The Board of Directors present the 20th Annual Report together with theaudited financial statements of the Company for the Financial Year (FY) ended March 312016.
Financial Results and state of the Companys affairs
Your Company as a holding company operates in Airports Energy Transportation andUrban Infrastructure business sectors through various subsidiaries associates and jointlycontrolled entities. The Company has Engineering Procurement and Construction (EPC)business as a separate operating division to cater to the requirements of implementing theprojects undertaken by the subsidiaries and others including Railway projects.
Analysis of the Companys audited consolidated and standalone financial resultsare given below:
|Particulars || |
| || |
March 31 2016
|March 31 2015 || |
March 31 2016
|March 31 2015 |
|Revenue from operations ||13357.66 ||11087.68 ||799.10 ||649.74 |
|Revenue share paid / payable to concessionaire grantors ||(2412.29) ||(2064.86) ||- ||- |
|Operating and administrative expenditure ||(6700.73) ||(6468.18) ||(210.91) ||(200.03) |
|Other Income ||454.27 ||327.46 ||15.07 ||19.48 |
|Finance Costs ||(4057.69) ||(3571.86) ||(514.88) ||(537.29) |
|Depreciation and amortisation expenses ||(2266.16) ||(1812.53) ||(15.77) ||(20.03) |
|(Loss)/Profit before exceptional items tax expenses minority interest and ||(1624.94) ||(2502.29) ||72.61 ||(88.13) |
|share of (loss)/ profit of associates || || || || |
|Exceptional Items: || || || || |
|Profit on sale of subsidiaries / jointly controlled entities ||2.31 ||34.44 ||- ||- |
|Loss on impairment of assets in subsidiaries ||(164.30) ||(115.74) ||- ||- |
|Reimbursement of expenses pertaining to earlier years received by a subsidiary ||51.42 ||- ||- ||- |
|Loss on account of provision towards claims recoverable ||- ||(130.99) ||- ||- |
|Breakage cost of interest rate swap ||- ||(91.83) ||- ||- |
|Provision for diminution in value of investments / advances in subsidiaries / associates ||(39.22) ||- ||(1576.93) ||(262.40) |
|(Loss)/Profit before tax expenses minority interest and share of (loss)/ profit of associates ||(1774.73) ||(2806.41) ||(1504.32) ||(350.53) |
|Tax expenses ||(224.21) ||(152.81) ||(14.58) ||(2.12) |
|(Loss)/Profit before minority interest and share of (loss)/ profit of associates ||(1998.94) ||(2959.22) ||(1518.90) ||(352.65) |
|Share of (loss)/profit from associates ||(5.52) ||(12.98) || || |
|Minority interest share of profit/(loss) ||(156.54) ||238.91 || || |
|Net (Loss)/Profit after tax minority interest and share of loss from associates ||(2161.00) ||(2733.29) ||(1518.90) ||(352.65) |
|Net (deficit) / surplus in the statement of profit and loss - Balance as per last financial statements ||(4006.89) ||(1183.56) ||62.81 ||429.37 |
|Transfer from debenture redemption reserve ||34.38 ||46.25 ||34.38 ||46.25 |
|Surplus / (Deficit) available for appropriation ||(6133.51) ||(3870.60) ||(1421.71) ||122.97 |
|Appropriations ||(63.78) ||(136.29) ||(38.50) ||60.16 |
|Net deficit in the statement of profit or loss ||(6197.29) ||(4006.89) ||(1460.21) ||62.81 |
|Earnings per equity share ( Rs ) - Basic and diluted (per equity share of Rs 1 each) ||(3.82) ||(6.46) ||(2.68) ||(0.83) |
Consolidated financial results
Improved operating performance in Airport and Energy sectors and commissioning of GMRChhattisgarh Energy Limited (GCHEPL) and GMR Rajahmundry Energy Limited (GREL) powerplants resulted in consolidated revenue increasing from Rs 11087.68 Crore in the previousyear to Rs 13357.66 Crore in the current year. Airport Energy Highways EPC andother segments contributed Rs 6540.58 Crore (48.97%) Rs 5522.55 Crore (41.34%) Rs761.41 Crore (5.70%) Rs 179.13 Crore (1.34%) and Rs 354.04 Crore (2.65%) respectively tothe consolidated revenue from operations.
Increase in operational cost finance cost and depreciation charge was mainly onaccount of commissioning of GCHEPL and GREL power plants and operating GMR Vemagiri PowerGeneration Limited (GVPGL) GMR Warora Energy Limited (GWEL) and GMR Kamalanga EnergyLimited (GKEL) power plants at higher capacity.
Inspite of the challenging economic conditions and difficult business environment yourCompany was successful in raising additional funds of Rs 1401.83 Crore throughrights issue and USD 30.00 Crore through issuance of Foreign Currency Convertible Bonds("FCCB"). GCHEPL and GREL power plants were commissioned during the year.
Standalone financial results
During the year ended March 31 2016 the revenue from operations of the Company onstandalone basis has increased by 22.99% from Rs 649.74 Crore to Rs 799.10 Crore onaccount of increase in interest income of the Company.
During the year ended March 31 2016 based on an internal assessment the Company hasmade a provision of Rs 1576.93 Crore towards diminution in value of its investment in GMRHighways Limited (GMRHL) GMR Renewable Energy Limited (GREEL) and GMR Energy Limited(GEL) primarily on account of their accumulated losses and diminution in value ofinvestments/advances in their subsidiaries. The same has been disclosed as an exceptionalitem in the financial statements.
Dividend / Appropriation to Reserves
Your Directors have not recommended any dividend on equity shares for the FY 2015-16.Preference dividend aggregating to Rs 50605 for the FY 2015-16 at the rate of 0.001% perannum on 11366704 Compulsorily Convertible Preference Shares (CCPS) of face value of Rs1000/- each has been provided in the books.
The net movement in the major reserves of the Company on standalone basis for FY2015-16 and the previous year are as follows:
| || ||( Rs in Crore) |
|Particulars || |
March 31 2016
|March 31 2015 |
|General Reserve ||40.62 ||40.62 |
|Securities Premium Account ||9971.55 ||7658.71 |
|Surplus in Statement of Profit and Loss ||(1460.21) ||62.81 |
|Debenture Redemption Reserve ||125.44 ||121.33 |
|Capital Reserve ||141.75 ||- |
|Foreign currency monetary || || |
|translation difference account ||(0.89) ||- |
| ||8818.26 ||7883.47 |
Management Discussion and Analysis Report (MDA)
MDA Report for the year under review as stipulated in Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafterreferred to as "SEBI LODR") is presented in a separate section forming part ofthe Annual Report.
The brief overview of the major developments of each of the Subsidiaries businessis presented below. Further MDA forming part of this Report also brings out review ofthe business operations of various subsidiaries and jointly controlled entities.
Your Companys airport business comprises of 3 operating airports viz. Delhi andHyderabad International Airports in India and Mactan Cebu International Airport inPhilippines. These Indian airports are owned by your Companys subsidiary GMRAirports Limited (GAL) while the 40% stake in GMR Megawide Cebu Airport Corporation(GMCAC) is held through GMR Infrastructure (Singapore) Pte. Limited also yourCompanys subsidiary.
Your Companys aviation business comprises of GMR Aviation Private Limited a 100%subsidiary of the Company which is operating in the general aviation space.
An overview of these assets during the year is briefly given below:
Delhi International Airport Private Limited (DIAL)
DIAL is a Joint Venture (JV) between GAL (64%) Airports Authority of India (AAI) (26%)and Fraport AG Frankfurt Airport Services Worldwide (Fraport) (10%). DIAL has entered intoa long-term agreement to operate manage and develop the Indira Gandhi InternationalAirport (IGIA) Delhi. Malaysia Airports (Mauritius) Private Limited originally owned 10%stake in the Joint Venture which has been purchased by GAL in May 2015.
Highlights of FY 2015-16:
DIAL surpassed the 48 million passenger mark in FY 2015-16 witnessing a growth of 18%in traffic over previous year. Strong growth in domestic cargo segment propelled DIAL toretain its number one position in cargo traffic in India with a 4% overall growth in FY2015-16 over the previous year. Due to delay in determination of tariff for the secondcontrol period the tariffs of the first control period have continued.
The non-aeronautical revenues grew by 19% over last year led by growth in commercialnon-aero sales and Land & Space rentals.
Air Asia India Ltd Air Canada Shandong Airlines Bhutan Airlines and Air Asia Xcommenced their operations from IGIA. New destinations like Domodedvo - Moscow SanFrancisco Toronto and Kunming were added which were earlier unserved from Delhi Airport.
Existing solar power plant capacity of 2.14 MW at IGIA increased to 7.84 MW withcommissioning of additional 5.70 MW capacity in FY 2015-16. The additional capacity isexpected to generate 8.5 million units of electricity per annum leading to savings of Rs3.0 to Rs 3.5 Crore per annum.
Strong focus on developing organizational culture based on operational excellence andcustomer focused initiatives helped DIAL to retain the world number 1 airport rank in the25-40 million passengers per annum (mppa) category by achieving a score of 4.96 on a scaleof 5 in 2015.
Key Awards and Accolades received in FY 2015-16:
Number 1 airport as per Airports Council International (ACI) Airport ServiceQuality (ASQ) ranking for 2015 in the 25 to 40 mn passenger category second year in arow.
ACI Director Generals Roll of Excellence 2015 for being ranked in top 5airports in its category in the last five years.
Best Airport Staff in India and Central Asia in 2016 SKYTRAX WorldAirport Awards for second year in a row.
International Safety Award in Distinction Category from BritishSafety Council with an overall score of 60 (on 60 Point scale) for the year 2016.
