Notes to Accounts of GVK Power & Infrastructure Ltd.

Mar 31, 2024

(j) Provisions

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. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement. Provisions are not recognised for future operating losses.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

(k) 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.

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.

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:

- The date of the plan amendment or curtailment, and

- 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.

- Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and

- Net interest expense or income

The Company treats accumulated leave, as a long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on an actuarial valuation using the projected unit credit method at the period-end/ year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The Company presents the entire liability in respect of leave as a current liability in the balance sheet, since it does not have an unconditional right to defer its settlement beyond 12 months after the reporting date.

(l) 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.

Financial assets

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.

Subsequent measurement

For the purposes of subsequent measurement, financial assets are classified in four categories:

a) Debt instruments at amortised cost.

b) Debt instruments at fair value through Other comprehensive income (FVTOCI).

c) Debt instruments, derivatives and equity instruments at fair value through profit and loss (FVTPL).

d) Equity instruments measured at fair value through other comprehensive income (FVOCI).

Debt instruments at amoritsed cost

A ‘debt instrument'' is measured at 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 receivables, other receivables and loans.

Debt instruments, derivatives and equity instruments at fair value through profit or loss (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''). The company has not designated any debt instrument as at FVTPL.

Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L. Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial assets) is primarily derecognised (i.e. removed from the Company''s 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, and

i. the Company has transferred substantially all the risks and rewards of the asset, or

ii. the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

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) 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 18.

c) Loan commitments which are not measured as at FVTPL.

d) Financial guarantee contracts which are not measured as at FVTPL.

The Company follows ‘simplified approach'' for recognition of impairment loss allowance on trade receivables

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, an entity is required to consider:

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 Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

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. In the Balance Sheet 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.

Financial liabilities

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, financial guarantee contracts. Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Loans and borrowings

This category is most relevant to the Company. 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.

This category generally applies to borrowings. For more information refer Note 15.

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.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial recognition as at fair value through 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 Statement of Profit or Loss. 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.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. 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.

(m) 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.

(n) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

- the profit attributable to owners of the Company;

- by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

- the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and

- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.

(o) Recent accounting pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31,2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

(p) Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III to the Act, unless otherwise stated.

26. Commitments and Contingencies

A. Leases

Operating lease commitments - Company as lessee

Operating leases are mainly in the nature of lease of office premises with no restrictions and are renewable/cancellable at the option of either of the parties. The Company has not entered into any non-cancellable leases. There is 10% escalation clause in the lease agreement. There are no sub-leases. There are no restrictions imposed by lease arrangements.

The Company has not recognised any contingent rent as expense in the Statement of Profit and Loss. The aggregate amount of operating lease payments recognised in the Statement of Profit and Loss is Rs. 7 lakhs (March 31,2023: Rs. 4 lakhs).

B. Capital and other commitments

i) Capital Commitments

The Company has no outstanding capital commitments as at year end. (March 31,2023: Nil)

ii) Other Commitments

a) The company has given undertaking to infuse equity aggregating to Rs. 481,526 lakhs (March 31,2023: Rs. 474,843 lakhs) in GVK Coal Developers (Singapore) Pte. Limited, towards shortfall, if any, of its loan repayment obligations [Also refer note C(ii) below]. Further, the Company has pledged 155,587,500 (March 31,2023: 155,587,500), 130,287,382 (March 31,2023: 130,287,382) and 48,000,000 (March 31, 2023: 48,000,000) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Limited respectively for securing loan obtained by GVK Coal Developers (Singapore) Pte. Limited, an associate entity in which Company has 10% stake.

32. Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure in consideration to the changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital. The Company includes within net debt, borrowings including interest accrued on borrowings, less cash and short-term deposits.

33. Fair values

The management assessed that the fair value of loans given, trade receivables, cash and cash equivalents, other financial assets, short term borrowings, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities or interest bearing nature of these instruments. 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.

Set out below, is a comparison by class of the carrying amounts and fair value of the company''s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

Level 1: Level 1 hierarchy includes financial instruments measuring using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing net asset value.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity shares, contingent consideration and indemnification asset included in level 3.

b) Valuation technique used to determine fair value

Specific valuation technique used to value financial instruments include:

- The fair value of investment in mutual funds is measured at quoted price or NAV.

- The fair values for non-current investments, other non-current financial assets and borrowings are based on discounted cash flows using a borrowing rate at the date of transition. They are classified as level 3 fair values in their fair value hierarchy due to the use of unobservable inputs, including own credit risk.

34. Significant accounting judgements, estimates and assumptions

The preparation of the Company''s 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.

A. Judgements

In the process of applying the Company''s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements.

i. Determination of control and accounting thereof

As detailed in the accounting policy, principles under Ind AS are different from the previous GAAP, especially with respect to assessment of control of subsidiaries. Further, investment in GVK Coal Developers (Singapore) Pte. Ltd has been accounted as associate since the company participates in all significant financial and operating decisions. The company has therefore determined that it has significant influence over this entity, even though it only holds 10% of the voting rights.

ii. Impairment of non-current assets including investments in subsidiaries, joint ventures and associates

Determining whether investment are impaired requires an estimation of the value in use of the individual investment or the relevant cash generating units. The value in use calculation is based on Discounted Cash Flow (‘DCF'') model over the estimated useful life of the power plants, concession on roads etc. Further, the cash flow projections are based on estimates and assumptions relating to conclusion of tariff rates, operational performance of the plants and coal mines, life extension plans, availability and market prices of gas, coal and other fuels, restructuring of loans etc in case of investments in entities in the energy business, estimation of passenger traffic and rates and outcomes of litigations, and settlements may be reached with lenders which are considered as reasonable by the management and significant uncertainties faced including absence of financial closure in respect of GVK Coal Developers (Singapore) Pte Ltd.

Based on such determination the Company has imparied carrying value of its deemed investment in GVK Jaipur Expressway Private Limited Rs 2,284 Lakhs (March 31,2023: Nil).

iii. Also refer note 54 on significant judgement on going concern ability of the Company.

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 has prepared financial statements 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.

(i) Taxes

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.

(ii) Defined employee benefit plans (Gratuity)

The cost of the defined benefit gratuity plan 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. Further details about gratuity obligations are given in note 27.

(iii) 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 Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements 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.

(iv) Depreciation on property, plant and equipment

Depreciation on property, plant and equipment is calculated on a straight-line basis using the rates arrived at based on the useful lives and residual values of all its property, plant and equipment estimated by the management. The management believes that depreciation rates currently used fairly reflect its estimate of the useful lives and residual values of property, plant and equipment, and the useful lives are in line with the useful lives prescribed under Schedule II of the Companies Act, 2013.

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the group and that are believed to be reasonable under the circumstances.

35 Financial risk management objectives and policies

Financial Risk Management Framework

The Company is exposed primarily to Credit Risk, Liquidity Risk and Market risk (fluctuations in foreign currency exchange rates and interest rate), which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

A Price risk

The company''s exposure to investment in mutual funds are subject to price and classified in the balance sheet as fair value through profit or loss.

Sensitivity

The table below summaries the impact of increase/decrease of the index on the company''s investment in mutual fund and profit/(loss) for the year.

B 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. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, loans and other financial assets. Trade receivables, Financial guarantee receivables (Other financial assets) and Loans given by the Company result in material concentration of credit risk as these are with related parties.

Exposure to credit risk:

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs. 12,626 lakhs (March 31,2023: Rs. 8,303 lakhs), being the total of the carrying amount of balances with trade receivables, Loans and Other financial assets.

Trade receivables, Other financial assets, Loans given:

An impairment analysis is performed at each reporting date. The Company does not hold collateral as security. Impairment analysis takes into account historical credit loss experience and adjusted for forward-looking information. Significant portion of trade receivables, other financial assets and loans given comprise receivables from related parties and not subject to significant credit risk based on past history.

C. Liquidity Risk

Liquidity Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

D. Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and interest rate risk. Financial instruments affected by market risk include loans and borrowings, investments, other financial assets and other financial liabilities.

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 change 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. As the Company has debt obligations with floating interest rates, exposure to the risk of changes in market interest rates are substantially dependent of changes in market interest rates.

As the company has no significant interest bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates.

Foreign Currency exchange rate 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 investment in foreign entity and financial asset/liability in relation to foreign entity in respect of financial guarantee. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. The Company has not entered into derivative instruments during the year.

The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise is Nil.

39. Details relating wilful defaulter

The Company is not declared as wilful defaulter by any bank or financial institution (as defined under the Companies Act, 2013) or consortium thereof or other lender in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

40. The Company has complied with the number of layers for its holding in downstream companies prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.

41. Corporate Social Responsibility Expenditure

The compnay is not required to spend on Corporate Social Responsibility (CSR) in view of the continuing losses during the last three years.

42. Relationship with Struck off Companies

The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

43 .The Company has not advanced or loaned or invested funds to any other person(s) or entity(is), including foreign entities (Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

The Company has not received any fund from any person(s) or entity(is), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

44. Registration of charges or satisfaction with Registrar of Companies

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

45. Undisclosed income

The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (previous year) in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

46. Details of Crypto Currency or Virtual Currency

The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

47. Social Security Code, 2020

The Code on Social Security 2020 (‘the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued.

The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

49 .The Company has an investment in GVK Coal Developers (Singapore) Pte. Limited (GVK Coal) which is assessed as an associate to the parent Company. The parent Company exercises significant influence on GVK Coal as per Ind AS 28.

The Company has also given guarantees and commitments for loans amounting to USD 1 132.45 Million ( Rs. 944,168 lakhs as at March 31,2024; Rs. 931,065 lakhs as at March 31,2023 ) (GVKPIL itself guaranteed towards the repayment of limits which shall be lower of either 53.9% (including in respect of the Hedging Agreements if any) of all principal amounts outstanding under the finance documents or USD 692.61 Million) taken by GVK Coal part of which is collateralized by pledge of 155,587,500 (March 31, 2023: 155,587,500), 130,287,382 (March 31, 2023: 130,287,382) and 48,000,000 (March 31, 2023: 48,000,000) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Limited respectively for securing loan obtained by GVK Coal Developers (Singapore) Pte. Limited and has also undertaken to provide financial assistance of USD 3.11 million (Rs. 2,593 lakhs) as at March 31,2024 (Rs. 2,557 lakhs as at March 31,2023) , with respect to which there are multiple significant uncertainties including outlook on the sector, non-achieving of financial closure and clearances for the project, concluding an appropriate solution with various stakeholders including lenders, and necessary environmental and regulatory clearances etc.. The entity''s current liabilities exceeded current assets by USD 2,624 million (Rs. 2,187,713 lakhs) as of March 31,2024 (March 31,2023: USD 2,845 million (Rs. 2,339,320 lakhs)) and accumulated losses as of March, 2024 is USD 1,386 million (Rs. 11,55,562 Lakh) based on audited special purpose consolidated financial statements of GVK Coal.

The GVK Coal lenders had also filed a claim in the High Court of Justice Business and Property Courts of England and Wales Commercial Courts (England Court) on November 09, 2020, and have sought to recover the amounts advanced to GVK Coal. During the current financial year 2023-24, the England court vide its order dated October 19, 2023, has crystalized the amount payable by the defendants (GVKPIL and other guarantors/ stakeholders in GVK Coal) at USD 2.19 billion including the amount towards interest.

As per legal opinion obtained by the company, the order dated 19th October 2023 passed by the England court is not speaking order. It has also been opined that the Order dated 19th October 2023 cannot be enforced in India and is contrary to the substantive law of India and is also in violation of the principles of natural justice.

Management has made several attempts were made by the company to have a solution with the lenders including an agreement dated March 23, 2017, wherein a non-binding framework solution was agreed upon for a settlement. Subsequently also there were several efforts to engage with the lenders to arrive at a settlement. The GVK Coal having failed to repay debt obligation, ICICI bank has invoked CG of GVKPIL on Nov 02, 2020 and demanding to pay the GVK Coal dues.

Further, one of the lenders has filed an application under Section 7 of the Insolvency and Bankruptcy Code 2016 to initiate Corporate Insolvency Resolution Process against the company (being guarantor for loan taken by GVK Coal) before National Company Law Tribunal, Hyderabad on July 14, 2022 and the company has filed its reply. As per the NCLT website, initially final hearing was mentioned as 24.04.2024 but the authority has partly heard the details and next hearing is scheduled on 31.05.2024. As per the GVKPIL management, petition filed by the ICICI Bank against GVKPIL is barred by Section 10A of the Code as the invocation of the Guarantee was admittedly done vide invocation of guarantee dated 02.11.2020 and as such the invocation of the guarantee on GVKPIL falls squarely within the period prescribed by Section 10A of the code. As per 10A, no application for initiation of corporate insolvency resolution process can be filed in respect of a default that has occurred on or after 25th March, 2020 till 25th March, 2021. However, as per ICICI Bank petition, the account (GVK Coal Developers) has become NPA with all the lenders around FY 2016-17. The ultimate outcome of the same and the resultant impact of the same on the financial statements is not ascertainable and cannot be commented upon.

The company is hopeful of achieving one time settlement with the lenders in view of its arrangement with Adani Airport Holdings Limited (AAHL) which is adequately incentivized to find solution with the lenders to get unencumbered ownership over the shares of GVK Airport Developers Limited pledged with the lenders. The extent of the liability that may arise in respect of guarantees and commitments and the manner of such settlement is presently not ascertainable and accordingly no provision has been made in this regard in relation to any liability.

The company has provided for impairment of Rs 78,634 Lakhs for full value of its investment and receivable in earlier years in the absence of any certainty of realization either by use or from the settlement that may be reached.

50. GVKPIL has wholly own subsidiary company viz. GVK Energy Limited (''GVKEL''), certain subsidiaries and jointly controlled entity (group companies) of GVKEL are facing uncertainties as detailed below

Certain subsidiaries and jointly controlled entity (group companies) of GVK Energy Limited (''GVKEL'') are facing uncertainties as detailed below:

a) The Hon''ble Supreme Court of India had deallocated dedicated coal mine allotted to GVK Power (Goindwal Sahib) Limited (GVKPGSL). GVK Coal (Tokisud) Private Limited (GVKCTPL), a subsidiary company of GVKEL and mine operator was offered compensation by the Nominated Authority of Rs. 11,129 Lakhs as against carrying value of assets of Rs. 31,113 Lakhs as at March 31, 2017. GVKCTPL had appealed against the said order in the Hon''ble High Court of Delhi. The aforesaid court vide its order dated March 09,2017, directed GVKCTPL to submit its claim to the adjudicating authority constituted under the Coal Mines (Special Provisions) Act, 2015. Subsequently GVKCTPL submitted its claim for the balance amount of Rs. 19,882 Lakhs to the aforesaid authority. The nominated authority under the Ministry of Coal vide its order dated 16th March 2022 has further approved and released compensation of Rs.13,867 lakhs. Out of this an amount of Rs.8,883 lakhs have been deposited by nominated authority in interest bearing account with Registrar General of the Court as per the directions of the high court of Delhi dated 11th April 2022 and an amount of Rs.4,984 lakhs have been paid to lenders by nominated authority towards the balance dues payable as per the claims made by the lenders as on the date of vesting orders less the amount already paid to the lenders. Including the above amount of Rs 4,984 lakhs, a total of Rs 23,761 lakhs , being the due on vesting date has been paid to lenders. The nominated authority has advised in the above order to approach Coal Tribunal in respect of disputes including the compensation disallowed regarding R&R costs. The GVKCTPL has accordingly filed the appeal under sec. 27 of the Coal Mines (Special Provisions) Act, 2015 with Coal Tribunal for Rs 34,830 lakhs on August 01,2022 and the next hearing of the case is scheduled on June 20, 2024.

Based on the internal assessment, management believes that GVKCTPL will be appropriately reimbursed for cancelled coal mine. Additionally, the fund lying-in interest-bearing account with Registrar General of the Court will be sufficient to discharge all liabilities and accordingly no provision is required towards corporate guarantee given by GVKEL for loan taken by GVKCTPL and carrying value (Balance of claims) of Rs 6,015 Lakhs.

b) GVK Power (Goindwal Sahib) Limited (“GVKPGSL”) a subsidiary company of GVKEL, has been admitted into Corporate Insolvency Resolution Process on October 10, 2022 based on petition filed by Axis Bank Ltd, one of the lenders in the consortium of GVKPGSL with the Hon''ble NCLT, Hyderabad invoking Corporate Insolvency Resolution Process against GVKPGSL.

During the current financial year 2023-24, the Resolution plan submitted by resolution applicant has been approved by the Hon''ble NCLT Hyderabad vide its order dated December 22, 2023. As per the said order, the secured lenders have received Rs.1,078 crores against their claims of Rs.6,585 Crores. i.e. with a deficit of Rs.5,507 Crores. The GVKEL has provided Corporate Guarantee to the lenders of GVKPGSL with respect to the amount lent by them. The lenders through security trustee (IDBI Trusteeship services limited) have invoked the corporate Guarantee. Further, during the financial year 2023-24, one of the lenders (IDBI) has filed the case against the GVKEL demanding the amount of Rs.1,494 Crores in the Hon''ble NCLT, Hyderabad and next date of hearing is fixed on July 10, 2024.

As per management, liability of Corporate Guarantor is co - extensive with the liability of the Principal Borrower. Further, as per GVKPIL management, Section 31(1) of the Code states that when a resolution plan is approved by the adjudicating authority the same is binding on all the creditors and the guarantors and all other stake holders and hence no claim is maintainable against them. Considering, the liability of the Principal Borrower stands discharged pursuant to the CIRP of the Principal Borrower, as per GVKPIL management, the liability of the Corporate Guarantor also extinguishes.

Based on internal assessment of the management there is an uncertainty on the outcome of the liability that may arise in respect of guarantee given by GVKEL. therefore no provision has been made against the likely impact of the claim against such guarantee.

c) GVK Gautami Power Limited (GVKGPL), a jointly controlled entity of GVKEL, has been admitted into Corporate Insolvency Resolution Process (CIRP) during the current financial year 2023-24, i.e on October 20, 2023 based on petition filed by Edelweiss Asset Reconstruction Company Ltd, one of the lenders in the consortium of GVKGPL with the Hon''ble NCLT, Hyderabad and Interim Resolution professional appointed by NCLT has taken possession of all assets of GVKGPL. GVKEL has already provided for an impairment in the full value of investment in GVKGPL of Rs 51,897 Lakh.

The GVKEL has also provided Corporate Guarantee to the lenders of GVKGPL with respect to the amount lent by them. This Corporate Guarantee has not be invoked by the Lenders so far (account became NPA on 1st October 2016) and no demands have been raised on GVKEL. This Corporate Guarantee may be invoked the lenders of GVKGPL considering the default therein. In such an eventuality, GVKEL may need to reimburse the same, especially considering that the net assets of GVKGPL is negative. The extent of the liability that may arise in respect of guarantee given is presently not determinable at present and no provision has been made in this regard in relation to such liability.

d) During the earlier years, GVK Energy Ltd. (GVKEL) and Alaknanda Hydro Power Company Limited (AHPCL) have issued debentures vide respective Trust Deed and taken loans from ECL Finance Limited, Edelweiss Asset Reconstruction Company Limited, India Credit Fund II & Ecap Equities Limited (collectively referred to as “Edelweiss”). These Debentures and Loans are also secured by pledge of shares of GVK Power (Goindwal Sahib) Limited, GVK Coal Tokisud Company Private Limited and AHPCL held by GVKEL and shares of GVKEL held by GVKPIL as investment in respective companies. The loans were further secured by Corporate Guarantee given jointly by GVKEL and GVKPIL.

Since the repayment of loan and interest was defaulted, GVKEL and AHPCL have entered into settlement agreement with Edelweiss on October 31,2020 which resulted in settlement of principal and interest outstanding of Rs.68,730 Lakhs (GVKEL Rs.12,139 Lakhs and AHPCL Rs.56,591 Lakhs) at Rs.52,500 Lakhs (GVKEL Rs.3,800 Lakhs and AHPCL Rs.48,700 Lakhs) along with interest rate of 12.50% pa compound monthly w.e.f. September 16, 2020 till July 31,2021, which was further extended up to March 31,2022. AHPCL and GVKEL has made total payments of Rs.33,059 Lakhs resulting in balance payable of Rs. 27,115 Lakhs including interest till May 16, 2022 (GVK EL Rs.3,506 Lakhs and AHPCL Rs.23,609 Lakhs). AHPCL and GVKEL has requested for further time till August 31,2022 from Edelweiss for making balance payment and were in discussions with them.

However, Edelweiss has withdrawn the settlement agreement vide its mail dated April 1 1,2022. Edelweiss has also written letter dated July 08, 2022 invoking the Corporate Guarantee issued by GVKEL and GVKPIL.

Further, since GVKEL and AHCPL could not make the payment as per settlement terms, ECL Finance Limited (Edelweiss) has invoked the pledge of equity shares and transferred 46,60,11,000 Equity shares, each having face value of Rs 10, of AHPCL held by GVK Energy Limited on May 16, 2022. ECL Finance Limited will continue to hold these shares as security on behalf of Edelweiss for the loans taken/NCD issued by AHCPL & GVKEL. ECL Finance Limited reserved the right to sell the same as per the terms of the pledge agreement read with security sharing agreements.

GVKEL filed a suit before Delhi High Court on May 30, 2022, wherein GVKEL pleaded that because of the invocation and transfer of a valuable asset our liability towards the loan has been discharged and since the value of share is far in excess of the outstanding loan liability, the excess share to be returned. The Hon''ble High Court Delhi has given interim order dated May 31,2022 wherein it is stated that while selling the shares of AHPCL by Lenders, the best offer received by them would be communicated to the GVKEL and GVKPIL as well as to the Court, and an opportunity would be given to them to match the said offer within five days. In the meanwhile, if GVKEL and GVKPIL get an offer for the aforesaid shares, they shall also inform the defendants as well as the Court. In the event GVKEL and GVKPIL are unable to match the offer of the lenders, the lenders would be free to sell the said shares at the best offer received by them. Till the time, the shares which are invoked are sold in the aforesaid manner, the lenders shall not sell any other shares that have been pledged by the GVKEL and GVKPIL with the lenders. However, the lenders shall be free to invoke the pledged shares. Next hearing of the case is scheduled on July 09, 2024.

GVKEL has transferred the liability of AHPCL in its books of account relating to Edelweiss and based on legal opinion, GVKEL has shown the discharge of the loan liability of Edelweiss against the invoked shares till a settlement is arrived at with Edelweiss. GVKEL has not accounted for the impact of the annulment of settlement since they are confident of achieving settlement with Edelweiss. However, on conservative basis, a loss on invocation and transfer of shares, amounting to Rs.19,486 Lakhs during year ended March 31,2023 (being difference in face value of pledged shares invoked by Edelweiss and the liability of Edelweiss appearing in books of GVKEL and AHPCL as per settlement terms) has been accounted in the books of accounts and reported as an exceptional item in the standalone financials of GVKEL and consolidated financials of GVKPIL.

Due to above mentioned default in the repayment of amount due on Loan / NCDs, Edelweiss (through its debentures trustee namely Catalyst Trusteeship Limited) has also filed petition with the Hon''ble NCLT, Hyderabad invoking Corporate Insolvency Resolution Process against GVKPIL (being the Guarantor of the Loan / NCDs) and GVKEL on October 21,2022 and the next hearing of the case is scheduled on July 12, 2024.

Meanwhile, AHPCL, GVKEL and GVKPIL has entered into a settlement agreement with the lenders on October 09, 2023, which requires to pay Rs 33,000 Lakhs up to October 31, 2023 and simple interest @12.50% pa is payable w.e.f. 1st November 2023. The entire amount along with interest is to be paid on or before 30th November 2023 and due date further extended till Jun 30, 2024 with phased payments. On 27th February''24 the lead lender of Alaknanda Hydro Power Company Limited has approved the release of Rs 20,000 Lakhs out of Rs 33,000 lakhs and Rs.13,000 Lakhs to be brought in by GVKPIL group and till date GVKPIL group has paid an amount of Rs 9,150 lakhs as agreed.

As per the terms of the settlement, lenders will release the securities including the transfer of 46,60,11,000 Equity shares, each having face value of Rs.10, of AHPCL to GVKEL on payment of amount due as per the settlement agreement.

e) The company has assessed and based on the valuation carried out and other relevant factors, no provision is considered necessary in the books of accounts towards the carrying value of investment in GVKEL of Rs 84,120 Lakhs (March 31,2023 Rs.74,122 Lakhs) and Loan of Rs.10,565 Lakhs (March 31,2023 Rs. 6,497 Lakhs).

51 . The company has made an investment in GVK Transportation Private Limited (GVKTPL) considering that GVKTPL does not have a certainty over the cash flows and timing of such cash flows in the underlying projects of GVKTPL, the Company has carried out an impairment assessment of its carrying value of investment in the earlier years.

GVKTPL has further made investments into three subsidiaries out of which two subsidiaries are facing uncertainties, detailed as follow:

a. GVK Bagodara Vasad Expressway Private Limited (GVK BVEPL)

A wholly owned step down subsidiary of GVKPIL has carried out project work towards the Concessionaire Agreement entered with Gujarat State Road Development Corporation Limited (GSRDC). During construction, there has been significant delays in fulfilling the obligations from GSRDC like providing Land required for construction, right of way, shifting of utilities etc., which has resulted in significant delays in construction. On March 27, 2018, GSRDC has issued a termination and arbitration notice as per which GSRDC has terminated the concession agreement and also has claimed an amount of Rs. 108,419 Lakhs. In response to the same, GVK BVEPL has written to GSRDC denying the claims from GSRDC and terminated the agreement. GVK BVEPL has also stated that the delay is due to the default from GSRDC. Also, GVK BVEPL has notified GSRDC that dispute settlement process will be as per the Concession Agreement.

