture Allotment

Committee

in GMR Infrastructure Limited Member of CSR Committee in GMR

Airports Limited

Member of Nomination and Remuneration Committee of GMR Goa

International Airport Limited

Member of Nomination and

Remuneration Committee in GMR Aviation Private Limited

The Board of Directors of the Company recommends passing of the resolution as set out in Item No.11 of the AGM Notice as a Special Resolution.

Mr. Srinivas Bommidala (himself) and Mr. G. M. Rao (his father-in-law) are

deemed to be interested or concerned in the proposed resolution.

None of the Directors or Key Managerial Personnel of the Company and their relatives are concerned or interested in the Resolution.

By Order of the Board

Sd/-

Place : Date :

Hyderabad July 19, 2017

Anup Kumar Samal Company Secretary


Statement containing required information as per Part II of Section II of

Schedule V of the Companies Act, 2013:

I. GENERAL INFORMATION

1 Nature of Industry

Airport Operator – Aviation Industry

2 Date of commencement of commercial operations

The Airport has commenced its commercial operations from March 23,

2008.

3 In case of new companies, expected date of commencement of activities as per project approved by financial institutions

appearing in the prospectus

Not Applicable.

4 Financial Performance based on given indicators

The financial estimates for FYs 2017-18 and 2018-19 are as under:

(Rs. in Crores)

Financial Year / Parameter 2017-18 2018-19

Total Revenue 1253.12 1369.58

Operating Cost including concession

fee

395.95 421.46

Profit before – Interest

Depreciation and Taxes (PBIDT)

857.17 948.11

Depreciation and Interest 418.64 426.81

Profit Before Tax (PBT) 438.53 521.30

5 Foreign investments or collaborators, if any

Malaysia Airports Holdings, Berhad along with its subsidiary, MAHB

(Mauritius) Private Limited, is holding 41580000 Equity Shares of Rs.10/- each aggregating to Rs.41.58 Crores representing 11% of the total paid

up share capital of the Company.

II. INFORMATION ABOUT THE APPOINTEE

1 Background details of Mr. Srinivas Bommidala

Mr. Srinivas Bommidala aged about 54 years has been appointed as the Managing Director of the Company for a period five years with effect from

23rd January 2012. Currently, he is also the Managing Director of Delhi

International Airport Private Limited.


One of the first directors of the Group and has been a member of the

Board since 1996, Srinivas Bommidala entered his family tobacco export business in 1982 and led the diversification into new businesses such as

Aerated water bottling plants, etc. He was also in charge of international

marketing and management of the organization.

Subsequently, he led the team as the Managing Director of GMR Power

Corporation Limited for setting up the first Independent Power Project.

Situated at Chennai in southern part of India this 200 MW project with slow speed diesel technology is the world‟s largest diesel engine power

plant under one roof. He was also instrumental in implementing the 388

MW combined cycle gas turbine power project in Andhra Pradesh.

When the Government of India decided to modernize and restructure New

Delhi airport under a Public Private Partnership in 2006, he became the

first Managing Director of this venture and successfully managed the transition process from a public owned entity to a public private

partnership enterprise.

In 2007 he took over as the Chairman of Transportation & Highways

Sector consisting of Transportation, Special Economic Zone at Kakinada -

Andhra Pradesh and Krishnagiri in Tamilnadu , Construction, Commercial Property Development at Delhi & Hyderabad Airports/ Aerotropolis and

other Group Properties Businesses. Also he was the Chairman of GMR

Sports which owns Delhi Dare Devils as IPL Franchisee.

In 2011, Mr. Srinivas Bommidala took over as the Chairman – Airports,

which consists of Indira Gandhi International Airport (Delhi), Rajiv Gandhi

International Airport (Hyderabad) and Mactan Cebu International Airport, Republic of Philippines. Recently, GMR Group has won the bid for

development and operation of Mopa Greenfield Airport in Goa. GMR today

is among the top five airport developers in the world. He will continue to spearhead Commercial Property Development / Aerotropolis at New Delhi

and Hyderabad airports.

2 Past Remuneration

Mr. Srinivas Bommidala was initially appointed as a MD in GMR Hyderabad

International Airport Limited (“GHIAL” or “the Company”) for a period of five years from January 23, 2012 to January 22, 2017, at a remuneration

of Rs.1,91,66,000/- per annum for a period of three years from January

23, 2012 to January 22, 2015.

Application to the Central Government / Ministry of Corporate Affairs

(“MCA”) for the aforesaid appointment and payment of remuneration to

the MD, was filed by GHIAL on 06/03/2012 and the approval of the MCA was received on 07/01/2014 for appointment for a period of 5 years and

remuneration for a period of 2 years only as under:


o Rs.1,77,72,767/- for the period (from 23/01/2012 to 22/01/2013)

to be paid by both DIAL and GHIAL or anyone of them;

o Rs.2,04,38,682/- for the period (from 23/01/2013 to 22/01/2014)

to be paid by both DIAL and GHIAL or anyone of them;

However, the MCA did not make any mention about the remuneration to

be paid during the period January 23, 2014 to January 22, 2015, being

the third year of approval sought.

For FY 2012-13 and 2013-14, since both DIAL and GHIAL were having

profits, remuneration of Rs.1,91,66,000/- p.a. was actually paid by GHIAL to the MD as per the Companies Act, 1956 (keeping in view the maximum

permissible limits of 5%) as approved by the Board (dtd 23/01/2012) and

shareholders (dtd 21/02/2012). The aforesaid information was

communicated to the MCA vide GHIAL‟s letter dated July 26, 2013.

For the remaining period (i.e. from 01/04/2014 till 22/01/2015), in

absence of any specific approval from the MCA, as indicated above, GHIAL has paid the minimum remuneration of Rs.93,13,690/- for the FY 2014-15

to the MD, based on its effective capital (as contained in Schedule V of the

Companies Act, 2013) and the balance amount will be paid upon receiving the approval from the MCA for the period from 01/04/2014 till

22/01/2015.

3 Recognition or Awards

GMR Group has developed prestigious infrastructure projects including public private partnerships – such as Hyderabad and Delhi Airports, Power

Projects, Highways, etc. which are pride to the nation. Mr. Srinivas

Bommidala is one of the key persons in spearheading these projects successfully.

4 Job Profile and his suitability

Mr. Srinivas Bommidala has worked on major infrastructure projects

promoted by GMR Group in the energy sector, road sector and the

aviation sector. He heads the Airports business of the GMR Group and is in-charge of the affairs of Indira Gandhi International Airport (Delhi), Rajiv

Gandhi International Airport (Hyderabad) and Mactan Cebu International

Airport, Republic of Philippines. Recently, GMR Group has won the bid for development and operation of Mopa Greenfield Airport in Goa. Further,

GMR Group recently has won the right to develop & operate the New

Heraklion Greenfield Airport at Kastelli in Crete Island, Greece. GMR today

is among the top five airport developers in the world. He continues to spearhead Commercial Property Development / Aerotropolis at New Delhi

and Hyderabad airports.

Under the stewardship of Mr. Srinivas Bommidala, the Hyderabad Airport

(RGIA), owned and maintained by the Company has implemented various

measures in the direction of improving passenger service efficiency, power


savings, environmental protection, cost reduction etc. which have taken

the customer service to the highest levels and RGIA is amongst the top three airports in the passenger capacity of 5-15 million for the last seven consecutive years. RGIA has been ranked as number one airport in ASQ survey by Airport Council International (ACI) in 2016 in 5-15 million passenger category.

Under his stewardship various income boosting measures were implemented. The cost saving measures also included replacing the high

cost borrowings with low cost funds through effective refinancing at

substantially lower cost than the existing loans. All these measures contributed to the tremendous increase in the bottom line of the

company.

Keeping in view the tremendous contribution made by Mr. Srinivas Bommidala to the development of the airport, it is proposed to

remunerate him appropriately, as the Managing Director of the Company

for the previous period from April 01, 2014 to January 22, 2015 for an amount of Rs. 1,55,95,348/- (as already approved by the Shareholders at

their Extra-ordinary General Meeting held on 21/02/2012) subject to the

approval of the Central Government.

5 Remuneration proposed

For the below mentioned period and as per the details below:

1) Basic Salary: Rs.9,42,000/- per month – (Rupees Nine Lakhs and Forty Two Thousand only)

2) Special Pay: Rs.9,833/- per month (Rupees Nine Thousand Eight Hundred and Thirty Three only)

3) Allowances & Perquisites:

Category – A:

(i) Housing:

House Rent Allowance upto @ 40% of Basic Salary or Rent Free Unfurnished Accommodation at a cost not exceeding 40% of Basic Salary

per month.

(ii) Club Fees:

Membership Fees in any two clubs not being admission and Life Membership fees.

Financial

Year

For the Period No. of

days

Salary per

annum (Rs.)

Salary for the

period (Rs.)

2014-15

April 01, 2014 to January 22, 2015

297 days

1,91,66,000/-

1,55,95,348/-


(iii) Medical Reimbursement:

Reimbursement of medical expenses incurred on self and / or family not

exceeding Rs.1,00,000 per annum.

(iv) Group Insurance Plans:

Group insurance Plans cover for self and family, the premium not

exceeding Rs. 67,000/- per annum.

Category – B:

1) Contribution to Provident Fund, Superannuation fund or annuity fund

as per the applicable provisions of the relevant statutes. Gratuity

payable should not exceed half month‟s salary for each completed year

of service.

2) Encashment of leave as per Company‟s rules.

Category – C:

Provision of car for use on Company‟s business and telephones at

residence for official purposes. Personal long distance calls on telephones and use of car for private purpose shall be billed by the Company.

The valuation of perquisites shall be as per the provisions of the Income

Tax Act.

The detailed salary break up as enumerated above, may be interchanged

as may be agreed by and between Mr. Srinivas Bommidala and the company, within the overall remuneration limit of Rs.191.66 lakhs per

annum.

The proposed remuneration is not in addition to the remuneration previously approved by the Shareholders vide its vide resolution passed in

its Extra Ordinary General Meeting held on 21/02/2012, but is a

confirmation of the same pursuant to the provisions of the Companies Act 2013.

6 Comparative remuneration profile with respect to industry, size of the Company, profile of the person and position.

The proposed remuneration is lower than that of remuneration being paid

to managerial personnel of other private airport companies in India.

7 Pecuniary relationship directly or indirectly with the Company or

relationship with the Managerial Personnel, if any.

Mr. Srinivas Bommidala has no pecuniary relationship directly or indirectly

with the company or its managerial personnel other than his proposed remuneration in the capacity of a Managing Director.


III. OTHER INFORMATION

The other information as earlier provided in the EGM notice dated: 21-02-

2012 is depicted below as the information is pertaining to previous period

(from April 01, 2014 to January 22, 2015):

1 Reasons of loss or inadequate profits:

The Rajiv Gandhi International Airport has started its commercial

operations from March 23, 2008 and is in the 4th year of commercial

operations.

The Company has registered losses for the financial years 2007-08, 2008-

09 and 2009-10. However, in the financial year 2010-11, the Company

has registered net profit of Rs.103.98 Crores after recognizing the deferred tax asset (net) amounting to Rs.102.89 Crores.

The unaudited financial results for the period ended December 31, 2011, indicate net profit (PAT) of Rs.16.35 Crores and the Company expects to

improve its profitability for the full financial year 2011-12.

The Airport being a prestigious infrastructure project with world class facilities involving huge costs for construction, the company is incurring

considerable amounts towards servicing the loans. This is a common

situation in case of huge infrastructure projects in initial stages. The Company expects to improve its operations and adequate profits in the

coming years.

2 Steps taken or proposed to be taken for improvement

The Company has taken various initiatives to enhance its aero and non-

aero business. Due to recovery in economy, it is expected that air passenger traffic would also improve in the near future.

3 Expected increase in productivity and profits in measurable terms

On account of reasons mentioned in clause 2 above, the Company is

expected to increase its revenues.



Regd. Office: GMR Aero Towers, Rajiv Gandhi International Airport Shamshabad, Hyderabad 500 108, Telangana, India

Tel: +91 40 6739 4099 / 6739 5000, Fax: + 91 40 6739 3043 Website: www.hyderabad.aero

ATTENDANCE SLIP

Fourteenth Annual General Meeting of Shareholders of GMR Hyderabad International Airport Limited to be held on Monday, August 21, 2017 at 12.00

Noon at the Registered Office of the Company at GMR Aero Towers, Rajiv

Gandhi International Airport, Shamshabad, Hyderabad 500 108, Telangana.

Name of the Member: ……............................................................................

Regd. Folio No. : .……………………………............................................................

*DP ID No. : …………….................................................................................

*Client ID No. : ………………………....................................................................

No. of shares held: ………………………...............................................................

Note: Member / Proxy must hand over the duly signed attendance slip at the

venue.

* Applicable for the members holding shares in electronic form. Signature of the

Member / Proxy

_______________________________________

Signature of the Member / Proxy


FORM NO MGT-11

PROXY FORM

(Pursuant to Section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014)

CIN : U62100TG2002PLC040118

Name of the Company : GMR Hyderabad International Airport Limited

Registered Office : GMR Aero Towers, Rajiv Gandhi International Airport,

Shamshabad, Hyderabad 500 108, Telangana

Name of the Member(s) :

Registered Address :

E mail Id :

Folio No / Client Id :

DP ID :

I / We, being the holder(s) of shares of the above named company, hereby appoint:

(1) . ……………………………………………… r/o ………………………………………… having email ID …………………………………….. failing him;

(2) . ……………………………………………… r/o …………………………………………

having email ID …………………………………….. failing him;

(3) ………………………………………………… r/o …………………………………………

having email ID …………………………………….. failing him;

as my / our proxy to attend and vote (on a poll) for me/us and on my/our behalf

at the 14th Annual General Meeting of the Company, to be held on Monday, August 21, 2017 at 12.00 Noon at the Registered Office of the Company at

GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad

500 108, Telangana and at any adjournment thereof in respect of such

resolutions as are indicated below:

Sno Particulars of Resolution For Against

1 Adoption of the standalone audited financial statement of the Company for the financial year ended March 31,

2017, the reports of the Board of Directors and Auditors

thereon.


2 Adoption of the consolidated audited financial statement of the Company for the financial year ended

March 31, 2017 and Auditors Report thereon.

3 Declaration of dividend of Rs.2.50 per equity share of

face value of Rs.10/- each (i.e. 25%) for the financial

year 2016-17.

4 Appointment of a Director in place of Mr. Grandhi Kiran

Kumar [DIN: 00061669], who retires by rotation and is eligible for reappointment.

5 Appointment of a Director in place of Mr. Venkatramana Hegde [DIN: 06689221], who retires by rotation and is

eligible for reappointment.

6 Appointment of the Joint Statutory Auditors of the Company.

7 Ratification of the remuneration of cost auditors for the

financial year ended March 31, 2017.

8 Appointment of Mr. Jayesh Ranjan, IAS [DIN: 00003692] as Director of the Company.

9 Appointment of Mr. I. N. Murthy [DIN: 07752535] as

Director of the Company.

10 Re-appointment of Mrs. Siva Kameswari Vissa [DIN 02336249] as an independent Director of the Company.

11 Payment of remuneration to the Managing Director for previous period from 01-04-2014 to 22-01-2015.

Signed this ________ day of _____________________ , 2017.

Signature of the Shareholder……………………………………………

Signature of Proxy holder(s)

(1) Name …………………………………………..

(2) Name …………………………………………..

(3) Name …………………………………………..

Notes:

1) This form of Proxy in order to be effective should be duly completed and

deposited at the Registered Office of the Company, not less than 48 hours

before the commencement of the meeting.

2) This is only optional. Please put “” in the appropriate column against the

resolutions indicated in the Box. If you leave the „For‟ or „Against‟ column blank against any or all the resolutions, your Proxy will be entitled to vote

in the manner as he / she thinks appropriate.

Affix Revenue Stamp Re 1/-



Regd. Office : GMR Aero Towers, Rajiv Gandhi International Airport

Shamshabad, Hyderabad 500 108, Telangana, India

Tel : +91 40 6739 4099 / 6739 5000, Fax : + 91 40 67393043 Website : hyderabad.aero

ROUTE MAP TO THE VENUE

of the 14th AGM of GMR Hyderabad International Airport Limited,

to be held on Monday, August 21, 2017 at 12.00 Noon at GMR Aero Towers, Rajiv Gandhi International Airport,

Shamshabad, Hyderabad 500 108, Telangana

Rajiv Gandhi International

Airport

Rotary

No.3

Venue of AGM GHIAL Office

GMR Aero Towers

Decathlon

Sports Store

GMR HIAL Airport Office (Project Site

Office)

Airport Approach Road



BOARD’S REPORT FOR THE FINANCIAL YEAR ENDED MARCH 31, 2017

Dear Shareholders,

Your Directors take pleasure in presenting the 14th Board’s Report of the Company together with the audited financial statements for the financial year ended March 31, 2017 and the Auditors’ Report thereon.

Your Directors take immense pride to report that the Rajiv Gandhi International Airport (RGIA) is being operated to the best of international standards in terms of safety, security and operational excellence. RGIA was ranked as Number ONE airport in ASQ survey by Airport Council International (ACI) in 2016 in 5-15 million passenger category. This is a testimony of your Company’s relentless effort in providing superior customer experience RGIA has been consistently ranked as top three international airports since commencement of its operations in 2008. OPERATIONAL PERFORMANCE

Your Company during the financial year 2016-17 was able to enhance the airside Air Traffic Movement (ATM) capacity to 33 from 28 per hour in coordination with the Directorate General of Civil Aviation (DGCA) and Airports Authority of India (AAI). Despite the passenger throughput being higher than the current designed capacity during the year, your Company was able to provide seamless passenger flow in the terminal by taking debottlenecking measures. The commitment and pursuit of providing superior customer experience is evident from the fact that the organization has been successful in maintaining its position amongst the World's Best Airports in the category of 5-15 Million Passengers Per Annum (MPPA) in the Airport Service Quality (ASQ) Survey by the Airports Council International (ACI). RGIA consistently being in the Top 3 positions in the World (in its category) for eight consecutive years (2009-2016) and in the year 2016, RGIA regained the World’s No. 1 position in its category. The passenger growth has seen an impressive year-on-year growth of 22% with Compounded Annual Growth Rate (CAGR) of 12% in last 6 years and the passenger traffic exceeded 15 million in the financial year 2016-17. The ATM growth too has seen a CAGR of 5% in last 6 years with presently 19 foreign and 9 domestic passenger airlines flying out to 46 destinations (16 international and 30 domestic). Your Company clocked 131,264 number of ATMs in the financial year 2016-17, a growth of 23% over previous year. The domestic ATMs grew by 27% and international ATMs grew by 7% compared to previous year. The Cargo traffic has seen a CAGR of 9% for last 6 years, higher than the country’s average of 3% and handled record 1.13 Lakh Metric Tonnes (MTs) in the last financial year and it crossed 1.24 Lakh MT in the financial year 2016-17. The Freighter ATMs have been increased at a CAGR of 18% since 2011 till 2017. Cargo handled in the financial year 2016-17 was 1,24,087 MTs, a growth of 10% over previous year. The domestic cargo grew by 5% and international cargo grew by 15% compared to previous year. The growth in traffic was fuelled by affordable ticket pricing, propensity of people towards air travel as preferred mode of transportation over rail and road and general growth in economy.

Page No. 28GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 Board's Report

Your company has also made concerted efforts to bring new airlines to operate from RGIA. Two new airlines commenced operations from RGIA and also new frequencies were added in both passenger and cargo segment by the existing airlines. The airfare was stable during the period due to range-bound oil price globally which is the largest cost factor for airline operations. It is expected that the buoyancy in traffic will continue with marginal taper off due to higher base effect. Your Company has entered into second 5-year control period (2016-2021) for which Airport Economic Regulatory Authority (AERA) will determine the aeronautical service charges and your Company has already filed Multi-Year Tariff Proposal (MYTP) with the Regulator. It is expected that the new aeronautical tariff would be notified by Financial Year 2018. Although the Passenger Terminal was built to cater to 12 Million Passenger Per Annum (MPPA), however, your Company has successfully served 15 MPPA during the year by taking several interim measures which have helped your Company to cater to the peak passenger flow without compromising on the passenger experience despite unprecedented spurt in traffic during last 3 years. Your Directors expect to maintain the operational excellence in the coming years and continue to provide customer delight as it enters the next phase of growth. FINANCIAL RESULTS AND STATE OF THE COMPANY’S AFFAIRS

Your Company has prepared the annual financial statements in compliance with the Companies (Indian Accounting Standards) Rules 2015 which have been made effective from the financial year 2016-17 onwards.

Presented below, the financial results of the Company:

(Rs.in Crores)

Particulars

March 31, 2017 March 31, 2016

Income from Operations 1105.40 616.51

Other Income 47.59 21.50

Finance Income 55.08 20.45

Total Income 1208.07 658.46

Less : Concession Fee to MOCA 46.20 25.79

Net Income 1161.87 632.67

Profit before Finance Charges & Depreciation 904.84 405.29

Finance Charges 201.06 190.75

Depreciation and amortization expenses 203.81 205.75

Profit before exceptional items and tax 499.97 8.79

Exceptional item 85.78 -

Profit before tax 585.75 8.79

Provision for Taxation

- Current tax - Minimum alternate tax 101.38 -

- Minimum alternate tax credit entitlement (101.38) -

- Deferred Tax 150.96 2.60

Profit after Taxation 434.79 6.19

Other Comprehensive Income (0.45) (0.03)

Total Comprehensive Income for the year 434.34 6.16

Add: Balance brought forward from previous years (233.35) (239.51)


Particulars

March 31, 2017 March 31, 2016

Balance available for appropriations 200.99 (233.35)

Appropriation of Profits :

- Transfer to General Reserve -- --

- Balance carried forward to Balance Sheet 200.99 (233.35)

EPS

No. of Equity Shares of Rs.10/- each 37,80,00,000 37,80,00,000

Basic and Diluted (Rupees) 11.49 0.16

CHANGE IN THE NATURE OF BUSINESS, IF ANY There is no change in the nature of business of your 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 the company’s operations in future. However, the Regulator promulgated normative capital cost for Passenger Terminal Building and Pavement with a provision that in case the rates are higher than the ceiling rate fixed by the Regulator, the justifications, so submitted by the airport operators on actual incurrence of the cost shall be examined by a duly constituted Committee of Experts of the Regulator and based on their recommendations the final costs will be adopted. Representations were also made with the Regulator through industry association against the order and your Company filed an appeal before the Airports Economic Regulatory Authority Appellate Tribunal (AERAAT) against the order of the Regulator on normative capital cost, which is pending for adjudication. DIVIDEND

Your Directors recommended a maiden equity dividend of Rs.2.50 per equity share on paid up capital of Rs.10/- each for the financial year 2016-17, to the shareholders of the Company, for their approval, at the ensuing Annual General Meeting. APPROPRIATIONS TO RESERVES

No amount has been transferred to the reserves. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

There are no material changes and commitments affecting the financial position of the Company between March 31, 2017 and the Board’s Report dated July 19, 2017. SNAPSHOT OF MAJOR EVENTS AND ACHIEVEMENTS Airline Marketing:

During the period under review, two more domestic airlines started scheduled commercial operations from RGIA. While AirAsia India (I5) started operations on September 23, 2016, Go Air (G8) started operations effective October 12, 2016. Apart from attracting new airlines, RGIA is connected to several new domestic destinations such as Jabalpur, Mangalore, Chandigarh, Tiruvananthapuram, Cuddapah, Nanded, Guwahati, Patna and Surat. Also, existing destinations received additional frequencies resulting in domestic ATM growth of 27% in FY 2017, which is highest among all Public Private Partnership (PPP) airports in India.


On the international front, RGIA connected to a new destination – Colombo on 12th July 2017 by SriLankan Airlines, a new international airline in GHIAL’s airline customer portfolio. Jet Airways (9W) started a daily flight to Dammam, Air India (AI) increased frequency to Jeddah to three times a week. Gulf Air (GF) too increased frequency from seven weekly to nine weekly, while Oman Air (WY) increased frequencies from double daily to triple daily. On the tourism front, your Company signed a memorandum of understanding with Cambodia Airports to develop tourism flows between RGIA to three airports operated by Cambodia Airports.

Land Side Developments: Your Company including its subsidiaries has successfully completed various projects during the period, major being:

GMR Hyderabad Aerotropolis Limited (GHAL), a Wholly Owned Subsidiary of your Company constructed, developed and delivered 4 lakh sq.ft. space on lease basis, to Amazon for its Regional Fulfilment Centre at RGIA premises, which is one of the largest such facilities of Amazon in South Asia.

GMR Hyderabad Aviation SEZ Limited (GHASL), a Wholly Owned Subsidiary of your Company during the period under review, executed long term lease agreement for 23 acres of airport land with Citron Group, a renowned multinational pharmaceutical company, who wanted to establish its pharma formulations manufacturing unit.

Terminal and Airside Expansion:

The aviation industry in India is experiencing superlative growth in the past 3 years. This growth will get further momentum with the introduction of National Civil Aviation Policy 2016 which we expect will attract lot of investment interest from overseas players. The introduction of Regional Connectivity Scheme (RCS) will provide further stimulus as the tier-I and tier-II underserved and unserved cities would be connected to hub airports. RCS will boost up air travel as it is becoming more affordable to masses. Your Company is on the cusp of a major expansion program to increase the terminal capacity in sync with the passenger growth. The present terminal with all the debottlenecking and de-peaking measures presently operates at ~130% of capacity. However, the objective would be to provide permanent solutions to the capacity constraint through expansion. Fair amount of progress already made in that direction in terms of capital cost assessment and presentation of the cost estimates before the airport users consultation committee. Since the expansion program coincided with second control period tariff proposal, it was filed with the Regulator. However, the Regulator came out with normative capital cost for construction of terminal building and construction of pavement in June 2016. Since the envisaged capital outlay plan is higher than the normative capital cost prescribed by the Regulator, efforts are on to get upfront nod from the Regulator on the capex program to minimize the uncertainty on allowance of the cost

The expansion capex shall be funded through an optimal mix of debt and internal accruals. Your Company has generated adequate cash to fund the capex in a bankable debt equity ratio and doesn’t envisage any fresh equity infusion by the existing shareholders. Operations:

In order to provide unique customer experience, your company is continuously improvising the customer offerings through change in look and feel of the terminal ambience, introduce more technology driven solution so that the passengers feel at home while travelling through the terminals. The major initiatives which came to fruition during the period are as below;


Mobile Check-in counters: Your Company has always been at the fore front of

innovation and enabling technology-driven solutions to ease airport operations and enhance passenger service. As part of the technological enhancement and for better passenger facilitation and experience, Mobile Check-in counters (Roving agents) and Document Exchanger are being used in the Airport Terminal, thus reducing the passenger waiting time at the conventional check-in counters.

‘Passenger is Prime!’:‘Passenger is Prime!’ is envisioned as the new mantra for RGIA family to focus efforts on ensuring best-in-class passenger experience. As the first initiative under the Passenger is Prime programme, your Company has deployed a dedicated set of Passenger Service Associates (PSAs) to assist and support passengers across all key touch points in the Airport Terminal. Till date, RGIA is the only airport in India to implement the same.

Level 3+ accreditation to RGIA: RGIA has been accredited “Level 3+ Carbon

Neutrality” under Airport Carbon Accreditation (ACA) programme by the Airport Council International (ACI) on December 06, 2016. With this, RGIA became the first Airport in the Asia Pacific Region to achieve the Level 3+ accreditation in the size category of 5 to 15 MPPA and only the second airport overall in the region to attain the landmark recognition.

Departure ramp widening project: Completed departure ramp widening project with

minimum inconvenience to the passengers at RGIA, thus enhancing the capacity of the ramp in terms of vehicular movement by adding additional lanes i.e., from the previous 3 lanes to 4 lanes, thereby curbing decongestion during the peak hours.

Departure plates extended: Departure extended plate flooring and other related works

have been completed on a war-foot basis to accommodate the passenger and visitors movement through the extended plates. This has eased out congestion at the departure entry points especially during the peak hours, further improving passengers experience.

Additional initiatives to reduce passenger congestion: New screening machines

have been installed in the Airport Terminal with a new layout. Reorientation of Domestic Security Hold Area (SHA) in the Airport had been completed to accommodate eight numbers of X-Ray Baggage Inspection System (XBIS) / fourteen numbers Door Frame Metal Detectors (DFMDs) against the previous five numbers of XBIS / ten numbers of DFMDs in view of the increase in the passenger traffic for faster and better security processing. Three numbers of XBIS / six numbers of DFMDs layout have been developed near Terminal Gate Entry No. 1 at RGIA to give exclusivity for hand baggage passengers who have checked-in through Web (Online) / Common Use Self Service (CUSS). All these initiatives have further reduced congestion at the check-in points.

Domestic Bus Gates: Two new domestic bus gates with four boarding lanes have

been commissioned to facilitate increased demand during peak departures. The nomenclature and signage of the Domestic Bus Gates had been changed for ease of identification of gates.

The above initiatives played catalyst role in addressing and enriching the passenger experience inside the terminal at your airport. Commercial: Your Company during the period under review, has added multiple world renowned brands such as Parcos, Porsche, Mumbai Central, Island Bar, Subway and Mont Blanc in Airport Terminal.


Cargo:

Freighter Capacity Enhancement:

o Qatar Airways: Added third frequency from April 2016 thereby increasing the

capacity allocation from 120 MTs / week to 150 MTs / week;

o Turkish Cargo: Started second frequency from May 2016 thereby increasing the

capacity allocation from 25 MTs / week to 50 MTs / week;

o Cathay Pacific Cargo: Increased the capacity allocation from 40 MTs / week to 80

MTs / week. REGULATORY AND TARIFF

Your Company in the earlier financial year received a favorable “Till” dispensation from the Ministry of Civil Aviation (MoCA), who vide its letter dated June 10, 2015 under section 42(2) of AERA Act, 2008, issued policy direction to Airport Economic Regulatory Authority (AERA) to adopt “Shared Till” with 30% cross subsidization in tariff determination of RGIA. The said philosophy of “Shared Till” is now enshrined in the National Civil Aviation Policy 2016 and extended to all the Airports in India wherein the future tariffs would be determined under “30% Hybrid Till”. This policy move by the Union Government shall make the investments more attractive in the Airport infrastructure in India. Your Company has entered into Control Period (CP)-2 from April 1, 2016 and accordingly filed the tariff proposal for CP2 with AERA. The Multi Year Tariff Proposal (MYTP) is under review by AERA and a Consultation Paper seeking stakeholders’ comments is expected to be released during the current financial year (2017-18). In this regard, AERA has conveyed continuation of prevailing airport charges till September 30, 2017 or determination of tariff for CP2, whichever is earlier. Since the Airport has crossed its designed passenger throughput, the expansion proposal to enhance the capacity to 20 MPPA also forms an integral part of the tariff proposal. However, given the traffic growth of 20%+ in the last 3 years, the capacity augmentation plan may be reviewed by your Company, during the course of implementation provided the growth remains unabated.

RATING

The consistent performance of your Company has its reflection in the upgraded ratings of banking limits by domestic rating agencies. Presently, the banking limits are rated by CRISIL, ICRA, India Ratings and Care Ratings. The credit rating of banking limits, currently are rated at “AA” by all the rating agencies from earlier level of “A-“ during the financial year 2015-16. The restoration of UDF and growth in non-aeronautical revenues has helped your Company to post a stellar operational performance resulting into a rating upgrade.

AWARDS AND CERTIFICATIONS RECEIVED BY THE COMPANY DURING THE PERIOD UNDER REVIEW

RGIA regained World #1 ASQ ranking (4.94) in 5-15 MPPA category and #13 Globally by Airport Council International (ACI);

Received Golden Peacock Business Excellence Award 2017 under large scale industry-Transportation-Aviation category for imbibing process and standards in the working culture and environment of the organization;


RGIA became the first Airport in the Asia Pacific Region to achieve Level 3+ Carbon Neutrality of the Airport Carbon Accreditation by ACI in the size category of 5 to 15 MPPA;

Adjudged first place in 5S Excellence Award by Confederation of Indian Industry (CII);

Winner of Great Indian Workplace Award in 2017;

Won Indian Travel Award – South 2017 in the Best Loyalty Program Category in recognition for the efforts towards destination marketing;

Awarded order of merit in the field of Environment by Center for Asia Pacific Aviation (CAPA);

Received ASSOCHAM second Corporate Governance Excellence Award 2015-16 as runners-up under the unlisted private sector company;

RGIA awarded “Fastest Growing Cargo Airport 2016” at India Cargo Awards West and South;

Hyderabad Menzies Air Cargo Private Limited (A Joint Venture Company) has received the award for “Best Cargo Terminal Workforce 2016” at Warehousing Excellence Awards;

Received Asia-Pacific Silver Recognition for Human Resources Excellence from ACI;

Conferred the ‘Active Customer Engagement Award’ in the inaugural edition of “CII Award for Customer Obsession 2016”.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors and Key Managerial Personnel of your Company presently comprises of the following:

Sl. No.

Name of the Director Representing

1 Mr. G. M. Rao, Chairman Sponsors (GMR)

2 Mr. Srinivas Bommidala, Managing Director Sponsors (GMR)

3 Mr. Grandhi Kiran Kumar Sponsors (GMR)

4 Mr. H. J. Dora Sponsors (GMR)

5 Mr. C. Prasanna Sponsors (GMR)

6 Datuk Badlisham bin Ghazali Sponsors (MAHB)

7 Mr. Venkatramana Hegde Airports Authority of India

8 Mr. I.N. Murthy Airports Authority of India

9 Mr. Jayesh Ranjan, IAS Government of Telangana

10 Mr. K. Ramakrishna Rao, IAS Government of Telangana

11 Mr. R.S.S.L.N. Bhaskarudu Independent Director

12 Mr. N. C. Sarabeswaran Independent Director

13 Mrs. Siva Kameswari Vissa Independent Director

14 Mr. P. Vijay Bhaskar Independent Director

SNo Name of the Key Managerial Personnel Designation

1 Mr. Srinivas Bommidala Managing Director

2 Mr. S.G.K. Kishore Chief Executive Officer

3 Mr. Rajesh Arora Chief Financial Officer

4 Mr. Anup Kumar Samal Company Secretary


CHANGES IN THE COMPOSITION OF BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

1) Mr. P. Vijay Bhaskar was appointed as an Independent Director of the Company with

effect from September 28, 2016 by the shareholders at the last (13th) Annual General Meeting of the Company. Mr. Jayesh Ranjan, IAS was appointed as an additional

director by the Board of Directors with effect from January 20, 2017. Mr. I.N. Murthy was appointed as an additional director by the Board of Directors with effect from March 14, 2017. These additional directors hold their office till the ensuing 14th Annual General Meeting. The resolutions proposing their appointment as Directors are being placed for approval of Shareholders at the ensuing 14th Annual General Meeting.

2) Mr. Arvind Kumar, IAS ceased to be a Director of the Company with effect from January

20, 2017, due to change of its representing Director on the Board by Government of Telangana. Mr. S. Samanta ceased to be a Director of the Company with effect from March 14, 2017, owing to change of it’s representing Director by Airports Authority of India on the Company’s Board.

The Board of Directors places on record its appreciation for the valuable services rendered by Mr. Arvind Kumar, IAS and Mr. S. Samanta, during their tenure as Directors of the Company.

3) Mr. Grandhi Kiran Kumar and Mr. Venkatramana Hegde retire at the 14th Annual General Meeting by rotation and are eligible for re-appointment.

4) Mrs. Siva Kameswari Vissa was appointed as an Independent Director for a term of two years at the 12th Annual General Meeting of the Company held on September 30, 2015 and her term of appointment ends at the ensuing 14th Annual General Meeting. The resolution proposing her re-appointment for another term for a period of five years from the date of 14th Annual General Meeting (AGM) is being placed for approval of the shareholders at 14th AGM.

BOARD COMMITTEES

The Board Committees have been reconstituted on May 04, 2017 and the following are the current composition of Board Committees:

Name of the Board Committee Composition

Audit Committee Mr. R.S.S.L.N. Bhaskarudu (Chairman) Mr. K. Ramakrishna Rao, IAS

Mr. N.C. Sarabeswaran Mrs. Siva Kameswari Vissa Mr. C. Prasanna

Nomination and Remuneration Committee Mr. R.S.S.L.N. Bhaskarudu (Chairman) Mr. N.C. Sarabeswaran Mr. C. Prasanna

Mr. I. N. Murthy

CSR Committee Mr. R.S.S.L.N. Bhaskarudu (Chairman) Mr. Jayesh Ranjan, IAS

Mr. C. Prasanna

Share Allotment and Transfer Committee

Mr. R.S.S.L.N. Bhaskarudu (Chairman) Mr. C. Prasanna

Mr. I.N. Murthy


NUMBER OF MEETINGS OF THE BOARD There were four Board Meetings held during the financial year 2016-17 and the details of attendance of Directors (Attended-Yes; Leave of Absence-LOA; Not Applicable-NA) are as under:

SNo Name of the Director 27-04-2016 18-07-2016 07-11-2016 2 20-01-2017

1 Mr. G.M. Rao Yes Yes Yes Yes

2 Mr. Srinivas Bommidala LOA LOA LOA Yes

3 Mr. Grandhi Kiran Kumar Yes LOA Yes LOA

4 Mr. C. Prasanna Yes LOA Yes Yes

5 Mr. H.J. Dora Yes LOA Yes Yes

6 Mr. Venkatramana Hegde Yes Yes Yes Yes

7 Mr. I.N. Murthy1 NA NA NA NA

8 Mr. K. Ramakrishna Rao, IAS Yes LOA LOA LOA

9 Mr. Jayesh Ranjan, IAS2 NA NA NA NA

10 Datuk Badlisham bin Ghazali LOA LOA Yes LOA

11 Mr. R.S.S.L.N. Bhaskarudu) Yes Yes Yes Yes

12 Mr. N.C. Sarabeswaran Yes Yes Yes Yes

13 Mrs. Siva Kameswari Vissa Yes Yes Yes Yes

14 Mr. P. Vijay Bhaskar 3 NA NA Yes Yes

15 Mr. Arvind Kumar, IAS4 Yes Yes Yes Yes

16 Mr. S. Samanta5 NA Yes Yes LOA

17 Mr. L.L. Krishnan6 LOA NA NA NA

1Mr. I. N. Murthy was appointed as a Director of the Company with effect from March 14, 2017.

2Mr. Jayesh Ranjan, IAS was appointed as a Director of the Company with effect from January 20, 2017. 3Mr. P. Vijay Bhaskar was appointed as an Independent Director with effect from September 28, 2016. 4Mr. Arvind Kumar, IAS ceased to be a Director of the Company with effect from January 20, 2017.

5Mr. S. Samanta appointed to be a Director of the Company with effect from June 28, 2016 and he ceased to be a director with effect from March 14, 2017.

6Mr. L.L. Krishnan ceased to be a Director of the Company with effect from June 28, 2016. NUMBER OF COMMITTEE MEETINGS

Number of Committee Meetings held during financial year 2016-17 and the details of attendance of Committee Members (Attended-Yes; Leave of Absence-LOA; Not Applicable-NA) are given below:


Audit Committee Meetings: There were four Audit Committee Meetings held during the financial year 2016-17 and the details of attendance of the Members are as under:

SNo Name of the Committee Member 27-04-2016 18-07-2016 07-11-2016 220-01-2017

1 Mr. R.S.S.L.N. Bhaskarudu Yes Yes Yes Yes


3 Mr. I.N. Murthy* NA NA NA NA

4 Mrs. Siva Kameswari Vissa Yes Yes Yes Yes

5 Mr. C. Prasanna Yes LOA Yes Yes

6 Mr. S. Samanta* NA Yes Yes LOA

7 Mr. L.L. Krishnan* LOA NA NA NA

*Audit Committee was reconstituted by the Board on June 28, 2016 by inducting Mr. S. Samanta as the Member in place of Mr. L.L. Krishnan. Further, the Committee was reconstituted by the Board on March 14, 2017 by inducting Mr. IN Murthy as the Member in place of Mr. S. Samanta. Nomination and Remuneration Committee Meetings:

There were four Nomination and Remuneration Committee Meetings held during the financial year 2016-17 and the details of attendance of the Members were as under:

SNo Name of the Committee Member 27-04-2016 18-07-2016 07-11-2016 220-01-2017

1 Mr. R.S.S.L.N. Bhaskarudu Yes Yes Yes Yes


3 Mr. C Prasanna Yes LOA Yes Yes

4 Mr. S. Samanta#

NA Yes Yes LOA

5 Mr. L.L. Krishnan# LOA NA NA NA

6 Mr. I.N. Murthy# NA NA NA NA

#Nomination and Remuneration Committee was reconstituted by the Board on June 28, 2016 by inducting Mr. S. Samanta as the Member in place of Mr. L.L. Krishnan. Further, the Committee was reconstituted by the Board on March 14, 2017 by inducting Mr. IN Murthy as the Member in place of Mr. S. Samanta. CSR Committee Meetings:

There were two CSR Committee Meetings held during the financial year 2016-17 and the details of attendance of the Members are as under:

SNo Name of the Committee Member 27-04-2016 20-01-2017

1 Mr. R.S.S.L.N. Bhaskarudu Yes Yes

2 Mr. C Prasanna Yes Yes

3 Mr. S. Samanta# NA LOA

4 Mr. L.L. Krishnan LOA NA

5 Mr. I.N. Murthy NA NA


#CSR Committee was reconstituted by the Board on June 28, 2016 by inducting Mr. S. Samanta as the Member in place of Mr. L.L. Krishnan. Further, the Committee was reconstituted by the Board on March 14, 2017 by inducting Mr. I.N. Murthy as the Member in place of Mr. S. Samanta. DIRECTORS’ RESPONSIBILITY STATEMENT

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

a) that in the preparation of the annual financial statements for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Note 2.1 of the Notes to the financial statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit and loss of the Company for the year ended on that date;

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

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

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

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

STATEMENT ON DECLARATION OF INDEPENDENT DIRECTORS

Based on the declarations received from the Independent Directors and on evaluation of the relationships disclosed, the following Directors are independent in terms of Section 149(6) of the Companies Act, 2013 :- a) Mr. R.S.S.L.N. Bhaskarudu b) Mr. N.C. Sarabeswaran c) Mrs. Siva Kameswari Vissa and d) Mr. P. Vijay Bhaskar

The Company has received the declarations and disclosures as required under the Companies Act, 2013 from the above Independent Directors. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out the annual performance evaluation for the financial year 2016-17, in respect of the Board and Committees, the Chairman, Self and Peer of Directors. Structured and separate Questionnaires were prepared for Board and its Committees’ Evaluation; Directors Self-Evaluation; the Chairman Evaluation and Directors’ Peer Evaluation after taking into consideration various aspects of the management and governance issues.


COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION The salient features of Nomination and Remuneration Policy of the Company covering Directors’ appointment, remuneration, criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of section 178, is appended as Annexure -1 to this Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The following loans or guarantees given or security provided or investments were made by the Company during the financial year 2016-17:

SNo Name of the entity Relation Amount (Rs.) Particulars

1 GMR Hyderabad Aerotropolis Limited (GHAL)

Subsidiary 23,87,00,000

Investment – 2,38,70,000

equity shares of Rs.10/- each by way of subscription

2 GMR Aerospace Engineering Limited (GAEL)

Subsidiary 61,00,00,000 Investment - 6,10,00,000 equity shares of Rs.10/- each by way of subscription

3 GMR Hyderabad Aerotropolis Limited (GHAL)

Subsidiary 20,00,00,000 Loan given

4 GMR Hospitality and Retail Limited

(GHRL)

Subsidiary 11,50,00,000

Loans given

5 GMR Hospitality and Retail Limited (GHRL)

Subsidiary 125,00,00,000 Provided corporate guarantee in favour of Lenders of GHRL for securing the refinancing of existing loans

6 GMR Aerospace Engineering Limited (GAEL)

Subsidiary 135,86,40,000 Pledge of 13,58,64,000 Equity Shares of Rs.10/- each of GAEL held by GHIAL in favour of GAEL Lenders

7 Hyderabad Duty Free Retail Limited (HDFRL)*

Subsidiary 5,08,5000 Pledge of 50,85,000 Equity Shares of Rs.10/- each of HDFRL held by GHIAL in favour of HDFRL Lenders, for securing the refinancing of existing loans

* Hyderabad Duty Free Retail Limited has been merged with GMR Hospitality and Retail Limited (formerly GMR Hotels and Resorts Limited) effective from April 27, 2017, with an appointed date April 01, 2016.

Your Company being an infrastructure Company is exempted from complying with the provisions of section 186 of the Companies Act, 2013 relating to loans and guarantees. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH THE RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013

The Company has not entered into any contracts or arrangements with the related parties referred to in Section 188(1) of the Companies Act, 2013 and as such no particulars are given.


All the transactions with the related parties being in the ordinary course of business and at arms’ length basis were reviewed and approved by the Audit Committee including omnibus approvals during the financial year 2016-17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars regarding foreign exchange earnings and outgo appear as separate items in the Notes No. 39 to the Accounts. Since the Company does not own any manufacturing facility, the particulars relating to technology absorption stipulated in the Companies (Accounts) Rules, 2014 are not applicable. However, the particulars relating to conservation of energy are provided in Annexure -2 to the Board’s Report. RISK MANAGEMENT POLICY Your Company (GHIAL) has established Enterprise Risk Management (ERM) framework to identify, assess, monitor and mitigate various risks that may affect the organization. As per ERM framework, the risks are identified considering the internal and external environment. While there were no risks perceived that threatens the existence of the company, following were identified as certain key risks. These risks are being monitored at regular intervals along with mitigating measured:

SNo Nature of Risk

1 Delay in receiving outstanding amount from Air India (AI) Group Companies

2 Delay in augmenting Terminal Capacity

3 Financial health of few subsidiaries straining GHIAL’s Financials

4 Normative approach for the determination of CAPEX Cost

5 Unfavorable Regulatory Order on pending issues

Risk mitigation plan is prepared and progress is monitored and reviewed by business steering committee during the performance reviews on a periodical basis. INTERNAL CONTROL SYSTEM

Your Company’s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. Your Company’s internal control procedures ensure compliance with various policies, practices and statutes in keeping with the organisation’s pace of growth and increasing complexity of operations. The Management Assurance Group, internal audit team, of the Company, carries out extensive audits throughout the year, across all functional areas and submits its reports to the Audit Committee. INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY

Your Company has adopted policies and procedures including the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of fraud and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures under the Companies Act, 2013.


During the year under review, such controls were reviewed and tested by the internal audit department. There was no reportable material weakness in the design or operations were observed. CORPORATE SOCIAL RESPONSIBILITY

Your Company is driven by Group’s vision on CSR to make a difference, specifically to society by contributing to the economic development of the country and improving the quality of life of the local communities. Towards this vision, the Company partners with the communities around the Airport to drive various initiatives in the areas of education, health, hygiene, sanitation, empowerment, livelihood and community development. The Company has been implementing community development initiatives in the villages surrounding Rajiv Gandhi International Airport (RGIA) since 2005. The intensive activities in these thrust areas have been focused in four villages i.e. Airport Colony (rehabilitation colony), Gollapally, Mamidipally and Shamshabad. Details about the CSR policy and initiatives taken by the Company on CSR during the financial year 2016-17 are given in the CSR Annual Report, as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, which is annexed to this report as Annexure 3. SHARE CAPITAL

The paid up equity share capital of your Company as on March 31, 2017 was Rs.378,00,00,000 (Rupees Three Hundred Seventy Eighty Crore only) comprises of 37,80,00,000 (Thirty Seven Crore Eighty Lakhs) equity shares of face value of Rs.10/- (Rupees Ten) each. During the year under review, the Company had not issued any new shares. Being the holder of 63% of the paid up equity share capital of the Company, as on March 31, 2017, GMR Airports Limited is the Holding Company of your Company. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

During the financial year 2016-17, the following companies ceased to be subsidiaries of the Company.

SNo. Name of the Company Reason

1 GMR Hyderabad Multiproduct SEZ Limited (GHMSL)

Being non-operative and no business proposed to be carried out, the Company was closed under Fast Track Exit Scheme.

2 GMR Airport Handling Services Company Limited (GAHSCL)

Being non-operative and no business proposed to be carried out the Company was closed under Fast Track Exit Scheme.

3 GMR Hyderabad Airport Resource Management Limited (GHARML)

The entire shareholding (50,000 shares of face value of Rs.10/- each) held by the Company in GHARML was transferred to GMR Infrastructure Limited (holding company), consequent to which GHARML ceased to be a subsidiary of the Company.

During the financial year 2016-17, no company has become subsidiary of the Company.


Statement under Section 129(3) of the Companies Act, 2013 In accordance with Section 129(3) of the Companies Act, 2013 and applicable Accounting Standards, the Company has prepared a consolidated financial statement of the Company and all its subsidiaries and joint venture companies, which is forming part of the Annual Report. A statement containing salient features of the financial statements of the following subsidiary and joint venture companies*, in the prescribed Form AOC-1 is attached to the consolidated financial statements of the Company:

1. Hyderabad Duty Free Retail Limited** 2. GMR Hospitality and Retail Limited*** (formerly GMR Hotels and Resorts Limited) 3. GMR Aerospace Engineering Limited 4. GMR Aero Technic Limited 5. GMR Hyderabad Aviation SEZ Limited 6. Hyderabad Airport Security Services Limited 7. GMR Hyderabad Aerotropolis Limited 8. GMR Hyderabad Airport Power Distribution Limited 9. Hyderabad Menzies Air Cargo Private Limited 10. Asia Pacific Flight Training Academy Limited (JV) 11. Laqshya Hyderabad Airport Media Private Limited (JV)

*During FY 2016-17, GMR Hyderabad Multiproduct SEZ Limited (GHMSL) and GMR Airport Handling Services Company Limited (GAHSCL) were closed under Fast Track Exit Scheme. Further, the entire shareholding (50,000 shares of face value of Rs.10/- each) of GMR Hyderabad Airport Resource Management Limited (GHARML) held by the Company in GHARML was transferred to GMR Infrastructure Limited, consequent to which GHARML ceased to be subsidiary of the Company, during FY 2016-17.

**Hyderabad Duty Free Retail Limited (HDFRL) is amalgamated with GMR Hospitality and Retail

Limited (GHRL) [Formerly GMR Hotels and Resorts Limited] with effect from April 27, 2017 with an

appointed date as April 01, 2016.

*** The name of the Company was changed w.e.f. May 16, 2017.

Amalgamation of Subsidiaries - Hyderabad Duty Free Retail Limited (HDFRL) with GMR Hospitality and Retail Limited (GHRL) As part of a business strategy and in order to have a simplified management structure with better administration and control, merger of HDFRL with GHRL was contemplated. Considering the petition praying for sanction of the Scheme of Arrangement for amalgamation of HDFRL with GHRL, NCLT vide its order sanctioned the scheme on April 18, 2017 with appointed date as April 01, 2016. The effective date of the scheme is April 27, 2017, being the certified true copy of the NCLT Order filed in form INC-28 with the ROC. Therefore, HDFRL got dissolved without being wound up. Upon the Scheme becoming effective, in order to depict the both the businesses, (i.e. Hotel-existing business and Duty Free Retail- Business of merged entity) the name of the GHRL was changed from GMR Hotels and Resorts Limited to GMR Hospitality and Retail Limited. Pursuant to clause 11 of the sanctioned scheme, GHRL has allotted 1,69,50,000 equity shares of Rs.10/- to GHIAL in the exchange ratio of 1 : 1 for transfer and vesting of the Undertaking of HDFRL. GHRL has prepared the financial statements for the financial year 2016-17 by combining both GHRL and HDFRL books of accounts in accordance with “Pooling of Interest Method” as per IND AS – 103 (Business combinations of entities under common control).


STATUTORY AUDITORS

M/s. S. R. Batliboi & Associates LLP, Chartered Accountants [ICAI Firm Registration No.101049W/E00004] and M/s. Brahmayya & Co., Chartered Accountants, Bangalore [ICAI Firm Registration No.000515S], who are the Joint Statutory Auditors of the Company and hold office until the conclusion of the ensuing 14th Annual General Meeting (AGM) and are eligible for reappointment. However, M/s. Brahmayya & Co., have shown their unwillingness to continue as the Joint Statutory Auditors of the Company. It is proposed to re-appoint M/s. S. R. Batliboi & Associates LLP, Chartered Accountants and appoint M/s. K. S. Rao & Co, Chartered Accountants [ICAI Firm Registration No. 003109S] in place of M/s. Brahmayya & Co., as Joint Statutory Auditors of the Company for a term of two (2) years and five (5) years respectively to hold office from the conclusion of the 14th Annual General Meeting (AGM).

The Company has received letters from both M/s. S. R. Batliboi & Associates LLP and M/s. K. S. Rao & Co separately, confirming their willingness to act as Joint Statutory Auditors and also their eligibility to the effect that their appointment, if made, would be in accordance with Section 139(2) of the Companies Act, 2013 and that, they are not disqualified for such appointments within the meaning of Section 141 of the Companies Act, 2013. COMMENTS ON STATUTORY AUDITORS’ REPORT

Auditors Qualified Opinion:

As more fully explained in the Note 41 to the standalone Ind-AS financial statements, as at March 31, 2017, the Company has investment and share application money amounting to Rs. 200.42 Crore and Rs. 12.00 Crore respectively, made in a wholly owned subsidiary Company GMR Aerospace Engineering Limited. The subsidiary has significant receivables from its wholly owned subsidiary whose accumulated losses have fully eroded its net worth as at March 31, 2017. The recovery of such investment and share application money in the subsidiary is dependent upon the ability of the step down subsidiary to scale up its operations in future and achieve sustained profitability. Based on the reasons fully explained in the aforesaid note, the management is of the view that there is no impairment in the value of such investment and share application money required at this juncture. However, in view of the current financial position of the step down subsidiary company and in the absence of sufficient appropriate audit evidence to support the key assumptions made by the management in the business plan, we are unable to comment on the carrying value of the investment and share application money including adjustments, if any, that may be required to be made to such carrying amounts of investment and share application money. Directors Comments:

The financial statements as at March 31, 2017 include investment including share application money aggregating to Rs. 212.42 crore (March 31, 2016 Rs. 151.42 crore) made in wholly owned subsidiary company, GMR Aerospace Engineering Limited. The subsidiary has a wholly owned subsidiary GMR Aero Technic Limited, which has incurred a net loss of Rs. 39.18 crore (March 31, 2016: Rs. 73.36 crore) in the current financial year and has accumulated losses of Rs.363.92 crore as at March 31, 2017 (March 31, 2016: Rs. 324.82 crore), which exceeds its net worth. Also, it has incurred cash losses in the current and in the preceding financial year. The recovery of such investment in the subsidiary company is dependent upon the ability of the aforesaid wholly owned subsidiary to scale up its operations in future and achieve sustained profitability. Based on the future business plan and projections approved by the Board of Directors of the subsidiary company and valuation assessment done, the Management is of the view that there is no permanent diminution in the value of such investments. Accordingly, these financial statements do not include any adjustments relating to the recoverability of assets.


Further, the Statutory Auditors have not reported any incident of fraud by the company or by the officers and employees of the company in the financial year under review. SECRETARIAL AUDIT The Board of Directors of the Company had re-appointed Mr. Srikrishna Chintalpati, Partner, KBG Associates, Practising Company Secretary (ICSI M.No. 5984 and CP No.6262), as Secretarial Auditor for the financial year 2016-17 and his secretarial audit report is appended to this Report as Annexure - 4.

There are no qualifications, reservations or adverse remarks in the secretarial audit report for the financial year 2016-17. COST AUDIT The Board of Directors of the Company had re-appointed M/s. Narasimha Murthy & Co., Cost Accountants (Firm Registration No. 000042), for carrying out the audit of applicable cost accounting records of the Company for the financial year 2016-17. M/s. Narasimha Murthy & Co., have submitted the cost audit report for the financial year 2016-17.

There are no qualifications, reservations or adverse remarks in the cost audit report for the financial year 2016-17. EXTRACT OF THE ANNUAL RETURN

The extract of the annual return as on March 31, 2017 in the format prescribed under section 92(3) of the Companies Act, 2013 is annexed to this Report as Annexure-5. PUBLIC DEPOSITS

During the financial year under review, the Company has not accepted any deposits from the public within the meaning of Section 73 and other applicable provisions of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. HUMAN RESOURCES AND DEVELOPMENT

Recruitment: The Company has continued HR Business Partner (HRBP) concept and increased the screening levels with the motive of enhancing the quality of candidates hired. As on March 31, 2017, there were 517 employees on Company’s rolls. Learning and Development: The Company provides opportunities to all its employees to attend training programs to develop their technical and behavioral skills through various training programs spread across domains like Airside, safety, Firefighting, Hazard Management, Aviation security, soft skills, Values & Beliefs, MS office, etc. Employee Relations: During the year under review, relations between the employees and

the management continued to remain cordial. Communication forums: The Company gives a platform for employees to communicate

directly with CEO and promote bottom up communication flow through CEO Unplugged forum (Town hall Meeting) which is held once in a quarter. In this platform CEO shares all the insights pertaining to group, vertical and sector business along with organizational performance, plans, goals & objectives. All the strategies, hits & misses of last quarter are conveyed to the employees. This is also a platform to recognize the contributions of employees and welcome new employees aboard.