Golden Peacock Award for Sustainability in the Aviation Sector for2015.
Indias smartest airport buildings at the Times of India-Honeywell SmartBuilding Awards 2015.
Best Emerging Airport - Asia at the Asian Freight Logistics and Supply Chain(AFLAS) Awards.
CII Business Excellence Star Awards: Leaders in Operations Management &Leaders in Customer Management 2015.
GMR Hyderabad International Airport Limited (GHIAL)
GHIAL is a JV between GAL (63%) AAI (13%) Government of Telangana (13%) and MAHB(Mauritius) Private Limited (11%) and has entered into a long-term agreement to operatemanage and develop the Rajiv Gandhi International Airport (RGIA) Hyderabad.
Highlights of FY 2015-16:
GHIAL continued to record strong traffic growth in its 8th year ofoperation. Passenger traffic touched 12.5 million registering a growth of 19% year onyear (Y-o-Y). Similarly Cargo also registered impressive growth to reach 113000 MT agrowth of 10% Y-o-Y. ATM (Air Traffic Movement) also had a strong growth of 12% Y-o-Yending the year with 106303. The year also showed remarkable progress towardsGHIALs Mission of being the Gateway of Choice and Preferred Logistics Hub for Southand Central India region marked by additions to the airline count on both passenger (1international and 2 domestic) and cargo (1 domestic) fronts and additional frequenciesfrom the existing airlines.
Towards ensuring a well-rounded and enjoyable experience to its passengers the airportenhanced its retail and shopping experience by modifying the layout to unidirectionalflow which has yielded additional number of new stores and retail outlets at thepassenger terminal. The Airport charges for GHIAL (User Development Fee (UDF) andPassenger Service Fee Facilitation Component (PSF)) were successfully restored videthe Interim Order from the Hyderabad High Court which has enhanced the cash flow and thesame was implemented with effect from November 05 2015. GHIAL also signed an escrowaccount with Air India for collection of UDF and PSF which is a mechanism that has aidedGHIAL in securing the dues and strengthening the cash flows.
To enhance the passenger experience GHIAL has operationalized an end-to-end E-Boardingprocess for domestic passengers becoming the only airport in India to implement the same.It has improved the efficiency at each security check point and has started the journey ofIndian Aviation along the path of "Digital India as envisaged by the Hon. PrimeMinister.
Adding another green milestone to GMRs clean energy journey GHIAL hascommissioned a 5 MW Solar Power Plant for its captive consumption to meet theairports peak power demand. The airport also completely refurbished Hajj Terminalwhich enhanced the passengers and meeters & greeters facilities.Despite challenges GHIAL has always maintained its focus on service quality and passengerdelight and this continued dedication saw the airport win accolades from passengers andindustry associations for its excellence in service delivery with ACI ranking RGIA amongthe top 3 in the world for ASQ for the 7th year in a row.
Awards and Accolades received in FY 2015-16:
Worlds Third Best Airport 2015 in ASQ Rating by ACI in 5-15 mn passengercategory.
Best Regional Airport in India and Central Asia at the Skytrax World AirportAwards a web based survey voted directly by passengers.
Emerging Cargo Airport of the Year Region India awarded by STAT TimesInternational Award for the second time in a row.
ACI Asia-Pacific Silver Recognition for Human Resources Excellence.
CII Award for "Excellent Energy Efficient Unit" for a second time in arow.
Golden Peacock Environment Management Award for 2015.
Best Landscape - Garden Festival 2016 (sixth time in a row).
As more and more aviation-oriented businesses are being drawn to airport cities andtransportation corridors radiating from them a new urban form is emerging theAerotropolis stretching upto 20 miles (30 kilometers) outward from some airports. Thisconcept developed by Dr. John Kasarda has been adopted by GMR Group at its airports inHyderabad and Delhi and GMR Group is working towards developing an ecosystem around theairports.
Both Delhi and Hyderabad have completed the master plan for their landside developmentsand are engaged in the development of physical infrastructure and discussions withpotential tenants.
During the course of the year DIAL witnessed 3 of its hotel assets coming on line.Delhi airport has also undertaken works to beautify the Aerocity area and the work isexpected to be completed in 2016.
GMR Megawide Cebu Airport Corporation (GMCAC)
GMCAC a JV between GMR group (40%) and Megawide Corporation (60%) in April 2014entered into a concession agreement with Mactan Cebu International Airport Authority fordevelopment and operation of Mactan Cebu International Airport (Cebu airport) for a periodof 25 years. GMCAC took operational responsibility of the airport in November 2014 and hasnow been operating the airport for 20 months.
Highlights of FY 2015-16:
GMCAC has laid great emphasis on boosting traffic at Cebu airport both domestic andinternational.
In a bid to boost international tourism GMCAC has been working with the tourism bodyof Cebu and Philippines as well as with travel agents to boost tourist traffic fromChina Japan and Australia. As a result GMCAC has seen international traffic grow by18.5% while the domestic traffic has also grown at 9.6%. In terms of internationalconnectivity GMCAC has also seen 3 new routes being added viz. Cebu Dubai Cebu Los Angeles and Cebu- Taipei.
On the operational front GMCAC has brought about a significant transformation in theexisting terminal facilities by:
a) Introduction of common security checks for passengers boarding Domestic andInternational flights. This resulted in doubling of the capacity of security x-ray lanes.b) Installed New Flight Information Display Systems. c) Introduced new check-in systemsand increased the number of check-in counters. d) Developed a new meeters' andgreeters area. e) Introduced enhanced F&B and retail operations including launchof a completely overhauled Duty Free area.
GMCAC is also steadily working towards development of the new terminal. To mitigate thedelay in handover of land which was under occupation of Philippines air force GMCAC hasstarted work on the land parcels made available to it in June 2015. The structural worksfor the new terminal building are underway and we are confident of completing the terminalwithin the timelines specified in the concession agreement.
Awards and Accolades received in FY 2015-16:
Asia-Pacific Transport Deal of the Year.
Best Project Finance deal award by Triple A Asia Infrastructure awards.
GMR Mal International Airport Private Limited (GMIAL)
GMR Group along with its partner Malaysia Airports are engaged in arbitration withGovernment of Maldives (GoM) and Maldives Airport Company Ltd. (MACL) after the latterrepudiated the agreement in December 2012. In order to expedite the progress of thearbitration both GMR Group and GoM have agreed to bifurcate the arbitration in 2 phases;first phase was to focus on questions of liability; while the second phase was to quantifythe amount recoverable. In June 2014 the tribunal had ruled that the concession agreementwas valid and binding and GoM had illegally terminated the concession agreement and istherefore liable to GMR/GMIAL for compensation. After subsequent hearings the tribunalhas ruled in February 2016 that the debt owed by GMIAL to Axis Bank will form part of thecompensation payable by GoM to GMIAL. The hearing to determine the quantum of damagespayable by Government of Maldives to GMIAL is scheduled in the month of August 2016.
GMR Aviation Private Limited (GAPL)
GAPL operates and owns one of the youngest fleets in the country and addresses thegrowing need for charter services. The operations are managed by professionals with robustprocesses and systems to ensure highest levels of efficiency and safety. In order to boostrevenues and rationalize overhead costs GAPL has entered into a 2 year managementcontract with Jet Set Go a general aviation fleet aggregator. As per the agreementJet Set Go will take responsibility for operations and marketing of the aircrafts.
The Energy Sector companies are operating around 4600 MWs of Coal Gas Liquid fueland Renewable power plants in India and around 2200 MWs of power projects are undervarious stages of construction and development besides a pipeline of other projects. TheEnergy Sector has a diversified portfolio of thermal and hydro projects with a mix ofmerchant and long term Power Purchase Agreements (PPA).
Following are the major highlights of the Energy Sector:
A. Operational Assets: I. Generation:
1. GMR Warora Energy Limited (Formerly EMCO Energy Limited) (GWEL) 600MW:
The Plant consists of 2 x 300 MW coal fired Units with all associatedauxiliaries and Balance of Plant Systems.
GWEL has a Coal supply Agreement with South Eastern Coalfields Limited (SECL) for atotal Annual Contracted Quantity (ACQ) of 2.6 Million Tonnes per annum.
Tamil Nadu Generation and Distribution Corporation Limited (TAGENDCO) PPA wasfully operationalized during the year which was earlier pending due to non availabilityof transmission corridor and long-term open access.
During the year the Plant has achieved availability of 94.80% and Gross PlantLoad Factor (PLF) of 75.95%.
More than 90% ash utilization was achieved during the year.
Weir construction for water availability by Maharashtra Industrial DevelopmentCorporation (MIDC) is under way and expected to be made ready in FY 2016-17.
2. GMR Kamalanga Energy Limited (GKEL) 1050 MW:
GKEL in which GMR Energy Limited has 86% stake with IIF & IDFC holding thebalance stake has developed 1050 MW (3x 350) coal fired power plant at Kamalanga VillageOdisha.
The plant is supplying power to Haryana through PTC India Limited to Odishathrough GRIDCO Limited and to Bihar through Bihar State Power Holding Company Limited.
85% of the capacity is tied-up in long term PPAs.
GKEL has received Letter of Assurances from Mahanadi Coalfields Limited (MCL)for 1050 MW of which 500 MW is for firm linkage and 550 MW is for tapering linkage. GKELhas signed Fuel Supply Agreement (FSA) for firm linkage for 500 MW and tapering linkagefor 200 MW with MCL and is getting coal supply accordingly. GKEL has also signed FSA withEastern Coalfields Limited (ECL) for 350 MW tapering linkage and coal supply correspondingto tapering linkage for 204 MW had started earlier.