GVK BVEPL has approached The International Centre for Alternative Dispute Resolution (ICADR) for appointment of Arbitration Tribunal (AT). Arbitration Tribunal is constituted, and the dispute is being addressed. GSRDC has filed a claim of Rs 108,419 lakhs and GVK BVEPL has filed its statement of Defense and a counter claim of Rs.91,325 lakhs as termination payment due to GSRDC default (apart from various other claims towards Loss of Profit, Interest Payment on Debts etc.) disputing the very process of termination and are also taking other necessary legal remedies in this regard. Initially GVK BVEPL intended to bring into substitution process, however despite best efforts of GVK BVEPL, substitution process could not be completed. Meanwhile GSRDC awarded project to two different contractors. Hence GVK BVEPL is no more going concern, and the financials are prepared accordingly since financial year ended March 31,2020.

GVK BVEPL is closely working with the lenders by explaining to them the intricacies of the project and outlining support required to give effect to the process of arbitration. Tribunal having heard arguments of both sides has given a split verdict, Justice Thakkar and Justice Panchal have rendered a combined award of Rs 41,296 Lakhs in favor of GSRDC and Justice Deepak Varma had passed a dissenting award of Rs.27,438 Lakhs in favor of the Company. Till date GVK BVEPL not yet received the signed copy of the order. Considering this split award and based on the facts, the company has filed an appeal before Commercial Court, Ahmedabad on November 20, 2023 and the matter is coming up for hearing on 20.06.2024.

b. GVK Deolikota Expressway Private Limited (GVK DKEPL)

A wholly owned step-down subsidiary of GVKPIL. On June 25, 2019, GVK DKEPL has issued a termination notice under Article 37.2.2 of the Concession Agreement for termination on account of material breach and defaults on the part of National Highway Authority of India (NHAI) during the course of construction like providing Right of Way (ROW), shifting of utilities, obtaining approvals & clearances, alternate route & prevention of complete user fee collection etc., which has resulted in significant delays in construction of expressway. Further, GVK DKEPL has claimed a termination payment of Rs. 169,650 lakhs

(apart from various other claims towards future loss, Loss of Toll Revenue, Loss suffered on account of additional overheads etc.) from NHAI as per the terms of the Concession Agreement. In response to the above notice, GVK DKEPL has received letter from NHAI dated July 03, 2019 denying the claim of GVK DKEPL stating that the termination notice issued under clause 37.2.2 is invalid as defaults alleged by GVK DKEPL are false and NHAI has not committed any material default in complying with the provisions of the Concession Agreement.

On September 12, 2019, NHAI has issued a termination notice as per clause 37.2.1 of the Concession Agreement for nonfulfilment of the obligation as stated in the Concession Agreement by Concessionaire. NHAI by virtue of this notice, is deemed to have taken possession and control of the project highway along with all the equipment on or at site. After this termination notice

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Mar 31, 2023

a. Terms/rights attached to equity shares

The Company has only one class of equity share having par value of Rs.1 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. 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.

Every holder of equity shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

Commitments and Contingencies

A. Leases

Operating lease commitments - Company as lessee

Operating leases are mainly in the nature of lease of office premises with no restrictions and are renewable/cancellable at the option of either of the parties. The Company has not entered into any non-cancellable leases. There is 10% escalation clause in the lease agreement. There are no sub-leases. There are no restrictions imposed by lease arrangements.

The Company has not recognised any contingent rent as expense in the Statement of Profit and Loss. The aggregate amount of operating lease payments recognised in the Statement of Profit and Loss is Rs. 4 lakhs (March 31,2022: Rs. 4 lakhs).

B. Capital and other commitments

i) Capital Commitments

The Company has no outstanding capital commitments as at year end. (March 31,2022: Nil)

ii) Other Commitments

a) The company has given undertaking to infuse equity aggregating to Rs. 474,843 lakhs (March 31,2022: Rs. 421,846 lakhs) in GVK Coal Developers (Singapore) Pte. Limited, towards shortfall, if any, of its loan repayment obligations [Also refer note C(iii) below]. Further, the Company has pledged 155,587,500 (March 31, 2022: 155,587,500), 130,287,382 (March 31, 2022: 22,495,000) and 48,000,000 (March 31,2022: 48,000,000) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Limited respectively for securing loan obtained by GVK Coal Developers (Singapore) Pte. Limited, an associate entity in which Company has 10% stake.

Security against loan taken by group companies

(i) The Company had provided security by way of pledge of 230,960,770 (March 31, 2022: 230,960,770) shares of GVK Energy Limited for loans taken by the aforesaid subsidiary/ joint venture entity.

(ii) The Company has provided security by way of corporate guarantees amounting to Nil (March 31,2022: Rs. 12,978 lakhs) to subsidiaries and joint ventures and Rs. 456,222 lakhs to the lenders of GVK Coal Developers (Singapore) Pte Ltd, an associate (March 31,2022: Rs. 420,654 lakhs) for various fund and nonfund based facility availed by them. Also refer note iii below

(iii) . Refer note 49 & 55.

B) Disclosures related to defined benefit plan

The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employees who have completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at retirement age.

The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:

32. Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure in consideration to the changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital. The Company includes within net debt, borrowings including interest accrued on borrowings, less cash and short-term deposits.

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 interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings.

No changes were made in the objectives, policies or processes for managing capital during the year ended March 31,2023.

33. Fair values

The management assessed that the fair value of loans given, trade receivables, cash and cash equivalents, other financial assets, short term borrowings, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities or interest bearing nature of these instruments. 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.

Set out below, is a comparison by class of the carrying amounts and fair value of the Group''s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

Level 1: Level 1 hierarchy includes financial instruments measuring using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing net asset value.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity shares, contingent consideration and indemnification asset included in level 3.

b) Valuation technique used to determine fair value

Specific valuation technique used to value financial instruments include:

- The fair value of investment in mutual funds is measured at quoted price or NAV.

- The fair values for non-current investments, other non-current financial assets and borrowings are based on discounted cash flows using a borrowing rate at the date of transition. They are classified as level 3 fair values in their fair value hierarchy due to the use of unobservable inputs, including own credit risk.

34. Significant accounting judgements, estimates and assumptions

The preparation of the Company''s 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.

A. Judgements

In the process of applying the Company''s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements.

i. Determination of control and accounting thereof

As detailed in the accounting policy, principles under Ind AS are different from the previous GAAP, especially with respect to

assessment of control of subsidiaries. Further, investment in GVK Coal Developers (Singapore) Pte. Ltd has been accounted as associate since the company participates in all significant financial and operating decisions. The company has therefore determined that it has significant influence over this entity, even though it only holds 10% of the voting rights.

ii. Impairment of non-current assets including investments in subsidiaries, joint ventures and associates

Determining whether investment are impaired requires an estimation of the value in use of the individual investment or the relevant cash generating units. The value in use calculation is based on Discounted Cash Flow (‘DCF'') model over the estimated useful life of the power plants, concession on roads etc. Further, the cash flow projections are based on estimates and assumptions relating to conclusion of tariff rates, operational performance of the plants and coal mines, life extension plans, availability and market prices of gas, coal and other fuels, restructuring of loans etc in case of investments in entities in the energy business, estimation of passenger traffic and rates and outcomes of litigations, and settlements that may be reached with lenders which are considered as reasonable by the management and significant uncertainties faced including absence of financial closure in respect of GVK Coal Developers (Singapore) Pte Ltd.

Based on such determination the Company has imparied carrying value of its investment in GVK Airports International Pte. Ltd Nil (March 31,2022: 669 Lakhs).

iii. Also refer note 54 on significant judgement on going concern ability of the Company.

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 has prepared financial statements 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.

(i) Taxes

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.

(ii) Defined employee benefit plans (Gratuity)

The cost of the defined benefit gratuity plan 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. Further details about gratuity obligations are given in note 27.

(iii) 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 Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements 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.

(iv) Depreciation on property, plant and equipment

Depreciation on property, plant and equipment is calculated on a straight-line basis using the rates arrived at based on the useful lives and residual values of all its property, plant and equipment estimated by the management. The management believes that depreciation rates currently used fairly reflect its estimate of the useful lives and residual values of property, plant and equipment, and the useful lives are in line with the useful lives prescribed under Schedule II of the Companies Act, 2013.

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the group and that are believed to be reasonable under the circumstances.

35 Financial risk management objectives and policies

Financial Risk Management Framework

The Company is exposed primarily to Credit Risk, Liquidity Risk and Market risk (fluctuations in foreign currency exchange rates and interest rate), which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

A Price risk

The company''s exposure to investment in mutual funds are subject to price and classified in the balance sheet as fair value through profit or loss.

Sensitivity

The table below summaries the impact of increase/decrease of the index on the company''s investment in mutual fund and profit/(loss) for the year.

B 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. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, loans and other financial assets. Trade receivables, Financial guarantee receivables (Other financial assets) and Loans given by the Company result in material concentration of credit risk as these are with related parties.

Exposure to credit risk:

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs. 8,303 lakhs (March 31,2022: Rs. 13,035 lakhs), being the total of the carrying amount of balances with trade receivables, Loans and Other financial assets.

Trade receivables, Other financial assets, Loans given:

An impairment analysis is performed at each reporting date. The Company does not hold collateral as security. Impairment analysis takes into account historical credit loss experience and adjusted for forward-looking information. Significant portion of trade receivables, other financial assets and loans given comprise receivables from related parties and not subject to significant credit risk based on past history.

C. Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

D. Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and interest rate risk. Financial instruments affected by market risk include loans and borrowings, investments, other financial assets and other financial liabilities.

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 change 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. As the Company has debt obligations with floating interest rates, exposure to the risk of changes in market interest rates are substantially dependent of changes in market interest rates.

As the company has no significant interest bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on the portion of loans and borrowings. With all other variables held constant, the Company''s profit/(loss) before tax is affected through impact on floating rate borrowings, as follows:

Foreign Currency exchange rate 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 investment in foreign entity and financial asset/liability in relation to foreign entity in respect of financial guarantee. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. The Company has not entered into derivative instruments during the year.

The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise is Nil.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rate, with other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities.

36. Segment reporting

In accordance with Indian Accounting Standard (Ind AS) 108 on Operating segments, segment information has been given in the consolidated financial statements of the Company, and therefore no separate disclosure on segment information is given in these financial statements.

38. Details of Benami Property held

The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.

39. Details relating wilful defaulter

The Company is not declared as wilful defaulter by any bank or financial institution (as defined under the Companies Act, 2013) or consortium thereof or other lender in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

40. The Company has complied with the number of layers for its holding in downstream companies prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.

41. Corporate Social Responsibility Expenditure

The compnay is not required to spend on Corporate Social Responsibility (CSR) in view of the continuing losses during the last three years.

42. Relationship with Struck off Companies

The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

43 .The Company has not advanced or loaned or invested funds to any other person(s) or entity(is), including foreign entities (Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

The Company has not received any fund from any person(s) or entity(is), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

44. Registration of charges or satisfaction with Registrar of Companies

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

45. Undisclosed income

The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (previous year) in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

46. Details of Crypto Currency or Virtual Currency

The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

47. Social Security Code, 2020

The Code on Social Security 2020 (‘the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued.

The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

49 .The Company has an investment in GVK Coal Developers (Singapore) Pte. Limited (GVK Coal) which is assessed as an associate to the parent Company. The parent Company exercises significant influence on GVK Coal as per Ind AS 28.

The company has also given guarantees and commitments for loans amounting Rs. 931,065 lakhs (March 31,2022: Rs. 858,478 lakhs) taken by GVK Coal as at March 31, 2023 part of which is collateralized by the pledge of 37% shares of GVK Airport Holdings Limited, and has also undertaken to provide financial assistance of USD 3.11 million (Rs. 2,557 lakhs) as at March 31, 2023 (March 31, 2022: Rs. 2,358 lakhs), an entity whose current liabilities exceeds current assets by USD 2,845 million (Rs. 2,339,320 lakhs) as at March 31,2023 (March 31,2022: USD 2,459 million (Rs. 1,864,024 lakhs)) and the entity has also incurred net losses of USD 212 Million (Rs.174,606 Lakh) for the nine months ended March 31,2023 (July 1,2021 to June 30,

2022; USD 308 Million (Rs.243,142 Lakh)) based on the audited financial statements. GVK Coal is witnessing various material uncertainties. The prices of the coal have fallen since GVK coal had acquired a stake in the coal mines. GVK Coal has not been able to achieve financial closure resulting in delays in commencement of mine development activity when compared to scheduled date, delays in entering into definitive agreements for port and rail development and agreement for sale of coal and also necessary environmental and regulatory clearances. Further, all the lenders of GVK Coal have classified the loan as nonperforming and the lenders had an option to curtail the rights of the company on various assets either on October 2015 or every year thereafter.

The lenders have also filed a claim in the High Court of Justice Business and Property Courts of England and Wales Commercial Courts (England Court) on November 09, 2020 and have sought to recover the amounts advanced to GVK Coal. Under the interim solution undertaking by the lenders dated March 23, 2017, the respective arguments of the lenders and the company were filed with the court. On June 13, 2022, the Judge has adjourned the starting of the trial to October, 2023. Despite the matter is pending before England Court, one of the lenders has filed an application under section 7 of the Insolvency and Bankruptcy Code 2016 to initiate Corporate Insolvency Resolution Process against the company (being guarantor for loan taken by GVK Coal) before National Company Law Tribunal, Hyderabad on July 14, 2022 and the company has filed the reply. The next date of hearing is 8th June 2023.

The Company is hopeful of achieving one time settlement with the lenders in view of its arrangement with Adani Airport Holdings Limited (AAHL) which is adequately incentivized to find solution with the lenders to get unencumbered ownership over the shares of GVK Airport Developers pledged with the lenders. The extent of the liability that may arise in respect of guarantees and commitments and the manner of such settlement is presently not ascertainable and accordingly no provision has been made in this regard in relation to any liability.

The company has provided for impairment of Rs 78,634 Lakhs for full value of its investment and receivable in earlier years in the absence of any certainty of realization either by use or from the settlement that may be reached.

50. Till 3rd February 2022, GVK Energy Ltd (GVKEL) has been considered as jointly controlled entity under IND - AS 28 "Investment in associate and joint venture", based on the protective rights available to the other investors of GVKEL. As on 4th February 2022, the company (GVKPIL) has acquired the control over the operations of GVKEL from those Investors as per the Termination Agreement dated 3rd February 2022 resulting in relinquishment of protective rights available to investors. GVKPIL has also bought 1 1,72,46,622 shares of GVKEL form those Investors under this agreement. Accordingly, GVKEL and its group companies (Energy group) are considered as Subsidiaries of the GVKPIL w.e.f. 4th February 2022.

Certain subsidiaries and jointly controlled entity (group companies) of GVK Energy Limited (''GVKEL'') are facing uncertainties as detailed below:

a) The Hon''ble Supreme Court of India had deallocated dedicated coal mine allotted to GVK Power (Goindwal Sahib) Limited (GVKPGSL). GVK Coal (Tokisud) Private Limited (GVKCTPL), a subsidiary company of GVKEL and mine operator was offered compensation by the Nominated Authority of Rs. 11,129 Lakhs as against carrying value of assets of Rs. 31,113 Lakhs as at March 31,2017. GVKCTPL had appealed against the said order in the Hon''ble High Court of Delhi. The aforesaid court vide its order dated March 09,2017, directed GVKCTPL to submit its claim to the adjudicating authority constituted under the Coal Mines (Special Provisions) Act, 2015. Subsequently GVKCTPL submitted its claim for the balance amount of Rs. 19,882 Lakhs to the aforesaid authority. The GVKEL has also given corporate guarantee for the loan taken by GVKCTPL. The nominated authority under the Ministry of Coal vide its order dated 16th March 2022 has further approved and released compensation of Rs.13,867 lakhs. Out of this an amount of Rs.8,883 lakhs have been deposited by nominated authority in interest bearing account with Registrar General of the Court as per the directions of the high court of Delhi dated 11th April 2022 and an amount of Rs.4,984 lakhs have been paid to lenders by nominated authority towards the balance dues payable as per the claims made by the lenders as on the date of vesting orders less the amount already paid to the lenders. Nominated authority has advised in the above order to approach Coal Tribunal in respect of disputes including the compensation disallowed with regards to R&R costs. The company has accordingly filed the appeal under sec. 27 of the Coal Mines (Special Provisions) Act, 2015 with Coal Tribunal for a claim of Rs 34,830 lakhs on August 01,2022 and the next hearing of the case is scheduled on June 22, 2023.

Management believes that GVKCTPL will be appropriately reimbursed for cancelled coal mine and accordingly no provision is required towards corporate guarantee given by GVKEL for loan taken by GVKCTPL and carrying value (Balance of claims) of Rs 6,015 Lakhs.

b) GVK Power (Goindwal Sahib) Limited (“GVKPGSL”) a subsidiary company of GVKEL, has been admitted into Corporate Insolvency Resolution Process on October 10, 2022 based on petition filed by Axis Bank Ltd, one of the lenders in the consortium of GVKPGSL with the Hon''ble NCLT, Hyderabad invoking Corporate Insolvency Resolution Process against the company. GVKEL has filed an appeal against this order before NCLAT, Chennai on October 27, 2022 and GVKEL filed appeal in Supreme court on May 19, 2023 as the appeal filed by GVKEL dismissed by NCLAT, Chennai on April 24, 2023.

Interim Resolution professional appointed by NCLT has taken possession of all assets of GVKPGSL.

The GVKEL has provided Corporate Guarantee to the lenders of GVKPGSL with respect to the amount lent by them. This Corporate Guarantee may be invoked by the Lenders of GVKPGSL considering the default therein. In such an eventuality, GVKEL may need to reimburse the same, especially considering that the net assets of GVKPGSL is negative. However, the extent of the liability that may arise in respect of guarantee is presently not ascertainable and accordingly no provision has been made in this regard in relation to such liability.

c) There has been uncertainty regarding supplies/availability of gas to power plant of GVK Gautami Power Limited (GVKGPL), a jointly controlled entity of GVKEL. The company has incurred losses of Rs. 35,783 Lakhs during the year ended March 31, 2023 (March 31, 2022: Rs. 37,439 Lakhs) and the net worth of the company has been eroded upto and including the financial year ended March 31, 2023. The GVKGPL is confident that Government of India will continue to take necessary steps/initiatives to improve the situation of natural gas. However, in the interim the GVKGPL is working with the lenders for one-time settlement proposal wherein the loans would be settled at the value of the plant to be realized on its sale to AP DISCOM. Further, Management, based on its rights under power purchase agreement to recover capacity charges and in view of installing alternate fuel equipment and on the basis of aforesaid discussions, believes that the GVKGPL continues to be in operation in foreseeable future despite continued losses or will be able to amicably settle the loan liability as part of one-time settlement proposal. The GVKEL has also given corporate guarantee for the loan taken by GVKGPL. The GVKEL believes that no provision for impairment/diminution is required towards carrying value of assets aggregating to Rs. 79,259 Lakhs as at March 31,2023 of GVKGPL (March 31,2022 of Rs.82,799 lakhs) and also no provision towards corporate guarantee given by GVKEL to GVKGPL is necessary.

Trade receivables of GVK Gautami Power Limited, includes outstanding minimum alternate tax amounts claims for reimbursement under the provisions of Income Tax Act, 1961 for the period commencing from the financial year 2009-10 to 2010-11, aggregating to Rs. 1,500 Lakhs (March 31,2022: Rs. 1,500 Lakhs) which has been disputed by AP Transco/subject to approvals. As lenders have classified the borrowings of the GVKGPL as ""Non-performing Assets (NPA)”. Indian Overseas Bank and Union Bank of India, members of the consortium, issued notices dated 13th December, 2021 and 16th March, 2022 respectively under Sub-section (4) of Section 19 of the Recovery of Debts due to banks and financial institutions Act,1993, read with Sub Rule (2A) of Rule 5 of the Debt Recovery Tribunal (Procedure) Rules 1993 directing GVKGPL to file necessary written statement and reply. GVKGPL is in the process of contesting the above notices before the Debt Recovery Tribunal.

Further, Edelweiss Asset Reconstruction Company Ltd. and Bank of Baroda issued Loan recall notices dated 21st January, 2022 and 4th February, 2022 respectively. Edelweiss Asset Reconstruction Company Ltd issued a notice dated 19th July, 2022 under section 13(2) of The Securitization and Reconstruction of Financial Assets and enforcement of Security Interest Act 2002 ("SARFAESI Act") read with Security interest (Enforcement) Rules, 2002 ("Rules" ) and next hearing of the case is schedule on June 05, 2023.

Moreover, Edelweiss Asset Reconstruction Company Ltd, one of the lenders in the consortium of GVKGPL has filed petition with the Hon''ble NCLT, Hyderabad invoking Corporate Insolvency Resolution Process against the company and the next hearing of the case is scheduled on May 29, 2023.

d) The company has assessed and based on the valuation carried out and other relevant factors, no provision is considered necessary in the books of accounts towards the carrying value of investment in GVKEL of Rs 74,122 Lakhs (March 31,2022 Rs.74,122 Lakhs) and Loan of Rs.6,497 Lakhs (March 31,2022 Rs.1 1,297 Lakhs).

e) Edelweiss (through its debentures trustee namely Catalyst Trusteeship Limited) has also filed petition with the Hon''ble NCLT, Hyderabad invoking Corporate Insolvency Resolution Process against GVKPIL on October 21,2022 and the next hearing of the case is scheduled on June 07, 2023

51. The company has made an investment in GVK Transportation Private Limited (GVKTPL) amounting to Rs. 4,977 lakhs (Includes deemed investment of Rs. 1,181 lakhs) and given a loan amounting to Rs. 11 lakhs as at March 31,2023. Considering that GVKTPL does not have a certainty over the cash flows and timing of such cash flows in the underlying projects of GVKTPL, the Company has carried out an impairment assessment of its carrying value of investment and other receivables on a value in use basis.

GVKTPL has further made investments into three subsidiaries out of which two subsidiaries are facing uncertainties, detailed as follows:

a. GVK Bagodara Vasad Expressway Private Limited (GVK BVEPL)

GVK Bagodara Vasad Expressway Private Limited (GVK BVEPL), a wholly owned step down subsidiary of GVKPIL has carried out project work towards the Concessionaire Agreement entered with Gujarat State Road Development Corporation Limited (GSRDC). During construction, there has been significant delays in fulfilling the obligations from GSRDC like providing Land required for construction, right of way, shifting of utilities etc., which has resulted in significant delays in construction. On March 27, 2018, GSRDC has issued a termination and arbitration notice as per which GSRDC has terminated the concession agreement and also has claimed an amount of Rs. 108,419 Lakhs. In response to the same, GVK BVEPL has written to GSRDC denying the claims from GSRDC and terminated the agreement. GVK BVEPL has also stated that the delay is due to the default from GSRDC. Also, GVK BVEPL has notified GSRDC that dispute settlement process will be as per the Concession Agreement.

GVK BVEPL has approached The International Centre for Alternative Dispute Resolution (ICADR) for appointment of Arbitration Tribunal (AT). Arbitration Tribunal is constituted and the dispute is being addressed. GSRDC has filed a claim of Rs 108,419 lakhs and GVK BVEPL has filed its statement of Defense and a counter claim of Rs.91,325 lakhs as termination payment due to GSRDC default (apart from various other claims towards Loss of Profit, Interest Payment on Debts etc.) disputing the very process of termination and are also taking other necessary legal remedies in this regard. Initially GVK BVEPL intended to bring into substitution process, however in spite of best efforts of GVK BVEPL, substitution process could not be completed. Meanwhile GSRDC awarded project to two different contractors. Hence GVK BVEPL is no more going concern and the financials are prepared accordingly since financial year ended March 31,2020.

GVK BVEPL is closely working with the lenders by explaining to them the intricacies of the project and outlining support required to give effect to the process of arbitration. Tribunal heard arguments of both sides in respect of Application dated 23-09-2021 and the hearing was concluded. Both parties filed the written arguments and Tribunal reserved the orders on February 24, 2023 and GSRDC has approached the High Court of Gujarat for seeking the extension of mandate of the Tribunal for rendering the award in the Arbitration Proceeding on March 15, 2023. The next hearing of the case is scheduled on June 06, 2023.

b. GVK Deolikota Expressway Private Limited (GVK DKEPL)

GVK Deoli Kota Expressway Private Limited (GVK DKEPL), a wholly owned step-down subsidiary of GVKPIL. On June 25, 2019, GVK DKEPL has issued a termination notice under Article 37.2.2 of the Concession Agreement for termination on account of material breach and defaults on the part of National Highway Authority of India (NHAI) during the course of construction like providing Right of Way (ROW), shifting of utilities, obtaining approvals & clearances, alternate route & prevention of complete user fee collection etc., which has resulted in significant delays in construction of expressway. Further, GVK DKEPL has claimed a termination payment of Rs. 169,650 lakhs (apart from various other claims towards future loss, Loss of Toll Revenue, Loss suffered on account of additional overheads etc.) from NHAI as per the terms of the Concession Agreement. In response to the above notice, GVK DKEPL has received letter from NHAI dated July 03, 2019 denying the claim of GVK DKEPL stating that the termination notice issued under clause 37.2.2 is invalid as defaults alleged by GVK DKEPL are false and NHAI has not committed any material default in complying with the provisions of the Concession Agreement.

On September 12, 2019, NHAI has issued a termination notice as per clause 37.2.1 of the Concession Agreement for nonfulfillment of the obligation as stated in the Concession Agreement by Concessionaire. NHAI by virtue of this notice, is deemed to have taken possession and control of the project highway along with all the equipment on or at site. After this termination notice toll plaza is deemed to have been transferred to NHAI and from September 16, 2019 onwards NHAI started collecting the toll on the project highway.

The matter is under Arbitration and the company has filed claim documents with Tribunal and NHAI has filed statement of defense and next cross examining the witness of NHAI is schedule on 24, 25, 26 & 29 of July, 2023.

