Annual report analysis

1. Annual Report Analysis of
GMR Infra Ltd.
Prepared by :
Sidharth Panda (316SM1026)
Pravash Kumar Jena (316SM1016)
Arindam Bhattacharjee (316SM1006)

2. Contents
• Introduction
• Vision, Values and Beliefs
• General Information
• Organization Structure
• Competitors
• Financial highlights of 2015-16 and Board’s report
• Information on the shares of the company
• Financial statements of 2015-16
• Comparison with previous financial year
• SWOT Analysis
• Latest news on GMR
• Conclusion

3. Introduction
• GMR Group is an infrastructural company headquartered in Bengaluru. The company was founded in
1978 by Grandhi Mallikarjuna Rao.
• Employing the Public Private Partnership model, the Group has implemented several infrastructure
projects in India.
• The Group also has a global presence with infrastructure operating assets and projects in several countries
including Nepal, Turkey, South Africa, Indonesia, Singapore, the Maldives and the Philippines.
• GMR Group chairman Grandhi Mallikarjuna Rao, a first-generation entrepreneur hailing from Rajam in
Srikakulam District in Andhra Pradesh, pledged $340 million, which is equivalent to his personal share in
the infrastructure conglomerate, to improve education among the underprivileged sections of the society.
• The company started with Agri-based industries like Jute, Sugar, Breweries and slowly moved in the
Infrastructure space over the past decade. Now the GMR group interests lie in areas of Airports, Energy,
Highways and Urban Infrastructure.
• In the financial year 2015-16 it earned a revenue of $1.6 billion.

4. Vision, Values and Beliefs
• Vision :
• GMR Group will be an institution in perpetuity that will build entrepreneurial
organizations making a difference to society through creation of value.
• Values and beliefs :

5. General Information

6. Organizational Structure

7. Competitors :
• Larsen & Toubro
• DLF
• Tata Projects Ltd
• Jaypee Group
• Oberoi Realty
• Unitech
• Reliance Infrastructure
• Punj Lloyd
• Gammon India

8. Highlights of 2015-16
Consolidated Financial Performance

9. Contd…

10. • GMR, as a holding company, operates in Airports, Energy, Transportation and Urban
Infrastructure business sectors through various subsidiaries, associates and jointly
controlled entities.
• The Company has Engineering, Procurement and Construction (EPC) business.
• It has a separate operating division to cater to the requirements of implementing the
projects undertaken by the subsidiaries and others, including Railway projects.
• Analysis of the Company’s audited consolidated and standalone financial results are given
in next page
Board’s Report

11. Particulars Consolidated Standalone
March 31,
2016
March 31,
2015
March 31,
2016
March 31,
2015
Revenue from operations 13,357.66 11,087.68 799.10 649.74
Revenue share paid / payable to concessionaire grantors (2,412.29) (2,064.86) - -
Operating and administrative expenditure (6,700.73) (6,468.18) (210.91) (200.03)
Other Income 454.27 327.46 15.07 19.48
Finance Costs (4,057.69) (3,571.86
)
(514.88) (537.29)
Depreciation and amortisation expenses (2,266.16) (1,812.53
)
(15.77) (20.03)
(Loss)/Profit before exceptional items, tax expenses, minority interest and
share of (loss)/ profit of associates
(1,624.94) (2,502.29) 72.61 (88.13)
ExceptionalItems:
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) - -
Breakagecost of interestrate swap - (91.83) - -
Provision fordiminution in value of investments/ advancesin subsidiaries / associates (39.22) - (1,576.93
)
(262.40)
(Loss)/Profit before tax expenses, minority interest and share of (loss)/ profit
of associates
(1,774.73) (2,806.41) (1,504.32) (350.53)
Tax expenses (224.21) (152.81) (14.58) (2.12)
(Loss)/Profit before minority interest and share of (loss)/ profit of associates (1,998.94) (2,959.22) (1,518.90) (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 (2,161.00) (2,733.29) (1,518.90) (352.65)
Net (deficit) / surplus in the statement of profit and loss - Balance as per last financial statements (4,006.89) (1,183.56
)
62.81 429.37
Transfer from debenture redemption reserve 34.38 46.25 34.38 46.25
Surplus / (Deficit) available for appropriation (6,133.51) (3,870.60) (1,421.71) 122.97
Appropriations (63.78) (136.29) (38.50) 60.16
Net deficit in the statement of profit or loss (6,197.29) (4,006.89) (1,460.21) 62.81
Earnings per equity share (`) - Basic and diluted(per equity share of ` 1 each)
(3.82) (6.46) (2.68) (0.83)