During this year Ministry of Coal has allowed continuation / extension of MoUcoal (earlier tapering linkage) to GKEL beyond March 2016 till June 2016. Further fromDecember 2015 onwards supplies from ECL have been transferred to MCL leading to a costsavings of Rs 80 Crore per year.
During this period GKEL achieved availability of 91.5% and PLF of 67.6%.
GKEL received favourable order from CERC on GRIDCO tariff on the basis of whichGKEL has raised supplementary bills of Rs 233.82 Crore to GRIDCO for the period uptoNovember 2015 and has also raised regular bills aggregating to Rs 204.33 Crore for theperiod from December 2015 to March 2016.
GKEL received favourable order from CERC on Change in Law petition againstHaryana Discoms with claim of
Rs 115.94 Crore of arrears from FY 2014 to FY 2016 period.
GKEL successfully completed refinancing of the project debt under FlexibleStructuring Scheme along with the new facility of Rs 400 Crore against the regulatoryreceivables. Working capital limit was also enhanced with sanction of Rs 745 Crore.
3. GMR Chhattisgarh Energy Limited (GCHEPL) 1370 MW:
GCHEPL a wholly owned subsidiary of GEL has developed 1370 MW (2 x 685 MW)pulverized coal-fired super critical technology based power project in Raikheda VillageTilda Block Raipur District in the State of Chhattisgarh. GCHEPL has received all thenecessary statutory and environmental clearances. The project has achieved COD of Unit 1 and Unit 2 on June 01 2015 and March 31 2016 respectively and startedcommercial operation of Unit 1 from November 01 2015. The project participated inthe coal block auction last year bid and won two coal blocks namely Talabira andGaneshpur.
The Railway track for movement of rake to site has been completed and sidingoperations have commenced. Ganeshpur coal block (located in Latehar District Jharkhandand earlier allotted to Tata Steel Limited and Adhunik Thermal Energy) has a reserve ofabout 92 MT and is expected to start its production by FY 18 and reach its peak productioncapacity by FY 21.
Talabira coal block (located in Odisha and earlier allotted to HINDALCO) has areserve of about 8.5 MT. This is an operating coal block and GCHEPL started productionfrom August 2015 onwards and GCHEPL has been receiving coal for its operations.
GCHEPL is actively pursuing to tie-up the entire capacity through variousupcoming medium and long-term power procurement tenders.
4. GMR Vemagiri Power Generation Limited (GVPGL) - 370 MW:
GVPGL a wholly owned subsidiary of GEL operates a 370 MW natural gas-firedcombined cycle power plant at Rajahmundry Andhra Pradesh. During the FY 2016 the plantcommenced operations on roster basis beginning August 2015 under e-bid RLNG scheme. Inline with the scheme the plant secured gas corresponding to 30% PLF for period June 2015to September 2015 50% PLF for the period October 2015 to March 2016 and 30% PLF for theperiod April 2016 to September 2016. GVPGL operated at an average PLF of 17.88% during theyear.
To benefit from the softened LNG prices world-wide GVPGL is strivingcontinuously to import LNG on short term basis to obtain higher PLF.
5. GMR Rajahmundry Energy Limited (GREL) 768 MW:
GREL a wholly owned subsidiary of GEL is engaged in setting up of 768 MW (2 x384 MW) combined cycle gas based power project.
GREL achieved COD on October 22 2015 and secured gas for operations throughe-bid RLNG scheme at 50% PLF for the period October 2015 to March 2016 and 30% PLF for theperiod April 2016 to September 2016. The plant began commercial operations for the firsttime starting November 16 2015 based on the roster decided by AP-Transco. GREL operatedat an average PLF of 20.12% during the year.
To benefit with the softened LNG prices world-wide GREL is strivingcontinuously to import LNG on short term basis and looking forward to tie up power byentering into the PPA opportunities available.
Further the lenders have invoked Strategic Debt Restructuring (SDR) for GRELresulting in conversion of outstanding debt amounting to Rs 1413.99 Crore ( Rs1308.57 Crore of debt and Rs 105.42 Crore of Interest accrued thereon) into equity inorder to acquire 55% shareholding in GREL. Post the restructuring the total outstandingdebt of GREL would be Rs 2366 Crore.
6. Barge mounted Power Plant of GMR Energy Limited (GEL) Kakinada:
GEL operates 220 MW combined cycle barge mounted power plant at Kakinada AndhraPradesh. There was no generation of power by the barge mounted power plant during the yearended March 31 2016 on account of non-availability of gas.
Plant is kept under preservation since March 2013. Preservation methods wereadopted based on Original Equipment Manufacturers (OEM) procedures.
Efforts are being made to arrange gas from domestic sources and LNG market.
7. GMR Power Corporation Limited (GPCL) Chennai:
GPCL in which GEL holds 51% stake operates a 200 MW diesel poweredpower plant and was selling power to Tamil Nadu Generation and Distribution CorporationLimited (TAGENDCO). There was no generation of power during the year and currently theplant is kept under preservation.
TAGENDCO had extended the PPA from February 15 2014 to February 14 2015 withfresh tariff and new terms and conditions. GPCL requested TAGENDCO for extension of PPAfrom February 15 2015 and is awaiting clearance for supplying power.
8. GMR Gujarat Solar Power Private Limited (GGSPPL) Charanka Village Gujarat:
GGSPPL a wholly owned subsidiary of GEL operates 25 MW Solar power project atCharanka village Patan district Gujarat. GGSPPL has entered into 25 year PPA withGujarat Urja Vikas Nigam Limited for supply of entire power generation. GGSPPL hasachieved commercial operation on March 04 2012 and received certificate of commissioningfrom M/s. Gujarat Energy Development Agency ("GEDA"). Indu ProjectsLimited has been awarded the contract for operation and maintenance of the plant for aperiod of 5 years. Plant has achieved a Gross DC PLF of 19.36% for FY 2015-16 and recordedrevenue of Rs 63.18 Crore for the FY. Significantly during the year GGSPPL also receivedthe following ISO Certifications from DNV GL of Norway (1) ISO 9001:2008 (QualityManagement System) ISO 14001:2004 (Environmental Management System) and OHSAS 18001:2007(Occupational Health and Safety Management System).
9. GMR Rajam Solar Power Private Limited (GRSPPL) Rajam:
GRSPPL a wholly owned subsidiary of GEL commissioned a 1 MW Solar power project inRajam Andhra Pradesh in February 2016. The Company has signed a 25 year PPA with both GMRInstitute of Technology (700KW) and GMR Varalakshmi Care Hospital (300KW) for the sale ofpower generated.
1. Aravali Transmission Service Company Limited (ATSCL):
ATSCL a wholly owned subsidiary of GEL successfully implemented the projectwith 96 km line including 400 kV S/C Hindaun-Alwar transmission line and 2 315 MVA400/220 kV Grid Substation at Alwar and other associated works in the State of Rajasthanwith a total project cost of Rs 146.20 Crore. This is the second public privatepartnership (PPP) project of its kind in Rajasthan which is being executed on Build OwnOperate Maintain (BOOM) basis for a concession period of 25 years from the date of ProjectAward.
The 400 kV Hindaun-Alwar transmission line was successfully charged on July 252014. Grid Substation was charged on July 31 2014.
COD was achieved on July 17 2014 in line with the provisions of TransmissionService Agreement (TSA).
Rajasthan Electricity Regulatory Commission (RERC) gave an unfavorable order incase of the Tariff Revision Petition filed before RERC seeking compensation in terms ofeither TSA period extension (to compensate ATSCL on account of delayed grant oftransmission license escalation in project cost due to change in law and CODconsideration) or upfront loss compensation.
Company has approached Appellate Tribunal for Electricity (APTEL) seeking reliefagainst the order of RERC.
The asset has performed at more than the target availability of 98%.
2. Maru Transmission Service Company Limited (MTSCL):
MTSCL a wholly owned subsidiary of GEL successfully implemented the projectwith 269 km line including 400 kV S/C Bikaner-Deedwana Transmission Line 400 kV S/CAjmer-Deedwana Transmission Line 220 kV D/C Sujangarh-Deedwana Transmission Line and2x315 MVA 400/220 kV Grid sub-station at Deedwana and other associated works in the Stateof Rajasthan with a total project cost of Rs 251.90 Crore. This is the first PPP projectof its kind in Rajasthan which is being executed on BOOM basis for a concession period of25 years from the date of Project Award.
COD was declared by Order of the RERC from December 16 2013.
Arrears have been received from Discoms as per the relief granted by RERC to payall unpaid revenue from December 16 2013.
RERC gave an unfavorable order in case of the Tariff Revision Petition filedbefore RERC seeking compensation in terms of either TSA period extension (to compensateMTSCL on account of delayed grant of transmission license escalation in project cost dueto change in law) or upfront loss compensation.
Company has approached APTEL seeking relief against the order of RERC.
The asset has performed at more than the target availability of 98%.
Stake sale in the Transmission projects:
GEL has entered into definitive agreements with Adani Transmission Limited agreeing totransfer its interest in aforesaid ATSCL and MTSCL. The transaction shall be concludedsubject to fulfillment of necessary conditions precedent.
1. GMR Bajoli Holi Hydropower Private Limited (GBHHPL) (180 MW):
GBHHPL a wholly owned subsidiary of GEL is implementing 180 MW hydro powerplant on the river Ravi at Chamba District Himachal Pradesh.
GBHHPL achieved financial closure on April 25 2013 and tied-up the debtrequirement of Rs 1380 Crore and the necessary loan agreements were executed. Allclearances required for undertaking construction are in place and complete land asrequired for the project is in GBHHPLs possession.
All the contracts for execution of civil works and Electro Mechanical works wereawarded and civil works are going on with the completion of infrastructure works.