The Concession Agreement being the sole agreement executed by the Company, termination of the same has now resulted into liquidation basis of accounting which has been adopted in preparation of these financial statements of GVK DKEPL. Under the liquidation basis of accounting, all assets and liabilities are measured at their net realizable value. As toll collection right has been taken over by NHAI from the Company, Company has impaired toll and premium assets against premium liability (not due) and claim receivable from NHAI.

c) J.C. Flowers Asset Reconstruction Pvt Ltd ( Debt assigned by Yes bank) has also filed petition with the Hon''ble NCLT, Hyderabad invoking Corporate Insolvency Resolution Process against GVKTPL on February 24, 2022 and the next hearing of the case is scheduled on May 29, 2023.

Based on such assessment management has made an impairment provision amountng to Rs 4,977 lakhs (which includes deemed investment of Rs. 1,181 lakhs) in the earlier years.

52. GVK Perambalur SEZ Private Limited (GVK SEZ), a wholly owned subsidiary company. The Company has an investment and has receivables (Loan given to subsidiaries classified as equity) aggregating to Rs 10,913 Lakhs (March 31, 2022: Rs 10,230 Lakhs). GVK SEZ stood as a Guarantor and mortgaged its land admeasuring 2,506.25 Acres to Syndicate Bank (since merged with Canara Bank) on account of loans taken by the company. GVK PIL has since repaid the loan taken from Canara Bank and the bank has also acknowledged the same. However, inspite of the same, Canara bank has not issued a no due certificate and has not returned the original title documents. The Canara Bank has exercised the right of general lien under section 171 of Indian Contract Act,1872 and has enforced general lien over the title deeds in the name of GVK SEZ for liabilities of GVK Coal (Singapore) PTE Ltd, an associate of GVK PIL. GVK PIL and GVK SEZ have jointly filed writ petition stating that Bank exercising of general lien under section 171 of the Indian contract Act, 1872 is wholly misconceived and illegal and contrary to the terms of Guarantee extended by the GVK SEZ. Further, Enforcement Directorate (ED) has provisionally attached the said Land property in view of investigation under Prevention of Money Laundering Act (PMLA) (Refer Note 42). However, Hon''ble High Court of Telangana has stayed the proceedings by issuing Show Cause Notice to ED. As on March 31,2023, the status remains the same.

53. In June 2020, Central Bureau of Investigation (CBI) has registered a First Information Report (FIR) against MIAL, its holding Company GVK Airport Holdings Limited (GVKAHL) (both are erstwhile step-down subsidiaries of the Company), the Chairman and Vice Chairman of the Company and has initiated investigation on various matters alleging misuse of funds of MIAL including for the benefit of other GVK group and related parties. CBI has filed a charge sheet before the Chief Metropolitan Court, Mumbai on February 09, 2023, laying as allegation under section 120B read with section 420 of IPC against MIAL, Vice Chairman, Director & CFO of the Company and four other GVK group companies apart from others. The Court has granted bail to all the accused. The main issue alleged is siphoning of fund of MIAL eventually causing a loss to AAI. After going through the Charge Sheet, the company is of the view that the case will not stand the test of scrutiny of the court and will eventually be dismissed. The company is also of the view that the charges are unsubstantiated, and no offence u/s section 420 IPC has been made out as there is no loss to AAI, Government, or any Tax Authorities as alleged. Considering the status of the proceedings, the implications, if any, that may arise can''t be ascertained and would be considered in the financial statements on conclusion of the aforesaid proceedings.

The Enforcement Directorate (ED) has also taken up the investigation under the Prevention of Money Laundering Act (PMLA) on the basis of an FIR registered by the CBI. ED has filed a complaint in April 2021 on the same matters against the above-mentioned parties and some of the subsidiaries, joint ventures and step down subsidiaries of the Company, their directors and officers, and the concerned parties are cooperating with the investigating agencies. ED has filed a complaint before the City Court and Additional Session Judge, Greater Bombay under Section 45 of Prevention of Money Laundering Act, 2002 for commission of offence of Money laundering under section 3, read with section 70, Punishable u/s 4 of the Prevention of Money Laundering Act, 2002. The Audit Committee of the Company, based on the legal advice received by the Audit committee of MIAL, have decided not to proceed with any independent investigation on the matters mentioned in the FIR or the complaint filed by ED. Considering the status of the proceedings, the implications, if any, that may arise can''t be ascertained and would be considered in the financial statements on conclusion of the aforesaid investigation.

54. As at March 31, 2023, The company has also provided guarantees and commitments and/or has undertaken to provide financial assistance on behalf of various entities and as further detailed in notes 49, 50, 51(a) and 51(b) (referring to notes on GVK Coal Developers (Singapore) Pte Limited, GVK Energy Limited, GVK Bagodara Vasad Expressway Private Limited and GVK Deoli Kota Expressway Private Limited) uncertainties are being faced by various projects such as delays in development of coal mines in an overseas project where the Company has provided guarantees and commitments for the borrowings, losses incurred by gas based power plant in the absence of gas and litigations on rights to claim capacity charge, . arbitration on delay of commencement of road projects, termination of various projects etc. These factors may indicate significant doubt on going concern ability of the company. Notwithstanding the above, the financial statements of the company have been prepared on going concern basis as management believes that the company would be able to ultimately meet its commitments, reduce debt by stake sale and the entities on whose behalf guarantees/ commitments have been extended would be able to meet their obligations. Further, the Management is confident that aforesaid entities would win litigations; obtain approvals of regulators; will reach an optimal solution with non-controlling shareholders and lenders; obtain requisite gas allocation etc. as required despite current macro-economic environment challenges.

55. The Company and its erstwhile subsidiary GVK Airport Developers Limited (GVK ADL) had entered into a binding agreement comprising a co-operation agreement and other related agreements with Adani Airport Holdings Limited (AAHL) on August 31,2020 and subsequent dates. This includes acquisition of the debt by AAHL from various lenders of GVKADL with a view to release pledge on certain shares of GVK Airport Holdings Limited (GVKAHL) and with an ability for AAHL to convert the acquired debt from the lenders of GVKADL to equity so as to acquire equity interest in Mumbai International Airport Limited (MIAL) and also acquiring Company''s equity and other instruments in GVKADL and also possible acquisition/ settlement of debt of GVK Coal Developers (Singapore) Pte Ltd (with a view to release pledge on remaining shares of GVKAHL). AAHL has since acquired the debt of GVKADL from lenders and has converted the same to equity acquiring controlling interest in GVKADL on July 13, 2021. Consequently GVKADL, Bangalore Airport & Infrastructure Developers Limited (BAIDL), GVKAHL, MIAL and Navi Mumbai International Airport Limited (NMIAL) are no longer subsidiaries of the Company from July 13, 2021. The company has recognized a profit of Rs.4,576 Lakh on account of transfer of Equity shares and a gain of Rs 2,336 Lakhs on account of fair value of balance of the investment held in GVKADL for the year ended March 31,2022.

The broad contours of the co-operation and related agreements is detailed below:

(i) Acquisition of debt and related accrued interest with carrying value in the financial statements of GVKADL of Rs. 255,107

lakhs by AAHL.

(ii) AAHL acquiring certain securities of Sutara Roads & Infra Limited, a subsidiary of the Company and another Company of the promoter group to be used exclusively for financial support of any of its affiliates and affiliates of GVKPIL post the date of co-operation agreement.

(iii) Acquiring equity of Rs. 30,000 lakhs and other instruments of Rs. 100,000 lakhs held by GVKPIL and its subsidiary in GVKADL by AAHL to be settled by transfer of securities held by AAHL referred to in (ii) above.

(iv) GVKPIL and AAHL have also agreed on certain steps to be taken in respect of lenders of GVK Coal.

GVKPIL has sold its majority holding in GVKADL to AAHL and AAHL has acquired and hold the securities as per Para (ii) above during the financial year ended March 31, 2022. The management of the company considered GVKPIL as beneficial owner of the Optionally Convertible Debentures (OCDs) of Rs.137,464 Lakhs held by AAHL as per Para (ii) above in view of the terms of arrangement. Accordingly, the securities held in the name of AAHL have been classified as Current Investments of GVKPIL at Rs.1,37,464 Lakhs in the financial statements.

The full financial effect of the above cannot be estimated as certain aspects of the transaction including settlement with GVK Coal lenders are yet to be concluded.

56 .The Board of Directors has approved the scheme of amalgamation in their meeting 23rd March, 2022 for with regard to Amalgamation of

- GVK Airport Services Private Limited (Transferor Company -1),

- GVK Power (Khadur Sahib) Private Limited (Transferor Company -2),

- GVK Shivpuri Dewas Expressway Private Limited (Transferor Company -3),

- Sutara Roads & Infra Limited (Transferor Company -4)

- GVK Power & Infrastructure Limited (Transferee Company)

The application has filed with National Company Law Tribunal, Hyderabad on 31st March, 2022, seeking for the dispensation of shareholders & credits meeting and same has been allowed by order dated January 09, 2023. NCLT has directed the applicant companies to send the copies of proposed scheme to Statutory Authorities for their objection before formal approval of scheme of Arrangement. So far, the company have not received any comment from any these authorities. All the above companies are finalizing the company petition to be filed with NCLT.

57 .Certain amounts (currency value or percentages) shown in the various tables and paragraphs included in the standalone financial statements have been rounded off or truncated as deemed appropriate by the management of the Company.

58. Previous year''s figures have been regrouped/reclassified , wherever necessary, to conform to the current year''s classification.

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Mar 31, 2018

1 Corporate information

GVK Power & Infrastructure Limited (‘the Company’ or ‘GVKPIL’) provides operation and maintenance services, manpower and consultancy services and incidental services to owners of power plants, airports etc. The Company has also acquired substantial ownership interest into power companies, airports, roads and companies providing infrastructure facilities. The registered office of the company is located at ‘Paigah House’, 156-159 Sardar Patel Road Secunderabad, Telangana- 500003.

2. Statement of significant accounting policies

2.1 Basis of preparation

i. Compliance with Ind AS

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act., 2013 (the Act), read with Rule 7 of the Companies (Indian Accounting Standards) Rules, 2015, as amended and other relevant provisions of the Act.

(ii) Historical cost convention

The financial statements have been prepared on a historical cost basis, except the following:

- certain financial assets and liabilities are measured at fair value

- defined benefit plans - plan assets are measured at fair value.

a. Terms/rights attached to equity shares

The Company has only one class of equity share having par value of Rs.1 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. 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.

Every holder of equity shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote..

a) Term loan aggregating to Rs. 9,745 (March 31, 2017: Rs. 1 1,276) (excluding Interest) is secured by first pari-passu charge on the current assets, present and future of the Company and pledge of 299,000 preference shares of GVK Airport Developers Limited out which 239,800 preference shares are held by Sutara Roads & Infra Limited. The loan is further secured by subservient mortgage of property, admeasuring 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited and carries an effective interest of 14.33% per annum. The loan is repayable in twenty four unequal monthly instalments after a moratorium of twelve months from the date of first drawdown viz. April 30, 2016 (Refer note 39).

b) Term loan aggregating to Rs. 849 (March 31, 2017: Rs. 14,012) (excluding interest) is secured by mortgage of property, admeasuring 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited and carries an effective interest of 14.50% per annum. The loan is repayable after a period of 35 months from the date of first drawdown viz. August 27, 2015 (Refer note 39).

b. Significant estimates

In calculating the tax expense for the current and previous period, the company has treated finance costs as non deductible expense for tax purposes. However, the tax legislation in relation to these expenditures is not clear and the company has on prudent basis, considered the same as non-deductible expense and the income tax assessments of the company are under dispute with Income Tax Authorities with respect to this matter. If the ruling should be in the favor of the Company, this would reduce the current tax payable and current tax expense by Rs. 817 (March 31, 2017: Rs. 1,296).

3. Earning per equity share (EPS)

Basic and Diluted EPS amounts are calculated by dividing the profit/ (loss) for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year. There are no potentially dilutive equity shares in the Company.

The following reflects the income and share data used in the basic and diluted EPS computations:

4. Commitments and Contingencies

A. Leases

a. Operating lease commitments - Company as lessee

Operating leases are mainly in the nature of lease of office premises with no restrictions and are renewable/cancellable at the option of either of the parties. The Company has not entered into any non-cancellable leases.

There is no escalation clause in the lease agreement. There are no sub-leases. There are no restrictions imposed by lease arrangements. The aggregate amount of operating lease payments recognised in the Statement of Profit and Loss is Rs. 11 (March 31, 2017: Rs. 12).

The Company has not recognised any contingent rent as expense in the Statement of Profit and Loss.

B. Capital and other commitments

i) Capital Commitments

The Company does not has any outstanding capital commitments as at year end. (March 31, 2017: Nil)

ii) Other Commitments

a) The Company has outstanding equity commitments to fund subsidiaries under construction stage aggregating to Rs. Nil (March 31, 2017: Rs. 114,910).

b) The company has given undertaking to infuse equity aggregating to Rs. 383,561 (March 31, 201 7: Rs. 383,576) in GVK Coal Developers (Singapore) Pte. Limited, towards shortfall, if any, of its loan repayment obligations. Further, the Company has pledged 1 55,587,500 (March 31, 2017: 1 55,587,500), 22,495,000 (March 31, 2017: 22,495,000) and 48,000,000 (March 31, 201 7: 48,000,000) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Limited respectively for securing loan obtained by GVK Coal Developers (Singapore) Pte. Limited, an entity in which Company has 10% stake. Management believes that GVK Coal Developers (Singapore) Pte. Limited will be able to meet its obligations.

c) During the year ended March 31, 2011, the Company, GVK Energy Limited (jointly controlled entity) and certain private equity investors (‘investors’) had entered into an investment agreement pursuant to which the Company has undertaken to conduct an initial public offering of the GVK Energy Limited’s equity shares (‘Qualified IPO’ or ‘QIPO’) within 72 months from the date of investment agreement (preferred listing period). If the GVK Energy Limited does not make a QIPO during the preferred listing period and no offer for sale or demerger takes place within 12 months of the preferred listing period, then, at any time thereafter, the investors will have a put option with respect to all of the securities held by the Investor (“Put Right”) on the Company and the GVK Energy Limited at the higher of i) 20% IRR from the date of investment to the date of receipt of proceeds from the investor (“Put IRR”) and ii) the fair market value of the investor’s shares. Provided the Put IRR shall be reduced to 15%, if at least 3 private sector initial public offerings with an issue size of Rs.100,000 or more each have not taken place in India between the 48th month to the 72nd month from date of investment agreement.

The Company based on legal advice believes that the put option with guaranteed return is not enforceable/ in view of the regulations of Reserve Bank of India and hence no liability towards the same has been accounted in the financial statements.

C. Contingent liabilities

Direct and indirect taxes

(i) Income tax demand for assessment year 2009-10 Rs. 10 (March 31, 2017: Rs. 10), for assessment year 2010-11 for Rs. 279 (March 31, 2017: Rs. 279), for assessment year 2011-12 for Rs. 11 (March 31, 2017: Rs. 11) and for assessment year 2012-13 Rs. 44 (March 31, 2017: 44).

(ii) The Company had received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duty of Rs. 2,829 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has received a favorable order from the Hon’ble High Court of Andhra Pradesh dated July 06, 2017 that stamp duty is not applicable on the above transfer of shares, hence the order has been set aside. Contigent liability in this regard is Rs. Nil (March 31, 2017 : Rs.(2,829)

Security against loan taken by others

i) The Company had provided security by way of pledge of 251,999,900 (March 31, 2017: 251,999,900) shares of GVK Airport Developers Limited for loans taken by the aforesaid subsidiary.

(ii) The Company had provided security by way of pledge of 230,960,770 (March 31, 2017: 230,960,770) shares of GVK Energy Limited for loans taken by the aforesaid joint venture entity.

(iii) The Company has provided security by way of corporate guarantees amounting to Rs. 209,445 (March 31, 2017: Rs. 162,538) to subsidiaries and joint ventures and Rs. 368,519 to an associate (March 31, 2017: Rs. 369,975) for various fund and non-fund based facility availed by them.

Management is of the opinion that the aforesaid companies will be able to meet their obligations as they arise and consequently no adjustment is required to be made to the carrying value of the security and guarantees provided.

5. Employee benefits

A) Defined contribution plan

B) Disclosures related to defined benefit plan

The Company has a defined benefit gratuity plan in India (funded). The Company’s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age.

The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:

1. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

2. The expected rate of return on assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

3. The Company expects to contribute Rs. 1 to gratuity in the next year (March 31, 2017: Rs. 1)

6. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defined under the provisions of “Micro, small and medium enterprises Act, 2006” is based on Management’s knowledge of their status. There are no dues to micro, small and medium enterprises as at the year end.

7. In respect of the amounts mentioned under section 125 of the Companies Act, 2013 there are no dues that are to be credited to the Investor Education and Protection Fund as at the year end.

8. Related Parties

(a) Related parties where control exists

GVK Jaipur Expressway Private Limited GVK Airport Developers Limited (GVKADL)

Goriganga Hydro Power Private Limited (upto December 31, 2017)

GVK Perambalur SEZ Private Limited

GVK Oil & Gas Limited (upto December 31, 2017)

GVK Developmental Projects Private Limited GVK Airport Holdings Limited (GVKAHL)

PT.GVK Services, Indonesia.

GVK Transportation Private Limited

GVK Ratle Hydro Electrical Projects Private Limited

GVK Energy Venture Private Limited (upto December 31, 2017)

GVK Bagodara Vasad Expressway Private Limited

GVK Deoli Kota Expressway Private Ltd

Bangalore Airport & Infrastructure Developers Limited

Mumbai International Airport Private Limited

GVK Airports International Pte Ltd

GVK Airport Services Private Limited

Sutara Roads & Infra Limited

GVK Shivpuri Dewas Expressway Private Limited

(b) Related parties where joint control exists

GVK Energy Limited

GVK Industries Limited

Alaknanda Hydro Power Company Limited

GVK Power (Goindwal Sahib) Limited

GVK Gautami Power Limited

GVK Power (Khadur Sahib) Private Limited

GVK Coal (Tokisud) Company Private Limited

Mumbai Aviation Fuel Farm Facility Private Limited

Mumbai Airport Lounge Services Private Limited

(c) Associates

Seregraha Mines Limited

Bangalore International Airport Limited (upto July 13, 2017)

GVK Coal Developers (Singapore) Pte Ltd

(d) Key management personnel

Dr. GVK Reddy - Chairman Mr. G V Sanjay Reddy - Director Mr A Issac George - Director Mr Krishna R Bhupal - Director

(e) Enterprises over which the key management personnel exercise significant influence

TAJ GVK Hotels & Resorts Limited

Orbit Travels & Tours Private Limited

GVK Technical & Consultancy Services Private Limited

Pinakini Share and Stock Broker Limited

GVK Employee Welfare Trust

Crescent EPC Projects and Technical Services Limited (Formerly GVK Projects and Technical Services Limited)

9. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company manages its capital structure in consideration to the changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, borrowings including interest accrued on borrowings and trade payables, less cash and short-term deposits.

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 interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. The Company has delayed repayment of dues to banks and financial institutions during the year. Hence, the entire portion of long term borrowing has been classfied as current.

10. Significant accounting judgements, estimates and assumptions

The preparation of the Company’s 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.

A. Judgements

In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements.

i. Impairment of non-current assets including investments in subsidiaries, joint ventures and associates

Determining whether investment are impaired requires an estimation of the value in use of the individual investment or the relevant cash generating units. The value in use calculation is based on Discounted Cash Flow (‘DCF’) model over the estimated useful life of the power plants, concession on roads, airports etc. Further, the cash flow projections are based on estimates and assumptions relating to conclusion of tariff rates, operational performance of the plants and coal mines, life extension plans, availability and market prices of gas, coal and other fuels, restructuring of loans etc in case of investments in entities in the energy business, estimation of passenger traffic and rates and favorable outcomes of litigations etc. in the airport and expressway business which are considered as reasonable by the management.

ii. Determination of control and accounting thereof

As detailed in the accounting policy, principles under Ind AS are different from the previous GAAP, especially with respect to assessment of control of subsidiaries. Accordingly certain entities like GVK Energy Limited, where the company has majority shareholding, they have been accounted as joint venture entity on account of certain participative rights granted to other partners/ investors under the shareholding agreements. Further, investment in GVK Coal Developers (Singapore) Pte. Ltd has been accounted as associate since the company participates in all significant financial and operating decisions. The company has therefore determined that it has significant influence over this entity, even though it only holds 10% of the voting rights.

Under Ind AS, joint ventures are accounted under the equity method as per Ind AS 28 against the proportionate line by line consolidation under previous GAAP.

iii. Also refer note 45 on significant judgement on going concern ability of the Company.

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 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.

(i) Taxes

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.

Also refer note 30(b) for significant estimates for income taxes.

(ii) Defined employee benefit plans (Gratuity)

The cost of the defined benefit gratuity plan 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. Further details about gratuity obligations are given in Note 33.

(iii) 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 Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements 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.

(iv) Depreciation on property, plant and equipment

Depreciation on property, plant and equipment is calculated on a straight-line basis using the rates arrived at based on the useful lives and residual values of all its property, plant and equipment estimated by the management. The management believes that depreciation rates currently used fairly reflect its estimate of the useful lives and residual values of property, plant and equipment, and the useful lives are in line with the useful lives prescribed under Schedule II of the Companies Act, 2013.

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the group and that are believed to be reasonable under the circumstances.

11 Financial risk management objectives and policies

Financial Risk Management Framework

The Company is exposed primarily to Credit Risk, Liquidity Risk and Market risk (fluctuations in foreign currency exchange rates and interest rate), which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

A Price risk

The company’s exposure to investment in mutual funds are subject to price and classified in the balance sheet as fair value through profit or loss.

Sensitivity

The table below summaries the impact of increase/decrease of the index on the company’s investment in mutual fund and profit/(loss) for the period.

B 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. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, loans and other financial assets. Trade receivables, Financial guarantee receivables (Other financial assets) and Loans given by the Company result in material concentration of credit risk as these are with related parties.

Exposure to credit risk:

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs. 9,762 (March 31, 2017: Rs. 10,275), being the total of the carrying amount of balances with trade receivables, Loans and Other financial assets.

Trade receivables, Other financial assets, Loans given:

An impairment analysis is performed at each reporting date. The Company does not hold collateral as security. Impairment analysis takes into account historical credit loss experience and adjusted for forward-looking information. Significant portion of trade receivables, other financial assets and loans given comprise receivables from related parties and not subject to significant credit risk based on past history.

C Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

D Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and interest rate risk. Financial instruments affected by market risk include loans and borrowings, investments, other financial assets and other financial liabilities.

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 change 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. As the Company has debt obligations with floating interest rates, exposure to the risk of changes in market interest rates are substantially dependent of changes in market interest rates.

As the company has no significant interest bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on the portion of loans and borrowings. With all other variables held constant, the Company’s profit/(loss) before tax is affected through impact on floating rate borrowings, as follows:

Foreign Currency exchange rate 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 investment in foreign entity and financial asset/liability in relation to foreign entity in respect of financial guarantee. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. The Company has not entered into derivative instruments during the year.

The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are as under:

* Amount in INR is at basis the amortised cost valuation.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rate, with other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities.

12. Segment reporting

In accordance with Indian Accounting Standard (Ind AS) 108 on Operating segments, segment information has been given in the consolidated financial statements of the Company, and therefore no separate disclosure on segment information is given in these financial statements.

13. The company has an investment in GVK Coal Developers (Singapore) Pte. Limited (GVK Coal) which is assessed as an associate to the Company. The Company exercises significant influence on GVK Coal as per Ind AS 28.

The Company has made investments and has receivables aggregating to Rs. 69,414 (March 31, 2017: Rs. 51,815 ) and provided guarantees and commitments for loans amounting Rs. 752,080 (March 31, 2017: Rs. 752,1 10 ) taken by GVK Coal as at March 31, 2018, and has undertaken to provide financial assistance of USD 7.83 million (Rs. 5,009 ) as at March 31, 2018, an entity whose current liabilities exceeds current assets by USD 2,151 million (Rs. 1,398,927 ) as at March 31, 2018 and has incurred losses of USD 77 million (Rs. 50,189 ) for the year ended March 31, 2018, based on the unaudited financial statements is witnessing material uncertainties. The prices of the coal have fallen since GVK coal had acquired stake in the coal mines. GVK Coal has not been able to achieve financial closure resulting in delays in commencement of mine development activity when compared to scheduled date, delays in entering into definitive agreements for port and rail development and agreement for sale of coal. Further, certain lenders of GVK Coal have classified the loan as non- performing and the lenders had an option to curtail the rights of the company on various assets either on October 2015 or every year thereafter. The lenders have not yet exercised this option.

GVK coal is in discussion with non- controlling shareholders to realign the option exercise dates, looking for additional funding from potential investors and working with lenders to reach to optimal solution. Management believes that while the prices of coal have fallen, the fall in prices of other commodities and services would offset the impact of fall in coal prices on the project by reducing capital and operating cost requirements and hence, GVK Coal would be able to ultimately establish profitable operations, meet its obligations and its current liabilities being in excess of current assets is temporary in nature. The coal prices have also shown an increasing trend in the recent past. The management further believes that even though there are material uncertainties in the short to medium term around achieving appropriate solutions with lenders, non-controlling share-holders and on funding the project, considering the prospects in the long term, presently no adjustment is required to receivables and , investments, and the Company considers the same as fully recoverable once the operations are established. Further, the management believes that considering the active discussions with the lenders, it is not probable that guarantees and commitments will be invoked. In the unlikely situation that the guarantees and commitments were to be invoked, the company will be required to arrange cash flows to service the guarantees and commitments. Such outflow which will be accompanied by acquisition of additional interest in the assets of the GVK coal and hence it is unlikely to have any significant adverse impact on the statement of profit and loss.