Employee Development Initiatives: The Company has in place Multi-Tier Leadership Development Programs (MTLDP) which equips employees at various management levels with managerial and execution skills required at their levels to excel as versatile leaders. Participants are prepared to take on higher cross-functional responsibilities and drive a high-performance culture in the organization. During the year under review, junior management employees underwent, Young Leaders Program & Transform which is designed to improve the communication skills & personal effectiveness of the participants.

Employee recognition: Recognition culture in the Company saw a positive trend among employees in terms of motivation, performance and continuing endeavor for achievement. The Company recognizes exemplary performers through various initiatives like Star of the Month (SOM-Individual & Team), Star Team of Quarter, Thank you & Well done cards. Rising no of SOM Nominations and card redemptions indicates positive change in recognition culture. Employee Engagement & Wellness:

Employee engagement is amongst the top priority for GHIAL. Employee engagement survey is conducted with help of third party survey administration partner. Summaries of survey results are circulated with employees and these engagement survey findings become the basis for developing employee engagement initiatives across departments. Department wise action plans are developed to ensure that engagement factors affecting each department are well addressed.

Also the survey results are shared and discussed with various employee focused groups segments like Gender, Tenure in group, level-wise, age group, etc. The focused group and department action plan inputs been shared with leaders and action plan implemented for improvement areas. Engagement interventions include initiatives like Job rotation / enlargement opportunities for employees, V-Connect for new joinees, sports events, recognition platforms, festival celebrations, professional development initiatives etc. Also the Company has extended engagement to employee’s family and also to Airport stakeholders through events like Pariwar Milan in financial year 2016-17. The Company has been conducting stakeholder engagement initiative like “One Family, One Mission”, under which various events like International Yoga Day, Sankranti Celebrations, Women’s day, Dandiya night were organized for the RGIA community. Various health awareness sessions, blood donation camps and medical screening camps were conducted as part of employee wellness initiative- “Ayushi”. Employees undergo annual health checkup as per eligibility and its mandatory for employees of departments like ARFF & Security and Control. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

In your Company, an Anti Sexual Harassment Policy is in place in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to address complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this Policy. Details of sexual harassment complaints received and disposed off during the financial year 2016-17, are as under:

Number of complaints received: NIL

Number of complaints disposed off: NIL


VIGIL MECHANISM The Company has established a vigil mechanism for Directors, regular employees and consultants of the Company, including advisors, in-house consultants, whole time directors and employees on contract. This Policy also applies to third parties with any commercial dealings with the Company, including vendors, service providers, partners, joint venture employees and customers. Any Whistle Blower making a complaint under this Policy may make a Disclosure to the Ombudsperson – Mr. HJ Dora, Director of the Company, through the following modes: (a) Oral complaints through teleconference or by personally meeting the Ombudsperson, or

by calling 1800-1020-467 or such other number as is set out on the Group’s website at www.gmrgroup.in.

(b) Complaints filed through electronic means to [email protected] to raise a concern

under the Policy. The Policy provides for maintaining confidentiality and protection to the Whistle Blower against any victimization. SAFETY AND ENVIRONMENT

The levels of safety and environment performance standards at your Company have been further enhanced during the financial year 2016-17. Your Company’s proactive approach on Stakeholder sensitization on various safety and environment processes combined with stringent oversight process has yielded superior results during the past financial year period. During the past year the incidents/accidents have come down sharply both in terms of numbers as well as severity in spite of exponential increase in passenger throughput and Air Traffic Movements. On the environment front, the organization has successfully achieved the Carbon Neutral status (Level 3+) which demonstrates superior environmental performance by your Company. Some of the salient features of your Company’s safety and environment management are indicated below: I. Safety:

1. RGIA Safety Mission Statement:

“We are committed to developing, nurturing and proactively promoting a safety culture at RGIA with the philosophy ‘Safety first.’”

2. Synopsis

In line with the Safety Management System framework defined by the International Civil Aviation Organisation (ICAO) and the Directorate General of Civil Aviation, India (DGCA), your Company has implemented a comprehensive Safety Management System (SMS) to continued safety assurance through safety risk management and active safety promotion. The current SMS process at your Company has progressed to the level of proactive and predictive risk identification and mitigation standards.

3. Safety Performance and assurance

The Company’s Safety Performance for the financial year 2016-17: During the financial year, Safety department has organized a comprehensive training on SMS to selected SPOCs from internal and external stakeholders as a Train-The-Trainer initiative. These SPOCs in turn has trained all the personnel internally on the


http://www.gmrgroup.in/

Safety processes and best practices. As part of safety assurance, safety audits and oversight checks have been conducted on all the critical processes to ensure continual compliance to SMS process. Further, the critical safety concerns/issues are effectively identified and addressed jointly through high level interactive forums like Runway Safety Committee consisting of airline pilots, Air Traffic Controllers and senior members from other agencies.

4. Safety compliance

The ‘Safety Management System’ (SMS) at RGIA is in compliance with DGCA regulatory guidelines. Also the Aerodrome License [AL/Public/021] has been renewed and valid till March 03, 2018. Also as part of IMS recertification process, the OHSAS 18001 has been certified and valid till December 31, 2018.

5. Safety Initiatives

As a continual improvement of safety initiatives, the organization undertakes regular hazard identification and mitigation measures dedicated teams and Safety Action Groups jointly. In addition regular safety alerts and notifications are sent across as a proactive safety measure. Additionally all the stakeholders are encouraged to voluntarily report hazards and safety occurrences through online reporting portals and various other modes.

6. Safety Promotion

Safety promotion is an integral part of safety management system implementation at RGIA. During National Safety Week many safety awareness programmes and initiatives have been launched with the dedicated participation of senior leaders from all stakeholders. Also the stakeholders are sensitised regularly through safety bulletins, safety alerts through various communication medium.

II. Environment

During the financial year 2016-17, your Company has achieved significant milestones on the environment management processes. Some of the key points include the following: o The Consent for Operation (CFO) of the Airport was renewed for 5 years by the

Telangana State Pollution Control Board in April 2016.

o A 5 MW solar power plant has been commissioned meeting 15-20% of the Airport electricity demand from this green energy. Your Company is setting up another 8 MW Solar Power Plant for which the detailed Technical evaluation of EPC bids is completed and it is expected that the incremental facility shall be commissioned by latter half of the calendar year.

o Your Company has reduced 3405.85 tCO2e of its scope1 & 2 carbon emissions in 2016 over 2015.

o “Level 3+: Carbon Neutrality” Airport Carbon Accreditation by the Airports Council International to your Company in December16. The Level 3+, Neutrality is the

highest level of environmental achievement and recognition of the airport's great efforts in reducing/ neutralizing carbon emissions. In Asia- Pacific region, the Rajiv Gandhi International Airport is the first airport to achieve the Level3+ status in its category.


o Your Company has received the prestigious CAPA Chairman’s “Order of Merit” for its focus on environmental sustainability and for being the first Airport in Asia Pacific in its category to become carbon neutral.

o The Ministry of Environment, Forests and Climate change (MoEF&CC) has granted

“Environmental Clearance” to your Company for its 25 MPPA airport expansion

project. PARTICULARS OF REMUNERATION

In accordance with the provisions of Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are set out in Annexure-6 to the Board’s Report. ACKNOWLEDGEMENT

Your Directors take this opportunity to express their sincere thanks and gratitude to the Government of India, State Government of Telangana, various Government Departments / Authorities, Airports Authority of India, Malaysia Airports Holdings Berhad, MAHB (Mauritius) Private Limited, GMR Group, Concessionaries, Customers, Suppliers, Vendors and Lending Banks and Financial Institutions and Joint Venture Partners, for their co-operation.

Your Directors place on record their sincere appreciation for the contributions made by employees at all levels through their hard work, dedication, solidarity and support.

For and on behalf of the Board of Directors

Place : Date :


Sd/- Srinivas Bommidala

Managing Director DIN 00061464

Sd/- R.S.S.L.N. Bhaskarudu

Director DIN 00058527



Annexure-1 to GHIAL Board’s Report FY 2016-17

Salient Features of the Nomination and Remuneration Policy

The Nomination and Remuneration Policy is formulated in compliance with Section 178 of the Companies Act, 2013 and the applicable rules made thereunder. The Board has, on the recommendation of the Nomination and Remuneration Committee (Committee) approved the policy for selection and appointment of Directors, Senior Management and their remuneration. (1) The Key Objectives of the Committee are:

(a) To guide the Board in relation to appointment and removal of Directors, Key Managerial Personnel (KMP) and Senior Management.

(b) To evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation.

(c) To recommend to the Board a policy relating to Remuneration payable to the Directors, Key Managerial Personnel and Senior Management.

(2) Appointment criteria and qualifications

(a) Subject to the applicable provisions of the Companies Act, 2013, other applicable laws, if any and GMR Group HR Policy, the Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or other Employees at Senior Management level and recommend to the Board his / her appointment.

(b) The Company shall not appoint or continue the employment of any person as the Managing Director / Whole-time Director / Manager who has attained the age of seventy years. Provided that the term of the person holding this position may be extended beyond the age of seventy years with the approval of shareholders by passing a special resolution based on the explanatory statement annexed to the notice for such motion indicating the justification for extension of appointment beyond the age of seventy years.

(3) Term / Tenure

(a) Managing Director / Whole-time Director / Manager (Managerial Personnel)

The Company shall appoint or re-appoint any person as its Managerial Personnel for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of the said term.

(b) Independent Director

(i) An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment is made in the Board's report.

(ii) No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director in the Company.

Page No. 49GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 A-1 to Board’s Report - Salient Features of the NR Policy

(4) Evaluation

Subject to Schedule IV of the Companies Act, 2013, the Committee shall carry out the evaluation of Directors at such intervals as may be considered necessary.

(5) Removal

Due to reasons for any disqualification mentioned in the Companies Act, 2013, rules made thereunder or under any other applicable laws, rules and regulations, the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director, KMP, subject to the provisions and compliance of the applicable laws, rules and regulations.

(6) Retirement

The Director, KMP and Personnel of Senior Management shall retire as per the applicable provisions of the Companies Act, 2013 and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP, Personnel of Senior Management in the same position / remuneration or otherwise even after attaining the retirement age, in the interest and for the benefit of the Company.

(7) Provisions relating to Remuneration

(a) The remuneration / compensation / commission etc. to Managerial Personnel will be determined by the Committee and recommended to the Board for approval. The remuneration / compensation / commission etc. shall be subject to the approval of the shareholders of the Company and Central Government, wherever required.

(b) The remuneration and commission to be paid to the Managerial Personnel shall be

as per the statutory provisions of the Companies Act, 2013, and the rules made thereunder for the time being in force.

(c) Increments to the existing remuneration / compensation structure may be

recommended by the Committee to the Board which should be within the slabs / scales approved by the Shareholders in the case of Managerial Personnel.

(d) The remuneration to Personnel of Senior Management shall be governed by the

GMR Group HR Policy.

(e) The remuneration / commission to Non-Executive Directors shall be in accordance with the statutory provisions of the Companies Act, 2013, and the rules made thereunder for the time being in force.

(f) The Non- Executive / Independent Director may receive remuneration by way of fees

for attending meetings of Board or Committee thereof and such fees shall not exceed the maximum amount as prescribed in the Companies Act, 2013.

(g) The sitting fee paid to Independent Directors and Women Directors, shall not be less than the sitting fee payable to other directors.

(h) The Independent Director shall not be entitled to any stock option of the Company.


Place : Date :






Page No. 50GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 A-1 to Board’s Report - Salient Features of the NR Policy


Annexure – 2 to the GHIAL Board’s Report FY 2016-17

Particulars relating to conservation of energy as per the Companies (Accounts) Rules, 2014 (a) Energy Conservation Measures taken in the FY 2016-17:

LED Conversion of Internal Lighting at the Terminal and other Buildings of the Airport

LED Conversion of High Mast Lighting

Replacement of old Split ACs with new Invertor Split ACs

Replacement of Energy Efficient Pumps

LED Conversion of Road Lighting (perimeter, connection roads)

Replacement of Conventional ceiling fans with Energy Efficient Super fans

Focus and rectification of Duct leakages to avoid AC Leakage at Check-in Hall

Nature Switch (Infrared based space grade lighting sensors) for controlling High mast

and outdoor Lighting

Main Access Road LED conversion

Taxi way edge light conversion to LED (36W to 1W LED)

Replacement of condenser water pipe line at ATC

Arresting of (Air Handling Unit) AHU Canvas / Duct joint / Collar Leakages

AHU Frequency Optimization during winter

Optimization of Chillier Operation in Cargo Satellite Building

Chillier Timing optimization at the Office Buildings

(b) Additional investments and proposals, if any, being implemented for reduction of consumption

of energy in the FY 2016-17:

LED Conversion of Internal Lighting at Terminal and other Buildings of Airport -Rs.9.47

Lacs

LED Conversion of High Mast Lighting - Rs.2.64 Lacs

Replacement of old Split ACs with new invertor Split ACs – Rs.3.76 Lacs

Replacement of Energy Efficient Pumps - Rs.0.33 Lacs

LED Conversion of Road Lighting (perimeter, connection roads) - Rs.1.80 Lacs

Replacement of Conventional ceiling fans with Energy Efficient Super fans – Rs.1.11

Lacs

Focus and rectification of Duct leakages to avoid AC Leakage at Check-in Hall –

Rs.0.28 Lacs

Nature Switch (Infrared based space grade lighting sensors) for controlling High mast

and outdoor Lighting. – Rs.1.44 Lacs

Main Access Road LED conversion – Rs.0.65 Lacs

Taxi way edge light conversion to LED (36W to 1W LED) – Rs.0.68 Lacs

(c) Impact of the above measures at (a) and (b) for reduction of energy consumption:

Overall power consumption reduced by 13 % per pax. i.e. 2.16 units per pax against 2.48 per pax, as compared with previous year of operation.

Following initiatives are planned in the FY 2017-18 for reduction of energy consumption:

Retrofitting of EC fans in AHU- Passenger Terminal

Chiller Plant Manager for Optimization of chiller operation

Departure roof lightning –LED Conversion

Page No. 51GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 A-2 to Board’s Report - Conservation of Energy

High mast Lightning –LED Conversion

Conversion of CFL to LED Signage’s in Airfield Ground Lighting

Descaling of Chillers

Replacement of Conventional Fire escape signage’s with LED fixtures.

LED conversion of internal lighting in Passenger Terminal & Other Building

Installation of VFDs for Pumps at RAXA and Township

Invertor Split AC in Airside Landside & Other Facility.

Duct Leakage Arresting, VFD, Lightning Opt in Admin Offices.

Arresting of (Air Handling Unit) AHU Canvas / Duct joint / Collar Leakages


Place: Date :


Sd/-

Srinivas Bommidala Managing Director

DIN 00061464

Sd/-

R.S.S.L.N. Bhaskarudu Director

DIN 00058527

Page No. 52GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 A-2 to Board’s Report - Conservation of Energy


Annexure – 3 to the GHIAL Board’s Report FY 2016-17 CSR Annual Report for the Financial Year 2016-17

1 The brief outline of the company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.

GMR Hyderabad International Airport Limited (“GHIAL” or “the Company”), a part of GMR Group has adopted the CSR Policy of GMR Group. GMR Group (the Group) recognizes that its business activities have wide impact on the societies in which it operates and therefore an effective practice is required giving due consideration to the interests of its stakeholders including shareholders, customers, employees, suppliers, business partners, local communities and other organizations.

GHIAL is driven by Group’s vision to make a difference, specifically to the society by contributing to the economic development of the country and improving the quality of life of the local communities. Towards this vision, the Company, partners with the communities around the Airport to drive various initiatives in the areas of education, health, hygiene, sanitation, empowerment, livelihood and community development. Implementation of various activities under these three verticals is being carried out directly by GHIAL CSR Team with the professional support of M/s GMR Varalakshmi Foundation from planning to execution.

GHIAL has been implementing community development initiatives in the villages surrounding Rajiv Gandhi International Airport (RGIA) since 2005. The intensive activities in these thrust areas have been focused in 4 villages i.e. Airport Colony (rehabilitation colony), Gollapally, Mammidipally and Shamshabad as these are the villages most affected by the Airport (Local Villages).This year we have adopted two more villages around the airport namely Ranganayakula Thanda and Charinagar for implementing community development activities. The CSR initiatives also extend to another 20 villages surrounding the airport. CSR activities in these villages have created a win-win situation for the community and the company.

Weblink http://hyderabad.aero/our-company.aspx and for overview of Projects or Programs is http://hyderabad.aero/our-company.aspx

2 Composition of the CSR Committee

Mr. R.S.S.L.N. Bhaskarudu, Independent Director (Chairman); Mr. C. Prasanna; and Mr. I. N. Murthy

3 Average net profit of the company for last three financial years 2013-14; 2014-15 and 2015-16

In loss i.e. (Rs.114.15 lakhs)

4 Prescribed CSR Expenditure (two per cent of the amount as in item 3 above)

--

5 Details of CSR spent during the financial year 2016-17 :

(a) Total amount spent for the financial year Rs.246.07 lakhs *

(b) Amount unspent, if any; --

(c) Manner in which the amount spent during the financial year is detailed below:

Rs.246.07 lakhs

* In view of the losses incurred by the Company during the last three financial years, in terms of provisions of the Companies Act, 2013, the Company is not required to spend any amount towards CSR activities in the financial year 2016-17. However, as a matter of being a responsible corporate citizen and to continue the voluntary efforts towards CSR, the Company has budgeted an amount of Rs.250 lakhs towards CSR Activities for the financial year 2016-17.

Page No. 53GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 A–3 to Board’s Report -CSR Annual Report

http://hyderabad.aero/our-company.aspx

http://hyderabad.aero/our-company.aspx

GMR Varalakshmi Foundation (GMRVF) is a specialized CSR arm of the GMR Group and helps Group companies to carry out CSR activities. It is a Section 8 not-for-profit company and its thrust areas are Education, Health and Livelihoods which are very much in line with the sectors specified in Schedule VII of the Companies Act, 2013 for CSR projects. GMRVF has carried out the CSR activities in communities surrounding the Hyderabad airport and also in other areas in the State of Telangana, in the financial year 2016-17 on behalf of GMR Hyderabad International Airport Limited, as detailed below:

(1) (2) (3) (4) (5) (6) (7) (8)

SNo CSR project or activity identified Sector in which the Project is covered

Projects or programs 1) Local area or other

2) Specify the State and district where projects or

programs undertaken

Amount outlay

(budget) project or programs

wise (In Rs. lakhs)

Amount spent on the projects or programs

Sub-heads: (1) Direct expenditure

on projects or programs (2) Overheads

(In Rs. lakhs)

Cumulative expenditure

upto the reporting

period (In Rs. lakhs)

Amount spent by Company or through implementing Agency# (In Rs. lakhs)

1 Support to 9 anganwadis in 3 project-affected villages and 2 new villages covering around 300 children

Supporting Govt. schools in project-villages including 2 new villages

Support to Gifted Children at GMR Chinmaya Vidyalaya

Community Libraries in the village

Education

Airport Colony, Mamidipally, Gollapally, Shamshabad (Local Villages around Airport) Shamshabad, Rangareddy District, Telangana

26..49 26.13 26.13 26.13

2 Running Mobile Medical Unit for elderly group in 21 existing villages and 2 new villages with around 3000 beneficiaries every month

Running Evening Clinics in 5 project villages and 2 new villages benefiting more than 700 villagers monthly

Running Nutrition Centres for pregnant and Lactating women in three villages benefiting 90 women

Operating a RO plant at Airport Rehabilitation Colony benefitting more than 400 families with safe drinking water and initiated construction of a new RO plant at Gollapally village.

Health Airport Colony, Mamidipally, Gollapally, Shamshabad (Local Villages around Airport) Shamshabad, Rangareddy District, Telangana

30.42 29.82 29.82 29.82

3 Supporting skill training centre activities

Residential vocational training for school dropouts being organized in 10 different trades in partnership with agencies like Voltas, Schneider, Volvo, Saint Gobain – Gyproc, Aveon Technovations and ATDC

Trained 919 youth in 10 trades and 856 trainees and which help them settled either by way of wage or self-employment.

Tie-up with Mission for Elimination of Poverty in urban Areas (MEPMA), Telangana state for training of 500

Empowerment and

Livelihood

Airport Colony, Mamidipally, Gollapally, Shamshabad (Local Villages around Airport) Shamshabad, Rangareddy District, Telangana

111.24 110.52 110.52 10.52

100.00#


unemployed youth in 8 different trades under Employment through Skills Training & Placement (ESTP).

Started “Solar PV Technician” training programme in partnership with Aveon Technovations Pvt. Ltd, Hyderabad. Sri. Arvind Kumar, IAS, the then Principal Secretary, Industries and Commerce, Telangana state inaugurated the course.

Conducted 2 batches of Recognition of Prior Learning (RPL) programmes in “Two and Three Wheeler Technician” trade and Refrigeration and Air Conditioning Trade.

Support to vocational training center at Muchintal village, near Shamshabad run by Swarna Bharat Trust.

This center was inaugurated on 16th January 2017 by Hon’ble Chief Minister of Telangana,

Sri. K. Chandrasekhara Rao.

4 Community Development Initiatives The following infrastructure works have been taken up in villages • Repair of drainage lines in two villages • Energy efficient Street lights • New school building and RO building

Rural development

projects

Airport Colony, Mamidipally and, Gollapally, (Local Villages around Airport)

Shamshabad, Rangareddy District, Telangana

25.26 23.76 23.76 23.76

5 Others Donation to two orphanages in Telangana benefiting over 100 children towards lodging boarding, education, etc.

50.00 50.00 50.00 50.00 #

Sub Total-A

Sub Total-B Admin Costs 6.59 5.84 5.84 5.84 Total – A & B 250.00 246.07 246.07

for and on behalf of the Board of Directors

Place : Date :


Sd/-


DIN 00061464

Sd/-


DIN 00058527


KBG Associates Company Secretaries

Flat # 101, Sri Sai Krishna Residency, 1-2-234/13,

Aravind Nagar Domalguda, Hyderabad, Telangana, India -500 029,

Ph: +91-40-66785426 Fax: +91-40-66785427

Annexure 4 to GHIAL Board’s Report FY 2016-17

Form No. MR-3

Secretarial Audit Report

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the

Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,

The Members


(CIN: U62100TG2002PLC040118)

GMR Aero Towers

Rajiv Gandhi International Airport

Shamshabad, Hyderabad – 500 108

Telangana, India

We have conducted the Secretarial Audit of the compliance of applicable statutory

provisions and the adherence to good corporate practices by GMR Hyderabad

International Airport Limited (hereinafter called “the Company”). Secretarial Audit

was conducted in a manner that provided us a reasonable basis for evaluating the

corporate conducts / statutory compliances and expressing our opinion thereon.

Based on our verification of the books, papers, minute books, forms and returns filed

and other records maintained by the Company and also the information provided by its

officers, agents and authorized representatives during the conduct of Secretarial Audit;

we hereby report that in our opinion, the Company has, during the audit period

covering the financial year ended on March 31, 2017, complied with the statutory

provisions listed hereunder and also that the Company has proper Board processes and

compliance mechanism in place to the extent, in the manner and subject to the reporting

made hereinafter :

We have examined the books, papers, minute books, forms and returns filed and other

records maintained by the Company for the financial year ended on March 31, 2017

according to the provisions of:

SNo Particulars

1. The Companies Act, 2013 (“the Act”) and the Rules made thereunder;

2. The Depositories Act, 1996 and the Regulations and Bye-laws framed

thereunder;

3. The Securities Contracts (Regulation) Act, 1956 and the Rules made

thereunder;

4. Foreign Exchange Management Act, 1999 and the Rules and Regulations

made thereunder to the extent of Foreign Direct Investment and External

Commercial Borrowings;

5. We have also examined compliance with the applicable clauses of the

Secretarial Standard-1 on Meetings of the Board of Directors and Secretarial

Standard-2 on General Meetings, issued by The Institute of Company

Secretaries of India.

Page No. 56GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 A–4 to Board’s Report -Secretarial Audit Report




Ph: +91-40-66785426 Fax: +91-40-66785427

,

Sl Particulars

1. Under the Companies Act, 2013

A. That based on our examination and verification of the records produced to us

and according to the information and explanations given to us by the

Company’s officers, we report that the Company has, in our opinion, complied

with the applicable provisions of the Companies Act, 2013 (“the Act”) and the

Rules made thereunder and Memorandum and Articles of Association of the

Company, inter alia with regard to :

a. Maintenance of various statutory registers and documents and making

necessary entries therein;

b. Forms, returns, documents and resolutions required to be filed with the

Register of Companies and the Central Government;

c. Service of documents by the company on its Members, Directors and

Registrar of Companies.

d. Notices, Agenda and Minutes of proceedings of General Meetings and of

the Board and its Committee meetings including Circular Resolution;

e. The meetings of :

i.) the Board of Directors held on 27-04-2016, 18-07-2016, 07-11-2016

and 20-01-2017;

ii) Audit Committee held on 27-04-2016, 18-07-2016, 07-11-2016 and

20-01-2017;

iii) Nomination & Remuneration Committee held on 27-04-2016, 18-07-

2016, 07-11-2016 and 20-01-2017.

iv) CSR Committee held on 27-04-2016 and 20-01-2017;

v) Board Sub-Committee on Merger of Hyderabad Duty Free Retail

Limited with GMR Hotels and Resorts Limited on 11-08-2016

vi) Board Sub-Committee for raising of funds on 19-09-2016

vii) Board Sub-Committee for raising of funds on 24-10-2016

f. The Annual General Meeting held on 28-09-2016;

g. Approvals of the Members, the Board of Directors, the Committees of

Directors wherever required;

h. Constitution of the Board of Directors / Committee(s) of Directors,

appointment, retirement and reappointment of Directors.

i. Payment of remuneration to Directors

j. Appointment and remuneration of Auditors;

k. Transfer and transmission of Company’s shares and issue and dispatch of

duplicate share certificates. There was no transfer and transmission of

shares during the financial year

l. i. Declaration and distribution of dividends (Due to accumulated losses, the

Company has not declared any dividend)

m. Transfer of Unpaid and Unclaimed dividend to the Investor Education

and Protection Fund. (Not applicable as the Company does not have any

unpaid and unclaimed dividend).

n. Borrowings and registration, modification and satisfaction of charges

wherever applicable;





Ph: +91-40-66785426 Fax: +91-40-66785427

Sl Particulars

o. Investment of the Company’s funds including investments and loans to

others;

p. Form of balance sheet as prescribed under Part I, form of statement of

profit and loss as prescribed under Part II and General Instructions for

preparation of the same as prescribed in Schedule III to the Act;

q. Directors’ Report;

r. Contracts, common seal, registered office and publication of name of the

Company; and

B. Under the Companies Act, 2013, we further report that :

i. The Board of Directors of the Company is duly constituted with proper

balance of Executive Directors, Non-Executive Directors and

Independent Directors. The changes in the composition of the Board of

Directors that took place during the period under review were carried out

in compliance with the provisions of the Act.

ii. Adequate notice is given to all directors to schedule the Board Meetings,

agenda and detailed notes on agenda were sent at least seven days in

advance, and a system exists for seeking and obtaining further

information and clarifications on the agenda items before the meeting and

for meaningful participation at the meeting.

iii. All decisions at Board Meetings and Committee Meetings are carried out

on requisite majority and recorded in the minutes of the meetings of the

Board of Directors or Committee of the Board, as the case may be.

iv. There was no prosecution initiated and no fines or penalties were

imposed during the year under review under the Act, SCRA, Depositories

Act, and Rules, Regulations and Guidelines framed under these Acts

against / on the Company, its Directors and Officers.

v. The Directors (including Independent Directors) have complied with the

disclosure requirements in respect of their eligibility of appointment,

initial and annual disclosures / declarations.

2. Under the Depositories Act, 1996, we report that :

The Company has complied with the provisions of the Depositories Act,

1996 and the Bye laws framed thereunder by the Depositories with regard

to dematerialization / rematerialisation of securities and reconciliation of

records of dematerialized securities with all securities issued by the

Company.

3. Under FEMA, 1999, we report that :

The Company has complied with the provisions of the FEMA, 1999 and

the Rules and Regulations made under that Act to the extent applicable.





Ph: +91-40-66785426 Fax: +91-40-66785427

Sl Particulars

4. Under other applicable laws, we report that :

Based on the Quarterly Compliance Certificate issued by CEO of the

Company (and submitted to the Board of Directors at the Board Meetings

held during the financial year 2016-2017 (for all 4 quarters), we are of

opinion there has been due compliance of all the Laws to the extent

applicable including the Aircraft Act, 1934, the Aircraft Rules, 1937, the

AERA Act, 2008, other Civil Aviation Requirements (CAR) Rules,

Labour Laws, Finance & Taxation Laws, Corporate and Pollution Laws,

Orders Rules, Regulations, Guidelines and other legal requirements of the

Central and State Government as well as Local Authorities concerning

the business and affairs of the Company.

5. We further report that there are adequate systems and processes in the

company commensurate with the size and operations of the Company to

monitor and ensure compliance with applicable laws, rules, regulations

and guidelines.

6. We further report that during the audit period there are no specific

events/actions having a major bearing on the company’s affairs in

pursuance of the above referred laws, rules, regulations, guidelines,

standards taken place.

7. We further report that the Company being an Unlisted Company, the

Regulations and Guidelines prescribed under the Securities and Exchange

Board of India Act, 1992 (‘SEBI Act’) are not applicable to the

Company.

For KBG Associates

Company Secretaries

Sd/

(Srikrishna S Chintalapati)

Place: Hyderabad Partner

Date: July 06, 2017 CP # 6262

Note: This report is to be read with our letter of even date which is annexed as

“ANNEXURE-A” and forms an integral part of this report.





Ph: +91-40-66785426 Fax: +91-40-66785427

‘ANNEXURE-A’

To,

The Members


(CIN: U62100TG2002PLC040118)

GMR Aero Towers

Rajiv Gandhi International Airport

Shamshabad, Hyderabad – 500 108

Telangana, India

Our report for the even date to be read with the following Letter:

Sl Particulars

1. Maintenance of secretarial records is the responsibility of the management of

the company. Our responsibility is to express an opinion on these secretarial

records based on our audit.

2. We have followed the audit practices and processes as were appropriate to

obtain reasonable assurance about the correctness of the contents of the

Secretarial records. The verification was done on test basis to ensure that

correct facts are reflected in secretarial records. We believe that the processes

and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records

and Books of Accounts of the Company.

4. Wherever required, we have obtained the Management representation about the

compliance of laws, rules and regulations and happening of events, etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules,

regulations, standards is the responsibility of management. Our examination

was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of

the company nor of the efficacy or effectiveness with which the management

has conducted the affairs of the company.

For KBG Associates

Company Secretaries

Sd/-

(Srikrishna S Chintalapati)

Place: Hyderabad Partner

Date: July 06, 2017 CP # 6262



Annexure 5 to GHIAL Board’s Report FY 2016-17 Form No. MGT-9

EXTRACT OF ANNUAL RETURN as on the financial year ended on 31st March, 2017

[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i) Corporate Identity Number (CIN) : U62100TG2002PLC040118

ii) Registration Date : 17-12-2002

iii) Name of the Company : GMR Hyderabad International Airport Limited

iv) Category / Sub-Category of the Company : Company Limited by Shares

v) Address of the Registered office and contact details : GMR Aero Towers, Rajiv Gandhi International Airport Shamshabad, Hyderabad 500 108, Telangana, India Tel : +91-40- 6739 4099 / 6739 5000

vi) Whether listed company : Un Listed Company

vii) Name, Address and Contact details of Registrar and Transfer Agent, if any

: Karvy Computershare Private Limited Operations Office: Karvy Selenium Tower-B, Plot Nos.31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampaly Hyderabad – 500 032, Telangana, India Tel +91- 40-67161717

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

SNo Name and Description of main products / services

NIC Code of the Product/ service % to total turnover of the company

1 Airport Operator (Operation of terminal facilities such as airway terminals and airport)

5223 100%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES –

SNo Name and address of the company CIN/GLN Holding/ Subsidiary/ Associate

% of shares held

Applicable Section

1 GMR Airports Limited SKIP House, Museum Road, Bangalore 560 025, Karnataka, India

U65999KA1992PLC037455 Holding 63% 2(46)

2 GMR Hyderabad Aerotropolis Limited GMR Aero Towers, Rajiv Gandhi International Airport, Hyderabad 500 108, Telangana, India

U45400TG2007PLC054827 Subsidiary 100% 2(87)

3 GMR Hyderabad Aviation SEZ Limited GMR Aero Towers, Rajiv Gandhi International Airport, Hyderabad 500 108, Telangana, India


4 Hyderabad Airport Security Services Limited GMR HIAL Airport Office, Rajiv Gandhi International Airport, Hyderabad 500 108, Telangana, India


5 Hyderabad Duty Free Retail Limited* GMR Aero Towers, Rajiv Gandhi International Airport, Hyderabad 500 108, Telangana, India


6 GMR Hospitality and Retail Limited* (Formerly GMR Hotels and Resorts Limited) GMR Aero Towers, Rajiv Gandhi International Airport, Hyderabad 500 108, Telangana, India


7 GMR Hyderabad Airport Power Distribution Limited 4th Floor, Aero Towers, Rajiv Gandhi International Airport, Hyderabad 500 108, Telangana, India


Page No. 61GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 A–5 to Board’s Report - Extract of Annual Return

8 GMR Aerospace Engineering Limited

Plot No.1, C/o. GMR Hyderabad Aviation SEZ Limited Rajiv Gandhi International Airport, Hyderabad 500 108, Telangana, India


9 GMR Aero Technic Limited Plot No.1, C/o GMR Hyderabad Aviation SEZ Limited, Rajiv Gandhi International Airport, Hyderabad 500 108, Telangana, India

U35122TG2010PLC070489 Subsidiary of GMR Aerospace Engineering Limited

100% 2(87)

10 Hyderabad Menzies Air Cargo Private Limited Air Cargo Terminal, Rajiv Gandhi International Airport, Shamshabad 500 108, Telangana, India

U62100TG2006PTC049243 Subsidiary 51.00% 2(87)

11 Asia Pacific Flight Training Academy Limited GMR HIAL Airport Office, Rajiv Gandhi International Airport, Hyderabad 500 108, Telangana, India

U80302TG2011PLC072687 JV Company 40.00% 2(6)

12 Laqshya Hyderabad Airport Media Private Limited Jaganlaxmi, Laqshya House, Next to Rameshwar Temple, Saraswati Baug, Society Road, Jogeshwari (East), Mumbai – 400 060, Maharashtra, India

U74300MH2007PTC176612 JV Company 49.00% 2(6)

* Hyderabad Duty Free Retail Limited has been merged with GMR Hospitality and Retail Limited (formerly GMR Hotels and Resorts Limited) effective from April 27, 2017, with an appointed date April 01, 2016.

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) i) Category-wise Share Holding

Category of Shareholders

No. of Shares held at the beginning of the year [As on 1st April 2016]

No. of Shares held at the end of the year [As on 31st March, 2017]

% Change during

the year Demat Physical Total % of Total Shares

Demat Physical Total % of Total Shares

A. Promoter s

(1) Indian

a) Individual/ HUF Nil 5 5 0.00 Nil 5 5 0.00 None

b) Central Govt 49140000 - 49140000 13.00 49140000 - 49140000 13.00 None

c) State Govt(s) - 49140000 49140000 13.00 - 49140000 49140000 13.00 None

d) Bodies Corp. 238139995 -- 238139995 63.00 238139995 -- 238139995 63.00 None

e) Banks / FI - - - - - - - - -

f) Any other - - - - - - - - -

Sub-total (A) (1):- 287279995 49140005 336420000 89.00 287279995 49140005 336420000 89.00 None

(2) Foreign

a) NRIs - - - - - - - - - -

Individuals - - - - - - - - -

b) Other – - - - - - - - - -

Individuals - - - - - - - - -

c) Bodies Corp. 41573540 6460 41580000 11.00 41573540 6460 41580000 11.00 None

d) Banks / FI - - - - - - - - -

e) Any Other - - - - - - - - -

Sub-total (A) (2):- 41573540 6460 41580000 11.00 41573540 6460 41580000 11.00 None

Total shareholding of Promoter (A) = (A)(1)+(A)(2)

328853535 49146465 378000000 100.00 328853535 49146465 378000000 100.00 None

B.Public Shareholding

1. Institutions - - - - - - - - -

a) Mutual Funds - - - - - - - - -

b) Banks / FI - - - - - - - - -

c) Central Govt

d) State Govt(s)

e) Venture Capital Funds

- - - - - - - - -


f) Insurance Companies

- - - - - - - - -

g) FIIs - - - - - - - - -

h) Foreign Venture Capital Funds

- - - - - - - - -

i) Others (specify) - - - - - - - - -

Sub-total (B)(1):- - - - - - - - - -

2. Non-Institutions - - - - - - - - -

a) Bodies Corp. - - - - - - - - -

i) Indian - - - - - - - - -

ii) Overseas

b) Individuals - - - - - - - - -

i) Individual shareholders holding nominal share capital upto Rs. 1 lakh

- - - - - - - - -

ii) Individual shareholders holding nominal share capital in excess of Rs 1 lakh

- - - - - - - - -

Sub-total (B)(2):- - - - - - - - - -

Total Public Shareholding (B)=(B)(1)+ (B)(2)

- - - - - - - - -

C. Shares held by Custodian for GDRs & ADRs

- - - - - - - - -

Grand Total (A+B+C) 328853535 49146465 378000000 100.00% 328853535 49146465 378000000 100% None

(ii) Shareholding of Promoters

Sl No.

Shareholder’s Name Shareholding at the beginning of the year [As on 1st April, 2016]

Shareholding at the end of the Year [As on 31st March, 2017]

No. of Shares

% of total Shares of company

%of Shares Pledged / encumbered to total shares

No. of Shares

% of total Shares of the company

%of Shares Pledged / encumbered to total shares

% change in shareholding during the year

1 Airports Authority of India 49140000 13.00 -- 49140000 13.00 -- None

2 Hon’ble Governor of Telangana 49140000 13.00 -- 49140000 13.00 -- None 3 Malaysia Airports Holdings Berhad 6460 -- -- 6460 -- -- None 4 MAHB (Mauritius) Private Ltd 41573540 11.00 28656486 41573540 11.00 28656486 None 5 GMR Airports Limited (GAL)* 238139000 63.00 164123514 238139000 63.00 164123514 None 6 GMR Infrastructure Limited 1000 -- -- 1000 -- -- None Total 378000000 100.00 192780000 378000000 100.00 192780000 None * including 5 shares held in the name of individual nominee shareholders holding one share each

iii) Change in Promoters’ Shareholding - no change

Sl. No.

Shareholding at the beginning of the year [As on 1st April, 2016]


No. of shares % of total shares of the company


At the beginning of the year -NA-

Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc):

-NA-

At the End of the year -NA-


(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Sl. No.

Name of the Shareholder Shareholding at the beginning of the year [As on 1st April, 2016]


% change in shareholding during the year



1 Airports Authority of India 49140000 13.00 49140000 13.00 No Changes

2 Hon’ble Governor of Telangana 49140000 13.00 49140000 13.00

3 Malaysia Airports Holdings Berhad 6460 -- 6460 --

4 MAHB (Mauritius) Private Ltd 41573540 11.00 41573540 11.00

5 GMR Airports Limited (GAL)* 238139000 63.00 238139000 63.00

6 GMR Infrastructure Limited 1000 -- 1000 --

* including 5 shares held in the name of individual nominee shareholders holding one share each (v) Shareholding of Directors and Key Managerial Personnel:

Sl. No.

Name of the Director / KMP Shareholding at the beginning of the year

Cumulative Shareholding during the year



1 Mr. SGK Kishore, CEO*

At the beginning of the year 1 equity share -- 1 equity share -

Date wise Increase / Decrease in Shareholding during the year

At the end of the year 1 equity share -- 1 equity share -

2

At the beginning of the year Mr. Rajesh Arora CFO* 1 equity share -- 1 equity share -

Date wise Increase / Decrease in Shareholding during the year

At the end of the year 1 equity share -- 1 equity share -

* holding share on behalf of GMR Airports Limited as a nominee shareholder. V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding / accrued but not due for payment (Amount in Rs.)

Particulars Secured Loans excluding deposits

Unsecured Loans

Deposits Total Indebtedness

Indebtedness at the beginning of the financial year 2016-17

i) Principal Amount 17,974,419,734.00 3,405,906,677.00 611,674,661.00 21,992,001,072.00

ii) Interest due but not paid - - - -

iii) Interest accrued but not due 3,010,048.00 - 3,010,048.00

Total (i+ii+iii) 17,977,429,782.00 3,405,906,677.00 611,674,661.00 21,995,011,120.00

Change in Indebtedness during the financial year 2016-17

• Addition 103,185.00 103,185.00

• Reduction (257,680,534.00) (126,381,576.00) (384,062,110.00)

Net Change (257,680,534.00) (126,381,576.00) 103,185.00 (383,958,925.00)

Indebtedness at the end of the financial year 2016-17

i) Principal Amount 17,662,614,917.00 3,279,525,101.00 611,777,846.00 21,553,917,864.00

ii) Interest due but not paid - - - -

iii) Interest accrued but not due 57,134,331.00 57,134,331.00

Total (i+ii+iii) 17,719,749,248.00 3,279,525,101.00 611,777,846.00 21,611,052,195.00


VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration paid to Managing Director, Whole-time Directors and/or Manager:

Sl. no.

Particulars of Remuneration Name of MD/WTD/Manager Total Amount (Rs.)

Mr. Srinivas Bommidala, MD

1 Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act,1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 (c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

2,71,25,690

2,71,25,690

2 Stock Option -- --

3 Sweat Equity -- --

4 Commission - as % of profit - others, specify…

27,01,370 27,01,370

5 Others, please specify ----

Total (A) 2,98,27,060 2,98,27,060

Ceiling as per the Act 13,71,76,140 13,71,76,140

B. Remuneration to other directors:

(Amount in Rs.)

Particulars of Remuneration

Name of the Director Total Amount

Mr RSSLN Bhaskarudu

Mr NC Sarabeswaran

Ms. Siva Kameswari Vissa

Mr. P. Vijay Bhaskar

Independent Directors

Fee for attending board / committee meetings

Commission Others, please specify

5,00,000 -- --

4,00,000

-- --

3,20,000

-- --

80,000

-- --

13,00,000

Total (1) 5,00,000 4,00,000 3,20,000 80,000 13,00,000

Name of the Director

Mr. GM Rao Mr. HJ Dora Mr. K. Ramakrishna Rao, IAS

Mr. S. Samanta (*)

Datuk Badlisham

Mr. VR Hegde

Mr. Arvind Kumar IAS

Total Amount

Other Non-Executive Directors

Fee for attending board / committee meetings Commission Others, please specify

80,000

-- --

60,000

-- --

20,000

-- --

1,80,000

-- --

20,000

-- --

80,000

-- --

80,000

5,20,000

-- --

Total (2) 80,000 60,000 20,000 1,80,000 20,000 80,000 5,20,000

Total(B)=(1+2) 5,80,000 4,60,000 3,40,000 2,60,000 20,000 80,000 18,20,000

Total Remuneration

Overall Ceiling as per the Act

Maximum of Rs.1,00,000/- sitting fee per meeting per director

(*) Paid to Airports Authority of India (AA), being Mr. S. Samanta representing Director of AAI


C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD (Amount in Rupees)

SNo Particulars of Remuneration Key Managerial Personnel

CEO Mr. SGK Kishore

CFO Mr. Rajesh Arora

CS Mr. Anup Kumar Samal

Total

1 Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 (c) Profits in lieu of salary under section 17(3) Income tax Act, 1961

1,49,40,141

57,59,469

23,51,183

2,30,50,793

2 Stock Option

3 Sweat Equity - - - -

4 Commission - as % of profit - others, specify…

- - - -

5 Others, please specify - - - -

Total 1,49,40,141 57,59,469 23,51,183 2,30,50,793

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: No

Type Section of the Companies Act

Brief Description

Details of Penalty / Punishment/ Compounding fees imposed

Authority [RD / NCLT/ COURT]

Appeal made, if any (give Details)

Penalty

Punishment

Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty

Punishment

Compounding


Place : Hyderabad Date : July 19, 2017







Annexure - 6 to GHIAL Board’s Report 2016-17

Particulars of remuneration of employees for the financial year ended March 31, 2017

A) Details of Top Ten Employees in terms of Remuneration drawn in the financial year 2016-17, as per Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

SNo Name of the

Employee

Designation

of the

Employee

Age

(years)

Remune-

ration paid

during the

year (Rs.)

Previous

Employer

before joining

the Company

Date of Joining

the Company

Qualifica

tions

Total

Years

of

Experie

nce

(Years)

Nature of

Employ-

ment :

Regular /

Contract

Employe

d for Full

Year /

Part of

the Year

1 Mr. Srinivas Bommidala Managing

Director

54 2,71,25,690 Entrepreneur 01.04.2010 B.Com 35 Regular Full year

2 Mr. SGK Kishore CEO 55 1,49,40,141 Civil Servant

(IAS- Govt. of

India)

01.03.2006 M.Tech 33 Regular Full Year

3 Mr. Hemanth D. P CCO –

Logistics,

SEZ & Cargo

54 1,01,99,157 Deccan 360

Airlines

09.04.2010 MBA 31 Regular Full Year

4 Mr. Manish Sinha COO-Airport

Operations

51 62,39,165 GVK Mumbai

International

Airport Ltd


5 Mr. George Cherian CCO- Retail 48 65,63,835 ARI Middle

East


6 Mr. Venkataramana K AVP – F & A (MRO)

55 59,74,491 Reliance

Infocomm Ltd

04.09.2006 B.com, CA

25 Regular Full year

7 Mr.Venkatesh Palabatla Head – BHR 52 58,70,693 Inlersoilrand

International

20.05.2010 MBA,

MEP

29 Regular Full year

8 Mr. Narayan R Head-

Aerospace and Airport City

47 57,92,213 Leading

Hotels of the World

23.08.2010 B.com 19 Regular Full year

9 Mr. Rajesh Arora CFO 48 57,59,469

Chambal

Fertilisers &

Chemicals

Limited

21.07.2015 B.Com

(Hons)

ICWA

27 Regular Full Year

10 Mr. Bhimasankara Sharma Kakaraparty

Head – Legal

53 53,35,014

Tanla

Solurions Ltd

29.01.2008 B.Com,LLB,PGD

(PM&IR)

27 Regular Full Year

Page No. 67GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 A-6 to Board’s Report - Particulars of remuneration of employees


B) Details of Employees who have drawn a remuneration not less than Rupees One Crore and Two Lakhs per annum and employed throughout the financial year 2016-17, as per Rule 5 (2) (i) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

SNo Name of the

Employee

Designatio

n of the

Employee

Age

(years)

Remun-

eration paid

during the

year

(Rs.)

Previous

Employer

before

joining the

Company

Date of Joining

the Company

Qualifica

tions

Total

Years

of

Experie

nce

(Years)

Nature of

Employ-

ment :

Regular /

Contract

Employed

for Full Year

/ Part of the

Year

1 Mr. Srinivas Bommidala Managing

Director

54 2,71,25,690 Entrepreneur 01.04.2010 B.Com 35 Regular Full year

2 Mr. SGK Kishore CEO 55 1,49,40,141 Civil Servant

(IAS- Govt.

of India)

01.03.2006 M.Tech 33 Regular Full Year

C) Details of Employees who have drawn a remuneration not less than Rupees Eight lakhs and Fifty Thousand per month and employed part of the financial year 2016-17, as per Rule 5 (2) (ii) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 – “NIL”


Place : Date :


Sd/-


DIN 000061464

Sd/-


DIN 00058527

Page No. 68GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 A-6 to Board’s Report - Particulars of remuneration of employees

S. R. BATLIBOI & ASSOCIATES LLP Brahmayya & Co.,

Chartered Accountants Chartered Accountants

Oval office, 18, iLabs Centre, Khivraj Mansion,

Hitech City, Madhapur, 10/2, Kasturba Road,

Hyderabad – 500 081 Bengaluru – 560 001 INDEPENDENT AUDITOR’S REPORT To the Members of GMR Hyderabad International Airport Limited Report on the Standalone Ind AS Financial Statements We have audited the accompanying standalone Ind AS financial statements of GMR Hyderabad International Airport Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies (collectively known as the „Ind AS Financial Statements”) and other explanatory information. Management’s Responsibility for the Ind AS Financial Statements The Company‟s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements. The procedures selected depend on the auditor‟s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company‟s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in

Page No. 69GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 Auditors' Report on Standalone Financials

the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company‟s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone Ind AS financial statements. Basis for Qualified Opinion As more fully explained in the Note 41 to the standalone Ind-AS financial statements, as at March 31, 2017, the Company has investment and share application money amounting to Rs. 200.42 Crore and Rs. 12.00 Crore respectively, made in a wholly owned subsidiary Company GMR Aerospace Engineering Limited. The subsidiary has significant receivables from its wholly owned subsidiary whose accumulated losses have fully eroded its net worth as at March 31, 2017. The recovery of such investment and share application money in the subsidiary is dependent upon the ability of the step down subsidiary to scale up its operations in future and achieve sustained profitability. Based on the reasons fully explained in the aforesaid note, the management is of the view that there is no impairment in the value of such investment and share application money required at this juncture. However, in view of the current financial position of the step down subsidiary company and in the absence of sufficient appropriate audit evidence to support the key assumptions made by the management in the business plan, we are unable to comment on the carrying value of the investment and share application money including adjustments, if any, that may be required to be made to such carrying amounts of investment and share application money. Qualified opinion In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, of its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date. Emphasis of Matter a. With regard to note 42 to these standalone Ind AS financial statements, the Company had

accrued Rs. 1.89 Crore during the year ended March 31, 2015 towards the remuneration to its Managing director, which includes Rs. 0.8 Crore in excess of the limits specified in Sub Section (3) of Section 197 read with Schedule V of the Companies Act, 2013 pending approval from the Central Government for the period April 1, 2014 to January 22, 2015. The ultimate outcome of the matter cannot be presently determined. Pending the final outcome, no adjustments have been made in this regard in the standalone Ind AS financial statements.

b. We draw attention to note 35(II)(C)(xi) to these standalone Ind AS financial statements regarding

the costs related to residential quarters for Central Industrial Security Force (CISF) deployed at the Rajiv Gandhi International Airport, Hyderabad and other costs which continue to be adjusted against PSF (SC) fund pending the final decision from the Honourable High Court at Hyderabad for the State of Telangana and for the State of Andhra Pradesh and consequential instructions from the MoCA.

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


Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor‟s report) Order, 2016 (“the Order”) issued by the Central

Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act, we report that: (a) We have sought and obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purpose of our audit; (b) Except for the possible effects of the matter described in the Basis for Qualified Opinion

paragraph, in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive income, Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) Except for the possible effects of the matter described in the Basis for Qualified Opinion

paragraph above, in our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) The matters described in the Basis for Qualified Opinion paragraph above and note (b) under the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

(f) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2017, from being appointed as a director in terms of section 164 (2) of the Companies Act, 2013;

(g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.

(h) With respect to the adequacy of the internal financial controls over financial reporting of the

Company and the operating effectiveness of such controls, refer to our separate report in “Annexure 2” to this report; and


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

i. The Company has disclosed the impact of pending litigations on its financial position in its

Ind AS financial statements – Refer Notes 35(II) and 44 to the standalone Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts – Refer Note 16 to the standalone Ind AS financial statements;;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company; and

iv. The Company has provided disclosures in Note 13(iii) to these standalone Ind AS financial statements as to the holding of Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on audit procedures and relying on the management representation we report that the disclosures relating to opening cash balance and collections are in accordance with books of account maintained by the Company and as produced to us by the Management. However, we are unable to obtain sufficient appropriate audit evidence to report on whether the disclosure relating to collection in cash as permitted receipts is appropriate.

For S.R. BATLIBOI & ASSOCIATES LLP

ICAI Firm registration number: 101049W/E00004 Chartered Accountants Sd/- per Shankar Srinivasan Partner Membership No.: 213271 Place: Hyderabad Date: May 04, 2017

For Brahmayya & Co.,

ICAI Firm registration number: 000515S Chartered Accountants

Sd/-

per G. Srinivas Partner Membership No.: 086761

Place: Hyderabad

Date: May 04, 2017


Annexure 1 referred to in our report of even date Re: GMR Hyderabad International Airport Limited (“the Company”)

i) (a) The Company has maintained proper records showing full particulars, including quantitative

details and situation of Property, Plant and Equipment.

(b) All Property, Plant and Equipment were physically verified by the management in the earlier

years in accordance with a planned programme of verifying them once in three years which,

in our opinion, is reasonable having regard to the size of the Company and the nature of its

assets.

(c) According to the information and explanations given by the management, the title deeds of

immovable properties included in property, plant and equipment are held in the name of the

Company.

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

(iii) According to the information and explanations given to us, the Company has not granted any

loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, there are no

loans, investments, guarantees, and securities granted in respect of which provisions of section 185 and 186 of the Companies Act 2013 are applicable and hence not commented upon.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the

Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the

provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the

rules made by the Central Government for the maintenance of cost records under section

148(1) of the Companies Act, 2013, related to related to aeronautical services, and services

related to supplying of fuel at the airport, and are of the opinion that prima facie, the

specified accounts and records have been made and maintained. We have not, however,

made a detailed examination of the same.

(vii) (a) Undisputed statutory dues including provident fund, employees‟ state insurance, income-tax,

sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and other material

statutory dues applicable to it have generally been regularly deposited with the appropriate

authorities.


(b) According to the information and explanations given to us, undisputed dues in respect of provident fund, employees‟ state insurance, income-tax, service tax, customs duty, value added tax, cess and other material statutory dues which were outstanding, at the year-end, for a period of more than six months from the date they became payable, are as follows:

Name of the statute

Nature of dues Amount of dues (Rs)

Period to which the amount relates

Andhra Pradesh Municipalities act, 1965

Property tax 11.49 Crore* April 2013 to September 2016

*The amount includes penal interest of Rs. 3.38 Crore.

(c) According to the records of the Company, the dues outstanding of income-tax, service tax,

customs duty, value added tax and cess on account of any dispute, are as follows:

Name of the statute Nature of dues

Amount of dues

(including

penalty) (Rs

Crore)

Period to

which

the

amount

relates

Forum where dispute

is pending

Finance Act, 1994

Reversal of Cenvat

Credit including

penalty

55.65* Various

dates

Customs Excise &

Service Tax Appellate

Tribunal

Finance Act, 1994

Penalty equivalent to

service tax on User

Development Fee

7.43

April

2008 to

Decembe

r 2008

The Commissioner of

Customs, Central

Excise & Service Tax

Hyderabad

Building and Other

Construction

Workers‟ Welfare

Cess Act, 1996.

Cess on Building 25.20 Various

dates

High Court of Andhra

Pradesh

Finance Act, 1994

Non- payment of

service tax on import

of services.

0.73 Various

dates

The Commissioner of

Customs, Central


Hyderabad

Finance Act, 1994

Non-payment of

service tax for

supply of water and

electricity to

concessionaires and

irregular availment

of CENVAT

3.20**

October

2008 to

June

2010

Customs Excise &


Tribunal Hyderabad


Name of the statute Nature of dues

Amount of dues

(including

penalty) (Rs

Crore)

Period to

which

the

amount

relates

Forum where dispute

is pending

Finance Act, 1994

Irregular availment

of CENVAT credit

on Chartering of

Aircrafts and IDBI

Trusteeship services

1.24***

October

2011 to

March

2013

Customs Excise &


Tribunal Hyderabad

Finance Act, 1994 Irregular availment

of CENVAT credit. 0.35#

October

2011 to

March

2013

The Deputy

Commissioner of

Customs, Central


Hyderabad

Income Tax Act, 1961 Disallowance of

certain expenses 34.93

AY 2007-

08 to AY

2013-14

Income Tax Appellate

Tribunal, Bengaluru

Income Tax Act, 1961 Disallowance of

certain expenses 43.61

AY 2014-

15

Commissioner of

Income Tax (Appeals),

Bengaluru

* Amount includes penalty of Rs. 31.13 Crore. The Company has deposited Rs. 12.20 Crore under

protest.

** The amount includes penalty of Rs. 1.67Crore. The Company has deposited Rs.0.15 Crore

under protest.

*** The amount includes penalty of Rs. 0.62 Crore. The Company has deposited Rs. 0.05 Crore

under protest.

# The amount includes penalty of Rs. 0.17 Crore. The Company deposited Rs. 0.02 Crore under

protest.