GBHHPL had also executed the Connectivity Agreement with HP Power TransmissionCorporation Limited and Long Term Access Agreement with Power Grid Corporation of IndiaLimited (PGCIL) for evacuating power outside Himachal Pradesh.
The construction works of the project are in full swing and River Diversion workis completed on schedule on October 01 2015. Overall progress of 32% has been achievedtill end of FY 2015-16.
2. GMR Upper Karnali Hydro Power Public Limited (GUKPL) (900 MW):
GUKPL a subsidiary of GEL is developing 900 MW Upper Karnali Hydroelectricproject (HEP) located on river Karnali in Dailekh Surkhet and Achham Districts of Nepal.During the year under review post execution of Project Development Agreement (PDA)several key activities as per PDA compliance Technical appraisal of the Project Designand tendering works have been completed despite a series of Force Majeure eventslike Earthquake political upheaval etc. The Project land has been identified jointverification for Government and Forest land has been completed and same is under review byconcerned Ministry before seeking cabinet approval. Rehabilitation Action Plan (RAP) asper International Finance Corporation (IFC) Performance Standards and the SafeguardPolicies has been prepared and private land acquisition process is currently underway.Similarly Environment and Social Impact Assessment (ESIA) studies as per IFC PerformanceStandards have also been prepared and are under finalisation with the lenders. Thedetailed technical appraisal by a seven member Panel of Experts (empanelled with IFC) hasbeen completed and the Panel submitted its final report. The Hydraulic model studies asper the Panels advice has also been completed and the technical design of theProject has been finalised. Tender engineering has been completed and the formal tenderprocess is being launched shortly.
For the Transmission Line detailed survey has been completed and cadastralmapping is in advanced stage of completion. Post execution of the PTA between Governmentof India (GoI) and Government of Nepal (GoN) and the SAARC energy pact between SAARCnations GoI is in advanced stage of finalisation of a Cross border policy. GoI and GoNhave also agreed to build the cross border
Transmission line (From Lamki in Nepal to Bareilly in UP) on bilateral route matchingwith the commissioning schedule of the Upper Karnali HEP. Regarding power sale a MoU hasbeen executed with M/s NTPC Vidyut Vyapar Nigam Limited (NVVN) for tie-up of the entiresaleable capacity of the Project in India and Bangladesh. NVVN is also nominated by GoI asthe Nodal agency for sale of Power between India Nepal Bangladesh and Bhutan. Post thisMoU discussions are underway with select buyers in India and Bangladesh for tie-up ofpower on long term route. Joint Development Agreement (JDA) was executed with IFC for bothGeneration and Transmission projects on December 22 2014 and as per the JDA IFC proposesto invest as Co-developer for the Projects with 10% equity under InfraVentures route and also assume the role of lead lender and debt arranger. TheProject has received LoIs in excess of USD 1.1 billion from Multilateral Development Banks(MDBs) across the globe and post this the first all lenders site visit / lenders meetingwas held at Kathmandu on April 05 2016. The lenders are presently engaged in Projectappraisal activities.
3. GMR (Badrinath) Hydro Power Generation Private Limited (GBHPL) - Badrinath -(300 MW):
GBHPL a subsidiary of GEL is in the process of developing 300 MW hydroelectricpower plant on Alaknanda river in the Chamoli District of Uttarakhand State. The projecthas received all major statutory clearances like Environmental and Techno economicconcurrence from Central Electricity Authority (CEA). The project got registered in TheUnited Nations Framework Convention on Climate Change (UNFCCC) and it is eligible forreceiving the Clean Development Mechanism (CDM) benefits.
Implementation Agreement has been executed with the Government of Uttarakhand onMay 17 2013. Financial Closure (FC) process is in the advanced stage. Project hasreceived term loan sanction from Power Finance Corporation Limited. However FC processhas been held-up due to Honble Supreme Courts stay order on
24 Hydro Electric Projects in Uttarakhand (Order dated May 07 2014) issued whilehearing a civil appeal in the matters of Alaknanda Hydro Power Company Limited and thestay order is in effect till date.
4. Himtal Hydropower Company Private Limited (HHPPL) (600 MW):
HHPPL a subsidiary of GEL is developing 600 MW Upper Marsyangdi-2Hydroelectric Power Project on the river Marsyangdi in Lamjung and Manang Districts ofNepal. During the year under review significant progress was made in negotiations /finalisation of the PDA with Investment Board Nepal (IBN) and the same is in advancedstage. The land for the entire project has been identified and verified. The finalverified land case has been submitted to GoN. MoU for sale of power with Government ofBangladesh has been finalised and is awaiting the execution pending the notification ofthe cross border policy which is currently under formulation by GoI.
For the Transmission Line Detailed Route Survey and Cadastral Map Survey is inadvanced stage of completion. JDA was executed with IFC for transmission line project onDecember 22 2014 and JDA with IFC is already in place for Himtal (the GenerationCompany). IFC proposes to invest in the Project as Co-developer with 10% equity underInfra Ventures route and also act as lead lender and lead arranger for theProject. Post PTA/SAARC Energy pact execution GoI and GoN have also recently agreed tobuild the cross border Transmission line on bilateral route matching with thecommissioning schedule of the Upper Marsyangdi-2 Hydro Electric Project.
5. GMR Londa Hydropower Private Limited (GLHPPL) - 225 MW:
GMR Energy Limited owns the 100% stake of GLHPPL which is developing a 225 MW projectin East Kameng district in Arunachal Pradesh. The Detailed Project Report("DPR") has been prepared and has received techno-economic concurrence from theCEA. The Expert Appraisal Committee (EAC) of Ministry of Environment Forest and ClimateChange (MoEF & CC or MoEF) has recommended for Environmental Clearance and accordinglyMoEF & CC had issued in-principle clearance to this project. However formalEnvironmental Clearance shall be granted by MoEF & CC after obtaining the Forest-stage-I clearance. Defence clearance for setting up the project has been receivedfrom Ministry of Defence GoI.
C. Mining Assets:
1. PT Barasentosa Lestari (PTBSL):
GEL had acquired 100% stake in PTBSL in September 2008 which has coal mine in SouthSumatra Province with more than 650 MT Coal Resources in ~24385 Hectares and totalmineable reserves of about 280 Million Metric Ton (MMT). Trial coal production and saleshave commenced in FY 2015 however the operations were suspended because of thelimitations of transportation of coal due to lower water levels in Musi River. The coalproduction is expected to be gradually ramped up from 1 Million Ton Per Annum (MTPA) to 3MTPA over a period. The coal is planned to be exported to India to cater to captive demandof power plants owned by the Group and also to trade the coal through in-house coaltrading arm.
2. PT Golden Energy Mines Tbk (PT GEMS):
GEL through its overseas subsidiary GMR Coal Resources Pte. Ltd. had acquired 30%stake in PT GEMS a group company of Sinarmas Group Indonesia. PT GEMS a limitedliability company listed on the Indonesia Stock Exchange. PT GEMS is carrying out miningoperations in Indonesia through its subsidiaries which own coal mining concessions inSouth Kalimantan Central Kalimantan and Sumatra. PT GEMS is also involved in coal tradingthrough its subsidiaries. Coal mines owned by PT GEMS and its subsidiaries have totalresources of more than 2.0 billion tons and Joint Ore Reserves Committee (JORC) certifiedreserves of more than 620 MT of thermal coal. GMR Group has a Coal off take Agreement withPT GEMS which entitles GMR to off take coal for 25 years.
GMR Highways Limited a wholly owned subsidiary of your Company is one of the leadinghighways developer in India with 9 operating highways assets (including two projects inwhich it holds minority interest). During the FY 2016 we have entered into definitiveagreements to divest our balance 26% stake in Ulunderpet Expressways Private Limited andour entire stake in GMR OSE Hungund Hospet Highways Private Limited. The FY 2015-16 hasseen a subdued growth in the highways sector due to various factors such as slowedeconomic situation funding constraints land acquisition issues etc. This has resulted inlower investment from private players in infrastructure in general including roads andhighways sector. For Kishangarh-Udaipur-Ahmedabad project which had been terminated inDecember 2012 a dispute notice to NHAI was served invoking arbitration to settle thedispute. The Arbitration Tribunal has been constituted and the matter will be taken up inhearings scheduled during FY 2016-17.
The Group is developing a 2100 acre multi product Special Investment Region (SIR) atKrishnagiri near Hosur in Tamil Nadu and 10000 acre Port-based multi-product SIR atKakinada Andhra Pradesh.
GMR Group with an objective of building world class industrial infrastructure inIndia is setting up a SIR at Hosur Tamil Nadu just 45 km from Electronic CityBengaluru. The location provides unique advantage of multi-modal connectivity withNational and State Highways and a railway line running alongside. Krishnagiri SIR isplanned to be developed as an integrated city spread across 2100 acres in the influencearea of proposed Chennai-Bangalore Industrial Corridor. Krishnagiri SIR is being plannedto house the following manufacturing clusters:
Automotive & Ancillary;
Defense and Aerospace;
Electronics Product Manufacturing.
Designed to encompass a complete ecosystem Phase 1A of Krishnagiri SIR spread over 275acres will contain all that are essential for a large industrial city center. KrishnagiriSIR has following key offerings to its esteemed clientele:
Sho vel ready developed plot with road drainage water supply Treatment Plants(WTP) Sewage Treatment Plants (STP) and other similar facilities;
Water Potable water;
Power 33 kV level dedicated sub-station with a Solar power plant.
The entire infrastructure is being developed and maintained by GMR Group underscoringits commitment to quality service and timelines. The "integrated" design wouldendeavor to provide first world standard residential social and commercial amenitiesmaking this zone a truly "self-contained".