14. Certain subsidiaries and jointly controlled entity (group companies) of GVK Energy Limited (‘GVKEL’), a jointly controlled entity are facing uncertainties as detailed below:

a) There has been uncertainty regarding supplies/availability of gas to power plants of GVK Industries Limited (GVKIL), subsidiary company, and GVK Gautami Power Limited (GVKGPL), jointly controlled entity. These group companies have made losses of Rs. 36,736 (March 31, 2017: Rs. 26,729 ). The lenders have classified the loan balances of these group companies as non-performing assets. The Company is confident that Government of India will continue to take necessary steps/initiatives to improve the situation of natural gas. However in the interim these group companies are working with the lenders for one time settlement proposal wherein the loans would be settled at the value of the plant to be realised on its sale to APDISCOM. Further, Management, based on its rights under power purchase agreement to recover capacity charges and in view of installing alternate fuel equipment and on the basis of aforesaid discussions, believes that these group companies continue to be in operation in foreseeable future despite continued losses or will be able to amicably settle the loan liability as part of one time settlement proposal. The Company has given corporate guarantee for the loan taken by GVKGPL. The Company accordingly believes that no provision for impairment/diminution is required towards carrying value of assets aggregating to Rs. 59,304 of GVKIL and Rs. 118,500 of GVKGPL respectively and also no provision towards corporate guarantee given to GVKGPL is necessary.

b) Uncertainty is faced by coal plant with carrying value of non-current assets of Rs. 402,550 (March 31, 2017: Rs. 422,510) of GVK Power (Goindwal Sahib) Limited (‘GVKPGSL’), subsidiary company, towards supply of fuel consequent to de-allocation of coal mine. Management has filed petition with Punjab State Electricity Regulatory Commission (PSERC) for re-negotiation of terms of power purchase agreement such as rate revision, approval for using imported coal, approval for completed capital cost, etc. claiming force majeure and change in law as envisaged under Power Purchase Agreement. Pending determination of final tariff, PSERC in its interim order has allowed the subsidiary company to run the plant on imported fuel for up to two and half years within which GVKPGSL should make arrangements for coal on long term basis. In the interim Punjab State Power Corporation Limited (‘PSPCL’) has made certain deductions aggregating to Rs. 15,267 while approving the revenue claimed by GVKPGSL pursuant to the aforesaid interim order. GVKPGSL has also filed petitions with PSERC for the aforesaid deductions made by PSPCL.

In February 2018, GVKPGSL has obtained long term coal linkage through Scheme for Harnessing and Allocating Koyala Transparently in India (SHAKTI scheme) for significant part of its capacity. Further in March 2018, PSERC has approved a provisional fixed charges of Rs 2.20 per unit till the final capital cost is determined.”

GVKPGSL was unable to run the plant at optimal capacity during financial year 2016-17 and 2017-18 primarily on account of low availability of fuel and hence defaulted on repayment of dues to lenders. Consequently the lenders have classified the loan balances of GVKPGSL as non-performing assets. GVKPGSL is currently working with lenders towards the resolution plan as required by the RBI notification dated February 12, 2018 on resolution of stressed assets. If a resolution plan is not implemented as per the timelines specified in the aforesaid notification, lenders shall file insolvency application, singly or jointly, under the Insolvency and Bankruptcy Code 2016 within 15 days from the expiry of the said timeline.

Management based on internal assessment/legal advice believes that the aforementioned petitions will be decided in its favor and hence cancellation of coal mine will not impact the operations of the power project and it is also confident of receiving approval from the lenders for resolution plan and also implementing the same within the specified timelines. Accordingly, management is of the view that no provision is required to be made to assets with carrying value of Rs. 417,818 .

c) The Hon’ble Supreme Court of India has deallocated coal mine allocated to GVK Coal (Tokisud) Company Private Limited (‘GVKCTPL’), subsidiary company of Company’s jointly controlled entity, and Nominated Authority had offered compensation of Rs. 11,129 as against carrying value of assets of Rs. 31,113 as at March 31, 2018. GVKCTPL had appealed against the said order in the Hon’ble High Court of Delhi. The aforesaid court vide its order dated March 09, 2017, directed GVKCTPL to submit its claim to the adjudicating authority constituted under the Coal Mines (Special Provisions) Act, 2015 and subsequently GVKCTPL submitted its claim for the balance compensation claim of Rs. 19,882 to the aforesaid authority. Management believes that GVKCTPL will be appropriately reimbursed for cancelled coal mine and accordingly no provision is required to be made to the carrying value of assets.

d) Trade receivable of GVKIL, include accruals towards reimbursement of fixed charges for the financial year 1997-1998 to 2000-2001, on increased capital cost worked out as per ratios set out in the Power purchase agreement aggregating to Rs. 3,597 (March 31, 2017: Rs. 3,212) by GVKIL, disincentive recoverable aggregating to Rs. 2,409 (March 31, 2017: Rs. 2,151), minimum alternate tax under the provisions of Income Tax Act, 1961 for the period commencing from the financial year 20002001 up to the financial year 2010-2011, aggregating to Rs. 3,119 (March 31, 2017: Rs. 2,945 ) and other receivables of Rs. 60 (March 31, 2017: Rs.54) which are being refuted by AP Transco/subject to approvals.

The company based on the above assessments believes that it is appropriate to recognize investments and loans and advances given to GVK Energy Limited aggregating to Rs. 1 12,643 in financial statements at carrying value and no provision for diminution for such investments and loans is necessary and also no provision is required for corporate guarantees given by the company amounting to Rs. 10,298 as at March 31, 2018.

15. As at March 31, 2018, the Group/Company had accumulated losses and the Company has incurred losses during the preceding years. The Company/group has delayed payment of loans and interest and certain loan accounts have been classified as non-performing by banks. The Company has provided guarantees and commitments and/or has undertaken to provide financial assistance on behalf of various entities and as further detailed in notes 43 and 44 (referring to notes on GVK Coal Developers (Singapore) Pte Limited and GVK Energy Limited), uncertainties are being faced by various projects such as delays in development of coal mines in an overseas project where the Company has provided guarantees and commitments for the borrowings, losses incurred by gas based plants in the absence of gas and litigations on rights to claim capacity charge, re-negotiation of terms of PPA of coal based plant and litigations on determination of tariff of hydro power project. These factors may indicate significant doubt on going concern. Notwithstanding the above, the financial statements of the Company have been prepared on going concern basis as management believes that the Company would be able to ultimately establish profitable operations, meet its commitments, reduce debt by stake sale and the entities on whose behalf guarantees/ commitments have been extended would be able to meet their obligations. Further, the Management is confident that aforesaid entities would win litigations; obtain approvals of regulators; will reach an optimal solution with non-controlling shareholders and lenders; obtain requisite gas/coal allocation etc. as required despite current macro-economic environment challenges. Also the Company’s subsidiaries i.e. Mumbai International Airport Private Limited and GVK Jaipur Expressway Private Limited are operating satisfactorily. The Company through its group company has also won the bid for Navi Mumbai International airport and is in the process of achieving financial closure.

16. Fair values

The management assessed that loans given, trade receivables, cash and cash equivalents, other financial assets, short term borrowings, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities or interest bearing nature of these instruments. 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.

Set out below, is a comparison by class of the carrying amounts and fair value of the Group’s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

Level 1: Level 1 hierarchy includes financial instruments measuring using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing net asset value.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity shares, contingent consideration and indemnification asset included in level 3.

b) Valuation technique used to determine fair value

Specific valuation technique used to value financial instruments include:

- The fair value of investment in mutual funds is measured at quoted price or NAV.

- The fair values for non-current investments, other non-current financial assets and borrowings are based on discounted cash flows using a borrowing rate at the date of transition. They are classified as level 3 fair values in their fair value hierarchy due to the use of unobservable inputs, including own credit risk.

17. The financial statements contain certain amounts reported as “0” which are less than Rs. 1.

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Mar 31, 2017

1 Corporate information

GVK Power & Infrastructure Limited (‘the Company’ or ‘GVKPIL’) provides operation and maintenance services, manpower and consultancy services and incidental services to owners of power plants, airports etc. The Company has also acquired substantial ownership interest into power companies, airports, roads and companies providing infrastructure facilities. The registered office of the company is located at ‘Paigah House’, 156-159 Sardar Patel Road Secunderabad, Telangana-500003.

The financial statements were authorised for issue in accordance with a resolution of the directors on May 24, 2017.

2. Statement of significant accounting policies

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) specified under section 133 of the Act., read with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended.

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”” or “‘‘Previous 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 33 for information on how the Company adopted Ind AS. The financial statements have been prepared on a historical cost convention and on an accrual basis except for certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments) The financial statements are presented in INR and all values are rounded to the nearest rupees lakhs, except when otherwise indicated.

a. Terms/rights attached to equity shares

The Company has only one class of equity share having par value of Rs. 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. 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.

a) Term loan aggregating to Rs. 13,805 is secured by first pari-passu charge on the current assets, present and future of the Company and pledge of 299,000 preference shares of GVK Airport Developers Limited out which 239,800 preference shares are held by Sutara Roads & Infra Limited. The loan is further secured by subservient mortgage of property, admeasuring 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited and carries an effective interest of 14.33% per annum. The loan is repayable in twenty four unequal monthly instalments after a moratorium of twelve months from the date of first drawdown viz. April 30, 2016 (Refer note 32).

b) Term loan aggregating to Rs. 14,956 is secured by mortgage of property, admeasuring 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited and carries an effective interest of 13.27% per annum. The loan is repayable after a period of 35 months from the date of first drawdown viz. August 27, 2015 (Refer note 32).

Term loan aggregating to Rs. Nil (March 31, 2016: Rs. Nil, April 01, 2015: Rs. 42,880) carried an interest of 11.50% per annum and was secured by (i) charge on loans and advances of the Company to GVK Airport Developers Limited (“GVKADL”) and also loans and advances provided by GVKADL to GVK Airport Holdings Private Limited (“GVKAHPL”) and Bangalore Airport & Infrastructure Developer Private Limited (“BAIDPL”); (ii) exclusive charge on shares of GVKADL to the extent of two times of facility amount; (iii) exclusive charge on shares of GVKAHPL and BAIDPL not exceeding 30% of the shares of the Companies and the no. of shares to be pledged would be in proportion to the lenders at GVKADL; (iv) first pari passu charge on Himayatsagar and Paigah House property, Hyderabad; (v) second pari passu charge on land of 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited; (vii) proportionate proceeds of liquidity event at GVKADL, GVK AHPL and BAIDPL and (viii) charge on shares of GVKADL, GVK AHPL and BAIDPL along with HDFC and SREI or any other future lender representing at least 61% of the paid up share capital of the Company.

3. Taxes

a. Income tax expense:

The major components of income tax expenses for the year ended March 31, 2017 and for the year ended March 31, 2016 are as follows:

b. Reconciliation of effective tax rate

4. Earning per equity share

Basic and Diluted 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. There are no potentially dilutive equity shares in the Company.

The following reflects the income and share data used in the basic and diluted EPS computations:

5. Commitments and Contingencies

A. Leases

a. Operating lease commitments - Company as lessee

Operating leases are mainly in the nature of lease of office premises with no restrictions and are renewable/cancellable at the option of either of the parties. The Company has not entered into any non-cancellable leases.

There is no escalation clause in the lease agreement. There are no sub-leases. There are no restrictions imposed by lease arrangements. The aggregate amount of operating lease payments recognised in the Statement of Profit and Loss is Rs. 12 (March 31, 2016: Rs. 11).

The Company has not recognised any contingent rent as expense in the Statement of Profit and Loss.

B. Capital and other commitments

ii) Other Commitments

a) The Company has outstanding equity commitments to fund subsidiaries under construction stage aggregating to Rs. 114,910 (March 31, 2016: Rs. 133,802; April 01, 2015: Rs. 146,614)

b) The company has given undertaking to infuse equity aggregating to Rs. 383,576 (March 31, 2016: Rs. 392,416; April 01, 2015: Rs. 333,258) in GVK Coal Developers (Singapore) Pte. Limited, towards shortfall, if any, of its loan repayment obligations. Further, the Company has pledged 155,587,500 (March 31, 2016: 81,148,236; April 01, 2015: 81,148,236), 22,495,000 ( March 31, 2016: 22,495,000; April 01, 2015: 22,495,000) and 48,000,000 (March 31, 2016: 48,000,000; April 01, 2015: 48,000,000) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Private Limited respectively for securing loan obtained by GVK Coal Developers (Singapore) Pte. Limited, an entity in which Company has 10% stake. Management believes that GVK Coal Developers (Singapore) Pte. Limited will be able to meet its obligations.

c) During the year ended March 31, 2011, the Company, GVK Energy Limited (jointly controlled entity) and certain private equity investors (‘investors’) had entered into an investment agreement pursuant to which the Company has undertaken to conduct an initial public offering of the GVK Energy Limited’s equity shares (‘Qualified IPO’ or ‘QIPO’) within 72 months from the date of investment agreement (preferred listing period). If the GVK Energy Limited does not make a QIPO during the preferred listing period and no offer for sale or demerger takes place within 12 months of the preferred listing period, then, at any time thereafter, the investors will have a put option with respect to all of the securities held by the Investor (“Put Right”) on the Company and the GVK Energy Limited at the higher of i) 20% IRR from the date of investment to the date of receipt of proceeds from the investor (“Put IRR”) and ii) the fair market value of the investor’s shares. Provided the Put IRR shall be reduced to 15%, if at least 3 private sector initial public offerings with an issue size of Rs.100,000 or more each have not taken place in India between the 48th month to the 72nd month from date of investment agreement.

The Company based on legal advice believes that the put option with guaranteed return is not enforceable/subject to the regulations of Reserve Bank of India and hence no liability towards the same has been accounted in the financial statements.

C. Contingent liabilities

Direct and indirect taxes

(i) Income tax demand for assessment year 2008-09 for Rs. Nil (March 31, 2016: Rs. 73; April 01, 2015: Rs. 73), for assessment year 2009-10 Rs. 10 (March 31, 2016: Rs. 10; April 01, 2015: Rs. 10), for assessment year 2010-11 for Rs. 279 (March 31, 2016: Rs. 279; April 01, 2015: Rs. 279), for assessment year 2011-12 for Rs. 11 (March 31, 2016: Rs. 11; April 01, 2015 : Rs. 11) and for assessment year 2012-13 Rs. 44 (March 31, 2016: Rs. 44; April 01, 2015: Rs. 44).

ii) The Company had received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duties of Rs. 2,829 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has obtained an order from the Andhra Pradesh High Court staying the above notice on March 13, 2008 until such further orders from the said court. Management based on its internal assessment and/or legal advice is confident that the cases will be decided in the Company’s favour.

Security against loan taken by others

i) The Company had provided security by way of pledge of 251,999,900 (March 31, 2016: 183,000,000; April 01, 2015: 183,000,000) shares of GVK Airport Developers Limited for loans taken by the aforesaid subsidiary.

(ii) The Company had provided security by way of pledge of 230,960,770 (March 31, 2016: 230,960,770; April 01, 2015: 87,910,588) shares of GVK Energy Limited for loans taken by the aforesaid jointly controlled entity.

(iii) The Company has provided security by way of corporate guarantees amounting to Rs 162,538 (March 31, 2016: Rs. 254,295; April 01, 2015: Rs. 227,919) to subsidiaries and Rs. 1,441 to an associate (March 31, 2016: Rs. 1,441; April 01, 2015: Rs. 1,441) for various fund and nonfund based facility availed by them.

(iv) The Company has provided security by way of corporate guarantees amounting to Rs. Nil (March 31, 2016: Rs. 2,006; April 01, 2015: Rs. 3,941) for securing loans obtained by GVK Projects and Technical Services Limited.

(v) The Company has provided security by way of guarantee amounting to Rs. 368,534 (March 31, 2016: Rs. 377,027; April 01, 2015: Rs. 320,189) for securing loans obtained by GVK Coal Developers (Singapore) Pte Limited.

Management is of the opinion that the aforesaid companies will be able to meet their obligations as they arise and consequently no adjustment is required to be made to the carrying value of the security and guarantees provided.

6. Employee benefits

A) Defined contribution plan

B) Disclosures related to defined benefit plan

The Company has a defined benefit gratuity plan in India (funded). The Company’s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age.

The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:

1. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

2. The expected rate of return on assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

3. The Company expects to contribute Rs. 1 to gratuity in the next year (March 31, 2016: Rs. 1)

7. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defi ned under the provisions of “Micro, small and medium enterprises Act, 2006” is based on Management’s knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31, 2017, March 31, 2016 or April 01, 2015.

8. In respect of the amounts mentioned under section 125 of the Companies Act, 2013 there are no dues that are to be credited to the Investor Education and Protection Fund as at March 31, 2017; March 31, 2016 (April 01, 2015: Rs. Nil)

9. Related Parties

(a) Related parties where control exists

GVK Jaipur Expressway Private Limited GVK Airport Developers Limited (GVKADL)

GVK Coal (Tokisud) Company Private Limited

Goriganga Hydro Power Private Limited

GVK Perambalur SEZ Private Limited

GVK Oil & Gas Limited

GVK Developmental Projects Private Limited

GVK Airport Holdings Private Limited (GVKAHPL)

PT.GVK Services, Indonesia.

GVK Transportation Private Limited

GVK Ratle Hydro Electrical Projects Private Limited

GVK Energy Venture Private Limited

GVK Bagodara Vasad Expressway Private Limited

GVK Deoli Kota Expressway Private Ltd

Bangalore Airport & Infrastructure Developers Private Limited

Mumbai International Airport Private Limited

GVK Power (Khadur Sahib) Private Limited

GVK Airports International Pte Ltd

GVK Airport Services Private Limited

Sutara Roads & Infra Limited

GVK Shivpuri Dewas Expressway Private Limited

(b) Related parties where joint control exists

GVK Energy Limited

GVK Industries Limited

Alaknanda Hydro Power Company Limited

GVK Power (Goindwal Sahib) Limited

GVK Gautami Power Limited

(c) Associates

Seregraha Mines Limited Bangalore International Airport Limited

(d) Key management personnel

Dr. GVK Reddy - Chairman and Managing director

Mr. G V Sanjay Reddy - Director

Mr A Issac George - Director

Mr Krishna Ram Bhupal - Director

Mr S Balasubramanian - Director

Mr S Anwar - Director

Mr Santha K John - Director

Mr K Balarama Reddi - Director

Mr CH G Krishna Murthy - Director

(e) Enterprises over which the key management personnel exercise significant influence

TAJ GVK Hotels & Resorts Limited

Orbit Travels & Tours Private Limited

GVK Technical & Consultancy Services Private Limited

Pinakini Share and Stock Broker Limited

GVK Employee Welfare Trust

GVK Projects and Technical Services Limited

GVK Coal Developers (Singapore) Pte Ltd

10. Details of loan given to subsidiaries, associates, parties in which directors are interested:

Subsidiaries and joint ventures

i) GVK Oil & Gas Limited

Balance as at March 31, 2017 Rs. 3 (March 31, 2016 Rs. Nil, April 01, 2015 Rs. 10,156)

Maximum amount outstanding during the year was Rs. 3 (March 31, 2016 Rs. 10,156, April 01, 2015 Rs. 17,746)

The aforesaid loan is repayable at the option of subsidiary.

ii) GVK Perambalur SEZ Private Limited

Balance as at March 31, 2017 Rs. 4,251 (March 31, 2016 Rs. 6,732, April 01, 2015 Rs. 6,719)

Maximum amount outstanding during the year was Rs. 6,751 (March 31, 2016 Rs. 6,732, April 01, 2015 Rs. 6,719)

The aforesaid loan is repayable at the option of subsidiary.

iii) Goriganga Hydro Power Private Limited

Balance as at March 31, 2017 Rs. Nil (March 31, 2016 Rs. 4,771; April 01, 2015 Rs. 4,767) aximum amount outstanding during the year was Rs. 4,847 (March 31, 2016 Rs. 4,771; April 01, 2015 Rs. 4,767)

Loan of Rs. 4,847 given to Goriganga Hydro Power Private Limited has been written off in the current year.

The aforesaid loan was repayable at the option of subsidiary.

iv) GVK Airport Developers Limited

Balance as at March 31, 2017 Rs. Nil (March 31, 2016 Rs. 28,493; April 01, 2015 Rs. 76,242)

Maximum amount outstanding during the year was Rs. 29,149 (March 31, 2016 Rs. 76,242; April 01, 2015 Rs. 84,162) The aforesaid loan was repayable on demand.

v) GVK Developmental Projects Private Limited

Balance as at March 31, 2017 Rs. 49 (March 31, 2016 Rs. 0; April 01, 2015 Rs. 4,033)

Maximum amount outstanding during the year was Rs. 5,684 (March 31, 2016 Rs. 4,033; April 01, 2015 Rs. 5,583)

The aforesaid loan is repayable on demand.

vi) GVK Transportation Private Limited

Balance as at March 31, 2017 Rs. 805 (March 31, 2016 Rs. 5,306; April 01, 2015 Rs. 0)

Maximum amount outstanding during the year was Rs. 15,162 (March 31, 2016 Rs. 6,928; April 01, 2015 Rs. 21,249 The aforesaid loan is repayable on demand.

vii) GVK Ratle Hydro Electrical Projects Private Limited

Balance as at March 31, 2017 Rs. 0 (March 31, 2016 Rs. 1; April 01, 2015 Rs. 1 )

Maximum amount outstanding during the year was Rs. 1 (March 31, 2016 Rs. 1; April 01, 2015 Rs. 1)

The aforesaid loan is repayable on demand.

viii) Alaknanda Hydro Power Company Limited

Balance as at March 31, 2017 Rs. Nil (March 31, 2016 Rs. Nil; April 01, 2015 Rs. Nil)

Maximum amount outstanding during the year was Rs. Nil (March 31, 2016 Rs. Nil; April 01, 2015 Rs. 2)

The aforesaid loan was repayable on demand.

ix) GVK Power (Goindwal Sahib) Limited

Balance as at March 31, 2017 Rs. 22 (March 31, 2016 Rs. 22; April 01, 2015 Rs. 16)

Maximum amount outstanding during the year was Rs. 22 (March 31, 2016 Rs. 22; April 01, 2015 Rs. 156)

The aforesaid loan was repayable on demand.

x) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31, 2017 Rs. 0 (March 31, 2016 Rs. 0; April 01, 2015 Rs. 0)

Maximum amount outstanding during the year was Rs. 0 (March 31, 2016 Rs. 0; April 01, 2015 Rs. 0)

The aforesaid loan is repayable on demand.

xi) GVK Energy Limited

Balance as at March 31, 2017 Rs. 2,282 (March 31, 2016 Rs. 40; April 01, 2015 Rs. 80)

Maximum amount outstanding during the year was Rs. 2,282 (March 31, 2016 Rs. 217; April 01, 2015 Rs. 127) The aforesaid loan is repayable on demand.

xii) GVK Coal Developers (Singapore) Pte Limited Limited

Balance as at March 31, 2017 Rs. Nil (March 31, 2016 Rs. Nil; April 01, 2015 Rs. 3)

Maximum amount outstanding during the year was Rs. Nil (March 31, 2016 Rs. 3; April 01, 2015 Rs. 3)

The aforesaid loan is repayable on demand.

xiii) GVK Bagodara Vasad Expressway Private Limited

Balance as at March 31, 2017 Rs. 5 (March 31, 2016 Rs. 4; April 01, 2015 Rs.3)

Maximum amount outstanding during the year was Rs. 5 (March 31, 2016 Rs. 4; April 01, 2015 Rs. 3)

The aforesaid loan is repayable on demand.

xiv) GVK Jaipur Expressway Private Limited

Balance as at March 31, 2017 Rs. 82 (March 31, 2016 Rs. 1; April 01, 2015 Rs. 3)

Maximum amount outstanding during the year was Rs. 104 (March 31, 2016 Rs. 4; April 01, 2015 Rs. 3)

The aforesaid loan is repayable on demand.

xv) Bangalore International Airport Limited

Balance as at March 31, 2017 Rs. 4 (March 31, 2016 Rs. 1; April 01, 2015 Rs. 8)

Maximum amount outstanding during the year was Rs. 5 (March 31, 2016 Rs. 8; April 01, 2015 Rs. 8)

The aforesaid loan is repayable on demand.

xvi) GVK Industries Limited

Balance as at March 31, 2017 Rs. 137 (March 31, 2016 Rs. 141; April 01, 2015 Rs.135)

Maximum amount outstanding during the year was Rs. 143 (March 31, 2016 Rs. 141; April 01, 2015 Rs. 593) The aforesaid loan is repayable on demand.

xvii) GVK Deoli Kota Expressway Private Limited

Balance as at March 31, 2017 Rs. 2 (March 31, 2016 Rs. Nil; April 01, 2015 Rs.Nil)

Maximum amount outstanding during the year was Rs. 2 (March 31, 2016 Rs. Nil; April 01, 2015 Rs. Nil)

The aforesaid loan is repayable on demand.

xviii) GVK Airport Services Private Limited

Balance as at March 31, 2017 Rs. 0 (March 31, 2016 Rs. Nil; April 01, 2015 Rs.Nil)

Maximum amount outstanding during the year was Rs. 0 (March 31, 2016 Rs. Nil; April 01, 2015 Rs. Nil)

The aforesaid loan is repayable on demand.

11. Details of trade receivables due from private companies in which Company’s director is a director.

Mumbai International Airport Private Limited Rs. 223 (March 31, 2016 Rs. 129; April 01, 2015: Rs. 22)

12. First time adoption to Ind-AS

A. Reconciliation of equity as previously reported under Previous GAAP and that computed under Ind AS

B. Reconciliation between net loss as previously reported under Previous GAAP and Ind AS for the year ended 31 March 2016

C. Notes to reconciliation of equity as at April 01, 2015 and March 31, 2016 and net loss for the year ended March 31, 2016.

(i) Fair Value gain/loss on current investment

Under Indian GAAP, investments in mutual funds are accounted for as short-term investments and accordingly they are carried at lower of cost and fair value. Under Ind AS, the Company has designated such investments as FVTPL investments. Ind AS requires FVTPL investments to be measured at fair value.

(ii) Fair value loss on investment

The Company had made certain investments in certain non cumulative redeemable preference shares including share application money in coal project with the object of obtaining coal at discounted price. Under Indian GAAP the same have been carried at cost. Under Ind AS the same are carried at amortised cost and the fair value loss on initial recognition has been taken to opening reatined earnings or the statement of profit and loss, as the case may be, as the coal project is facing certain difficulties.