(viii) In our opinion and according to information and explanations given by the management, the

Company has not defaulted in repayment of loans or borrowing to a financial institution, bank or Government of Telangana. The Company has not issued any debentures.

(ix) In our opinion and according to the information and explanations given by the management,

the Company has utilised the term loans for the purposes for which they were raised. The Company has not raised money by way of initial public offer or further public offer or debt instruments.

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


(xi) According to the information and explanations given by the management, we report that the

Company had accrued managerial remuneration which is over and above

the amount mandated by the provisions of section 197 read with Schedule V to the Companies

Act, 2013, by Rs. 0.8 crore as at March 31, 2017. As represented to us, the Company has applied

to the Central Government seeking approval for the managerial remuneration accrued in

excess as mentioned below:

Payment made to Managing Director 3.79 Crore

Amount provided in excess of the limits prescribed 0.8 Crore

Amount due for recovery as at Balance Sheet date Refer note below*

Steps taken to secure the recovery of the amount Refer note below*

* Pending receipt of the Central government approval pertaining to the year ended March 31,

2015, no steps /adjustments have taken/considered respectively.

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii)

of the Order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management, transactions with the

related parties are in compliance with section 177 and 188 of Companies Act, 2013 where

applicable and the details have been disclosed in the notes to the Ind AS financial statements,

as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence reporting requirements under clause 3(xiv) are not applicable to the Company and hence not commented upon.

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of

the Reserve Bank of India Act, 1934 are not applicable to the Company.

For S.R. BATLIBOI & ASSOCIATES LLP ICAI Firm registration number: 101049W/E300004 Chartered Accountants Sd/- per Shankar Srinivasan

Partner Membership No.: 213271 Place: Hyderabad Date: May 04, 2017

For Brahmayya & Co., ICAI Firm registration number: 000515S Chartered Accountants

Sd/-

per G. Srinivas

Partner Membership No.: 086761

Place: Hyderabad Date: May 04, 2017


Annexure 2 To the Independent Auditor’s Report Of Even Date On The Standalone Ind AS

Financial Statements Of GMR Hyderabad International Airport Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the

Companies Act, 2013 (“the Act”) To the Members of GMR Hyderabad International Airport Limited We have audited the internal financial controls over financial reporting of GMR Hyderabad International Airport Limited (“the Company”) as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date. Management’s Responsibility for Internal Financial Controls The Company‟s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the company‟s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditor’s Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor‟s judgement, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the internal financial controls system over financial reporting.


Meaning of Internal Financial Controls Over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Company's assets that could have a material effect on the Ind AS financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Qualified Opinion According to the information and explanations given to us and based on our audit, the following material weakness has been identified in the operating effectiveness of the Company‟s internal financial controls over financial reporting as at March 31, 2017: The Company has designed internal financial controls over estimation of impairment in value of investments and share application money, however, in case of such assessment with respect to a subsidiary company, as more fully explained in note 41 to the standalone Ind AS financial statements as at March 31, 2017, the absence of sufficient appropriate audit evidence to support the key assumptions made by the management in the business plan, could potentially result in the Company not providing for adjustments, if any, that may be required to be made to such carrying amounts of investment and share application money. A „material weakness‟ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim Ind AS financial statements will not be prevented or detected on a timely basis. In our opinion, the Company has, in all material respects, maintained adequate internal financial controls over financial reporting as of March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India, and except for the possible effects of the material weakness described above on the achievement of the objectives of the control criteria, the Company‟s internal financial controls over financial reporting were operating effectively as of March 31, 2017.


Explanatory paragraph

We also have audited, in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act, the standalone Ind AS financial statements of the Company, which comprise the Balance Sheet as at March 31, 2017, and the related Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information. This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2017 standalone Ind AS financial statements of the Company and this report affects our report dated May 4, 2017 which expressed a qualified opinion on those standalone Ind AS financial statements. For S.R. BATLIBOI & ASSOCIATES LLP ICAI Firm registration number: 101049W/E300004 Chartered Accountants Sd/- per Shankar Srinivasan Partner Membership No.: 213271 Place: Hyderabad Date: May 04, 2017

For Brahmayya & Co., ICAI Firm registration number: 000515S Chartered Accountants

Sd/-

per G. Srinivas Partner Membership No.: 086761

Place: Hyderabad Date: May 04, 2017


Notes March 31, 2017 March 31, 2016 April 1, 2015

I. ASSETS

1. Non-current assets

(a) Property, Plant and Equipment 3 1,709.21 1,872.52 1,907.05

(b) Capital work-in-progress 3 20.60 22.03 5.99

(c) Intangible assets 4 1.77 0.74 1.10

(d) Investments in subsidiaries and joint ventures 5.1 486.15 292.77 287.93

(e) Financial assets

(i) Loans 6 102.55 62.96 59.17

(ii) Bank balances other than cash and cash equivalents 7 24.10 4.10 -

(iii) Other financial assets 8 9.90 8.02 8.89

(f) Non current tax assets 9.1 9.83 34.98 17.97

(g) Deferred tax asset (net) 9.2 167.95 99.96 102.56

(h) Other non-current assets 10 64.67 81.31 183.00

2,596.73 2,479.39 2,573.66

2.Current assets

(a) Inventories 11 7.19 10.40 12.19

(b) Investments in subsidiaries and joint ventures 5.1 - 28.98 31.00

(c) Financial Assets

(i) Investments 5.2 354.43 196.82 13.01

(ii) Trade Receivables 12 91.30 117.95 76.96

(iii) Cash and cash equivalents 13 287.32 16.78 23.62

(iv) Loans 6 1.19 0.80 0.33

(v) Other financial assets 8 19.74 11.70 8.44

(d) Current tax assets 9.1 26.80 0.25 12.38

(e) Other current assets 10 9.27 6.90 8.00

797.24 390.58 185.93

Total Assets 3,393.97 2,869.97 2,759.59

II. EQUITY AND LIABILITIES

EQUITY

(a) Equity Share capital 14 378.00 378.00 378.00

(b) Other Equity 14.1

(i) Capital reserve 107.00 107.00 107.00

(ii) Retained earnings 200.99 (233.35) (239.51)

685.99 251.65 245.49

LIABILITIES

1. Non-current liabilities

(a) Financial Liabilities

(i) Borrowings 15 1,965.12 2,046.95 2,015.58

(ii) Other financial liabilities 16 292.37 304.49 299.43

(b) Government grants 17 32.10 12.07 -

(c)Deferred tax liability (net) 9.2 117.58 - -

(d)Other non-current liabilities 18 29.42 33.69 36.88

2,436.59 2,397.20 2,351.89

2. Current liabilities

(a) Financial Liabilities

(i) Borrowings 15 - - 0.03

(ii) Trade payables 19 72.18 64.32 45.00

(iii) Other financial liabilities 16 164.72 126.89 92.88

(b) Government grants 17 1.13 1.13 -

(c) Other current liabilities 18 12.69 11.47 16.19

(d) Short term provisions 20 7.44 5.62 5.29

(e) Current tax liability (net) 9.3 13.23 11.69 2.82

271.39 221.12 162.21

Total Equity and Liabilities 3,393.97 2,869.97 2,759.59

2.1

As per our report of even date.

For S.R. BATLIBOI & ASSOCIATES LLP For Brahmayya & Co., For and on behalf of the Board of Directors of

ICAI Firm registration

number: 101049W/E300004


number: 000515S



-Sd- -Sd- -Sd- -Sd-

per Shankar Srinivasan per G. Srinivas Srinivas Bommidala RSSLN Bhaskarudu

Partner Partner Managing Director Director

Membership No.: 213271 Membership No.: 086761 DIN: 00061464 DIN: 00058527

-Sd- -Sd-

Anup Kumar Samal Rajesh Arora

Company Secretary Chief Financial Officer

Place: Hyderabad Place: Hyderabad Place: Hyderabad

Date: May 4, 2017 Date: May 4, 2017 Date: May 4, 2017

GMR Hyderabad International Airport LimitedCIN:U62100TG2002PLC040118

Standalone Balance Sheet as at March 31, 2017

Summary of significant accounting policies

The accompanying notes are an integral part of the financial statements.

(All amounts in Rupees Crores, except otherwise stated)

Page No. 80GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 Standalone Financial Statements

NotesFor the year ended

March 31, 2017

For the year ended

March 31, 2016

I REVENUE

Revenue from operations 21 1,105.40 616.51

Other income 22 47.59 21.50

Finance income 23 55.08 20.45

Total revenue (I) 1,208.07 658.46

II EXPENSES

Concession fee 49 46.20 25.79

Employee benefits expense 24 59.65 58.90

Other expenses 25 197.38 168.48

Total expenses (II) 303.23 253.17

904.84 405.29

Finance costs 26 201.06 190.75 Depreciation and amortization expenses 27 203.81 205.75

IV Profit before exceptional items and tax 499.97 8.79

V Exceptional item 29 85.78 -

VI Profit before tax (III-IV) 585.75 8.79

VII Tax expense: 28

(1) Current tax - Minimum alternate tax 101.38 -

(2) Deferred Tax

Deferred tax expense 150.96 2.60

Minimum alternate tax credit entitlement 43 (101.38) -

Total tax expense 150.96 2.60

VIII Profit for the year (VI-VII) 434.79 6.19

IX Other Comprehensive Income

Items that will not be reclassified to profit or loss

Re-measurement losses on defined benefit plans (0.45) (0.03)

434.34 6.16

30 11.49 0.16

As per our report of even date


ICAI Firm registration number: 101049W/E300004

ICAI Firm registration number: 000515S



-Sd- -Sd- -Sd- -Sd-




-Sd- -Sd-





(1) Basic and diluted



Standalone Statement of Profit and Loss for the year ended March 31, 2017

III Earnings before interest, tax, depreciation and amortization

X Total Comprehensive Income for the year (VIII + IX)

XI Earnings per equity share:



For the year ended

March 31, 2017

For the year ended

March 31, 2016

Cash flow from operating activities

Profit before tax 585.74 8.81

Adjustment to reconcile profit before tax to net cash flows:


Bad debts writeen off 0.04 -

Provision for doubtful advances - 0.04

Provision for non moving inventories of stores and spares 0.17 -

(Reversal)/Provision for impairment in value of investments (85.78) 4.89

Loss /(profit) on sale / discard of property plant and equipments 0.28 (0.10)

Interest income (14.27) (14.32)

Interest income arising from fair valuation of financial guarantee (0.62) (0.61)

Fair value gain on financial instruments at fair value through profit or loss (40.19) (5.52)

Profit on sale of current investments (other than trade) (26.05) (7.14)

Reversal of provision no longer required (0.79) (1.44)

Dividend from subsidiaries (11.32) (8.94)

Interest on borrowings 185.81 185.35

Other borrowing costs 11.50 2.75

Interest - others 3.00 1.11

Amortisation of deferred income (3.05) (1.87)

Income from government grants (2.08) (0.48)

Income arising from fair valuation of investment in mutual funds (2.69) (0.24)

Operating profit before working capital changes 803.51 368.04

Working capital adjustments:

Increase in trade payables 8.30 24.95

Decrease in other liabilities (0.02) (6.03)

Increase in other financial liabilities 21.35 26.35

Increase in provisions 1.82 0.32

Increase in government grants 22.11 13.68

(Increase)/decrease in trade receivables 26.61 (40.99)

(Increase)/decrease in inventories (0.68) 1.78

Decrease in other assets 17.23 20.80

Increase in other financial assets (8.03) (2.23)

(Decrease)/increase in loans (1.54) 0.47

Cash generated from operations 890.65 407.15

Direct tax paid (net) (101.24) 3.99

Net cash flow from operating activities (A) 789.42 411.14

Cash flows from investing activities

Purchase of property plant and equipment, including CWIP and capital advances (42.66) (66.46)

Proceeds from sale of property plant and equipment 0.03 0.22

Purchase of non-current investments (72.90) (6.01)

Share application money in subsidiary (Investment) (12.00) -

Loans to subsidiary companies (31.50) (11.70)

Repayment of loans by subsidiary companies 1.50 -

Purchase of current investments (3,020.07) (1,365.16)

Sale of current investments 2,891.20 1,188.72

Dividend income 11.32 8.94

Interest received 10.18 9.51

Investment in margin money deposit (20.00) (4.10)

Net cash flow used in investing activities (B) (284.89) (246.02)

Cash flows from financing activities

Proceeds from borrowings 50.00 89.99

Repayment of borrowings (89.09) (78.31)

Repayment of short-term borrowings - (0.03)

Other borrowing costs (11.50) (2.75)

Interest paid (183.40) (180.86)

Net cash flow used in financing activities (C) (233.99) (171.96)


Standalone Cash flow statement for the year ended March 31, 2017



For the year ended

March 31, 2017

For the year ended

March 31, 2016


Standalone Cash flow statement for the year ended March 31, 2017


Net increase/(decrease) in cash and cash equivalents (A + B + C) 270.54 (6.85)

Cash and cash equivalents at the beginning of the year 16.78 23.63

Cash and cash equivalents at the end of the year 287.32 16.78

Components of cash and cash equivalents

Cash on hand 0.03 0.09

Money in transit 0.21 -

With banks

- on current account 37.08 9.79

- on deposit account 250.00 6.90

Total cash and cash equivalents (refer note 13) 287.32 16.78



ICAI Firm registration number: 101049W/E300004

ICAI Firm registration number: 000515S



-Sd- -Sd- -Sd- -Sd-




-Sd- -Sd-






a. Equity Share Capital:

No. Amount

Equity shares of Rs. 10 each issued, subscribed and fully paid

As at April 1, 2015 378,000,000 378.00

Issue of shares - -

As at March 31, 2016 378,000,000 378.00

Issue of shares - -

As at March 31, 2017 378,000,000 378.00

b. Other Equity

March 31, 2017 March 31, 2016

(i) Retained earnings

As at April 1, 2016/ April 1, 2015 (233.35) (239.51)

Profit for the year 434.79 6.19

Items recognised directly in Other Comprehensive Income

Remeasurement of post-employment benefits obligations (0.45) (0.03)

200.99 (233.35)

Capital reserve 107.00 107.00

Total retained earnings 307.99 (126.35)





number: 101049W/E300004


number: 000515S



-Sd- -Sd- -Sd- -Sd-




-Sd- -Sd-





CIN:U62100TG2002PLC040118


Standalone Statement of Changes in Equity for the year ended March 31, 2017



3 Property Plant and Equipment

Leasehold

Improvements

Buildings on

Leasehold

Land

Plant &

machineryRunways Roads

Furniture &

fixtures

Office

equipmentComputers

Electrical

InstallationsVehicles

Free hold

land

Buildings

on freehold

land

Total

Capital

work in

progress

Total including

Capital work in

progress

Deemed Cost

As at April 01, 2015 91.55 866.09 348.36 339.02 96.16 24.62 0.66 7.52 130.34 2.73 - - 1,907.05 5.99 1,913.04

Additions - 18.77 24.61 - 2.42 1.22 0.17 4.88 8.64 0.19 16.13 62.31 139.34 16.04 155.38

Disposals* - (0.92) (0.07) (0.00) - (0.24) - (0.02) (0.00) (0.74) - - (1.99) - (1.99)

Adjustments - 13.37 6.66 5.27 1.71 0.62 0.37 1.93 2.78 - - - 32.71 - 32.71

As at March 31, 2016 91.55 897.31 379.56 344.29 100.29 26.22 1.20 14.31 141.76 2.18 16.13 62.31 2,077.11 22.03 2,099.14

Additions - 12.04 20.84 - - 3.30 1.40 6.34 3.80 0.61 - - 48.33 - 48.33

Adjustments - (3.14) (1.61) (1.22) (0.40) (0.15) (0.09) (0.46) (0.67) - - (0.17) (7.91) (1.43) (9.34)

Disposals* - - (1.01) - - - (0.45) (0.39) - - - - (1.85) - (1.85)

As at March 31, 2017 91.55 906.21 397.78 343.07 99.89 29.37 2.06 19.80 144.89 2.79 16.13 62.14 2,115.68 20.60 2,136.28

Depreciation

As at April 01, 2015 - - - - - - - - - - - - - - -

Charge for the year 3.98 40.34 55.75 14.87 32.23 7.29 0.70 6.14 41.34 1.62 - 1.11 205.37 - 205.37

Disposals* - - - - - (0.10) - (0.00) - (0.68) - - (0.78) - (0.78)

As at March 31, 2016 3.98 40.34 55.75 14.87 32.23 7.19 0.70 6.14 41.34 0.94 - 1.11 204.59 - 204.59

Charge for the year 3.99 39.93 52.88 15.03 32.93 8.25 0.28 3.50 44.47 0.75 - 1.40 203.41 - 203.41

Adjustments - - - - - - - - - - - - - - 0.00

Disposals* - - (0.69) - - - (0.45) (0.39) - - - - (1.53) - (1.53)

As at March 31, 2017 7.97 80.27 107.94 29.90 65.16 15.44 0.53 9.25 85.81 1.69 - 2.51 406.47 - 406.47

Net block

As at March 31, 2017 83.58 825.94 289.84 313.17 34.73 13.93 1.53 10.55 59.08 1.10 16.13 59.63 1,709.21 20.60 1,729.81

As at March 31, 2016 87.57 856.97 323.81 329.42 68.06 19.03 0.50 8.16 100.42 1.24 16.13 61.20 1,872.52 22.03 1,894.55

As at March 31, 2015 91.55 866.09 348.36 339.02 96.16 24.62 0.66 7.52 130.34 2.73 - - 1,907.05 5.99 1,913.04

Net book value 31-Mar-17 31-Mar-16 1-Apr-15

Plant, property and equipment 1,709.21 1,872.52 1,907.05 Capital work in progress 20.60 22.03 5.99

Leasehold

Improvements

Buildings on

Leasehold

Land

Plant &

machineryRunways Roads

Furniture &

fixtures

Office

equipmentComputers

Electrical

InstallationsVehicles Total

As at April 1, 2015

Gross Block 106.22 1,101.52 548.91 434.39 140.42 51.22 30.75 159.32 229.37 9.95 2,812.07

Accumulated depreciation 14.67 235.43 200.55 95.37 44.26 26.60 30.09 151.80 99.03 7.22 905.02

Net Block 91.55 866.09 348.36 339.02 96.16 24.62 0.66 7.52 130.34 2.73 1,907.05


Notes to the standalone financial statements for the year ended March 31, 2017

* Includes reversal of outstanding liabilities amounting to Rs. Nil ( March 31, 2016: Rs. 1.09 crore) pertaining to project construction which are no longer payable now and reversal for depreciation thereon amounting to Rs. Nil (March 31, 2016:

0.17 Crore ) under depreciation charge of the year.

Ind AS 101 Exemption : The Company has availed the exemption available under Ind AS 101, wherein the carrying value of property, plant and equipment has been carried forward at the amount as determined under the previous GAAP.

Information regarding gross block of assets, accumulated depreciation has been disclosed by the Company separately as follows :



4. Intangible Assets

Computer software Total

Deemed Cost

As at April 1, 2015 1.10 1.10

Additions 0.02 0.02

Disposals - -

As at March 31, 2016 1.12 1.12

Additions 1.43 1.43

Disposals - -

As at March 31, 2017 2.55 2.55

Amortization

As at April 1, 2015 - -

Charge for the year 0.38 0.38

Disposals - -

As at March 31, 2016 0.38 0.38

Charge for the year 0.40 0.40

Disposals - -

As at March 31, 2017 0.78 0.78

Net block

As at March 31, 2017 1.77 1.77

As at March 31, 2016 0.74 0.74

Deemed cost as at April 1, 2015 1.10 1.10

Computer software

As at April 1, 2015

Gross Block 18.50

Accumulated Depreciation 17.40

Net book value as per previous GAAP Value 1.10

Deemed Cost as on April 1, 2015 1.10

Ind AS 101 Exemption : The Company has availed the exemption available under Ind AS 101, wherein the carrying value of

intangible assets has been carried forward at the amount as determined under the previous GAAP. Information regarding

gross block of assets, accumulated depreciation has been disclosed by the Company separately as follows :


Notes to the standalone financial statements for the year ended March 31,2017



5.1 Investments

March 31, 2017 March 31, 2016 April 1, 2015 March 31, 2017 March 31, 2016 April 1, 2015

Non-current Current




Financial Assets

5.2 Investments

March 31, 2017 March 31, 2016 April 1, 2015

Investments at FVTPL

Unquoted Commerical Paper

Srei Infrastructure Finance Ltd. 48.81 - -

Investment in Mutual Funds (Unquoted)

Birla Sunlife Cash Plus Institutional Premium - Growth

1,288,906.587 (March 31, 2016: 1,855,853.775, April 1, 2015:

356,924.560) of face value of Rs. 100 each33.58 45.25 8.01

IDBI Liquid Fund - Regular plan Growth

288,649.338 units (March 31, 2016: Nil, April 1, 2015: Nil) of face

value of Rs. 1,000 each50.05 - -

Birla Sun Life Savings Fund Instl. - Growth

819,910.577 units (March 31, 2016: Nil, April 1, 2015: Nil) of face

value of Rs. 100 each26.13 - -

Birla Sun Life Short Term fund-Regular Growth.

16,319,922.709 units (March 31, 2016: Nil, April 1, 2015: Nil) of face


DHFL Pramerica Liquid Fund - Growth Option

1,948,073.558 units (March 31, 2016: Nil, April 1, 2015: Nil) of face


Sundaram Money Fund Regular Growth

Nil units (March 31, 2016: 4,711,319.747, April 1, 2015: Nil) of face

value of Rs. 10 each- 15.01 -

Axis Liquid Institutional - Growth Option

50,229.814 units (March 31, 2016: 102,446.465 , April 1, 2015: Nil) of

face value of Rs. 1000 each9.04 17.15 -

ICICI Prudential Liquid Regular Plan - Growth

1,116,540.679 units (March 31, 2016: 2,567,077.19, April 1, 2015: Nil)

of face value of Rs. 100 each26.83 57.40 -

Kotak liquid fund Institutional premium - Growth

52,616.2266 units (March 31, 2016: 55,500.1008, April 1, 2015: Nil) of

face value of Rs. 1000 each17.31 17.01 -

SBI Premier Liquid Fund Regular Plan - Growth

Nil units (March 31, 2016:189,701.99, April 1, 2015: 22788.5980) of

face value of Rs. 1000 each- 45.00 5.00

Total FVTPL investments 354.43 196.82 13.01

Aggregate value of unquoted investments 354.43 196.82 13.01

Current


5.1 Investments


Investments at Cost

Investments in equity instruments of subsidiaries

Unquoted equity shares

Hyderabad Menzies Air Cargo Private Limited 0.52 0.52 0.52 - - -

520,200 (March 31, 2016: 520,200 , April 1, 2015: 520,200) Equity

shares of Rs. 10 each fully paid-up

Hyderabad Menzies Air Cargo Private Limited 0.02 0.02 0.02 - - -

18,735 (March 31, 2016: 18,735, April 1, 2015:18,735) Preference


GMR Hyderabad Aerotropolis Limited 57.50 33.63 33.63 - - -

57,500,000 (March 31, 2016: 33,630,000, April 1, 2015: 33,630,000)

Equity shares Rs. 10 each fully paid-up

GMR Hyderabad Airport Resource Management Limited - - 0.05 - - -

Nil (March 31, 2016: 50,000, April 1, 2015: 50,000) Equity shares of

Rs. 10 each fully paid-up

[At cost less provision for impairment in value Rs. Nil (March 31,

2016 :5,00,000)]

Hyderabad Airport Security Services Limited 12.50 12.50 12.50 - - -

12,500,000 (March 31, 2016: 12,500,000, April 1, 2015: 12,500,000)

Equity shares of Rs. 10 each fully paid-up

[3,750,000 (March 31, 2016: 3,750,000, April 1, 2015: 3,750,000)

Equity shares of Rs. 10 each fully paid up have been pledged with

the bankers against the loan taken by the subsidiary]

GMR Hyderabad Aviation SEZ Limited 51.60 51.60 49.90 - - -

51,600,000 (March 31, 2016: 51,600,000 , April 1, 2015: 49,900,000)


GMR Hyderabad Multiproduct SEZ Limited - - 0.05 - - -

50,000 (March 31, 2016: 50,000, April 1, 2015: 50,000) Equity shares

of Rs. 10 each fully paid-up

[At cost less provision for impairment in value Rs. 5,00,000 (March

31, 2016 :5,00,000)]

Hyderabad Duty Free Retail Limited

Nil (March 31, 2016: 16,950,000, April 1, 2015: 16,950,000) Equity

shares of Rs. 10 each fully paid-up - 16.95 16.95 - - - [5,085,000 (March 31, 2016: 5,085,000, April 1, 2015: 5,085,000)

Equity shares of Rs. 10 each fully paid up have been pledged with

GMR Airport Handling Services Company Limited - - 0.05 - - -


of Rs. 10 each fully paid-up

[At cost less provision for impairment in value Rs. 5,00,000 (March

31, 2016 :5,00,000)]

GMR Hyderabad Airport Power Distribution Limited 0.05 0.05 0.05 - - -


of Rs.10 each fully paid up

GMR Aerospace Engineering Limited 196.15 147.15 141.15 - - -

292,900,000(March 31, 2016: 243,900,000, April 1, 2015: 237,900,000)


[135,864,000 (March 31, 2016: 121,329,000, April 1, 2015:

110,619,000) Equity shares of Rs. 10 each fully paid up have been GMR Hotels and Resorts Limited 126.61 - - - 28.98 31.00

126,608,916 (March 31, 2016: 109,658,916, April 1, 2015: 109,658,916)

Equity shares of Rs. 10 each fully paid-up[32,897,675 (March 31, 2016: Nil, April 1, 2015: Nil) Equity shares of

Rs. 10 each fully paid up have been pledged with the bankers

[At cost less provision for impairment in value Rs. Nil (March 31,

2016 :Rs. 806,864,289, April 1, 2015: Rs. 786,560,407)]

Investments in equity instruments of Joint ventures

Unquoted equity shares

Laqshya Hyderabad Airport Media Private Limited 9.80 9.80 9.80 - - -

9,800,000 (March 31, 2016: 9,800,000, April 1, 2015: 9,800,000) Equity


Asia Pacific Flight Training Academy Limited 3.56 3.53 3.53 - - -

3,556,969(March 31, 2016: 3,526,969, April 1, 2015: 3,526,969) Equity


Non-current Current





5.1 Investments


Non-current Current




Others

Investment in subsidiaries arising on account of fair valuation of

loan given below market rate 20.70 9.88 12.59 - - -


financial guarantee given to subsidiary 7.14 7.14 7.14 - - -

Total investments carried at cost 486.15 292.77 287.93 - 28.98 31.00

Aggregate value of unquoted investments 486.15 292.77 287.93 - 28.98 31.00



loan given below market rate:

GMR Hotels and Resorts Limited 11.86 0.50 3.75

Hyderabad Airport Security Services Limited 3.25 3.25 3.25

Laqshya Hyderabad Airport Media Private Limited 5.59 6.13 5.59

Total 20.70 9.88 12.59


financial guarantee given to following subsidiaries: GMR Hyderabad Aviation SEZ Limited's financial liability 0.89 0.89 0.89

GMR Hotels and Resorts Limited's financial liability 1.98 1.98 1.98

GMR Aerospace Engineering Limited's financial liability 4.27 4.27 4.27

Total 7.14 7.14 7.14


6 Loans


Loans to employees - - 0.03 0.00 0.04 0.04

Loans to related parties (refer details below) 102.55 62.96 59.14 1.19 0.76 0.29

102.55 62.96 59.17 1.19 0.80 0.33

Break up of Loans to related parties

Share Application Money

GMR Aerospace Engineering Limited 12.00 - - - - - GMR Hyderabad Aviation SEZ Limited - - 1.70 - - -

Loans

Hyderabad Airport Security Services Limited - - 5.94 - - - GMR Hotels and Resorts Limited 65.99 57.20 44.99 - - - GMR Hyderabad Aerotropolis Limited 19.80 - - 0.20 - - Laqshya Hyderabad Airport Media Private Limited 4.76 5.76 6.51 0.99 0.76 0.29

102.55 62.96 59.14 1.19 0.76 0.29

7 Bank balances other than cash and cash equivalents


Margin money deposits with more than 12 months maturity* 24.10 4.10 -

24.10 4.10 -

*Margin money deposits represent security held by bank including bank guarantees issued by the bankers on behalf of the Company.

8 Other financial assets


Unsecured, considered good

Security deposits 10.21 8.33 9.20 0.10 0.41 0.02

Less: Provision for doubtful deposit (0.31) (0.31) (0.31) - - -

9.90 8.02 8.89 0.10 0.41 0.02

Non trade receivables - - - 17.13 9.23 6.98 Grant receivable from authorities - - - 0.04 0.04 0.04 Unbilled revenue - - - 1.44 1.31 1.33 Interest accrued on others - - - 0.43 - - Interest accrued on fixed deposits - - - 0.60 0.71 0.07

9.90 8.02 8.89 19.74 11.70 8.44

9.1 Tax asset


Advance income tax (net of provision for current tax) 9.83 34.98 17.97 26.80 0.25 12.38

9.83 34.98 17.97 26.80 0.25 12.38

9.2 Deferred tax asset / (deferred tax liability)


Deferred tax liability

Fixed assets: Impact of difference between tax depreciation and depreciation / amortisation charged for the financial reporting

132.35 167.69 184.95

Gross deferred tax liability 132.35 167.69 184.95

Deferred tax asset

On account of Unabsorbed depreciation 14.05 173.32 194.21

On account of remeasurement of defined benefit plans - 27.76 26.73

On account of provision for doubtful trade, advances and dimunition in value of investment

0.72 - -

Gross deferred tax asset 14.77 201.08 220.94

Deferred tax (liability) / asset (net) (117.58) 33.39 35.99

MAT credit entitlement 167.95 66.57 66.57

Net deferred tax asset (net) 167.95 99.96 102.56

Net deferred tax liability (net) (117.58) - -

9.3 Tax liability


Provision for tax (net of advance tax) - - - 13.23 11.69 2.82

- - - 13.23 11.69 2.82


Notes to the Standalone financial statements for the year ended as at March 31, 2017

Current

Non-current

Non current Current

Non current Current

Non-current


Non-current Current





10 Other assets


Capital advances

Unsecured, considered good 4.26 1.30 83.30 - - -

(A) 4.26 1.30 83.30 - - -

Advances other than capital advances

Passenger service fee (Security component) 42.26 61.34 80.03 - - -

Others 5.14 5.37 5.41 3.67 1.58 2.72

47.40 66.71 85.44 3.67 1.58 2.72

Less: Provision for doubtful advances (0.04) (0.04) 0.00 - - -

(B) 47.36 66.67 85.44 3.67 1.58 2.72

Prepaid expenses 0.65 0.94 1.90 2.67 1.95 2.79

Balance with statutory / government Authorities (Including deposits refer note 35 C) 12.40 12.40 12.36 2.93 3.37 2.49

(C) 13.05 13.34 14.26 5.60 5.32 5.28

Total (A+B+C) 64.67 81.31 183.00 9.27 6.90 8.00

11 Inventories

March 31, 2017 March 31, 2016 April 1 2015

Raw materials & components(at cost) - 0.31 0.31

Stores, Spares etc. (valued at lower of cost or net realizable value) 7.36 10.09 11.88

Less: Provision for non moving spares (0.17) - -

7.19 10.40 12.19

12 Trade receivables



Related parties 3.77 10.69 15.28

Others 87.53 107.26 61.68

Unsecured, considered doubtful

Others 0.34 0.34 0.34

Less: Allowances for doubtful receivables (0.34) (0.34) (0.34)

91.30 117.95 76.96

13 Cash and cash equivalents


Cash and cash equivalents

-Cash on hand 0.03 0.09 0.04

-Deposits with original maturity of less than three months 250.00 6.90 20.50

-Balances with Banks

-In current accounts 37.08 9.79 3.08

Money in transit 0.21 - -

287.32 16.78 23.62

SBNs*

Other INR

denomination

notes

Total

Closing cash in hand as on November 8, 2016 0.27 0.02 0.29

(+) Permitted receipts** 0.43 7.21 7.64

(-) Permitted payments - (0.18) (0.18)

(-) Amount deposited in Banks (0.70) (6.80) (7.50)

Closing cash in hand as on December 30, 2016 - 0.25 0.25

Non-current Current

* For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.

Current

iii) During the year, the Company had specified bank notes or other denomination notes as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017. The details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December, 30 2016, denomination wise SBNs and other notes as per the notification is given below:

Current

No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person. Nor any trade or other receivable are duefrom firms or private companies respectively in which any director is a partner, a director or a member.

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are securedto the extent of security deposits recieved, are interest bearing and settlement occurs in cash. For the year ended March 31, 2017, the Company has not recorded any impairmentof receivables relating to amounts owed by related parties (March 31, 2016: Rs. Nil). This assessment is undertaken each financial year through examining the financial position ofthe related party and the market in which the related party operates.

Trade receivables are interest bearing @18% p.a. and are generally with the credit term of 7 to 15 days.

Current

i) Cash at banks does not earn interest . Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates.

ii) At March 31, 2017, the Company had available Rs. Nil, March 31, 2016: Rs. 68.01 crores and April 1, 2015 : Rs. 158 crores of undrawn committed borrowing facilities.

**The Company has collected Rs. 0.43 Crore in Specified Bank Notes during the period November 9 to December 30, 2016 and disclosed the same as permitted receipts. Thesepermitted receipts represents cash collected towards car parking charges and airport entry passes during the period November 9 to November 13, 2017. Management hasconsidered that the aforesaid collections are permissible as these are towards public utility services which were subsequently waived through a government notification witheffect from November 14, 2017. Accordingly, the management has accepted these SBN during the aforesaid period for uninterrupted functioning of the airport facilities.





14 Equity


Authorized shares (No.)

400,000,000 (March 31, 2016: 400,000,000, April 1, 2015: 400,000,000) equity shares of Rs. 10 each 400.00 400.00 400.00

Issued, subscribed and fully paid-up shares (No.)

378,000,000 (March 31, 2016: 378,000,000, April 1, 2015: 378,000,000) equity shares of Rs.10 each fully paid up 378.00 378.00 378.00



Total 378.00 378.00 378.00

(a) Reconciliation of the shares outstanding at the beginning and at the end of the year

Equity Shares No. Amount. No. Amount. No. Amount.

At the beginning of the year 378,000,000 378.00 378,000,000 378.00 378,000,000 378.00

Issued during the year

Outstanding at the end of the year 378,000,000 378.00 378,000,000 378.00 378,000,000 378.00

(b) Terms/ rights attached to equity shares

(c) Shares held by holding /ulitmate holding company /holding company and/or their subsidiaries/associates.

Name of Shareholder No. Amount. No. Amount. No. Amount.

GMR Airports Limited, holding company 238,139,000 238.14 238,139,000 238.14 238,139,000 238.14

GMR Infrastructure Limited, Ultimate holding company 1,000 0.00 1,000 0.00 1,000 0.00

238,140,000 238.14 238,140,000 238.14 238,140,000 238.14

(d) Details of shareholders holding more than 5% shares in the Company


Equity shares of Rs. 10 each fully paid

GMR Airports Limited, holding company 238,139,000 63% 238,139,000 63% 238,139,000 63%

Airports Authority of India 49,140,000 13% 49,140,000 13% 49,140,000 13%

Government of Telangana 49,140,000 13% 49,140,000 13% 49,140,000 13%

MAHB (Mauritius) Private Limited 41,573,540 11% 41,573,540 11% 41,573,540 11%

14.1 Other Equity


Retained Earnings

Opening Balance (233.35) (239.51) (239.51)

Add: Profit for the year 434.79 6.19 -


Remeasurement of post-employment benefits obligations (0.45) (0.03) -

Total Retained Earnings 200.99 (233.35) (239.51)

Capital reserve 107.00 107.00 107.00

307.99 (126.35) (132.51)

As per records of the Company including its register of share holders/members and other declarations received from share holders regarding beneficial interest, the above share holding represents both legal and beneficial ownership of shares.



(e) No Shares have been issued by the Company for consideration other than cash, during the period of five years immediately preceding the reporting date.

(f) Shares reserved for issue under options

There are no shares reserved for issue under options and contract/commitments for the sale of shares/disinvestment.


The Company has only one class of equity shares having par value of Rs 10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed bythe Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the holders of equityshares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equityshares held by the shareholders. Further all shareholders will have their representative in the board of directors of the company as per the terms of arrangement.





15 Financial liabilities - Borrowings


Term loan (secured)

From Financial Institution:

Indian rupee term loan from financial institutions - 420.35 424.52 - 4.21 -

From Bank:

Indian rupee term loan from banks 1,228.92 809.87 727.70 46.93 7.45 -

Term loan in foreign currency (secured)

Foreign currency loan from banks 421.15 488.42 517.72 58.71 59.76 56.44

Loan from Government of Telangana (Unsecured) 315.05 315.05 315.05 - - -

Loan from related party (Unsecured) - 13.26 30.59 12.90 12.28 14.28

Secured Borrowings

Short Term Loans from Banks:

Cash credit - - - - - 0.03

1,965.12 2,046.95 2,015.58 118.54 83.70 70.75

Amount disclosed under the head "other current financial liabilities" (Refer note 16) - - - (118.54) (83.70) (70.72)

Net Amount 1,965.12 2,046.95 2,015.58 - - 0.03

16 Other financial liabilities


At FVTPL

Derivative not designated as hedge (Interest rate swap)* 67.24 107.43 112.94 - - -

Total other financial liabilities at FVTPL 67.24 107.43 112.94 - - -

At Amortised cost

Retention money 0.95 0.48 0.06 8.51 7.69 6.91

Deposit from concessionaires 23.82 21.00 22.93 9.92 12.88 8.80

Concession fee payable 195.98 170.58 157.88 - - -

Current maturities of long term borrowings - - - 118.54 83.70 70.72

Non trade payables - - - 6.93 11.31 0.23

Capital creditors - - - 14.50 10.40 5.32

Interest accrued but not due on borrowings - - - 5.71 0.30 0.29

Total other financial liabilities at amortised cost 220.75 192.06 180.87 164.11 126.28 92.27

Financial guarantee contracts 4.38 5.00 5.62 0.61 0.61 0.61

Total other financial liabilities 292.37 304.49 299.43 164.72 126.89 92.88


Financial guarantee contracts

GMR Hotels and Resorts Ltd. 1.05 1.14 1.23 0.09 0.09 0.09

GMR Hyderabad Aviation SEZ Ltd. 0.51 0.65 0.80 0.14 0.14 0.14

GMR Aerospace Engineering Ltd. 2.82 3.21 3.59 0.38 0.38 0.38

Total financial guarantee contracts 4.38 5.00 5.62 0.61 0.61 0.61

* The Company had an Interest Rate Swap (IRS) arrangement to convert floating rate of interest into fixed rate of interest, as per the terms of the loan agreement. The effectiveweighted average interest rate is 8.295% p.a (2016: 8.295% p.a.). The decrease in fair value of the interest rate swap has been recognised in finance income.

Non-current Current

Non-current Current

iii. Indian rupee term loans from financial institutions (secured) carry interest at base rate plus agreed spread, which is subject to reset at the end of an agreed interval. Theinterest rate during the year ranges from 9.95% to 10.50% p.a. (2016: 10.90% to 10.50% p.a). During the current year, the term loans from financial institutions (secured) wererefinanced from banks (secured) in October 2016 without any change in repayment schedule. The loan was repayable in 52 quarterly installments beginning from July 31, 2016.

v. Interest free loan received from the Government of Telangana is repayable in five equal installments commencing from 16th anniversary of the commercial operations date(March 23, 2008).

i. Indian rupee term loans from banks (secured) carry interest at base rate plus agreed spread, which is subject to reset at the end of agreed interval. The interest rate during theyear ranges from 10.20% to 10.70% p.a (2016: 10.80% to 11.25% p.a). During the current year, the Indian rupee term loans from banks (secured) were partially refinanced inOctober, 2016 without any change in the repayment schedule. The loan is now repayable in 51 quarterly installments beginning from October 31, 2016.

ii. Foreign currency loan (secured) from a bank carries interest @ LIBOR plus agreed spread. The Company had entered into an Interest Rate Swap (IRS) arrangement to convertfloating rate of interest into fixed rate of interest, as per the terms of the loan agreement. The effective weighted average interest rate is 8.295% p.a (2016: 8.295% p.a.). The loan isrepayable in 56 quarterly installments beginning from July 01, 2010.

iv. Indian rupee loans, foreign currency loan including the IRS arrangement and loan from financial institution are secured by mortgage of leasehold right, title, interest andbenefit in respect of leasehold land (to an extent of 2136.455 acres) , freehold land of 8.824 acres and first paripassu charge on all movable and immovable assets, operating cashflows, book debts, receivables, intangibles and revenues, both present and future, as well as assignment of all right, title, interest, benefits, claims and demands available underthe concession agreement and other project documents, security interest in the Trust and Retention account, Debt service reserve account and further secured by pledge of164,123,514 (2016: 164,123,514) and 28,656,486 (2016: 28,656,486) equity shares, both present and future, held or to be held, upto 51% of the paid up share capital of the Company,as the case may be, by both, the holding company and MAHB (Mauritius) Private Limited respectively.

vi. Cash credit from bank is secured by way of first paripassu charge on all movable and immovable assets, operating cash flows, book debts, receivables, intangibles andrevenues, both present and future and a second ranking charges by way of mortgage of leasehold right title, interest and benefit in respect of leasehold land (to an extent of 2044acres and 29 guntas) but not limited to documents of title to the goods. The cash credit is repayable on demand and carries interest 12.75% p.a.

Non Current Current





17 Government grants


Opening Balance 13.20 - -

Grant during the year 22.11 13.68 -

Less: Recognised in the statement of profit and loss (2.08) (0.48) -

33.23 13.20 -

Non Current 32.10 12.07 - Current 1.13 1.13 -

18 Other liabilities

March 31, 2017 March 31, 2016 April 1 2015 March 31, 2017 March 31, 2016 April 1 2015

Unearned revenue 8.72 33.69 15.57 3.99 7.01 9.61

Deferred income 20.70 - 21.31 3.35 - 3.04

Service tax payable - - - 0.05 0.03 0.04

Tax deducted at source - - - 4.84 4.02 3.12

Other statutory dues - - - 0.46 0.41 0.38

29.42 33.69 36.88 12.69 11.47 16.19

19 Trade payables


Trade Payable

- Related parties 15.58 8.59 4.84

- Others 56.60 55.72 40.16

72.18 64.32 45.00

20 Provisions


Provision for employee benefits

Provision for compensated absences 7.16 5.50 5.18

Provision for superannuation fund 0.13 0.12 0.11

Provision for gratuity 0.15 - -

7.44 5.62 5.29

Short term

Concession fee is payable to Ministry of Civil Aviation in respect of first 10 years in 20 equal half yearly installments commencing from the 11th anniversary of the commercialoperations date (March 23, 2008). Concession fee from the 11th year is payable on a half yearly basis. The difference between the fair value and carrying value of such fee payablehas been treated as a government grant as per Ind AS 20.

Non-current Current

iii) For explanations on the Company’s credit risk management processes, refer to Note 39

Terms and conditions of the above financial liabilities:

i) Trade payables are non-interest bearing and are normally settled on 30 days terms.

ii) The dues to related party are unsecured and are normally payable within 30 days from the date of receipt of demand.


21 Revenue from operations For the year ended

March 31, 2017

For the year ended

March 31, 2016

Income from services

Aeronautical 708.27 287.57

Non Aeronautical 397.13 328.94

1,105.40 616.51

22 Other income For the year ended

March 31, 2017

For the year ended

March 31, 2016

Gain on account of foreign exchange fluctuations (net) 0.36 0.20

Profit on sale of current investments (other than trade) 26.05 7.14

Amortisation of deferred income 0.69 0.85

Income from government grant 2.08 0.48

Income arising from fair valuation of investment in mutual fund 2.69 0.24

Provisions no longer required, written back 0.79 1.44

Profit on sale of assets - 0.10

Dividend from subsidiary 11.32 8.94

Other non-operating income 3.61 2.11

47.59 21.50

23 Finance income For the year ended

March 31, 2017

For the year ended

March 31, 2016

Interest on:

Bank deposits 1.37 1.60

Loan to subsidiaries 8.04 6.89

Others 4.86 5.83

Income arising from fair valuation of financial guarantee 0.62 0.61

Gain on account of fair valuation of interest rate swap* 40.19 5.52

Total 55.08 20.45

24 Employee Benefits Expense For the year ended

March 31, 2017

For the year ended

March 31, 2016

Salaries, wages and bonus 50.01 49.91

Contribution to provident and other funds [31 (a)] 3.82 3.64

Gratuity expenses [Note 31 (b)] 0.53 0.54

Staff welfare expenses 3.80 3.85

Recruitment and Training Expenses 1.49 0.96

59.65 58.90



*It represents the reversal of loss, on derivatives not designated as hedges, which was adjusted to the retained

earning on the date of transition to Ind AS as at April 1, 2015.






25 Other expenses For the year ended

March 31, 2017

For the year ended

March 31, 2016

Operator fee 1.23 1.18

Operating and Maintenance Expenses 12.65 11.41

Power and fuel 17.49 22.42

Manpower Outsourcing Charges 22.79 20.16

House keeping charges 11.37 10.26

Consumption of stores & spares 11.47 8.58

Repairs and maintenance

i) Plant & Machinery 15.20 13.43

ii) Buildings 6.45 4.71

iii) IT Systems 11.72 10.70

iv) Other 3.56 1.56

Insurance 1.85 2.04

Security expenses 10.99 8.38

Bus Hire Charges 0.48 0.47

Health and safety charges 0.25 0.20

Rent 4.43 4.06

Rates and taxes 5.68 5.70

Advertising and business promotion 3.53 2.65

Collection Charges 4.20 0.99

Travelling and Conveyence 8.92 7.25

Communication costs 3.21 1.89

Office Maintainance 2.79 2.36

Consultancy & Professional Fees 8.40 5.00

Management Fee 22.58 15.45

Printing and stationery 0.29 0.27

Donation - 0.05

CSR expenditure (refer details below) 2.46 0.31

Directors’ sitting fees 0.18 0.20

Payments to Auditors (refer details below) 1.02 0.55

Provision for impairment in value of investments in shares of

subsidiary company - 4.89


Provision for doubtful advances - 0.04

Bad debts writeen off 0.04 -

Loss on sale / discarding of assets 0.28 -

Miscellaneous expenses 1.70 1.32

197.38 168.48

For the year ended

March 31, 2017

For the year ended

March 31, 2016

Payment to Auditors (Included in other expenses above)

As Auditor

Audit fee 0.36 0.23

Tax audit fee 0.03 0.03

Other services 0.57 0.24

Reimbursement of expenses 0.06 0.05

1.02 0.55





Details of CSR expenditure: For the year ended

March 31, 2017

For the year ended

March 31, 2016

a) Gross amount required to be spent by the Company during

the year 2.46 0.31

(b) Amount spent in cash

i) Construction/acquisition of any asset - -

ii) On purposes other than (i) above 2.46 0.31

(c) Total amount spent during the year



26 Finance costs For the year ended

March 31, 2017

For the year ended

March 31, 2016

Interest on debt and borrowings 185.81 185.35

Other borrowing cost 11.50 2.75

Interest-others 3.00 1.11

Bank charges 0.75 1.54

201.06 190.75

27 Depreciation and amortization expense For the year ended

March 31, 2017 For the year ended

March 31, 2016

Depreciation on property, plant and equipment (note 3) 203.41 205.37

Amortisation of intangible assets (note 4) 0.40 0.38

203.81 205.75


28 Income Tax

A. The major components of income tax expenses are:

Statement of profit and loss:

For the year ended

March 31, 2017

For the year ended

March 31, 2016

Current income tax:

Current income tax charge - -

Deferred tax:

150.96 2.60

150.96 2.60

B. Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate for 31 March 2016 and 31 March 2017:

For the year ended

March 31, 2017

For the year ended

March 31, 2016

Accounting profit 585.56 8.80

Tax at the applicable tax rate of 30.90% (March 31, 2017:

30.90%, March 31, 2016: 30.90%)

180.94 2.72

1) Dividend Income exempt U/s 10(34) 3.50 2.76

2) Amount disallowed u/s 43B 0.02 0.36

3) Gain on recognition of MTM on IRS 12.42 1.70

4) Others - Ind AS adjustments 4.22 (5.07)

5) Reversal of deferred tax during tax holiday period u/s 80IA 21.05 8.42

7) Others (0.68) 0.50

Tax effect of expenses that are not deductible in determining taxable profit:

1) Amount disallowed u/s 43B 0.79 -

2) Amount of disallowances U/s 14A 1.13 0.46

3) Donations & CSR Expenditure 0.76 0.12

4) Interest on delayed payment of income tax 0.41 0.00

5) Effect of depreciation relating to unrelaised forex loss 5.46 5.96

6) Effect of depreciation relating to Capital Reserve 2.01 2.01

Income tax expense reported in the statement of profit and loss 150.96 2.60

C. Deferred tax:

March 31, 2017 March 31, 2016 March 31, 2017 March 31, 2016 April 1, 2015


Fixed assets: Impact of difference between tax depreciation

and depreciation / amortisation charged for the financial

reporting

35.35 (17.26) 132.35 167.69 184.95

Gross deferred tax liability 35.35 (17.26) 132.35 167.69 184.95

Deferred tax asset

Unabsorbed depreciation (159.27) (20.89) 14.05 173.32 194.21

On account of expenditure charged to the statement of

profit and loss but allowed for tax purposes on payment

basis. - -

0.44 0.44 0.44

On account of provision for doubtful trade, advances and

dimunition in value of investment (27.04) 1.03 0.28 27.32 26.29

(186.31) (19.86) 14.77 201.08 220.94

Net deferred tax (liability)/Asset (150.96) (2.60) (117.58) 33.39 35.99

D.

March 31, 2017 March 31, 2016

Opening balance 33.39 35.99

Tax income/(expense) during the period recognised in profit or loss (150.96) (2.60)

Closing balance (117.58) 33.39

ii) The Company off sets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and

the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

iii) The Company has tax losses which arose in India of Rs. 45.45 Crore (March 31, 2016: Rs. 558.32 Crore, April 1, 2015 : Rs. 628.50 Crore) that are

available for offsetting against future taxable profits of the Company.

Balance sheet

Tax effect of income that are not taxable in determining taxable profit / allowable

expenditure that are not part of Book profit:




Statement of profit or loss

i) Deferred tax on adjustments recognised on account of adoption of Ind AS are not considered as these adjustments get reversed in the subsequent

periods and have no impact on the accounting or tax profit.

Reconciliations of deferred tax liabilities/assets(net)

Relating to origination and reversal of temporary differences

Income tax expense reported in the statement of profit or loss



Notes to the standalone financial statements for the year ended March 31, 2017 (All amounts in Rupees Crores, except otherwise stated)

1. Corporate information

GMR Hyderabad International Airport Limited (‘GHIAL’ or ‘the Company’), was incorporated on December 17, 2002, for managing the operations of Rajiv Gandhi International Airport at Hyderabad. The Company had entered into a Concession Agreement with Ministry of Civil Aviation, Government of India, which gives the Company an exclusive right of the Development, Construction, Operation and Maintenance on revenue share model for an initial term of 30 years, which can be extended by another 30 years at the option of the Company which has been exercised by the Company.

Aeronautical revenues of the Company are regulated by the Airport Economic Regulatory Authority of India (AERA) established under an Act of Parliament under Airport Economic Regulation Act, 2008. Accordingly, as per AERA (Terms and Conditions for Determination of Tariff for Airport Operators) Guidelines 2011 dated 28.02.2011, the Company is required to get its Aeronautical Tariff determined from AERA for each Control period consisting of five years period starting from April 1, 2011. Information on other related party relationships of the Company is provided in Note 32.

The financial statements were authorized for issue in accordance with a resolution of the directors passed in the Board meeting held on May 4, 2017.

2. Basis of preparation

In accordance with the notification issued by Ministry of Corporate Affairs, the Company is required to prepare its financial statements under Indian Accounting Standards ('Ind AS') notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016 with effect from April 1, 2016. Accordingly, the Company’s management has now prepared Ind AS financial statements which comprise the Balance Sheets as at March 31, 2017 and March 31, 2016, the Opening Balance Sheet as at April 1, 2015 (transition date), the Statements of Profit and Loss, the Statements of Cash Flow and the Statements of Changes in Equity for the year ended March 31, 2017 and for the year ended March 31, 2016, and a summary of the significant accounting policies and other explanatory information (together hereinafter referred to as “Ind AS Financial Statements”). For all periods up to and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended March 31, 2017 are the first, the Company has prepared in accordance with Ind AS. Refer to note 52 for information on how the Company adopted Ind AS.

The financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities (refer accounting policy regarding financial instruments) which have been measured at fair value.

The financial statements are presented in Indian Rupees (“Rs.”) and all the values are rounded to the nearest Crore, except when otherwise indicated.

2.1 Significant Accounting Policies

a) Use of estimates The preparation of financial statements in conformity with IND AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting year. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.




The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

b) Current versus non-current classification The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when: i) It is expected to be realised or intended to be sold or consumed in normal operating cycle, ii) It is held primarily for the purpose of trading, iii) It is expected to be realised within twelve months after the reporting period, or iv) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at

least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when: i) It is expected to be settled in normal operating cycle, ii) It is held primarily for the purpose of trading, iii) It is due to be settled within twelve months after the reporting period, or iv) There is no unconditional right to defer the settlement of the liability for at least twelve months after

the reporting period. All other liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

c) Property, plant and equipment

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment as at 31 March 2015, measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment as on 1 April 2015.

Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Capital work in progress includes cost of property, plant and equipment under installation/under development as at the balance sheet date. Property, plant and equipment under installation or under construction as at balance sheet are shown as capital work-in-progress, intangible assets under development as at balance sheet date are shown as intangible assets under development and the related advances are shown as loans and advances.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. Further, when each major inspection is performed, its cost is recognised in the carrying amount of the item of property, plant and equipment as




a replacement if the recognition criteria are satisfied. All other repairs and maintenance are charged to profit and loss during the reporting period in which they are incurred.

On Transition to Ind AS, the Company has availed the optional exemption on “Long term Foreign currency Monetary items” and has accordingly continued with the policy to adjust the exchange differences arising on translation/ settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset recognised in the financial statements for the period ended 31 March 2016 ( as per previous GAAP) to the cost of the property, plant and equipment and depreciates the same over the remaining life. In accordance with the Ministry of Corporate Affairs (‘MCA’) circular dated August 09, 2012, exchange differences adjusted to the cost of property, plant and equipment are total differences, arising on long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset, for the period. In other words, the Company does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange differences.

The Company identifies and determines cost of each component / part of the asset separately, if the component / part has a cost which is significant to the total cost of the asset having useful life that is materially different from that of the remaining asset. These components are depreciated over their useful lives; the remaining asset is depreciated over the life of the principal asset.

The Company has assessed the components except in case of Runways and Taxiways which is pending issuance of final notification by Airport Economic Regulatory Authority (AERA).

Spares parts that can only be used in connection with a particular item of plant, property and equipment, and whose use is expected to be irregular, are capitalized. Such spare parts are depreciated over a period, not exceeding the remaining useful life of the principal asset. All spare parts, stand-by and servicing equipment qualify as plant, property and equipment (PPE) if they meet the definition of PPE i.e. if the company intends to use these during more than a period of 12 months. The spare parts capitalized in this manner are depreciated as per useful life period, not exceeding a period of five years based on management estimate supported by technical evaluation.

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised.

d) Depreciation on Property, plant and equipment Depreciation on the Property plant and equipment is calculated on a straight-line basis using the rates arrived at, based on useful lives estimated by the management, which coincides with the lives prescribed under Schedule II of the Companies Act, 2013 except for assets individually costing less than Rs. 5,000 which are fully depreciated in the year of acquisition and certain items of building, plant and equipment, the Company, based on technical assessment made by technical expert and management estimate, believes that the useful lives of such assets are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.