Kakinada SEZ/ SIR
GMR Group owns 51% in Kakinada SEZ Private Limited which is developing Kakinada SEZ /SIR in the State of Andhra Pradesh in proximity to the cities of Vishakapatnam andKakinada. With an area span of over 10000 acres Kakinada SEZ / SIR will beself-contained Port-based Industrial park with ideally designed core infrastructureindustrial common infrastructure business facilitation infrastructure and socialinfrastructure across varied dedicated areas such as housing lifestyle and high-end expatfriendly zone. Kakinada SEZ / SIR is designed for balancing the sensitivity to culture andheritage of the region and also for integration with the native eco-system.
Pals Plush a leading toy manufacturing company has already started itsoperations in an area of over 100000 sq. ft. of space and has already recruited over 600people. It has plans to recruit over 1200 people by FY 17.
TATA Business Support Services has established a rural BPO and has alreadyrecruited over 30 people and training for the next batch of people is underway.Anticipated to recruit over 100 people in the near future.
Received interests from various domestic and international companies toestablish their factories in Kakinada SEZ / SIR and are in various phases of advanceddiscussions.
Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC) hasexecuted and registered an Agreement for sale with the company for 1563.22 acres of landat Kona Village Thondangi Mandal for the purpose of Companys Port / IndustrialBackup area / Industrial Park.
Secured approvals to draw water up to 11 MGD from various sources for Industrialuse.
Laid down the power cables inside the industrial zone and provided industrialpower supply for existing industries.
Master Plan for Phase 1 development of around 916 acres has been completed.
Internal black top roads and plots have been developed.
Pursuant to the strategic decision taken to pursue EPC opportunities outside GMR Groupand consequent to the Groups entry into Railway Projects during FY 2015-16 theGroup has started construction of 2 Dedicated
Water Freight Corridor Corporation (DFCC) projects in the state of Uttar Pradesh.Mobilization and design for the projects is substantially completed and construction is infull swing.
Your Company has also achieved substantial completion of 2 Rail Vikas Nigam Limited(RVNL) projects in the States of Andhra Pradesh and Uttar Pradesh that were awarded in FY2013-14.
Raxa Security Services Limited (Raxa)
Raxa became a subsidiary of the Company during FY 2015-16 consequent to the Groupacquiring 100% stake in Raxa. Raxa is engaged in the business of providing securitymanpower and technology services to industrial and business establishments.
Consolidated Financial Statement
In accordance with the Companies Act 2013 and Accounting Standard (AS) - 21 onConsolidated Financial Statement read with AS - 23 on Accounting for Investments inAssociates and AS - 27 on Financial Reporting of Interests in Joint Ventures the auditedconsolidated financial statement is provided in the Annual Report.
Subsidiaries Joint Ventures and Associate Companies
As on March 31 2016 the Company had 123 subsidiary companies apart from 26 jointventures and 4 associate companies. During the year under review companies listed belowhave become or ceased to be Companys subsidiaries or associate companies. The Policyfor determining material subsidiaries as approved may be accessed on the Companyswebsite at the link: http://investor.gmrgroup.in/investors/GIL-Policies.html. The completelist of subsidiary companies joint ventures and associate companies as on March 31 2016is provided in "Annexure A" to this Report.
Raxa Security Services Limited (Raxa) and Indo Tausch Trading DMCC (ITTD) becamesubsidiaries during the FY 2015-16.
Homeland Energy Group Limited (HEGL) ceased to be subsidiary during the FY 2015-16. GMRMal Retail Private Limited (GMRPL) and GMR Airports (Malta) Limited (GMRAML) wereliquidated during the FY 2015-16 and accordingly ceased to be subsidiaries.
GMR OSE Hungund Hospet Highways Private Limited (GOSEHHHPL) ceased to be a subsidiarycompany and became an associate company during the FY 2015-16.
Report on the highlights of performance of subsidiaries associates and joint venturesand their contribution to the overall performance of the Company has been provided in FormAOC-1.
Directors Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a) that in the preparation of the annual financial statements for the year ended March31 2016 the applicable accounting standards have been followed along with properexplanation relating to material departures if any; b) that such accounting policies asmentioned in Note 2.1 of the Notes to the Financial Statements have been selected andapplied consistently and judgment and estimates have been made that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as atMarch 31 2016 and of the loss of the Company for the year ended on that date;
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls to be followed by the Company have been laiddown and that the financial controls are adequate and were operating effectively;
f) that proper systems have been devised to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
The Company continues to follow the Business Excellence Framework based on the MalcolmBaldrige Model for continuous improvement in all spheres of its activities. Your Companyworks towards continuous improvement in governance practices and processes in compliancewith the statutory requirements.
The Report on Corporate Governance as stipulated under relevant provisions of SEBI LODRforms part of the Annual Report. The requisite Certificate from the Practicing CompanySecretary confirming compliance with the conditions of Corporate Governance is attached tothis Report.
Business Responsibility Report
As stipulated under Regulation 34(2)(f) of SEBI LODR the Business ResponsibilityReport describing the initiatives taken by the Company from environmental social andgovernance perspective is attached as part of the Annual Report.
Contracts and arrangements with Related Parties
All contracts / arrangements / transactions entered by the Company during the FY 2016with related parties were in the ordinary course of business and on arms lengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions other than thetransaction mentioned below:
Loans extended by the Company to GEL to an extent of Rs 1288.26 Crore duringthe FY ended March 31 2016.
The Policy on related party transactions as approved by the Board may be accessed onthe Companys website at the link: http://investor.gmrgroup.in/investors/GIL-Policies.html. Your Directors draw attention of the members to Note 32 tothe standalone financial statements which sets out related party disclosures.
Corporate Social Responsibility (CSR)
The Corporate Social Responsibility Committee (CSR Committee) has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicatingthe activities to be undertaken by the Company which was approved by the Board. The CSRPolicy may be accessed on the Companys website at the link:http://investor.gmrgroup.in/ investors/GIL-Policies.html.
The Company has identified three focus areas towards the community service CSRactivities which are as under:
Health Hygiene & Sanitation
Empowerment & Livelihoods
The Company as per the approved policy may undertake other need based initiatives incompliance with Schedule VII to the Companies Act 2013. During the year the Company wasnot required to spend any amount on CSR as it did not have any profits. Accordingly ithas not spent any amount on CSR activities. The Annual Report on CSR activities is annexedas "Annexure B" to this Report.
The activities undertaken by GMR Varalakshmi Foundation (GMRVF) Corporate SocialResponsibility arm of the GMR Group have been highlighted in detail in the ManagementDiscussion and Analysis Report.
With business opportunities significantly increasing in the current businessenvironment new risks that can impact your Companys businesses are emerging. Forthese risks to be managed effectively it is imperative to identify and address theserisks in order to accomplish Companys objectives.
Your Companys Enterprise Risk Management (ERM) framework follows the current bestpractices and has been deployed to address the emerging challenges effectively.
Significant developments during the year under review are as follows:
Risk assessment was carried out in detail at bid stage for the Railway EPCprojects Philippines airports projects. Independent views on key business assumptionsmade for these bids were presented during board reviews enabling informeddecision-making;
The focus on decentralization of Risk Management function has continuedthroughout this year. This decentralization has been effectively translated intofunctioning ERM teams in the sectors coupled with support from outsourced partners;
Having successfully pilot-implemented the Project Risk Management (PRM)framework in the previous year the same has been replicated in the ongoing Railway EPCprojects. The deployment of PRM framework has enabled effective control over projectcosts;
The Group has felt the need for a measurable approach to decide the amount ofrisks it can take in achieving its business objectives in the changed business environmentover the past year. A draft Risk Appetite Framework for the Group is under development andreview with an objective to establish thresholds for quantum of risks that the Group canaccept;
The Physical Risk Benchmarking framework developed earlier is underimplementation at Energy assets.
Updates on ERM activities are shared on a regular basis with Management Assurance Group(MAG). The ERM Team also presents to the Management and the Audit Committee of the Boardthe risk assessment and minimization procedures adopted to assess the reliability of therisk management structure and efficiency of the process.
A detailed note on risks and concerns affecting the businesses of the Company isprovided in MDA.
Risk Management Policy
The Company has in place the Risk Management Policy duly approved by the Board ofDirectors.
The GMR Groups ERM philosophy is "To integrate the process for managing riskacross GMR Group and throughout its businesses and lifecycle to enable protection andenhancement of stakeholder value."
ERM aims at balancing the dynamic growth strategy of the Group with robust institutionbuilding processes by ensuring that key decisions with regard to strategy and institutionbuilding are commensurate with the Groups risk appetite.
The Group endorses the following principles as adapted from ISO 31000:2009 (RiskManagement - Principles and Guidelines):
ERM Protects and enhances value
ERM is an integral part of all organizational processes and is applicable acrossthe Group
ERM is an input to decision making
ERM is systematic structured and timely
ERM is transparent inclusive and consultative
ERM is dynamic iterative and responsive to changes
ERM facilitates continual improvement
Internal Financial Controls
The Company has in place adequate internal financial controls with reference tofinancial statements. These controls were tested and no reportable material weaknesseswere observed in the operations of the Company.
Directors and Key Managerial Personnel
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. G. B. S. Raju Director of the Company retires byrotation at the ensuing Annual General Meeting of the Company and is eligible forre-appointment. Mr. G. B. S. Raju has offered himself for re-appointment.
Based on the recommendation of the Nomination and Remuneration Committee the Board ofDirectors of the Company at its Meeting held on November 13 2015 appointed Mr. JayeshDesai as an Additional Director of the Company with effect from November 13 2015 to holdoffice upto the date of ensuing Annual General Meeting of the Company. The Company hasalso received notice in writing pursuant to Section 160 of the Companies Act 2013 from amember along with requisite deposit proposing his candidature as Director of the Companyat the ensuing Annual General Meeting.