(iii) Financial guarantee income/(expense) including exchange difference and unwinding income on financial assets

a) Financial guarantees where guarantee commission is charged

Under Indian GAAP, the Company has recognised Guarantee Commission on loan balance. However, under IND-AS, the Company has present valued the guarantee commission receivable through the tenor of the loan and recognised a receivable (financial asset) and unearned guarantee commission income (financial liabiltiy). The unearned guarantee commission income is taken to income on straight line basis and interest income is recognised on financial asset through the tenor of the loan.

b) Financial guarantees where guarantee commission is not charged

Under Indian GAAP, the Company has not accounted for financial guarantee where commission is not charged. However, under IND-AS, the Company has present valued the guarantee commission receivable through the tenor of the loan and recognised the same as investment in the entity and unearned guarantee commission income (financial liabiltiy). The unearned guarantee commission income is taken to income on straight line basis through the tenor of the loan.

c) Unwinding income on financial assets

Under Previous GAAP, investment in compulsorily redeemable preference shares in GVK Airport Developers Limited (‘GVKADL’) were carried at cost. Under Ind AS, the same needs to be accounted as financial asset as these instruments are compulsorily redeemable in cash. Preference shares are re-payable after a period of ten years with an option of an early redemption any time after one year from the date of allotment or such period as may be mutually agreed by giving a month’s notice. The Company expects GVKADL to repay the same by March 31, 2021. Accordingly, discounted value of redeemable preference shares issued by GVKADL has been carried at amortised cost and fair value loss on initial recognition has been recognised as equity and subequently interest income on the aforesaid financial asset and financial asset mentionted in (ii) above has been recognised in the statement of profit and loss.

13. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company manages its capital structure in consideration to the changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, borrowings including interest accrued on borrowings and trade payables, less cash and short-term deposits.

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 interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. The Company has delayed repayment of dues to banks and financial institutions during the year. Hence, the entire portion of long term borrowing has been classfied as current.

The Company has delayed repayment of dues to banks during the year. The following is the summary of delays:

14. First time adoption of Ind AS

“These financial statements for the year ended March 31, 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2016, 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”” or “‘‘Previous GAAP””).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2017, together with the comparative period data as at and for the year ended March 31, 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 April 1, 2015, the Company’s date of transition to Ind AS. Note 31 explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 01, 2015 and the financial statements as at and for the year ended March 31, 2016.”

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

a) The Company has elected to regard carrying values for all of property, plant and equipment as deemed cost at the date of the transition.

b) Ind AS 101 requires a first-time adopter to apply derecognition requirements in Ind AS 109 prospectively to transactions occurring on or after the date of transition to Ind AS. Accordingly, the Company continues to de-recognise the financial assets and financial liabilities for transactions which have occured before the date of transition to Ind AS.

c) “In the preparation of separate financial statements, Ind AS 27 Separate Financial Statements requires an entity to account for its investments in subsidiaries, jointly controlled entities and associates either:

a) At cost, or

b) In accordance with Ind AS 109.

If a first-time adopter measures such an investment at cost, it can measure that investment at one of the following amounts in its separate opening Ind AS balance sheet:

- Cost determined in accordance with Ind AS 27

- Deemed cost, defined as

- Fair value determined in accordance with Ind AS 113 at the date of transition to Ind AS, or

- Previous GAAP carrying amount at the transition date.

A first-time adopter may choose to use either of these bases to measure investment in each subsidiary, joint venture or associate where it elects to use a deemed cost. Accordingly, the Company has opted to carry the investment in subsidiaries and joint venture at cost as at the date of transition.”

d) Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements based for embedded leases based on conditions in place as at the date of transition.

Estimates

The estimates as at April 01, 2015 and 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) apart from impairment of financial assets based on expected credit loss model where application of Indian GAAP did not require estimation. The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at April 01, 2015 (transition date) and as of March 31, 2016.

15. Significant accounting judgements, estimates and assumptions

The preparation of the Company’s 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.

A) Judgements

In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements.

Lease commitments - the Company as lessee

The Company has entered into lease for office premises. The Company has determined, based on an evaluation of the terms and condition of the arrangements, such as the lease term not constituting a major part of the economic life of the office premises and the fair value of the asset, that it does not retain significant risk and rewards of the office premise and accounts for the contracts as 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 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.

(i) Taxes

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.

(ii) Defined employee benefit plans (Gratuity)

The cost of the defined benefit gratuity plan 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. Further details about gratuity obligations are given in Note 25.

(iii) 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 judgement is required in establishing fair values. Judgements 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 8E for further disclosures.

(iv) Depreciation on property, plant and equipment

Depreciation on property, plant and equipment is calculated on a straight-line basis using the rates arrived at based on the useful lives and residual values of all its property, plant and equipment estimated by the management. The management believes that depreciation rates currently used fairly reflect its estimate of the useful lives and residual values of property, plant and equipment, and the useful lives are in line with the useful lives prescribed under Schedule II of the Companies Act, 2013.

16. Financial risk management objectives and policies

Financial Risk Management Framework

The Company is exposed primarily to Credit Risk, Liquidity Risk and Market risk (fluctuations in foreign currency exchange rates and interest rate), which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

A) 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. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, loans and other financial assets. Trade receivables, Financial guaranatee receivables (Other financial assets) and Loans given by the Company result in material concentration of credit risk as these are with related parties.

Exposure to credit risk:

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs. 10,275, Rs. 62,920 and Rs. 108,883 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, Loans and Other financial assets.

Trade receivables, Other financial assets, Loans given:

An impairment analysis is performed at each reporting date. The Company does not hold collateral as security. Impairment analysis takes into account historical credit loss experience and adjusted for forward-looking information. Significant portion of trade receivables, other financial assets and loans given comprise of related parties and not subject to significant credit risk based on past history.

B) Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

C) Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and interest rate risk. Financial instruments affected by market risk include loans and borrowings, investments, other financial assets and other financial liabilities.

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 change 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. As the Company has debt obligations with floating interest rates, exposure to the risk of changes in market interest rates are substantially dependent of changes in market interest rates.

As the company has no significant interest bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on the portion of loans and borrowings. With all other variables held constant, the Company’s profit before tax is affected through impact on floating rate borrowings, as follows:

Foreign Currency exchange rate 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 investment in foreign entity and financial asset/liability in relation to foreign entity in respect of financial guarantee. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company is intending to enter into derivative instruments primarily to hedge foreign exchange. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. The Company has not entered into derivative instruments during the year.

The period/ year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are as under:

Foreign currency sensitivity

The following tables demonstrate the senstivity to a reasonably possible change in USD exchange rate, with other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities.

17. Segment reporting

In accordance with Indian Accounting Standard (Ind AS) 108 on Operating segments, segment information has been given in the consolidated financial statements of the Company, and therefore no separate disclosure on segment information is given in these financial statements.

18. The Hon’ble Supreme Court of India has de-allocated coal mine allocated to GVK Coal (Tokisud) Private Limited, subsidiary company of a Jointly controlled entity, and Nominated Authority has offered compensation of Rs. 11,129 as against carrying value of assets of Rs. 31,115 (March 31, 2016: Rs. 34,668). GVK Coal (Tokisud) Private Limited has received order from Hon’ble High Court dated March 09, 2017, based on which it has resubmitted its claim for the balance compensation claim. The Management believes that GVK Coal (Tokisud) Private Limited will be appropriately reimbursed for cancelled coal mine and accordingly the cancellation of coal mine will not have any material impact upon the financial statements.

19. The Company has made investments and has receivables aggregating to Rs. 51,815 (March 31, 2016: Rs. 20,157) and provided guarantees and commitments for loans amounting to Rs. 752,1 10 (March 31, 2016: Rs. 769,444) taken by GVK Coal Developers (Singapore) Pte. Limited (GVK Coal), an investee company, as at March 31, 2017, and has undertaken to provide financial assistance of USD 46 million (Rs.31,104) as at June 30, 2016, an entity whose current liabilities exceeds current assets by USD 2,119 million (Rs. 1,432,932) as at June 30, 2016 and has incurred losses of USD 122 million (Rs. 83,017) for the year ended June 30, 2016, based on the unaudited financial statements is witnessing material uncertainties. The prices of the coal have significantly fallen since GVK coal had acquired stake in the coal mines. GVK Coal has not been able to achieve financial closure resulting in delays in commencement of mine development activity when compared to scheduled date, delays in entering into definitive agreements for port and rail development and agreement for sale of coal. Further, certain lenders of GVK Coal have classified the loan as non- performing and the lenders had abridgement option on the loans either on October 2015 or every year thereafter. The lenders have not yet exercised the option for repayment of the loan. GVK coal is in discussion with non- controlling shareholders to realign the option exercise dates, looking for additional funding from potential investors and working with lenders to reach to optimal solution. Management believes that while the prices of coal have fallen, the fall in prices of other commodities and services would offset the impact of fall in coal prices on the project by reducing capital and operating cost requirements and hence, GVK Coal would be able to establish profitable operations, meet its obligations and its current liabilities being in excess of current assets is temporary in nature and will not impact ability of the GVK Coal to continue in operation in foreseeable future. The management further believes that the aforesaid will not have any material adverse impact upon cash flows of the Company and accordingly no adjustment is required to receivables, investments, guarantees and commitments.

20. Uncertainties faced by GVK Energy Limited and its group companies (Jointly controlled entity and its group companies)

a) There has been uncertainty regarding supplies/availability of gas to power generating plants and power projects under construction of the Group. Further, these group companies engaged in this business have made losses of Rs. 26,729 (March 31, 2016: Rs.26,158). Further, certain banks have classified loan balances of these group companies as nonperforming assets. These group companies are in the process of restructuring the loans. The Company is confident that Government of India will continue to take necessary steps/initiatives to improve the situation of natural gas. Further, Management based on its rights under power purchase agreement to recover capacity charges and in view of installing alternate fuel equipment and on the basis of aforesaid discussions believes that these group companies will continue to be in operation in foreseeable future despite continued losses.

b) Uncertainty is faced by coal plant with carrying value of non-current assets of Rs. 444,129 (March 31, 2016: Rs.463,295) of one of the group companies, towards supply of fuel. Management has obtained coal linkage for six months, tied up for importing coal and is mulling other options such as, obtaining coal linkage locally and has filed petition with Punjab State Electricity Regulatory Commission (PSERC) for re-negotiation of terms of power purchase agreement such as rate revision, approval for using imported coal etc. claiming force majeure and change in law as envisaged under Power Purchase Agreement. PSERC in its interim order has allowed the group company to run the plant on imported fuel for upto two and half years within which the group company should make arrangements for coal on long term basis. Management based on internal assessment/legal advice believes that cancellation of coal mine will not impact the operations of the power project.

c) One of the subsidiaries of GVKEL, has completed construction of 330MW hydro power project with a carrying value of Rs.506,768 as at March 31, 2017 (March 31, 2016: Rs. 529,882). The said Company has filed petitions with Uttar Pradesh Electricity Regulatory Commission (‘UPERC’) for extension of scheduled commercial operation date (‘SCOD’) and approval of additional capital cost to be considered for tariff determination. In the interim UPERC has provisionally determined tariff for the financial year 2015-16 and 2016-17 subject to the aforesaid petitions. The said Company had also filed a review petition with UPERC for revising the provisional tariff since it believes that certain components of the provisional tariff were not determined in accordance with the tariff regulations. UPERC in response to the review petition has stated that it will consider certain objections raised by the said Company during determination of final tariff. Pending determination of final tariff subsidiary has recorded revenue based on the provisional tariff approved by UPERC. Management based on its internal assessment/legal advice is confident that the aforementioned petitions will be decided in its favour.

The Company accordingly believes that investments in the jointly controlled entity amounting to Rs. 108,323 is recoverable in normal course of business and no provision for diminution is necessary.

21. As at March 31, 2017, the Company had accumulated losses and the Company has incurred losses during the preceding two years and the current year. The Company has delayed payment of loans and interest and certain loan accounts have been classified as nonperforming by banks. The Company has provided securities, guarantees and commitments and/or has undertaken to provide financial assistance on behalf of various entities and as further detailed in notes 25(B)(ii), 25(C), 37, 38 and 39 uncertainties are being faced by various projects in the Group such as delays in development of coal mines in an overseas project where the Company has provided securities, guarantees and commitments for the borrowings, losses incurred by gas based plants in the absence of gas and litigations on rights to claim capacity charge, cancellation of coal linkage to coal based plant and re-negotiation of terms of PPA of coal based plant. Notwithstanding the above, the financial statements of the Company have been prepared on going concern basis as Management believes that the Company would be able to establish profitable operations, meet its commitments, reduce debt by stake sale and the entities on whose behalf guarantees/ commitments have been extended would be able to meet their obligations. Further, the Management is confident that aforesaid entities would win litigations; obtain approvals of regulators; will reach an optimal solution with non-controlling shareholders and lenders; obtain requisite gas/coal allocation etc. as required and despite current macroeconomic environment challenges would establish profitable operations.

22. During the earlier year, Termination Notice was served by GVK Oil & Gas Limited, a subsidiary involved in oil & gas activity on Ministry of Petroleum and Natural Gas (Ministry) for termination of Production Sharing Contract. The subsidiary had alleged that it has not been able to effectively carry out exploration operations in the Blocks allotted to it due to Ministry of Defense clearance issues. While the Management continues to pursue with Ministry for reimbursement of costs, the Company had written off investments and advances made to subsidiary aggregating to Rs. Nil (March 31, 2016: Rs. 10,161).

23. On January 17, 2013 and subsequently from time to time, Securities and Exchange Board of India (SEBI) made amendment to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Equity Listing Agreement, pursuant to which listed entities have been prohibited from framing any employee benefit schemes involving acquisition of own securities from secondary market in excess of 10% of total assets of the scheme. The Company had formed GVK Employee Welfare Trust on July 15, 2009 which had purchased own equity shares which were acquired from secondary market. SEBI circular requires such Trust to dispose shares within five years from October 28, 2014 or to align the Trust with SEBI (ESOS and ESPS) Guidelines. In the current year, the trust has disposed off the shares held in the Company.

24. Fair values

The management assessed that loans given, trade receivables, cash and cash equivalents, other financial assets, short term borrowings, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities or interest bearing nature of these instruments. 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.

Set out below, is a comparison by class of the carrying amounts and fair value of the Group’s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

25. Standards issued but not yet effective

In March 2017, the ministry of corporate affairs issued the Companies (Indian Accounting Standards )(Amendments) Rules, 2017, notifying amendment to Ind AS 102, ‘Share-based payment.’ and Ind AS 7 “Statement of Cash Flow”. This amendment is in accordance with the recent amendment made by International Accounting Standards Board (IASB) to IAS 7. The Amendments is applicable to the Group from April 1, 2017.

Amendment to Ind AS 102

The amendment to Ind AS 102 provides specific guidance to measurement of cash settled awards, modification of cash settled awards that include a net settlement feature in respect of withholding taxes.

The aforesaid amendment is not applicable to the Company.

Amendment to Ind AS 7

The Amendment to IND AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Company has evaluated the disclosure requirement of the amendment and the effect on the financial statements is not expected to be material. These amendments does not have any recognition or measurement impact but requires additional disclosure to be given by the Company.

26. The financial statements contain certain amounts reported as “0“which are less than Rs. 1.

As per our report of even date.

---

Mar 31, 2016

b) Terms/rights attached to equity shares

The Company has only one class of equity share having par value of Rs.1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. 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.

a) Term loan aggregating to Rs. 20,500 is secured by first pari-passu charge on the current assets, present and future of the Company and pledge of 299,000 preference shares of GVK Airport Developers Limited, out of which 239,800 preference shares are held by Sutara Roads & Infra Limited. The loan is further secured by subservient mortgage of property, admeasuring 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited and presently carries interest of 13.40% per annum. The loan is repayable in twenty four unequal monthly installments after a moratorium of twelve months i.e. from April 30, 2016.

b) Term loan aggregating to Rs. 14,956 is secured by mortgage of property, admeasuring 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited and presently carries interest of 15.15% per annum. The loan is repayable after a period of 35 months from the date of first drawdown i.e. repayable on August 27, 2015.

Term loan aggregating to Rs. Nil (March 31, 2015: Rs. 42,880) carried an interest of 11.50% per annum and was secured by (i) charge on loans and advances of the Company to GVK Airport Developers Limited (“GVKADL”) and also loans and advances provided by GVKADL to GVK Airport Holdings Private Limited (“GVKAHPL”) and Bangalore Airport & Infrastructure Developer Private Limited (“BAIDPL”); (ii) exclusive charge on shares of GVKADL to the extent of two times of facility amount; (iii) exclusive charge on shares of GVKAHPL and BAIDPL not exceeding 30% of the shares of the Companies and the no. of shares to be pledged would be in proportion to the lenders at GVKADL; (iv) first pari passu charge on Himayatsagar and Paigah House property, Hyderabad; (v) second pari passu charge on land of 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited; (vii) proportionate proceeds of liquidity event at GVKADL, GVK AHPL and BAIDPL and (viii) charge on shares of GVKADL, GVK AHPL and BAIDPL along with HDFC and SREI or any other future lender representing at least 61% of the paid up share capital of the Company.

Note: a) Previous year figures are in parenthesis except for receivable/(payable) at year end -

b) Refer note 26 for equity commitments.

c) * Pledge of 81,148,236 (March 31, 2015: 81,148,236) shares of GVK Energy Limited, 22,495,000 (March 31, 2015: 22,495,000) shares of GVK Transportation Private Limited and 48,000,000 (March 31, 2015: 48,000,000) shares of GVK Airport Developers Limited

d) Refer note 5 (a) (b) and 7 for security provided by subsidiaries for loans availed by the Company.

e) The advances/loans and guarantees have been provided to meet normal business needs of respective entity.

f) ** 78,204,963 0.001% compulsory Convertible Debentures of Rs. 100 each were converted into 307,869,478 fully paid-up equity shares.

g) *** 239,800 preference shares of GVK Airport Developers Limited held by Sutara Roads & Infra Limited have been pledged for loans taken by the Company.

Note: a) Previous year figures are in parenthesis except for receivable/(payable) at year end -

b) Refer note 26 for equity commitments.

c) * Pledge of 81,148,236 (March 31, 2015: 81,148,236) shares of GVK Energy Limited, 22,495,000 (March 31, 2015: 22,495,000) shares of GVK Transportation Private Limited and 48,000,000 (March 31, 2015: 48,000,000) shares of GVK Airport Developers Limited

d) Refer note 5 (a) (b) and 7 for security provided by subsidiaries for loans availed by the Company.

e) The advances/loans and guarantees have been provided to meet normal business needs of respective entity.

f) ** 78,204,963 0.001% compulsory Convertible Debentures of Rs. 100 each were converted into 307,869,478 fully paid-up equity shares.

g) *** 239,800 preference shares of GVK Airport Developers Limited held by Sutara Roads & Infra Limited have been pledged for loans taken by the Company.

Note: a) Previous year figures are in parenthesis except for receivable/(payable) at year end -

b) Refer note 26 for equity commitments.

c) * Pledge of 81,148,236 (March 31, 2015: 81,148,236) shares of GVK Energy Limited, 22,495,000 (March 31, 2015: 22,495,000) shares of GVK Transportation Private Limited and 48,000,000 (March 31, 2015: 48,000,000) shares of GVK Airport Developers Limited

d) Refer note 5 (a) (b) and 7 for security provided by subsidiaries for loans availed by the Company.

e) The advances/loans and guarantees have been provided to meet normal business needs of respective entity.

f) ** 78,204,963 0.001% compulsory Convertible Debentures of Rs. 100 each were converted into 307,869,478 fully paid-up equity shares.

g) *** 239,800 preference shares of GVK Airport Developers Limited held by Sutara Roads & Infra Limited have been pledged for loans taken by the Company.

1. Details of loan given to subsidiaries, associates, parties in which directors are interested Subsidiaries

i) GVK Oil & Gas Limited

Balance as at March 31, 2016 Rs. Nil (March 31, 2015: Rs. 10,156)

Maximum amount outstanding during the year was Rs. 10,156 (March 31, 2015: Rs. 17,746)

The aforesaid loan was repayable on demand.

ii) GVK Perambalur SEZ Private Limited

Balance as at March 31, 2016 Rs. 6,732 (March 31, 2015: Rs. 6,719)

Maximum amount outstanding during the year was Rs. 6,732 (March 31, 2015:Rs. 6,719)

The aforesaid loan is repayable on demand.

iii) Goriganga Hydro Power Private Limited

Balance as at March 31, 2016 Rs. 4,771 (March 31, 2015: Rs. 4,767)

Maximum amount outstanding during the year was Rs. 4,771 (March 31, 2015: Rs. 4,767)

The aforesaid loan is repayable on demand.

iv) GVK Airport Developers Limited

Balance as at March 31, 2016 Rs. 28,493 (March 31, 2015: Rs. 76,242)

Maximum amount outstanding during the year was Rs. 76,242 (March 31, 2015: Rs. 84,162)

The aforesaid loan is repayable on demand.

v) GVK Developmental Projects Private Limited

Balance as at March 31, 2016 Rs. 0 (March 31, 2015: Rs. 4,033)

Maximum amount outstanding during the year was Rs. 4,033 (March 31, 2015: Rs. 5,583)

The aforesaid loan is repayable on demand.

vi) GVK Transportation Private Limited

Balance as at March 31, 2016 Rs. 5,306 (March 31, 2015: Rs. 0)

Maximum amount outstanding during the year was Rs. 6,928 (March 31, 2015: Rs. 21,249)

The aforesaid loan is repayable on demand.

vii) GVK Ratle Hydro Electrical Projects Private Limited

Balance as at March 31, 2016 Rs. 1 (March 31, 2015: Rs. 1)

Maximum amount outstanding during the year was Rs. 1 (March 31, 2015: Rs. 1)

The aforesaid loan is repayable on demand.

viii) Alaknanda Hydro Power Company Limited

Balance as at March 31, 2016 Rs. Nil (March 31, 2015: Rs. Nil)

Maximum amount outstanding during the year was Rs. Nil (March 31, 2015: Rs. 2)

The aforesaid loan was repayable on demand.

ix) GVK Power (Goindwal Sahib) Limited

Balance as at March 31, 2016 Rs. 22 (March 31, 2015: Rs. 16)

Maximum amount outstanding during the year was Rs. 22 (March 31, 2015: Rs. 156)

The aforesaid loan was repayable on demand.

x) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31, 2016 Rs. 0 (March 31, 2015: Rs. 0)

Maximum amount outstanding during the year was Rs. 0 (March 31, 2015: Rs. 0)

The aforesaid loan is repayable on demand.

xi) GVK Energy Limited

Balance as at March 31, 2016 Rs. 40 (March 31, 2015: Rs. 80)

Maximum amount outstanding during the year was Rs. 217 (March 31, 2015: Rs. 127)

The aforesaid loan is repayable on demand.

xii) GVK Coal Developers (Singapore) Pte Limited

Balance as at March 31, 2016 Rs. Nil (March 31, 2015: Rs. 3)

Maximum amount outstanding during the year was Rs. 3 (March 31, 2015: Rs. 3)

The aforesaid loan is repayable on demand.

xiii) GVK Bagodara Vasad Expressway Private Limited

Balance as at March 31, 2016 Rs. 4 (March 31, 2015: Rs.3)

Maximum amount outstanding during the year was Rs. 4 (March 31, 2015: Rs. 3)

The aforesaid loan is repayable on demand.

xiv) GVK Jaipur Expressway Private Limited

Balance as at March 31, 2016 Rs. 1 (March 31, 2015: Rs. 3)

Maximum amount outstanding during the year was Rs. 4 (March 31, 2015: Rs. 3)

The aforesaid loan is repayable on demand.

xv) Bangalore International Airport Limited

Balance as at March 31, 2016 Rs. 1 (March 31, 2015: Rs. 8)

Maximum amount outstanding during the year was Rs. 8 (March 31, 2015: Rs. 8)

The aforesaid loan is repayable on demand.

xvi) GVK Industries Limited

Balance as at March 31, 2016 Rs. 141 (March 31, 2015: Rs.135)

Maximum amount outstanding during the year was Rs. 141 (March 31, 2015: Rs. 593)

The aforesaid loan is repayable on demand.

2.. Contingent liabilities

a. Direct and indirect taxes:

(i) Income tax demand for assessment year 2008-09 for Rs. 73 (March 31, 2015: Rs. 73), for assessment year 2009-10 Rs. 10 (March 31, 2015: Rs. 10), for assessment year 2010-11 for Rs. 279 (March 31, 2015: 279), for assessment year 2011-12 for Rs. 11 (March 31, 2015: Rs. 11) and for assessment year 2012-13 Rs. 44 (March 31, 2015: Rs. 44).

(ii) The Company had received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duties of Rs. 2,829 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has obtained an order from the Andhra Pradesh High Court staying the above notice on March 13, 2008 until such further orders from the said court.

Management based on its internal assessment and/or legal advice is confident that the cases will be decided in the Company''s favour.

b. Security against loans taken by others

(i) The Company had provided security by way of pledge of 183,000,000 (March 31, 2015: 183,000,000) shares of GVK Airport Developers Private Limited for loans taken by the aforesaid subsidiary.

(ii) The Company had provided security by way of pledge of 230,960,770 (March 31, 2015: 87,910,588) shares of GVK Energy Limited for loans taken by the aforesaid subsidiary.

(iii) The Company has provided security by way of corporate guarantees amounting to Rs 254,295 (March 31, 2015: Rs. 227,919) to subsidiaries and Rs. 1,441 to an associate (March 31, 2015: Rs. 1,441) for various fund and nonfund based facility availed by them.

(iv) The Company has provided security by way of corporate guarantees amounting to Rs. 2,006 (March 31, 2015: Rs. 3,941) for securing loans obtained by GVK Projects and Technical Services Limited.

(v) The Company has provided security by way of guarantee amounting to Rs. 377,027 (March 31, 2015: Rs. 320,189) for securing loans obtained by GVK Coal Developers (Singapore) Pte Limited.