The following useful lives for various categories of property, plant and equipment’s are adopted by the Company

Particulars (Useful Life Taken)

Improvements to leasehold land 30

Buildings on lease hold land* 10-30

Other Buildings 30-60

Runways and taxiways 30

Roads- Other than RCC** 10

Electrical installations** 10-15

Plant and machinery 15

Office Equipment 5

Computer equipment and IT systems 3-6

Furniture and fixtures 10

Vehicles 8-10

Depreciation on adjustments to the historical cost of the assets on account of foreign exchange fluctuations is provided prospectively over the residual useful life of the asset. * The useful lives of modifications to buildings on leasehold land are estimated as 10 years. **The useful lives of internal roads – other than RCC and certain electrical installations (transformers) are estimated as 10 years and 15 years respectively. These lives are longer than those indicated in schedule II. Leasehold Improvements and buildings on leasehold land are amortised over shorter of estimated useful lives or lease period. On June 12, 2014, the Airport Economic Regulatory Authority ("the Authority") had issued a consultation paper viz.05/2014-15 in the matter of Normative Approach to Building Blocks in Economic Regulation of Major Airports wherein it, interalia, mentioned that the Authority proposes to lay down, to the extent required, the depreciation rates for airport assets, taking into account the provisions of the useful life of assets given in Schedule II of the Companies Act, 2013, for such assets that have not been clearly mentioned in the Schedule II of the Companies Act, 2013 or may have a useful life justifiably different than that indicated in the Companies Act, 2013 in the specific context to the airport sector. The Authority has initiated the process to enable it to issue a notification as appropriate, pursuant to the provisions of Part B of Schedule II of the Companies Act, 2013 for this purpose. Pending issuance of final notification by AERA of the useful lives of airport specific assets i.e. Runways, Taxiways and Apron, the Company, in the absence of any specific mention of useful lives of these assets in Schedule II to the Companies Act, 2013, has continued to depreciate these assets over their estimated useful lives as determined by the Management based on a technical evaluation. The impact, if any, based on the useful lives as may be notified by the Authority will be considered as per the order of the Authority. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.




e) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.

f) Amortisation of intangible assets

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each year. Cost relating to software licenses, which are acquired, are capitalized and amortized on a straight – line basis over their useful life not exceeding six years.

Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.

g) Impairment of non-financial assets The company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the company estimates the asset’s recoverable amount. An asset‘s recoverable amount is the higher of an asset’s or cash generating units’ (CGUs) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre—tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. Impairment losses are recognised in the statement of profit and loss. An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the company estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit or loss. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.




h) Inventory

Stores and spares, consumables are valued at lower of cost and net realisable value. However, stores and spare items held for use in providing the service are not written down below cost if the services are expected to be provided at or above cost. Cost is determined on a weighted average basis and includes all applicable costs in bringing goods to their present locations and condition. Net realizable value is the estimated current procurement price in the ordinary course of business.

i) Borrowing cost

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

j) Leases

The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

For arrangements entered into prior to April 1, 2015, the Company has determined whether the arrangement contain lease on the basis of facts and circumstances existing on the date of transition. (a) Company as a lessee :

A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease.

Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term unless either:

i) another systematic basis is more representative of the time pattern of the user’s benefit even if the payments to the lessors are not on that basis; or

ii) the payments to the lessor are structured to increase in line with expected general inflation to

compensate for the lessor’s expected inflationary cost increases. If payments to the lessor vary because of factors other than general inflation, then this condition is not met.

(b) Company as a lessor :

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the term of the relevant lease.

k) Provisions, contingent liabilities and commitments

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain.




Contingent liability is disclosed in the case of:

• A present obligation arising from past events, when it is not probable that an outflow of resources will not be required to settle the obligation

• A present obligation arising from past events, when it cannot be measured reliably. • A possible obligation arising from past events, unless the probability of outflow of resources is remote

Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets. Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

l) Retirement and other Employee Benefits

Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.

Retirement benefit in the form of Superannuation Fund and Employee State Insurance are defined contribution schemes and the contributions are charged to the statement of profit and loss of the year when the contributions to the respective funds are due. The Company has no obligation, other than the contribution payable to the respective funds.

The Company operates a defined benefit gratuity plan in India, which requires contributions to be made to a separately administered fund. The cost of providing benefits under the defined benefit plan is determined based on actuarial valuation using projected unit credit method.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognised in profit or loss on the earlier of:

i) The date of the plan amendment or curtailment, and ii) The date that the Company recognises related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:

i) Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and

ii) Net interest expense or income

Short term employee benefits

Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.




The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. However, the Company presents the entire provision towards accumulated leave as a current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for twelve months after the reporting date.

m) Financial Instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. A. Financial assets i. Initial recognition and measurement:

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

ii. Subsequent measurement:

For purposes of subsequent measurement, financial assets are classified in four categories: - Debt instruments at amortised cost - Debt instruments at fair value through other comprehensive income (FVTOCI) - Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)

Equity instruments measured at fair value through other comprehensive income (FVTOCI) Debt instruments at amortised cost: A ‘debt instrument’ is measured at the amortised cost if both the following conditions are met: a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

This category is the most relevant to the Company. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade and other receivables. Debt instrument at FVTOCI: A ‘debt instrument’ is classified as at the FVTOCI if both of the following criteria are met: a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and b) The asset’s contractual cash flows represent SPPI.




Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

Debt instrument at FVTPL: FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.

iii. Derecognition:

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the balance sheet) when: a. The rights to receive cash flows from the asset have expired, or b. The company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the company has transferred substantially all the risks and rewards of the asset, or (b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognise the transferred asset to the extent of the company’s continuing involvement. In that case, the company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay.

iv. Impairment of financial assets:

In accordance with Ind AS 109, the company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure: a. Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt

securities, deposits, trade receivables and bank balance b. Financial assets that are debt instruments and are measured as at FVTOCI c. Lease receivables under Ind AS 17




d. Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 11 and Ind AS 18

e. Loan commitments which are not measured as at FVTPL f. Financial guarantee contracts which are not measured as at FVTPL

The company follows ‘simplified approach’ for recognition of impairment loss allowance on; a. Trade receivables or contract revenue receivables; and b. All lease receivables resulting from transactions within the scope of Ind AS 17

The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.

ECL is the difference between all contractual cash flows that are due to the company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, the Company is required to consider:

a. All contractual terms of the financial instrument (including prepayment, extension, call and

similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument

b. Cash flows from the sale of collateral held or other credit enhancements that are integral to the

contractual terms

As a practical expedient, the Company evaluates individual balances to determine impairment loss allowance on its trade receivables. The evaluation is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss (P&L). This amount is reflected under the head ‘other expenses’ in the statement of profit and loss. The balance sheet presentation for various financial instruments is described below:

Financial assets measured as at amortised cost and contractual revenue receivables: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-




off criteria, the Company does not reduce impairment allowance from the gross carrying amount.

For assessing credit risk and impairment loss, the company combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.

v. Equity Investments:

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable. If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to statement of profit and loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.

B. Financial liabilities

i. Initial recognition and measurement:

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company’s financial liabilities include trade and other payables, loans and borrowings including cash credit, financial guarantee contracts and derivative financial instruments.


The measurement of financial liabilities depends on their classification, as described below: Financial liabilities at fair value through profit or loss: Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.




Gains or losses on liabilities held for trading are recognised in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss. The Company has not designated any financial liability as at fair value through profit and loss.

iii. Loans and borrowings:

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

iv. Financial guarantee contracts:

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee.

Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation.

v. Derecognition:

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

C. Reclassification of financial assets:

The company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The company’s senior management determines change in the business model as a result of external or internal changes which are significant to the company’s operations. Such changes are evident to external parties. A change in the business model occurs when the company either begins or ceases to perform an activity that is significant to its operations. If the company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the




change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest."

D. Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

E. Derivative financial instruments

The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps, to hedge its foreign currency risks, interest rate risks and commodity price risks, respectively. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.

n) Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company’s cash management.

o) Cash dividend to equity holders The Company recognises a liability to make cash distributions to equity holders when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the Companies Act, 2013, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.

p) Foreign currency transactions:

Functional and presentation currency The financial statements are presented in INR (Indian Rupees), which is also the company’s functional currency and the currency of the primary economic environment in which the Company operates.

Transactions and balances Transactions in foreign currencies are initially recorded by the Company at their respective functional currency spot rates at the date the transaction first qualifies for recognition. However, for practical reasons, the Company uses an average rate if the average approximates the actual rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.

Exchange differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception of the following: i) The Company treats foreign currency monetary item as "long-term foreign currency monetary item", if it has a term of 12 months or more at the date of its origination. In accordance with MCA circular dated




August 09, 2012, exchange differences for this purpose, are total differences arising on long-term foreign currency monetary items for the period. In other words, the Company does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference. Exchange difference arising on long term foreign currency monetary items related to acquisition of a fixed asset are capitalized and depreciated over the remaining useful life of the asset.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

q) Forward exchange contracts not intended for trading or speculations purposes: The premium or discount arising at the inception of the forward exchange contracts is amortized as expenses or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rate changes. Any profit or loss arising on cancellation or renewal of forward contract is recognized as income or expenses for the year.

r) Fair value measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

i. In the principal market for the asset or liability, or ii. In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.




The management determines the policies and procedures for both recurring fair value measurement, such as derivative instruments and unquoted financial assets measured at fair value, and for non-recurring measurement, such as assets held for distribution in discontinued operations.

External valuers are involved for valuation of significant assets, such as properties and unquoted financial assets, and significant liabilities, such as contingent consideration. Involvement of external valuers is decided upon by the management. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. The management decides, after discussions with the company's external valuers, which valuation techniques and inputs to use for each case.

At each reporting date, the management analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Company’s accounting policies. For this analysis, the management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.

The management, in conjunction with the Company’s external valuers, also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

This note summarises accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.

a) Disclosures for valuation methods, significant estimates and assumptions (note 36 B) b) Quantitative disclosures of fair value measurement hierarchy (note 38) c) Financial instruments (including those carried at amortised cost) (note 37)

s) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.

The specific recognition criteria described below must also be met before revenue is recognised.

1) Income from service:

Revenue from Aeronautical and Non-Aeronautical operations are recognized on accrual basis, when services are rendered and it is probable that an economic benefit will be received which can be quantified reliably. Further, Rental income arising from operating leases is accounted for on a straight-line basis over the lease terms and is included in non-aeronautical revenue in the statement of profit or loss due to its operating nature.

2) Interest income:

i. Interest on all debt instruments measured either at amortised cost or at fair value through other comprehensive income, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying




amount of the financial asset or to the amortised cost of a financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. Interest income is included in finance income in the statement of profit and loss.

ii. Interest for delayed payments from customers is accounted only when it is unconditionally accepted by the customers.

3) Dividends: Revenue is recognised when the Company’s right to receive the payment is established, which is generally when shareholders approve the dividend.

t) Concession fee:

As per the Concession Agreement (CA) entered into with Ministry of Civil Aviation (MoCA) in December, 2004, the Company is required to pay concession fee to MoCA @ 4% on its gross revenue. As per Article 3.3.2 of CA, “Gross Revenue” is defined to mean all pre-tax revenue of GHIAL with certain specified exclusions.

Management is of the view that certain income / credits arising on adoption of Ind-AS and also mark to market gain on valuation of IRS was not in contemplation of parties in December 2004 when this Concession Agreement was signed / entered. Further, these income/credits in Statement of Profit and Loss do not represent receipts from business operations, from any external sources and therefore, are not treated as “Gross Revenue” for calculation of Concession fee to MoCA. Accordingly, the Company, based on Legal Opinion, has provided the concession fee to MOCA based on Gross Revenue as per the Ind AS financial statements after adjusting such incomes/credits.

u) Government grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. Such grants related to income are deducted in reporting the related expense. When the grant is in the nature of capital subsidy it is treated as capital reserve. The Company has deferred payment arrangement on the concession fee payable to Ministry of Civil Aviation (MoCA) without interest. The effect of this assistance is treated as a government grant. The assistance is initially recognised and measured at fair value and the government grant is measured as the difference between the initial carrying value of the assistance and the fair value. The grant is subsequently measured as per the accounting policy applicable to financial liabilities.

v) Taxes on income Tax expense comprises current and deferred tax.

1) Current income tax

Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.




Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current and deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

2) Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

i. In respect of taxable temporary differences associated with investments in subsidiaries,

associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

i. When the deferred tax asset relating to the deductible temporary difference arises from the

initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

ii. In respect of deductible temporary differences associated with investments in subsidiaries,

associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. The Company is entitled to claim tax holiday for any 10 consecutive years out of 15 years, from the year of commencement of commercial operations in 2007-08, under Section 80-IA of the Income Tax Act, 1961, with regard to income from airport operations. Accordingly, deferred tax on items reversing within the tax holiday period is not considered.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Minimum Alternate Tax (MAT) paid in a year is charged to the Statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit




Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961 issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Statement of profit and loss and shown as “MAT Credit Entitlement under Deferred Tax Asset.” The Company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

Expenses and assets are recognised net of the amount of sales/ value added taxes paid, except:

i. When the tax incurred on a purchase of assets or services is not recoverable from the taxation

authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable

ii. When receivables and payables are stated with the amount of tax included

The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

w) Segment information: The Company has only one reportable business segment, which is operation of airport and providing allied services and operates in a single business segment. Accordingly, the amounts appearing in the financial statements relate to the Company’s single business segment

x) Earnings per share Basic Earnings Per Share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating Diluted Earnings Per Share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

y) Corporate social responsibility The Company charges its Corporate Social Responsibility (CSR) expenditure to the Statement of Profit & Loss Account.

z) Measurement of EBITDA The Company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The Company measures EBITDA on the basis of profit / (loss) from continuing operations. In its measurement, the Company does not include depreciation and amortization expense, finance cost and tax expense.




29. Exceptional item Reversal of provision for impairment in the value of investment: Owning to the merger of Hyderabad Duty Free Retail Limited into GMR Hotels and Resorts Limited (GHRL) and based on the independent valuation obtained by the Company for the merged entity, the provision for impairment in value of investments in GHRL made in the earlier years amounting to Rs. 85.78 crore has been reversed in the current year.

30. Earnings Per Share (EPS) Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares. The following reflects the income and share data used in the basic and diluted EPS computations:

Particulars March 31,2017 March 31,2016

Profit attributable to equity holders for basic and diluted earning

434.79 6.19

Weighted Average number of equity shares used for computing Earning Per Share (Basic and diluted)

37.80

37.80

Earnings Per Share (Basic and diluted) (Rs.) 11.49 0.16

Face value per share (Rs.) 10.00 10.00

31. Retirement and other employee benefits

a) Defined contribution plan

Contribution to provident and other funds under employee benefits expense are as under:

March 31, 2017 March 31, 2016

Contribution to provident fund 2.35 2.22

Contribution to ESI and labour welfare fund 0.03 0.02

Contribution to superannuation fund 1.44 1.40

Total 3.82 3.64

b) Defined benefit plans

Gratuity liability is a defined benefit obligation which is funded through policy taken from Life Insurance Corporation of India and Liability (net of fair value of investment in LIC) is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days’ salary (based on last drawn basic salary) for each completed year of service

The following tables summarize the components of net benefit expense recognised in the statement of profit or loss/OCI and amounts recognised in the balance sheet for defined benefit plans/obligations:




Net employee benefit expense (recognized in Employee Cost)

For the year ended

March 31, 2017

For the year ended

March 31, 2016

Current service cost 0.58 0.58

Net interest cost (0.05) (0.04)

Cost recognized in statement of profit and loss 0.53 0.54

Amount recognized in other comprehensive income

For the year ended

March 31, 2017

For the year ended

March 31, 2016

Actuarial (gain)/loss due to DBO experience 0.10 0.01

Actuarial (gain)/loss due to DBO assumption changes 0.31 -

Actuarial (gain)/loss arising during the year 0.41 0.01

Return on plan assets (greater)/less than discount rate 0.04 0.02

Actuarial (gains)/ losses recognized in OCI 0.45 0.03

Balance sheet


Defined benefit obligation (5.33) (4.37) (3.94)

Fair value of plan assets 5.18 4.79 3.95

Plan asset / (liability) (0.15) 0.42 0.01

Changes in the present value of the defined benefit obligation are as follows:


Opening defined benefit obligation 4.37 3.94 2.84

Interest cost 0.33 0.28 0.26

Current service cost 0.58 0.58 0.49

Acquisition cost 0.04 (0.06) 0.03

Benefits paid (including transfer) (0.40) (0.38) (0.09)

Actuarial losses/ (gain) on obligation-experience

0.41 0.01 0.41

Closing defined benefit obligation 5.33 4.37 3.94

Changes in the fair value of plan assets are as follows:


Opening fair value of plan assets 4.79 3.95 3.96

Expected return on plan assets 0.38 0.33 0.37

Contributions by employer 0.43 0.89 -

Acquisition adjustment 0.01 0.02 -


Return on plan assets greater/ (lesser) than discount rate

(0.04) (0.02) (0.30)

Actuarial (gains) / losses - - -

Closing fair value of plan assets 5.18 4.79 3.95




The major category of plan assets as a percentage of the fair value of total plan assets is as follows:


Investments with insurer 100% 100% 100%

The principal assumptions used in determining gratuity obligation for the Company's plans are shown below:

Particulars March 31, 2017 March 31, 2016 April 1, 2015

Discount rate (in %) 7.10% 7.80% 7.80%

Salary Escalation (in %) 6.00% 6.00% 6.00%

Attrition rate (in %) 5.00% 5.00% 5.00%

A quantitative sensitivity analysis for significant assumption as at 31 March 2017 is as shown below:

March 31, 2017 March 31, 2016

Discount rate

Effect due to 1% increase in discount rate (0.44) (0.36)

Effect due to 1% decrease in discount rate 0.51 0.41

Attrition rate

Effect due to 1% increase in attrition rate 0.06 0.06

Effect due to 1% decrease in attrition rate (0.07) (0.07)

Salary escalation rate

Effect due to 1% increase in salary increase rate 0.39 0.35

Effect due to 1% decrease in salary increase rate (0.37) (0.32)

The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The following payments are expected contributions to the defined benefit plan in the future years:

March 31, 2017

March 31, 2018 0.34

March 31, 2019 0.38

March 31, 2020 0.58

March 31, 2021 0.60

March 31, 2022 0.60

March 31, 2023 to March 31, 2027 4.44

The average duration of the defined benefit plan obligation at the end of the reporting period is 10 years (March 31, 2016: 10 years).




32. Details of transactions with Related Parties: A. Names of related parties and description of relationship:

Sl. No. Relationship Related party Name

(i) Holding company GMR Airports Limited (GAL)

(ii) GAL's holding company GMR Infrastructure Limited (GIL)

(iii) Ultimate holding company GMR Enterprises Private Limited (GEPL) (formerly GMR Holdings Private Limited)

(iv)

Subsidiary Companies Hyderabad Menzies Air Cargo Private Limited

GMR Hyderabad Aerotropolis Limited

Hyderabad Airport Security Services Limited

GMR Hyderabad Aviation SEZ Limited

GMR Hotels and Resorts Limited

Hyderabad Duty Free Retail Limited*

GMR Aerospace Engineering Limited

GMR Hyderabad Airport Power Distribution Limited

GMR Aero Technic Limited

(v) Fellow Subsidiary Companies GMR Aviation Private Limited

GMR Hyderabad Airport Resource Management Limited$

GMR Energy Limited

GMR Tambaram-Tindivanam Expressways Private Limited

GMR Tuni-Anakapalli Expressways Private Limited

Delhi International Airport Limited (formerly known as Delhi International Airport Private Limited)

Gateways For India Airports Private Limited

GMR Pochanpalli Expressways Limited

GMR Corporate Center Limited

GMR Infrastructure (Mauritius) Limited

GMR Energy Trading Limited

GMR SEZ and Port Holding Limited (Formerly GMR SEZ and Port Holding Private Limited)

GMR Highways Limited

GMR Corporate Affairs Private Limited

GMR Hyderabad Vijayawada Expressways Private Limited

GMR Vemagiri Power Generation Limited

GMR Rajahmundry Energy Limited

GMR Warora Energy Limited

(Formerly EMCO Energy Limited)

GMR Chhattisgarh Energy Limited

GMR Kamalanga Energy Limited

GMR Airport Developers Limited

GMR Power Corporation Limited

GMR Male International Airport Private Limited

GADL International Limited

Kakinada SEZ Limited (Formerly Kakinada SEZ Private Limited

Raxa Security Services Limited

GMR Sports Private Limited

Geokno India Private Limited





GMR Infrastructure (Singapore) Pte Limited

(vi) Associates of GMR Infrastructure Limited

Jadcherla Expressways Private Limited (formerly GMR Jadcherla Expressways Private Limited)

Ulundurpet Expressways Private Limited (formerly GMR Ulundurpet Expressways Private Limited)

(vii)

Shareholders having significant influence

Government of Telangana

Airports Authority of India

MAHB (Mauritius) Private Limited

(viii) Key management personnel Mr. Srinivas Bommidala – Managing Director

Mr. SGK Kishore - Chief Executive Officer

Mr. Rajesh Arora- Chief Financial Officer

Mr. Anup Kumar Samal - Company Secretary

Mr. G M Rao - Director

Mr. HJ Dora - Director

Mr. VR Hegde - Director

Mr. S. Samanta - Director

Mr. Arvind Kumar IAS - Director

Mr. Ramakrishna Rao IAS - Director

Mr. Datuk Badlisham Bin Ghazali * - Director

Mr. RSSLN Bhaskarudu- Independent Director

Mr. NC Sarabeswaran- Independent Director

Mrs. Vissa SivaKameswari -Independent Director

Mr. P. Vijay Bhaskar- Independent Director

Mr. Pradeep Chandra- Independent Director (Resigned with effect from April 27,2016

Mr. LL Krishnan- Independent Director(Resigned with effect from June 28,2016

(ix) Joint Venture Laqshya Hyderabad Airport Media Private Limited

Asia Pacific Flight Training Academy Limited

(x) Private company having common director (Section 8 Company)

GMR Varalakshmi Foundation

(xi) Other entities in which Directors are interested

GMR Family Fund Trust

B. Remuneration paid to Key Managerial Remuneration:

Details of Key Managerial Personnel For the year ended March 31, 2017

For the year ended March 31, 2016

Short Term Employee benefits

Sitting Fees


Sitting Fees

Remuneration to KMP 5.43 - 7.07 -

Mr. G M Rao - Director - 0.01 - 0.01

Mr. HJ Dora - Director - 0.01 - 0.01

Mr. VR Hegde - Director - 0.01 - 0.01

Mr. S. Samanta - Director - 0.02 - -

Mr. Arvind Kumar IAS - Director - 0.01 - -

Mr. Ramakrishna Rao IAS - Director - 0.00 - 0.00

Mr. Datuk Badlisham Bin Ghazali * - Director - 0.00 - 0.00

Mr. RSSLN Bhaskarudu- Independent Director - 0.05 - 0.06

Mr. NC Sarabeswaran- Independent Director - 0.04 - 0.06

Mrs. Vissa Siva Kameswari -Independent - 0.03 - 0.03







Sitting Fees


Sitting Fees

Director

Mr. P. Vijay Bhaskar - 0.01 - -

Mr. K. Pradeep Chandra IAS - - - 0.01

Mr. LL Krishnan - - - 0.02

C. Summary of Transactions with related parties during the year is as follows:

S. No. Related Party Transactions March 31,

2017 March 31,

2016

(i) Services received:

a Raxa Security Services Limited 12.30 9.11

b GMR Hotels and Resorts Limited 0.29 0.30

c Airports Authority of India 0.05 0.03

d GMR Aviation Private Limited 3.81 3.16

e GMR Airport Developers Limited 16.40 15.63

f GMR Infrastructure Limited 12.75 9.53

g GMR Airports Limited 10.52 6.19

h Laqshya Hyderabad Airport Media Private Limited 0.23 0.28

i GMR Corporate Affairs Private Limited 0.39 0.55

j GMR Family Fund Trust 0.10 -

k Geokno India Private Limited 0.33 -

l Government of Telangana 3.29 3.12

(ii) Investment during the year:

a GMR Hyderabad Aviation SEZ Limited - 1.70

b GMR Aerospace Engineering Limited 49.00 6.00

c Asia Pacific Flight Training Academy Limited 0.03 -

d GMR Hyderabad Aerotropolis Limited 23.87 -

(iii) Investment made in subsidiary during the year on account of amortization of Loans given:

a GMR Hotels and Resorts Limited 5.73 -

(iv) Advance towards share application money:

a GMR Aerospace Engineering Limited 12.00 -

(v) Security Deposit paid /(received):

a Hyderabad Menzies Air Cargo Private Limited (Actual cash flow – Rs. 0.1 (PY – Rs. 0.1)

(0.10) (0.10)

b Asia Pacific Flight Training Academy Limited (Actual cash flow – Rs. 0.01 (PY – Rs. Nil)

0.00 -

c Laqshya Hyderabad Airport Media Private Limited (Actual cash flow – Rs. 0.02 (PY – Rs. Nil)

0.02 -

d GMR Family Fund Trust (Actual cash flow – Rs. 0.39 (PY – Rs. Nil)

0.39 -

(vi) Income from operations:

a Hyderabad Menzies Air Cargo Private Limited 23.52 21.51

b Hyderabad Duty Free Retail Limited* - 23.26

c GMR Hotels and Resorts Limited 33.40 1.19

d Airports Authority of India 3.01 2.94

e GMR Aviation Private Limited 0.02 0.01

f GMR Infrastructure Limited 0.04 0.12




S. No. Related Party Transactions March 31, 2017

March 31, 2016

g GMR Hyderabad Aviation SEZ Limited** 2.38 (1.08)

h Laqshya Hyderabad Airport Media Private Limited 33.67 23.50

i Kakinada SEZ Private Limited 0.35 0.34

j GMR Aero Technic Limited 0.26 0.28

k GMR Airport Developers Limited 0.21 0.14

l GMR Hyderabad Aerotropolis Limited 0.37 0.22

m GMR Airports Limited 0.42 0.46

n Asia Pacific Flight Training Academy Limited 1.36 1.10

o Raxa Security Services Limited 0.01 0.02

p GEOKNO India Pvt Ltd 0.27 -

q GMR Energy Trading Limited 0.01 0.01

r GMR Highways Limited 0.26 0.24

s GMR Varalakshmi Foundation 0.34 0.34

(vii) Dividend income received from subsidiary Company:


b Hyderabad Duty Free Retail Limited* 10.17 2.54

(viii) Adjustment of Advance revenue Received:

a Hyderabad Menzies Air Cargo Private Limited - 5.71

(ix) Unsecured loan repaid during the year:

a Hyderabad Airport Security Services Limited 12.57 19.30

(x) Interest paid during the year:

a Hyderabad Airport Security Services Limited - 2.63

(xi) Unsecured loan given :

a GMR Hotels and Resorts Limited 11.50 9.50

b GMR Hyderabad Aerotropolis Limited 20.00 -

(xii) Unsecured loan received back:

a Hyderabad Airport Security Services Limited - 6.62

b Laqshya Hyderabad Airport Media Private Limited 1.50 1.07

(xiii) Interest on unsecured loan given:



(xiv) Interest on amortisation of interest free unsecured loan given:

a Laqshya Hyderabad Airport Media Private Limited 0.74 0.77

b GMR Hotels and Resorts Limited 3.03 2.71

c Hyderabad Airport Security Services Limited - 0.67

(xv) Interest on Delayed payments from customers

a Asia pacific Flight Training Academy Limited 0.20 0.22


c GMR Highways Limited 0.00 0.01

d Laqshya Hyderabad Airport Media Private Limited 0.02 0.03

e GMR Energy Trading Limited 0.00 -

(xvi) Sale of Asset:

a Asia pacific Flight Training Academy Limited - 0.00

b Hyderabad Duty Free Retail Limited* - 0.05

c Delhi International Airport Limited - 0.00

d Kakinada SEZ Private Limited 0.01 0.00

(xvii) Purchase of Asset:

a GMR Airport Limited - 0.00

b Geokno India Private Limited - 0.03

c Hyderabad Duty Free Retail Limited* - 0.02





March 31, 2016

d GMR Airport Developers Limited

2.35 -

(xviii) Pledge of equity shares by the Company with banks against the loan taken by the Subsidiary Companies:

a GMR Aerospace Engineering Limited 14.53 10.71

b GMR Hotels and Resorts Limited 32.90 -

c Hyderabad Duty Free Retail Limited* 5.08 -

(xix) Corporate guarantee given by the Company on behalf of its subsidiaries companies with banks against the loan taken:

a GMR Hyderabad Aviation SEZ Limited 5.42 5.42

b GMR Hotels and Resorts Limited (0.40) (7.00)

c GMR Aerospace Engineering Limited (3.60) 24.46

(xx) Corporate guarantee availed from the intermediate holding company against loan taken from banks:

a GMR Infrastructure Limited 37.14 89.99

b GMR Airport Limited - 41.00

(xxi) Bank guarantee given by the Company on behalf of its subsidiaries companies with banks:


b GMR Hyderabad Aviation SEZ Limited 0.05 (3.14)

c Hyderabad Duty Free Retail Limited* - (0.86)

d GMR Aero Technic Limited 0.76 -

e GMR Aerospace limited 8.56 -

(xxii) CSR Expenditure

a GMR Varalakshmi Foundation 2.46 0.34

(xxiii) Reimbursement of expenses claimed by the Company during the year from its related parties:



c Kakinada SEZ Limited 0.09 0.08

d Delhi International Airport Limited - 0.04

e GMR Hyderabad Aviation SEZ Limited 3.17 3.19

f GMR Airports Limited 0.15 0.21

g GMR Hotels and Resorts Limited 6.72 4.98

h Hyderabad Duty Free Retail Limited* - 1.30

i GMR Hyderabad Vijayawada Expressways Private Limited

- 0.00

j Hyderabad Menzies Air Cargo Private Limited 2.99 2.81

k Airports Authority of India 3.18 3.06

l GMR Hyderabad Aerotropolis Limited 0.16 0.15

m Asia Pacific Flight Training Academy Limited 0.21 0.21

n GMR Airport Developers Limited 0.45 0.44

o GMR Highways Limited 0.05 0.05

p Raxa Security Services Limited 0.00 0.00

q GMR Energy Trading Limited 0.00 0.00

r GMR Rajahmundry Energy Limited 0.00 -

s GMR Power Corporation Limited - 0.00

t GMR Varalakshmi Foundation 0.07 0.06

u GMR Vemagiri Power Generation Limited - 0.00

v Geokno India Private Limited 0.11 -

w GMR Aero Technic Limited 1.46 1.07





March 31, 2016

x GMR Aerospace Engineering Limited

0.06 -

(xxiv) Reimbursement of expenses claimed from the Company during the year by its related parties:

a Hyderabad Duty Free Retails Limited* - 0.07

b GMR Infrastructure Limited 0.00 0.01

c GMR Airports Limited 0.00 0.00

d Delhi International Airport Limited 0.25 0.22

e GMR Varalakshmi Foundation 0.00 -

f GMR Hotels and Resorts Limited 0.03 -

(xxv) Provision for impairment in value of Investment

a GMR Hotels and Resorts Limited - 2.03

b GMR Hyderabad Multiproduct SEZ Limited@ - 0.05

c GMR Airport Handling Services Company Limited@ - 0.05

d GMR Hyderabad Airport Resource Management Limited@$

- 0.05

(xxvi) Provision for impairment in value of additional investment made on account of amortisation of interest free loan and fair valuation of financial guarantee

a GMR Hotels and Resorts Limited - 2.71

(xxvii) Reversal of Provision for Impairment in value of Investment

a GMR Hotels and Resorts Limited@ 80.68 -

(xxviii) Reversal of Provision for impairment in value of additional investment made on account of amortisation of interest free loan and fair valuation of financial guarantee


(xxix) Provision for Impairment in value of Advance

a GMR Hyderabad Airport Resource Management Limited$ - 0.04

(xxx) Corporate Guarantee commission income on account of Ind-As Adjustments:


b GMR Aerospace Engineering Limited 0.38 0.38

c GMR Hyderabad Aviation SEZ Limited 0.09 0.09

(xxxi) Income on amortisation of deposit received:


b Asia Pacific Flight Training Academy Limited 0.01 0.01

c GMR Infrastructure Limited 0.00 0.00

d Hyderabad Duty Free Retail Limited* 0.00 0.00

e Laqshya Hyderabad Airport Media Private Limited 0.01 0.05

f GMR Aero Technic Limited 0.01 0.01

g GMR Varalakshmi Foundation 0.01 0.01

(xxxii) Interest expense on amortisation of deposit received:


b Asia Pacific Flight Training Academy Limited 0.01 0.03

c GMR Infrastructure Limited 0.00 0.00

d Hyderabad Duty Free Retail Limited* 0.00 0.00

e Laqshya Hyderabad Airport Media Private Limited 0.01 0.01

f GMR Aero Technic Limited 0.01 0.01

g GMR Varalakshmi Foundation 0.01 0.01




D. Outstanding balances at the end of the year:

S. No.

Particulars March 31, 2017

March 31, 2016

April 1, 2015

Non-Current

Current Non- Current

Current Non- Curre

nt

Current

(i) Balance Recoverable / (Payable):

a Hyderabad Menzies Air Cargo Private Limited

- 1.88 - 1.35 - 1.02

b GMR Hyderabad Airport Resource Management Limited$#

- 0.01 - 0.01 - 0.09

c Raxa Security Services Limited - (1.73) - (1.27) - (1.22)

d Airports Authority of India - 4.30 - 2.62 - 1.24

e GMR Infrastructure Limited - (3.07) - (1.96) - (1.11)

f Delhi International Airport Limited - (0.17) - (0.05) - (0.01)

g GMR Rajahmundry Energy Limited - 0.04 - 0.04 - 0.04

h GMR Airports Limited - (2.42) - (1.81) - (0.87)

i Hyderabad Duty Free Retail Limited* - - - 1.79 - 1.79

j GMR Hotels and Resorts Limited - 2.69 - 0.33 - 0.27

k GMR Hyderabad Vijayawada Expressways Private Limited

- 0.01 - 0.11 - 0.01

l GMR Holdings Private Limited - 0.01 - 0.01 - 0.01

m GMR Aviation Private Limited - (0.07) - (0.10) - (0.61)

n GMR Hyderabad Aviation SEZ Limited - 5.41 - 2.24 - 5.93

o Asia Pacific Flight Training Academy Limited

- 2.49 - 2.19 - 0.80

p GMR Airport Developers Limited - (2.85) - (2.58) - (0.45)

q Laqshya Hyderabad Airport Media Private Limited

- 4.79 - 0.75 - 4.62

r Kakinada SEZ Private Limited - 0.34 - 0.02 - 0.02

s GMR Aero Technic Limited - 0.86 - 1.35 - 0.34

t GMR Energy Trading Limited - 0.01 - 0.02 - 0.00

u GMR Power Corporation Limited - - - - - 0.00

v GMR Hyderabad Aerotropolis Limited - 0.16 - 0.08 - 0.07

w GMR Varalakshmi Foundation - (0.04) - 0.01 - 0.02

x Government of Telangana - (3.37) - (3.20) - (0.08)

y GMR Vemagiri Power Generation Ltd. - 0.00 - 0.00 - -

z GMR Highways Limited - (0.00) - 0.00 - -

aa GMR Corporate Affairs Private Limited - (0.11) - (0.08) - (0.10)

ab GEOKNO India Pvt Ltd - 0.38 - - - -

ac GMR Aerospace Engineering Limited 0.07 - - - -

ad GMR Family Fund Trust - (0.09) - - - -

ae GADL International Limited - - - - - (0.07)

af GMR Chhattisgarh Energy Private Limited

- - - - - 0.00

ag EMCO Energy Limited - - - - - 0.00




S. No.


March 31, 2016

April 1, 2015

Non-Current


Current Non- Curre

nt

Current

ah GMR Infrastructure (Singapore) Pte Limited

- - - - - 0.32

(ii) Security deposit received from / (paid) to related parties reccognised at amortised cost:


0.37 0.05 0.42 0.05 0.47 0.04

b Asia Pacific Flight Training Academy Limited

0.14 - 0.10 0.00 0.14 -

c GMR Infrastructure Limited - 0.02 - 0.02 0.02 0.01

d Hyderabad Duty Free Retail Limited* 0.00 - 0.00 - 0.00 -

e Laqshya Hyderabad Airport Media Private Limited

0.30 - 0.26 - 0.23 -

f GMR Aero Technic Limited - - 0.00 - 0.03 -

g GMR Varalakshmi Foundation 0.12 - 0.11 - 0.90 -

h Raxa Security Services Limited (1.75) - (1.75) - (1.75) -

i GMR Family Fund trust (0.39) - - - - -

(iii) Deferred income on deposits received recognized at amortised cost


0.28 0.05 0.33 0.05 0.38 0.05

b Asia Pacific Flight Training Academy Limited

0.01 0.00 0.02 0.01 - 0.00

c GMR Infrastructure Limited - - - 0.00 - 0.00

d Hyderabad Duty Free Retail Limited* 0.00 0.00 0.00 0.00 0.00 0.00

e Laqshya Hyderabad Airport Media Private Limited

0.03 0.03 0.08 0.03 0.09 0.03

f GMR Aero Technic Limited - - 0.00 0.00 0.00 0.00

g GMR Varalakshmi Foundation 0.01 0.01 0.03 0.01 0.03 0.02

(iv) Advance towards share application money:

a GMR Aerospace Engineering Limited - 12.00 - - - -

b GMR Hyderabad Aviation SEZ Limited - - - - 1.70 -

(v) Investments in subsidiaries:


0.54 - 0.54 - 0.54 -

b GMR Hyderabad Aerotropolis Limited 57.50 - 57.50 - 33.63 -

c Hyderabad Airport Security Services Limited

12.5

- 12.5

- 12.5

-

d GMR Hyderabad Aviation SEZ Limited 51.60

- 51.60

- 49.90 -

e GMR Hotels and Resorts Limited* 126.61 - - 28.98

- 31.00

f Hyderabad Duty free Retail Limited* - - 16.95 - 16.95 -

g GMR Hyderabad Airport Power Distribution Limited

0.05 - 0.05 - 0.05 -

h GMR Aerospace Engineering Limited 196.15 - 147.15 - 141.15 -




S. No.


March 31, 2016

April 1, 2015

Non-Current


Current Non- Curre

nt

Current

(vi) Investment in joint venture company:

a Asia Pacific Flight Training Academy Limited

3.56 - 3.56 - 3.53 -

b Laqshya Hyderabad Airport Media Private Limited

9.80

- 9.80

- 9.80 -

(vii) Investment in Subsidiaries and Joint venture on account of amortisation of Loans given and Fair valuation of Financial guarantees:

a GMR Hotels and Resorts Limited 11.86 1.98 6.13 1.98 6.13 1.98


5.58 - 5.58 - 5.58 -

c Hyderabad Airport Security services Limited

3.25 - 3.25 - 3.25 -

d GMR Aerospace Engineering Limited 4.27 - 4.27 - 4.27 -

e GMR Hyderabad Aviation SEZ Limited 0.88 - 0.88 - 0.88 -

(viii) Loans given :

a GMR Hotels and Resorts Limited 66.00 - 57.20 - 44.99 -

b GMR Hyderabad Aerotropolis Limited 19.80 0.20 - - - -

c Laqshya Hyderabad Airport Media Private Limited

4.76

0.99 5.76

0.76 6.51 0.29

d Hyderabad Airport Security services Limited

- - - - 5.94 -

(ix) Borrowings:

a Hyderabad Airport Security Services Limited

- (12.90) (13.26) (12.28) (30.59) (14.28)

* Hyderabad Duty Free Retail has been merged with GMR Hotels and Resorts Limited with appointed date as 01st April 2016 effective from April 27, 2017. **During the previous year, the Company issued a credit note amounting to Rs.3.75 Cr. to GHASL @The above amounts are net of provision for impairment in value of investment of Rs. Nil (March 31, 2016 Rs. 80.68 crore) in GMR Hotels and Resorts Limited. The subsidiary companies GMR Hyderabad Multiproduct SEZ limited and GMR Airport Handling Services Company Limited are in the process of striking off from the register of Companies. $ During the year, entire equity share capital of GMR Hyderabad Airport Resource management Limited has been sold to GMR Infrastructure limited for a nominal sum of Rs. 1 and the loss on sale of the equity is been booked for Rs. 0.05 $$ The above amount is net of provision for impairment in value of advance of Rs. Nil (March 31, 2016 Rs. 0.04 crore) in GMR Hyderabad Airport Resource Management Limited. Note: The Company has provided certain corporate group support services such as internal audit services, software and IT support etc. to its subsidiaries and joint venture companies, which are free of charge.




E. Outstanding guarantees / pledge of equity shares at the end of the year:

S. No.

Related Party Transactions March 31, 2017

March 31, 2016

April 1, 2015

(i) Pledge of equity shares by the shareholders having significant influence in the Company, with banks against the loan taken:

a GMR Airports Limited 164.12 164.12 164.12

b MAHB (Mauritius) Private Limited 28.66 28.66 28.66

(ii) Pledge of equity shares by the Company with banks against the loan taken by the subsidiary companies:

a Hyderabad Airport Security Services Limited 3.75 3.75 3.75

b GMR Aerospace Engineering Limited 135.86 121.33 110.62

c Hyderabad Duty Free Retail Limited* 10.17 5.09 5.09

d GMR Hotels and Resorts Limited 32.90 - -

(iii) Corporate guarantee given by the Company on behalf of its subsidiaries companies with banks against the loan taken:

a GMR Hotels and Resorts Limited 124.38 124.79 131.9

b GMR Aerospace Engineering Limited 278.38 281.99 257.53

c GMR Hyderabad Aviation SEZ Limited 60.62 55.20 49.78

(iv) Bank guarantee given by the Company on behalf of its subsidiaries companies with banks, as required under the loan covenants:

a GMR Hotels and Resorts Limited 7.38 5.73 5.73

b GMR Hyderabad Aviation SEZ Limited 0.31 0.26 3.40

c Hyderabad Duty Free Retail Limited* 3.00 3.00 3.86

d GMR Aero Technic Limited 0.76 - -

e GMR Aerospace Engineering Limited 8.56 - -

(v) Corporate guarantee availed from the intermediary holding company against loan taken from banks:

a GMR Infrastructure Limited - 1249.26 1159.27

b GMR Airport Limited 41.00 41.00 -

33. The Company has only one reportable business segment, which is operation of airport and providing

allied services and operates in a single business segment. Accordingly, the amounts appearing in the financial statements relate to the Company’s single business segment.

34. The Company has not dealt with any party as defined under the provisions of Micro, Small and Medium Enterprises Development Act, 2006 during the year.




35. Commitments and Contingencies

I. Leases Operating lease commitments: Company as lessee:

The Company has taken land and office spaces on operating lease having a term of 30 years and 5 years respectively. The land lease has an escalation of 5% per annum from the 8th anniversary of the Commercial Operations Date (i.e. March 23, 2008) and it has a renewal option for another thirty years which is co-terminus with the concession period. The office spaces leases have an escalation of 5% per annum and are renewable at the end of the lease period with mutual consent. Future minimum rentals payable under non-cancellable operating leases are as follows:


Within one year 3.75 3.26 3.10

After one year but not more than five years 21.22 18.91 18.01

More than five years 731.38 735.75 739.91

As per the terms of the Concession Agreement and Land Lease Agreement, the Government of Telangana leased the land to the Company for the concession period. The lease term neither constitutes a major part of the economic life nor the fair value of the land. Hence, all the significant risk and rewards of the ownership have not been transferred and accordingly the lease is classified as an operating lease.

Company as lessor: The Company has sub-leased land to various parties under operating leases having a term of 9 to 30 years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiable. Future minimum rentals receivable under non-cancellable operating leases are as follows:


Within one year 34.31 36.71 33.35



II. Litigation and Contingent Liabilities

A. Litigations provided for

i. Matters related to various service tax notices / orders referred in paragraph (C) below on contingent liabilities for which an amount of Rs.0.81 crores (March 31, 2016: Rs.0.81 crores) have been provided for in the books of account.

ii. Direct taxes:

a) A search operation under section 132 of the Income Tax Act, 1961 was carried out at the premises of

the Company by the Income Tax authorities on October 11, 2012 followed by another search closure visit on November 10, 2012, to check the compliance with the provisions of the Income Tax Act, 1961. Block Assessment in respect of A.Y 2007-2008 to 2012-2013 was completed and the Company received the assessment orders, which disallowed certain expenses and made few additions to the income resulting in reduction of carried forward loss amounting to Rs. 109.44 crores and no additional tax liability was assessed to be payable by the Company. The Company had filed an




appeal with the Commissioner of Income Tax (Appeals), Bengaluru against the said block assessment orders. During the current year, the Company received the orders from the Commissioner of Income Tax (Appeals), Bengaluru reducing the disallowances from Rs. 109.44 crores to Rs. 31.17 crores against which the Company has filed an appeal with Income Tax Appellate Tribunal, Bengaluru.

b) The Company received an assessment order for A.Y. 2013-14 disallowing expenses amounting to Rs. 23.68 crores against which the Company filed an appeal with the Commissioner of Income Tax (Appeals), Bengaluru (CIT). During the current year, the Company had received an order from CIT reducing the disallowance of expenditure from Rs. 23.68 crores to Rs. 3.76 crores against which the Company had filed an appeal with Income Tax Appellate Tribunal, Bengaluru.

c) The Company received assessment orders for the A.Y. 2014-15 and 2015-16 disallowing expenses aggregating to Rs. 23.79 crores and Rs. 19.82 crores respectively against which, the Company has filed an appeal with the Commissioner of Income Tax (Appeals), Bengaluru.

iii. In accordance with the provisions of the amended and restated Joint Venture agreement dated

November 16, 2010 executed by the Company with Menzies Aviation Plc, Menzies Aviation Cargo (Hyderabad) Limited (MACL), Menzies Aviation (India) Private Limited and Hyderabad Menzies Air Cargo Private Limited (HMACPL), the Company exercised its buy back rights to buy the shares held by MACL in HMACPL. MACL disputed GHIAL’s position as regards exercising the buyback rights. In view of the above dispute, GHIAL invoked Arbitration proceedings which is currently in progress.

B. Guarantees excluding financial guarantees

Bank guarantees outstanding in respect of customs and others Rs. 20 crores (March 31, 2016: Rs. 18.99 crores). Note: Performance guarantees given by the Company on its own behalf are not considered as contingent liability.

C. Matters under dispute are as follows:

i. The Company had received an order from the Office of Commissioner of Customs, Central Excise and Service Tax dated January 29, 2010 on irregular availment of the Cenvat amounting to Rs. 24.54 crores (March 31, 2016: Rs. 24.54 crores). The order also includes penalty of Rs. 31.11 crores (March 31, 2016: Rs. 31.11 crores). The Company had received stay order from CESTAT modified by High Court of Andhra Pradesh against the above said order subject to pre-deposit of Rs. 12.20 crores and accordingly, the Company had deposited the same with the service tax department within the stipulated time.

ii. The Company had received an order from the Office of Commissioner of Customs, Central Excise and

Service Tax dated October 28, 2009, as per which the Company is liable to pay an amount of Rs. 7.43 crores (March 31, 2016: Rs. 7.43 crores) towards penalty on delay in payment of service tax on the UDF. The Company has got the stay order against the above said order in the earlier years.

iii. The Company had received an order from the Office of Commissioner of Customs, Central Excise and

Service Tax dated November 25, 2013 on non- payment of service tax on recovery of electricity and water charges from its concessionaires and irregular availment of Cenvat amounting to Rs. 1.53 crores (March 31, 2016: Rs. 1.53 crores), including penalty of Rs 1.67 crores (March 31, 2016: Rs. 1.67 crores). The Company had received a stay subject to pre-deposit of Rs. 0.15 crores and accordingly, the Company had deposited same with the service tax department within the stipulated time.

iv. The Company had received Show Cause Notice dated June 17, 2013 from the Office of Commissioner of

Customs, Central Excise and Service Tax on non- payment of service tax on import of service amounting




to Rs. 0.33 crores (March 31, 2016: Rs. 0.33 crores). The Notice also included penalty of Rs. 0.41 crores (March 31, 2016: Rs. 0.41 crores).

v. The Company had received the Show Cause Notices dated October 23, 2013 and dated April 22, 2015

from the Office of Deputy Commissioner of Customs, Central Excise and Service Tax and from the Office of Assistant Commissioner of Customs, Central Excise and Service Tax amounting to Rs. 0.03 crores and Rs. 0.04 crores (March 31, 2016: 0.07 crores) respectively on irregular availment of cenvat credit. During the year, the Company has received an order dated February 29, 2016 from the Office of Assistant Commissioner of Customs, Central Excise and Service Tax amounting to 0.07 crores. The order also includes the interest payable thereon and penalty of Rs. 0.07 crores (March 31, 2016: Rs. 0.07 crores). The Company has filed the appeal before the office of Commissioner Customs, Excise and Service Tax (Appeal) and deposited an amount of Rs. 0.01 with the service tax department as required to file the appeal.

vi. The Company has received show cause notices from the Office of Assistant Commissioner of Customs,

Central Excise and Service Tax on irregular availment of cenvat credit amounting to Rs. 0.13 crores (March 31, 2016: Rs. 0.13 crores). The notice also includes the interest payable thereon and penalty of Rs. 0.13 crores (March 31, 2016: Rs. 0.13 crores).

vii. The Company has received a Show Cause Notice dated July 20, 2015 from the Office of Additional

Commissioner of Customs, Central Excise and Service Tax on irregular availment of cenvat credit amounting to Rs. 0.06 crore (March 31, 2016: Rs. 0.06 crore). During the year, the Company has received an order dated April 24, 2016 from the Office of Additional Commissioner of Customs, Central Excise and Service Tax amounting to Rs. 0.06 crore. The order also includes the interest payable thereon and penalty of Rs. 0.01 crore (March 31, 2016: Rs. 0.06 crore). The Company has filed the appeal before the office of Commissioner Customs, Excise and Service Tax (Appeal) and deposited an amount of Rs. 0.01 crore with the service tax department as required to file the appeal.

viii. The Company had received the Show Cause Notice dated April 23, 2014 from the Office of Commissioner of Customs, Central Excise and Service Tax on Irregular availment of cenvat credit amounting to Rs. 0.62 crores (March 31, 2016: 0.62 crores). The Notice also includes the interest payable thereon and penalty of Rs. 0.62 crores (March 31, 2015: Rs. 0.62 crores). In the previous year, the Company had received an order from the Office of Commissioner of Customs, Central Excise and Service Tax dated June 11, 2015 confirming the demand of Rs. 0.62 crores. The order also includes penalty of Rs. 0.62 crores. The Company has filed the appeal before the Customs, Excise and Service Tax Appellate Tribunal and deposited an amount of Rs. 0.05 crores with the service tax department as required to file the appeal.

ix. The Company had received a notice from the office of the Joint Commissioner of Labour for payment of

Building and other construction workers’ Welfare Cess @ 1% of the cost of construction of Airport amounting to Rs. 25.20 crores (March 31, 2016: Rs. 25.20 crores). The Company had received the stay order against the said order in the earlier years.

x. The Company had received notice dated January 19, 2013, from Hyderabad Metropolitan Water Supply

& Sewerage Board for disconnection of water connection for non-payment of sewerage cess arrears. The Company had received the stay order against the said order in the earlier years. The sewerage cess outstanding including interest as at March 31, 2017 amounts to Rs. 3.94 crores (March 31, 2016: Rs. 3.63 crores).

xi. Recovery from PSF (SC) Escrow account:

a) The Ministry of Civil Aviation (MoCA) had issued the order vide order no. AV 13024 /03/2011-AS (Pt. I) dated February 18, 2014 requiring the Airport Operators to reverse the expenditure incurred, since inception till date, towards procurement and maintenance of security systems/equipment and on creation of fixed assets out of PSF (SC) escrow account opened and maintained by the Airport Operator




in a fiduciary capacity. The Company had incurred Rs. 93.83 crores (March 31, 2016: Rs. 92.29 crores towards capital expenditure (including the construction cost and cost of land mentioned in note b and excluding related maintenance expense and interest thereon) till March 31, 2017 out of PSF (SC) escrow account as per SOPs, guidelines and clarification issued by the MoCA from time to time on the subject of utilization of PSF (SC) funds.

As the above order is contrary to and inconsistent with SOPs, guidelines and clarification issued by the MoCA from time to time in this regard, the Company had challenged the said order before Hon’ble High court of Andhra Pradesh. The Honorable Court, vide its order dated March 3, 2014 followed by further clarifications dated April 28, 2014 and December 24, 2014, stayed the MoCA order with an undertaking that, in the event the decision of the writ petition goes against the Company, it shall reverse all the expenditure incurred from PSF (SC).

Accordingly, the Company is continuing to incur the procurement and maintenance cost of security systems / equipment from PSF (SC) escrow account and during the year ended March 31, 2017 incurred an amount of Rs. 2.88 crores (March 31, 2016 Rs. 2.66 crores) on maintenance of security systems / equipment from the PSF (SC) escrow account.

b) As per the advice from the Ministry of Home Affairs and the SOP issued by the MoCA on March 06,

2002, the Company, through its wholly owned subsidiary, Hyderabad Airport Security Services Limited (HASSL) constructed the residential quarters for Central Industrial Security Force (CISF) deployed at the airport. After completion of such construction, the total construction cost including the cost of land amounting to Rs. 69.92 crores (March 31, 2016: Rs. 69.92 crores) was debited to the Passenger Service Fee (Security Component) Fund [PSF (SC) Fund] with intimation to the MoCA. The Comptroller & Auditor General, during their audits of PSF (SC) Fund, observed that, the Company had not obtained prior approval from the MoCA for incurring such cost from the PSF (SC) Fund as required by the guidelines dated January 8, 2010 and April 16, 2010 issued by the MoCA. However, Management of the Company is of the opinion that these guidelines were issued subsequent to the construction of the said residential quarters and approached the MoCA for approval of such debit notes to the PSF (SC) Fund account and also, made an application for an increase in PSF (SC) tariff to recover these dues and to meet the shortfall in discharging other liabilities from PSF (SC) fund. In the earlier years, the MoCA responded that, it is not in a position to consider the request for enhancement in the PSF (SC) tariff. As a result, the Company had requested the MoCA to advice the Airport Economic Regulatory Authority (AERA) for considering the cost of construction, land and other related costs with regard to the aforesaid residential quarters in determination of Aeronautical Tariff for the airport. Pending final instructions from the MoCA, residential quarters continue to be accounted under the PSF (SC) Fund and no adjustments have been made to these financial statements.

xii. Fuel surcharge adjustments (FSA) for the period from April 2008 to March 2010 amounting to Rs. 2.05

crores (March 31, 2016: Rs. 2.05 crores).

Based on the internal assessment and / or legal opinion, the Management is confident that, for the aforesaid mentioned contingent liabilities, no further provision is required to be made as at March 31, 2017.

III. Commitments

a) Capital commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of Advances) amounting to Rs.53.58 crores (March 31, 2016: Rs.12.11 crores; April 1, 2015: Rs.15.67 crores).

b) Other commitments




i. As per the terms of concession agreement, the Company is required to pay concession fees to the Ministry of Civil Aviation (MoCA) @ 4% on all its gross revenue (as defined in Concession Agreement) of the Company for an initial term of 30 years starting from March 23, 2008 which can be extended by another 30 years at the option of the Company.

ii. The Company has committed to provide financial support as necessary, to enable its wholly owned subsidiary company, GMR Aerospace Engineering Limited to meet its operational requirements as they arise and to meet its liabilities as and when they fall due.

iii. For commitments pertaining to lease arrangement refer clause I of note 35.

36. Significant accounting judgments, estimates and assumptions

A. Judgements In the process of applying the company’s accounting policies, management has made the following judgments, which has the effect on the amounts recognised in the financial statements: Discounting rate The Company has considered incremental borrowing rate of Airport sector i.e. 11.44% as at transition date for measuring deposits, being financial assets and financial liabilities, at amortised cost. Non applicability of Service Concession Agreement (SCA) GHIAL had entered into Concession agreement with the MoCA, which gives GHIAL an exclusive

right of development, design, financing, construction, commissioning, maintenance, operation and

management of the Hyderabad Airport on a revenue sharing model for an initial term of 30 years, which can be extended by another 30 years at the option of the Company. Under the agreement, the

MoCA has granted exclusive right and authority to perform some of the functions of the AAI being

the functions of operation, maintenance, development, design, construction, upgradation, modernization, finance and management of the Airport and to perform services and activities at the

airport constituting ‘Airport activities’ (regulated services) and ‘Non-Airport Activities’ (non-

regulated services). Airport Activities are regulated while there is no control over determination of prices for Non-Airport activities. Charges for Non-Airport activities are determined at the sole

discretion of GHIAL.

Appendix A to Ind AS 11 contains provisions to cover arrangements between public and private enterprises- referred to as service concession arrangement (“SCA”). An entity is required to evaluate

applicability of SCA for its arrangement under public to private partnership based on SCA guidance.

The applicability of service concession depends whether the grantors control or regulates what services the operator must provide with the infrastructure, to whom it must provide them, and at what

price; and also control the residual interest in the infrastructure.

GHIAL management conducted detailed analysis to determine applicability of Appendix A of Ind AS 11. The concession arrangement has significant non-regulated revenues, which are apparently not

ancillary in nature, as these are important from GHIAL, MoCA and users/passengers perspective.

Further, the regulated and non-regulated services are substantially interdependent and cannot be offered in isolation. Airport premises is being used both for providing regulated services and for

providing non-regulated services. Based on the Company’s proportion of regulated and non-regulated

activities, the directors have determined that over the concession period, the unregulated business activities drives the economics of the arrangement and contributes substantially to the profits of the

Company and hence concluded that SCA does not apply in its entirety to the Company.




