GMR Infrastructure

1.  We have audited the attached Balance Sheet of GMR Infrastructure
 Limited (the Company) as at March 31, 2009, and the related Profit
 and Loss Account and the Cash Flow Statement for the year ended on that
 date annexed thereto, which we have signed under reference to this
 report. These financial statements are the responsibility of the
 Company’s management. Our responsibility is to express an opinion on
 these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor’s Report) Order, 2003, as
 amended by the Companies (Auditor’s Report) (Amendment) Order, 2004
 (together the ‘Order’), issued by the Central Government of India in
 terms of sub-section (4A) of Section 227 of ‘The Companies Act, 1956’
 of India (the ‘Act’) and on the basis of such checks of the books and
 records of the Company as we considered appropriate and according to
 the information and explanations given to us, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 a.  We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 b.  In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 c.  The Balance Sheet, the Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 d.  In our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report comply with the
 accounting standards referred to in sub-section (3C) of Section 211 of
 the Act;
 
 e.  On the basis of written representations received from the
 directors, as on March 31, 2009 and taken on record by the Board of
 Directors, none of the directors is disqualified as on March 31, 2009
 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Act;
 
 f.  In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give in the prescribed
 manner the information required by the Act and give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 i.  in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2009;
 
 ii.  in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 iii.  in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 Annexure to Auditors’ Report
 
 [Referred to in paragraph 3 of the Auditors’ Report of even date to the
 members of GMR Infrastructure Limited on the financial statements for
 the year ended March 31, 2009]
 
 1 a. The Company is maintaining proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 b.  The fixed assets are physically verified by the management
 according to a phased programme designed to cover all the items over a
 period of three years, which in our opinion, is reasonable having
 regard to the size of the company and the nature of its assets.
 Pursuant to the programme, a portion of the fixed assets has been
 physically verified by the management during the year and no material
 discrepancies between the book records and the physical inventory have
 been noticed.
 
 c.  In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 of by the company during the year.
 
 2. The Company is a holding company with its investments mainly within
 the group companies and as such does not hold any physical inventory.
 Accordingly clause (ii) of paragraph 4 of the Order is not applicable
 to the Company.
 
 3 a. The company has granted unsecured loans to two companies covered
 in the register maintained under Section 301 of the Act, during the
 year ended March 31, 2008. The maximum amount involved during the year
 and the year-end balance of such loans aggregate to Rs. 740,000,000 and
 Rs.Nil respectively.
 
 b.  In our opinion, the rate of interest and other terms and conditions
 of such loans are not prima facie prejudicial to the interest of the
 company
 
 c.  In respect of the aforesaid loans, the parties are regular in
 repaying the principal amounts as stipulated and are also regular in
 payment of interest, where applicable.
 
 d.  In respect of the aforesaid loans, there is no overdue amount more
 than Rupees 1 lakh
 
 e.  The Company has not taken any loans, secured or unsecured, from
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Act.  Accordingly clauses (iii) (f) and (iii)
 (g) of paragraph 4 of the said Order are not applicable to the company
 for the current year.
 
 4. In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business for the
 purchase of fixed assets. The activities of the Company did not involve
 the purchase of inventory and sale of goods and services.  Further, on
 the basis of our examination of the books and records of the Company,
 and according to the information and explanations given to us, we have
 neither come across nor have been informed of any continuing failure to
 correct major weaknesses in the aforesaid internal control system.
 
 5.  According to the information and explanations given to us, there
 are no contracts or arrangements, the particulars of which need to be
 entered in the register maintained under Section 301 of the Act during
 the year. Accordingly, clause (v) of paragraph 4 of the said Order is
 not applicable to the Company for the current year.
 
 6.  The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  The Central Government has not prescribed cost records under
 section 209 (1) (d) of the Act for any of the activities of the Company
 and accordingly clause (viii) of paragraph 4 of the Order is not
 applicable to the Company.
 
 9 a.According to the information and explanations given to us and the
 records of the Company examined by us, in our opinion, the Company is
 generally regular in depositing the undisputed statutory dues including
 provident fund, income-tax and other material statutory dues as
 applicable with the appropriate authorities. According to the
 information and explanations given to us, and the records of the
 Company examined by us, investor education and protection fund,
 employees’ state insurance, sales tax, wealth tax, customs duty,
 service tax, excise duty, and cess are not applicable to the Company
 for the current year.
 
 b. According to the information and explanations given to us and the
 records of the company examined by us, there are no dues of income-tax
 which have not been deposited on account of any dispute. According to
 the information and explanations given to us and the records of the
 company examined by us, sales tax, wealth tax, service tax, customs
 duty, excise duty and cess are not applicable to the Company for the
 current year.
 
 10. The company has no accumulated loss as at March 31, 2009 and it has
 not incurred any cash loss in the financial year ended on that date or
 in the immediately preceding financial year.
 
 11. According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to a bank or a financial institution or debenture
 holders as at the balance sheet date.
 
 12. The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13. The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund / societies are not applicable to the
 company.
 
 14. In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15. In our opinion, and according to the information and explanations
 given to us, the terms and conditions of the guarantees given by the
 company, for loans taken by others from banks or financial institutions
 during the year, are not prejudicial to the interest of the company.
 
 16. In our opinion, and according to the information and explanations
 given to us, on an overall basis, the term loans have been applied for
 the purposes for which they were obtained.
 
 17. On the basis of an overall examination of the balance sheet of the
 Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 18. The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 19. The company has created security or charge in respect of debentures
 issued and outstanding at the year end.
 
 20. The company has not raised any money by public issues during the
 year. The management has disclosed the end use of monies during the
 year, out of public issue raised during the year ended March 31, 2007
 [Refer Note 3 on Schedule 15 (II)] and the same has been verified by
 us.
 
 21. During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
                                                    Thomas Mathew
                                                          Partner
                                             Membership No. 50087
                                             For and on behalf of
 Place: Bangalore                                Price Waterhouse
 Date: June 04, 2009                        Chartered Accountants