1. We have audited the attached balance sheet of GMR Infrastructure
Limited (''the Company'') as at March 31, 2012 and also the statement of
profit and loss and the cash flow statement for the year ended on that
date annexed thereto (''financial statements''). 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 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
3. As required by the Companies (Auditor''s Report) Order, 2003 (as
amended) (''Order'') issued by the Central Government of India in terms
of sub-section (4A) of Section 227 of the Companies Act, 1956 (''Act''),
we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Without qualifying our opinion, we draw attention to Note 29 to the
accompanying financial statements as at and for the year ended March
31, 2012 in connection with an investment of Rs. 307.86 Crore
(including loans of Rs. 91.27 Crore and investment in equity /
preference shares of Rs. 216.59 Crore made by the Company and its
subsidiaries) in GMR Ambala Chandigarh Expressways Private Limited
(GACEPL). Though GACEPL has been incurring losses since the
commencement of commercial operations, based on management''s internal
assessment and legal opinion obtained by the management of GACEPL, such
investment has been carried at cost.
5. Further to our comments in the Annexure referred to above, we
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
ii. 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
iii. The balance sheet, the statement of profit and loss and the cash
flow statement dealt with by this report are in agreement with the
books of account;
iv. In our opinion, the balance sheet, the statement of profit and loss
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
v. On the basis of the written representations received from the
directors, as on March 31, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Act;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Act, in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2012;
b) in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph 3 of our report of even date Re: GMR
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
(c) There was no disposal of a substantial part of fixed assets during
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable. Inventories lying with outside parties have been confirmed
by them as at year end.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory.
Discrepancies noted on physical verification of inventories were not
material, and have been properly dealt with in the books of account.
(iii) (a) The Company has granted unsecured loans (including unsecured
debentures) to nine entities covered in the register maintained under
section 301 of the Act. The maximum amount involved during the year
(excluding interest) was Rs. 2,779.06 Crore and the year-end balance of
loans (excluding interest) granted to such parties was Rs. 2,779.06
(b) In our opinion and according to the information and explanations
given to us and considering the economic interest of the Company in the
above entities, the rate of interest and other terms and conditions for
such loans/ debentures are not prima facie prejudicial to the interest
of the Company.
(c) In respect of unsecured loans (including unsecured debentures)
granted, repayment of the principal amount and payment of interest is
as stipulated or demanded as per mutually agreed terms.
(d) There is no overdue amount of loans/ debentures granted to
companies, firms or other parties listed in the register maintained
under section 301 of the Act.
(e) The Company has not taken any loans except that it has issued
unsecured debentures to one Company covered in the register maintained
under section 301 of the Act. The maximum amount involved during the
year (excluding interest) was Rs. 250 Crore and the year-end balance of
debentures (excluding interest) outstanding was Rs. 250 Crore.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such unsecured debentures are not prima facie prejudicial to the
interest of the Company.
(g) In respect of unsecured debentures issued, repayment of the
principal and payment of interest is as stipulated or demanded as per
mutually agreed terms.
(iv) 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 inventory and fixed assets and for the sale of services. In
case of purchase of certain fixed assets and inventory, the management
has represented that because of the unique and specialized nature of
the items involved, alternate quotations could not be obtained in
certain cases. The activities of the Company do not involve sale of
goods. During the course of our audit, we have not observed any major
weakness or continuing failure to correct any major weakness in the
internal control system of the Company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Act that need to be
entered into the register maintained under section 301 have been so
(b) In respect of transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lakhs entered into
during the financial year, because of the unique and specialized nature
of the items involved and absence of any comparable prices, we are
unable to comment whether the transactions were made at prevailing
market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public within
the meaning of Section 58A and 58AA of the Act and the rules framed
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Act, related
to the construction activities and are of the opinion that prima facie,
the prescribed accounts and records have been made and maintained. We
have not, however, made a detailed examination of records with a view
to determine whether they are accurate or complete.
(ix) (a) Undisputed statutory dues including provident fund (after
considering allowed five days of grace period), employees'' state
insurance, sales-tax, wealth-tax, service tax, customs duty, income
tax, excise duty, investor education and protection fund, cess and
other material statutory dues have generally been regularly deposited
with the appropriate authorities though there have been slight delays
in remittance of profession tax dues in a few cases.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees''
state insurance, investor education and protection fund, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(c) According to the information and explanations given to us, there
are no dues of income tax, sales-tax, wealth tax, service tax, customs
duty, excise duty and cess which have not been deposited on account of
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Order are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable to the
(xv) The Company has given a guarantee in respect of a loan taken by a
group Company from a bank in respect of which it has not charged any
commission nor was any adequate explanation provided to us of the
benefit to the Company for giving such a guarantee. In respect of other
guarantees given by the Company for loans taken by others from banks or
financial institutions, the terms and conditions, in our opinion, are
not prima-facie prejudicial to the interest of the Company.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Act.
(xix) According to the information and explanations given to us, the
Company has issued 3,500 secured debentures of Rs. 0.10 Crore each,
during the period covered by our audit report. The outstanding amount
as at March 31, 2012 in respect of these secured debentures is Rs.
349.13 Crore. The Company has created security in respect of debentures
issued. Further, the Company has unsecured debentures of Rs. 425.00
Crore outstanding as at March 31, 2012 on which no security is required
to be created.
(xx) The Company has not raised any money through a public issue during
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
For S. R. Batliboi & Associates
Firm registration number: 101049W
per Sunil Bhumralkar
Membership No.: 35141
Date: May 29, 2012