Leases: whether an arrangement contains a lease As per the terms of the Concession Agreement and Land Lease Agreement, the Government of Telangana leased the land to the Company for the concession period. The lease term neither constitutes a major part of the economic life nor the fair value of the land. Hence, all the significant risk and rewards of the ownership have not been transferred and accordingly the lease is classified as an operating lease

B. Estimates and Assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The company based its assumptions and estimates on parameters available when the standalone financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the company. Such changes are reflected in the assumptions when they occur. Defined benefit plans The cost of the defined benefit gratuity plan and other post-employment benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. See Note 31 for further disclosures. Contingent liabilities Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal, contractor, land access and other claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgment and the use of estimates regarding the outcome of future events. See clause II of Note 35 for further disclosures. Fair value measurement of financial instruments When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 37, 38 and 39 for further disclosures.




Tax Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. See Note 28 for further disclosures.




37. Fair values: The carrying amount of all financial assets and liabilities (except for those instruments carried at fair value) appearing in the financial statements is reasonable approximation of fair values.

Carrying value Fair value March

31, 2017 March

31, 2016 April 1,

2015 March

31, 2017 March

31, 2016 April 1,

2015

Financial assets

At Fair Value through profit or loss

Investments 354.43 196.82 13.01 354.43 196.82 13.01

At Amortised cost

Loans 103.74 63.76 59.50 103.74 63.76 59.50

Other financial assets 29.64 19.72 17.33 29.64 19.72 17.33

Cash and bank balances 311.42 20.88 23.62 311.42 20.88 23.62

Trade Receivables 91.30 117.95 76.96 91.30 117.95 76.96

Total Financial Assets 890.53 419.13 190.42 890.53 419.13 190.42

Financial liabilities

Financial liabilities carried at fair value through profit or loss

Derivative not designated as hedge (Interest rate swap)*

67.24 107.43 112.94 67.24 107.43 112.94

At amortised cost

Borrowings 1,965.12 2,046.96 2,015.61 1,965.12 2,046.96 2,015.61

Trade Payables 72.19 64.29 45.00 72.19 64.29 45.00

Financial guarantee contracts 4.99 5.61 6.23 4.99 5.61 6.23

Other financial liabilities 384.86 318.34 273.14 384.86 318.34 273.14

Total Financial Liabilities 2,494.40 2,542.63 2,452.92 2,494.40 2,542.63 2,452.92

The management assessed the cash and cash equivalent, trade receivables trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. *Assumption used in estimating the fair values: The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

i. Interest rate swaps:-The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observables yield curve.

ii. The fair values of quoted mutual funds and commercial paper are based on price quotations at the reporting date.




38. Fair Value Hierarchy: The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities. Quantitative disclosures fair value measurement hierarchy for assets and liabilities as at March 31, 2017:

Date of valuation

Total Fair value measurement using

Quoted prices in active markets

Significant observable

inputs

Significant unobservable inputs

Level 1 Level 2 Level 3

Assets measured at fair value

At FVTPL

Investment in mutual funds March 31, 2017 354.43 354.43* - -

Liabilities measured at fair value

Derivative not designated as hedge (Interest rate swap)

March 31, 2017 67.24 - 67.24 -

There have been no transfers between Level 1, Level 2 and Level 3 during the year. Quantitative disclosures fair value measurement hierarchy for assets and liabilities as at 31 March 2016:

Date of valuation




inputs

Significant unobservab

le inputs



At FVTPL

Investment in Mutual fund March 31, 2016 196.82 196.82* - -



March 31, 2016 107.43 - 107.43 -

There have been no transfers between Level 1, Level 2 and Level 3 during the year. Quantitative disclosures fair value measurement hierarchy for assets and liabilities as at 1 April, 2015:

Date of valuation




inputs

Significant unobservable

inputs



At FVTPL

Investment in Mutual fund April 1, 2015 13.01 13.01 - -



April 1, 2015 112.94 - 112.94 -




*Valuation Techniques used to determine the Fair Value: Specific valuation techniques used to value financial instruments include:

i. The use of quoted market price of Mutual funds. ii. The Fair value of Interest rate swaps is calculated as the present value of estimated future cash

flows based on observable interest yield curves. 39. Financial risk management objectives and policies:

The company’s activities expose it to variety of finance risk, market risk, credit risk and liquidity risk. The company’s focus is to foresee such risks and seek to minimize potential adverse impact on its financial performance. Financial risk The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Company’s operations and to provide guarantees to support its operations. The Company’s principal financial assets include loans, trade and other receivables and cash and cash equivalents are derived from its operations. The Company has entered into derivative transactions. The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below. Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and Demand risk. Financial instruments affected by market risk include loans and borrowings, Investments carried at FVTPL and deposits. However, it may be noted that as part of one of principle source of revenue i.e. aeronautical charges which are regulated, the risks are mitigated to a larger extent in case of any movement as the same are allowed as true up through determination of aeronautical tariff for the next control period. The sensitivity analyses in the following sections relate to the position as at 31 March 2017 and 31 March 2016. The sensitivity analysis have been prepared on the basis that the amount of debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant. The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions. The analysis for the contingent consideration liability is provided in Note 36 B. The following assumptions have been made in calculating the sensitivity analyses:




The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held as at 31 March 2017 and 31 March 2016. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Company’s policy is to convert variable rate loan to fixed rate loan if the perceived uncertainty of such variable market rates is for a long term. To manage this, the Company entered into interest rate swap by converting floating interest rate (LIBOR) to fixed interest rate. At 31 March 2017, after taking into account the effect of interest rate swaps, approximately 39% of the Company’s borrowings are at a fixed rate of interest (31 March 2016: 42%, 1 April 2015: 45%). The exposure of the Company's borrowing to interest rate changes at the end of the reporting period for actual outstanding balances as at year end:


Rupee term loan 1286.40 1249.26 1159.30

ECB loan borrowings 479.86 548.18 574.16

Interest rate sensitivity The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected, after the impact of hedge accounting. With all other variables held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings, as follows:

Movement in basis points

Impact on profit before tax

March 31, 2017

INR 50 6.43

USD

External Commercial Borrowing (ECB) 50 (0.04)

Interest rate swap on ECB 50 0.04

31 March, 2016

INR 50 6.25

USD



Foreign currency risk: Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s external commercial borrowings. The Company's exposure to foreign currency risk at the end of the reporting period expressed in foreign currency is as follows:




Payable on

March 31, 2017

March 31, 2017

March 31, 2016

March 31, 2016

April 1, 2015

April 1, 2015

Foreign Currency

Foreign Currency

(Rs. in crores)

Foreign Currency

(Rs. in crores)

Foreign Currency

(Rs. in crores)

EUR (93,136) (0.65) (41,537) (0.31) (108,148) (0.73)

AED (140,737) (0.25) - - - -

GBP - - - - (67,676) (0.63)

USD (1,527,104) (10.02) (9,297) (0.06) (58,132) (0.37)

USD-Loan (73,150,000) (479.86) (82,100,000) (548.18) (91,050,000) (574.16)

Grand Total (490.78) (548.86) (575.88)

Foreign currency sensitivity The following tables demonstrate the sensitivity to a reasonably possible change in USD and EUR exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is as under:-

Foreign Currency

Nature of transaction Change in Rate

March 31, 2017 Rs.

March 31, 2016 Rs.

USD Change in fair valuation of financial liabilities

5% 0.50 0.00

USD Change in depreciation on account of capitalisation of foreign exchange gain or loss on ECB

5% 1.71 1.94

The Company’s exposure to foreign currency changes for all other currencies is not material. Credit risk Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. Trade receivables Customer credit risk is managed by the Company as per approved debtors policy and established procedures and controls relating to customer credit risk management. Outstanding customer receivables are regularly monitored and any credit to new customers are generally covered by appropriate security in the form of deposits and/ bank guarantees. At March 31, 2017, the Company had 20 customers (31 March 2016: 14 customers, 1 April 2015: 10 customers) that owed the Company more than 1% each of total receivable and accounted for approximately 83% (31 March 2016: 84%, 1 April 2015: 87%) of all the receivables outstanding. There were 4 customers (31 March 2016: 2 customers, 1 April 2015: 4 customers) with balances greater than 5% each accounting for approximately 52% (31 March 2016: 64%, 1 April 2015: 77%) of the total amounts receivable. An impairment analysis is performed at each reporting date. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as moderate, as its customers are broad-based, however, they operate largely in dependent market.




Financial instruments (security deposits) and cash deposits Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within prudent limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments. Liquidity risk The Company monitors its risk of a shortage of funds using a rolling cash flow forecasts. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of working capital facilities and bank loans. The Company’s policy is to ensure that the repayments of borrowings are in sync with the cash flows generated from the operations. Approximately, 6% of the Company’s debt will mature in less than one year at 31 March 2017 (31 March 2016: 4%, 1 April 2015: 4%) based on the outstanding amount of borrowings reflected in the financial statements. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders, if required. The table below summarises the maturity profile of the company's financial liabilities based on contractual undiscounted payments.

On demand

Less than 3 months

3 to 12 months

1 to 5 years

> 5 years

Total

Year ended 31 March, 2017

Borrowings - 26.89 93.58 636.52 1,337.22 2,094.22

Trade & Other payables - 72.23 7.44 - - 79.67


Corporate Guarantee 462.41 - - - - 462.41

464.53 107.97 135.52 752.76 1503.18 2,963.95

Year ended 31 March, 2016

Borrowings - 14.94 69.47 554.32 1,499.30 2,138.03




463.69 83.42 111.69 629.36 1,656.78 2,944.94

As at 1 April, 2015

Borrowings - 14.94 69.47 554.32 1,499.30 2,138.03




440.43 80.73 96.10 607.18 1,651.75 2,876.20

Excessive risk concentration Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the company's performance to developments affecting a particular industry.




In order to avoid excessive concentrations of risk, the Company's policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

40. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company’s capital management is to maximize the shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is debt divided by total capital plus debt. The Company’s policy is to keep the gearing ratio at an optimal level to ensure that the debt related covenants are complied with.

Particulars As at March 31, 2017

As at March 31, 2016

As at April 1, 2015

Borrowings 2083.65 2130.66 2,086.33

Borrowings 2083.65 2,130.66 2,086.33

Equity 378.00 378.00 378.00

Other equity 307.99* (126.33) (132.51)

Total Capital 686.00 251.67 245.49 Capital and borrowings 2769.64 2382.33 2331.82 Gearing ratio 75% 89% 89%

*The above is inclusive of final dividend of Rs. 2.50 per fully paid equity share (31 March 2016 — Rs. Nil) recommended by the Board of Directors in its meeting held on May 4, 2017. The proposed dividend will require total outflow of Rs. 113.74 crores inclusive of dividend distribution tax thereon. The proposed dividend is subject to the approval of shareholders in the ensuing annual general meeting. In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any loans and borrowing in the current period. No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2017 and March 31, 2016.

41. The financial statements as at March 31, 2017 include investment including share application money

aggregating to Rs. 212.42 crore (March 31, 2016 Rs. 151.42 crore) made in wholly owned subsidiary company, GMR Aerospace Engineering Limited. The subsidiary has a wholly owned subsidiary GMR Aero Technic Limited, which has incurred a net loss of Rs. 39.18 crore (March 31, 2016: Rs. 73.36 crore) in the current financial year and has accumulated losses of Rs.363.92 crore as at March 31, 2017 (March 31, 2016: Rs. 324.82 crore), which exceeds its net worth. Also, it has incurred cash losses in the current and in the preceding financial year. The recovery of such investment in the subsidiary company is dependent upon the ability of the aforesaid wholly owned subsidiary to scale up its operations in future and achieve sustained profitability. Based on the future business plan and projections approved by the Board of Directors of the subsidiary company and valuation assessment done, the Management is of the view that there is no permanent diminution in the value of such investments. Accordingly, these financial statements do not include any adjustments relating to the recoverability of assets.




42. As at March 31, 2017, the Company has accrued Rs.1.98 crores towards the remuneration to its Managing Director, including Rs. 0.80 crores in excess of the limits specified in Sub Section (3) of Section 197 read with Schedule V of the Companies Act, 2013 in respect of year ended as at March 31, 2015. The said remuneration is approved by the Board of Directors, the Nomination and Remuneration Committee and by the Shareholders. Accordingly, the Company had applied to the Central Government for obtaining necessary approvals for payment of such remuneration and that, the amount in excess of the limits as mentioned above, will be paid as and when the approval is received from the Central Government. The Management of the Company is of the opinion that, the approval for payment of the remuneration will be obtained in due course and as such no adjustments have been made in these financial statements.

43. The Company has recognized, Minimum alternate tax (MAT) credit entitlement of Rs. 171.96 crores

(March 31, 2016: Rs.66.57 crores), as the Company based on estimates expects to adjust this amount after expiry of the tax holiday period (i.e. AY 2022-23) u/s 80IA of the Income Tax Act, 1961. Management is confident that in view of the anticipated tariff orders for the control periods which will be effective from financial year 2017-18, the Company’s normal tax liability will be more than the MAT payable after considering the deduction under section 80IA of the Income Tax, Act, 1961.

44. The Airport Economic Regulatory Authority (‘AERA’), passed an Aeronautical tariff order No. 38 dated

February 24, 2014, in respect of control period from April 1, 2011 to March 31, 2016. The Company had filed an appeal, challenging the disallowance of pre control period losses, foreign exchange loss on ECB and other issues for determination of its tariff with the AERA Appellate Tribunal (AERAAT) against the aforesaid order. Due to non-constitution of AERAAT Bench, the Company had filed a writ petition with the Honorable High Court at Hyderabad for the State of Telangana and for the State of Andhra Pradesh, which is yet to be heard.

45. The Company filed an application with AERA for determination of Aeronautical Tariff in respect of Second Control period from April 1, 2016 to March 31, 2021 including True up for shortfall of receipt vis a vis entitlement for the first control period. Pending determination of Aeronautical Tariff, AERA vide its order no. 19 dated March 31, 2017 has allowed to continue to charge the Aeronautical tariff as prevailed on 31.03.2017 for a period of 6 months w.e.f. April 1, 2017 or till determination of tariff for the aforesaid period whichever is earlier.

46. The financial statements of the Company do not include Accounts for Passenger Service Fee- Security

Component [PSF- (SC)] as the same are maintained separately in the fiduciary capacity by the Company on behalf of the Government of India and are governed by Standard Operating Procedure vide letter number AV/13024/047/2003-SS/AD dated January 19, 2009 issued by the Ministry of Civil Aviation, Government of India.

47. The Company, has agreed to buy out the 60% stake i.e. 60% shareholding amounting to Rs. 5.34 crores, in Asia Pacific Flight Training Academy Ltd.(APFTAL) held by its JV partner M/s Asia Pacific Flight Training Academy, SDN, BHD, Malaysia (APFT-Malaysia) at a value of One US Dollar considering the market potential of flight training business in India.

48. During the year, GMR Hotels and Resorts Ltd. (GHRL) and Hyderabad Duty Free Retail Ltd. (HDFRL),

two of its wholly owned subsidiary companies filed a Scheme of Arrangement for merger of HDFRL into GHRL "the scheme" under Section 391 and 394 (1) of the Companies Act, 1956. The National Company Law Tribunal (NCLT) passed an order on April 18, 2017, approving the said scheme with appointed date as April 1, 2016. The aforesaid order was filed with the Registrar of Companies on April 27, 2016. Accordingly, HDFRL has been merged into GHRL with appointed date as April 01, 2016. However, pending the share issue for Rs. 16.95 crores by GHRL to the Company, the investment in HDFRL has been added to the investments in GHRL.




49. As per the Concession Agreement (CA), the Company is required to pay concession fee to MoCA @ 4%

on its gross revenue. As per Article 3.3.2 of CA, “Gross Revenue” is defined to include all pre-tax revenue of GHIAL with certain specified exclusions. Management is of the view that certain income / credits arising on adoption of Ind-AS and also mark to market gain on valuation of IRS was not in contemplation of parties in December 2004 when this Concession agreement was signed / entered. Further, these income/credits in Statement of Profit and Loss do not represent receipts from business operations, from any external sources and therefore, are not treated as “Gross Revenue” for computation of Concession fee to MoCA. Accordingly, the Company, has not provided the concession fee on such income / credits. Additionally, Management is of the view that reversal of provision for impairment in the value of investment in GHRL recognized as an exceptional item does not represent receipts from business operation and the same is not considered for computation of Concession fee to MoCA.

Description Incomes forming

part of For the year ended

March 31, 2017

Reversal of Fair value of financial instruments Interest Rate Swap on actual settlement

Finance income 40.19

Discounting of Interest free loan given to subsidiaries Finance income 3.78

Income arising from fair valuation of financial guarantee Finance income 0.62

Discounting on fair valuation of deposit received from concessionaries

Other income 2.36

Income from government grant Other income 2.08

Amortisation of deferred income Other income 0.69

Provision for impairment in investments in subsidiary written back

Exceptional item 85.78

50. Reimbursement of expenses claimed by the Company have been reduced from the respective expense

head as mentioned in the table below:

Expense Head For the year ended


March 31, 2016

Electricity and water charges 32.35 28.78



Insurance 0.01 0.01



Miscellaneous expenses - 0.04

Advertising and business promotion - 0.06

Travelling and conveyance 0.03 0.06

Communication expenses - 0.00

Office Maintenance 0.03 0.02

Legal and professional fees - 0.02

51. First Time Adoption of Ind AS

These financial statements, for the year ended 31 March 2017, are the first, the company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2015, the company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).




Accordingly, the company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2017, together with the comparative period data as at end for the year ended 31 March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the company’s opening balance sheet was prepared as at 1 April 2015, the company’s date of transition to Ind AS. This note explains the principal adjustments made by the company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2015 and the financial statements as at end for the year ended 31 March 2016.

a) Mandatory exceptions to retrospective applications: Ind AS 101 allows first time adopters certain exemptions from the retrospective application of certain requirements under INDAS. The Company has applied the following exemptions: i) Estimates

The estimates at April 1, 2015 and at March 31, 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) The estimates used by the company to present these amounts in accordance with Ind AS reflect conditions at 1 April 2015, the date of transition to Ind AS, as of 31 March 2016.

ii) Impairment of financial assets (Trade receivables and other financial assets)

The Company has applied the exception related impairment of financial assets given in Ind AS 101. It has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial assets were initially recognized and compared that to the credit risk as at April 1, 2015.

iii) De-recognition of financial assets and financial liabilities

There are no items of financial asset and liabilities which are required to be derecognised as per Ind AS 109.

iv) Classification and measurement of financial assets

The company has classified financial assets in accordance with conditions that existed at the date of transition to Ind AS.

b) Exemptions applied:

i) Deemed cost-Previous GAAP carrying amount: (PPE and Intangible Assets)

Since there is no change in the functional currency, the Company has elected to continue with the carrying value for all of its PPE as recognised in its Indian GAAP financial as deemed cost at the transition date.

ii) Investment in subsidiary The Company has elected to apply previous GAAP carrying amount of its investment in subsidiary as deemed cost as on date of transition to Ind AS.

iii) Long Term Foreign Currency Monetary Items: (Long term foreign currency borrowings)

Under previous GAAP, as per MCA circular dated August 09, 2012, the Company has adjusted exchange differences to the cost of fixed assets being total differences, arising on long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset, for the period. In other words, the Company does not differentiate between exchange differences arising from foreign




currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference.

In accordance with paragraph D13AA of Ind AS 101, includes an optional exemption that allows a first-time adopter to continue the above accounting treatment in respect of the long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period.

The Company has elected to continue policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in financial statements as per previous GAAP.

iv) Fair value measurement of financial assets or financial liabilities

In accordance with paragraph D20 of Ind AS 109, the Company has applied to day one gain or loss provisions prospectively to transactions occurring on or after the date of transition to Ind AS.




Reconciliation of Equity as at April 1, 2015

April 1, 2015

IGAAP Ind AS adjustments Ind AS

Assets

Non-current assets

Property, plant and equipment 1907.05 - 1907.05 Capital work in progress 5.99 - 5.99 Intangible assets 1.10 - 1.10 Investments 268.20 19.73 287.93 Financial assets Loans 67.99 (8.82) 59.17

Other non- current financial asset 21.25 (12.36) 8.89

Non-current tax assets 17.97 - 17.97 Deferred tax assets (net) 0.00 102.56 102.56 Other non- current assets 243.46 (60.46) 183.00

2533.01 40.65 2573.66

Current assets Inventories 12.19 - 12.19 Investments 31.00 31.00 Financial assets Investments 13.00 0.01 13.01 Trade receivables 76.96 - 76.96 Cash and cash equivalents 23.62 - 23.62 Loans 1.11 (0.78) 0.33 Other current financial assets 8.44 - 8.44 Current tax assets (net) 12.38 - 12.38 Other current assets 8.68 (0.68) 8.00

187.38 (1.45) 185.93

TOTAL ASSETS 2720.39 39.20 2759.59

Equity

Equity share capital 378.00 - 378.00 Other equity Retained earnings (168.99) (70.52) (239.51) Capital reserve 107.00 - 107.00

Total equity 316.01 (70.52) 245.49

Non-current liabilities Financial Liabilities Borrowings 2022.63 (7.05) 2015.58 Other financial liabilities 204.51 94.92 299.43 Other liabilities 15.57 21.31 36.88

2242.71 109.18 2351.89

Current liabilities Financial Liabilities Borrowings 0.03 - 0.03 Trade payable 45.00 - 45.01 Other current financial liabilities 95.38 (2.50) 92.88 Provisions 5.29 - 5.29 Other liabilities 13.15 3.04 16.19 Current tax liability 2.82 - 2.82

161.67 0.54 162.21

TOTAL EQUITY AND LIABILITIES 2720.39 39.20 2759.59




Reconciliation of Equity as at March 31, 2016

March 31, 2016

IGAAP Ind AS adjustments Ind AS

ASSETS Non-current assets

Property, plant and equipment 1872.52 - 1872.52 Capital work in progress 22.03 - 22.03 Intangible assets 0.74 - 0.74 Investments 275.76 17.01 292.77 Financial assets Loans 67.65 (4.69) 62.96 Bank balances other than Cash and Cash equivalent 4.10 - 4.10 Other non- current financial asset 20.43 (12.41) 8.02 Non-current tax assets 23.29 11.69 34.98 Deferred tax assets (net) 39.11 60.85 99.96 Other non- current assets 142.05 (60.74) 81.31 2467.68 11.71 2479.39

Current assets Inventories 10.40 - 10.40 Investments 28.98 28.98 Financial assets Investments 196.57 0.25 196.82 Trade receivables 117.95 - 117.95 Other current financial assets 11.70 - 11.70 Cash and cash equivalents 16.78 - 16.78 Loans 1.54 (0.74) 0.80 Current tax assets 0.25 - 0.25 Other current assets 7.58 (0.68) 6.90 391.75 (1.17) 390.58

TOTAL ASSETS 2859.43 10.54 2,869.97

Equity

Equity share capital 378.00 - 378.00 Other equity Retained earnings (128.72) (104.63) (233.35) Capital reserve 107.00 - 107.00

Total equity 356.28 (104.63) 251.65

Non-current liabilities Financial Liabilities Borrowings 2053.62 (6.66) 2046.96 Other financial liabilities 230.24 74.25 304.49 Government grants - 12.07 12.07 Other non-current liabilities 11.90 21.79 33.69 2295.76 101.45 2397.21

Current liabilities Financial Liabilities Trade payable 64.31 - 64.31 Other financial liabilities 129.19 (2.30) 126.89 Government grants - 1.13 1.13 Short term provisions 5.62 - 5.62 Other current liabilities 8.27 3.20 11.47 Current tax liability(net) - 11.69 11.69 207.39 13.72 221.11

TOTAL EQUITY AND LIABILITIES 2859.43 10.54 2869.97




Reconciliation statement of profit and loss for the year ended March 31, 2016

March 31, 2016

IGAAP Ind AS

adjustments Ind AS

Revenue from operations 615.49 1.02 616.51 Other income 19.93 1.57 21.50 Finance income 10.14 10.31 20.45

Total Revenue 645.56 12.90 658.46

Concession fees 25.79 - 25.79 Employee benefit expenses 58.93 (0.03) 58.90 Depreciation and amortisation expenses 205.75 - 205.75

Finance costs 188.18 2.57 190.75

Other expenses 165.75 2.73 168.48

Total Expenses 644.40 5.27 649.67

Profit before tax 1.16 7.63 8.79 Deferred tax expense (39.11) (41.71) 2.60

Profit for the year 40.27 (34.08) 6.19

Other Comprehensive Income

Re-measurement gains (losses) on defined benefit plans - (0.03) (0.03)

Other comprehensive income for the year - (0.03) (0.03)

Total Comprehensive Income for the year, net of tax 40.27 (34.11) 6.16




Footnotes to the reconciliation of equity as at April 1, 2015 and March 31, 2016 and total comprehensive income for the year ended March 31, 2016 i) Security deposit:

Under the previous GAAP, interest free security deposits received from concessionaires / land lease arrangements or Interest free security deposits given for lease arrangements (that are refundable in cash on completion of its term) are recorded at their transaction value. Under Ind AS, the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposits have been recognised as deferred revenue. Consequent to this change, the amount of security deposits received from concessionaire decreased by Rs. 0.20 crores (1st April, 2015 Rs. 0.10 crores). The deferred revenue is increased by Rs. 0.11 crores (1st April 2015, Rs. 0.09 crores). The profit for the year and total equity as at March 31, 2016 increased by Rs. 0.24 crores due to amortisation of the deferred income of Rs. 0.24 crores.

ii) Borrowings:

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in statement of profit or loss over the tenure of the borrowings as part of the interest expense by applying the effective interest method. Under the previous GAAP, these transactions cost were amortised on a straight-line basis over the period of loan. Unamortized prepaid upfront cost of INR 72.40 crores as at 1st April 2015 has been reduced with a corresponding adjustment to borrowings. Accordingly, borrowings as at March 31, 2016 have been reduced by INR 7.37 crores (1st April, 2015; INR 7.05 crores) with a corresponding adjustment to borrowings and retained earnings. The total equity decreased by INR 0.13 crores as at transition date. The profit for the year ended March 31, 2016 reduced by INR 0.62 crores as a result of the additional interest expense.

iii) Fair valuation of investments in mutual fund

Under the previous GAAP, investment in mutual fund is classified as current investment based on the intended holding period and realisability. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognised in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended March 31, 2016.This increased the retained earnings by Rs. 0.24 crores (1st April, 2015: Rs. 0.01 crores). The profit and other comprehensive income for the year ended March 31, 2017 increased by INR 2.69 crores (March 31, 2016 : Rs. 0.24).

iv) Interest rate swap not designated as hedging instruments

Under the previous GAAP, the company has considered the critical terms of the Interest rate swap (IRS) and those of the principal term loan are same and based on the internal assessment carried out by the management, no adjustment were being made in the financial statements.

Under Ind AS, derivative instruments (not hedged) i.e. IRS are fair valued with mark to market loss of Rs. 112.47 crores, which is recognised in the retained earnings. For the year ended 31 March 2016, the fair valuation of IRS resulted in a gain of INR 5.51 crores [1st April, 2015: Loss Rs. 112.47 crores)] and the same is recognised in the statement of profit and loss.

v) Re-measurements of post-employment benefit plans

Under Ind AS, re-measurements i.e. actuarial gain and losses and the return on plan assets, except for amounts included in the net interest expense on the net defined liability are recognised in other comprehensive income instead of statement of profit and loss. Under the previous GAAP, these measurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2016 is increased by INR 0.03 crores. There is no impact on the total equity as at March 31, 2016.




vi) Deferred tax Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity. On the date of transition, the net impact on deferred tax assets is of Rs. 35.98 crores (31 March 2016: Deferred tax assets reduced by Rs. 5.74 crores).

vii) Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows

viii) Other comprehensive income Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to Ind AS profit or loss. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

ix) Loan to related parties Under previous GAAP, loans to related parties were recognised at their face/transaction values. The company has given interest free loans to its subsidiary companies in earlier years the outstanding amount of which on transition date was Rs 69.03 crores. Considering that the loans given were interest free, they have been fair valued and the differential amount of the carrying value and fair value has been recognised as equity component(additional investment in subsidiary) as per guidance under Ind AS 32. The Company has recognised Rs 22.37 crores as additional investment in subsidiary as on the date of transition. Interest income of Rs 12.76 crores upto the date of transition has been recognised in retained earnings. Interest income of Rs 3.41 crores has been recognised in the statement of profit and loss during the year ended 31 March 2016.

x) Financial guarantee given on behalf of its Subsidiaries

Under previous GAAP, financial guarantees given by the company free of cost for borrowings taken by its subsidiary companies were disclosed as contingent liabilities. As per Ind AS 109, these guarantees have been fair valued at the date of transition. Accordingly, the Company has recognised the financial liability of Rs. 0.91 crores as on the date of transition and income on fair valuation is recognised in retained earnings. Income on fair value of these financial guarantees of Rs 0.61 crores has been recognised in the statement of profit and loss for the year ended 31 March 2016.




xi) Government grants


At April 1 13.20 - -

Received during the year 22.11 13.68 -

Recognised in the statement of profit and loss

(2.08) (0.48) -

At 31 March 33.23 13.20 -

Non- Current 32.10 12.07 -

Current 1.13 1.13

Concession fee is payable to Ministry of Civil Aviation in respect of first 10 years in 20 equal half yearly installments commencing from the 11th anniversary of the commercial operations date (March 23, 2008). Concession fee from the 11th year is payable on a half yearly basis. The difference between the fair value and carrying value of such fee payable has been treated as a government grant as per Ind AS 20.

52. The Company has undertaken necessary steps to comply with the transfer pricing regulations. The management is of the opinion that the domestic transactions are at arm’s length and believes that the aforesaid legislation will not have any impact on the financial statements.


For S.R. BATLIBOI & ASSOCIATES LLP ICAI Firm Registration Number: 101049W/E300004 Chartered Accountants -Sd- per Shankar Srinivasan Partner Membership No.: 213271 Place: Hyderabad Date: May 04, 2017

For Brahmayya & Co., ICAI Firm Registration Number: 000515S Chartered Accountants -Sd- per G. Srinivas Partner Membership No.:086761 Place: Hyderabad Date: May 04, 2017

For and on behalf of the Board of Directors of GMR Hyderabad International Airport Limited

-Sd- -Sd- Srinivas Bommidala RSSLN Bhaskarudu Managing Director Director DIN.:00061464 DIN.:00058527

-Sd- -Sd- Anup Kumar Samal Rajesh Arora Company Secretary Chief Financial Officer Place: Hyderabad Date: May 04, 2017


S. R. BATLIBOI & ASSOCIATES LLP Brahmayya & Co., Chartered Accountants Chartered Accountants Oval office, 18, iLabs Centre, Khivraj Mansion, Hitech City, Madhapur, 10/2, Kasturba Road, Hyderabad – 500 081 Bengaluru – 560 001 INDEPENDENT AUDITOR’S REPORT To the Members of GMR Hyderabad International Airport Limited Report on the Consolidated Ind AS Financial Statements

1. We have audited the accompanying consolidated Ind AS financial statements of GMR Hyderabad International Airport Limited (hereinafter referred to as “the Holding Company”), its subsidiaries and jointly controlled entities (the Holding Company and its subsidiaries and jointly controlled entities together referred to as “the Group”), comprising of the consolidated Balance Sheet as at March 31, 2017, the Consolidated Statement of Profit and Loss including other comprehensive income, the Consolidated Cash Flow Statement, the Consolidated Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated Ind AS financial statements”).

Management’s Responsibility for the Consolidated Ind AS Financial Statements

2. The Holding Company’s Board of Directors is responsible for the preparation of these consolidated Ind AS financial statements in terms of the requirement of the Companies Act, 2013 (“the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated statement of changes in equity of the Group in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standard) Rules, 2015, as amended. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated Ind AS financial statements by the Directors of the Holding Company, as aforesaid.

Auditor’s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also

Page No. 154GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 Auditors' Report on Consolidated Financials

includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated Ind AS financial statements. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our qualified audit opinion on the Ind AS consolidated financial statements.

Basis for qualified opinion 4. As more fully explained in Note 55 to the accompanying Consolidated Ind AS Financial

Statements as at March 31, 2017, the Group has Goodwill amounting to Rs. 36.27 Crore arising on additional investment by Holding Company in a subsidiary company GMR Aerospace Engineering Limited (GAEL’). GAEL has a wholly owned subsidiary GMR Aero Technic Limited (‘GATL’), whose accumulated losses have fully eroded its net worth as at March 31, 2017. Based on the reasons fully explained in the aforesaid note, the management is of the view that there is no provision for impairment in the carrying value of goodwill at this juncture. However, in view of the current financial position of the step down subsidiary company and in the absence of sufficient appropriate audit evidence to support the key assumptions made by the management in their business plan, we are unable to comment on the carrying value of the goodwill, including adjustments, if any, that may be required to be made to carrying amount of such goodwill.

Qualified opinion 5. In our opinion and to the best of our information and according to the explanations given to us

and based on the consideration of reports of other auditors on separate financial statements and on the other financial information of a jointly controlled entity, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid consolidated Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at March 31, 2017, of their consolidated profit including other comprehensive income and their consolidated cash flows and consolidated statement of changes in equity for the year ended on that date.

Emphasis of Matter 6. a. With regard to note 42 to these consolidated financial statements, the Company had accrued Rs.

1.89 Crore during the year ended March 31, 2015 towards the remuneration to its Managing director, which includes Rs. 0.8 Crore in excess of the limits specified in Sub Section (3) of Section 197 read with Schedule V of the Companies Act, 2013 pending approval from the Central Government for the period April 1, 2014 to January 22, 2015. The ultimate outcome of the matter cannot be presently determined. Pending the final outcome, no adjustments have been made in this regard in the consolidated financial statements.

b. We draw attention to note 36 (II)(C)(xxiii) to the consolidated financial statements regarding

the costs related to residential quarters for Central Industrial Security Force (CISF) deployed at the Rajiv Gandhi International Airport, Hyderabad and other costs which continue to be adjusted against PSF (SC) fund pending the final decision from the Honourable High Court at Hyderabad for the State of Telangana and for the State of Andhra Pradesh and consequential instructions from the MoCA.

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


Report on Other Legal and Regulatory Requirements

7. As required by section 143(3) of the Act based on our audit and on the consideration of report of the other auditors on separate financial statements and the other financial information of a jointly controlled entity, as noted in the ‘other matter’ paragraph, to the extent applicable, we report that:

(a) We / the other auditors whose reports we have relied upon, have sought and obtained all the

information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid consolidated Ind AS financial statements;

(b) Except for the possible effects of the matter described in the Basis for Qualified Opinion

paragraph, in our opinion proper books of account as required by law relating to preparation of the aforesaid consolidated Ind AS financial statements have been kept by the Company so far as appears from our examination of those books and the reports of the other auditors;

(c) The Consolidated Balance Sheet, Consolidated Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated Ind AS financial statements;

(d) Except for the possible effects of the matter described in the Basis for Qualified Opinion

paragraph above, in our opinion, the aforesaid consolidated Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standard) Rules, 2015, as amended;

(e) The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Group;

(f) On the basis of the written representations received from the directors of the Holding Company as on March 31, 2017 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors who are appointed under Section 139 of the Act, of its subsidiary companies and jointly controlled companies entities incorporated in India, none of the directors of the Group’s companies incorporated in India is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) The qualification relating to the maintenance of accounts and other matters connected therewith

are as stated in the Basis for Qualified Opinion paragraph above; (a) With respect to the adequacy and the operating effectiveness of the internal financial controls

over financial reporting of the Holding Company and its subsidiary companies and jointly controlled entities incorporated in India, refer to our separate report in “Annexure 1” to this report;

(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule

11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the report of the other auditors on separate financial statements as also the other financial information of a jointly controlled entity, as noted in the ‘Other matter’ paragraph:

i. The consolidated Ind AS financial statements disclose the impact of pending litigations on its

consolidated financial position of the Group – Refer Note 36 (II) to the consolidated Ind AS financial statements;


ii. The Group has made provision in the consolidated Ind AS financial statements, as required

under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts – Refer Note 36(II)(A) to the consolidated Ind AS financial statements in respect of such items as it relates to the Group;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Holding Company, its subsidiaries and jointly controlled entities incorporated in India during the year ended March 31, 2017;

iv. The Holding Company and subsidiaries incorporated in India, have provided requisite disclosures in Note 13 to these consolidated Ind AS financial statements as to the holding of Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on our audit procedures and relying on the management representation of the Holding Company regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Group and as produced to us by the Management of the Holding Company. However, we are unable to obtain sufficient appropriate audit evidence to report on whether the disclosure relating to collection in cash as permitted receipts is appropriate.

Other Matter

8. The Joint auditor, Brahmayya & Co and us, have audited 8 subsidiaries and 1 jointly controlled entity in individual capacity whose financial statements reflect total assets of Rs. 12,108,592,873, net assets of Rs. 739,862,029 as at March 31, 2017, total revenues (including other income) and net cash inflows of Rs. 4,146,025,764 and Rs. 376,861,435 respectively, for the period ended on that date.

9. We did not audit the financial statements and other financial information, in respect of 1

jointly controlled entity, whose Ind AS financial statements include total assets of Rs 506,510,890 and net assets of Rs. 144,339,840 as at March 31, 2017, and total revenues of Rs. 607,952,081 and net cash inflows of Rs. 4,827,975 for the year ended on that date. The financial statements and other financial information have been audited by other auditors and whose report has been furnished to us by the Management. Our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of this jointly controlled entity, and our report in terms of sub-sections (3) of Section 143 of the Act, in so far as it relates to the aforesaid jointly controlled entity, is based solely on the report of such other auditors.


Our above opinion on the consolidated Ind AS financial statements, and our report on Other Legal and Regulatory Requirements above, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements and other financial information certified by the Management

For S.R. BATLIBOI & ASSOCIATES LLP ICAI Firm registration number: 101049W/E300004 Chartered Accountants Sd/- per Shankar Srinivasan Partner Membership No.: 213271 Place: Hyderabad Date : July 19, 2017

For Brahmayya & Co., Firm registration number: 000515S Chartered Accountants Sd/- per G Srinivas Partner Membership No.: 086761 Place: New Delhi Date : July 19, 2017


ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS OF GMR HYDERABAD INTERNATIONAL AIRPORT LIMITED Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) In conjunction with our audit of the consolidated financial statements of GMR Hyderabad International Airport Limited as of and for the year ended March 31, 2017, we have audited the internal financial controls over financial reporting of GMR Hyderabad International Airport Limited (hereinafter referred to as the “Holding Company”) and its subsidiary companies and jointly controlled companies, which are companies incorporated in India, as of that date. Management’s Responsibility for Internal Financial Controls The respective Board of Directors of the Holding company, its subsidiary companies and jointly controlled companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on, “the internal financial control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditor’s Responsibility Our responsibility is to express an opinion on the company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the Holding Company’s internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A


company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the consolidated financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Qualified Opinion According to the information and explanations given to us and based on the report issued by other auditors on internal financial controls system over financial reporting in case of subsidiary companies, its associate companies and jointly controlled companies, which are companies incorporated in India, the following material weakness have been identified as at March 31, 2017:

a) The Holding Company’s and one of the subsidiary company’s internal financial controls over use of assumptions for analysis of goodwill impairment were not operating effectively which could potentially result in the Company not providing for adjustments, if any, that may be required to be made to such carrying amounts of goodwill.

A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the holding company's annual or interim consolidated financial statements will not be prevented or detected on a timely basis. In our opinion, the Holding Company, its subsidiary companies and jointly controlled companies which are companies incorporated in India, have,, in all material respects, maintained adequate internal financial controls over financial reporting as at March 31, 2017, based on the internal control over financial reporting criteria established by the Holding Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India, and except for the possible effects of the material weakness described above on the achievement of the objectives of the control criteria, the internal financial controls over financial reporting were operating effectively in the Holding Company, its subsidiary companies and jointly controlled companies which are companies incorporated in India as of March 31, 2017.


Other Matters Our report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to one jointly controlled entity , which is a company incorporated in India, is based on the corresponding report of the auditor of such company incorporated in India. We also have audited, in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, the consolidated financial statements of the Holding Company, which comprise the Consolidated Balance Sheet as at March 31, 2017, and the Consolidated Statement of Profit and Loss and Consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, and our report dated July 19, 2017 expressed a qualified opinion.

For S.R. BATLIBOI & ASSOCIATES LLP ICAI Firm registration number: 101049W/E300004 Chartered Accountants Sd/- per Shankar Srinivasan Partner Membership No.: 213271 Place: Hyderabad Date : July 19, 2017

For Brahmayya & Co., Firm registration number: 000515S Chartered Accountants

Sd/- per G Srinivas Partner Membership No.: 086761 Place: New Delhi Date : July 19, 2017


Notes March 31, 2017 March 31, 2016 April 1, 2015

I. ASSETS

Non-current assets

Property, plant and equipment 3 2,079.08 2,273.73 2,341.12

Capital work-in-progress 3.1 115.83 69.23 55.26

Intangible assets 4 53.32 54.51 62.80

Intangible assets under development 0.00 0.63 0.19

Investment in joint venture 5.1 6.99 2.93 0.76

Financial assets

- Loans 6 4.76 5.76 6.54

- Bank balances other than cash and cash equivalents 7 29.10 4.51 7.31

- Other non current financial assets 8 9.81 8.09 8.83

Non current tax assets 9.1 43.79 65.70 44.57

Deferred tax asset (net) 9.2 168.26 100.73 102.77

Other non-current assets 10 72.56 88.76 189.15

2,583.50 2,674.58 2,819.30

Current assets

Inventories 11 51.18 48.35 43.88

Financial assets

- Investments 5.2 387.34 223.86 29.46

- Trade receivables 12 104.93 131.25 86.40

- Bank balances other than cash and cash equivalents 7 32.29 26.20 19.27

- Cash and cash equivalents 13 327.73 25.24 32.62

- Loans 6 0.99 0.80 0.34

- Other current financial assets 8 21.17 12.92 10.71

Current tax assets 9.1 28.62 2.21 16.61

Other current assets 10 13.45 10.90 12.52

967.70 481.73 251.81

Total Assets 3,551.20 3,156.31 3,071.11

II. EQUITY AND LIABILITIES

EQUITY

Equity share capital 14 378.00 378.00 378.00

Other equity 14.1

- Capital reserve 107.00 107.00 107.00

- Retained earnings (234.93) (516.21) (449.74)

Equity attributable to equity holders of the parent 250.07 (31.21) 35.26

Non-controlling interest 52.55 44.19 40.43

Total Equity 302.62 12.98 75.69

LIABILITIES

Non-current liabilities

Financial Liabilities

- Borrowings 15 2,411.67 2,482.46 2,431.94

- Other financial liabilities 16 289.01 301.74 288.20

Government grants 17 32.11 12.08 -

Deferred tax liability (net) 9.3 120.32 1.23 1.55

Other non-current liabilities 18 32.13 35.12 37.53

Long Term provisions 20 2.40 1.84 1.42

2,887.64 2,834.47 2,760.64

Current liabilities

Financial Liabilities

- Borrowings 15.1 21.05 27.66 27.42

- Trade payables 19 110.88 95.59 68.52

- Other financial liabilities 16 185.07 148.17 106.94

Government grants 17 1.13 1.13 -

Other current liabilities 18 18.78 16.38 21.09

Short term provisions 20 10.78 8.24 7.38

Current tax liability (net) 9.4 13.25 11.69 3.43

360.94 308.86 234.78

Total Equity and Liabilities 3,551.20 3,156.31 3,071.11

2.1




number: 101049W/E300004


number: 000515S








Place: Hyderabad Place: New Delhi Place: Hyderabad

Date: July 19, 2017 Date: July 19, 2017 Date: July 19, 2017


Consolidated Balance Sheet as at March 31, 2017


Summary of significant accounting policies

The accompanying notes are an integral part of the consolidated financial statements.

Page No. 162GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 Consolidated Financials

NotesFor the year ended

March 31, 2017

For the year ended

March 31, 2016

REVENUE

Revenue from operations 21 1,366.73 875.46

Other income 22 9.98 8.10

Total revenue 1,376.71 883.56

EXPENSES

Concession fee 48 46.20 25.79

Purchase of traded goods 55.89 42.16

Increase in traded goods 23 (6.89) (2.59)

Employee benefits expense 24 127.22 119.59

Other expenses 25 300.14 265.29

Total expenses 522.56 450.24

854.15 433.32

Finance income 26 (98.79) (24.88)

Finance costs 27 258.87 246.63 Depreciation and amortization expenses 28 247.25 253.28

446.82 (41.71)

Share of profit in joint venture 4.06 2.16

Profit / (loss) before tax 450.88 (39.55)

Tax expense: 29

Current tax - Minimum alternate tax 107.16 11.44

Tax of earlier years (0.03) 0.06

Deferred tax

Deferred tax expense 152.58 2.18

Minimum alternate tax credit entitlement 43 (101.03) (0.46)

Total tax expense 158.68 13.22

Profit /(loss) for the year 292.20 (52.77)

Other comprehensive income

Items that will not be reclassified to profit or loss

Re-measurement gains /(losses) on defined benefit plans (0.42) 0.05

291.78 (52.72)

Profit/(loss) attributable to:

Equity holders of the parent 283.81 (56.51)

Non controlling interests 30 8.39 3.74

Equity holders of the parent 283.42 (56.48)

Non controlling interests 8.36 3.76

31 7.51 (1.50)Summary of significant accounting policies 2.1




number: 101049W/E300004


number: 000515S










Total comprehensive income for the year, net of tax

Total comprehensive income attributable to:

Earnings per equity share:

Basic and diluted



Consolidated Statement of Profit and Loss for the year ended March 31, 2017


Earnings before interest, tax, depreciation and amortization (EBITDA)

Profit /(loss) before share of profit in joint ventures and tax


For the year ended

March 31, 2017

For the year ended

March 31, 2016

Cash flow from operating activities

Profit before tax 450.88 (39.55)

Adjustment to reconcile profit before tax to net cash flows:

Share of profit in joint venture (4.06) (2.16)


Bad debts written off 0.04 -

Inventories written off 0.75 0.48

Amortisation of deferred income (0.72) (0.88)

Provision for doubtful advances / debts - 0.07


Transfer of expenses from capital work in progress - 2.77

Unrealised foreign exchange loss /(gain) 0.09 0.12

Loss /(profit) on sale / discard of property plant and equipment 0.28 (0.09)

Interest on financial assets at amortised cost (9.94) (11.31)

Fair value gain on financial instruments at fair value through profit or loss (50.46) (3.75)

Gain on sale of financial assets (mutual funds) (27.39) (9.19)

Reversal of provision no longer required (1.48) (1.71)

Interest on financial liabilities held at amortized cost 256.80 244.05

Income from government grants (2.08) (0.48)

Gain on fair valuation of financial assets (mutual funds) (3.85) (0.26)

Operating profit before working capital changes 856.28 431.39

Working capital adjustments:

Increase in trade payables 15.10 28.66

Decrease in other liabilities 0.13 (6.24)

Increase in other financial liabilities 34.51 34.10

Increase in provisions 3.11 1.27

Increase in government grants 22.11 13.69

Decrease)/(Increase) in trade receivables 26.27 (44.88)

(Increase)/decrease in inventories (6.99) (4.95)

Decrease in other assets 17.40 21.34

(Increase) / decreased in other financial assets (1.63) (0.03)

(Decrease)/increase in loans 0.03 0.04

Cash generated from operations 966.32 474.39

Direct taxes paid (net) (110.06) (9.97)

Net cash flow from operating activities (A) 856.26 464.42

Cash flows from investing activities

Purchase of property, plant and equipment, including CWIP and capital advances (100.54) (75.68)

Proceeds from sale of property, plant and equipment 0.39 0.25

Purchase of non-current investments 0.00 (0.00)

Repayment of loans by joint venture 1.51 1.05

Purchase of financial assests (mutual funds) (3,023.46) (1,373.69)

Sale of financial assets (mutual funds) 2,891.20 1,188.72

Interest on financial assets at amortised cost 10.24 9.88

(Investment in) / withdrawal from deposits (6.09) (6.93)

(Investment in) / withdrawal from margin money deposit (24.59) 2.81

Net cash flow used in investing activities (B) (251.34) (253.59)

Cash flows from financing activities

Dividend paid to non- controlling interest (1.81) (8.30)

Dividend distribution tax on dividend paid to non-controlling interest (0.33) (1.69)

Proceeds from borrowings 175.00 89.99

Repayment of borrowings (216.71) (83.11)

(Repayment) of / withdrawal of short-term borrowings (6.61) 0.24

Interest paid (251.93) (215.42)

Net cash flow used in financing activities (C) (302.39) (218.29)


Consolidated Cash flow statements for the year ended March 31, 2017



For the year ended

March 31, 2017

For the year ended

March 31, 2016


Consolidated Cash flow statements for the year ended March 31, 2017


Net increase in cash and cash equivalents (A + B + C) 302.53 (7.46)

Cash and cash equivalents at the beginning of the year 25.24 32.62

Effects of exchange differences on cash & cash equivalents held in foreign currency (0.04) 0.08

Cash and cash equivalents at the end of the year 327.73 25.24

Components of cash and cash equivalents

Cash on hand 0.41 0.29

Cheques, credit card collection and drafts in hand 0.43 0.15

With banks

- on current account 63.59 13.47

- in exchange earner foreign currency account 5.28 4.38

- on deposit account 258.02 6.95

Total cash and cash equivalents (refer note 13) 327.73 25.24

Note:




number: 101049W/E300004


number: 000515S










Incase of GAEL, interest accrued on Indian rupee term loan from banks (secured) has been converted into Funded Interest Term Loan as

per terms of agreement. The said transaction is considered as a non-cash transaction for the purpose of cash flow statement.


a. Equity share capital:

No. Amount

Equity shares of Rs. 10 each issued, subscribed and fully paid

As at April 1, 2015 378,000,000 378.00

Issue of shares - -

As at March 31, 2016 378,000,000 378.00

Issue of shares - -

As at March 31, 2017 378,000,000 378.00

b. Other Equity

March 31, 2017 March 31, 2016

(i) Capital reserve 107.00 107.00

(ii) Retained earnings attributable to equity holders of the parent

Opening balance (516.21) (449.74)

Profit/(loss) for the year 283.81 (56.51)

(2.14) (9.99)

Items recognised directly in other comprehensive income

Remeasurement of defined benefit plan (0.39) 0.03

(234.93) (516.21)

(iii) Non controlling interests


Profit/(loss) for the year 8.39 3.74

Items recognised directly in other comprehensive income

Remeasurement of defined benefit plan (0.03) 0.02

52.55 44.19

Total other equity (including non controlling interests) (75.38) (365.02)





number: 101049W/E300004


number: 000515S











Consolidated Statement of Changes in equity for the year ended March 31, 2017


Less: Dividend paid to non controlling interest including dividend

distribution tax


3 Property plant and equipment

Leasehold

Improvements

Buildings on

Leasehold Land Plant & machinery Runways Roads

Furniture &

fixtures

Office

equipmentComputers

Electrical

InstallationsVehicles Free hold land

Buildings on

freehold landTotal

Deemed Cost

As at April 01, 2015 125.76 1,131.66 442.56 339.86 96.67 38.60 2.52 7.87 152.63 2.98 - - 2,341.11

Additions 0.18 19.76 26.65 - 2.42 1.77 0.41 5.15 9.04 0.19 16.13 62.31 144.01

Disposals - (0.92) (0.07) (0.00) - (0.30) - (0.02) (0.00) (0.74) - - (2.05)

Adjustments - 13.37 6.66 5.27 1.71 0.62 0.37 1.93 2.78 - - - 32.71

As at March 31, 2016 125.94 1,163.86 475.80 345.13 100.80 40.69 3.30 14.93 164.45 2.43 16.13 62.31 2,515.78

Additions - 12.92 23.77 - - 4.37 1.44 7.16 3.80 0.61 - - 54.07

Adjustments - (3.14) (1.61) (1.22) (0.40) (0.15) (0.09) (0.46) (0.67) - - (0.17) (7.91)

Disposals - - (1.01) - - - (0.45) (0.39) (0.57) - - - (2.42)

As at March 31, 2017 125.94 1,173.64 496.95 343.91 100.40 44.91 4.20 21.24 167.01 3.04 16.13 62.14 2,559.51

Depreciation - - - - - - - - - - - - -

As at April 01, 2015 - - - - - - - - - - - - -

Charge for the year 5.87 54.26 65.52 14.90 32.32 13.16 2.05 6.37 45.62 1.69 - 1.11 242.86

Disposals - - - - - (0.13) - (0.00) - (0.68) - - (0.81)

As at March 31, 2016 5.87 54.26 65.52 14.90 32.32 13.03 2.05 6.37 45.62 1.01 - 1.11 242.05

Charge for the year 5.96 53.93 62.01 15.07 33.02 14.27 0.99 3.87 48.79 0.81 - 1.40 240.12

Adjustments - - - - - - - - - - - - -

Disposals - - (0.69) - - - (0.45) (0.39) (0.21) - - - (1.74)

As at March 31, 2017 11.83 108.19 126.84 29.97 65.34 27.30 2.59 9.85 94.18 1.83 - 2.51 480.43

Net block - - - - - - - - - - - - -

As at March 31, 2017 114.11 1,065.45 370.11 313.94 35.06 17.61 1.61 11.39 72.83 1.21 16.13 59.63 2,079.08

As at March 31, 2016 120.07 1,109.60 410.28 330.23 68.48 27.66 1.24 8.56 118.83 1.42 16.13 61.20 2,273.73

As at March 31, 2015 125.76 1,131.66 442.56 339.86 96.67 38.60 2.52 7.87 152.63 2.98 - - 2,341.12

Notes:

Leasehold

Improvements

Buildings on

Leasehold Land Plant & machinery Runways Roads

Furniture &

fixtures

Office

equipmentComputers

Electrical

InstallationsVehicles Total PPE

As at April 1, 2015

Gross Block 147.17 1,392.29 660.07 435.36 140.97 66.80 34.31 161.40 253.93 10.26 3,302.56

Accumulated depreciation 21.41 260.63 217.51 95.50 44.30 28.20 31.78 153.53 101.30 7.28 961.44

Net Block 125.76 1,131.66 442.56 339.86 96.67 38.60 2.53 7.87 152.63 2.98 2,341.12

3.1 31-Mar-17 31-Mar-16 1-Apr-15

Capital Work in progress 115.83 69.23 55.26


Notes to the Consolidated financial statements for the year ended March 31, 2017

(All amounts in Rupees in crores , except otherwise stated)

1. Disposals include reversal of outstanding liabilities of the Group amounting to Rs. Nil (March 31,2016: Rs.1.09 crore, March 31, 2015: Rs. 0.95 crores) which are no longer payable now. The reversal for depreciation thereon amounting to Rs. Nil (March 31, 2016: Rs. 0.17

crore, March 31, 2015: 5.63) has been included under depreciation charge of the year.

2.Disposals include fixed assets written off which have been identified as unusable based on physical verification carried out by the Group during the year having a gross book value of Rs. Nil (March 31, 2016: Rs 0.73 crore, March 31, 2015 Rs 0.22 crore) and written

down value of Rs. Nil (March 31, 2016 Rs. 0.13 crore, March 31, 2015 Rs. 0.005 crore).

Ind AS 101 Exemption : The Group has availed the exemption available under Ind AS 101, wherein the carrying value of property, plant and equipment has been carried forward at the amount as determined under the previous GAAP. Information regarding gross block

of assets, accumulated depreciation has been disclosed by the Company separately as follows :


4. Intangible Asset

Goodwill*Computer

software

Technical

Knowhow

Right to Operate -

Cargo facility Total

Deemed Cost

As at April 1, 2015 36.27 3.98 8.98 13.57 62.80

Additions - 0.10 - 2.04 2.14

Disposals - - - (0.45) (0.45)

As at March 31, 2016 36.27 4.08 8.98 15.16 64.49

Additions - 2.08 - 3.86 5.94

Disposals - - - (0.09) (0.09)

As at March 31, 2017 36.27 6.16 8.98 18.93 70.34

Amortization

As at April 1, 2015 - - - - -

Charge for the year - 2.17 6.12 2.13 10.42

Disposals - - - (0.44) (0.44)

As at March 31, 2016 - 2.17 6.12 1.69 9.98

Charge for the year - 1.56 2.86 2.71 7.13

Disposals - - - (0.09) (0.09)

As at March 31, 2017 - 3.73 8.98 4.31 17.02

Net block

As at March 31, 2017 36.27 2.43 - 14.62 53.32

As at March 31, 2016 36.27 1.91 2.86 13.47 54.51

Deemed cost as at April 1, 2015 36.27 3.98 8.98 13.57 62.80

*Refer note 54 on impairment testing of goodwill.