Management is of the opinion that the aforesaid companies will be able to meet their obligations as they arise and consequently no adjustment is required to be made to the carrying value of the security and guarantees provided.

3. Capital and other commitments

z) The Company has outstanding equity commitments to fund subsidiaries under construction stage aggregating to Rs. 133,802 (March 31, 2015: Rs. 146,614).

(b) The company has given undertaking to infuse equity aggregating to Rs. 392,416 (March 31, 2015: Rs. 333,258) in GVK Coal Developers (Singapore) Pte. Limited, towards shortfall, if any, of its loan repayment obligations. Further, the Company has pledged 81,148,236 (March 31, 2015: 81,148,236), 22,495,000 (March 31, 2015: 22,495,000) and 48,000,000 (March 31, 2015: 48,000,000) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Private Limited respectively for securing loan obtained by GVK Coal Developers (Singapore) Pte. Limited, an entity in which Company has 10% stake. Management believes that GVK Coal Developers (Singapore) Pte. Limited will be able to meet its obligations.

(c) During the year ended March 31, 2011, the Company, GVK Energy Limited (subsidiary Company) and certain private equity investors (‘investors'') had entered into an investment agreement pursuant to which the Company has undertaken to conduct an initial public offering of the GVK Energy Limited''s equity shares (‘Qualified IPO'' or ‘QIPO'') within 72 months from the date of investment agreement (preferred listing period). If the GVK Energy Limited does not make a QIPO during the preferred listing period and no offer for sale or demerger takes place within 12 months of the preferred listing period, then, at any time thereafter, the investors will have a put option with respect to all of the securities held by the Investor (“Put Right”) on the Company and the GVK Energy Limited at the higher of i) 20% IRR from the date of investment to the date of receipt of proceeds from the investor (“Put IRR”) and ii) the fair market value of the investor''s shares. Provided the Put IRR shall be reduced to 15%, if at least 3 private sector initial public offerings with an issue size of Rs.100,000 or more each have not taken place in India between the 48th month to the 72nd month from date of investment agreement.

The Company believes that the subsidiary company would be able to successfully conduct QIPO in the preferred listing period or successfully complete offer for sale or demerger. The Company further believes that return guaranteed would be subjected to regulations of Reserve Bank of India.

4. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defined under the provisions of “Micro, small and medium enterprises Act, 2006” is based on Management''s knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31, 2016 or March 31, 2015.

5. Segment information

In accordance with Accounting Standard 17 - Segment Reporting, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

6. The Honourable Supreme Court vide its decision of September 24, 2014 held that allotment of various coal blocks including those allotted to GVK Coal (Tokisud) Company Private Limited, subsidiary of GVK Energy Limited is arbitrary and illegal and has cancelled the allotment. Subsequently, the government promulgated The Coal Mines (Special Provisions) Ordinance 2014, which intends to take appropriate action to deal with situation arising pursuant to the Honourable Supreme Court''s judgment. The subsidiary company has filed writ petition before the Hon''ble High Court of Delhi impugning the decision of the Nominated Authority, Ministry of Coal which quantified the compensation payable to the subsidiary company for taking over the Tokisud Coal Block as Rs. 11,129 against the carrying value of assets of Rs. 34,862 in the books of subsidiary company. The Management believes that the subsidiary will be appropriately reimbursed for cancelled coal mine and accordingly the cancellation of coal mine will not have any material impact upon the financial statements.

7. The Company has made investments aggregating to Rs. 39,071 (March 31, 2015: Rs. 34,886) by way of advances, subscription of shares and share application money and provided guarantees and commitments aggregating to Rs. 769,444 to lenders of GVK Coal Developers (Singapore) Pte Limited (GVK Coal) against its borrowings, an entity in which Company owns 10%. GVK Coal is currently under development phase and is making losses and its current liabilities exceed current assets by USD 900 million (March 31, 2015: USD 885 million) i.e. Rs. 574,160 (March 31, 2015: Rs. 553,929) (includes USD 758 million due to non-controlling shareholder who has extended time for repayment from time to time, the most recent extension until July 15, 2016), based on unaudited financial statements for the year ended June 30, 2015. In addition to aforesaid commitments, the Company has also given assurance for financial assistance, if required. The prices of the coal have significantly fallen since GVK coal had acquired stake in the coal mines. GVK Coal has not been able to achieve financial closure resulting in delays in commencement of mine development activity when compared to scheduled date, delays in entering into definitive agreements for port and rail development and agreement for sale of coal. Further, certain lenders of GVK Coal have classified the loan as non- performing and the lenders had abridgement option on the loans either on October 2015 or every year thereafter.

GVK coal is in discussion with non- controlling shareholders to realign the option exercise dates, looking for additional funding from potential investors and working with lenders to reach to optimal solution. Management believes that while the prices of coal have fallen, the fall in prices of other commodities and services would offset the impact of fall in coal prices on the project by reducing capital and operating cost requirements and hence, GVK Coal would be able to establish profitable operations, meet its obligations and its current liabilities being in excess of current assets is temporary in nature and will not impact ability of the GVK Coal to continue in operation in foreseeable future. The aforesaid will not have any material adverse impact upon cash flows of the Company and accordingly no adjustment is required to receivable, investments, share application money and guarantees and commitments.

8. The Company had applied to Central government on May 13, 2013 for waiver of excess managerial remuneration amounting to Rs. 21 for the year ended March 31, 2013 paid to a director in excess of the limits prescribed under Schedule XIII of the Companies Act, 1956. The Company believes approval will be obtained in due course and would not have any material impact upon the financial statements.

9. Uncertainties faced by GVK Energy Limited

a The subsidiary companies of GVK Energy Limited viz. GVK Industries Limited (GVKIL) and GVK Gautami Power Limited (GVKGPL) (collectively ‘subsidiary companies'') had commenced construction of phase III and phase II power plants respectively on which they have incurred aggregated cost of Rs. 15,651 (March 31, 2015: Rs. 15,655). Due to lower supply/availability of gas, the subsidiary companies have temporarily suspended the construction activities and intend to resume construction once natural gas is available which Management expects to happen in foreseeable future. Further, phase II of GVKIL and Phase I of GVKGPL having fixed assets with Written Down Value of Rs. 183,249 (March 31, 2015: Rs. 196,252) have during the current financial year achieved 6% PLF (March 31, 2015: Nil) and 2.6% PLF (March 31, 2015: Nil) respectively. Also, GVKIL and GVKGPL have incurred losses of Rs. 4,751 (March 31, 2015: Rs. 6,916) and Rs. 21,968 (March 31, 2015: Rs. 20,474) respectively. Further, certain banks have classified loan balances of GVKIL as non-performing asset. Further, the Company is confident that Government of India will continue to take necessary steps/initiatives to improve the situation of natural gas for e.g. scheme envisaging supplying of domestic gas to gas based upto the target plant load factor (‘PLF''), selected through a reverse e-bidding process and also intervention/sacrifices to be collectively made by all stakeholders. Further, Management based on its rights under power purchase agreement to recover capacity charges and in view of installing alternate fuel equipment and on the basis of aforesaid discussions believes the subsidiary companies will continue to be in operation in foreseeable future despite continued losses.

b. GVK Goindwal (Sahib) Limited, subsidiary company of GVK Energy Limited has subsequent to year completed construction of its 540 MW power project with carrying value of Rs. 466,972 and has completed commercial test but not declared availability in the absence of coal. In the wake of cancellation of coal mine as referred in note 36, Management has obtained coal linkage for six months, taken opinion for running plant on imported coal, tied up for importing coal and is mulling other options such as, obtaining coal linkage locally and has filed petition with Punjab State Electricity Regulatory Commission (PSERC) for re-negotiation of terms of power purchase agreement such as rate revision, approval for using imported coal etc. claiming force majeure and change in law as envisaged under Power Purchase Agreement. PSERC in its interim order has allowed the subsidiary company to run the plant on imported fuel for upto two and half years within which the Company should make arrangements for coal on long term basis. Management based on internal assessment/ legal advice believes that cancellation of coal mine will not impact the operations of the power project.

The Company accordingly believes that investments, including Compulsory Convertible Debentures, in subsidiary company with carrying value of Rs. 108,323 is recoverable in normal course of business and no provision for diminution is necessary.

10. As at March 31, 2016, the Company has accumulated losses of Rs.9,953 and the Company has incurred losses of Rs. 12,961 and Rs. 12,983 in the current and previous year respectively. The Company has delayed payment of loans and interest and certain loan accounts have been classified as nonperforming by banks. Further, as discussed in notes 25b, and 26, the Company has provided guarantees and commitments on behalf of various entities and as further detailed in notes 31, 32 and 34 uncertainties are being faced by various projects in the Group such as delays in development of coal mines in an overseas project where Company has provided guarantees and commitments for the borrowings, losses incurred by gas based plants in the absence of gas and litigations on rights to claim capacity charge, cancellation of coal linkage to coal based plant and re-negotiation of terms of PPA of coal based plant. Notwithstanding the above, the financial statements of the Company have been prepared on going concern basis as Management believes that the Company would be able to establish profitable operations, meet its commitments, reduce debt by stake sale and the entities on whose behalf guarantees/ commitments have been extended would be able to meet their obligations. Further, the Management is confident that aforesaid entities would win litigations; obtain approvals of regulators; will reach an optimal solution with non-controlling shareholders and lenders; obtain requisite gas/coal allocation etc. as required and despite current macro- economic environment challenges would establish profitable operations.

11. During the earlier year, Termination Notice was served by GVK Oil & Gas Limited, a subsidiary involved in oil & gas activity on Ministry of Petroleum and Natural Gas (Ministry) for termination of Production Sharing Contract. The subsidiary had alleged that it has not been able to effectively carry out exploration operations in the Blocks allotted to it due to Ministry of Defense clearance issues. While the Management continues to pursue with Ministry for reimbursement of costs, the Company has written off investments and advances made to subsidiary aggregating to Rs. 10,161 (March 31, 2015: Rs. 7,590).

12. On January 17, 2013 and subsequently from time to time, Securities and Exchange Board of India (SEBI) made amendment to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Equity Listing Agreement, pursuant to which listed entities have been prohibited from framing any employee benefit schemes involving acquisition of own securities from secondary market in excess of 10% of total assets of the scheme. The Company had formed GVK Employee Welfare Trust on July 15, 2009 which currently holds 18,083,890 own equity shares which were acquired from secondary market. SEBI circular requires such Trust to dispose shares within five years from October 28, 2014 or to align the Trust with SEBI (ESOS and ESPS) Guidelines. Management is evaluating options available in the circular and believes that application of this circular will not have any material impact on statement of profit and loss.

13. The financial statements contain certain amounts reported as “0“which are less than Rs. 1.

14. Previous year figures

Previous year figures have been regrouped/reclassified, where necessary, to conform to this year''s classification.

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Mar 31, 2015

A) Terms/rights attached to equity shares

The Company has only one class of equity share having par value of Rs.1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. 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.

a. Term loan aggregating to Rs. 16,667 is secured by first pari-passu charge on the current assets, present and future of the Company, second pari-passu charge on the current assets and fixed assets of GVK Industries Limited and pledge of 10% shares of GVK Industries Limited and presently carries interest of 13.15% per annum. The loan is repayable in six equal quarterly installments after a moratorium of eighteen months from the date of first drawdown viz. March 8, 2013.

b. Term loan aggregating to Rs. 14,968 is secured by mortgage of property, admeasuring 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited and presently carries interest of 13.25% per annum. The loan is repayable after a period of 35 months from the date of first drawdown viz. September 27, 2012.

The Company has not made payment of principal dues in certain cases. The details of payments not made are as follows:

Term loan aggregating to Rs. 42,880 currently carries interest of 11.50% per annum and secured by (i) charge on loans and advances of the Company to GVK Airport Developers Limited ("GVKADL") and also loans and advances provided by GVKADL to GVK Airport Holdings Private Limited ("GVKAHPL") and Bangalore Airport & Infrastructure Developer Private Limited ("BAIDPL"); (ii) exclusive charge on shares of GVKADL to the extent of two times of facility amount; (iii) exclusive charge on shares of GVKAHPL and BAIDPL not exceeding 30% of the shares of the Companies and the no. of shares to be pledged would be in proportion to the lenders at GVKADL; (iv) first pari passu charge on Himayatsagar and Paigah House property, Hyderabad; (v) second pari passu charge on land of 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited; (vii) proportionate proceeds of liquidity event at GVKADL, GVK AHPL and BAIDPL and (viii) charge on shares of GVKADL, GVK AHPL and BAIDPL along with HDFC and SREI or any other future lender representing at least 61% of the paid up share capital of the Company.

2. Gratuity benefit

The company operates one defined benefit plan, viz., gratuity, for its employees. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on retirement or termination at 15 days of last drawn salary for each completed year of service. The scheme is funded.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the plan.

3. Related party disclosures

Disclosure as required by Notified Accounting Standard 18 (AS -18) "Related Party Disclosures" are as follows: Names of the related parties and description of relationship:

(a)Related parties where control exists

Subsidiaries GVK Industries Limited

GVK Jaipur Expressway Private Limited Alaknanda Hydro Power Company Limited GVK Airport Developers Limited (GVKADL)

GVK Coal (Tokisud) Company Private Limited

Goriganga Hydro Power Private Limited

GVK Power (Goindwal Sahib) Limited

GVK Perambalur SEZ Private Limited

GVK Oil & Gas Limited

GVK Developmental Projects Private Limited

GVK Energy Limited

GVK Gautami Power Limited

GVK Airport Holdings Private Limited (GVKAHPL)

PT.GVK Services, Indonesia.

GVK Transportation Private Limited

GVK Ratle Hydro Electrical Projects Private Limited

GVK Energy Venture Private Limited

GVK Bagodara Vasad Expressway Private Limited

GVK Deoli Kota Expressway Private Ltd

Bangalore Airport & Infrastructure Developers Private Limited (BAIADPL)

Mumbai International Airport Private Limited GVK Power (Khadur Sahib)

Private Limited GVK Airports International Pte Ltd GVK Airport Services

Private Limited GVK Shivpuri Dewas Expressway Private Limited

b) Associates :

Bangalore International Airport Limited

Seregraha Mines Limited

(c) Key management personnel

Dr. GVK Reddy - Chairman and Managing director

Mr. G V Sanjay Reddy - Director

Mr A Issac George - Director

Mr Krishna Ram Bhupal - Director

(d) Enterprises over which the key management personnel exercise significant influence

TAJ GVK Hotels & Resorts Limited

Orbit Travels & Tours Private Limited

GVK Technical & Consultancy Services Private Limited

Pinakini Share and Stock Broker Limited

GVK Foundation

GVK Projects and Technical Services Limited

GVK Employee Welfare Trust

GVK Coal Developers (Singapore) Pte Ltd

4. Details of loan given to subsidiaries, associates, parties in which directors are interested

Subsidiaries

i) GVK Oil & Gas Limited

Balance as at March 31,2015 Rs. 10,156 (March 31,2014: Rs. 17,740) Maximum amount outstanding during the year was Rs. 17,746 (March 31,2014: Rs. 17,740) The aforesaid loan is repayable on demand.

ii) GVK Perambalur SEZ Private Limited

Balance as at March 31,2015 Rs. 6,719 (March 31,2014: Rs. 6,710) Maximum amount outstanding during the year was Rs. 6,719 (March 31,2014:Rs. 6,710) The aforesaid loan is repayable on demand.

iii) Goriganga Hydro Power Private Limited

BBalance as at March 31,2015 Rs. 4,767 (March 31,2014: Rs. 4,759) Maximum amount outstanding during the year was Rs. 4,767 (March 31,2014: Rs. 4,759) The aforesaid loan is repayable on demand.

iv) GVK Airport Developers Limited

Balance as at March 31,2015 Rs. 76,242 (March 31,2014: Rs. 51,802) Maximum amount outstanding during the year was Rs. 84,162 (March 31,2014: Rs. 58,302) The aforesaid loan is repayable on demand.

v) GVK Developmental Projects Private Limited

Balance as at March 31,2015 Rs. 4,033 (March 31,2014: Rs. 5,579) Maximum amount outstanding during the year was Rs. 5,583 (March 31,2014: Rs. 17,959) The aforesaid loan is repayable on demand.

vi) GVK Transportation Private Limited

Balance as at March 31,2015 Rs. 0 (March 31,2014: Rs. 17,089) Maximum amount outstanding during the year was Rs. 21,249 (March 31,2014: Rs. 17,089) The aforesaid loan is repayable on demand.

vii) GVK Ratle Hydro Electrical Projects Private Limited

Balance as at March 31,2015 Rs. 1 (March 31,2014: Rs. 0 ) Maximum amount outstanding during the year was Rs. 1 (March 31,2014: Rs. 4,268) The aforesaid loan is repayable on demand.

viii) Alaknanda Hydro Power Company Limited

Balance as at March 31,2015 Rs. Nil (March 31,2014: Rs. 2) Maximum amount outstanding during the year was Rs. 2 (March 31,2014: Rs. 2) The aforesaid loan was repayable on demand.

ix) GVK Power (Goindwal Sahib) Limited

Balance as at March 31,2015 Rs. 16 (March 31,2014: Rs. 0) Maximum amount outstanding during the year was Rs. 156 (March 31,2014: Rs. 1,325) The aforesaid loan was repayable on demand.

Notes to financial statements for the year ended March 31, 2015

(All amounts expressed in Indian Rupees Lakhs unless otherwise stated)

x) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31,2015 Rs. 0 (March 31,2014: Rs. 0) Maximum amount outstanding during the year was Rs. 0 (March 31,2014: Rs. 0) The aforesaid loan is repayable on demand.

xi) GVK Energy Limited

Balance as at March 31,2015 Rs. 80 (March 31,2014: Rs. 6) Maximum amount outstanding during the year was Rs. 127 (March 31,2014: Rs. 907) The aforesaid loan is repayable on demand.

xii) GVK Coal Developers (Singapore) Pte Limited Limited

Balance as at March 31,2015 Rs. 3 (March 31,2014: Rs. 3) Maximum amount outstanding during the year was Rs. 3 (March 31,2014: Rs. 165) The aforesaid loan is repayable on demand.

xiii) GVK Bagodara Vasad Expressway Private Limited

Balance as at March 31,2015 Rs. 3 (March 31,2014: Rs.1) Maximum amount outstanding during the year was Rs. 3 (March 31,2014: Rs. 1) The aforesaid loan is repayable on demand.

xiv) GVK Jaipur Expressway Private Limited

Balance as at March 31,2015 Rs. 3 (March 31,2014: Rs. 1) Maximum amount outstanding during the year was Rs. 3 (March 31,2014: Rs. 1) The aforesaid loan is repayable on demand.

xv) Bangalore International Airport Limited

Balance as at March 31,2015 Rs. 8 (March 31,2014: Rs. Nil) Maximum amount outstanding during the year was Rs. 8 (March 31,2014: Rs. Nil) The aforesaid loan is repayable in demand.

xvi) GVK Industries Limited

Balance as at March 31,2015 Rs. 135 (March 31,2014: Rs. Nil) Maximum amount outstanding during the year was Rs. 593 (March 31,2014: Rs. Nil) The aforesaid loan is repayable in demand.

5. Contingent liabilities

a. Direct and indirect taxes:

(i) Income tax demand for assessment year 2008-09 for Rs. 73 (March 31, 2014: Rs. 73), for assessment year 2009-10 Rs. 10 (March 31,2014: Rs. Nil), for assessment year 2010-11 for Rs. 279 (March 31,2014: 279), for assessment year 2011-12 for Rs. 11 (March 31,2014 : Rs. 11) and for assessment year 2012-13 Rs. 44 (March 31,2014: Rs. Nil).

(ii) The Company had received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duties of Rs. 2,829 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has obtained an order from the Andhra Pradesh High Court staying the above notice on March 13, 2008 until such further orders from the said court.

Management based on its internal assessment and/or legal advice is confident that the cases will be decided in the Company's favour

b. Security against loans taken by others

(i) The Company had provided security by way of pledge of 1,83,000,000 (March 31,2014: 170,800,000) shares of GVK Airport Developers Limited for loans taken by the aforesaid subsidiary.

(ii) The Company had provided security by way of pledge of 87,910,588 (March 31, 2014: 87,910,588) shares of GVK Energy Limited for loans taken by the aforesaid subsidiary.

(iii) The Company has provided security by way of corporate guarantees amounting to Rs 227,919 (March 31,2014: Rs. 212,371) to subsidiaries and Rs. 1,441 to an associate (March 31,2014: Rs. 1,441) for various fund and non- fund based facility availed by them.

(iv) The Company has provided security by way of corporate guarantees amounting to Rs. 3,941 (March 31,2014: Rs. 5,635) for securing loans obtained by GVK Projects and Technical Services Limited.

(v) The Company has provided security by way of guarantee amounting to Rs. 320,189 (March 31, 2014: Rs. 294,489) for securing loans obtained by GVK Coal Developers (Singapore) Pte Limited.

Management is of the opinion that the aforesaid Companies will be able to meet their obligations as they arise and consequently no adjustment is required to be made to the carrying value of the security and guarantees provided.

6. Capital and other commitments

(a) The Company has outstanding equity commitments to fund subsidiaries under construction stage aggregating to Rs. 146,614 (March 31,2014: Rs. 161,416).

(b) The company has given undertaking to infuse equity aggregating to Rs. 333,258 (March 31, 2014: Rs. 306,509) in GVK Coal Developers (Singapore) Pte. Limited, towards shortfall, if any, of its loan repayment obligations. Further, the Company has pledged 81,148,236 (March 31, 2014: 81,148,236), 22,495,000 (March 31, 2014: 22,495,000) and 48,000,000 (March 31, 2014: 44,800,000) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Limited respectively for securing loan obtained by GVK Coal (Singapore) Pte. Limited, an entity in which Company has 10% stake. Management believes that GVK Coal Developers (Singapore) Pte. Limited will be able to meet its obligations.

(c) During the year ended March 31, 2011, the Company, GVK Energy Limited (subsidiary Company) and certain private equity investors ('investors') had entered into an investment agreement pursuant to which the Company has undertaken to conduct an initial public offering of the GVK Energy Limited's equity shares ('Qualified IPO' or 'QIPO') within 60 months from the date of investment agreement (preferred listing period).

If the GVK Energy Limited does not make a QIPO during the preferred listing period and no offer for sale takes place within 12 months of the preferred listing period, then, at any time thereafter, the investors will have a put option with respect to all of the securities held by the Investor ("Put Right") on the Company and the GVK Energy Limited at the higher of i) 20% IRR from the date of investment to the date of receipt of proceeds from the investor ("Put IRR") and ii) the fair market value of the investor's shares. Provided the Put IRR shall be reduced to 15%, if at least 3 private sector initial public offerings with an issue size of Rs.100,000 or more each have not taken place in India between the 36th month to the 60th month from date of investment agreement.

The Company believes that the subsidiary Company would be able to successfully conduct QIPO in the preferred listing period.

7. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defined under the provisions of "Micro, small and medium enterprises Act, 2006" is based on Management's knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31,2015 or March 31,2014.

8. Segment information

In accordance with Accounting Standard 17 - Segment Reporting, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

9 . On January 17, 2013 and subsequently from time to time, Securities and Exchange Board of India (SEBI) made amendment to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Equity Listing Agreement, pursuant to which listed entities have been prohibited from framing any employee benefit schemes involving acquisition of own securities from secondary market in excess of 10% of total assets of the scheme. The Company had formed GVK Employee Welfare Trust on July 15, 2009 which currently holds 18,083,890 own equity shares which were acquired from secondary market. SEBI circular requires such Trust to dispose shares within five years from October 28, 2014 or to align the Trust with SEBI (ESOS and ESPS) Guidelines. Management is evaluating options available in the circular and believes that application of this circular will not have any material impact on statement of profit and loss.

10. The Company has made investments aggregating to Rs. 33,318 (March 31, 2014: Rs. 22,202) by way of advances, subscription of shares and share application money and provided guarantees and commitments aggregating to Rs. 653,448 to lenders of GVK Coal Singapore Pte Limited (GVK Coal), an entity in which Company owns 10%. GVK Coal has borrowed Rs. 653,448 (March 31,2014: Rs. 600,998) as at March 31,2015 from its lender against the aforesaid guarantees and commitments. GVK Coal is currently under development phase and is making losses and its current liabilities exceed current assets by USD 885 million (Rs. 553,929) based on unaudited financial statements for the year ended June 30, 2014. In addition to aforesaid commitments, the Company has also given assurance for financial assistance, if required. The prices of the coal have significantly fallen since GVK coal had acquired stake in the coal mines. GVK coal is also in discussion with non- controlling shareholders to realign the option exercise dates and additional funding from potential investors.

Management believes that GVK Coal would be able to establish profitable operations, meet it's obligations and it's current liabilities being in excess of current assets is temporary situation and will not impact ability of the company to continue in operation in foreseeable future and accordingly will not have any material adverse impact upon operations and cash flows of the Company.

11. The Company had applied to Central government on May 13, 2013 for waiver of excess managerial remuneration amounting to Rs. 21 for the year ended March 31, 2013 paid to a director in excess of the limits prescribed under Schedule XIII of the Companies Act, 1956. The Company believes approval will be obtained in due course and would not have any material impact upon the financial statements.

12. Uncertainties faced by GVK Energy Limited

a The subsidiary companies of GVK Energy Limited viz. GVK Industries Limited (GVKIL) and GVK Gautami Power Limited (GVKGPL) (collectively 'subsidiary companies') had commenced construction of phase III and phase II power plants respectively on which they have incurred aggregated cost of Rs. 15,655 (March 31, 2014: Rs. 15,655). Due to lower supply/availability of gas, the subsidiary companies have temporarily suspended the construction activities and intend to resume construction once natural gas is available which Management expects to happen in foreseeable future.