12. Information on the shares of the company
Stock Market Price Data related to listed shares :

13. Contd…

14. Distribution of equity shareholding as on March 31, 2016

15. Financial statement: Balance Sheet (2015-16)
March 31, 2016
`in Crore
March 31, 2015
`in Crore
EquityandLiabilities
Shareholders' funds
Share capital 603.59 1,572.80
Reserves and surplus 4,356.74 4,305.77
Money received against share warrants
-
141.75
4,960.33 6,020.32
Preference shares issued by subsidiaries 984.25 984.25
Share application pending allotment
-
889.66
Minority interest 1,644.03 1,765.50
Non-current liabilities
Long-term borrowings 37,413.35 38,738.96
Deferredtax liability (net) 81.00 73.36
Trade payables 29.14 21.03
Otherlong-termliabilities 2,186.57 2,064.07
Long-term provisions 104.00 59.39
39,814.06 40,956.81
Current liabilities
Short-term borrowings 1,741.10 3,511.18
Trade payables 1,946.83 2,035.08
Othercurrentliabilities 15,785.80 10,378.56
Short-term provisions 295.39 271.20
19,769.12 16,196.02
Total 67,171.79 66,812.56

16. Continued…
March 31 2016 March 31 2015
Assets
Non-current assets
Fixed assets
Tangible assets 37,685.64 23,760.52
Intangibleassets 9,543.38 10,422.23
Capital work-in-progress 4,053.46 16,838.99
Intangible assets under development 526.69 408.45
Non-current investments 132.94 210.86
Deferred tax asset (net) 70.93 19.04
Long-term loans and advances 2,306.74 2,384.75
Tradereceivables 43.17 97.16
Other non-current assets 3,347.99 3,949.41
57,710.94 58,091.41
Current assets
Current investments 1,841.13 1,201.82
Inventories 469.30 304.85
Tradereceivables 2,468.32 1,624.27
Cash andbankbalances 3,121.32 3,904.04
Short-term loans and advances 787.83 587.19
Other current assets 772.95 1,098.98
9,460.85 8,721.15
Total 67,171.79 66,812.56

17. March 31, 2016
` in Crore
March 31, 2015
` in Crore
EquityandLiabilities
Shareholders' funds
Share capital 603.59 1,572.80
Reserves and surplus 4,356.74 4,305.77
Money received against share warrants
-
141.75
4,960.33 6,020.32
Preference shares issued by subsidiaries 984.25 984.25
Share application pending allotment
-
889.66
Minority interest 1,644.03 1,765.50
Non-current liabilities
Long-term borrowings 37,413.35 38,738.96
Deferredtax liability (net) 81.00 73.36
Trade payables 29.14 21.03
Otherlong-termliabilities 2,186.57 2,064.07
Long-term provisions 104.00 59.39
39,814.06 40,956.81
Current liabilities
Short-term borrowings 1,741.10
3,511.18
Trade payables 1,946.83
2,035.08
Othercurrentliabilities 15,785.80
10,378.56
Short-term provisions 295.39 271.20
19,769.12 16,196.02
Total 67,171.79 66,812.56
P/L Statement for FY 2015-2016

18. March 31, 2016 (in
crores)
March 31 2015 (in
crores)
Assets
Non-current assets
Fixed assets
Tangible assets 37,685.64 23,760.52
Intangibleassets 9,543.38 10,422.23
Capital work-in-progress 4,053.46 16,838.99
Intangible assets under development 526.69 408.45
Non-current investments 132.94 210.86
Deferred tax asset (net) 70.93 19.04
Long-term loans and advances 2,306.74 2,384.75
Tradereceivables 43.17 97.16
Other non-current assets 3,347.99 3,949.41
57,710.94 58,091.41
Current assets
Current investments 1,841.13 1,201.82
Inventories 469.30 304.85
Tradereceivables 2,468.32 1,624.27
Cash andbank balances 3,121.32 3,904.04
Short-term loans and advances 787.83 587.19
Other current assets 772.95 1,098.98
9,460.85 8,721.15
Total 67,171.79 66,812.56
Continued…

19. CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES
(Loss) / profit from continuing operations before tax expenses, minority interest and share of (loss) / profit of
associates
(1,474.57) (2,769.85)
(Loss) / profit from discontinuing operations before tax expenses and minority interest (300.16) (36.56)
Profit / (loss) before tax expenses and minority interest (1,774.73) (2,806.41)
Adjustments to reconcile (loss) / profit before tax to net cash flows
Depreciation / amortizationof continuingoperations 2,128.74 1,771.86
Depreciation/ amortizationof discontinuingoperations 137.42 40.67
Adjustmentsto the carrying amount of current investments 0.82 3.72
Adjustmentsto the carrying amount of long-terminvestments - 0.05
Loss on derivative contracts (including provisions for mark-to-market loss) - 27.25
Loss on account of provision towards claims recoverable - 130.99
Provisions no longer required, writtenback (41.58) (21.45)
Impairment / other write off of tangible / intangible assets pertaining to continuing operations 168.85 122.16
Provision for diminution in value of investments in an associate 39.22 -
(Profit)/loss on sale of fixed assets (0.21) (2.03)
Provision / write off of doubtful advances and trade receivables 10.21 33.64
Effect of changes in exchange rates 12.35 10.93
Net gain on sale of investments (140.10) (61.07)
Profit on sale of subsidiaries / jointly controlled entities (2.31) (34.44)
Finance costs 3,963.82 3,403.05
Amortization of ancillary borrowing costs 93.87 168.81
Brokeragecost of interestrate swap - 91.83
Interest income (311.68) (291.07)
Dividend income on current investments - (0.04)
Cash flow statement for the year ended March 31, 2016
March 31 2016 March 31 2015