Computer

software

Technical

knowhow

Right to Operate -

Cargo facility

As at April 1, 2015

Gross block 27.49 31.35 29.42

Accumulated amortization 23.51 22.37 15.85

Net book value as per previous GAAP Value 3.98 8.98 13.57

Deemed cost as at April 1, 2015 3.98 8.98 13.57



(All amounts in Rupees , except otherwise stated)

Ind AS 101 Exemption : The Company has availed the exemption available under Ind AS 101, wherein the carrying value of

intangible assets has been carried forward at the amount as determined under the previous GAAP. Information regarding gross

block of assets, accumulated depreciation has been disclosed by the Company separately as follows :


5.1 Investment in joint ventures


Investments as per equity method

Unquoted equity shares (Refer note no. 53 )

Asia Pacific Flight Training Academy Limited - - - - - -


shares of Rs.10 each fully paid up

Laqshya Hyderabad Airport Media Private Limited 1.40 - - - - -



Investment in Laqshya Hyderabad Airport Media Private Limited

arising on account of fair valuation of loan given below market rate 5.59 2.93 0.76 - - - Total investments 6.99 2.93 0.76 - - -

Aggregate value of investment in joint ventures 6.99 2.93 0.76 - -

5.2 Financial Assets - Investments


Investments at Amortised Cost

Unquoted Commercial Paper

Srei Infrastructure Finance Ltd. 48.81 - -

Investment at FVTPL in Mutual Funds (Quoted)

Birla Sunlife Cash Plus Institutional Premium - Growth

41.78 47.70 9.13

IDBI Liquid Fund - Regular plan Growth

50.05 - -

Birla Sun Life Savings Fund Instl. - Growth

26.13 - -

Birla Sun Life Short Term fund-Regular Growth.

101.63 - -

Birla sunlife cash plus- growth regular plan

12.98 12.17 14.83

DHFL Pramerica Liquid Fund - Growth Option

41.05 - -

Sundaram Money Fund Regular Growth

- 15.01 -

Axis Liquid Institutional - Growth Option

9.04 23.16 -

ICICI Prudential Liquid Regular Plan - Growth

29.13 63.81 -

Kotak liquid fund Institutional premium - Growth

17.31 17.01 -

SBI Premier Liquid Fund Regular Plan - Growth

- 45.00 5.50

IDFC Cash Fund- Growth-Regular Plan

9.43 - -

Total investments in financial assets 387.34 223.86 29.46

Aggregate value of investments in financial assets 387.34 223.86 29.46

Nil units (March 31, 2016: 4,711,319.747, April 1, 2015: Nil) of face value of Rs. 10 each

50,229.814 units (March 31, 2016: 138,293.031 , April 1, 2015: Nil) of face value of Rs. 1000 each

1,212,561.322 units (March 31, 2016: 2,853,371.605, April 1, 2015: Nil) of face value of Rs. 100 each

52,616.2266 units (March 31, 2016: 55,500.1008, April 1, 2015: Nil) of face value of Rs. 1000 each

Nil units (March 31, 2016:189,701.99, April 1, 2015: 22,788.5980) of face value of Rs. 1000 each

47830.704 units (March 31, 2016: Nil, April 1, 2015: Nil) of face value of Rs. 1,000 each

1,332,827.587 (March 31, 2016: 1,866,181.775, April 1, 2015: 409,639.140) of face value of Rs. 100 each

288,649.338 units (March 31, 2016: Nil, April 1, 2015: Nil) of face value of Rs. 1,000 each

819,910.577 units (March 31, 2016: Nil, April 1, 2015: Nil) of face value of Rs. 100 each

16,319,922.709 units (March 31, 2016: Nil, April 1, 2015: Nil) of face value of Rs. 10 each

508540.965 units (March 31, 2016: 123,417.621, April 1, 2015: 626,358.331) of face value of Rs. 100 each

1,948,073.558 units (March 31, 2016: Nil, April 1, 2015: Nil) of face value of Rs. 1000 each


Notes to the Consolidated financial statements for the year ended March 31,2017


Non-current Current

Current


6 Loans


Loan to employees - - 0.03 0.00 0.04 0.05

Loans to joint venture (refer details below) 4.76 5.76 6.51 0.99 0.76 0.29

4.76 5.76 6.54 0.99 0.80 0.34

Break up of Loans to Joint venture

Laqshya Hyderabad Airport Media Private Limited 4.76 5.76 6.51 0.99 0.76 0.29

4.76 5.76 6.51 0.99 0.76 0.29

7 Bank balances other than cash and cash equivalents


Non- current bank balances 5.00 - - - - -

Margin money deposits with more than 12 months maturity* 24.10 4.51 7.31 - - -

Deposits with original maturity of more than three months but less than 12 months - - - 32.29 26.20 3.99

Deposits with original maturity of more than 12 months - - 15.28

29.10 4.51 7.31 32.29 26.20 19.27

*Margin money deposits represent security held by bank including bank guarantees issued by the bankers on behalf of the Group.

8 Other financial assets



Security deposits 10.12 8.40 9.14 0.34 0.41 0.16

Less: Provision for doubtful deposit (0.31) (0.31) (0.31) - - -

9.81 8.09 8.83 0.34 0.41 0.16

Non trade receivables - - - 7.14 7.23 5.19

Derivative not designated as hedge (Interest rate swap)* - - - 8.64 - -

Grant receivable from authorities - - - 0.04 0.04 0.04

Unbilled revenue - - - 1.44 1.31 4.50

Interest accrued on others - - - 0.43 - -

Interest accrued on fixed deposits - - - 1.46 2.19 0.75

Other financial assets 1.68 1.75 0.07

9.81 8.09 8.83 21.17 12.92 10.71

9.1 Tax asset


Advance income tax (net of provision for current tax) 43.79 65.70 44.57 28.62 2.21 16.61

43.79 65.70 44.57 28.62 2.21 16.61

9.2 Deferred tax asset



Fixed assets:

Impact of difference between tax depreciation and depreciation / amortisation

charged for the financial reporting

- 183.25 184.95

Gross deferred tax liability - 183.25 184.95

Deferred tax asset

On account of Unabsorbed depreciation - 188.91 194.21

On account of remeasurement of defined benefit plans - 27.84 0.44

On account of provision for doubtful trade, advances and diminution in value of

investment - - 26.29

Gross deferred tax asset - 216.75 220.94

Deferred tax asset (net) - 33.50 35.99

MAT credit entitlement 168.26 67.23 66.78

Deferred tax asset (net) 168.26 100.73 102.77

9.3 Deferred tax liability


Fixed assets:

Impact of difference between tax depreciation and depreciation / amortisation

charged for the financial reporting

154.34 5.13 4.84

Gross deferred tax liability 154.34 5.13 4.84

Deferred tax asset

On account of unabsorbed depreciation 33.30 3.90 3.29

On account of remeasurement of defined benefit plans 0.72 - -

Gross deferred tax asset 34.02 3.90 3.29

Deferred tax liability (net) 120.32 1.23 1.55

Non-current Current

Non-current Current

* In case of GAEL, Interest Rate Swap (IRS) arrangement to obtain Loan Equivalent Risk (LER) facility for the cross currency arrangement for its term loan. The effective weighted average interest rate is

5.215% p.a (2016: 5.215% p.a.). The increase in fair value of the interest rate swap has been recognised in finance income.

Non current Current


Notes to the Consolidated financial statements for the year ended as at March 31, 2017


Non-current Current





9.4 Tax liability


Provision for tax (net ) - - - 13.25 11.69 3.43

- - - 13.25 11.69 3.43

10 Other assets


Capital advances

Unsecured, considered good 7.52 3.80 84.47 - - -

(A) 7.52 3.80 84.47 - - -

Advances other than capital advances

Passenger service fee (Security component) 42.26 61.34 80.03 - - -

Others 7.86 8.10 8.21 4.32 2.28 3.57

50.12 69.44 88.24 4.32 2.28 3.57

Less: Provision for doubtful advances (0.04) (0.04) - - - -

(B) 50.08 69.40 88.24 4.32 2.28 3.57

Prepaid expenses 0.68 1.30 2.07 4.93 4.02 4.31

Balance with statutory / government Authorities (Refer note 35 C) 14.28 14.26 14.37 4.20 4.60 4.64

(C) 14.96 15.56 16.44 9.13 8.62 8.95

Total (A+B+C) 72.56 88.76 189.15 13.45 10.90 12.52

11 Inventories


Traded goods(at cost) 16.82 10.22 7.70

Stores and Spares (valued at lower of cost or net realizable value) 34.53 38.13 36.18

Less: Provision for non moving spares (0.17) - -

51.18 48.35 43.88

12 Trade receivables


Secured, considered good

Others 0.01 0.15 0.17


Related parties 3.21 5.41 9.25

Others 101.71 125.69 76.98

Unsecured, considered doubtful

Others 0.38 0.38 0.34

Less: Allowances for doubtful receivables (0.38) (0.38) (0.34)

104.93 131.25 86.40

13 Cash and cash equivalents


Cash and cash equivalents

-Cash on hand 0.41 0.29 0.32

-Deposits with original maturity of less than three months 258.02 6.95 20.56

-Balances with Banks

- in current accounts 63.59 13.47 6.40

- in exchange earner foreign currency account 5.28 4.38 5.21

Cheques, credit card collection and drafts in hand 0.43 0.15 0.13

327.73 25.24 32.62

SBNs*

Other INR

denomination

notes

Total

Closing cash in hand as on 08.11.2016 0.64 0.07 0.71

(+) Permitted receipts** 0.43 12.21 12.64

(+) Non Permitted receipts 0.01 - 0.01

(-) Permitted payments - 2.37 2.37

(-) Amount deposited in Banks 1.08 9.50 10.58

Closing cash in hand as on 30.12.2016 - 0.41 0.41

iii) During the year, the Group had specified bank notes or other denomination notes as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017. The details of Specified Bank Notes (SBN)

held and transacted during the period from November 8, 2016 to December, 30 2016, denomination wise SBNs and other notes as per the notification is given below:

* For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of

Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.

**GHIAL has collected Rs. 0.43 Crore in Specified Bank Notes during the period November 9 to December 30, 2016 and disclosed the same as permitted receipts. These permitted receipts represents

cash collected towards car parking charges and airport entry passes during the period November 9 to November 13, 2017. Management has considered that the aforesaid collections are permissible as

these are towards public utility services which were subsequently waived through a government notification with effect from November 14, 2017. Accordingly, the management has accepted these SBN

during the aforesaid period for uninterrupted functioning of the airport facilities.

Current

No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private

companies respectively in which any director is a partner, a director or a member.

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are secured to the extent of security

deposits received, are interest bearing and settlement occurs in cash. For the year ended March 31, 2017, the Group has not recorded any impairment of receivables relating to amounts owed by related

parties (March 31, 2016: Rs. Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

In case of GHIAL and GHASL, trade receivables are interest bearing @18% p.a. and are generally with the credit term of 7 to 15 days and in case of other companies, the revenue is on cash or credit

period not beyond 30 days.

Current

i) Cash at banks does not earn interest . Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn

interest at the respective short-term deposit rates.

ii) At March 31, 2017, the Group had available Rs. Nil, March 31, 2016: Rs. 68.01 crores and April 1, 2015 : Rs. 158 crores of undrawn committed borrowing facilities.

Non current Current

Non-current Current

Current





14 Equity


Authorized shares (No.)

400,000,000 (March 31, 2016: 400,000,000, April 1, 2015: 400,000,000) equity shares of Rs. 10 each 400.00 400.00 400.00





Total 378.00 378.00 378.00

(a) Reconciliation of the shares outstanding at the beginning and at the end of the year

Equity Shares No. Amount. No. Amount. No. Amount.

At the beginning of the year 378,000,000 378.00 378,000,000 378.00 378,000,000 378.00

Issued during the year

Outstanding at the end of the year 378,000,000 378.00 378,000,000 378.00 378,000,000 378.00

(b) Terms/ rights attached to equity shares

(c) Shares held by holding /ultimate holding company /holding company and/or their subsidiaries/associates.


GMR Airports Limited, holding company 238,139,000 238.14 238,139,000 238.14 238,139,000 238.14

GMR Infrastructure Limited, Ultimate holding company 1,000 0.00 1,000 0.00 1,000 0.00

238,140,000 238.14 238,140,000 238.14 238,140,000 238.14

(d) Details of shareholders holding more than 5% shares in the Company


Equity shares of Rs. 10 each fully paid

GMR Airports Limited, holding company 238,139,000 63% 238,139,000 63% 238,139,000 63%

Airports Authority of India 49,140,000 13% 49,140,000 13% 49,140,000 13%

Government of Telangana 49,140,000 13% 49,140,000 13% 49,140,000 13%

MAHB (Mauritius) Private Limited 41,573,540 11% 41,573,540 11% 41,573,540 11%

14.1 Other equity


Capital reserve 107.00 107.00 107.00

107.00 107.00 107.00

Retained earnings

Opening Balance (516.21) (449.74) (449.74)

Add: Profit/(loss) for the year 283.81 (56.51) -

Less: Dividend paid to non controlling interest including dividend distribution tax (2.14) (9.99) -


Remeasurement of post-employment benefits obligations (0.39) 0.03 -

Total Retained Earnings (234.93) (516.21) (449.74)

(127.93) (409.21) (342.74)

As per records of the Company including its register of share holders/members and other declarations received from share holders regarding beneficial interest, the above share holding represents

both legal and beneficial ownership of shares.

(e) No Shares have been issued by the Company for consideration other than cash, during the period of five years immediately preceding the reporting date.

(f) Shares reserved for issue under options

There are no shares reserved for issue under options and contract/commitments for the sale of shares/disinvestment.

The Company has only one class of equity shares having par value of Rs 10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is

subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of

the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. Further all shareholders will have their

representative in the board of directors of the company as per the terms of arrangement.








15 Financial liabilities - Borrowings


Term loan (secured)

From Others

Indian rupee term loans 120.82 420.35 424.52 1.88 4.21 -

From Banks

Indian rupee term loans 1,554.28 1,258.22 1,174.19 59.89 35.34 23.88

Term loan in foreign currency (secured)

Foreign currency loan from banks 421.15 488.42 517.72 58.71 59.76 56.44

Loan from Government of Telangana (Unsecured) 315.05 315.05 315.05 - - -

Inter corporate deposit 0.37 0.42 0.46 0.05 0.05 0.13

2,411.67 2,482.46 2,431.94 120.53 99.36 80.45

Amount disclosed under the head "other current financial liabilities" (Refer note 16) - - - (120.53) (99.36) (80.45)

Net Amount 2,411.67 2,482.46 2,431.94 - - -

Indian rupee term loans of GAEL from banks and FITL, post restructuring, are further secured by first charge (pari-passu) on all rights, title, interests, benefits, claims and demands whatsoever of

GAEL and its subsidiary, GATL with respect to the insurance contracts. First charge (pari-passu) on all the bank accounts of GAEL and its subsidiary, GATL. Pledge of 51% of paid up share capital (i.e.

149,379,000 shares) (March 31, 2016: 124,389,000, April 1, 2015: 121,329,000) of GAEL held by GHIAL. Out of which, GAEL has pledged 135,864,000 shares as at March 31, 2017 (March 31, 2016 : Pledge

of 121,329,000, April 1, 2015 : Pledge of 110,619,000 shares) and is in the process of getting the balance shares , i.e. 13,515,000 shares (March 31, 2016 : 3,060,000 which were issued on March 31, 2016,

April 1, 2015 : 10,710,000 which were issued on March 27, 2015) pledged, which were issued on November 23, 2016, January 21, 2017 and March 28, 2017. Un-conditional and irrevocable Corporate

Guarantee of GHIAL pari passu among the Lenders for their respective Term Loans and Funded Interest Term Loans.

GAEL has entered in to an agreement with a bank to obtain Loan Equivalent Risk (LER) facility for the cross currency arrangement, which is secured by a second charge over the fixed and current

assets, both present and future. Rs. 61.83 crores (March 31, 2016 : Rs. 64.12 crores) of term loan of GAEL has been swapped by way of cross currency arrangement with a Bank effective from March 10,

2016 pursuant to which the principal of Rs. 61.83 crores (March 31, 2016 : Rs. 64.12 crores) has been swapped for an equivalent USD 9,176,994.43 (March 31, 2016 : USD 9,516,883.12) and interest on such

loan from 11.00 % p.a. to 5.215 % p.a. on the applicable USD amount. Rs. 22.58 crores (March 31, 2016 : Rs. 23.65 crores) Funded Interest Term Loan (FITL) of GAEL has been swapped by way of cross

currency arrangement with a Bank effective from March 10, 2016 pursuant to which the principal of Rs. 22.58 crores (March 31, 2016 : Rs. 23.65 crores)has been swapped for an equivalent USD

3,351,391.47 (March 31, 2016 : USD. 3,510,204.08) and interest on such loan from 11.00 % p.a. to 5.215 % p.a. on the applicable USD amount. for Rs. 164.98 crores (March 31, 2016 : Rs. 164.98 crores) term

loan, the interest on such loan of GAEL has been swapped by way of cross currency arrangement with a Bank effective from March 10, 2016 pursuant to which the interest of 11.00 % p.a. has been

swapped to 9.78% p.a. on the applicable equivalent USD 24,486,827.46 (March 31, 2016 : USD 24,486,827.46) on such effective date. for Rs. 25.63 crores(March 31, 2016 : Rs. 25.63 crores)Funded Interest

Term Loan (FITL), the interest on such loan of GAEL has been swapped by way of cross currency arrangement with a Bank effective from March 10, 2016 pursuant to which the interest of 11.00 % p.a.

has been swapped to 9.78% p.a. on the applicable equivalent USD 3,804,437.85 (March 31, 2016 : USD 3,804,437.85) on such effective date.

x. Term loan of HASSL for Rs. 265,600,000 from bank carries interest @ 3% + RBI PLR base rate. The loan is repayable in 21 equal quarterly instalments beginning from March 31, 2012. Term loan is

secured by equitable mortgage of Leasehold right and title in respect of Leasehold Land belonging to GHIAL and other immovable properties and first charge on all movables, including movable

machinery, machinery spares, tools, accessories, furniture, fixtures, vehicles and other movable assets, book debts, operating cash flows, receivables, intangibles, uncalled capital, commissions,

revenues, present and future and assignment of all claim and demands from insurance, Trust and Retention Account and Debt Service Reserve Account and further secured by pledge of 37,50,000

equity shares of HASSL by GHIAL.

v. Interest free loan received by GHIAL from the Government of Telangana is repayable in five equal installments commencing from 16th anniversary of the commercial operations date (March 23,

2008).

vi. Term loan of GHRL from banks (secured) carry interest at base rate plus agreed spread, which is subject to reset at the end of agreed intervals. The interest rate during the year is 12.20% (March 31,

2016 : 12.20 %; April 01 2015: 12.75%). The loan was repayable in 48 unequal quarterly instalments beginning from December 31, 2012. The loan is secured by first pari passu charge by way of equitable

mortgage of the immovable properties pertaining to the Hotel Project (including assignment of leasehold rights in the case of leasehold land, if any) and assets of the project consisting of land

admeasuring 5.37 acres together with all the buildings, structures etc on such land, first pari passu charge on the whole of stocks of raw materials, goods-in-process, semi-finished goods and finished

goods, consumable stores and spares, book debts, bills, movable plant and machinery, machinery spares, tools and accessories and other movables, whole of equipment including its spares, tools and

accessories, software, whether installed or not and whether in the possession or under the control of or not, all the bank accounts (whether escrow and no lien or otherwise) and all estate, rights, title,

interest, benefits, claims and demands, trade receivables, all cash flows and receivables and proceeds. Also the above loan is secured by corporate guarantee given by GHIAL.

However, during the current year, the above term loans obtained from banks have been prepaid and settled in full by utilizing the proceeds of a fresh term loan facility availed from a Non Banking

Financial Company (NBFC).

Term loan of GHRL from others (secured) carries interest at base rate plus agreed spread. The loan carries the interest rate of 10.80% during the current year. The loan is repayable in 54 quarterly

installments commencing from January 2017 to April 2030. The Rupee term loan is secured by a pari passu first charge on immovable assets (including assignment of leasehold rights in the case of

leasehold land) , movable assets, revenues, book debts, bank accounts and a pledge over 30% of the equity shares of GHRL.

Also the above loan is secured by an irrevocable and unconditional corporate guarantee given by GHIAL.

vii. During the year 2015-16, Rupee term loan of HDFRL from a bank of Rs. 2.80 crores carries interest at base rate plus agreed spread subject to reset at the end of agreed interval. The interest rate

during the year 2015-16 is in the range of 11.25% to 11.75% p.a. (April 01, 2015: 11.75% to 12.50% p.a.). The loan was repayable in 22 quarterly unequal instalments starting from March 31, 2012 and will

end on March 31, 2017. The loan includes Rs.Nil (April 01, 2015: Rs 0.86 crores) which is guaranteed by GHIAL.

The loan is secured by current assets including stocks and such other movables, book debts, moveable assets, software, whether installed or not and whether in the possession or under the control of

HDFRL or not, and all the bank accounts. Further with a pledge of 30% of shares of total equity held by GHIAL. As on March 31, 2016, the Company has pledged 5,085,000 (April 01, 2015: 5,085,000)

such equity shares as per sanction terms.

The term loan of HDFRL has been swapped by way of cross currency pursuant to an arrangement entered into by HDFRL with a Bank on April 29, 2015. Under this arrangement, the principal of Rs.

5.40 crores has been swapped for an equivalent USD 852,676.46 and interest on such loan from 11.75% to 5.88% on the applicable USD amount.

viii. During the FY 14-15, GHASL got the term loan restructured from the bank at an interest rate of 11% p.a against the earlier interest rate of 12% p.a. Due to restructuring, the company got the

additional term loan facility by way of additional Funded Interest Term Loan (FITL) over a period of two years from March 1, 2015. Further, GHASL also got the moratorium of two years in repayment

of loans (term loan and FITL) repayable over 32 unequal quarterly installments beginning from June 2017 against earlier repayment term of over 40 unequal quarterly installments beginning from

November 2013.

The Term loan is secured by mortgage of Leasehold rights, title, interest and benefit in respect of Leasehold Land and exclusive charge on all movable and immovable assets, operating cash flows, book

debts, receivables, commissions, revenue of whatsoever nature, both present and future, and an exclusive charge on all the bank accounts of the Project, including TRA, Escrow account etc.

ix.Indian rupee term loan of GAEL from banks (secured) carry interest rate at base rate plus agreed spread, which is subject to reset at the end of agreed interval. The effective interest rate is 11% p.a . In

the earlier year, the Indian rupee term loan from banks (secured) were restructured with a moratorium period of two years in repayment of loan beginning from May 2014 post repayment of first

instalment of February 2014. The Loans are repayable in 40 quarterly unequal instalments beginning from June 2016 as against the earlier repayment term of 40 quarterly unequal instalments beginning

from February 2014. Further, the interest for a period of 25 months commencing from March 2014 had been converted into Funded Interest Term Loan (FITL). FITL is repayable in 28 quarterly unequal

instalments beginning from June 2016 and carry interest at base rate plus agreed spread, which is subject to reset at the end of agreed interval. The effective interest rate is 11% p.a.

The Indian rupee term loans of GAEL from banks are secured by first pari-passu charge by way of equitable mortgage of leasehold rights of land (of GAEL and its subsidiary, GATL) to the extent of

16.46 acres on which MRO facilities are constructed with all the buildings, structures etc. on such land. First charge (pari-passu) by way of hypothecation of all the movable assets of GAEL and its

subsidiary, GATL including, but not limited to plant & machinery, machinery spares, tools & accessories, current assets.

First charge (pari-passu) on book debts, operating cash flows, receivables, commissions, revenue of whatsoever nature and wherever arising, present and future of GAEL and its subsidiary, GATL.

i. In case of GHIAL, Indian rupee term loans from banks (secured) carry interest at base rate plus agreed spread, which is subject to reset at the end of agreed interval. The interest rate during the year

ranges from 10.20% to 10.70% p.a (2016: 10.80% to 11.25% p.a, April 1, 2015: 11.25% p.a.). During the current year, the Indian rupee term loans from banks (secured) were partially refinanced in

October, 2016 without any change in the repayment schedule. The loan is now repayable in 51 quarterly installments beginning from October 31, 2016.

ii. Foreign currency loan (secured) from a bank carries interest @ LIBOR plus agreed spread. The GHIAL had entered into an Interest Rate Swap (IRS) arrangement to convert floating rate of interest

into fixed rate of interest, as per the terms of the loan agreement. The effective weighted average interest rate is 8.295% p.a (2016: 8.295% p.a., April 1, 2015: 8.295% p.a.). The loan is repayable in 56

quarterly installments beginning from July 01, 2010.

iii. In case of GHIAL, Indian rupee term loans from others (secured) carry interest at base rate plus agreed spread, which is subject to reset at the end of an agreed interval. The interest rate during the

year ranges from 9.95% to 10.50% p.a. (2016: 10.90% to 10.50% p.a, April 1, 2015: 10.90% p.a.). During the current year, the term loans from others (secured) were refinanced from banks (secured) in

October 2016 without any change in repayment schedule. The loan was repayable in 52 quarterly installments beginning from July 31, 2016.

iv. In case of GHIAL, Indian rupee loans, foreign currency loan including the IRS arrangement and loan from others are secured by mortgage of leasehold right, title, interest and benefit in respect of

leasehold land (to an extent of 2136.455 acres) , freehold land of 8.824 acres and first paripassu charge on all movable and immovable assets, operating cash flows, book debts, receivables, intangibles

and revenues, both present and future, as well as assignment of all right, title, interest, benefits, claims and demands available under the concession agreement and other project documents, security

interest in the Trust and Retention account, Debt service reserve account and further secured by pledge of 164,123,514 (2016: 164,123,514, April 1, 2015: 164,123,514) and 28,656,486 (2016: 28,656,486,

April 1, 2015: 28,656,486) equity shares, both present and future, held or to be held, upto 51% of the paid up share capital of GHIAL, as the case may be, by both, the holding company and MAHB

(Mauritius) Private Limited respectively.

Non Current Current





15.1 Short-term borrowings


Cash credit 21.05 27.66 27.42

21.05 27.66 27.42

16 Other financial liabilities


At FVTPL

Derivative not designated as hedge (Interest rate swap)* 67.24 107.43 112.94 - 1.77 -

Total other financial liabilities at FVTPL 67.24 107.43 112.94 - 1.77 -

At Amortised cost

Retention money 1.38 0.48 0.06 9.73 8.77 7.85

Deposit from concessionaires 24.41 23.25 17.32 24.46 13.32 9.22

Concession fee payable 195.98 170.58 157.88 - - -

Current maturities of long term borrowings - - - 120.53 99.36 80.45

Non trade payables - - - 8.89 12.97 2.03

Capital creditors - - - 15.26 11.68 7.10

Interest accrued but not due on borrowings - - - 6.20 0.30 0.29

Total other financial liabilities at amortised cost 221.77 194.31 175.26 185.07 146.40 106.94

Total other financial liabilities 289.01 301.74 288.20 185.07 148.17 106.94

17 Government grants


Opening Balance 13.21 - -

Grant during the year 22.11 13.69 -

Less: Recognised in the statement of profit and loss (2.08) (0.48) -

33.24 13.21 -

Non Current 32.11 12.08 - Current 1.13 1.13 -

18 Other liabilities


Unearned revenue 10.59 13.18 15.90 4.09 7.05 9.62

Deferred income 21.54 21.94 21.63 3.43 0.08 3.07

Advances from Customers - - - 2.36 2.26 2.89

Service tax payable - - - 0.05 0.06 0.04

Tax deducted at source - - - 5.89 4.42 3.15

Other statutory dues - - - 2.96 2.51 2.32

32.13 35.12 37.53 18.78 16.38 21.09

19 Trade payables


Trade payable

- Related parties 20.60 10.91 7.79

- Others 90.29 84.68 60.73

110.88 95.59 68.52

20 Provisions


Provision for compensated absences - - - 10.18 7.88 7.08

Provision for superannuation fund - - - 0.13 0.12 0.11

Provision for gratuity 2.40 1.84 1.42 0.47 0.24 0.19

2.40 1.84 1.42 10.78 8.24 7.38

Long Term Short term

Non-current Current

Terms and conditions of the above financial liabilities of the Group :

i) Trade payables are non-interest bearing and are normally settled on 30 days terms.

ii) The dues to related party are unsecured and are normally payable within 30 days from the date of receipt of demand.

iii) For explanations on the Group’s credit risk management processes, refer to Note 39

iii.Cash Credit availed by GHRL from a bank is secured by way of first paripassu charge on entire current assets and cash flows including stocks, receivables, bank balances etc. with existing term

lenders and collateral first paripassu charge by way of extension of equitable mortgage of the immovable properties and assets pertaining to the hotel project ( including assignment of leasehold rights

in the case of leasehold land, if any ) and assets of the project consisting of land admeasuring 5.37 acres together with all the buildings, structures etc on such land.The cash credit is repayable on

demand and carries interest in the range of 2.50% above such bank's base rate to 3.8% above such bank's base rate.

Non-current Current

* In case of GHIAL, Interest Rate Swap (IRS) arrangement to convert floating rate of interest into fixed rate of interest, as per the terms of the loan agreement. The effective weighted average interest rate

is 8.295% p.a (2016: 8.295% p.a., April 1, 2015: 8.295% p.a.). The decrease in fair value of the interest rate swap has been recognised in finance income.

Concession fee is payable by GHIAL to Ministry of Civil Aviation in respect of first 10 years in 20 equal half yearly installments commencing from the 11th anniversary of the commercial operations

date (March 23, 2008). Concession fee from the 11th year is payable on a half yearly basis. The difference between the fair value and carrying value of such fee payable has been treated as a government

grant as per Ind AS 20.

i. Cash credit availed by GHIAL from bank is secured by way of first paripassu charge on all movable and immovable assets, operating cash flows, book debts, receivables, intangibles and revenues,

both present and future and a second ranking charges by way of mortgage of leasehold right title, interest and benefit in respect of leasehold land (to an extent of 2044 acres and 29 guntas) but not

limited to documents of title to the goods. The cash credit is repayable on demand and carries interest 12.75% p.a.

ii. Cash credit facility availed by GATL from bank is secured by way ofFirst charge on entire current assets and cash flows including stocks, receivables, bank balances etc., (Paripassu charge with

existing loan taken from GAEL. First pari passu charge by way of extension of equitable mortgage of leasehold rights of land to the extent of 16.46 acres standing in the name of GAEL in Sy.No.99/1

,Mamidipally village, Sarror nagar mandal, RR Dist, Telangana on which MRO facilities have been created along with all the buildings, structures. First pari passu charge by way of hypothecation of all

the movable assets belongs to GATL and GAEL and including but not limited to plant and machinery, machinery spares, tools & accessories, (Paripassu charge with existing loan taken from GAEL)

Corporate guarantee from GAEL. The cash credit facility is repayable on demand and carries interest of base rate plus 3.95%. (Presently 13.70%) (March 31, 2016 : 13.75%, April 1, 2015 14.20%)


21 Revenue from operations For the year ended

March 31, 2017

For the year ended

March 31, 2016

Income from services

Aeronautical 708.27 287.45

Non Aeronautical 414.01 371.55

Cargo operations 82.57 80.52

Hospitality and retail services 161.88 135.94

1,366.73 875.46

22 Other income For the year ended

March 31, 2017

For the year ended

March 31, 2016

Gain on account of foreign exchange fluctuations (net) 1.69 2.25

Amortisation of deferred income 0.72 0.88

Income from government grant 2.08 0.48

Provisions no longer required, written back 1.48 1.71

Profit on sale of assets - 0.10

Other non-operating income 4.01 2.68

9.98 8.10

23

Increase in traded goods

For the year ended

March 31, 2017

For the year ended

March 31, 2016

Opening stock 10.70 7.40

Closing stock 17.59 9.99

Increase (6.89) (2.59)

24 Employee Benefits Expense For the year ended

March 31, 2017

For the year ended

March 31, 2016


Contribution to provident and other funds [32 (a)] 7.06 6.58

Gratuity expenses [Note 32 (b)] 1.52 1.41


127.22 119.59








25 Other expenses For the year ended

March 31, 2017

For the year ended

March 31, 2016

Operator fee 4.87 4.63

Operating and maintenance expenses 44.74 38.19

Power and fuel 29.62 34.08

House keeping charges 11.67 10.54

Consumption of stores and spares 29.01 29.60

Cargo handling charges 2.84 2.73

Repairs and maintenance

Plant & Machinery 16.68 15.78

Buildings 6.68 5.28

IT Systems 12.58 11.44

Other 11.32 8.01

Insurance 4.38 4.74

Security expenses 15.48 12.42

Rent 4.43 4.49


License fees 4.56 3.08

Advertising and business promotion 5.55 4.37

Collection charges 4.20 0.99


Communication costs 4.71 3.01

Office maintenance 2.79 2.36

Legal and professional expenses 14.27 13.61

Technical fees 7.21 6.99

Management fee 24.65 17.51

Printing and stationery 1.02 0.85

Donation - 0.95

CSR expenditure (refer details below) 3.17 0.95

Directors’ sitting fees 0.30 0.34

Payments to Auditors (refer details below) 1.56 0.98


Provision for doubtful advances / debts - 0.07

Inventories written off 0.75 0.48

Bad debts written off 0.04 -

Fixed assets written off 0.28 0.01

Miscellaneous expenses 4.37 3.64

300.14 265.29

For the year ended

March 31, 2017

For the year ended

March 31, 2016

Payment to Auditors (Included in other expenses above)

As Auditor

Audit fee 0.85 0.61

Tax audit fee 0.05 0.05

Other services 0.57 0.24

Reimbursement of expenses 0.09 0.08

1.56 0.98

Details of CSR expenditure: For the year ended

March 31, 2017

For the year ended

March 31, 2016

a) Gross amount required to be spent by the Company during

the year 3.17 0.95

(b) Amount spent in cash



(c) Total amount spent during the year


ii) On purposes other than (i) above 3.17 0.95 Page No. 176GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 Consolidated Financials




26 Finance income For the year ended

March 31, 2017

For the year ended

March 31, 2016

Interest on financial assets at amortised cost:

Bank deposits 3.89 4.42

Loan to joint venture 0.70 0.78

Others 5.35 6.12

Gain on sale of financial assets (mutual funds) 27.39 9.19

Gain on fair valuation of financial assets (mutual funds) 3.85 0.26

Interest on interest rate swap arrangement 7.15 0.36

Gain on fair valuation of interest rate swap 50.46 3.75

Total 98.79 24.88

27 Finance costs For the year ended

March 31, 2017

For the year ended

March 31, 2016

Interest on financial liabilities held at amortized cost 242.32 240.23

Other borrowing cost 11.45 2.69

Interest-others 3.04 1.13


258.87 246.63

28 Depreciation and amortization expense For the year ended


March 31, 2016

Depreciation on property, plant and equipment (note 3) 240.12 242.86

Amortisation of intangible assets (note 4) 7.13 10.42

247.25 253.28


29 Income Tax

A. The major components of income tax expenses are:

Statement of profit and loss:

For the year ended

March 31, 2017

For the year ended

March 31, 2016

Tax for earlier years (0.03) 0.06

Current taxes:

Current income tax charge 6.13 10.98

Deferred tax:

Relating to origination and reversal of temporary differences 152.58 2.18

Income tax expense reported in the statement of profit or loss 158.71 13.16

B. Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate for 31 March 2016 and 31 March 2017:

For the year ended

March 31, 2017

For the year ended

March 31, 2016

Accounting profit 546.66 (34.49)

Tax at the applicable tax rate of 30.90% (March 31, 2017: 30.90%, March 31, 2016: 30.90%) 168.92 (10.66)

1) Dividend Income exempt U/s 10(34) 3.50 2.76

2) Amount disallowed u/s 43B 0.02 0.36

3) Gain on recognition of MTM on IRS 12.42 1.70

4) Others - Ind AS adjustments 4.22 (5.07)

5) Reversal of deferred tax during tax holiday period u/s 80IA 18.28 9.27

6) Deduction u/s 80IA 7.81 8.83

7) Deduction u/s 80G 0.04 0.08

8) Unabsorbed accumulated losses on which deferred tax is not created* (19.11) (27.19)

9) Others (0.68) 0.63

Tax effect of expenses that are not deductible in determining taxable profit:

1) Amount disallowed u/s 43B 0.79 -

2) Amount of disallowances U/s 14A 1.13 0.46

3) Donations & CSR Expenditure 0.76 0.12

4) Interest on delayed payment of income tax 0.41 0.00

5) Effect of depreciation relating to unrelaised forex loss 5.46 5.96

6) Effect of depreciation relating to Capital Reserve 2.01 2.01

7) Other non-deductible expenses - 0.22

8) Other Ind AS adjustments - 0.00

9) Impact of MAT provisions 5.31 5.85

10) Impact of surcharge applicability 0.15 0.53

11) Others 0.27 0.04

Income tax expense reported in the statement of profit and loss 158.71 13.16

C. Deferred tax:

March 31, 2017 March 31, 2016 March 31, 2017 March 31, 2016 April 1, 2015


Fixed assets: Impact of difference between tax depreciation and

depreciation / amortisation charged for the financial reporting

35.80 (17.03) 152.43 188.23 189.66

Fair value of financial assets/liabilities 0.01 - 0.10 0.11 -

Impact of notional interest on loan taken from Related Party (1.77) - 1.82 0.05 0.17

Gross deferred tax liability 34.04 (17.03) 154.35 188.39 189.83

Deferred tax asset

Unabsorbed depreciation (158.50) (20.89) 30.41 188.91 194.21

On account of expenditure charged to the statement of profit and loss but

allowed for tax purposes on payment basis.(27.11) 0.02 0.72 27.84 26.78

On account of provision for doubtful trade, advances and dimunition in

value of investment - 1.03 - - -

Tax Holiday Reversals (1.01) 0.63 2.89 3.90 3.30

(186.62) (19.21) 34.02 220.65 224.29

Net deferred tax (liability)/Asset (152.58) (2.18) (120.33) 32.26 34.47

MAT credit entitlement 101.03 0.46 168.26 67.23 66.78

Net deferred tax Asset - - 168.26 99.49 101.24

Net deferred tax liability - - (120.33) - -

D.

March 31, 2017 March 31, 2016


Tax income/(expense) recognised in the statement of profit or loss (51.55) (1.72)

Closing balance 47.97 99.52

Reconciliations of deferred tax liabilities/assets(net)

i) Deferred tax on adjustments recognised on account of adoption of Ind AS are not considered as these adjustments get reversed in the subsequent periods and have

no impact on the accounting or tax profit.

ii) The Group off sets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax

assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

iii) In case of GAEL, being entitled to claim tax holiday for any ten consecutive years out of fifteen years, from the year of commencement of commercial operations in

2011-12 under Section 80 IAB of the Income tax Act 1961. GAEL has recognised deferred tax asset on unabsorbed depreciation and carried forward losses only to the

extent GAEL has sufficient taxable temporary differences.

iii) In case of GATL, being entitled to claim tax holiday for first ten consecutive years from the year of commencement of commercial operations in 2011-12 under

Section 10AA of the Income tax Act 1961. GATL has recognised deferred tax asset on unabsorbed depreciation and carried forward losses only to the extent GATL has

sufficient taxable temporary differences. Further, since the entire Deferred tax asset / Deferred tax liability on accelerated depreciation and unbilled revenue is

reversed in the tax holiday period. No Deferred tax asset / Deferred tax liability is accounted for the same.




Tax effect of income that are not taxable in determining taxable profit / allowable expenditure that are not

part of Book profit:

*Deferred tax assets are not recognised to the extent it is not probable that the temporary differences will reverse in the foreseeable future and taxable profit will be

available against which the temporary differences can be utilised by the respective subsidiary companies.

Statement of profit or loss Balance sheet


GMR Hyderabad International Airport Limited Notes to the Consolidated Ind AS Financial Statements for the year ended March 31, 2017


1. Corporate information The Consolidated Ind AS Financial Statements comprise financial statement of GMR Hyderabad International Airport Limited (‘GHIAL’ or ‘the Company’) and its subsidiaries and the joint ventures (hereinafter collectively referred to as ‘the Group’) for the year ended March 31, 2017. GHIAL, was incorporated on December 17, 2002, for managing the operations of Rajiv Gandhi International Airport at Hyderabad. The Group is principally engaged in construction and maintenance of airport and various related activities.

The Group is engaged in operation of airport infrastructure and other allied service such as cargo handling, development of airport city and SEZ area near airport, trading of goods in duty free area of airport, security services and hospitality services, maintenance, repair and overhaul facility (MRO) of aircraft at near and around the airport etc. The Consolidated Ind AS Financial Statements are authorized for issue in accordance with a resolution of the directors passed in the Board meeting held on July 19, 2017.

2. Significant accounting policies

2.1 Basis of preparation

The Consolidated Ind AS Financial Statements of the Group have been prepared in accordance with Indian Accounting Standards ('Ind AS') notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended. For all periods up to and including the year ended March 31, 2016, the Group prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These Consolidated Ind AS Financial Statements for the year ended March 31, 2017 are the first Consolidated Ind AS Financial Statements, the Group has prepared in accordance with Ind AS. Refer to note 55 for information on how the Group adopted Ind AS. The Consolidated Ind AS Financial Statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value or revalued amount: Derivative financial instruments Certain financial assets and liabilities measured at fair value (refer accounting policy regarding

financial instruments) The Consolidated Ind AS Financial Statements are presented in INR and all values are rounded to the nearest crore, except when otherwise indicated.

2.2 Basis of Consolidation

The consolidated financial statements comprise the standalone financial statements of the Company and its subsidiaries as at March 31, 2017. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has: Power over the investee (i.e. existing rights that give it the current ability to direct the relevant

activities of the investee) Exposure, or rights, to variable returns from its involvement with the investee, and The ability to use its power over the investee to affect its returns




Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: The contractual arrangement with the other vote holders of the investee Rights arising from other contractual arrangements The Group’s voting rights and potential voting rights The size of the group’s holding of voting rights relative to the size and dispersion of the holdings of

the other voting rights holders.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the Consolidated Ind AS Financial Statements from the date the Group gains control until the date the Group ceases to control the subsidiary. Consolidated Ind AS Financial Statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances. If a member of the group uses accounting policies other than those adopted in the Consolidated Ind AS Financial Statements for like transactions and events in similar circumstances, appropriate adjustments are made to that group member’s financial statements in preparing the Consolidated Ind AS Financial Statements to ensure conformity with the group’s accounting policies. The financial statements of all entities used for the purpose of consolidation are drawn up to same reporting date as that of the parent company, i.e., year ended on March 31. When the end of the reporting period of the parent is different from that of a subsidiary, the subsidiary prepares, for consolidation purposes, additional financial information as of the same date as the financial statements of GHIAL to enable GHIAL to consolidate the financial information of the subsidiary, unless it is impracticable to do so. Consolidation procedure: a. Combine like items of assets, liabilities, equity, income, expenses and cash flows of the parent with

those of its subsidiaries. For this purpose, income and expenses of the subsidiary are based on the amounts of the assets and liabilities recognized in the Consolidated Ind AS Financial Statements at the acquisition date.

b. Offset (eliminate) the carrying amount of the parent’s investment in each subsidiary and the parent’s portion of equity of each subsidiary. Business combinations policy explains how to account for any related goodwill.

c. Eliminate in full intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between entities of the group (profits or losses resulting from intragroup transactions that are recognized in assets, such as inventory and Property, plant and equipment, are eliminated in full). Ind AS 12 Income Taxes applies to temporary differences that arise from the elimination of profits and losses resulting from intragroup transactions.

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.




Group Information: Information about subsidiaries

* Hyderabad Duty Free Retail has been merged with GMR Hotels and Resorts Limited with appointed date as April 1, 2016 effective from April 27, 2017. @ During the year, entire equity share capital of GMR Hyderabad Airport Resource Management Limited has been sold to GMR Infrastructure Limited for a nominal value of Re. 1 and loss on the sale of the equity has been accounted for Rs. 0.05 Crore. # As at March 31, 2017, the subsidiary companies GMR Hyderabad Muliproduct SEZ Limited and GMR Airport Handling Services Company Limited were in the process of striking off from the register of Companies and subsequent to the year end, the names of these subsidiaries have been struck off from the register of Companies.

Name Principal activities Place and Country of operation

% equity interest

March 31, 2017

March 31, 2016

April 1, 2015

Hyderabad Menzies Air Cargo Private Limited (HMACPL)

Cargo handling operations at airport

Hyderabad, India

51% 51% 51%

Hyderabad Airport Security Services Limited (HASSL)

Operation of airport allied services

Hyderabad, India

100% 100% 100%

GMR Hyderabad Aerotropolis Limited (GHAL)

Development of commercial property

Hyderabad, India

100% 100% 100%

GMR Hyderabad Aviation SEZ Limited (GHASL)

Development of SEZ

Hyderabad, India

100% 100% 100%

Hyderabad Duty Free Retail Limited (HDFRL)*

Operation of duty free outlets at airport

Hyderabad, India

100% 100% 100%

GMR Hyderabad Airport Power Distribution Limited (GHAPDL)

Development of power distribution facility

Hyderabad, India

100% 100% 100%

GMR Hotels and Resorts Limited (GHRL)

Operation of business hotel

Hyderabad, India

100% 100% 100%

GMR Aerospace Engineering Limited (GAEL)

Development of facilities for maintenance, repair and overhaul (MRO) of aircrafts

Hyderabad, India

100% 100% 100%

GMR Aero Technic Limited (GATL)

Operation of MRO Hyderabad, India

100% 100% 100%

GMR Hyderabad Airport Resource Management Limited

Operation of airport allied services

Hyderabad, India

@ 100% 100%

GMR Hyderabad Multiproduct SEZ Limited

Development of SEZ

Hyderabad, India

# 100% 100%

GMR Airport Handling Services Company Limited

Ground handling services

Hyderabad, India

# 100% 100%




Information about Joint Ventures

2.3 Statement of significant accounting policies

a. Use of estimates: The preparation of Consolidated Ind AS Financial Statements in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting year. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described in Note 36. The Group based its assumptions and estimates on parameters available when the Consolidated Ind AS Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

b. Business combinations and goodwill:

In accordance with Ind AS 101 provisions related to first time adoption, the Group has elected to apply Ind AS accounting for business combinations prospectively from 1 April 2015. As such, Indian GAAP balances relating to business combinations entered into before that date, including goodwill, have been carried forward with minimal adjustment (please refer note 54). The same first time adoption exemption is also used for joint ventures. Business combinations other than common control business combinations are accounted for using the acquisition method. The cost of an acquisition other than in a common control business combination is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred. Business combination involving entities under common control are accounted for using the pooling of interests method. At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their acquisition date fair values. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable. However, the following assets and liabilities acquired in a business combination are measured at the basis indicated below: i. Deferred tax assets or liabilities, and the assets or liabilities related to employee benefit arrangements

are recognized and measured in accordance with Ind AS 12 Income Tax and Ind AS 19 Employee Benefits respectively.

Name Principal activities

Country of Incorporation

% equity interest

March 31, 2017

March 31, 2016

April 1, 2015

Laqshya Hyderabad Airport Media Private Limited (LHAMPL)

Advertisement India 49% 49% 49%

Asia Pacific Flight Training Academy Limited (APFTAL)

Flight Training India 40% 39.66% 39.66%




ii. Liabilities or equity instruments related to share based payment arrangements of the acquiree or share – based payments arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with Ind AS 102 Share-based Payments at the acquisition date.

iii. Assets (or disposal groups) that are classified as held for sale in accordance with Ind AS 105 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that standard.

iv. Reacquired rights are measured at a value determined on the basis of the remaining contractual term of the related contract. Such valuation does not consider potential renewal of the reacquired right.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss or OCI, as appropriate. Any contingent consideration to be transferred by the acquirer is recognized at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of Ind AS 109 Financial Instruments, is measured at fair value with changes in fair value recognized in profit or loss. If the contingent consideration is not within the scope of Ind AS 109, it is measured in accordance with the appropriate Ind AS. Contingent consideration that is classified as equity is not re-measured at subsequent reporting dates and subsequent its settlement is accounted for within equity. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without routing the same through OCI. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognized in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods. Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is




measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted through goodwill during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date. These adjustments are called as measurement period adjustments. The measurement period does not exceed one year from the acquisition date.

c. Investment in joint ventures:

A Joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. The considerations made in determining whether significant influence or joint control are similar to those necessary to determine control over the subsidiaries. The Group’s investments in its joint venture are accounted for using the equity method. Under the equity method, the investment in a joint venture is initially recognized at cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the joint venture since the acquisition date. Goodwill relating to the joint venture is included in the carrying amount of the investment and is not tested for impairment individually.

The statement of profit and loss reflects the Group’s share of the results of operations of the joint venture. Any change in OCI of those investees is presented as part of the Group’s OCI. In addition, when there has been a change recognized directly in the equity of the joint venture, the Group recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the joint venture are eliminated to the extent of the interest in the joint venture. If an entity’s share of losses of a joint venture equals or exceeds its interest in the joint venture (which includes any long term interest that, in substance, form part of the Group’s net investment in the joint venture), the entity discontinues recognising its share of further losses. If the joint venture subsequently reports profits, the entity resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognized. The aggregate of the Group’s share of profit or loss of a joint venture is shown on the face of the statement of profit and loss. The financial statements of the joint venture are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group. After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its joint venture. At each reporting date, the Group determines whether there is objective evidence that the investment in the joint venture is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the joint venture and its carrying value, and then recognises the loss as ‘Share of profit of a joint venture’ in the statement of profit or loss.




d. Current versus Non-current classification: The Group presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when:

i) It is expected to be realised or intended to be sold or consumed in normal operating cycle ii) It is held primarily for the purpose of trading iii) It is expected to be realised within twelve months after the reporting period, or iv) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least

twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when: i) It is expected to be settled in normal operating cycle, ii) It is held primarily for the purpose of trading, iii) It is due to be settled within twelve months after the reporting period, or iv) There is no unconditional right to defer the settlement of the liability for at least twelve months after

the reporting period. All other liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Group has identified twelve months as its operating cycle.

e. Property, plant and equipment:

On transition to Ind AS, the group has elected to continue with the carrying value of all of its property, plant and equipment as at 31 March 2015, measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment as on 1 April 2015.

Freehold land is carried at historical cost less impairment loss, if any. All other items of property, plant and equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Capital work in progress includes cost of property, plant and equipment under installation/under development as at the balance sheet date. Property, plant and equipment under installation or under construction as at balance sheet are shown as capital work-in-progress, and the related advances are shown as loans and advances.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. Further, when each major inspection is performed, its cost is recognized in the carrying amount of the item of property, plant and equipment as a replacement if the recognition criteria are satisfied. All other repairs and maintenance are charged to profit and loss during the reporting period in which they are incurred.

On Transition to Ind AS, GHIAL has availed the optional exemption on “Long term Foreign currency Monetary items” and has accordingly continued with the policy to adjust the exchange differences arising on translation/settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset recognized in the financial statements for the year ended 31 March 2016 (as per previous GAAP), to the cost of the property, plant and equipment and depreciates the same over




the remaining life. In accordance with the Ministry of Corporate Affairs (‘MCA’) circular dated August 09, 2012, exchange differences adjusted to the cost of property, plant and equipment are total differences, arising on long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset, for the year. In other words, the Company does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange differences.

The Group identifies and determines cost of each component / part of the asset separately, if the component / part has a cost which is significant to the total cost of the asset having useful life that is materially different from that of the remaining asset. These components are depreciated over their useful lives; the remaining asset is depreciated over the life of the principal asset. All spare parts, stand-by and servicing equipment qualify as plant, property and equipment (PPE) if they meet the definition of PPE i.e. if the Group intends to use these during more than a period of 12 months. The spare parts capitalized in this manner are depreciated as per useful life period, not exceeding a period of five years based on management estimate supported by technical evaluation.

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognized.

f. Depreciation:

Depreciation on the Property plant and equipment is calculated on a straight-line basis using the rates arrived at, based on useful lives estimated by the management, which coincides with the lives prescribed under Schedule II of the Companies Act, 2013 and certain items of building, plant and equipment, the Group, based on technical assessment made by technical expert and management estimate, believes that the useful lives of such assets are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used. The Group has used the following useful lives to provide depreciation on its Property, plant and equipment:

Particulars Useful lives estimated by the management (years)

Improvements to leasehold land 15-30

Buildings on lease hold land* 10-30

Other Buildings 30-60

Runways and taxiways 30

Roads- Other than RCC** 10

Electrical installations** 10-15

Plant and machinery 15

Office Equipment 5

Computer equipment and IT systems 3-6

Furniture and fixtures 8-10

Vehicles 8-10

Depreciation on adjustments to the historical cost of the assets on account of foreign exchange fluctuations is provided prospectively over the residual useful life of the asset. * The useful lives of modifications to buildings on leasehold land are estimated as 10 years.




**The useful lives of internal roads – other than RCC and certain electrical installations (transformers) are estimated as 10 years and 15 years respectively. These lives are longer than those indicated in schedule II. Leasehold Improvements and buildings on leasehold land are amortized over shorter of estimated useful lives or lease period.

On June 12, 2014, the Airport Economic Regulatory Authority (“the Authority”) has issued a consultation paper viz.05/2014-15 in the matter of Normative Approach to Building Blocks in Economic Regulation of Major Airports wherein it, interalia, mentioned that the Authority proposes to lay down, to the extent required, the depreciation rates for airport assets, taking into account the provisions of the useful life of assets given in Schedule II of the Companies Act, 2013, for such assets that have not been clearly mentioned in the Schedule II of the Companies Act, 2013 or may have a useful life justifiably different than that indicated in the Companies Act, 2013 in the specific context to the airport sector. The Authority has initiated the process to enable it to issue a notification as appropriate, pursuant to the provisions of Part B of Schedule II of the Companies Act, 2013 for this purpose. Pending issuance of final notification by AERA of the useful lives of airport specific assets i.e. Runways, Taxiways and Apron, GHIAL, in the absence of any specific mention of useful lives of these assets in Schedule II to the Companies Act, 2013, has continued to depreciate these assets over their estimated useful lives as determined by the Management based on a technical evaluation. The impact, if any, based on the useful lives as may be notified by the Authority will be considered as per the order of the Authority. GHIAL has assessed the components except in case of Runways and Taxiways which is pending issuance of final notification by Airport Economic Regulatory Authority (AERA). In case of GAEL, Buildings on leasehold land are amortized on a straight line basis over the period of lease i.e., 27 years. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

g. Intangible assets: Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. Goodwill arising on consolidation is not amortized but tested for impairment. Service concession arrangements: HMACPL constructs or upgrades infrastructure (construction or upgrade services) used to provide a public service and operates and maintains that infrastructure (operation services) for a specified period of time. These arrangements may include Infrastructure used in a public-to-private service concession arrangement for its entire useful life. Under Appendix A to Ind AS 11 – Service Concession Arrangements, these arrangements are accounted for based on the nature of the consideration. The intangible asset model is used to the extent that HMACPL receives a right (i.e. a concessionaire) to charge users of the public service. The financial model is used when HMACPL has an unconditional contractual right to receive cash or other financial assets from or at the direction of the grantor for the construction service. When the unconditional right to receive cash covers only part of the service, the two models are combined to account separately for each component. If HMACPL performs more than one service (i.e. construction, upgrade services and operation services) under a single contract or arrangement, consideration received or receivable is allocated by reference to the relative fair values of the service delivered, when the amount are separately identifiable.




The concession arrangement is a service concession arrangement under appendix A to Ind AS 11. Through the concession agreement, GHIAL has granted further concession to HMACPL along with sub-leasing of the part of cargo infrastructure facility to HMACPL and since it has a right to charge the users for the services and therefore, the same has been classified under Intangible assets model. The intangible asset is amortized over the shorter of the estimated period of future economic benefits which the intangible assets are expected to generate or the concession period, from the date they are available for use. An asset carried under concession arrangements is derecognized on disposal or when no future economic benefits are expected from its future use or disposal.

h. Amortization of intangible assets Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each year. Cost relating to software licenses, which are acquired, are capitalized and amortized on a straight – line basis over their useful life not exceeding six years.

Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the statement of profit and loss. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is derecognized.

Amortization of Intangible assets under service concession arrangements:

The intangible asset created as per service concession arrangement are amortized over the shorter of the estimated period of future economic benefits which the intangible assets are expected to generate or the concession period, from the date they are available for use.

i. Impairment of non-financial assets:

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset‘s recoverable amount is the higher of an asset’s or cash generating units’ (CGUs) fair value less cost to sell and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre—tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. Impairment losses are recognized in the statement of profit and loss. An assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change




in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of profit or loss.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

j. Investment Property: Investment property comprises of building that is held for long-term rental yields and/or for capital appreciation. Investment property is initially recognized at cost, including transaction costs. Subsequently investment property comprising of building is carried at cost less accumulated depreciation and accumulated impairment losses, if any. The cost includes the cost of replacing parts and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of the investment property are required to be replaced at intervals, the Group depreciates them separately based on their specific useful lives. All other repair and maintenance costs are recognized in statement of profit and loss as incurred.

Though the Group measures investment property using cost based measurement, the fair value of investment property is disclosed in the notes. Fair values are determined based on an annual evaluation performed by an accredited external independent valuer applying a valuation model recommended by the International Valuation Standards Committee.