Further, phase II of GVKIL and Phase I of GVKGPL having fixed assets with Written Down Value of Rs. 196,252 (March 31,2014: Rs. 209,670) has during the current financial year achieved Nil PLF (March 31, 2014: Nil) and Nil PLF (March 31,2014: Nil) respectively. Also, GVKIL and GVKGPL have incurred losses of Rs. 6,916 (March 31,2014: Rs. 7,888) and Rs. 20,474 (March 31,2014: Rs. 21,103) respectively. However, GVKIL is in the process of tying up of additional loans and GVKGPL has already obtained moratorium for payments. Further, the Company and Association of Power Producers are closely monitoring the situation and evaluating various approaches to deal with the situation and Management of the Company is confident that Government of India will take necessary steps/initiatives to improve the situation of natural gas. Further, Management based on its rights under power purchase agreement to recover capacity charges and in view of installing alternate fuel equipment and on the basis of aforesaid discussions believes the subsidiary companies will continue to be in operation in foreseeable future despite continued losses.

b. GVK Goindwal (Sahib) Limited, subsidiary company is presently constructing 540 MW power project with carrying value of Rs. 388,986 which was dependent upon GVK coal mine for fuel. In the wake of cancellation of coal mine as referred in note 36, Management has obtained coal linkage for six months, taken opinion for running plant on imported call, tied up for importing coal and is mulling other options such as, obtaining coal linkage locally and has filed petition with Punjab State Electricity Regulatory Commission for re- negotiation of terms of power purchase agreement such as rate revision, approval for using imported coal etc. claiming force majeure and change in law as envisaged under Power Purchase Agreement. Management based on legal advise believes that cancellation of coal mine will not impact the operations of the upcoming power project.

The Company accordingly believes that investments, including Compulsory Convertible Debentures, in subsidiary company with carrying value of Rs. 108,323 (includes gas and non-gas based projects) is recoverable in normal course of business and no provision for diminution is necessary.

13. During the previous year, Termination Notice was served by GVK Oil & Gas Limited, a subsidiary involved in oil & gas activity on Ministry of Petroleum and Natural Gas (Ministry) for termination of Production Sharing Contract. The subsidiary had alleged that it has not been able to effectively carry out exploration operations in the Blocks allotted to it due to Ministry of Defence clearance issues. The Management believes that Ministry will reimburse subsidiary for costs incurred by it and accordingly no adjustment is required to balance carrying value of investments and advances aggregating to Rs. 10,161 (net of written off Rs. 7,590) (March 31,2014: Rs. 17,745) and guarantee aggregating to Rs. Nil (March 31,2014: Rs. 813) issued by the Company for subsidiary.

14. The Honourable Supreme Court vide is decision of September 24, 2014 held that allotment of various coal blocks including those allotted to GVK Coal (Tokisud) Company Private Limited, subsidiary of GVK Energy Limited is arbitrary and illegal and has cancelled the allotment. Subsequently, the government promulgated The Coal Mines (Special Provisions) Ordinance 2014, which intends to take appropriate action to deal with situation arising pursuant to the Honourable Supreme Court's judgment. The subsidiary company has filed writ petition before the Hon'ble High Court of Delhi impugning the decision of the Nominated Authority, Ministry of Coal which quantified the compensation payable to the subsidiary company for taking over the Tokisud Coal Block as Rs. 11,129 against the carrying value of assets of Rs. 35,575 in the books of subsidiary company. The Management believes that the subsidiary will be appropriately reimbursed for cancelled coal mine and accordingly no provision is required to be made to investments, including Compulsory Convertible Debentures, in GVK Energy Limited with carrying value of Rs. 108,323

15. The financial statements contain certain amounts reported as "0"which are less than Rs. 1.

16. Previous year figures

Previous year figures have been regrouped/reclassified, where necessary, to conform to this year's classification.

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Mar 31, 2014

1. Corporate information

GVK Power & Infrastructure Limited (''the Company'' or ''GVKPIL'') provides operation and maintenance services, manpower and consultancy services and incidental services to owners of power plants, airports etc. The Company has also acquired substantial ownership interest into power companies, airports, roads and companies providing infrastructure facilities.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notifed under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956 read with General Circular 8/2014 dated April 4, 2014, issued by the Ministry of Corporate Afairs. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. Gratuity benefit

The company operates one defined benefit plan, viz., gratuity, for its employees. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on retirement or termination at 15 days of last drawn salary for each completed year of service. The scheme is funded.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the plan.

4. Related party disclosures

Disclosure as required by Notified Accounting Standard 18 (AS -18) "Related Party Disclosures" are as follows: Names of the related parties and description of relationship: (a)Related parties where control exists

Subsidiaries GVK Industries Limited

GVK Jaipur Expressway Private Limited Alaknanda Hydro Power Company Limited

GVK Airport Developers Private Limited

GVK Coal (Tokisud) Company Private Limited

Goriganga Hydro Power Private Limited

GVK Power (Goindwal Sahib) Limited

GVK Perambalur SEZ Private Limited

GVK Oil & Gas Limited

GVK Developmental Projects Private Limited

GVK Energy Limited

GVK Gautami Power Limited

GVK Airport Holdings Private Limited

PT.GVK Services, Indonesia.

GVK Transportation Private Limited

GVK Ratle Hydro Electrical Projects Private Limited

GVK Energy Venture Private Limited

GVK Bagodara Vasad Expressway Private Limited

GVK Deoli Kota Expressway Private Ltd

Bangalore Airport & Infrastructure Developers Private Limited (BAIADPL)

Mumbai International Airport Private Limited

GVK Power (Khadur Sahib) Private Limited

GVK Airports International Pte Ltd

GVK Shivpuri Dewas Expressway Private Limited

b) Associates

Bangalore International Airport Limited Seregraha Mines Limited

(c) Key management personnel

Dr. GVK Reddy, Chairman and Managing director Mr. G V Sanjay Reddy, Director Mr A Issac George, Director Mr Krishna Ram Bhupal, Director

(d) Enterprises over which the key management personnel exercise significant influence

TAJ GVK Hotels & Resorts Limited

Orbit Travels & Tours Private Limited

GVK Technical & Consultancy Services Private Limited

Pinakini Share and Stock Broker Limited

GVK Foundation

GVK Projects and Technical Services Limited

GVK Employee Welfare Trust

GVK Coal Developers (Singapore) Pte Ltd

24. Details of loan given to subsidiaries, associates, parties in which directors are interested

Subsidiaries

i) GVK Oil & Gas Limited

Balance as at March 31, 2014 Rs. 17,740 (March 31, 2013: Rs. 17,620)

Maximum amount outstanding during the year was Rs. 17,740 (March 31, 2013: Rs. 17,620)

The aforesaid loan is repayable on demand.

ii) GVK Perambalur SEZ Private Limited

Balance as at March 31, 2014 Rs. 6,710 (March 31, 2013: Rs. 6,692)

Maximum amount outstanding during the year was Rs. 6,710 (March 31, 2013:Rs. 6,692)

The aforesaid loan is repayable on demand.

iii) Goriganga Hydro Power Private Limited

Balance as at March 31, 2014 Rs. 4,759 (March 31, 2013: Rs. 4,751)

Maximum amount outstanding during the year was Rs. 4,759 (March 31, 2012: Rs. 4,751)

The aforesaid loan is repayable on demand.

iv) GVK Airport Developers Private Limited

Balance as at March 31, 2014 Rs. 51,802 (March 31, 2013: Rs. 57,302)

Maximum amount outstanding during the year was Rs. 58,302 (March 31, 2012: Rs. 81,590)

The aforesaid loan is repayable on demand.

v) GVK Developmental Projects Private Limited

Balance as at March 31, 2014 Rs. 5,579 (March 31, 2013: Rs. 15,112)

Maximum amount outstanding during the year was Rs. 17,959 (March 31, 2013: Rs. 15,112)

The aforesaid loan is repayable on demand.

vi) GVK Transportation Private Limited

Balance as at March 31, 2014 Rs. 43,070 (March 31, 2013: Rs. 35,782)

Maximum amount outstanding during the year was Rs. 43,070 (March 31, 2013: Rs. 37,191)

The aforesaid loan is repayable on demand.

vii) GVK Ratle Hydro Electrical Projects Private Limited

Balance as at March 31, 2014 Rs. 0 (March 31, 2013: Rs. 4,258)

Maximum amount outstanding during the year was Rs. 4,268 (March 31, 2013: Rs. 4,258)

The aforesaid loan is repayable on demand.

viii) Alaknanda Hydro Power Company Limited

Balance as at March 31, 2014 Rs. 2 (March 31, 2013: Rs. Nil)

Maximum amount outstanding during the year was Rs. 2 (March 31, 2013: Rs. Nil)

The aforesaid loan was repayable on demand.

ix) GVK Power (Goindwal Sahib) Limited

Balance as at March 31, 2014 Rs. 0 (March 31, 2013: Rs. Nil)

Maximum amount outstanding during the year was Rs. 1,325 (March 31, 2013: Rs. 971)

The aforesaid loan was repayable on demand.

x) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31, 2014 Rs. 0 (March 31, 2013: Rs. 0)

Maximum amount outstanding during the year was Rs. 0 (March 31, 2013: Rs. 0)

The aforesaid loan is repayable on demand.

xi) GVK Energy Limited

Balance as at March 31, 2014 Rs. 6 (March 31, 2013: Rs. 4)

Maximum amount outstanding during the year was Rs. 907 (March 31, 2013: Rs. 7,502) The aforesaid loan is repayable on demand.

xii) GVK Coal Developers (Singapore) Pte Limited Limited

Balance as at March 31, 2014 Rs. 3 (March 31, 2013: Rs. 88)

Maximum amount outstanding during the year was Rs. 165 (March 31, 2013: Rs. 119)

The aforesaid loan is repayable on demand.

xiii) GVK Bagodara Vasad Expressway Private Limited

Balance as at March 31, 2014 Rs. 1 (March 31, 2013: Rs. Nil)

Maximum amount outstanding during the year was Rs. 1 (March 31, 2013: Rs. Nil)

The aforesaid loan is repayable on demand.

xiv) GVK Jaipur Expressway Private Limited

Balance as at March 31, 2014 Rs. 1 (March 31, 2013: Rs. Nil)

Maximum amount outstanding during the year was Rs. 1 (March 31, 2013: Rs. Nil)

The aforesaid loan is repayable on demand.

5. Contingent liabilities

a. Direct and indirect taxes:

(i) Income tax demand for assessment year 2008-09 for Rs. 73 (March 31, 2013: Rs. 73), for assessment year 2010-11 for Rs. 279 (March 31, 2013: 871) and for assessment year 2011-12 for Rs. 11 (March 31, 2013 : Rs. Nil)

(ii) The Company had received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duties of Rs. 2,829 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has obtained an order from the Andhra Pradesh High Court staying the above notice on March 13, 2008 until such further orders from the said court.

Management based on its internal assessment and/or legal advice is confident that the cases will be decided in the Company''s favour.

b. Security against loans taken by others

(i) The Company had provided security by way of pledge of 170,800,000 (March 31, 2013: 170,800,000) shares of GVK Airport Developers Private Limited for loans taken by the aforesaid subsidiary.

(ii) The Company had provided security by way of pledge of 87,910,588 (March 31, 2013: Nil) shares of GVK Energy Limited for loans taken by the aforesaid subsidiary.

(iii) The Company has provided security by way of corporate guarantees amounting to Rs. 212,371 (March 31, 2013: Rs. 114,322) to subsidiaries and Rs. 1,441 to an associate (March 31, 2013: Rs. 1,441) for various fund and non- fund based facility availed by them.

(iv) The Company has provided security by way of corporate guarantees amounting to Rs. 5,635 (March 31, 2013: Rs. 6,879) for securing loans obtained by GVK Projects and Technical Services Limited.

(v) The Company has provided security by way of guarantee amounting to Rs. 332,601 (March 31, 2013: Rs. 281,432) for securing loans obtained by GVK Coal Developers (Singapore) Pte Limited.

Management is of the opinion that the aforesaid Companies will be able to meet their obligations as they arise and consequently no adjustment is required to be made to the carrying value of the security and guarantees provided.

6. Capital and other commitments

(a) The Company has outstanding equity commitments to fund subsidiaries under construction stage aggregating to Rs. 161,416 (March 31, 2013: Rs. 63,625).

(b) The company has given undertaking to infuse equity aggregating to Rs. 346,177 (March 31, 2013: Rs. 292,919) in GVK Coal Developers (Singapore) Pte. Limited, towards shortfall, if any, of its loan repayment obligations. Further, the Company has pledged 81,148,236 (March 31, 2013: 73,217,647), 22,495,000 (March 31, 2013: 22,495,000) and 44,800,000 (March 31, 2013: 44,800,000) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Private Limited respectively for securing loan obtained by GVK Coal (Singapore) Pte. Limited, an entity in which Company has 10% stake. Management believes that GVK Coal Developers (Singapore) Pte. Limited will be able to meet it''s obligations.

(c) During the year ended March 31, 2011, the Company, GVK Energy Limited (subsidiary Company) and certain private equity investors (''investors'') had entered into an investment agreement pursuant to which the Company has undertaken to conduct an initial public ofering of the GVK Energy Limited''s equity shares (''Qualifed IPO'' or ''QIPO'') within 60 months from the date of investment agreement (preferred listing period).

If the GVK Energy Limited does not make a QIPO during the preferred listing period and no ofer for sale takes place within 12 months of the preferred listing period, then, at any time thereafer, the investors will have a put option with respect to all of the securities held by the Investor ("Put Right") on the Company and the GVK Energy Limited at the higher of i) 20% IRR from the date of investment to the date of receipt of proceeds from the investor ("Put IRR") and ii) the fair market value of the investor''s shares. Provided the Put IRR shall be reduced to 15%, if at least 3 private sector initial public oferings with an issue size of Rs. 100,000 or more each have not taken place in India between the 36th month to the 60th month from date of investment agreement.

The Company believes that the subsidiary Company would be able to successfully conduct QIPO in the preferred listing period.

7. Micro, small and medium enterprises

The identifcation of micro, small and medium enterprise suppliers as Defined under the provisions of "Micro, small and medium enterprises Act, 2006" is based on Management''s knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31, 2014 or March 31, 2013.

8. Segment information

In accordance with Accounting Standard 17 - Segment Reporting, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

9. On January 17, 2013, May 13, 2013 and November 29, 2013, Securities and Exchange Board of India (SEBI) made amendment to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Equity Listing Agreement, pursuant to which listed entities have been prohibited from framing any employee benefit schemes involving acquisition of own securities from secondary market. The Company had formed GVK Employee Welfare Trust on July 15, 2009 which currently holds 18,083,890 own equity shares which were acquired from secondary market. SEBI circular requires such Trust to dispose shares by June 30, 2014 or to align the Trust with SEBI (ESOS and ESPS) Guidelines. Management is evaluating options available in the circular and believes that application of this circular will not have any material impact on Statement of profit and loss.

10. The Company has made investments aggregating to Rs. 22,202 by way of subscription of shares and share application money and provided guarantees and commitments aggregating to Rs. 678,778 to GVK Coal Singapore Pte Limited (GVK Coal), an entity in which Company owns 10%. GVK Coal is currently under development phase and is making losses and its current liabilities exceed current assets by USD 259 mn based on unaudited financial statements for the year ended June 30, 2013. In addition to aforesaid commitments, the Company has also given assurance for financial assistance, if required. GVK coal is also in discussion with non- controlling shareholders to realign the option exercise dates and additional funding from potential investors.

Management believes that GVK Coal would be able to establish profitable operations and current liabilities being in excess of current assets is temporary and accordingly will not have any impact upon investments/guarantees of the Company.

11. The Company had applied to Central government on May 13, 2013 and April 24, 2012 for waiver of excess managerial remuneration for the year''s ended March 31, 2013 and March 31, 2012 amounting to Rs. 137 and Rs. 207 respectively paid to two directors in excess of the limits prescribed under Schedule XIII of the Companies Act, 1956. During the current year, one of the directors has refunded excess remuneration and the Company is awaiting approval for excess managerial remuneration paid to another director for the year''s ended March 31, 2013 and March 31, 2012 amounting to Rs. 21 and Rs. 112 respectively which the Company believes will be obtained in due course and would not have any material impact upon the financial statements.

12. The subsidiary companies of GVK Energy Limited viz. GVK Industries Limited (GVKIL) and GVK Gautami Power Limited (GVKGPL) (collectively ''subsidiary companies'') had commenced construction of phase III and phase II power plants respectively on which they have incurred aggregated cost of Rs. 15,655 (March 31, 2013: Rs. 15,659). Due to lower supply/availability of gas, the subsidiary companies have temporarily suspended the construction activities and intend to resume construction once natural gas is available which Management expects to happen in foreseeable future. Further, phase II of GVKIL and Phase I of GVKGPL having fixed assets with Written Down Value of Rs. 209,670 (March 31, 2013: Rs. 220,491) has during the current financial year achieved Nil PLF (March 31, 2013: 29.49%) and Nil PLF (March 31, 2013: 24.52%) respectively. Also, GVKIL and GVKGPL have incurred losses of Rs. 7,888 (March 31, 2013: Rs. 8,547) and Rs. 21,103 (March 31, 2013: Rs. 15,332) respectively. However, both the Companies have already tied up with lead bankers and majority of other consortium lenders for additional loans/ moratorium for payments of loan and are confident of receiving approval from the remaining lenders. Further, the Company and Association of Power Producers are closely monitoring the situation and evaluating various approaches such as installing alternate fuel equipment (already done by GVKGPL and GVKIL) etc. to deal with the situation and Management of the Company is confident that Government of India will take necessary steps/initiatives to improve the situation of natural gas. Further, Management based on its rights under power purchase agreement to recover capacity charges and receipt of the approval from majority of the consortium lenders, believes the subsidiary companies will continue to be in operation in foreseeable future despite continued losses. The Company accordingly believes that investments, including Compulsory Convertible Debentures, in subsidiary company with carrying value of Rs. 108,323 (includes gas and non-gas based projects) is recoverable in normal course of business and no provision for diminution is necessary.

13. During the year Termination Notice has been served by GVK Oil & Gas Limited, a subsidiary involved in oil & gas activity on Ministry of Petroleum and Natural Gas (Ministry) for termination of Production Sharing Contract. The subsidiary has alleged that it has not been able to efectively carry out exploration operations in the Blocks allotted to it due to Ministry of Defence clearance issues. The Management believes that Ministry will reimburse subsidiary for costs incurred by it and accordingly no adjustment is required to carrying value of investments and advances aggregating to Rs. 17,745 and guarantee aggregating to Rs. 813 issued by the Company for subsidiary.

14. The financial statements contain certain amounts reported as "0"which are less than Rs. 1.

15. Previous year figures

Previous year figures have been regrouped/reclassified, where necessary, to conform to this year''s classification.

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Mar 31, 2013

1. Corporate information

GVK Power & Infrastructure Limited (''the Company'' or ''GVKPIL'') provides operation and maintenance services, manpower and consultancy services and incidental services to owners of power plants, airports etc. The Company has also acquired substantial ownership interest into power companies, airports, roads and companies providing infrastructure facilities.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. Gratuity benefit

The company operates one defined benefit plan, viz., gratuity, for its employees. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on retirement or termination at 15 days of last drawn salary for each completed year of service. The scheme is funded.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the plan.

4. Related party disclosures

Disclosure as required by Notified Accounting Standard 18 (AS -18) "Related Party Disclosures" are as follows: Names of the related parties and description of relationship:

(a)Related parties where control exists

Subsidiaries GVK Industries Limited

GVK Jaipur Expressway Private Limited

Alaknanda Hydro Power Company Limited

GVK Airport Developers Private Limited

GVK Coal (Tokisud) Company Private Limited

Goriganga Hydro Power Private Limited

GVK Power (Goindwal Sahib) Limited

GVK Perambalur SEZ Private Limited

GVK Oil & Gas Limited

GVK Developmental Projects Private Limited

GVK Energy Limited

GVK Gautami Power Limited

GVK Airport Holdings Private Limited

PT.GVK Services, Indonesia.

GVK Transportation Private Limited

GVK Ratle Hydro Electrical Projects Private Limited

GVK Energy Venture Private Limited

GVK Bagodara Vasad Expressway Private Limited

GVK Deoli Kota Expressway Private Ltd

Bangalore Airport & Infrastructure Developers Private Limited Mumbai International Airport Private Limited (was associate till October 17, 2011)

GVK Power (Khadur Sahib) Private Limited

GVK Airports International Pte Ltd

GVK Shivpuri Dewas Expressway Private Limited

b) Associates

Bangalore International Airport Limited Seregraha Mines Limited

(c) Key management personnel

Dr. G V K Reddy, Chairman and Managing director

Mr. G V Sanjay Reddy, Director

Mr A Issac George, Director

Mr Krishna Ram Bhupal, Director

(d) Enterprises over which the key management personnel exercise significant influence

TAJ GVK Hotels & Resorts Limited

Orbit Travels & Tours Private Limited

GVK Technical & Consultancy Services Private Limited

Pinakini Share and Stock Broker Limited

GVK Foundation

GVK Projects and Technical Services Limited

GVK Employee Welfare Trust

GVK Coal Developers (Singapore) Pte Ltd

5. Details of loan given to subsidiaries, associates, parties in which directors are interested Subsidiaries

i) GVK Oil & Gas Limited

Balance as at March 31, 2013 Rs. 17,620 (March 31, 2012: Rs. 16,906)

Maximum amount outstanding during the year was Rs. 17,620 (March 31, 2012: Rs. 16,906)

The aforesaid loan is repayable on demand.

ii) GVK Perambalur SEZ Private Limited

Balance as at March 31, 2013 Rs. 6,692 (March 31, 2012: Rs. 6,638)

Maximum amount outstanding during the year was Rs. 6,692 (March 31, 2012:Rs. 6,638)

The aforesaid loan is repayable on demand.

iii) Goriganga Hydro Power Private Limited

Balance as at March 31, 2013 Rs. 4,751 (March 31, 2012: Rs. 4,674)

Maximum amount outstanding during the year was Rs. 4,751 (March 31, 2012: Rs. 4,674)

The aforesaid loan is repayable on demand.

iv) GVK Airport Developers Private Limited

Balance as at March 31, 2013 Rs. 57,302 (March 31, 2012: Rs. 81,437)

Maximum amount outstanding during the year was Rs. 81,590 (March 31, 2012: Rs. 83,894)

The aforesaid loan is repayable on demand.

v) GVK Developmental Projects Private Limited

Balance as at March 31, 2013 Rs. 15,112 (March 31, 2012: Rs. 92)

Maximum amount outstanding during the year was Rs. 15,112 (March 31, 2012: Rs. 92)

The aforesaid loan is repayable on demand.

vi) GVK Transportation Private Limited

Balance as at March 31, 2013 Rs. 35,782 (March 31, 2012: Rs. 32,854)

Maximum amount outstanding during the year was Rs. 37,191 (March 31, 2012: Rs. 38,147)

The aforesaid loan is repayable on demand.

vii) GVK Ratle Hydro Electrical Projects Private Limited

Balance as at March 31, 2013 Rs. 4,258 (March 31, 2012: Rs. 3,649)

Maximum amount outstanding during the year was Rs. 4,258 (March 31, 2012: Rs. 3,650)

The aforesaid loan is repayable on demand.

viii) Alaknanda Hydro Power Company Limited

Balance as at March 31, 2013 Rs. Nil (March 31, 2012: Rs. Nil)

Maximum amount outstanding during the year was Rs. Nil (March 31, 2012: Rs. 3)

The aforesaid loan was repayable on demand.

ix) GVK Power (Goindwal Sahib) Limited

Balance as at March 31, 2013 Rs. Nil (March 31, 2012: Rs. Nil)

Maximum amount outstanding during the year was Rs. 971 (March 31, 2012: Rs. Nil)

The aforesaid loan was repayable on demand.

x) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31, 2013 Rs. 0 (March 31, 2012: Rs. Nil)

Maximum amount outstanding during the year was Rs. 0 (March 31, 2012: Rs. Nil)

The aforesaid loan is repayable on demand.

xi) GVK Energy Limited

Balance as at March 31, 2013 Rs. 4 (March 31, 2012: Rs. Nil)

Maximum amount outstanding during the year was Rs. 7,502 (March 31, 2012: Rs. Nil)

The aforesaid loan is repayable on demand.

xii) GVK Coal Developers (Singapore) Pte Limited Limited

Balance as at March 31, 2013 Rs. 88 (March 31, 2012: Rs. 40)

Maximum amount outstanding during the year was Rs. 119 (March 31, 2012: Rs. 718)

The aforesaid loan is repayable on demand.

6. Contingent liabilities

a. Direct and indirect taxes:

i) Income tax demand for assessment year 2008-09 for Rs. 73 (March 31, 2012: Rs. 73) and for assessment year 2010-11 for Rs. 871 (March 31, 2012: Nil)

ii) The Company had received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duties of Rs. 2,829 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has obtained an order from the Andhra Pradesh High Court staying the above notice on March 13, 2008 until such further orders from the said court.

Management based on its internal assessment and/or legal advice is confident that the cases will be decided in the Company''s favour.

b. Security against loans taken by others

i) The Company has provided security by way of pledge of 170,800,000 (March 31, 2012: 180,000,000) shares of GVK Airport Developers Private Limited for loans taken by the aforesaid subsidiary.

ii) The Company has provided security by way of corporate guarantees amounting to Rs. 1 14,322 (March 31, 2012: Rs. 88,220) to subsidiaries and Rs. 1,441 to an associate (March 31, 2012: Rs. 1,441) for various fund and non-fund based facility availed by them.

iii) The Company has provided security by way of corporate guarantees amounting to Rs. 6,879 (March 31, 2012: Rs. 9,074) for securing loans obtained by GVK Projects and Technical Services Limited.

iv) The Company has provided security by way of guarantee amounting to Rs. 281,432 (March 31, 2012: Rs. 220,587) for securing loans obtained by GVK Coal Developers (Singapore) Pte Limited.

Management is of the opinion that the aforesaid Companies will be able to meet their obligations as they arise and consequently no adjustment is required to be made to the carrying value of the security and guarantees provided.