Further the Nomination and Remuneration Committee of the Board of Directors has alsorecommended the re-appointment of Mrs. Vissa Siva Kameswari Mr. R.S.S.L.N. BhaskaruduMr. N. C. Sarabeswaran Mr. S. Sandilya Mr. S. Rajagopal and Mr. C. R.Muralidharan as Independent Directors of the Company for their second term for a period offive years or upto the conclusion of Twenty Fifth Annual General Meeting whichever isearlier. Subsequently Board at its meeting held on August 06 2016 has recommended thesaid re-appointment.
Dr. Prakash G. Apte and Mr. V. Santhanaraman have not opted for re-appointmentas Independent Director for their second term.
The Company has received notice in writing under the provisions of Section 160 of theCompanies Act 2013 from member along with the requisite deposit proposing thecandidature of each of the said directors for the office of Independent Directors whoopted for re-appointment to be re-appointed as such under the provisions of Section 149of the Companies Act 2013.
The brief resume and details of Directors who are to be appointed / reappointed arefurnished in the Notice to the Annual General Meeting.
The Company has received declarations from all the Independent Directors who opted forre-appointment confirming that they meet the criteria of independence as prescribed bothunder Section 149(6) of the Companies Act 2013 and Regulation 16 of SEBI LODR.
During the year under review Mr. Adi Seshavataram Cherukupalli was appointed asCompany Secretary of the Company with effect from August 13 2015 in place of Mr.C.P. Sounderarajan.
Annual evaluation of Board performance Board Committees and individual directorspursuant to the provisions of the Act and the corporate governance requirements under SEBILODR has been carried out. The performance of the Board and its committees was evaluatedbased on the criteria like composition and structure effectiveness of processesinformation and functioning etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of theindividual directors on the basis of the criteria such as the contribution of theindividual director to the Board and committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the Chairman was also evaluated on the key aspects of his role. TheCompanys Nomination and Remuneration Policy for Directors Key Managerial Personneland Senior Management is annexed as "Annexure C" to the BoardsReport.
Auditors and Auditors Report
M/s. S. R. Batliboi & Associates LLP Chartered Accountants Statutory Auditors ofthe Company hold office till the conclusion of the ensuing Annual General Meeting and areeligible for re-appointment. They have confirmed their eligibility to the effect thattheir re-appointment if made would be within the prescribed limits under the CompaniesAct 2013 and that they are not disqualified for re-appointment.
Managements response on the Statutory Auditors' Qualification / Comments on theCompanys standalone financial statements
1. Qualification pertaining to the dispute in GMIAL On termination of thecontract and on conservative basis the Group wrote off assets worth Rs 202.61 Croreduring FY 2012-13 retaining only carry value of assets equivalent to Project Loan fromAxis bank taking into account the Direct Agreement entered in to by GoM / MACL with Axisbank. Tribunals award dated June 18 2014 declared that the Concession Agreementwas not void ab initio was valid and binding on the parties and also declared that theGoM and MACL are jointly and severally liable to GMIAL for loss caused by repudiation ofthe contract. Further on June 17 2015 the tribunal in its decision in respect of thepreliminary issue stated that the limit of damages recoverable in the aforementionedaward was intended to apply from the date of concession agreement has been repudiated andalso the limit to recoverable damages identified in the aforementioned award means alldamages recoverable by GMIAL and not only contractually contemplated damages. In itsfurther order vide third part final award dated February 23 2016 the Tribunal declaredthat the sums payable by GMIAL to Axis Bank are included in the sums which would have beenpayable by GoM / MACL to GMIAL. Based on the above favourable orders the Management isconfident that it is entitled for a compensation higher than the value of assets carriedin the financial statements and the claims if any from GADLIL and other serviceproviders for termination of their contracts. Accordingly no further adjustments tofinancial statements is considered necessary.
2. Qualification pertaining to the investments in GKUAEL - The Company has already madea provision for diminution in the value of investments amounting to Rs 137.47 Crorerepresenting the entire expenses incurred on this project till date. Further the projectwas delayed and subsequently terminated on account of delay by NHAI in fulfillingmandatory conditions precedent. Accordingly Management is confident that amicablesolution will be arrived at for the dispute with NHAI as well as on account of claims fromsub-contractors. As it was not feasible on the date of adoption of financial statements toassess final outcome from these disputes and likely impact of the same on the financialstatements no further provision is made. These settlements will be taken into account andappropriate adjustments would be made in financial statements as and when assessmentbecomes feasible on settlement of disputes.
3. Qualification in the report on internal financial controls regarding assessment ofcarrying value of investments in GMIAL and GKUAEL The Group has a robust system inplace to assess the appropriateness of the carrying value of its investments includingtesting for impairments. Managements view on the instant cases are explained in theparas 1 and 2 above.
Managements response on the Statutory Auditors' Qualification / Comments on theCompanys consolidated financial statements
4. Qualification pertaining to the capitalization of indirect expenditure and borrowingcosts in GREL - GREL has approached the Ministry of Corporate Affairs (MCA) seekingclarification / relaxation on applicability of MCA general circular 35/2014 dated August27 2014. In view of the same no adjustment has been made to this effect in the financialstatements.
5. Qualification pertaining to capitalization of Unit 1 on the date of declaration ofcommercial operation and also one of its mines in GCHEPL - Management is of view that thecoal mine is integral part of power plant and Unit-1 is related to that coal mine. Thesaid coal mine had started operation from the extraction from August 01 2015 but coalextracted was not sufficient to run Unit 1. Post ramp-up of coal production GCHEPL hasstarted commercial operation from Unit-1 on November 01 2015 and has declared COD of Unit1 along with Mines with effect from October 31 2015.
6. Qualifications pertaining to GMIAL and GKUAEL - Management responses are provided inparas 1 and 2 respectively.
7. Qualification in the report on internal financial controls regarding compliance withthe applicable accounting standards in case of GREL and GCHEPL The Group has propersystems and review mechanisms in place to ensure compliance with the accounting standards.Managements view on the instant cases are explained in the paras 4 and 5 above.
8. Qualification in the report on internal financial controls regarding assessment ofcarrying value of investments in GMIAL and GKUAEL Management responses are providedin para 3 above.
Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit records maintained by the Companyin respect of its EPC business is required to be audited.
The Board on the recommendation of the Audit Committee has appointed M/s. Rao Murthy& Associates Cost Accountants as cost auditors for conducting the audit of costrecords of the Company for the FY 2016-17.
Accordingly a Resolution seeking Members ratification for the remuneration toM/s. Rao Murthy & Associates Cost Accountants is included in the Notice conveningthe Annual General Meeting.
The Board has appointed M/s. V. Sreedharan & Associates Company Secretaries afirm of Company Secretaries in Practice to conduct Secretarial Audit for the FY 2015-16.The Secretarial Audit Report for the FY ended March 31 2016 is annexed herewith as "AnnexureD" to this Report. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.
Disclosures: CSR Committee
The CSR Committee comprises of Mr. R.S.S.L.N. Bhaskarudu as Chairman Mr. B.V.N. Raoand Mr. G.B.S. Raju as members.
The Audit Committee comprises of Mr. N. C. Sarabeswaran as Chairman Mr. S. RajagopalMr. R. S. S. L. N. Bhaskarudu and Mrs. Vissa Siva Kameswari as members.
All the recommendations made by the Audit Committee were accepted by the Board.
The Company has a vigil mechanism named Whistle Blower Policy which provides aplatform to disclose information confidentially and without fear of reprisal orvictimization where there is reason to believe that there has been serious malpracticefraud impropriety abuse or wrong doing within the Company. The details of the WhistleBlower Policy is explained in the Corporate Governance Report and also posted on thewebsite of the Company.
Meetings of the Board
A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year six (6) Board Meetings were convened and held. The details of which are given inthe Corporate Governance Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013.
Particulars of Loans Guarantees and Investments
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
Conservation of energy technology absorption and foreign exchange earnings and outgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is provided in "Annexure E".
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT. 9 is providedin "Annexure F".
Particulars of Employees and related disclosures
The information required under Section 197(12) of the Companies Act 2013 read withRule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is attached as "Annexure G".
The information required under Rule 5(2) and (3) of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided in the Annexure formingpart of this Report. In terms of the first proviso to Section 136 of the Companies Act2013 the Report and
Accounts are being sent to the members excluding the aforesaid Annexure. Any memberinterested in obtaining the same may write to the Company Secretary at the RegisteredOffice of the Company. None of the employees listed in the said Annexure other than theExecutive Chairman and Managing Director are related to any Director of the Company.
Developments in Human Resources and Organization Development
The Company has robust process of human resources development which is described indetail in MDA section under the heading "Developments in Human Resources andOrganization Development at GMR Group".
Changes in Share capital
During the year your Company had issued 934553010 equity shares of face valueof Rs1eachforcashatapriceof Rs 15perequityshare(includingapremium of Rs 14 per equity share)for an amount aggregating to Rs 1401.83 Crore on rights basis to the eligible equityshareholders of your Company in the ratio of 3 equity shares for every 14 fullypaid-up equity shares held by the eligible equity shareholders on the record date.
Conversion of CCPS into Equity Shares:
During the year the Company converted CCPS Series A and B preference share of Rs568.33 Crore and Rs 568.34 Crore respectively into equity shares. The preference share ofSeries A CCPS were converted into 359478241 equity shares of Rs 1 each at conversionprice of Rs 15.81 per equity share (including premium of Rs 14.81 per share) and Series BCCPS were converted into 380666645 equity shares of Rs 1 each at conversion price of Rs14.93 per equity share (including premium of Rs 13.93 per share). Accordingly preferenceshare capital had decreased by Rs 1136.67 Crore and equity share capital had increased byRs 74.01 Crore.