Investment properties are derecognized when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in the statement of profit and loss in the period of derecognition.

k. Inventories

Stores and spares and traded goods are valued at lower of cost and net realisable value. Cost is determined on a weighted average basis and includes all applicable costs incurred in bringing goods to their present location and condition. However, stores and spares items held for use in providing the service are not written down below cost if the services are expected to be provided at or above cost.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

l. Borrowing cost:

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

m. Leases:

The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.




For arrangements entered into prior to April 1, 2015, the Group has determined whether the arrangement contain lease on the basis of facts and circumstances existing on the date of transition.

(a) Group as a lessee :

A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the group is classified as a finance lease.

Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term unless either: i) another systematic basis is more representative of the time pattern of the user’s benefit even if the

payments to the lessors are not on that basis; or

ii) the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases. If payments to the lessor vary because of factors other than general inflation, then this condition is not met.

Finance leases are capitalised at the commencement of the lease at the inception date fair value of the

leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the statement of profit and loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Group’s general policy on the borrowing costs. A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

(b) Group as a lessor :

Leases in which the Group does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Group to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.

n. Provisions, Contingent Liabilities and commitments

Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement. Contingent liability is disclosed in the case of:

• A present obligation arising from past events, when it is not probable that an outflow of resources will not be required to settle the obligation

• A present obligation arising from past events, when it cannot be measured reliably. • A possible obligation arising from past events, unless the probability of outflow of resources is remote




The Group does not recognize a contingent liability but discloses its existence in the financial statements.

Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets. Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

o. Retirement and other employee benefits:

Retirement benefit in the form of provident fund is a defined contribution scheme. The Group has no obligation, other than the contribution payable to the provident fund. The Group recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.

Retirement benefit in the form of Superannuation Fund and Employee State Insurance are defined contribution schemes, and the Group recognizes contribution payable to these schemes as an expense, when an employee renders the related service. The Group has no obligation, other than the contribution payable to the funds.

The Group operates a defined benefit gratuity plan in India, which requires contributions to be made to a separately administered fund. The cost of providing benefits under the defined benefit plan is determined based on actuarial valuation using projected unit credit method.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognized in profit or loss on the earlier of:

i) The date of the plan amendment or curtailment, and ii) The date that the Group recognises related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Group recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:

i) Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and

ii) Net interest expense or income. Short term employee benefits

Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit. The group measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The group treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for




based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. However, the Group presents the entire provision towards accumulated leave as a current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for twelve months after the reporting date.

p. Financial Instrument

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

A. Financial assets i. Initial recognition and measurement:

All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Group commits to purchase or sell the asset.


For purposes of subsequent measurement, financial assets are classified in four categories: - Debt instruments at amortized cost - Debt instruments at fair value through other comprehensive income (FVTOCI) - Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL) - Equity instruments measured at fair value through other comprehensive income (FVTOCI)

Debt instruments at amortized cost:

A ‘debt instrument’ is measured at the amortized cost if both the following conditions are met: a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

This category is the most relevant to the Group. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.

Debt instrument at FVTOCI:

A ‘debt instrument’ is classified as at the FVTOCI if both of the following criteria are met: a) The objective of the business model is achieved both by collecting contractual cash flows and

selling the financial assets, and

b) The asset’s contractual cash flows represent SPPI.




Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Group recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

Debt instrument at FVTPL:

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

In addition, the Group may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’).

Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.

iii. Derecognition:

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e. removed from the balance sheet) when: a. The rights to receive cash flows from the asset have expired, or b. The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of the Group’s continuing involvement. In that case, the company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

iv. Impairment of financial assets:

In accordance with Ind AS 109, the Group applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure: a. Financial assets that are debt instruments, and are measured at amortized cost e.g., loans, debt

securities, deposits, trade receivables and bank balance b. Financial assets that are debt instruments and are measured as at FVTOCI c. Lease receivables under Ind AS 17 d. Trade receivables or any contractual right to receive cash or another financial asset that result

from transactions that are within the scope of Ind AS 11 and Ind AS 18 e. Loan commitments which are not measured as at FVTPL




f. Financial guarantee contracts which are not measured as at FVTPL

The Group follows ‘simplified approach’ for recognition of impairment loss allowance on; a. Trade receivables or contract revenue receivables; and b. All lease receivables resulting from transactions within the scope of Ind AS 17

The application of simplified approach does not require the Group to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the Group determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.

ECL is the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, the Group is required to consider:

a. All contractual terms of the financial instrument (including prepayment, extension, call and

similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument

b. Cash flows from the sale of collateral held or other credit enhancements that are integral to the

contractual terms

As a practical expedient, the Group evaluates individual balances to determine impairment loss allowance on its trade receivables. The evaluation is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss (P&L). This amount is reflected under the head ‘other expenses’ in the statement of profit and loss. The balance sheet presentation for various financial instruments is described below:

Financial assets measured as at amortized cost and contractual revenue receivables: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Group does not reduce impairment allowance from the gross carrying amount.

For assessing credit risk and impairment loss, the Group combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.

v. Equity Investments:




All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognized by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. For all other equity instruments, the Group may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Group makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable. If the Group decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to statement of profit and loss, even on sale of investment. However, the Group may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.

B. Financial liabilities

i. Initial recognition and measurement:

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, loans and borrowings including cash credit, financial guarantee contracts and derivative financial instruments.


The measurement of financial liabilities depends on their classification, as described below: Financial liabilities at fair value through profit or loss: Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognized in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to P&L. However, the Group may transfer the cumulative gain or loss within equity. All other changes in fair value of




such liability are recognized in the statement of profit or loss. The Group has not designated any financial liability as at fair value through profit and loss.

iii. Loans and borrowings:

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.

iv. Financial guarantee contracts:

Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee.

Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognized less cumulative amortization.

v. Derecognition:

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.

C. Reclassification of financial assets:

The Group determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Group’s senior management determines change in the business model as a result of external or internal changes which are significant to the Group’s operations. Such changes are evident to external parties. A change in the business model occurs when the Group either begins or ceases to perform an activity that is significant to its operations. If the Group reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Group does not restate any previously recognized gains, losses (including impairment gains or losses) or interest."

D. Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.




E. Derivative financial instruments The Group uses derivative financial instruments, such as forward currency contracts and interest rate swaps, to hedge its foreign currency risks, interest rate risks and commodity price risks, respectively. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.

q. Cash and cash equivalents:

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group’s cash management.

r. Cash dividend to equity holders of the parent

The Group recognises a liability to make cash distributions to equity holders of the parent when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the Companies Act, 2013, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognized directly in equity.

s. Foreign currency Transactions

The Group’s Consolidated Ind AS Financial Statements are presented in INR, which is also the functional currency of GHIAL. For each entity the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions and balances

Transactions in foreign currencies are initially recorded by the Company at their respective functional currency spot rates at the date the transaction first qualifies for recognition. However, for practical reasons, the Group uses an average rate if the average approximates the actual rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.

Exchange differences arising on settlement or translation of monetary items are recognized in profit or loss with the exception of the following:

GHIAL treats foreign currency monetary item as "long-term foreign currency monetary item", if it has a term of 12 months or more at the date of its origination. In accordance with MCA circular dated August 09, 2012, exchange differences for this purpose, are total differences arising on long-term foreign currency monetary items for the period. In other words, the Group does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference. Exchange difference arising on long term foreign currency monetary items related to acquisition of a Property, plant and equipment are capitalized and depreciated over the remaining useful life of the asset.




Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

t. Fair Value Measurement

The group measures financial instruments, such as, derivatives at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

i. In the principal market for the asset or liability, or ii. In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Management determines the policies and procedures for both recurring fair value measurement, such as derivative instruments and unquoted financial assets measured at fair value, and for non-recurring measurement, such as assets held for distribution in discontinued operations.

External valuers are involved for valuation of significant assets, such as properties and unquoted financial assets, and significant liabilities, such as contingent consideration. Involvement of external valuers is decided upon by the management. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. The management decides, after discussions with the group's external valuers, which valuation techniques and inputs to use for each case.




At each reporting date, the Management analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the group’s accounting policies. For this analysis, the Valuation Committee verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.

The Management, in conjunction with the group’s external valuers, also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.

For the purpose of fair value disclosures, the group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

This note summarises accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.

a) Disclosures for valuation methods, significant estimates and assumptions (note 36 B) b) Quantitative disclosures of fair value measurement hierarchy (note 38) c) Financial instruments (including those carried at amortized cost) (note 37)

u. Revenue recognition:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The group has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.

The specific recognition criteria described below must also be met before revenue is recognized.

1) Income from service:

i. Revenue from Airport Operations i.e. Aeronautical and Non-Aeronautical Operations are recognized on an accrual basis, net of service tax and applicable discounts, when services are rendered and it is possible that an economic benefit will be received which can be quantified reliably. Revenue from Aeronautical operations includes landing and parking charges of aircraft, operation and maintenance of passenger boarding and other allied services. Revenue from Non-aeronautical operations include granting rights to use land and space primarily for catering to the needs of passengers, air traffic services and air transport services.

Further, Rental income arising from operating leases is accounted for on a straight-line basis over the lease terms and is included in non-aeronautical revenue in the statement of profit or loss due to its operating nature.

ii. In case of cargo handling revenue, revenue from outbound cargo is recognized at the time of acceptance of cargo with respect to non-airline customers and at the time of departure of aircraft with respect to airline customers and revenue from inbound cargo is recognized at the time of arrival of aircraft in case of airline customers and at the point of delivery of cargo in case of non-airline customers.

iii. Income from the concession arrangements earned under the intangible asset model consists of : (a) fair value of contract revenue, which is deemed to be fair value of consideration transferred to acquire the asset; and (b) payments actually received from the users.




iv. Revenue from commercial property development rights granted to concessionaires is

recognized on accrual basis, as per the terms of the agreement entered into with the customers.

v. Revenue earned in excess of billings has been included under ‘other assets’ as unbilled revenue and billings in excess of revenue has been disclosed under ‘other liabilities’ as unearned revenue.

vi. Revenue from hotel operations comprises of income by way of hotel room rent, sale of food,

beverages and allied services relating to the hotel and is recognized net of taxes and discounts as and when the services are provided and products are sold.

vii. Income from management / technical services is recognized as per the terms of the agreement

on the basis of services rendered.

2) Sale of Goods:

i. Revenue from sale of goods at the duty free outlets operated by the Group is recognized at the time of delivery of goods to customers which coincides with transfer of risks and rewards to its customers. Sales are stated net of returns and discounts.

3) Revenues and cost of improvements to concession assets In conformity with appendix A of Ind AS 11, HMACPL recognizes revenues and the associated costs of improvements to concession assets which it is obligated to perform at the airports as established by the concession agreement. Revenues represent the value of the exchange between HMACPL and the government with respect to the improvements, given that HAMCPL constructs or provides improvements to the airports as obligated under the concession agreement and in exchange, the government grants HMACPL the right to obtain benefits for services provided using those assets. HMACPL has determined that its obligations per the concession agreement should be considered to be a revenue earning activity as all expenditures incurred to fulfill the concession agreement are included in the maximum tariff it charges its customers and therefore it recognizes the revenue and expense in profit and loss when the expenditures are performed. The cost for such additions and improvements to concession assets is based on actual costs incurred by HMACPL in the execution of the additions or improvements, considering the requirements in the concession agreement. The amount of revenues for these services is equal to the amount of costs incurred, as HMACPL do not obtain any profit margin for these construction services. The amounts paid are set at market value.

4) Interest income:

i. Interest on all debt instruments measured either at amortized cost or at fair value through other comprehensive income, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortized cost of a financial liability. When calculating the effective interest rate, the group estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. Interest income is included in finance income in the statement of profit and loss.

ii. Interest for delayed payments from customers is accounted only when it is unconditionally accepted by the customers.




5) Dividend Income

Revenue is recognized when the group’s right to receive the payment is established, which is generally when shareholders approve the dividend.

v. Government Grants

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognized as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. Such grants related to income are deducted in reporting the related expense. When the grant is in the nature of capital subsidy it is treated as capital reserve.

GHIAL has deferred payment arrangement on the concession fee payable to Ministry of Civil

Aviation (MoCA) without interest. The effect of this assistance is treated as a government grant. The assistance is initially recognized and measured at fair value and the government grant is measured as the difference between the initial carrying value of the assistance and the fair value. The grant is subsequently measured as per the accounting policy applicable to financial liabilities.

w. Taxes :

1) Current income tax

Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity). Current and deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

2) Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except: i. When the deferred tax liability arises from the initial recognition of goodwill or an asset or

liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

ii. In respect of taxable temporary differences associated with investments in subsidiaries and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is




probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

i. When the deferred tax asset relating to the deductible temporary difference arises from the initial

recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

ii. In respect of deductible temporary differences associated with investments in subsidiaries and

interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. The Entities (GHIAL, GATL and HMACPL) are entitled to claim tax holiday for any 10 consecutive years out of 15 years, from the year of commencement of commercial operations in 2007-08, under Section 80-IA of the Income Tax Act, 1961, with regard to income from airport operations. Accordingly, deferred tax on items reversing within the tax holiday period is not considered.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax for the year. The Group recognizes deferred tax asset for MAT credit available only to the extent that it is probable that the Group will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Group recognizes MAT credit as an asset, it is created by way of credit to the statement of profit and loss and shown a deferred tax asset. The Group reviews the “MAT credit entitlement” asset at each reporting date and writes

down the asset to the extent that it is probable that it will pay normal tax during the specified period.

Expenses and assets are recognized net of the amount of sales/ value added taxes paid, except:

i. When the tax incurred on a purchase of assets or services is not recoverable from the taxation

authority, in which case, the tax paid is recognized as part of the cost of acquisition of the asset or as part of the expense item, as applicable

ii. When receivables and payables are stated with the amount of tax included

The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.




x. Segment Reporting Policies

Identification of Segments:

Based on the “management approach” as defined in Ind AS 108 – Operating Segments, the Chief Operating Decision Maker (‘CODM’) has carried out evaluation of the Group’s performance at an overall group level as one reportable operating segment i.e. ‘Airport and allied services ‘. Segment accounting policies:

The Group prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the Consolidated Ind AS Financial Statements of the Group as a whole.

y. Earnings per share:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares, if any.

z. Corporate Social Responsibility (CSR) expenditure:

The Group has charged its CSR expenditure during the year to the statement of profit and loss.

aa. Measurement of EBIDTA

The Group has elected to present earnings before interest, tax, depreciation and amortization (EBIDTA) as a separate line item on the face of the statement of profit and loss. The Group measures EBIDTA on the basis of profit / (loss) from continuing operations. In its measurement, the Group does not include finance income, depreciation and amortization expenses, finance cost and tax expense.


GMR Hyderabad International Airport Limited Notes to the Consolidated Ind AS Financial Statements for the year ended March 31, 2017 (All amounts in Rupees Crores, except otherwise stated)

30. Non-controlling interest:

Particulars For the year ended March 31, 2017


Balance at beginning of year (excluding share of CCPS) 26.19 22.43

Share of profit for the year 8.36 3.76

Total 34.55 26.19

Share of compulsory convertible cumulative preference shares (CCPS) in HMACPL

18.00 18.00

Balance at end of year 52.55 44.19

31. Earnings Per Share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

The following reflects the income and share data used in the basic and diluted EPS computations:

Particulars For the year ended March 31, 2017


Profit attributable to equity holders for basic and diluted earning

283.82 (56.53)

Weighted average number of equity shares used for computing earnings per share (Basic and diluted)

37.80 37.80

Earnings per share (Basic and diluted) (Rs.) 7.51 (1.50)

Face value per share (Rs.) 10.00 10.00

32. Retirement and other employee benefits

a) Defined contribution plan

Contribution to provident and other funds under employee benefits expense are as under:



Contribution to provident fund 4.97 4.59

Contribution to ESI and labour welfare fund 0.31 0.23

Contribution to superannuation fund 1.78 1.76

7.06 6.58

b) Defined benefit plans

Gratuity liability is a defined benefit obligation which is funded through policy taken from Life Insurance Corporation of India and Liability (net of fair value of investment in LIC) is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days’ salary (based on last drawn basic salary) for each completed year of service.

The following tables summarize the components of net benefit expense recognised in the statement of profit or loss/OCI and amounts recognised in the balance sheet for defined benefit plans/obligations:



Net employee benefit expense (recognized in Employee Cost)



Current service cost 1.37 1.27 Net interest cost 0.15 0.14 Cost recognized in statement of profit and loss 1.52 1.41

Amount recognized in other comprehensive income



Actuarial (gain)/loss due to DBO experience (0.10) 0.01

Actuarial (gain)/loss due to DBO assumption changes

(0.31) - Actuarial (gain)/loss arising during the year 0.41) 0.03 Return on plan assets (greater)/less than discount rate

(0.01) 0.01 Actuarial (gains)/ losses recognized in OCI ( 0.42) 0.05

Balance sheet


Defined benefit obligation (8.66) (7.14) (6.12)

Fair value of plan assets 5.79 5.06 4.51

Plan asset / (liability) (2.87) (2.08) (1.61)

Changes in the present value of the defined benefit obligation are as follows:


Opening defined benefit obligation

7.14 6.12 4.28

Interest cost 0.52 0.44 0.38

Current service cost 1.37 1.27 1.05

Acquisition cost 0.04 (0.06) 0.00


Actuarial losses/ (gain) on obligation-experience 0.47 (0.04) 0.67

Closing defined benefit obligation 8.66 7.14 6.11

Changes in the fair value of plan assets are as follows:


Opening fair value of plan assets 5.49 4.51 4.40

Expected return on plan assets 0.41 0.38 0.41

Contributions by employer 0.64 0.70 0.16

Acquisition adjustment 0.01 0.02 -


Return on plan assets greater/ (lesser) than discount rate

(0.03) (0.02) (0.30)

Actuarial (gains) / losses 0.10 0.02 0.01

Closing fair value of plan assets 5.79 5.06 4.51



The major category of plan assets as a percentage of the fair value of total plan assets is as follows:


Investments with insurer 100% 100% 100%

The principal assumptions used in determining gratuity obligation for the Group's plans are shown below:


Discount rate (in %) 7.10% 7.80% 7.80%

Salary Escalation (in %) 6.00% 6.00% 6.00%

Attrition rate (in %) 5.00% 5.00% 5.00%

A quantitative sensitivity analysis for significant assumption as at 31 March 2017 is as shown below:

March 31, 2017 March 31, 2016

Discount rate

Effect due to 1% increase in discount rate 1.99) (1.38)

Effect due to 1% decrease in discount rate 2.23 1.52

Attrition rate

Effect due to 1% increase in attrition rate 1.44 1.07

Effect due to 1% decrease in attrition rate (1.47) (1.09)

Salary escalation rate

Effect due to 1% increase in salary increase rate

2.05 1.45

Effect due to 1% decrease in salary increase rate

(1.92) (1.34)

The sensitivity analysis above has been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

The following payments are expected contributions to the defined benefit plan in the future years:

March 31, 2017

March 31, 2018 0.67

March 31, 2019 0.99

March 31, 2020 1.32

March 31, 2021 1.54

March 31, 2022 1.64

March 31, 2023 to March 31, 2027 6.80

The average duration of the defined benefit plan obligation at the end of the reporting period is 10 years (March 31, 2016: 10 years).



33. Details of transactions with Related Parties:

A. Names of related parties and description of relationship:


(i) Holding company GMR Airports Limited (GAL)

(ii) GAL's holding company GMR Infrastructure Limited (GIL)

(iii) Ultimate holding company GMR Enterprises Private Limited (GEPL) (formerly known as GMR Holdings Private Limited)

(iv) Fellow Subsidiary Companies GMR Aviation Private Limited

GMR Hyderabad Airport Resource Management Limited$

GMR Energy Limited

GMR Tambaram-Tindivanam Expressways Private Limited

GMR Tuni-Anakapalli Expressways Private Limited

Delhi International Airport Limited (formerly known as Delhi International Airport Private Limited)

Gateways For India Airports Private Limited

GMR Pochanpalli Expressways Limited

GMR Corporate Center Limited

GMR Infrastructure (Mauritius) Limited

GMR Energy Trading Limited

GMR SEZ and Port Holding Limited (Formerly known as GMR SEZ and Port Holding Private Limited)

GMR Highways Limited



GMR Vemagiri Power Generation Limited

GMR Rajahmundry Energy Limited

GMR Warora Energy Limited

(Formerly known as EMCO Energy Limited)

GMR Chhattisgarh Energy Limited

GMR Kamalanga Energy Limited

GMR Airport Developers Limited

GMR Power Corporation Limited

GMR Male International Airport Private Limited

GADL International Limited

Kakinada SEZ Limited (Formerly Kakinada SEZ Private Limited

Raxa Security Services Limited

GMR Sports Private Limited

Geokno India Private Limited


GMR Kishnagiri SEZ Limited

GMR Goa International Airport Limited

GMR Business Process Services Private Limited

(vi) Associates of GMR Infrastructure Limited

Jadcherla Expressways Private Limited (formerly GMR Jadcherla Expressways Private Limited)

Ulundurpet Expressways Private Limited (formerly GMR Ulundurpet Expressways Private Limited)

(vii)

Shareholders having significant influence

Government of Telangana

Airports Authority of India




MAHB (Mauritius) Private Limited

Menzies Aviation Cargo (Hyderabad) Limited, Mauritius

Menzies Aviation Plc (UK)

Menzies Aviation (India) Private Limited

(viii) Key management personnel Mr. Srinivas Bommidala – Managing Director

Mr. SGK Kishore - Chief Executive Officer

Mr. Rajesh Arora- Chief Financial Officer

Mr. Anup Kumar Samal - Company Secretary

Mr. G M Rao – Director

Mr. HJ Dora – Director

Mr. VR Hegde – Director

Mr. S. Samanta – Director

Mr. Arvind Kumar IAS – Director

Mr. Ramakrishna Rao IAS - Director

Mr. Datuk Badlisham Bin Ghazali - Director

Mr. RSSLN Bhaskarudu- Independent Director

Mr. NC Sarabeswaran- Independent Director

Mrs. Vissa SivaKameswari -Independent Director

Mr. Pradeep Chandra- Independent Director (Resigned with effect from April 27,2016

Mr. LL Krishnan- Independent Director(Resigned with effect from June 28,2016

Mr. P. Vijay Bhaskar- Independent Director

(ix) Joint Venture Laqshya Hyderabad Airport Media Private Limited


(x) Private company having common director (Section 8 Company)

GMR Varalakshmi Foundation

(xi) Other entities in which Directors are interested

GMR Family Fund Trust

B. Remuneration paid to Key Managerial Remuneration:




Sitting Fees


Sitting Fees

Remuneration to KMP 5.43 - 7.07 -

Mr. G M Rao – Director - 0.01 - 0.01

Mr. HJ Dora – Director - 0.01 - 0.01

Mr. VR Hegde – Director - 0.01 - 0.01

Mr. S. Samanta – Director - 0.02 - -

Mr. Arvind Kumar IAS - Director - 0.01 - -

Mr. Ramakrishna Rao IAS - Director - 0.00 - 0.00

Mr. Datuk Badlisham Bin Ghazali * - Director - 0.00 - 0.00

Mr. RSSLN Bhaskarudu- Independent Director - 0.05 - 0.06

Mr. NC Sarabeswaran- Independent Director - 0.04 - 0.06

Mrs. Vissa Siva Kameswari -Independent Director

- 0.03 - 0.03

Mr. P. Vijay Bhaskar - 0.01 - -

Mr. K. Pradeep Chandra IAS - - - 0.01

Mr. LL Krishnan - - - 0.02



C. Summary of Transactions with related parties during the year is as follows:

S. No.

Related Party Transactions For the year

ended 31-Mar-17

For the year ended

31-Mar-16

(i) Services received:


b GMR Airports Limited 12.63 8.28

c Raxa Security Services Limited 14.21 10.99

d GMR Aviation Private Limited 3.81 3.16


f GMR Corporate Affairs Private Limited 0.39 0.55

g GMR Family Fund Trust 0.10 -

h GMR Krishnagiri SEZ Ltd 0.01 0.04

i Geokno India Private Limited 0.33 -

j Laqshya Hyderabad Airport Media Private Limited 0.23 0.28

k Government of Telangana 3.29 3.12

l Airports Authority of India 0.05 0.03

m Menzies Aviation Plc (UK) 7.80 7.64

(ii) Security Deposit (paid) /received):

a Laqshya Hyderabad Airport Media Private Limited 0.02 -

b GMR Family Fund Trust 0.39 -

(iii) Income from operations:



c GMR Aviation Private Limited 0.05 0.05

d Kakinada SEZ Private Limited 0.35 0.36


f Raxa Security Services Limited 0.01 0.02

g GEOKNO India Pvt Ltd 0.27 -

h GMR Energy Trading Limited 0.01 0.01

i GMR Highways Limited 0.26 0.24

j GMR Business Process Services Private Limited 0.00 -

k GMR Sports Private Limited - 0.02

l GMR Goa International Airport Limited 0.00 -

m GMR Vemagiri Power Generation Limited 0.00 -

n Delhi International Airport Private Limited 0.00 0.01

o GMR Warora Energy Limited 0.00

p Laqshya Hyderabad Airport Media Private Limited 33.67 23.50

q Asia Pacific Flight Training Academy Limited 1.57 1.24

r Airports Authority of India 3.01 2.94

s GMR Varalakshmi Foundation 0.36 0.36

(iv) Unsecured loan repaid during the year:

a Menzies Aviation (India) Private Limited 0.10 0.20

(v) Unsecured loan received back:




(vi) Interest on amortisation of interest free unsecured loan given:


(vi) Interest on Delayed payments from customers

a GMR Highways Limited - 0.01

b GMR Energy Trading Limited - -

c Asia pacific Flight Training Academy Limited 0.20 0.22

d Laqshya Hyderabad Airport Media Private Limited 0.02 0.03

(vii) Sale of Asset:

a Kakinada SEZ Private Limited 0.01 -

b Asia Pacific Flight Training Academy Limited - 0.00

c Delhi International Airport Limited - 0.00

(viii) Purchase of Asset:

a Geokno India Private Limited - 0.03

b GMR Airport Developers Limited 2.41 0.14

c GMR Airport Limited - 0.00

(ix) Corporate guarantee availed from the intermediate holding company against loan taken from banks:


b GMR Airport Limited - 131.00

(x) CSR Expenditure

a GMR Varalakshmi Foundation 2.46 0.34

(xi) Reimbursement of expenses claimed by the Group during the year from its related parties:



c Kakinada SEZ Limited 0.09 0.08

d Delhi International Airport Limited - 0.04


f GMR Highways Limited 0.05 0.05

g Geokno India Private Limited 0.11 -

h Asia Pacific Flight Training Academy Limited 0.21 0.21

i Laqshya Hyderabad Airport Media Private Limited 1.17 0.90

j Airports Authority of India 3.18 3.06

k GMR Varalakshmi Foundation 0.07 0.06

l


- 0.00

m Raxa Security Services Limited 0.00 0.00

n GMR Energy Trading Limited 0.00 0.00

o GMR Rajahmundry Energy Limited 0.00 -

p GMR Power Corporation Limited - 0.00

q GMR Vemagiri Power Generation Limited - 0.00

(xii) Reimbursement of expenses claimed from the Group during the year by its related parties:



D. Outstanding balances at the end of the year:

S. No.

Particulars 31-Mar-17

31-Mar-16

01-Apr-15

Non-Current

Current Non-Current

Current Non-Current

Current

(i) Balance Recoverable / (Payable):

a GMR Enterprises Private Limited - 0.01 - 0.01 - 0.01

b GMR Infrastructure Limited - (3.06) - (1.89) - (1.10)

c GMR Airports Limited - (2.37) - (2.29) - (0.87)

d Raxa Security Services Limited - (1.95) - (1.54) - (1.35)

e Delhi International Airport Limited - (0.17) (0.11) (0.04) (0.16) (0.01)

f GMR Rajahmundry Energy Limited - 0.04 - 0.04 - 0.04

g


- 0.01 - 0.11 - 0.01

h GMR Aviation Private Limited - (0.04) - (0.07) - (0.61)

i GMR Airport Developers Limited - (3.31) - (3.50) - (0.88)

j Kakinada SEZ Private Limited - 0.34 - 0.02 - 0.03

K GMR Energy Trading Limited - 0.01 - 0.02 - -

l GMR Power Corporation Limited - - - - - 0.00

m


- (0.11) - (0.08) - (0.10)

n GMR Highways Limited - (0.00) - 0.00 - -

a GMR Infrastructure Limited - 0.01

b GMR Airports Limited - 0.03

c Delhi International Airport Limited 0.25 0.22

d Menzies Aviation (India) Private Limited 0.29 0.27

e GMR Varalakshmi Foundation 0.00 -

(xiii) Income on amortisation of deposit received:

a Asia Pacific Flight Training Academy Limited 0.01 0.01


c GMR Varalakshmi Foundation 0.01 0.01

d GMR Infrastructure Limited 0.00 0.00

(xiv) Interest expense on amortisation of deposit received:

a Asia Pacific Flight Training Academy Limited 0.01 0.03


c GMR Varalakshmi Foundation 0.01 0.01

d GMR Infrastructure Limited 0.00 0.00

(xv) Dividend declared and paid:

a Menzies Aviation Cargo (Hyderabad) Limited, Mauritius

1.64 8.30

(xvi) Interest on loan - Unwinding of discount and changes in the discount rate

a Menzies Aviation (India) Private Limited 0.05 0.07



S. No.


31-Mar-16

01-Apr-15

o GEOKNO India Pvt Ltd - 0.38 - - - -

P GADL International Limited - - - - - (0.07)

q GMR Chhattisgarh Energy Limited - - - - - 0.00

r EMCO Energy Limited - - - - - 0.00

s


- - - - - 0.32

t GMR Krishnagiri SEZ Ltd - - - (0.02)

u GMR Energy Limited - - - - - 0.00

v GMR Tuni Anakapalli Expressways Private Limited

- - - - - 0.00

w GMR Tambaram Tindivanam Expressways Private Limited

- - - - - 0.00

x

GMR Goa International Airport Limited

- 0.00 - - - -

y

GMR Business Process Services Private Limited

- 0.00 - - - -

z

Laqshya Hyderabad Airport Media Private Limited

- 4.79 - 0.75 - 4.62

aa


- 2.50 - 2.24 - 0.82

ab Government of Telangana - (3.37) - (3.20) - (0.08)

ac Menzies Aviation Plc (UK) - (4.40) - (0.80) - (0.60)

ad Menzies Aviation (India) Private Limited

- (0.02) - 0.00 - (0.02)

ae Airports Authority of India - 4.30 - 2.62 - 1.24

af GMR Family Fund Trust - (0.09) - - - -

ag GMR Varalakshmi Foundation - (0.03) - 0.01 - 0.02

(ii) Security deposit received from / (paid) to related parties reccognised at amortised cost:

a GMR Infrastructure Limited - 0.02 - 0.02 0.02 0.01

b Raxa Security Services Limited (1.75) - (1.75) - (1.75) -

c Asia Pacific Flight Training Academy Limited

0.14 - 0.10 - 0.14 -

d Laqshya Hyderabad Airport Media Private Limited

0.30 - 0.26 - 0.23 -

e GMR Varalakshmi Foundation 0.12 - 0.11 - 0.90 -

f GMR Family Fund trust (0.39) - - - - -

(iii) Deferred income on deposits received recognized at amortised cost


0.01 - 0.02 0.01 - -


0.03 0.03 0.08 0.03 0.09 0.03

c GMR Varalakshmi Foundation 0.01 0.01 0.03 0.01 0.03 0.02

(iv) Investment in joint venture company:


3.56 - 3.56 - 3.53 -


9.80 - 9.80 - 9.80 -



S. No.


31-Mar-16

01-Apr-15

(v) Investment in Joint venture on account of amortisation of Loans given and Fair valuation of Financial guarantees:

a Laqshya Hyderabad Airport Media Private Limited

5.58 - 5.58 - 5.58 -

(vi) Loans given :

a Laqshya Hyderabad Airport Media Private Limited

4.76 0.99 5.76 0.76 6.51 0.29

(vii) Borrowings:

a Menzies Aviation (India) Private Limited

(0.42) - (0.47) - (0.60) -

(viii) Equity Component of Related party loans

a Menzies Aviation (India) Private Limited

(0.58) - (0.58) - (0.58) -

E. Outstanding guarantees / pledge of equity shares at the end of the year:

S. No.

Related Party Transactions 31-Mar-17 31-Mar-16 01-Apr-15

(i) Pledge of equity shares by the shareholders having significant influence in GHIAL, with banks against the loan taken:

a GMR Airports Limited 164.12 164.12 164.12

b MAHB (Mauritius) Private Limited 28.66 28.66 28.66

(ii) Corporate guarantee availed from the intermediary holding company against loan taken from banks:

a GMR Infrastructure Limited - 1,249.26 1,159.27

b GMR Airport Limited 131.00 131.00 -

$ During the year, entire equity share capital of GMR Hyderabad Airport Resource management Limited has been sold to GMR Infrastructure limited for a nominal sum of Rs. 1 and the loss on sale of the equity is been booked for Rs. 0.05.

Note: GHIAL has provided certain corporate group support services such as internal audit services, software and IT support etc. to its joint venture companies, which are free of charge.

34. The Group has only one reportable operating business segment, which is operation of airport and providing allied services. Accordingly, the amounts appearing in the financial statements relate to the Group’s single business segment.

35. Commitments and Contingencies

I. Leases

Operating lease commitments: Group as lessee

As per the terms of the Concession Agreement and Land Lease Agreement, the Government of Telangana leased the land to GHIAL for the concession period. The lease term neither constitutes a major part of the economic life nor the fair value of the land. Hence all significant risk and rewards of the ownership have not been transferred and accordingly lease is classified as an operating lease.



GHIAL has taken land and office spaces on operating lease having a term of 30 years and 5 years respectively. The land lease has an escalation of 5% per annum from the 8th anniversary of the Commercial Operations Date (i.e. March 23, 2008) and it has a renewal option for another thirty years which is co-terminus with the concession period. The office spaces leases have an escalation of 5% per annum and are renewable at the end of the lease period with mutual consent.

Future minimum rentals payable under non-cancellable operating leases are as follows:


Within one year 3.75 3.26 3.10

After one year but not more than five years

21.22 18.91 18.01


Operating lease commitments: Group as lessor

Group has sub-leased land to various parties under operating leases having a term of 9 to 30 years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiable.

Future minimum rentals receivable under non-cancellable operating leases are as follows:


Within one year 42.17 39.52 36.83



II. Litigation and Contingent Liabilities

A. Litigations provided for

i. Matters related to various service tax notices / orders referred in paragraph (C) below on contingent

liabilities of GMR Hyderabad International Airport Limited for which an amount of Rs.0.81 crore (March 31, 2016: Rs.0.81 crore) have been provided for in the books of account.

ii. Matter related to service tax notice / order referred in note (C) below on contingent liabilities of GMR

Hyderabad Aerotropolis Limited for which an amount of Rs. 0.85 crore (March 31, 2016: Rs. 0.85 crore. April 01, 2015: Rs. 0.85 crore) have been provided for in the books of account.

iii. Direct taxes:

a) A search operation under section 132 of the Income Tax Act, 1961 was carried out at the premises

of GHIAL by the Income Tax authorities on October 11, 2012 followed by another search closure visit on November 10, 2012, to check the compliance with the provisions of the Income Tax Act, 1961. Block Assessment in respect of A.Y 2007-2008 to 2012-2013 was completed and GHIAL received the assessment orders, which disallowed certain expenses and made few additions to the income resulting in reduction of carried forward loss amounting to Rs. 109.44 crore and no additional tax liability was assessed to be payable by GHIAL. GHIAL had filed an appeal with the Commissioner of Income Tax (Appeals), Bengaluru against the said block assessment orders. During the current year, GHIAL received the orders from the Commissioner of Income Tax (Appeals), Bengaluru reducing the disallowances from Rs. 109.44 crore to Rs. 31.17 crore against which GHIAL has filed an appeal with Income Tax Appellate Tribunal, Bengaluru.

b) GHIAL received an assessment order for A.Y. 2013-14 disallowing expenses amounting to Rs.23.68 crore against which GHIAL filed an appeal with the Commissioner of Income Tax (Appeals), Bengaluru (CIT). During the current year, GHIAL had received an order from CIT reducing the disallowance of expenditure from Rs. 23.68 crore to Rs. 3.76 crore against which GHIAL had filed an appeal with Income Tax Appellate Tribunal, Bengaluru.



c) GHIAL received assessment orders for the A.Y. 2014-15 and 2015-16 disallowing expenses

aggregating to Rs. 23.79 crore and Rs. 19.82 crore respectively against which, GHIAL has filed an appeal with the Commissioner of Income Tax (Appeals), Bengaluru.

d) GHAL had filed the Appeal against the assessment order passed u/s 143(3) for AY 2012-13 from

the office of Deputy Commissioner of Income Tax wherein the assessing officer had disallowed Rs. 0.10 crore (March 31,2016 Rs. 0.10 crore; April 01,2015 Rs, 0.10 crore) debited to statement of profit and loss stating that the business is yet to start.

iv. In accordance with the provisions of the amended and restated Joint Venture agreement dated November 16, 2010 executed by HMACPL with Menzies Aviation Plc, Menzies Aviation Cargo (Hyderabad) Limited (MACL), Menzies Aviation (India) Private Limited and Hyderabad Menzies Air Cargo Private Limited (HMACPL), HMACPL exercised its buy back rights to buy the shares held by MACL in HMACPL. MACL disputed GHIAL’s position as regards exercising the buyback rights. In view of the above dispute, GHIAL invoked Arbitration proceedings which is currently in progress.

B. Guarantees excluding financial guarantees

In case of GHIAL, Bank guarantees outstanding in respect of customs and others Rs. 20 crore (March 31, 2016: Rs. 18.99 crore). In the case of GHRL, Bank guarantees outstanding in respect of customs department Rs. 0.74 crore (March 31, 2016: Rs. Nil). In the case of HDFRL, Bank guarantees outstanding in respect of customs department Rs. Nil (March 31, 2016: Rs. 13.16 crore).

C. Matters under dispute are as follows:

i. GHIAL had received an order from the Office of Commissioner of Customs, Central Excise and Service

Tax dated January 29, 2010 on irregular availment of the Cenvat amounting to Rs. 24.54 crore (March 31, 2016: Rs. 24.54 crore). The order also includes penalty of Rs. 31.11 crore (March 31, 2016: Rs. 31.11 crore). GHIAL had received stay order from CESTAT modified by High Court of Andhra Pradesh against the above said order subject to pre-deposit of Rs. 12.20 crore and accordingly, GHIAL had deposited the same with the service tax department within the stipulated time.

ii. GHIAL had received an order from the Office of Commissioner of Customs, Central Excise and Service

Tax dated October 28, 2009, as per which GHIAL is liable to pay an amount of Rs. 7.43 crore (March 31, 2016: Rs. 7.43 crore) towards penalty on delay in payment of service tax on the UDF. GHIAL has got the stay order against the above said order in the earlier years.

iii. GHIAL had received an order from the Office of Commissioner of Customs, Central Excise and Service

Tax dated November 25, 2013 on non- payment of service tax on recovery of electricity and water charges from its concessionaires and irregular availment of Cenvat amounting to Rs. 1.53 crore (March 31, 2016: Rs. 1.53 crore), including penalty of Rs 1.67 crore (March 31, 2016: Rs. 1.67 crore). GHIAL had received a stay subject to pre-deposit of Rs. 0.15 crore and accordingly, GHIAL had deposited same with the service tax department within the stipulated time.

iv. GHIAL had received Show Cause Notice dated June 17, 2013 from the Office of Commissioner of Customs, Central Excise and Service Tax on non- payment of service tax on import of service amounting to Rs. 0.33 crore (March 31, 2016: Rs. 0.33 crore). The Notice also included penalty of Rs. 0.41 crore (March 31, 2016: Rs. 0.41 crore).

v. GHIAL had received the Show Cause Notices dated October 23, 2013 and dated April 22, 2015 from the Office of Deputy Commissioner of Customs, Central Excise and Service Tax and from the Office of



Assistant Commissioner of Customs, Central Excise and Service Tax amounting to Rs. 0.03 crore and Rs. 0.04 crore (March 31, 2016: 0.07 crore) respectively on irregular availment of cenvat credit. During the year, GHIAL has received an order dated February 29, 2016 from the Office of Assistant Commissioner of Customs, Central Excise and Service Tax amounting to 0.07 crore. The order also includes the interest payable thereon and penalty of Rs. 0.07 crore (March 31, 2016: Rs. 0.07 crore). GHIAL has filed the appeal before the office of Commissioner Customs, Excise and Service Tax (Appeal) and deposited an amount of Rs. 0.01 crore with the service tax department as required to file the appeal.

vi. GHIAL has received show cause notices from the Office of Assistant Commissioner of Customs, Central Excise and Service Tax on irregular availment of cenvat credit amounting to Rs. 0.13 crore (March 31, 2016: Rs. 0.13 crore). The notice also includes the interest payable thereon and penalty of Rs. 0.13 crore (March 31, 2016: Rs. 0.13 crore).

vii. GHIAL has received a Show Cause Notice dated July 20, 2015 from the Office of Additional Commissioner of Customs, Central Excise and Service Tax on irregular availment of cenvat credit amounting to Rs. 0.06 crore (March 31, 2016: Rs. 0.06 crore). During the year, GHIAL has received an order dated April 24, 2016 from the Office of Additional Commissioner of Customs, Central Excise and Service Tax amounting to Rs. 0.06 crore. The order also includes the interest payable thereon and penalty of Rs. 0.01 crore (March 31, 2016: Rs. 0.06 crore). GHIAL has filed the appeal before the office of Commissioner Customs, Excise and Service Tax (Appeal) and deposited an amount of Rs. 0.01 crore with the service tax department as required to file the appeal.

viii. GHIAL had received the Show Cause Notice dated April 23, 2014 from the Office of Commissioner of

Customs, Central Excise and Service Tax on Irregular availment of cenvat credit amounting to Rs. 0.62 crore (March 31, 2016: 0.62 crore). The Notice also includes the interest payable thereon and penalty of Rs. 0.62 crore (March 31, 2015: Rs. 0.62 crore). In the previous year, GHIAL had received an order from the Office of Commissioner of Customs, Central Excise and Service Tax dated June 11, 2015 confirming the demand of Rs. 0.62 crore. The order also includes penalty of Rs. 0.62 crore. GHIAL has filed the appeal before the Customs, Excise and Service Tax Appellate Tribunal and deposited an amount of Rs. 0.05 crore with the service tax department as required to file the appeal.

ix. GHAL had received a show cause notice No O.R.No.79/2014 –Adj.(Commr) from Commissioner of

Customs, Central Excise & Service Tax dated April 23,2014 on irregular availment of the Cenvat Credit amounting to Rs. 0.29 crore (for the period October 2008 to March 2011) including a penalty of Rs 1.14 crore (March 31,2016 Rs 1.14 crore April 1,2015 Rs 1.14 crore). During the previous year, GHAL has received an order from the office of Commissioner of Customs, Central Excise & Service Tax vide Order No. Hyd Excus-002-COM-006-15-16 dated July 23, 2015, confirming the demand of Rs. 0.29 crore including a penalty of Rs 0.29 crore. GHAL has preferred an appeal with CESTAT, Hyderabad.

x. GHAL had received an order from Commissioner of Customs, Central Excise & Service Tax dated June 22, 2016 against their reply to show cause notice No 35/2016-17 regarding short payment of service tax of Rs.1.47 crore under RCM on Architecture service. GHAL had preferred an appeal with Commissioner of Customs, Central Excise & Service Tax and reversed cenvat credit of Rs.0.11 crore towards pre-deposit.

xi. GHASL had received Show Cause Notice dated July 17, 2015 from the Office of the Assistant Commissioner of Customs, Central Excise and Service Tax wherein service tax refund of Rs.0.01 crore (March 31,2016: Rs.0.01 crore ; April 01,2015 : Nil) has been denied.

xii. Subsequent to the year end, GHASL has received a Show Cause Notice (SCN) from the Commissioner (Audit), Central Excise and Service Tax for an amount of Rs. 8.55 crore (March 31,2016: Nil; April 01, 2015: Nil) for granting exemption of service tax under renting of immovable property services without obtaining Form A1 / A2 for the period from October 2011 to March 2016.

xiii. GHRL has received a show cause notice from the assistant commissioner of service tax levying service tax on 100% value of Room retention charges amounting to Rs. 0.04 crore (March 31,2016: Rs. Nil; April 01, 2015: Rs. Nil) as against the current practice of discharging the service tax on 60% value.



xiv. HMACPL accrued customs officers' salaries stationed at Air Cargo Terminal based on debit notes raised

by the customs department on GHIAL as the ultimate cost has to be borne by the custodian i.e. HMACPL. GHIAL filed a writ petition under article, 226 of the constitution of India in the Honorable High Court of Judicature of Andhra Pradesh at Hyderabad against the demand raised in previous years, GHIAL had received an order from the Honorable High court of Andhra Pradesh (Single Judge), stating that the grounds on which the levy was made by customs department were wholly unsustainable and accordingly HMACPL had reversed the accrued customs cost amounting to Rs. 14.02 crore for the period from March 23, 2008 to March 31, 2012 as provision no longer required written back and included the same in other income. Subsequent to the above order, the customs department preferred an appeal against the same and on November 2, 2012, a bench of two judges of the Honorable High Court of Andhra Pradesh passed an order for interim suspension of the said order passed by the Honorable Single Judge.

xv. HMACPL had rendered cargo handling services for export cargo during the period March 2008 to June 2010 on which HMACPL had not paid service tax in view of the exemption available under cargo handling services. HMACPL had received a show cause notice from the Office of Commissioner of Customs & Central Excise requiring HMACPL to show cause as to why the services rendered during March 2008 to June 2010 should not be classified under “Airport Services” and “Storage and Warehousing Services” (“Taxable Service”). On May 3, 2013, HMCPL had received an order from Commissioner of Customs, Central Excise and Service tax. As per the said order, the commissioner had concurred with the departments view and classified the services of cargo handling for export cargo as Taxable Service. As a result of which, there was a demand levied of Rs.1.89 crore as service tax for the period March 2008 to June 2010 under Airport Services and Rs. 1.07 crore as service tax for the period March 2008 to June 2010 on Storage and Warehousing Services along with applicable interest and penalty. Subsequently, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) in its stay order dated October 25, 2013 has mentioned that X-ray Screening, Terminal Storage and Processing, Unitization and Demurrage would be incidental and ancillary in relation to cargo handling service. As a result, there shall be a waiver of pre deposit of the dues and stay against recovery during pendency of the appeal.

xvi. HMACPL had availed CENVAT credit on capital goods during the period April 2007 to March 2012 amounting to Rs. 0.07 crore and department is of the view that HMACPL has irregularly claimed input credit on ineligible items and raised a demand of Rs. 0.07 crore along with applicable interest and penalty. The Commissioner (Appeals) has upheld the order issued by the Additional Commissioner against the claim by HMACPL. HMACPL aggrieved by the said order, has paid an amount of Rs. 0.07 crore under protest as per the stay application hearing with Commissioner (Appeals) and an appeal has been filed with CESTAT. CESTAT has passed the stay order on August 1, 2014 from payment of interest and penalty.

xvii. GHRL had received notices of demand in the year 2013 from commercial taxes department, levying Value Added Tax on leasing of Audio Video Equipment’s amounting to Rs. 0.36 crore (March 31, 2016: Rs. 0.24 crore; April 01, 2015: Rs. 0.24 crore). GHRL has replied to the department against the said notices of demand.

xviii. HMACPL had received assessment order during previous years for the assessment years 2009-2010, 2010-2011, 2011-2012 and 2012-13 respectively, denying the deduction u/s 80-IA of the Income Tax Act, 1961 and demanding tax of Rs. 1.54 crore (including interest of Rs 0.22 crore), Rs. 2.73 crore (including interest of Rs 0.70 crore), Rs. 3.03 crore (including interest of Rs.0.74 crore) and Rs. 2.54 crore (including interest of Rs 0.66 crore) for the respective assessment years. HMACPL had filed an appeal with Commissioner of Income - Tax (Appeals), Hyderabad and had paid Rs. 1.54 crore, Rs. 2.73 crore, Rs. 3.03 crore, and Rs. 2.54 crore for the assessment years 2009-2010, 2010-2011, 2011-2012 and 2012-13 respectively under protest. During the previous years, the said appeals were dismissed by the Commissioner of Income - Tax (Appeals), Hyderabad against which HMACPL had filed an appeal with the Income Tax Appellate Tribunal, Hyderabad. During the current year, HMACPL has received a favorable order from Income Tax



Appellate Tribunal, Hyderabad allowing the deduction u/s 80 IA of the Income tax Act, 1961 for the Assessment years 2009-2010, 2010-2011, 2011-2012 and 2012-13. However, the department has preferred further appeal before high court.

xix. HMACPL received an order from the Assistant Commissioner of Income Tax for the assessment year

2013-14 on February 29, 2016 denying the deduction u/s 80-IA of the Income Tax Act, 1961. Per this order the refund receivable to HMACPL has a reduced by Rs. 4.18 crore. Aggrieved by the reduction in refund, HMACPL has filed an appeal with the Commissioner of Income - Tax (Appeals), Hyderabad on April 6, 2016.

xx. HMACPL received an order from Deputy Commissioner of Income Tax, Hyderabad for the reopening of the assessment year 2008-09 disallowing an item of expense amounting to Rs. 0.85 crore. HMACPL has filed an appeal with the Commissioner of Income - Tax (Appeals), Hyderabad on May 5, 2015.

xxi. GHIAL had received a notice from the office of the Joint Commissioner of Labour for payment of Building and other construction workers’ Welfare Cess @ 1% of the cost of construction of Airport amounting to Rs. 25.20 crore (March 31, 2016: Rs. 25.20 crore). GHIAL had received the stay order against the said order in the earlier years.

xxii. GHIAL had received notice dated January 19, 2013, from Hyderabad Metropolitan Water Supply & Sewerage Board for disconnection of water connection for non-payment of sewerage cess arrears. GHIAL had received the stay order against the said order in the earlier years. The sewerage cess outstanding including interest as at March 31, 2017 amounts to Rs. 3.94 crore (March 31, 2016: Rs. 3.63 crore).

xxiii. Recovery from PSF (SC) Escrow account:

a) The Ministry of Civil Aviation (MoCA) had issued the order vide order no. AV 13024 /03/2011-AS

(Pt. I), dated February 18, 2014 requiring the Airport Operators to reverse the expenditure incurred, since inception till date, towards procurement and maintenance of security systems/equipment and on creation of fixed assets out of PSF (SC) escrow account opened and maintained by the Airport Operator in a fiduciary capacity. GHIAL had incurred Rs. 93.83 crore (March 31, 2016: Rs. 92.29 crore towards capital expenditure (including the construction cost and cost of land mentioned in note b and excluding related maintenance expense and interest thereon) till March 31, 2017 out of PSF (SC) escrow account as per SOPs, guidelines and clarification issued by the MoCA from time to time on the subject of utilization of PSF (SC) funds.

As the above order is contrary to and inconsistent with SOPs, guidelines and clarification issued by the MoCA from time to time in this regard, GHIAL had challenged the said order before Hon’ble High court of Andhra Pradesh. The Honorable Court, vide its order dated March 3, 2014 followed by further clarifications dated April 28, 2014 and December 24, 2014, stayed the MoCA order with an undertaking that, in the event the decision of the writ petition goes against GHIAL, it shall reverse all the expenditure incurred from PSF (SC).

Accordingly, the GHIAL is continuing to incur the procurement and maintenance cost of security systems / equipment from PSF (SC) escrow account and during the year ended March 31, 2017 incurred an amount of Rs. 2.88 crore (March 31, 2016 Rs. 2.66 crore) on maintenance of security systems / equipment from the PSF (SC) escrow account.

b) As per the advice from the Ministry of Home Affairs and the SOP issued by the MoCA on March 06,

2002, GHIAL, through its wholly owned subsidiary, Hyderabad Airport Security Services Limited (HASSL) constructed the residential quarters for Central Industrial Security Force (CISF) deployed at the airport. After completion of such construction, the total construction cost including the cost of land amounting to Rs. 69.92 crore (March 31, 2016: Rs. 69.92 crore) was debited to the Passenger Service Fee (Security Component) Fund [PSF (SC) Fund] with intimation to the MoCA. The Comptroller & Auditor General, during their audits of PSF (SC) Fund, observed that, GHIAL had not obtained prior approval from the MoCA for incurring such cost from the PSF (SC) Fund as required



by the guidelines dated January 8, 2010 and April 16, 2010 issued by the MoCA. However, Management of GHIAL is of the opinion that these guidelines were issued subsequent to the construction of the said residential quarters and approached the MoCA for approval of such debit notes to the PSF (SC) Fund account and also, made an application for an increase in PSF (SC) tariff to recover these dues and to meet the shortfall in discharging other liabilities from PSF (SC) fund. In the earlier years, the MoCA responded that, it is not in a position to consider the request for enhancement in the PSF (SC) tariff. As a result, GHIAL had requested the MoCA to advice the Airport Economic Regulatory Authority (AERA) for considering the cost of construction, land and other related costs with regard to the aforesaid residential quarters in determination of Aeronautical Tariff for the airport. Pending final instructions from the MoCA, residential quarters continue to be accounted under the PSF (SC) Fund and no adjustments have been made to these financial statements.

xxiv. Fuel surcharge adjustments (FSA) for the period from April 2008 to March 2010 amounting to Rs. 2.05 crore (March 31, 2016: Rs. 2.05 crore).

Based on the internal assessment and / or legal opinion, the Management of the Group is confident that, for the aforesaid mentioned contingent liabilities, no further provision is required to be made as at March 31, 2017.

III. Commitments

a) Capital commitments

Estimated amount of contracts of the Group remaining to be executed on capital account and not provided for (net of Advances) amounting to Rs.77.78 crore (March 31, 2016: Rs.18.03 crore; April 1, 2015: Rs.18.67 crore).

b) Other commitments

i. As per the terms of concession agreement, the GMR Hyderabad International Airport Limited is required to pay concession fees to the Ministry of Civil Aviation (MoCA) @ 4% on all its gross revenue (as defined in Concession Agreement) of GHIAL for an initial term of 30 years starting from March 23, 2008 which can be extended by another 30 years at the option of GHIAL.

ii. For commitments pertaining to lease arrangement refer clause I of note 35. iii. GAEL has a commitment to build cash margin to the extent of 10% of the Loan Equivalent Risk

(LER) Facility obtained from a bank over the period of one year from the date of first disbursement/contract under the facility.

iv. As per the amended and restated joint venture agreement dated November 16, 2010 executed

between GMR Hyderabad International Airport Ltd, Menzies Aviation Plc, Menzies Aviation Cargo (Hyderabad) Limited, Menzies Aviation (India) Private Limited and Hyderabad Menzies Air Cargo Private Limited, HMACPL shall pay preference dividends at a coupon rate of 11.97% on the paid up value of compulsorily convertible cumulative preference shares which is amounting to Rs.2.16 crore and tax thereon for the year ended March 31, 2017. Pending the approval of the directors of the board, the same has been disclosed as contingent liability.

36. Significant accounting judgments, estimates and assumptions:

The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.



Judgments

In the process of applying the group’s accounting policies, management has made the following judgments, which has the effect on the amounts recognised in the financial statements:

Discounting rate

The Group has considered incremental borrowing rate of Airport sector i.e. 11.44% as at transition date for measuring deposits, being financial assets and financial liabilities, at amortised cost.

Non applicability of Service Concession Agreement (SCA) to GHIAL

GHIAL had entered into Concession agreement with the MoCA, which gives GHIAL an exclusive right of development, design, financing, construction, commissioning, maintenance, operation and management of the Hyderabad Airport on a revenue sharing model for an initial term of 30 years, which can be extended by another 30 years at the option of GHIAL. Under the agreement, the MoCA has granted exclusive right and authority to perform some of the functions of the AAI being the functions of operation, maintenance, development, design, construction, upgradation, modernization, finance and management of the Airport and to perform services and activities at the airport constituting ‘Airport activities’ (regulated services) and ‘Non-Airport Activities’ (non-regulated services). Airport Activities are regulated while there is no control over determination of prices for Non-Airport activities. Charges for Non-Airport activities are determined at the sole discretion of GHIAL.