7. Capital and other commitments

a) The Company has outstanding equity commitments to fund subsidiaries under construction stage aggregating to Rs. 30,617 (March 31, 2012: Rs. 29,565).

b) The company has given undertaking to infuse equity aggregating to Rs. 292,919 (March 31, 2012: Rs. 229,590) in GVK Coal Developers (Singapore) Pte. Limited, towards shortfall, if any, of its loan repayment obligations. Further, the Company has pledged 73,217,647 (March 31, 2012: 73,217,647), 22,495,000 (March 31, 2012: 22,495,000) and 44,800,000 (March 31, 2012: Nil) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Private Limited respectively for securing loan obtained by GVK Coal (Singapore) Pte. Limited, an entity in which Company has 10% stake.

c) During the year ended March 31, 2011, the Company, GVK Energy Limited (subsidiary Company) and certain private equity investors (''investors'') had entered into an investment agreement pursuant to which the Company has undertaken to conduct an initial public offering of the GVK Energy Limited''s equity shares (''Qualified IPO'' or ''QIPO'') within 60 months from the date of investment agreement (preferred listing period).

If the GVK Energy Limited does not make a QIPO during the preferred listing period and no offer for sale takes place within 12 months of the preferred listing period, then, at any time thereafter, the investors will have a put option with respect to all of the securities held by the Investor ("Put Right") on the Company and the GVK Energy Limited at the higher of i) 20% IRR from the date of investment to the date of receipt of proceeds from the investor ("Put IRR") and ii) the fair market value of the investor''s shares. Provided the Put IRR shall be reduced to 15%, if at least 3 private sector initial public offerings with an issue size of Rs.100,000 or more each have not taken place in India between the 36th month to the 60th month from date of investment agreement.

The Company believes that the subsidiary Company would be able to successfully conduct QIPO in the preferred listing period.

8. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defined under the provisions of "Micro, small and medium enterprises Act, 2006" is based on Management''s knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31, 2013 or March 31, 2012.

9. Operating leases

The Company has entered into commercial leases which are in the nature of operating lease agreements for office spaces for period up to 3 years. There are no restrictions placed upon the company by entering into these leases. Further there are no renewal or escalation clauses in the lease.

10. On January 17, 2013 and May 13, 2013, Securities and Exchange Board of India (SEBI) made amendment to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Equity Listing Agreement, pursuant to which listed entities have been prohibited from framing any employee benefit schemes involving acquisition of own securities from secondary market. The Company had formed GVK Employee Welfare Trust on July 15, 2009 which currently holds 18,083,890 own equity shares which were acquired from secondary market. SEBI circular requires such Trust to dispose shares by December 31, 2013 or to align the Trust with SEBI (ESOS and ESPS) Guidelines. Management is evaluating options available in the circular and believes that application of this circular will not have any material impact on statement of profit and loss.

11. The Reserve Bank of India (''RBI'') had issued guidelines for Core Investment Companies (CIC) on January 5, 2011 pursuant to which Systematically Important Core Investment Companies (SI-CIC) are required to apply for registration with RBI within six months from the date of issue of the guidelines. The Company had applied to RBI for granting Certificate of Registration and was awaiting approval. During the current year, the Company based on legal advice and internal assessment concluded that since its income from financial assets in the year ended March 31, 2012 are less than 50% of the gross income, the Company is not a Non- Banking Financial Company and accordingly not required to register with RBI. The Company vide its letter dated September 20, 2012 to RBI indicated that it is not a Non-Banking Financial Company and is withdrawing its application for registration.

12. The Company has applied to Central government on May 13, 2013 and April 24, 2012 for waiver of excess managerial remuneration for the year''s ended March 31, 2013 and March 31, 2012 amounting to Rs. 137 and Rs. 207 respectively paid to two directors in excess of the limits prescribed under Schedule XIII of the Companies Act, 1956. The Company believes that approval will be obtained in due course and would not have any material impact upon the financial statements.

13. The subsidiary companies of GVK Energy Limited viz. GVK Industries Limited (GVKIL) and GVK Gautami Power Limited (GVKGPL) (collectively ''subsidiary companies'') had commenced construction of phase III and phase II power plants respectively on which they have incurred aggregated cost of Rs. 15,659 as at March 31, 2013. Due to lower supply/availability of gas, the subsidiary companies have temporarily suspended the construction activities and intend to resume construction once natural gas is available which Management expects to happen in foreseeable future. Further, phase II of GVKIL and Phase I of GVKGPL having fixed assets with Written Down Value of Rs. 220,491 as at March 31, 2013 has during the current financial year achieved PLF of 29.49% and 24.52% respectively and have provided for refund of capacity charge and disincentives aggregating to Rs. 10,608 (March 31, 2012: Rs. 2,510) and Rs. 24,114 (March 31, 2012: Rs. 7,009) respectively. The Company and Association of Power Producers are closely monitoring the situation and evaluating various approaches such as installing alternate fuel equipment (already done by GVKGPL and GVKIL is in the process of installing) etc. to deal with the situation and Management is confident that Government of India will take necessary steps/initiatives to improve the situation of natural gas. The Company accordingly believes that investments, including Compulsory Convertible Debentures, in subsidiary company with carrying value of Rs. 108,323 (includes gas and non-gas based projects) is recoverable in normal course of business and no provision for diminution is necessary.

14. Segment information

In accordance with Accounting Standard 17 - Segment Reporting, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

15. The financial statements contain certain amounts reported as "0"which are less than Rs. 1.

16. Previous year figures

Previous year figures have been regrouped/reclassified, where necessary, to confirm to this year''s classification.

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Mar 31, 2012

1. Corporate information

GVK Power & Infrastructure Limited ('the Company' or 'GVKPIL') provides operating and maintenance services, manpower and consultancy services and incidental services to owners of power plants, airports etc. The Company has also acquired substantial ownership interest into power generating assets, airports, roads and companies providing infrastructure facilities.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

a) Terms/rights attached to equity shares

The Company has only one class of equity share having par value of Rs.1 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. 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.

Vehicle loan from bank carries interest at 8.5% p.a. The loan is repayable in 36 monthly installments of Rs.3.15 from the date of loan, viz., January 29, 201 1. The loan is secured by charge over fixed asset i.e. vehicle, for which finance is provided by the lender.

a. Overdraft facility is unsecured and carries interest rate of 10.85%.

b. Term loan aggregating to Rs.20,000 is secured by first charge on the current assets, present and future of the Company and carries interest at base 150 bps i.e. 11.50% per annum

c. Term loan aggregating to Rs.1,870 presently carries interest of 12% per annum and scured by (i) charge on loans and advances of the Company to GVK Airport Developers Private Limited ("GVKADPL") and also loans and advances provided by GVKADPL to GVK Airport Holdings Private Limited ("GVKAHPL") and Bangalore Airport & Infrastructure Developer Private Limited ("BAIDPL") (ii) exclusive charge on shares of GVKADPL to the extent of two times of facility amount. (iii) exclusive charge on shares of GVKAHPL and BAIDPL not exceeding 30% of the shares of the Companies and the no. of shares to be pledged to be in proportion to the lenders at GVKADPL.

d. Term loans aggregating to Rs.15,000 is unsecured and carries interest rate of 11.75%.

3. Gratuity benefit

The company operates one defined benefit plan, viz., gratuity, for its employees. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on retirement or termination at 15 days of last drawn salary for each completed year of service. The scheme is unfunded.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the plan.

* During the previous year, the Company has transferred certain employees to its subsidiary GVK Energy Limited pursuant to which liability of Rs.30 was transferred to aforesaid subsidiary.

4. Related party disclosures

Disclosure as required by Notified Accounting Standard 18 (AS -18) "Related Party Disclosures" are as follows: Names of the related parties and description of relationship:

a) Related parties where control exists

Subsidiaries

GVK Industries Limited GVK Jaipur Expressway Private Limited Alaknanda Hydro Power Company Limited GVK Airport Developers Private Limited GVK Coal (Tokisud) Company Private Limited Goriganga Hydro Power Private Limited GVK Power (Goindwal Sahib) Limited

5. Details of Loan given to subsidiaries, associates, parties in which directors are interested Subsidiaries

i) GVK Oil & Gas Limited

Balance as at March 31, 2012 Rs.16,906 (March 31, 2011: Rs.15,225)

Maximum amount outstanding during the year was Rs.16,906 (March 31, 2011: Rs.15,225)

The aforesaid loan is repayable on demand

ii) GVK Perambalur SEZ Private Limited

Balance as at March 31, 2012 Rs.6,638 (March 31, 2011: Rs.6,302)

Maximum amount outstanding during the year was Rs.6,638 (March 31, 2011:Rs.6,302)

The aforesaid loan is repayable on demand

iii) Goriganga Hydro Power Private Limited

Balance as at March 31, 2012 Rs.4,674 (March 31, 2011: Rs.4,309) Maximum amount outstanding during the year was Rs.4,674 (March 31, 2011: Rs.4,309)

The aforesaid loan is repayable on demand

iv) GVK Airport Developers Private Limited

Balance as at March 31, 2012 Rs.81,437 (March 31, 2011: Rs.58,485) Maximum amount outstanding during the year was Rs.83,894 (March 31, 2011: Rs.83,285)

The aforesaid loan is repayable on demand

v) GVK Developmental Projects Private Limited

Balance as at March 31, 2012 Rs.92 (March 31, 2011: Rs.92) Maximum amount outstanding during the year was Rs.92 (March 31, 2011: Rs.95)

The aforesaid loan is repayable on demand

vi) GVK Transportation Private Limited

Balance as at March 31, 2012 Rs.32,854 (March 31, 2011: Rs.191) Maximum amount outstanding during the year was Rs.38,147 (March 31, 2011: Rs.191 )

The aforesaid loan is repayable on demand

vii) GVK Ratle Hydro Electrical Projects Private Limited

Balance as at March 31, 2012 Rs.3,649 (March 31, 2011: Rs.3,574) Maximum amount outstanding during the year was Rs.3,650 (March 31, 2011:Rs.3,574)

The aforesaid loan is repayable on demand

viii) Alakananda Hydro Power Company Limited

Balance as at March 31, 2012 Rs.Nil (March 31, 2011: Rs.Nil) Maximum amount outstanding during the year was Rs.3 (March 31, 2011:Rs.28)

The aforesaid loan was repayable on demand

ix) GVK Power (Goindwal Sahib) Limited

Balance as at March 31, 2012 Rs.Nil (March 31, 2011: Rs.Nil)

Maximum amount outstanding during the year was Rs.Nil (March 31, 2011:Rs.500)

The aforesaid loan was repayable on demand

x) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31, 2012 Rs.Nil (March 31, 2011: Rs.Nil)

Maximum amount outstanding during the year was Rs. Nil (March 31, 2011:Rs.1,023)

The aforesaid loan was repayable on demand

xi) GVK Energy Limited

Balance as at March 31, 2012 Rs.Nil (March 31, 2011: Rs.Nil)

Maximum amount outstanding during the year was Rs. Nil (March 31, 2011:Rs.3,279)

The aforesaid loan was repayable on demand

6. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defined under the provisions of "Micro, small and medium enterprises Act, 2006" is based on Management's knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31, 2012 or March 31, 2011.

7. Segment information

In accordance with Accounting Standard 17 - Segment Reporting, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

8. The Reserve Bank of India ('RBI') had issued guidelines for Core Investment Companies (CIC) on January 5, 2011 pursuant to which Systematically Important Core Investment Companies (SI-CIC) are required to apply for registration with RBI within six months from the date of issue of the guidelines. The Company had applied to RBI for granting Certificate of Registration and is awaiting approval. As a SI-CIC, the Company is required to comply with requirements of capital requirements and leverage ratios. The Company is not in compliance with the aforesaid requirements and in the process of submitting an application to

Reserve Bank of India for granting additional time to meet the compliance requirements. The Company based on legal advice/ internal assessment believes that RBI would look favourably into the matter. Further, the Company based on legal advise/ internal assessment believes that since its income from financial assets in the year ended March 31, 2012 are less than 50% of the gross income, the Company is not a Non- Banking Financial Company in the current year.

9. The Company has applied to Central government on April 24, 2012 for waiver of excess managerial remuneration amounting to Rs.207 paid to two directors during the year beyond the limits specified in Part II of Section II (B) and Section III of Schedule XIII of the Companies Act, 1956. The Company believes that approval will be obtained in due course and would not have any material impact upon the financial statements.

10. The financial statements contain certain amounts reported as "0"which are less than Rs.1.

11. Previous year figures

Till the year ended March 31, 2011, the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company. The company has reclassified previous year figures to conform to this year's classification.

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Mar 31, 2011

1. Nature of operations

GVK Power & Infrastructure Limited ("the Company or "GVKPIL") provides operating and maintenance services, manpower and consultancy services and incidental services to owners of power plants and infrastructure companies. It has also acquired substantial ownership interest into power generating assets and companies engaged in providing infrastructure facilities.

2. Employee benefits

The Company has a defined benefit gratuity scheme. Every employee who has completed five years or more of service gets a gratuity on retirement or termination at 15 days salary (last drawn salary) for each completed year of service. The scheme is unfunded.

The following tables summarize the components of net benefit recognized in the profit and loss account and amounts recognized in the balance sheet for the gratuity scheme.

3. Related party transaction

Disclosure as required by Notified Accounting Standard 18 (AS -18) "Related Party Disclosures" are as follows: Names of the related parties and description of relationship:

b) Associates Mumbai International Airport Private Limited **

Bangalore International Airport Limited**

Seregraha Mines Limited**

** through subsidiary Company

c) Key management personnel

Dr G V Krishna Reddy - Chairman & Managing Director

Mr G V Sanjay Reddy - Vice Chairman

Mr A Issac George - Director & CFO

Mr Krishna Ram Bhupal - Director

d) Enterprises over TAJ GVK Hotels & Resorts Limited which the key Orbit Travel & Tours Private Limited management GVK Novopan Industries Limited personnel exercise GVK Technical & Consultancy Services Private Limited significant influence Gautami Power (Samalkot) Private Limited (merged with GVK Gautami Power Limited) Pinakini Share & Stock Broker Limited GVK Projects & Technical Services Limited GVK Foundation GVK Employees Welfare Trust

5. Details of Loan given to subsidiaries, associates, parties in which directors are interested and companie under same management Subsidiaries:

i) GVK Gautami Power Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. Nil (Previous Year Rs. 155,500)

The aforesaid loan was repayable on demand

ii) GVK Industries Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. Nil (Previous Year Rs. 83,401)

The aforesaid loan was repayable on demand

iii) GVK Power (Goindwal Sahib) Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. 50,000)

Maximum amount outstanding during the year was Rs. 50,000 (Previous Year Rs. 196,938)

The aforesaid loan is repayable on demand

iv) GVK Oil & Gas Limited

Balance as at March 31, 2011 Rs. 1,522,535 (Previous Year Rs. 9)

Maximum amount outstanding during the year was Rs. 1,522,535 (Previous Year Rs. 9)

The aforesaid loan was repayable on demand

v) GVK Perambalur SEZ Private Limited

Balance as at March 31, 2011 Rs. 630,224 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 630,224 (Previous Year Rs. Nil)

The aforesaid loan was repayable on demand

vi) Goriganga Hydro Power Private Limited

Balance as at March 31, 2011 Rs. 430,886 (Previous Year Rs. 543)

Maximum amount outstanding during the year was Rs. 430,886 (Previous Year Rs. 543)

The aforesaid loan was repayable on demand

vii) GVK Airport Developers Private Limited

Balance as at March 31, 2011 Rs. 5,848,477 (Previous Year Rs. 4,863,760)

Maximum amount outstanding during the year was Rs. 8,328,477 (Previous Year Rs. 4,911,160)

The aforesaid loan is repayable on demand

viii) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. 102,267)

Maximum amount outstanding during the year was Rs. 102,267 (Previous Year Rs. 140,302)

The aforesaid loan is repayable on demand

ix) GVK Developmental Projects Private Limited

Balance as at March 31, 2011 Rs. 9,226 (Previous Year Rs. 6)

Maximum amount outstanding during the year was Rs. 9,513 (Previous Year Rs. 102,002)

The aforesaid loan is repayable on demand

x) GVK Jaipur Expressway Private Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. Nil (Previous Year Rs. 60,000)

The aforesaid loan was repayable on demand

xi) GVK Transportation Private Limited

Balance as at March 31, 2011 Rs. 19,143 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 19,143 (Previous Year Rs. Nil)

The aforesaid loan was repayable on demand

Notes to Accounts

(All amounts expressed in Indian Rupees Thousands unless otherwise stated)

xii) GVK Energy Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 327,894 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

xiii) Alaknanda Hydro Power Company Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 2,758 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

xiv) Mumbai International Airport Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 275 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

xv) Bangalore International Airport Limited

Balance as at March 31, 2011 Rs. 872 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 872 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

xvi) GVK Ratle Hydro Electrical Project Private Limited

Balance as at March 31, 2011 Rs. 357,424 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 357,424 (Previous Year Rs. Nil)

The aforesaid loan was repayable on demand

4. Contingent liability

a. Direct and indirect taxes

i) Income tax demand for assessment year 2008-09 for Rs. 7,298 (March 31, 2010 Rs. Nil).

ii) The Company has received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duties of Rs. 282,960 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has obtained an order from the Andhra Pradesh High Court staying the above notice on March 13, 2008 until such further orders from the said court.

Management based on its internal assessment and/or legal advice is confident that the cases will be decided in the Companys favour.

b. Security against loans taken by others

i) During the year ended March 31, 2011 the Company has provided security amounting to Rs. 1,800,000 (Previous Year Rs. 6,047,918) by way of pledge of its investments in subsidiaries in respect of amounts borrowed by its subsidiaries.

ii) During the year ended March 31, 2011 the Company has provided security by way of corporate guarantees amounting to Rs. 11,618,821 (Previous Year 14,980,000) to subsidiaries and Rs. 144,100 to an associate (Previous Year Rs. 144,100).

iii) During the year ended March 31, 2011 the Company has provided security by way of corporate guarantees amounting to Rs. 1,004,792 (Previous Year 990,533) to GVK Projects and Technical Services Limited.

Management is of the opinion that the aforesaid Companies will be able to meet their obligations as they arise and consequently no adjustment is required to be made to the carrying value of the security and guarantees provided.

5. Segment information

In accordance with Accounting Standard 17 - Segment Reporting, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

6. Additional information pursuant to the provisions of Paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 to the extent Nil or not applicable have not been disclosed.

7. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defined under the provisions of "Micro, small and medium enterprises development Act, 2006" is based on Managements knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31, 2011.

8. Dilution of investment

During the current year, the Company, GVK Energy Limited (subsidiary Company) and certain private equity investors (investors) have entered into an investment agreement pursuant to which the Company has transferred its investments in the below mentioned subsidiaries to GVK Energy Limited and then diluted its stake by 18.05% in favour of the investors:

a. GVK Industries Limited

b. GVK Gautami Power Limited

c. GVK Coal (Tokisud) Company Private Limited

d. GVK Power (Goindwal Sahib) Limited

e. Alaknanda Hydro Power Company Limited

As per the investment agreement, the Company and GVK Energy Limited has undertaken to conduct an initial public offering of the GVK Energy Limiteds equity shares (Qualified IPO or QIPO) within 60 months from the date of investment agreement (preferred listing period).

If the GVK Energy Limited does not make a QIPO during the preferred listing period and no offer for sale takes place within 12 months of the preferred listing period, then, at any time thereafter, the investors will have a put option with respect to all of the securities held by the Investor ("Put Right") on the Company and the GVK Energy Limited at the higher of i) 20% IRR from the date of investment to the date of receipt of proceeds from the investor ("Put IRR") and ii) the fair market value of the investors shares.

Provided the Put IRR shall be reduced to 15% IRR, if at least 3 private sector initial public offerings with an issue size of Rs.10,000,000 or more each have not taken place in India between the 36th month to the 60th month from date of investment agreement.

9. Previous year comparatives

Previous year figures have been regrouped where necessary to conform to current year classification.`

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Mar 31, 2010

1. Nature of operations

GVK Power & Infrastructure Limited ("the Company or "GVKPIL") provides operating and maintenance services, manpower and consultancy services and incidental services to owners of power plants and infrastructure companies. It has also acquired substantial ownership interest into power generating assets and companies engaged in providing infrastructure facilities.

2. Employee benefits

The Company has a defined Benefit Gratuity Plan. Every employee who has completed five years or more of service gets a gratuity on retirement or termination at 15 days salary (last drawn salary) for each completed year of service. The scheme is unfunded.

The following tables summarize the components of net benefit recognized in the profit and loss account and amounts recognized in the balance sheet for the respective plans.

3. Related party transaction

Disclosure as required by Notified Accounting Standard 18 (AS -18) "Related Party Disclosures" are as follows:

Names of the related parties and description of relationship:

(a) Related parties where control exists

Subsidiaries GVK Industries Limited

GVK Jaipur Expressway Private Limited

Alakananda Hydro Power Company Limited

GVK Airport Developers Private Limited

GVK Coal (Tokisud) Company Private Limited

Goriganga Hydro Power Private Limited

GVK Power (Goindwal Sahib) Limited

GVK Perambalur SEZ Private Limited (Formerly GVK Infratech Private Limited)

GVK Oil & Gas Limited (Formerly GVK Energy Limited)

GVK Developmental Projects Pvt Ltd

GVK Energy Limited

GVK Gautami Power Limited (Fomerly Gautami Power Limited)

GVK Airport Holdings Private Limited*

Bangalore Airport & Infrastructure Developers Private Limited*

* Through subsidiary Company

(b) Associates

Mumbai International Airport Private Limited ** Bangalore International Airport Limited **

Seregraha Mines Limited** ** Through subsidiary Company

(c) Key management personnel

Mr. G V Krishna Reddy Chairman and Managing director

Mr. G V Sanjay Reddy Director

Mr A Issac George Director

Mr Krishna Ram Bhupal Director

(d) Companies over which the key management personnel exercise significant influence

TAJ GVK Hotels & Resorts Limited

Orbit Travels & Tours Private Limited

GVK Novopan Industries Limited

GVK Technical & Consultancy Services Private Limited

Gautami Power (Samalkot) Private Limited

Pinakini Share and Stock Broker Limited

GVK Projects and Technical Services Limited

(Formed by merger of GVK Aviation Private Limited and Vertex Project Limited)

GVK Foundation

4. Details of Loan given to subsidiaries, associates and parties in which directors are interested Subsidiaries

(i) GVK Gautami Power Limited

Balance as at March 31, 2010 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 155,500 (Previous Year Rs. 348,500)

The aforesaid loan was repayable on demand

(ii) GVK Industries Limited

Balance as at March 31, 2010 Rs. Nil (Previous Year Rs. 50,000)

Maximum amount outstanding during the year was Rs. 83,401 (Previous Year Rs. 200,000)

The aforesaid loan was repayable on demand

(iii) GVK Power (Goindwal Sahib) Limited

Balance as at March 31, 2010 Rs. 50,000 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 196,938 (Previous Year Rs. 125)

The aforesaid loan is repayable on demand

(iv) GVK Oil & Gas Limited

Balance as at March 31, 2010 Rs. 9 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 9 (Previous Year Rs. 760)

The aforesaid loan is repayable on demand

(v) GVK Perambalur SEZ Private Limited

Balance as at March 31, 2010 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. Nil (Previous Year Rs. 20,000)

The aforesaid loan was repayable on demand

(vi) Goriganga Hydro Power Private Limited

Balance as at March 31, 2010 Rs. 543 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 543 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

(vii) GVK Airport Developers Private Limited

Balance as at March 31, 2010 Rs. 4,863,760 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 4,911,160 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

(viii) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31, 2010 Rs. 102,267 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 140,302 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

(ix) GVK Developmental Projects Private Limited

Balance as at March 31, 2010 Rs. 6 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 102,002 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

(x) GVK Jaipur Expressway Private Limited

Balance as at March 31, 2010 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 60,000 (Previous Year Rs. Nil)

The aforesaid loan was repayable on demand

5. Contingent liability

a. Security against loans taken by others

(i) During the year ended March 31, 2010 the Company has provided security amounting to Rs. 6,047,918 (Previous Year Rs. 2,860,912) by way of pledge of its investments in subsidiaries in respect of amounts borrowed by its subsidiaries.

(ii) During the year ended March 31, 2010 the Company has provided security by way of corporate guarantees amounting to Rs. 14,980,000 (Previous Year 2,918,200) to subsidiaries and Rs. 144,100 to an associate (Previous Year Rs. Nil).

(iii) During the year ended March 31, 2010 the Company has provided security by way of corporate guarantees amounting to Rs. 990,533 (Previous Year 1,211,210) to GVK Projects and Technical Services Limited (formerly known as GVK Aviation Private Limited)

Management is of the opinion that the subsidiary Companies and the associate will be able to meet their obligations as they arise and consequently no adjustment is required to be made to the carrying value of the security and guarantees provided.

b. Claims against the Company not acknowledged as debt

(i) The Company has received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duties of Rs. 282,960 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has obtained an order from the Andhra Pradesh High Court staying the above notice on March 13, 2008 until such further orders from the said court.

(ii) The Company has received a show cause notice from service tax authorities demanding the Company to pay service tax of Rs. 27,943 under the category "Management, Maintenance or Repair services" for operating and maintenance of immovable property, management of power plant and maintenance of equipment for the period from July 1, 2003 to September 30, 2008. The Company has preferred an appeal against the said order before Customs, Excise and Service Tax Appellate Tribunal, Bangalore. The consequential liability in respect of service tax for the period from July 1, 2003 to March 31, 2010 is estimated at Rs. 48,529 (Previous Year Rs. 30,624). Management, based on its internal assessment, is confident that the case will be decided in the Companys favour.

6. Segment information

In accordance with Accounting Standard 17 - Segment Reporting, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

7. Additional information pursuant to the provisions of Paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 to the extent Nil or not applicable have not been disclosed.

8. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defined under the provisions of "Micro, small and medium enterprises development Act, 2006" is based on Managements knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31, 2010.

9. Previous year comparatives

Previous year figures have been regrouped where necessary to conform to current year classification.