The total paid capital of the Company as on March 31 2016 after the above issues is Rs603.59 Crore.
Forfeiture of money received against share warrant:
During the year the Board of Directors of the Company had approved the forfeiture ofRs 141.75 Crore advance received against share warrants as the warrant holders did notexercise the option within the due date. The amount is transferred to Capital Reserveaccount.
Environmental Protection and Sustainability
Since inception sustainability has remained at the core of our business strategy.Besides economic performance safe operations environment conservation and socialwell-being have always been at the core of our philosophy of sustainable business. Inanticipation of upcoming regulations and requirements the Company has investedsubstantially and allocated other resources to proactively adopt and implementmanufacturing / business processes to increase its adherence to environmental standardsand enhance its industry safety levels. At GMR Group the challenges due to theCompanys operations related to EHS aspects of the business employees and societyare mapped and mitigated through a series of systematic and disciplined sets of policiesand procedures.
The Company continues to abide by regulations concerning the environment by allocatingsubstantial investments and resources on a continuous basis to adopt and implementpollution control measures. Our continual endeavor to go beyond compliance and conservenatural resources helps to march towards attaining excellence in environmental managementand efficient and sustainable operations as well. As the Company operates in anincreasingly resource-constrained world being environmentally conscious and efficient arekey to our operations. The Company has a Corporate Environment Health Safety and Quality(EHSQ) Policy to articulate guide and adopt an integrated approach towards implementingEHSQ objectives and the Company remains committed towards the said policy. Theseestablished systems certified by reputed certifying agencies have helped to monitor andmanage our operations systematically safely and in environmental friendly manner. Whensuch practices become institutionalized they protect environment life assets and reducecosts.
The Company recognizes the challenge and understands the global thrusts for minimizingthe effect of developmental projects towards global warming. The Company has developedvarious projects voluntarily and some of the projects are under development stage whichultimately reduces GHG emissions into the atmosphere and thus minimizing the globalwarming effect. The Company has evolved as Sustainability leader by registering 7 CDMProjects with UNFCCC.
As a responsible corporate citizen the Company is striving to meet the expectations ofneighboring communities around our plants and other locations through GMR VaralakshmiFoundation. The foundation works closely with them and strives to impact the lives ofmillions of farmers youth women and children through numerous programs for theirbenefit.
GMR Energy Sector has continuously ventured to promote cleaner fuel operations andrenewable energy. A super critical technology power plant was developed at Chhattisgarh.The 25 MW capacities Solar Photo-Voltaic based power generation and 2.1 MW and 1.25 MWwind turbine generators in the State(s) of Gujarat and Tamil Nadu respectively with thetotal capacity of the wind turbine generator being 3.35 MW are fully operational withcommitment towards sustainability in terms of clean and renewable energy resource.Further GRSPPL a wholly owned subsidiary of GEL has also commissioned a 1 MW Solar powerproject in Rajam Andhra Pradesh in February 2016.
GMR Energy sector has aligned its energy business with its comprehensive "EHSFramework" adopting best manufacturing practices optimizing energy naturalresources and technology best available practices go beyond compliance etc.
All the operating units have all necessary statutory clearances in place and are incompliance with environmental regulations. The Company has adopted state-of-the-artsystems and measures to control emissions and effluent in design stage itself. Hazardouswastes management and disposal has been in accordance with Central Pollution Control Board(CPCB) guidelines. Continuous Stack Emission Monitoring System (CEMS) and ContinuousAmbient Air Quality Monitoring Systems (CAAQMS) at power plants have been set formonitoring of vital pollution parameters on real time basis.
Also each of the operating units has dedicated Effluent Treatment Plant to treat wastewater from the units and utilize or discharge in accordance with Pollution Control BoardNorms. All parameters like stack emissions ambient air quality water quality noiselevel etc. are maintained well within the stipulated norms. The monitoring reports aresubmitted periodically to statutory authorities. Internal audits and surveillance auditsas per the requirements of ISO certifications are conducted and any observation ornon-conformance is dealt with utmost seriousness. The system is managed by dedicated EHSteam and steered frequently at Apex level for quick actions.
Various employee engagement campaigns are conducted at plant by celebrating WorldEnvironment Day National Safety Week National Fire Service Week National CleanlinessDay Road Safety Awareness Week Energy Conservation Week Earth Day etc. to createawareness and generate ideas for implementation. Regular mass plantation is organized withinvolvement of employees their families and nearby villagers. Dense green belt isdeveloped at many sites and is under progress at few project sites. Fruit bearing treespecies are also being planted. Its survival is ensured with proper care.
Systems and processes as per Global Reporting Initiative (GRI-G4) are being implementedacross all the power plants. Energy Sector is publishing its Sustainability Report everyyear since FY 2013-14 as per GRI-G4 guidelines which are made available to all itsrelevant stakeholders. Sustainability reports are also available on Company website.Further Energy Sector initiated and adopted GRI-G4 based Sustainability & EHSManagement software E-tool titled SoFi for capturing online sustainabilitydata of all operating assets and projects first in the power sector in India.
GWEL has been certified for ISO 9001:QMS ISO 14001:EMS and OHSAS 18001 by M/s BVCI. Inthe year 2015 GWEL implemented and certified for ISO 50001: Energy Management System fromM/s BVCI. Under the "Sampoorna Swachhata" initiative 5S implementationprogrammes were carried out and GWEL is certified for deploying 5S practicesat plant in January 2016 by National Productivity Council (NPC). GWEL also implementedwaste management initiative by installing "Mechanized bio- composter" forconverting food wastes into manure. 89% of fly ash generated during FY 2015 16 wasutilized for cement making bricks making etc. To manage the wellness at work placeseries of programmes under "Nirmal Jivan" initiatives like Navchetna Shibir foremployees fun Saturday for stress management counseling of all employeeswith dietician health awareness Yoga Shibir and motivational programs for employees andtheir family members were organized. GWEL successfully conducted series of EHS awarenessprograms Earth day World Environment day National Safety week and observing NationalFire Service week various training programs on Permit to Work (PTW) system emergencyresponse plan fire - fighting electrical safety chemical handling gas cylinderhandling conducted to employees and contractual employees. Mock drills on scenarios suchas fire in warehouse hydrogen leakage from generator fire in coal crusher ash leakagefrom ash silo were conducted. During FY 2015-16 GWEL planted 6000 fruit bearing and 14000forest tree species under "Sustainable farming based greenbelt development"initiative. Testimonial to all such initiatives are receiving SHRUSHTIs Good GreenGovernance Award-2015 Golden Peacock Occupational Health and Safety Awards - 2015Greentech
Occupational Health and Safety Awards 2015 MEDA Award 2016 for EnergyManagement from Government of Maharashtra in FY 2015-16.
GKEL is fully compliant with the statutory norms required for operation of the plant.Besides various environmental protection initiatives audio visual safety trainingsBehavior Based Safety (BBS) trainings work permit system with Lock Out and Tag Out(LOTO) House Keeping drive with "5S" Hazard Identification & Riskassessment (HIRA) were also implemented to inculcate positive safety culture amongstworkforce. Following Surveillance Audit of Integrated Management System (IMS) GKELreceived ISO 14001: EMS OHSAS 18001 and ISO 9001: QMS certificates. Various campaignsviz. World Earth Day World Environment Day Road Safety Awareness Week National SafetyDay / Week Pollution Prevention Day were observed to create environment awareness amongthe employees and contract workforce. 47% of the total ash generated in the FY 2015-16(1387671.71 MT) has been utilized for brick manufacturing and land development. Inexisting green area around 50157 saplings were planted covering additional area of about64.5 acres during FY 2015-16.
GCHEPL has valid factory License from Inspectorate of Factories Hazardous wasteauthorization and Bio medical waste authorization from Chhattisgarh EnvironmentConservation Board. GCHEPL has also obtained the amendment for usage of domestic coal fromMoEF. In FY 2015-16 total 70172 saplings were planted over approximately 74.32 acreswithin plant premises. GCHEPL received ISO 14001: EMS & OHSAS 18001 certificates forimplementing Integrated Management System (IMS). Workforce at GCHEPL enthusiasticallyparticipated in various campaigns viz. World Water Day World Environment Day RoadSafety Awareness Week National Safety Day / Week & Fire service day. No majorincident was reported in FY 2015-16. For all operational activities and maintenance SAPbased PTW system and other work permits are followed. Compliance with Personal Protectiveequipment is ensured while working. EHS training is imparted to all new and existingemployees every year.
GVPGL and GREL units are gas based power plants. Both units are certified for ISO9001:2008 ISO 14001:2004 and OHSAS 18001: 2007 by M/s. GL-DNV. EHS practices are deployedto achieve the highest level of performance. For assessment of EHS practices externalsafety audit was conducted at GVPGL all observations were suitably addressed with actionplan. EHS training is imparted regularly like First Aid through M/s. St. JohnAmbulance. Mock drills for each plant were conducted on different emergency scenarios. EHSinitiatives like celebration of Road Safety Week National Safety Week Fire Service WeekWorld Earth Day and World Environment Day are done at plant sites to enhance the EHSawareness level. On day of Karthika Vanamahotsavam 100 tree saplings wereplanted.