Appendix A to Ind AS 11 contains provisions to cover arrangements between public and private enterprises- referred to as service concession arrangement (“SCA”). An entity is required to evaluate applicability of SCA for its arrangement under public to private partnership based on SCA guidance. The applicability of service concession depends whether the grantors control or regulates what services the operator must provide with the infrastructure, to whom it must provide them, and at what price; and also control the residual interest in the infrastructure. GHIAL management conducted detailed analysis to determine applicability of Appendix A of Ind AS 11. The concession arrangement has significant non-regulated revenues, which are apparently not ancillary in nature, as these are important from GHIAL, MoCA and users/passengers perspective. Further, the regulated and non-regulated services are substantially interdependent and cannot be offered in isolation. Airport premises is being used both for providing regulated services and for providing non-regulated services. Based on GHIAL’s proportion of regulated and non-regulated activities, the directors have determined that over the concession period, the unregulated business activities drives the economics of the arrangement and contributes substantially to the profits of GHIAL and hence concluded that SCA does not apply in its entirety to GHIAL.

Applicability of Service Concession Agreement (SCA) to HMACPL

HMACPL, constructs or upgrades infrastructure (construction or upgrade services) used to provide a public service and operates and maintains that infrastructure (operation services) for a specified period of time. These arrangements may include infrastructure used in public-to-private service concession arrangement for its entire useful life. Appendix A to Ind AS 11 on Service Concession Arrangement (“SCA”) provides that these arrangements are accounted for based on the nature of the consideration. An entity is required to evaluate applicability of SCA for its arrangement under public to private partnership based on SCA guidance. The applicability of service concession depends whether the grantors control or regulates what services the operator must provide with the infrastructure, to whom it must provide them, and at what price; and also control the residual interest in the infrastructure. The intangible asset model is used to the extent that HMACPL receives a right (i.e. a concessionaire) to charge users of the public



service. The financial model is used when HMACPL receives a right to receive cash or other financial assets from or at the direction of the grantor for the construction service.

Accordingly, though GHIAL has granted the further concession to HMACPL alongwith leasing of the part of the cargo infrastructure facility but since HMACPL has a right to charge the users of the services and therefore, the same has been classified under intangible asset model. Leases:

As per the terms of the Concession Agreement and Land Lease Agreement, the Government of Telangana leased the land to the GHIAL for the concession period. The lease term neither constitutes a major part of the economic life nor the fair value of the land. Hence, all the significant risk and rewards of the ownership have not been transferred and accordingly the lease is classified as an operating lease

Concession fee: As per the Concession Agreement (CA) entered into by GHIAL with Ministry of Civil Aviation (MoCA)

in December, 2004, GHIAL is required to pay concession fee to MoCA @ 4% on its gross revenue. As per Article 3.3.2 of CA, “Gross Revenue” is defined to mean all pre-tax revenue of GHIAL with certain specified exclusions.

Management is of the view that certain income / credits arising on adoption of Ind-AS and also mark to

market gain on valuation of IRS was not in contemplation of parties in December 2004 when this Concession Agreement was signed / entered. Further, these income/credits in Statement of Profit and Loss do not represent receipts from business operations, from any external sources and therefore, are not treated as “Gross Revenue” for calculation of Concession fee to MoCA. Accordingly, the Company, based on Legal Opinion, has provided the concession fee to MOCA based on Gross Revenue as per the Ind AS financial statements after adjusting such incomes/credits.

A. Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the group. Such changes are reflected in the assumptions when they occur.

Defined benefit plans

The cost of the defined benefit gratuity plan and other post-employment benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. See Note 32 for further disclosures.



Contingent liabilities

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Group, including legal, contractor, land access and other claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgment and the use of estimates regarding the outcome of future events. See clause II of Note 36 for further disclosures. Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 38, 39 and 40 for further disclosures.

Tax

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. See Note 29 for further disclosures.

GAEL neither has any taxable temporary difference nor any tax planning opportunities available that could partly support the recognition of these losses as deferred tax assets. On this basis, GAEL has determined that it cannot recognise deferred tax assets on the tax losses carried forward.

Impairment of Financial asset

The impairment provisions for financial assets are based on the assumptions about risk of default and expected loss rates. The Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Group’s past history, existing market conditions as well as forward looking estimates at the end of each reporting year.

37. Fair values:

The carrying amount of all financial assets and liabilities appearing in the financial statements is reasonable approximation of fair values.

Carrying value Fair value

March 31, 2017

March 31, 2016

April 1, 2015

March 31, 2017

March 31, 2016

April 1, 2015

Financial assets

At Fair Value through profit or loss

Investments 387.34 223.86 29.46 387.34 223.86 29.46

Financial liabilities

Financial liabilities carried at fair value through profit or loss

Interest rate swaps 58.60 109.20 112.94 58.60 109.20 112.94



The management assessed the cash and cash equivalent, trade receivables trade payables, bank overdrafts and other liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. In case of long term borrowings, all borrowings carry floating rate of interest and hence, the carrying value is considered to be the same as its fair value.

Assumptions used in estimating the fair values:

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

i. Interest rate swaps:-The fair value of interest rate swaps is calculated as the present value of the

estimated future cash flows based on observables yield curve. ii. The fair values of quoted mutual funds and commercial paper are based on price quotations at the

reporting date.

38. Fair Value Hierarchy: The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities. Quantitative disclosures fair value measurement hierarchy for assets and liabilities as at 31 March 2017:

Particulars Date of Valuation

Total

Fair value measurement using


Significant observable inputs

Significant un observable inputs

Level-1 Level-2 Level-3


At FVTPL

Investment in mutual funds March 31, 2017 387.34 387.34 - -



March 31, 2017 58.60 - 58.60 -

There have been no transfers between Level 1, Level 2 and Level 3 during the year.

Quantitative disclosures fair value measurement hierarchy for assets and liabilities as at 31 March 2016:


Total







At FVTPL

Investment in mutual funds March 31, 2016 223.86 223.86 - -



March 31, 2016 109.20 - 109.20 -



Quantitative disclosures fair value measurement hierarchy for assets and liabilities as at 1 April, 2015:


Total







At FVTPL

Investment in mutual funds April 1, 2015 29.46 29.46 - -



April 1, 2015 112.94 - 112.94 -

Valuation Techniques used to determine the Fair Value:

Specific valuation techniques used to value financial instruments include: i. The use of quoted market price of Mutual funds.

ii. The Fair value of Interest rate swaps is calculated as the present value of estimated future cash flows based on observable interest yield curves.

39. Financial risk management objectives and policies:

The Group’s activities expose it to variety of finance risk, market risk, credit risk and liquidity risk. The Group’s focus is to foresee such risks and seek to minimize potential adverse impact on its financial performance.

Financial risk

The Group’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Group’s operations and to provide guarantees to support its operations. The Group’s principal financial assets include loans, trade and other receivables and cash and cash equivalents are derived from its operations. The Group has entered into derivative transactions.

The Group is exposed to market risk, credit risk and liquidity risk. The Group’s senior management oversees the management of these risks. The Group’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Group’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors of respective companies reviews and agrees policies for managing each of these risks, which are summarised below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and Demand risk. Financial instruments affected by market risk include loans and borrowings, Investments carried at FVTPL and deposits.

However, in case of GHIAL it may be noted that as part of one of principle source of revenue i.e. aeronautical charges which are regulated, the risks are mitigated to a larger extent in case of any movement as the same are allowed as true up through determination of aeronautical tariff for the next control period. The sensitivity analyses in the following sections relate to the position as at 31 March 2017 and 31 March 2016.



The sensitivity analysis have been prepared on the basis that the amount of debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant.

The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions. The analysis for the contingent consideration liability is provided in Note 36 B.

The following assumptions have been made in calculating the sensitivity analyses:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held as at 31 March 2017 and 31 March 2016.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt obligations with floating interest rates.

The Group manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Group’s policy is to convert variable rate loan to fixed rate loan if the perceived uncertainty of such variable market rates is for a long term. To manage this, GHIAL and GAEL entered into interest rate swap by converting floating interest rate (LIBOR) to fixed interest rate.

The exposure of the Group's borrowing to interest rate changes at the end of the reporting period for actual outstanding balances as at year end:

Particulars March 31, 2017 March 31, 2016 April 1, 2015 Rupee term loan* 1,625.96 1,713.21 1,593.33

ECB loan borrowings 479.86 548.18 574.16

*The borrowings exposures are disclosed on the basis of actual transaction value. All loans are carried at floating rate of interest.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected, after the impact of hedge accounting. With all other variables held constant, the Group’s profit before tax is affected through the impact on floating rate borrowings, as follows:

Movement in basis points

Impact on profit before tax

March 31, 2017

INR 50 8.88

USD



31 March, 2016

INR 50 8.48

USD





Foreign currency risk:

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s external commercial borrowings and operating activities.

The Group's exposure to foreign currency risk at the end of the reporting period expressed in foreign currency is as follows:

As at March 31, 2017

March 31, 2017

March 31, 2016

March 31, 2016

April 1, 2015

April 1, 2015

Foreign Currency

Foreign Currency

(Rs. in crores)

Foreign Currency

(Rs. in crores)

Foreign Currency

(Rs. in crores)

Payable EUR 110,258.25 0.77 122,525.13 0.91 162,509.08 1.10

SGD 7,197.51 0.03 7,280.06 0.04 6,835.58 0.03

AED 140,737.00 0.25 - - - -

GBP 156,954.00 1.27 236,536.36 2.26 101,283.00 2.27

USD 7,917,796.97 51.95 1,822,231.81 11.82 854,653.94 5.42

CHF 44,225.00 0.29 24,076.00 0.17 17,629.00 0.11

USD-Loan 73,150,000.00 479.86 82,756,348.00 552.56 91,674,248.00 578.10

Total 534.42 567.76 587.03

Receivable USD 245,482.00 41.52 67,847,560.00 14.14 98,114.00 0.62

CHF 15,047.00 0.10 7,154.00 0.05 9,135.00 0.06

EURO 746.00 0.01 1,099.00 0.01 1,179.00 0.01 Total 41.63 14.20 0.69

Bank balances (including credit card collection)

USD 833,519.61 5.47 683,066.00 4.71 671,633.00 5.64

Loans & Advances

USD 847.00 0.01 217.00 0.00 13,251.00 0.08

CHF 277.00 0.00 277.00 0.00 - -

GBP 463.00 0.00 - - - -

EUR - - - - 2,446.00 0.02 Total 0.01 0.00 13,251.00 0.10

Foreign Currency on hand

AED 9,526.00 0.02 2,720.00 0.00 4,395.00 0.01

AUD 186.00 0.00 241.00 0.00 1,408.00 0.01

CAD 160.00 0.00 60.00 0.00 135.00 0.00

CHF 7.00 0.00 7.00 0.00 7.00 0.00

EURO 593.00 0.00 178.00 0.00 228.00 0.00

GBP 110.00 0.00 5.00 0.00 438.00 0.00

HKD 28.00 0.00 28.00 0.00 28.00 0.00

JPY 17,042.00 0.00 42.00 0.00 42.00 0.00

KWD 151.00 0.00 21.00 0.00 131.00 0.00

MYR 140.00 0.00 2.00 0.00 383.00 0.00

NZD 8.00 0.00 8.00 0.00 8.00 0.00

OMR 244.00 0.00 - - 40.00 0.00

QAR 675.00 0.00 130.00 0.00 320.00 0.00

SAR 9,420.00 0.02 2,134.00 0.00 5,006.00 0.01

SGD 381.00 0.00 35.00 0.00 687.00 0.00

THB 367.00 0.00 87.00 0.00 3,287.00 0.00

USD 31,719.00 0.21 16,400.00 0.11 21,510.00 0.14

Total 0.25 0.11 0.16



Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rates, with all other variables held constant. The impact on the Group’s profit before tax is as under:-

Foreign Currency

Nature of transaction Change in Rate

March 31, 2017 Rs.

March 31, 2016 Rs.

USD Change in fair valuation of financial liabilities and financial assets

5% 9.33 0.38

USD Change in depreciation on account of capitalisation of foreign exchange gain or loss on ECB

5% 1.71 1.94

The Group’s exposure to foreign currency changes for all other currencies is not material.

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Trade receivables

Customer credit risk is managed by the Group as per approved debtors policy and established procedures and controls relating to customer credit risk management. Outstanding customer receivables are regularly monitored and any credit to new customers are generally covered by appropriate security in the form of deposits and/ bank guarantees.

At March 31, 2017, GHIAL had 20 customers (31 March 2016: 14 customers, 1 April 2015: 10 customers) that owed GHIAL more than 1% each of total receivable and accounted for approximately 83% (31 March 2016: 84%, 1 April 2015: 87%) of all the receivables outstanding. There were 4 customers (31 March 2016: 2 customers, 1 April 2015: 4 customers) with balances greater than 5% each accounting for approximately 52% (31 March 2016: 64%, 1 April 2015: 77%) of the total amounts receivable.

Apart from the above, the carrying amount of financial assets of the group represents the maximum

credit exposure. The maximum exposure to credit risk was Rs. 3.72 crore, Rs. 7.54 crore and Rs. 4.76

crore as of March 31, 2017, March 31, 2016 and April 1, 2015 respectively, being the total of the carrying

amount of balances with trade receivables.

An impairment analysis is performed at each reporting date. The Group does not hold collateral as security. GHIAL evaluates the concentration of risk with respect to trade receivables as moderate, as its customers are broad-based, however, they operate largely in dependent market.

Collateral

GAEL has pledged part of its margin money deposits in order to fulfil the collateral requirements for the derivatives contracts. At 31 March 2017, 31 March 2016 and 1 April 2015, the fair values of the short-term deposits pledged were Rs. 5 crore, Rs. Nil and Rs. Nil, respectively. There are no other significant terms and conditions associated with the use of collateral.

Financial instruments (security deposits) and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Group’s treasury



department in accordance with the Group’s policy. Investments of surplus funds are made only with approved counterparties and within prudent limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

Liquidity risk

The Group monitors its risk of a shortage of funds using a rolling cash flow forecasts.

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of working capital facilities and bank loans. The Group’s policy is to ensure that the repayments of borrowings are in sync with the cash flows generated from the operations. The Group assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Group has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders, if required. The table below summarises the maturity profile of the Group's financial liabilities based on contractual undiscounted payments.

On demand

< 3 months

3 to 12 months

1 to 5 years

> 5 years

Total

Year ended March 31, 2017

Borrowings 21.05 30.60 91.86 814.85 1,608.57 2,566.93

Trade & other payables 22.54 88.35 13.19 - - 124.08


46.17 145.06 140.80 931.52 1,775.11 3,038.66

Year ended March 31, 2016

Borrowings 23.42 15.78 201.06 652.16 1,721.93 2,614.35



41.11 100.03 251.74 727.20 1,881.66 3,001.74

As at April 1, 2015

Borrowings 22.41 21.56 69.60 611.64 1,755.35 2,480.55



39.93 75.75 103.96 664.50 1,902.22 2,786.32

Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Group’s performance to developments affecting a particular industry. In order to avoid excessive concentrations of risk, the Group's policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.



40. Capital management

For the purpose of the Group’s capital management, capital includes issued equity capital, and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Group’s capital management is to maximize the shareholder value.

The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Group monitors capital using a gearing ratio, which is debt divided by total capital plus debt. The Group’s policy is to keep the gearing ratio at an optimal level to ensure that the debt related covenants are complied with.

Particulars As at As at As at


Borrowings 2,553.25 2,609.47 2,539.83

Borrowings 2,553.25 2,609.47 2,539.83

Equity 378.00 378.00 378.00

Other equity (127.92)* (409.23) (342.74)

Total Capital 250.08 (31.23) 35.26

Capital and borrowings 2,803.33 2,578.24 2,575.09

Gearing ratio 91.08% 101.21% 98.63%

*The above is inclusive of final dividend of Rs. 2.50 per fully paid equity share (31 March 2016 — Rs. Nil) recommended by the Board of Directors of GHIAL in its meeting held on May 4, 2017. The proposed dividend will require total outflow of Rs. 113.74 crore inclusive of dividend distribution tax thereon. The proposed dividend is subject to the approval of shareholders in the ensuing annual general meeting.

In order to achieve this overall objective, the Group’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2017 and March 31, 2016.

41. As at March 31, 2017, GHIAL has accrued Rs.1.98 crore including superannuation fund of Rs.0.09 crore towards the remuneration to its Managing Director, including Rs. 0.80 crore in excess of the limits specified in Sub Section (3) of Section 197 read with Schedule V of the Companies Act, 2013 in respect of year ended as at March 31, 2015. The said remuneration is approved by the Board of Directors, the Nomination and Remuneration Committee and by the Shareholders. Accordingly, GHIAL had applied to the Central Government for obtaining necessary approvals for payment of such remuneration and that, the amount in excess of the limits as mentioned above, will be paid as and when the approval is received from the Central Government. The Management of GHIAL is of the opinion that, the approval for payment of the remuneration will be obtained in due course and as such no adjustments have been made in these financial statements.

42. GHIAL has recognized, Minimum alternate tax (MAT) credit entitlement of Rs. 171.96 crore (March 31, 2016: Rs.66.57 crore), as GHIAL based on estimates expects to adjust this amount after expiry of the tax holiday period (i.e. AY 2022-23) u/s 80IA of the Income Tax Act, 1961. Management is confident that in view of the anticipated tariff orders for the control periods which will be effective from financial year 2017-18, GHIAL’s normal tax liability will be more than the MAT payable after considering the



deduction under section 80IA of the Income Tax, Act, 1961.

43. The Airport Economic Regulatory Authority (‘AERA’), passed an Aeronautical tariff order No. 38 dated February 24, 2014, in respect of control period from April 1, 2011 to March 31, 2016. GHIAL had filed an appeal, challenging the disallowance of pre control period losses, foreign exchange loss on ECB and other issues for determination of its tariff with the AERA Appellate Tribunal (AERAAT) against the aforesaid order. Due to non-constitution of AERAAT Bench, GHIAL had filed a writ petition with the Honorable High Court at Hyderabad for the State of Telangana and for the State of Andhra Pradesh, which is yet to be heard.

44. GHIAL filed an application with AERA for determination of Aeronautical Tariff in respect of Second Control period from April 1, 2016 to March 31, 2021 including True up for shortfall of receipt vis a vis entitlement for the first control period. Pending determination of Aeronautical Tariff, AERA vide its order no. 19 dated March 31, 2017 has allowed to continue to charge the Aeronautical tariff as prevailed on 31.03.2017 for a period of 6 months w.e.f. April 1, 2017 or till determination of tariff for the aforesaid period whichever is earlier.

45. The financial statements of GHIAL do not include Accounts for Passenger Service Fee- Security Component [PSF- (SC)] as the same are maintained separately in the fiduciary capacity by GHIAL on behalf of the Government of India and are governed by Standard Operating Procedure vide letter number AV/13024/047/2003-SS/AD dated January 19, 2009 issued by the Ministry of Civil Aviation, Government of India.

46. GHIAL has agreed to buy out the 60% stake i.e. 60% shareholding amounting to Rs. 5.34 crore, in Asia Pacific Flight Training Academy Ltd.(APFTAL) held by its JV partner M/s Asia Pacific Flight Training Academy, SDN, BHD, Malaysia (APFT-Malaysia) at a value of One US Dollar considering the market potential of flight training business in India.

47. During the year, GMR Hotels and Resorts Ltd. (GHRL) and Hyderabad Duty Free Retail Ltd. (HDFRL), two of GHIAL wholly owned subsidiary companies filed a Scheme of Arrangement for merger of HDFRL into GHRL "the scheme" under Section 391 and 394 (1) of the Companies Act, 1956. The National Company Law Tribunal (NCLT) passed an order on April 18, 2017, approving the said scheme with appointed date as April 1, 2016. The aforesaid order was filed with the Registrar of Companies on April 27, 2016. Accordingly, HDFRL has been merged into GHRL with appointed date as April 01, 2016.

48. As per the Concession Agreement (CA), the GHIAL is required to pay concession fee to MoCA @ 4% on its gross revenue. As per Article 3.3.2 of CA, “Gross Revenue” is defined to include all pre-tax revenue of GHIAL with certain specified exclusions. Management is of the view that certain income / credits arising on adoption of Ind-AS and also mark to market gain on valuation of IRS was not in contemplation of parties in December 2004 when this Concession agreement was signed / entered. Further, these income/credits in Statement of Profit and Loss do not represent receipts from business operations, from any external sources and therefore, are not treated as “Gross Revenue” for computation of Concession fee to MoCA. Accordingly, GHIAL has not provided the concession fee on such income / credits.

Additionally, Management is of the view that reversal of provision for impairment in the value of investment in GHRL recognized as an exceptional item does not represent receipts from business operation and the same is not considered for computation of Concession fee to MoCA.



Description Incomes forming

part of

Reversal of Fair value of financial instruments Interest Rate Swap on actual settlement

Finance income

Discounting of interest free loan given to subsidiaries# Finance income

Discounting of interest free loan given to Joint Venture Finance income

Income arising from fair valuation of financial guarantee# Finance income

Discounting on fair valuation of deposit received from concessionaries Other income

Income from government grant Other income

Amortisation of deferred income Other income

Provision for impairment in investments in subsidiary

written back #

Exceptional Item

#These transactions got eliminated in the consolidated financial statement of the Group.

49. In case of HMACPL, the Bureau of Civil Aviation (BCAS), through its order dated April 28, 2010, decided that there shall be a Sterile Cargo Holding Area at the airports. The access to cargo processing area will be regulated by airport entry permits issued by BCAS. Accordingly, Central Investigative Security Force (CISF) personnel were deployed as per the instructions of BCAS and the security charges includes accrual of security cost of CISF personnel amounting to Rs. 2.47 crore (March 31, 2016: Rs. 2.00 crore). The Management is confident that there would be no additional liability other than the amount accrued in the books of account.

50. The Group has undertaken necessary steps to comply with the transfer pricing regulations. The Management is of the opinion that the international and domestic transactions are at arm’s length and believes that the aforesaid legislation will not have any impact on the Consolidated Financial Statements.

51. Reimbursement of Expenses claimed by GHIAL have been reduced from the respective expense head

as mentioned in the table below:

Expense head For the Year ended March31, 2017

For the Year ended March31, 2016

Electricity and water charges 21.05 17.98



Miscellaneous expenses - 0.04


Communication expenses 0.00 0.00

Office Maintenance 0.03 -

Legal and professional fees - 0.02



52. Disclosure as per the Schedule III of the Companies Act, 2013:

A) Net Assets, i.e. total assets minus total liabilities as at:

Name of the Entity


As % of consolidated net assets

Amount As % of consolidated net assets

Amount As % of consolidated net assets

Amount

GHIAL 44.78% 135.54 (490.52)% (63.58) (60.46)% (45.77)

HMACPL 29.05% 87.90 499.94% 64.80 76.74% 58.09

HASSL 0.10% 0.31 (95.27)% (12.35) (33.33)% (25.23)

GHARML - - (0.08)% (0.01) 0.06% 0.04

GHAL 24.61% 74.48 235.15% 30.48 43.23% 32.72

GHASL 7.24% 21.92 230.45% 29.87 53.35% 40.38

GHMSL - - 0.04% 0.01 0.01% 0.01

GAEL including GATL

(28.99)% (87.73) (743.58)% (96.38) (60.95)% (46.13)

HDFRL - - 206.69% 26.79 30.85% 23.35

GAHSCL - - 0.19% 0.02 0.04% 0.03

GHAPDL 0.01% 0.03 0.24% 0.03 0.04% 0.03

GHRL 20.89% 63.21 234.17% 30.35 49.42% 37.41

Jointly controlled entities (as per Equity method)

APFTAL - - - - - -

LHAMPL 2.31% 6.99 22.58% 2.93 1.00% 0.76

Total 100.00% 302.65 100.00% 12.96 100.00% 75.69

Non-controlling interest in a subsidiary

HMACPL - 52.56 - 44.17 - 40.43

B) Share of profit and loss for the financial year:

Name of the entity

2016-17 2015-16 As % of consolidated profit or loss

Amount As % of consolidated profit or loss

Amount

GHIAL 88.67% 261.16 97.41% (49.66)

HMACPL 15.09% 44.43 (89.76)% 45.76

HASSL 0.01% 0.02 (0.32)% 0.17

GHARML - - (0.01)% 0.00

GHAL 0.05% 0.14 4.11% (2.10)

GHASL (3.83)% (11.29) 17.66% (9.00)

GHMSL - - 0.01% (0.00)

GAEL including GATL(wholly owned subsidiary)

(16.30)% (48.02) 108.28% (55.19)

HDFRL - - (59.86)% 30.51

GAHSCL - - 0.01% (0.00)

GHAPDL - - 0.00% (0.00)

GHRL 14.95% 44.02 26.72% (13.62)

Jointly controlled entities (as per Equity method)

APFTAL - - - -

LHAMPL 1.38% 4.06 (4.25)% 2.16

Non-controlling interest in a subsidiary

HMACPL - 8.39 3.74



53. Interest in Joint Venture

a. The Group has a 49% interest in Laqshya Hyderabad Airport Media Private Limited (LHAMPL), a joint venture engaged in offering Out of Home (OOH) / Outdoor Media Services for display of advertisement at the airport. The Group’s interest in LHAMPL is accounted for using the equity method in the consolidated financial statements. Summarised financial information of the joint venture, based on its Ind AS financial statements, and reconciliation with the carrying amount of the investment in consolidated financial statements are set out below: Summarised Balance Sheet as at March 31, 2017:

March 31

2017 March 31

2016 1 April

2015

Current assets, including cash and cash equivalents Rs. 1.16 crore (March 2016: Rs.0.68 crore, April 1, 2015: Rs.

1.37 crore) 27.59 16.56 15.23

Non-current assets 23.06 24.66 26.25

Current liabilities (13.16) (8.26) (10.15)

Non-current liabilities including borrowing Rs. 15.91 crore (March 2016: Rs.19.45 crore, April 1, 2015: Rs. 22.33

crore) (16.16) (19.93) (22.72)

Equity 21.33 13.03 8.61

Proportion of the Group’s ownership 49% 49% 49%

Carrying amount of the investment 10.45 6.39 4.22 Summarised statement of Profit and Loss account as at March 31, 2017:

For the year ended


March 31, 2016

Revenue from operations 60.44 42.83

Other Income 0.35 0.14


Employee benefit expenses 2.71 2.16

Other expenses 41.09 30.31

Depreciation 1.77 1.71

Finance cost 2.96 3.08

Total expenses 48.53 37.26 Profit before tax 12.26 5.71

Tax expenses 4.00 1.23

Profit after tax 8.26 4.48

Other comprehensive income 0.02 (0.05) Total comprehensive income 8.28 4.43

Group’s share of profit for the year 4.06 2.17

Group’s share of contingent liabilities of the jointly controlled entity is Rs. 0.23 crore (March 2016: Rs. 0.17 crore, April 1, 2015: Rs. 0.11 crore).

b. The Group has a 40% interest in Asia Pacific Flight Training Academy Limited (APFTAL), a joint

venture engaged in the business of flight training academy for pilot training, advanced training, Aeronautical and Ground Engineering training. The Group’s interest in APFTAL is accounted for using the equity method in the consolidated financial statements. Summarized financial information of the joint venture, based on its Ind AS financial statements, and reconciliation with the carrying amount of the investment in consolidated financial statements are set out below:



Summarised Balance Sheet as at March 31, 2017:

March 31 2017 March 31 2016 1 April 2015

Current assets, including cash and cash equivalents Rs. 1.38 crore (March 2016:

Rs.1.31 crore, April 1, 2015: Rs. 0.11 crore) 3.32 3.25 1.06

Non-current assets 1.46 1.22 1.74

Current liabilities (9.08) (6.51) (3.47)

Non-current liabilities (0.13) (0.06) (0.06)

Equity (4.43) (2.10) (0.73)

Proportion of the Group’s ownership 40% 39.66% 39.66%

Carrying amount of the investment (1.77) (0.84) (0.29) Summarised statement of Profit and Loss account as at March 31, 2017:

For the year ended


March 31, 2016

Revenue from operations 6.43 5.41

Other income 0.14 0.10


Employee benefit expenses 2.07 1.39

Other expenses 6.06 4.89

Depreciation 0.53 0.39

Finance cost 0.20 0.23

Total expenses 8.86 6.90 Loss for the year (2.29) (1.39)

Other comprehensive income (0.03) 0.01

Total comprehensive income / (loss) (2.32) (1.38)

Group’s share of loss for the year (0.93) (0.55)

Group’s share of contingent liabilities of the jointly controlled entity is Rs. 0.39 crore (March 2016: Rs. 0.39 crore, April 1, 2015: Rs. Nil crore).

54. Goodwill on acquisition:

During August 2014, GHIAL has made additional investment of 5% stake in GAEL, thereby making the shareholding from 50% to 55% making GAEL and GATL from jointly controlled entities to subsidiaries. Subsequently in December’14, GHIAL has acquired the balance stake thereby making GAEL and GATL 100% subsidiaries. On conversion of joint controlled entities to subsidiaries, the excess of Investment over the net assets as on the day of acquisition has been treated as Goodwill.

(i) The interest of the GHIAL, as on the date of conversion during previous year, in the net assets of the GAEL& GATL (wholly owned subsidiary of GAEL) is given below:

Particulars GAEL *

Net assets acquired on the date of acquisition. (A) (24.58)

Purchase consideration and investment by GHIAL (B) 11.69

Net Goodwill (A-B) 36.27

* Includes net assets of GATL (wholly owned subsidiary of GAEL).

Note: The Consolidated Financial statements as at March 31, 2017 include goodwill on additional investment by GHIAL during the financial year 2014-15 in subsidiary GAEL. GAEL has a wholly



owned subsidiary GATL which has incurred losses of Rs. 39.18 crore (March 31, 2016: Rs. 73.36 crore) for the year and has accumulated losses as at March 31, 2017 of Rs. 363.92 crore (March 31, 2016: Rs. 324.82 crore) which exceeds its net worth. Also GATL has incurred cash loss in the current and preceding financial years. The future economic benefit from such goodwill is dependent upon the ability of the aforesaid wholly owned subsidiary to scale up its operations in future and achieve sustained profitability.

Impairment testing of goodwill:

Goodwill acquired through business combinations has been allocated to the below MRO business managed through the above referred operating entities for impairment testing:

Carrying amount of goodwill allocated to MRO business:

Intangible Assets March 31, 2017 March 31, 2016 April 1, 2015

Goodwill 36.27 36.27 36.27

The Group performed its annual impairment test for years ended 31 March 2017 and 31 March 2016 in April 2016 and April 2017, respectively (hereinafter ‘reference date’, this is generally based on year-end).

Based on the management approved Business plan and valuation assessment done by its management, the management of the Group expects that there will be significant increase in the operations of GATL and achieve sustained profitability.

The projections of the business is above the book value of its equity, indicating no sign of impairment of goodwill and impairment of the assets of the operating business. Accordingly, these Consolidated Financial Statements do not include any adjustment relating to the impairment of Goodwill acquired through business combination.

MRO:

The recoverable amount of the MRO business, Rs. 36.27 Crs as at March 31, 2017, has been determined based on the management approved business plan of the operating entity covering a twelve-year period. The projected cash flows have been updated to reflect the decreased demand for services. The pre-tax discount rate applied to cash flow projections for impairment testing during the current year is 13.69% (March 31, 2016: 13.69%) and cash flows beyond the twelve-year period are extrapolated using a 3.0% growth rate (March 31, 2016: 3.0%) that is the same as the long-term average growth rate for the MRO industry. As a result of this analysis, there is no permanent diminution in the value of goodwill, accordingly, these financial statement do not include any adjustments relating to impairment of goodwill.

The calculation of value in use for MRO business is most sensitive to the following assumptions:

Revenue

Discount rates

Cost price inflation

Growth rates used to extrapolate cash flows beyond the forecast period

Revenue-: Revenue are based on existing contracts and expected contracts from potential customers. These are increased over the projected period for anticipated efficiency improvements and increased demand. An increase of 10% per annum was applied for initial 3 years and then stabilized at 8% growth rate for remaining period.

Discount rates - Discount rates represent the current market assessment of the risks specific to the



business, taking into consideration the time value of money. The discount rate calculation is based on the specific circumstances of the cost of equity. The cost of equity is derived from the expected return on investment by the Group’s investors. Segment-specific risk is incorporated by applying individual beta factors. The beta factors are evaluated annually based on publicly available market data.

Cost price inflation – Estimates are obtained from general inflation indices, as well as data relating to specific material items. Forecast figures are used if data is publicly available, otherwise past actual material price movements are used as an indicator of future price movements.

Growth rate estimates – Rates are based on expected industry growth. For the reasons explained above, the long-term rate used to extrapolate the budget for the MRO business.

Sensitivity to changes in assumptions -

Revenue: The management has considered the possibility of greater than forecast increase in revenue. Revenue are based on existing contracts and expected contracts from potential customers for projected period. These are increased over the projected period for anticipated efficiency improvements and increased demand. An increase of 10% per annum was applied for initial 3 years and then stabilized at 8% growth rate for remaining period. A decreased demand can lead to a decline in revenue. A decrease in revenue growth by 2.40% would result in impairment.

Discount rates - A rise in pre-tax discount rate to 16.70 % (i.e. +3%) would result in impairment.

Cost price inflation – The management has considered the possibility of greater than forecast increases in cost price inflation. Forecast price inflation lies within a range of 7%. If cost price increase is greater than 10% and the Business Unit is unable to pass on or absorb these increases through efficiency improvements, then the Group will have an impairment.

Growth rate estimates –The management has considered stable perpetual growth rate of 3%. The management recognizes that the possibility of new entrants can have a significant impact on growth rate assumptions and a reduction of 9% perpetual growth rate after forecast period will result in impairment.

55. First Time Adoption of Ind AS

These consolidated financial statements, for the year ended 31 March 2017, are the first, the Group has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Group prepared its consolidated financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). Accordingly, the Group has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2017, together with the comparative period data as at end for the year ended 31 March 2016, as described in the summary of significant accounting policies. In preparing these consolidated financial statements, the Group’s opening balance sheet was prepared as at 1 April 2015, the Group’s date of transition to Ind AS. This note explains the principal adjustments made by the group in restating its Indian GAAP consolidated financial statements, including the consolidated balance sheet as at 1 April 2015 and the consolidated financial statements as at end for the year ended 31 March 2016.

a) Mandatory exceptions to retrospective applications:

Ind AS 101 allows first time adopters certain exemptions from the retrospective application of certain



requirements under INDAS. The Group has applied the following exemptions:

i) Estimates

The estimates at April 1, 2015 and at March 31, 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) The estimates used by the Group to present these amounts in accordance with Ind AS reflect conditions at 1 April 2015, the date of transition to Ind AS, as of 31 March 2016.

ii) Impairment of financial assets (Trade receivables and other financial assets)

The Group has applied the exception related impairment of financial assets given in Ind AS 101. It has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial assets were initially recognized and compared that to the credit risk as at April 1, 2015.

iii) De-recognition of financial assets and financial liabilities

There are no items of financial asset and liabilities which are required to be derecognised as per Ind AS 109, except as mentioned under foot note (x) to reconciliation of equity.

iv) Classification and measurement of financial assets

The Group has classified financial assets in accordance with conditions that existed at the date of transition to Ind AS.

b) Exemptions applied:

i) Deemed cost-Previous GAAP carrying amount: (PPE and Intangible Assets)

Since there is no change in the functional currency, the Group has elected to continue with the carrying value for all of its PPE and Intangible Assets as recognised in its Indian GAAP financial as deemed cost at the transition date.

ii) Long Term Foreign Currency Monetary Items: (Long term foreign currency borrowings)

Under previous GAAP, as per MCA circular dated August 09, 2012, the GHIAL has adjusted exchange differences to the cost of fixed assets being total differences, arising on long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset, for the period. In other words, GHIAL does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference. In accordance with paragraph D13AA of Ind AS 101, includes an optional exemption that allows a first-time adopter to continue the above accounting treatment in respect of the long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period.

GHIAL has elected to continue policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the consolidated financial statements as per previous GAAP.

iii) Non-Controlling Interest : The following requirements of Ind AS 110 are applied prospectively from the date of transition to Ind AS (provided that Ind AS 103 is not applied retrospectively to past business combinations):

To attribute total comprehensive income to non-controlling interests irrespective of whether this results in a deficit balance

To treat changes in a parents ownership interest as equity transactions To apply Ind AS 110 to loss of control of a subsidiary



iv) Business Combination

Ind AS 101 provides the option to apply Ind AS 103 prospectively. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.

The group has elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.

v) Fair value measurement of financial assets or financial liabilities

In accordance with paragraph D20 of Ind AS 101, the Group has applied to day one gain or loss provisions prospectively to transactions occurring on or after the date of transition to Ind AS. Therefore, unless a first-time adopter elects to apply Ind AS 109 retrospectively to day one gain or loss transactions, transactions that occurred prior to the date of transition to Ind AS do not need to be retrospectively restated.

Reconciliation of Equity as at April 1, 2015 :

April 1, 2015

IGAAP Ind AS adjustments

Ind AS


Property, plant and equipment 2,341.11 (23.71) 2,317.40

Capital work in progress 55.51 (0.25) 55.26

Intangible assets 64.39 (1.59) 62.80

Intangible assets under development - 0.19 0.19

Investment in joint venture - 0.76 0.76

Financial assets

Loans 323.71 (317.17) 6.54

Bank balances other than cash and cash equivalents - 7.31 7.31

Other non-current financial assets - 8.83 8.83

Non-current tax assets - 44.57 44.57

Deferred tax asset (net) - 102.77 102.77

Other non- current assets 6.63 182.52 189.15

2,815.07 4.23 2,819.30

Current assets

Inventories 44.00 (0.12) 43.88

Financial assets

Investments 29.42 0.04 29.46

Trade receivables 88.40 (2.00) 86.40

Bank balances other than cash and cash equivalents - 19.27 19.27

Cash and cash equivalents 53.74 (21.12) 32.62

Loans 25.28 (24.94) 0.34

Other current financial assets - 10.71 10.71

Current tax assets - 16.61 16.61

Other current assets 10.96 1.56 12.52

251.80 0.01 251.81

TOTAL ASSETS 3,066.87 4.24 3,071.11

Equity

Equity share capital 378.00 - 378.00

Other reserves 107.00 - 107.00

Retained Earnings (364.45) (85.29) (449.74)



Equity attributable to equity holders of the parent 120.55 (85.29) 35.26

Non-controlling interest 39.52 0.91 40.43

Non-current liabilities Financial Liabilities

Borrowings 2,452.98 (21.04) 2,431.94

Other financial liabilities 215.26 72.94 288.20

Deferred tax liability (net) 1.49 0.06 1.55

Other non-current liabilities - 37.53 37.53

Long Term provisions 1.50 (0.08) 1.42 2,671.23 89.41 2,760.64

Current liabilities Financial Liabilities Borrowings 27.42 (0.00) 27.42 Trade Payable 67.61 0.91 68.52 Other current financial liabilities 130.79 (23.85) 106.94 Other liabilities - 21.09 21.09

Short Term Provisions 9.75 (2.37) 7.38

Current tax liability (net) - 3.43 3.43

235.55 (0.77) 234.78

Total liabilities 2,906.78 88.64 2,995.42

TOTAL EQUITY AND LIABILITIES 3,066.87 4.24 3,071.11

Reconciliation of Equity as at March 31, 2016:

March 31, 2016 IGAAP Ind AS

adjustments Ind AS


Property, plant and equipment 2,296.71 (22.99) 2,273.72

Capital work in progress 69.97 (0.74) 69.23 Other Intangible assets 56.19 (1.68) 54.51

Intangible assets under development - 0.63 0.63

Financial assets

Investments in joint venture - 2.93 2.93

Loans 229.77 (224.01) 5.76

Bank balance other than cash and cash equivalents - 4.51 4.51

Other financial assets - 8.09 8.09

Non-current tax assets - 65.70 65.70

Deferred tax assets (net) 37.86 62.87 100.73

Other non-current assets 4.51 84.25 88.76

2,695.01 (20.44) 2,674.57 Current assets Inventories 48.57 (0.22) 48.35

Financial assets Investments 223.57 0.29 223.86

Trade receivables 134.95 (3.70) 131.25

Other current financial assets - 12.92 12.92 Bank balances other than cash and cash equivalents - 26.20 26.20 Cash and short-term deposits 52.30 (27.06) 25.24

Loans 15.80 (15.00) 0.80

Current tax assets - 2.21 2.21

Other current assets 15.16 (4.26) 10.90



March 31, 2016 IGAAP Ind AS

adjustments Ind AS

490.35 (8.62) 481.73 TOTAL ASSETS 3,185.36 (29.06) 3,156.30

Equity

Equity share capital 378.00 - 378.00 Other reserves 107.00 - 107.00

Retained Earnings (393.88) (122.35) (516.23)

Equity attributable to equity holder of the parent 91.12 (122.35) (31.23)

Non-controlling interests 42.89 1.30 44.19 Non-current liabilities Financial Liabilities Borrowings 2,500.91 (18.45) 2,482.46

Other financial liabilities 254.10 47.64 301.74

Government grants - 12.08 12.08

Long Term provisions - 1.84 1.84

Deferred tax liability (net) - 1,23 1.23

Other non-current liabilities 1.66 33.46 35.12

2,756.67 77.80 2,834.47 Current liabilities Financial Liabilities Borrowings 27.66 - 27.66

Trade Payable 89.43 6.17 95.60

Other financial liabilities 165.28 (17.11) 148.17

Government grants - 1.13 1.13

Current tax liability (net) - 11.69 11.69

Provisions 12.32 (4.08) 8.24

Other current liabilities - 16.38 16.38 294.69 14.18 308.87 Total liabilities 3,051.36 91.98 3,143.34

TOTAL EQUITY AND LIABILITIES 3,185.37 (29.07) 3,156.30

Reconciliation statement of profit and loss for the year ended March 31, 2016:

March 31, 2016

IGAAP Ind AS adjustments

Ind AS

CONTINUING OPERATIONS

Revenue from operations 883.46 (8.00) 875.46

Other income 26.27 (18.17) 8.10

Total Revenue 909.73 (26.17) 883.56

Concession Fees 25.79 - 25.79

Purchase of traded goods 36.18 5.97 42.16

Increase in traded goods (2.59) - (2.59)

Employee benefit expenses 120.83 (1.25) 119.59

Depreciation and amortisation expenses 254.17 (0.87) 253.30

Finance income - (24.88) (24.88)

Finance costs 245.34 1.29 246.63

Other expenses 269.53 (4.24) 265.29

Total Expenses 949.26 (23.96) 925.28

Profit/(loss) before exceptional items and tax from continuing operations

(39.52) (2.21) (41.73)



Share of Profit / loss of an associate and joint ventures

- 2.16 2.16

Exceptional item 2.77 (2.77) -

Profit/(loss) before and tax from continuing operations

(42.30) 2.72 (39.58)

Deferred tax (39.35) 41.52 2.18

Current tax 11.79 (0.36) 11.44

Tax of earlier years (0.81) 0.88 0.06

Minimum alternate tax credit entitlement 0.06 (0.52) (0.46)

Income tax expense (28.30) 41.52 13.22

Profit/(loss) for the year from continuing operations

(13.99) (38.80) (52.79)

Profit for the year (13.99) (38.80) (52.79)

OTHER COMPREHENSIVE INCOME

Re-measurement gains (losses) on defined benefit plans

- 0.09 0.05

- 0.09 0.05

Net other comprehensive income not to be reclassified to profit or loss in subsequent periods

- 0.09 0.05

Other comprehensive income for the year, net of tax

- 0.09 0.05

Total comprehensive income for the year, net of tax

(13.99) (38.75) (52.74)

Attributable to: Equity holders of the parent (24.63) (31.87) (56.50)

Non-controlling interests 10.64 (6.88) 3.76




Footnotes to the reconciliation of equity as at April 1, 2015 and March 31, 2016 and total comprehensive income for the year ended March 31, 2016

i) Security deposit:

Under the previous GAAP, interest free security deposits received from concessionaires / land lease arrangements or Interest free security deposits given for lease arrangements (that are refundable in cash on completion of its term) are recorded at their transaction value. Under Ind AS, the Group has fair valued these security deposits. Difference between the fair value and transaction value of the security deposits have been recognised as deferred revenue. Consequent to this change, the amount of security deposits received from concessionaire decreased by Rs. 0.14 crore (1st April, 2015 Rs. 1.76 crore). The deferred revenue is increased by Rs. 0.01 crore (1st April 2015, Rs. 1.56 crore). The profit for the year and total equity as at March 31, 2016 increased by Rs. 0.35 crore due to amortisation of the deferred income of Rs. 0.35 crore

ii) Investment in joint venture:

a) GHIAL hold 49% interest in Laqshya Hyderabad Airport Media Private Limited (LHAMPL), and exercises joint control over the entity. Under Indian-GAAP group has proportionately consolidated its interest in LHAMPL in the consolidated financial statement. On transition to Ind AS the group has assessed and determined that LHAMPL is its JV under Ind AS 111 Joint Arrangements. Therefore, it needs to be accounted for using the equity method as against proportionate consolidation. For the application of equity method, the initial investment is measured as the aggregate of Ind AS amount of assets and liabilities that the group had previously proportionately consolidated including any goodwill arising on acquisition. Derecognition of proportionately consolidated LHAMPL limited has resulted in change in balance sheet, statement of profit and loss and cash flow statement. For its impact on the financial statement refer note 53.

b) GHIAL hold 39.66% interest in Asia Pacific Flight Training Academy Limited (APFTAL), and exercises joint control over the entity. Under Indian-GAAP group has proportionately consolidated its interest in APFTAL in the consolidated financial statement. On transition to Ind AS the group has assessed and determined that APFTAL is its JV under Ind AS 111 Joint Arrangements. Therefore, it needs to be accounted for using the equity method as against proportionate consolidation. For the application of equity method, the initial investment is measured as the aggregate of Ind AS amount of assets and liabilities that the group had previously proportionately consolidated. Derecognition of proportionately consolidated APFTAL limited has resulted in change in balance sheet, statement of profit and loss and cash flow statement. For its impact on the financial statement refer note 53.

iii) Intangible assets

In case of HMACPL, as per Appendix A to Ind AS 11 on Service Concession Arrangements, Intangible asset model is used to the extent that HMACPL receives a right (i.e. a concessionaire) to charge users of the public service. As per previous GAAP, HMACPL has recognized it’s assets as tangible and intangible assets. Accordingly, since all the assets of HMACPL are covered under service concession arrangement, an intangible asset –“Right to operate cargo facility” as granted by the government has been recognized in the bools of accounts. The intangible asset is amortised over the shorter of the estimated period of future economic benefits which the intangible assets are expected to generate or the concession period, from the date they are available for use.

iv) Borrowings: Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in statement of profit or loss over the tenure of the borrowings as part of the interest expense by applying the effective interest method. Page No. 242GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 Consolidated Financials



Under the previous GAAP, these transactions cost were amortised on a straight line basis over the period of loan. In case of GHIAL, unamortised prepaid upfront cost of Rs. 72.40 crore as at April 1, 2015 has been reduced with a corresponding adjustment to borrowings. Accordingly, borrowings as at March 31, 2016 have been reduced by Rs. 7.37 crore (April 1, 2015: Rs. 7.05 crore) with a corresponding adjustment to borrowings and retained earnings. The total equity decreased by Rs. 0.13 crore as at transition date. The profit for the year ended March 31, 2016 reduced by Rs. 0.62 crore as a result of the additional interest expense. Further, in case of GHASL, as required under Ind AS 109 proportionate cost of upfront fee paid on obtaining loan towards Property plant, equipment to be charged to Statement of Profit and Loss. Accordingly, as on the date of transition the upfront fee to the extent capitalised in the earlier period net of depreciation reversal amounting to Rs. 0.36 crore is credited to Property, Plant and Equipment. Further, impacts of the above said adjustment in respect of other companies are immaterial.

v) Fair valuation of investments in mutual fund Under the previous GAAP, investment in mutual fund is classified as current investment based on the intended holding period and realisability. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognised in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended March 31, 2016. This increased the retained earnings by Rs. 0.29 crore (1st April, 2015: Rs. 0.04 crore).

vi) Interest rate swap not designated as hedging instruments

Under the previous GAAP, GHIAL has considered the critical terms of the interest rate swap (IRS) and those of the principal term loan are same and based on the internal assessment carried out by the management, no adjustment were being made in the respective financial statements.

Under Ind AS, derivative instruments (not hedged) i.e. IRS is fair valued with mark to market loss of Rs. 112.47 crore as at April 01, 2015, being recognised in the retained earnings. For the year ended 31 March 2016, the fair valuation of IRS resulted in a gain of Rs 3.75 crore and the same is recognised in the statement of profit and loss with a corresponding reduction in the IRS provision.

vii) Revenue and operation and maintenance cost HMACPL, as per appendix A of Ind AS 11, recognizes revenues and the associated costs of improvements to service concession assets which it is obligated to perform at the airports as established by the concession agreement. The cost for such additions and improvements to concession assets is based on actual costs incurred by it in the execution of the additions or improvements, considering the requirements in the concession agreement. The amount of Rs. 2.04 crore of revenues for these services is equal to the amount of costs incurred, as HMACPL do not obtain any profit margin for these construction services.

viii) Re-measurements of post-employment benefit plans

Under Ind AS, re-measurements i.e. actuarial gain and losses and the return on plan assets, except for amounts included in the net interest expense on the net defined liability are recognised in other comprehensive income instead of statement of profit and loss. Under the previous GAAP, these measurements were forming part of the profit or loss for the year. As a result of this change, the loss for the year ended March 31, 2016 is increased by Rs. 0.05 crore. There is no impact on the total equity as at March 31, 2016.




ix) Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Group has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity.

x) Dividend

Under Indian GAAP, proposed dividends including DDT are recognised as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, proposed dividend is recognised as a liability in the period in which it is declared by the respective subsidiaries (when approved by shareholders in a general meeting) or paid. Therefore, the liability towards proposed dividend amounting to Rs. 6.99 crore as at April 01, 2015, and Rs.8.46 crore as at March 31, 2016, has been derecognised against retained earnings and adjusted as an appropriation for the period in which it is declared. Further, dividend distribution tax amounting to Rs. 4.24 Crore on dividend declared by HMACPL and HDFRL during the year ended March 31, 2016 to the extent pertaining to GHIAL has been charged off in the Statement of Profit and Loss.

xi) Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

xii) Other comprehensive income

Under Indian GAAP, the Group has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to Ind AS profit or loss. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.




xiii) Loan to joint venture

Under previous GAAP, loans to joint venture were recognised at their face/transaction values. GHIAL has given interest free loans to its joint venture in earlier years the outstanding amount of which on transition date was Rs 10 crore. Considering that the loans given were interest free, they have been fair valued and the differential amount of the carrying value and fair value has been recognised as equity component(additional investment in joint venture) as per guidance under Ind AS 32.

GHIAL has recognised Rs 5.58 crore as additional investment in the joint venture subsidiary as on the date of transition. Interest income of Rs 2.38 crore upto the date of transition has been recognised in retained earnings. Interest income of Rs 0.77 crore has been recognised in the statement of profit and loss during the year ended 31 March 2016.


For S.R. BATLIBOI & ASSOCIATES LLP ICAI Firm Registration Number: 101049W/E300004

Chartered Accountants

per Shankar Srinivasan Partner Membership No.: 213271

Place: Hyderabad Date: July 19, 2017

For Brahmayya & Co., ICAI Firm Registration Number: 000515S Chartered Accountants

per G. Srinivas Partner Membership No.:086761

Place: New Delhi Date: July 19,2017

For and on behalf of the Board of Directors of GMR Hyderabad International Airport Limited

Srinivas Bommidala RSSLN Bhaskarudu Managing Director Director DIN.:00061464 DIN.:00058527

Anup Kumar Samal Rajesh Arora Company Secretary Chief Financial Officer

Place: Hyderabad Date: July 19, 2017


Rs. In Crore

S.No 1 2 3 4 5 6 7 8

Name of the subsidiary Hyderabad Menzies Air

Cargo Private Limited

Hyderabad Airport

Security Services

Limited

GMR Hyderabad

Aerotropolis Limited

GMR Hyderabad

Aviation SEZ

Limited

GMR Aerospace

Engineering Limited

GMR Aero Technic

Limited

GMR Hyderabad

Airport Power

Distribution Limited

GMR Hospitality and

Retail Limited

(Formerly GMR

Hotels and Resorts

Limited ) $

The date since when

subsidiary was acquired 7-Feb-2007 20-Jul-2007 18-Jul-2007 4-Dec-2007 12-Dec-2014 12-Dec-2014 18-Sep-2012 8-Sep-2008

Reporting periodApril 01, 2016 - March 31,

2017

April 01, 2016 -

March 31, 2017

April 01, 2016 -

March 31, 2017

April 01, 2016 -

March 31, 2017

April 01, 2016 - March

31, 2017

April 01, 2016 -

March 31, 2017

April 01, 2016 - March

31, 2017

April 01, 2016 -

March 31, 2017

Reporting currency INR INR INR INR INR INR INR INR

Share Capital # 19.04 12.50 57.50 51.60 292.90 25.00 0.05 126.61

Reserves and Surplus 68.88 0.71 (3.63) 7.92 4.52 (198.46) (0.02) (143.49)

Total Assets 112.89 13.34 77.04 147.37 596.80 64.49 0.03 194.12

Total Liabilities 24.97 0.13 23.17 87.85 299.38 237.95 0.00 211.00

Investments* 20.17 0.34 - 7.86 - - - 4.54

Turnover 89.05 - 0.81 13.62 29.90 58.00 - 167.47

Profit before taxation 26.72 0.02 (0.33) (3.31) (2.94) (54.33) (0.00) (4.72)

Provision for taxation 5.70 0.00 0.07 1.88 - (15.16) - (1.71)

Profit after taxation 21.02 0.02 (0.40) (5.19) (2.94) (39.18) (0.00) (3.01)

Proposed dividend - - - - - - - -

% of shareholding 51% 100% 100% 100% 100% 100% 100% 100%

Notes:

Names of subsidiaries which have been liquidated or sold during the year:

Sold during the year:

1. GMR Hyderabad Airport Resource Management Limited

Liquidated during the year:

1. GMR Hyderabad Multi Product SEZ Limited

2. GMR Airport Handling Services Company Limited

2 * Investments except investment in Subsidiaries, joint ventures and associates.

3. $ Hyderabad Duty Free Retail Limited (HDFRL) is amalgamated with GMR Hospitality and Retail Limited (GHRL) [Formerly GMR Hotels and Resorts Limited] with effect from April 27, 2017 with an appointed

date as April 01, 2016. Accordingly, Share Capital of GHRL includes Share Capital Suspense of 16.95 crores, i.e. Share capital of HDFRL on account of merger.

1.The annual accounts of the Subsidiary Companies and the related detailed information will be made available to the members of the Company and the subsidiary companies seeking such information at any point of

time. The annual accounts of the subsidiary companies will also be kept for inspection by any member in the registered office and that of the subsidiary companies concerned.

Part “A”: Subsidiaries

Form No. AOC - 1

(Pursuant to First proviso to sub-section (3) of section 129 of the Companies Act, 2013 read with Rule 5 of the Companies(Accounts) Rules, 2014)

Statement containing salient features of the financial statement of subsidiaries / associate companies / joint ventures

Page No. 246GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 Form AOC-1

Rs. In Crore

Name of Associates or Joint Ventures Laqshya Hyderabad Airport

Media Private Limited

(LHAMPL)

Asia Pacific Flight

Training Academy

Limited (APFTAL)

1. Latest audited Balance Sheet Date 31-Mar-2017 31-Mar-2017

2. Date on which the Associate or Joint Venture was associated or acquired 14-May-2011 18-Feb-2011

3. Shares of Associate or Joint Ventures held by the company on the year end

No. 9,800,000 3,556,969

Amount of Investment in Associates or Joint Venture 9.80 3.56

Extent of Holding (in percentage) 49.00% 40.00%

4. Description of how there is significant influence NA NA

5. Reason why the associate/joint venture is not consolidated Refer note 1 below Refer note 1 below

6. Networth attributable to shareholding as per latest audited Balance Sheet 10.45 (1.77)

7. Profit or Loss for the year - -

i. Considered in Consolidation 4.06 -

ii. Not Considered in Consolidation - (0.91)

Note 1 :

Sd/- Sd/-

Place : Hyderabad Srinivas Bommidala RSSLN Bhaskarudu

Date : July 19, 2017 Managing Director Director

(DIN 000061464) (DIN 00058527)

Part B-Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

For and on behalf of Board of Directors

On transition to Ind AS, GHIAL has assessed and determined that LHAMPL and APFTAL are its JV under Ind AS 111 Joint Arrangements. Therefore, theses need to be accounted for using the

equity method as against proportionate consolidation.

Under the equity method, the investment in a joint venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the entity’s share of net assets of

the joint venture since the acquisition date. Goodwill relating to the joint venture is included in the carrying amount of the investment and is not tested for impairment individually.

Further, in case entity’s share of losses of a joint venture equals or exceeds its interest in the joint venture (which includes any long term interest that, in substance, form part of the entity’s net

investment in the joint venture), the entity discontinues recognising its share of further losses. If the joint venture subsequently reports profits, the entity resumes recognising its share of those

profits only after its share of the profits equals the share of losses not recognised.

Page No. 247GMR Hyderabad International Airport Limited 14th Annual Report 2016-17 Form AOC-1

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