GMR Energy Limited (GEL) Kakinada has established efficient EHS procedure andpractices and has achieved zero Lost Time Injury Frequency Rate (LTIFR) with nilreportable accidents in FY 2015-16. Plant is compliant with all statutory norms andprocedures. GEL celebrated World Environmental Day Safety Week Road Safety Week FireService Week Earth day and Karthika Vanamahostavam. Swachh Bharat campaign is inprogress. Periodical surveillance audit of ISO 9001:2008 ISO 14001:2004 and OHSAS 18001:2007 has been done by M/s. GL-DNV. GEL successfully implemented 2 environmental managementprogrammes on energy conservation and minimization of water consumption. To make the areagreen plantations were done by employees in Plant premises as well as nearby schools.
GMR Bajoli Holi Hydro Power Project is being constructed with compliance to allapplicable EHS rules regulations and best practices. There was NIL reportable majorincident at site and project achieved 5418369 safe man hours in FY 2015-16. FirstSurveillance audit for Integrated management system (IMS) covering ISO 9001:2008 ISO14001:2004 and OHSAS 18001: 2007 certificates was conducted by M/s TUV India. Periodicalmedical checkups were conducted for employees and contract workers. Regular medical campsare also organized for workforce and community. Safety tool box talk safety training andsite inspections are conducted on daily basis. 100% contract employees were covered underEHS awareness on utilization of PPE at site. All critical air quality parameters insidetunnels are displayed near portal of adits. First aid medical assistance set up has beencreated at site which is managed by a qualified doctor and paramedic staff with ambulance.Various EHS reviews are conducted every month at site. In FY 2015-16 approximately 2800saplings were planted at project and colony sites.
Airport Sector embraces the concept of sustainability by managing activities inenvironment friendly manner minimizing natural resource utilization and maintainingcollaborative relationships with the community and stakeholders. Our strategy forlong-term stability and continual improvement is focused on cost-effective operationsocial responsibility environment and ecology oriented business approach and practiceswhich are governed and managed by latest technological processes improved infrastructureefficient operational measures continuous learning and education effective changemanagement and communication with all possible stakeholders support.
Environment Sustainability Management is an integral part of our business strategywhich helps in achieving social credibility and business sustainability by efficientintegration of policy system procedures infrastructure and community support. TheCompany adopted all possible proactive sustainable approach for the airports to develop anenvironment friendly posture that accommodates the communitys concerns while stillmeeting all regulatory requirements. Our key environmental and social elements which havedirect/indirect impact on society are aircraft noise emission air quality water andwaste water solid waste and conservation of natural resources. A dedicated team ofprofessionals is deployed to deal with all areas of environmental and social concerns. Allthe impacts associated with its business aspect are being effectively resolved by workingclosely with the communities around the airports by proper knowledge sharing forums mediacommunications communication to stakeholders and stakeholders meeting further withthe support of regulatory and government agencies.
Air and Water management is ensured by regular monitoring analysis and followinggovernment regulations and guidance. Solid and Hazardous wastes are handled as per theapplicable rules. Sewage Treatment Plant is operational to treat the waste water. Entiretreated water is being reused appropriately for flushing and irrigation purposes.
Environment Sustainability Management is an integral part of your companysbusiness strategy. It focusses highly on natural resource conservation pollutionpreventions and skill developments on the part of business sustainability at Delhi Airportby efficient integration of policy system procedures infrastructures and communitysupports.
DIAL is committed to conduct its business in an environment and social friendly mannerby adopting all possible operational and technological measures to minimize the impact ofits activities on the environment and society.
DIAL has adopted all possible proactive sustainable approach for the airport to developan environment friendly posture that accommodates the communitys concerns whilestill meeting all regulatory requirements.
Some of the achievements of DIAL during this FY are:
Green Company Gold Level Award on June 25 2015.
CII - Green Company Best Practices Award in Renewable Energy and GHG MitigationJune 25 2015.
National Award for Excellence in Energy Management by CII October 2015.
Golden Peacock Sustainability Award 2015 in October 2015.
DIAL CEO represented International Aviation community along with ICAO PresidentDr. Aliu at Conference of Parties (COP 21) in Paris on December 03 2015.
Release of knowledge sharing document on "Aviation Best Practices: ClimateChange and Emission Reduction" on August 25 2015.
Successfully completed ISO 14001 Environment Management System sustenanceaudit by M/s. DNV (Sustaining from 2009).
Sustain "Optimization Level" accreditation by Airport CouncilInternational (ACI) for Carbon Management implemented at IGI Airport since 2012.
Achieved a Carbon intensity of 2.32 kgCO2/ Pax during the year2015-16.
Sixth ACI Asia-Pacific Regional Environment Committee (REC) seminar wasorganized at Delhi Airport on March 10-11 2016.
DIAL is also Energy Security Steering Committee Member of TERI Business Councilfor Sustainable Development.
Regular Training on Environmental Management and Sustainability Management.
Environment Day celebration and Tree plantation on every World Environment Dayevent on 5th June.
GHIAL operates the Rajiv Gandhi International Airport (RGIA) at Hyderabad. GHIALconsiders EHS as an integral part of business and is committed to conducting business inan environment-friendly and sustainable manner in line with Group's Vision MissionValues Beliefs and Corporate Policies. GHIAL believes in the concept of 3R principles(Reduce-Reuse-Recycle) and actively promotes the same among all its stakeholders. Duringthe year the organisation has focused on actively promoting safety culture andsustainable operating environment through optimal use of all resources. All theinitiatives were successfully implemented with the active cooperation by all the internaland external stakeholders.
GHIAL is committed to develop nurture and proactively promote EHS culture with thephilosophy of Safety first.
As part of its continual improvement of EHS performance GHIAL has initiated manysafety awareness programmes trainings audit and inspections on a continual basis. Duringthe year there was no incident involving fatality. The Safety ManagementSystem (SMS) at GHIAL is robust and is currently in Phase-4 in terms of its maturityand meticulous implementation which is in line with DGCA guidelines. The Aerodrome Licensehas been renewed and is valid till March 03 2018. Further GHIAL has been re-certified byBVQ for IMS (OHSAS 18001) for the period from January 01 2016 to December 31 2018.
As a continual improvement of EHS initiatives the organization has identified theHuman factors in safety occurrences as a primary concern and engages thestakeholders through various forums to enhance awareness on this crucial factor. Inaddition to this regular safety alerts notifications are sent across as a proactivesafety measure. The Safety Management System at GHIAL has been comprehensive with thecombination of DGCA mandates British Safety Council guidelines and OHSAS-18001 frameworkwhich makes it a unique feature.
Safety assurance is closely monitored through various safety oversight activities whichinclude annual safety audits and inspections of all key stakeholders and service providersencompassing safety process personnel competencies and process audits. AdditionallyManagement of Change is a critical requirement to ensure continued safetypractices which is exercised through carrying out Safety Assessment of all major changeswithin the airport and meticulously maintained risk register. Various safety concerns aredeliberated and adequately addressed in various safety committees including Runway SafetyCommittee Apron Safety Committees Works Coordination Committee etc.
To maintain ecological balance at RGIA green belt has been developed in an area of 273hectares with various plant species and 971 hectares of natural greenery has been leftundisturbed. RGIA has won the best landscape award at the Garden festival for the sixthconsecutive year in 2016 from the Commissioner Horticulture Dept. of Horticulture Govt.of Telangana.
RGIA has achieved energy saving of 3.397 million kWh (kilowatt hour) in the last fiveyears from various energy conservation practices. It has reduced its carbon footprint by5578 tonnes in 2015 over base year 2009. RGIA received "Certificate of Merit" inNational Energy Conservation Awards 2011 from Bureau of Energy Efficiency Government ofIndia for its achievements.
It has also received the Confederation of Indian Industries (CII) Award for"Excellent Energy Efficient Unit" during the 16th National Award forExcellence in Energy Management 2015.
The RGIA Passenger Terminal Building has Leadership in Energy and EnvironmentalDesign (LEED) certification for its unique design which allows maximum naturallighting and other features that enable optimal use of energy and water.
Waste-water is being treated in STP at site and being reused for flushing andplantation. Sludge from STP is being used as manure.
At RGIA the rainwater net recharge is estimated at 1.729 million cubic metre perannum. Surface water use and several water saving measures contribute to waterconservation.
Food waste generated from the airport is converted as compost on the site. Compost isused as manure in place of Chemical Fertilizers. Paper and plastic waste are handed overto recyclers for reprocess and reuse.
RGIA very actively promotes environmental awareness to the airport community and to thepassengers by observing various days like World Environment Day World Forestry Day OzoneLayer Protection Day Earth Day etc.
Further the other details with respect to Environmental Protection and Sustainabilityhave been explained in the MDA Report.
Events subsequent to the date of financial statements
There are no material changes and commitments affecting financial position of thecompany between March 31 2016 and Boards Report dated August 06 2016.
Change in the nature of business if any
There is no change in the nature of business of the Company.
Significant and Material Orders passed by the Regulators
There are no significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and the Companys operations in future.
During the year under review the Company has not accepted any deposits from thepublic.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
Your Company has in place an Anti-Sexual Harassment Policy in line with therequirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibitionand Redressal) Act 2013. An Internal Complaints Committee (ICC) has been set up toaddress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this Policy.
The following is a summary of sexual harassment complaints received and disposed offduring the FY ending March 31 2016:
|Number of complaints received ||: ||NIL |
|Number of complaints disposed off ||: ||NIL |
Your Directors thank the lenders banks financial institutions business associatescustomers Government of India State Governments in India regulatory and statutoryauthorities shareholders and the society at large for their valuable support andco-operation. Your Directors also thank the employees of the Company and its subsidiariesfor their continued contribution commitment and dedication.
| ||For and on behalf of the Board |
| ||Sd/- |
|Place: New Delhi ||G. M. Rao |
|Date: August 06 2016 ||Executive Chairman |