20. Operatingprofitbeforeworkingcapitalchanges 4,284.69 2,588.45
Movements in working capital :
Increase/ (decrease)in tradepayables andotherliabilities 418.21 529.12
Increase / (decrease) in provisions 49.27 (19.01)
(Increase) / decrease in trade receivables (749.82) 41.45
(Increase) / decrease in inventories (161.66) 37.22
(Increase) / decrease in other assets 48.74 (18.64)
(Increase) / decrease in loans and advances (222.15) (35.93)
Cash generated from operations 3,667.29 3,122.66
Direct taxes paid (net of refunds) (312.52) (207.84)
Net cash flowfrom operatingactivities (A) 3,354.77 2,914.82
CASH FLOW (USED IN) / FROM INVESTING ACTIVITIES
Purchase of fixed assets and cost incurred towards assets under construction / development (2,242.13) (3,805.09)
Proceeds from sale of fixed assets 0.99 5.70
Proceeds fromsale of stake in jointlycontrolledentities/subsidiaries 17.38 1,560.18
Purchase of long-term investments - (0.56)
Sale/ (purchase)of currentinvestments(net) (440.26) (437.79)
Loans given to / (repaid by) others 28.84 25.75
Purchase consideration paid on acquisition /additional stake in subsidiary companies / jointly controlled entities (732.43) (97.06)
(Investments) / redemptionof bank deposits (net) (having original maturity of more than three months) 1,244.61 (704.79)
Interest received 325.02 289.13
Dividend received - 0.04
Net cash flowused in investing activities (B) (1,797.98) (3,164.49)
Continued… March 31 2016 March 31 2015

21. March 31, 2016
` in Crore
March 31, 2015
` in Crore
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of equity shares (including securities premium and net of related securities issue expenses) 493.41 1,441.56
(Repayment)/Proceeds from issue of share warrants / share application pending allotment - 1,031.41
Redemption of preference shares (including redemption out of securities premium) - (329.59)
Redemption premium on debentures, preference shares and related security issue expenses (288.32) (312.47)
Issue of common stock in consolidated entities (including share application money) - 14.68
Proceeds from borrowings 7,595.86 11,481.53
Repayment of borrowings (5,798.51) (9,277.87)
Financecosts paid (3,650.62) (3,448.95)
Brokeragecost of interestrateswap - (91.83)
Dividend paid (including dividend distribution taxes) (18.78) (60.15)
Net cash flow(used in) /from financingactivities(C) (1,666.96) 448.32
Net (decrease) / increase in cash and cash equivalents (A + B + C) (110.18) 198.65
Cash and cash equivalents as at April 1, 1,698.12 1,494.31
Cash and cash equivalents on acquisitions during the year 7.08 0.95
Cash andcash equivalents on account of sale of subsidiaries / jointlycontrolledentities duringthe year (10.24) (2.91)
Effect of exchange differences on cash and cash equivalents held in foreign currency 23.46 7.12
Cash and cash equivalents as at March 31, 1,608.24 1,698.12
COMPONENTS OF CASH AND CASH EQUIVALENTS
Cash on hand / credit card collection 8.23 9.81
Cheques/ drafts on hand 18.76 8.49
With banks:
- on current account 693.41 1,206.26
- on deposit account (having original maturity of less than or equal to three months) 887.84 473.56
Total cash and cash equivalents 1,608.24 1,698.12
Continued

22. Comparison with previous financial year
1572.8
4305.77
1765.5
2733.29
603.59
4356.74
1644.03
2161
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
Share Capital Reserves & Surplus Minority interest Profit
All figures are in crores (₹)
2014-15 2015-16

23. Contd…
44296.75
3511.8
51430.19
2468.32
47550.11
1741.1
51809.17
1624.27
0
10000
20000
30000
40000
50000
60000
Long term borrowings Short term borrwowings Fixed Assets Trade Receivables
All figures are in crores (₹)
2014-15 2015-16

24. Contd…
1624.27
11087.68
2064.86
565.51
2468.32
13357.66
2412.29
628.39
0
2000
4000
6000
8000
10000
12000
14000
16000
Cash and bank balance Revenue from operations Revenue share payable Subcontracting expenses
All figures are in crores (₹)
2014-15 2015-16

25. SWOT Analysis
• Strengths:
• First mover advantage in
aviation sector
• Impressive project execution
record
• Wide management bandwidth
• Weakness:
• Complex holding structure of
entity
• Frequent alternations of policy
framework
• Imposition of MAT on SEZs
• Opportunities:
• Enough opportunities to exploit
in infrastructure sector
• First mover advantage adds
significant technical advantage
to the company
• Threats:
• Regulatory framework still
evolving for Indian aviation
sector

26. Latest news on GMR
• GMR has won arbitration against Government of Maldives and got a
compensation of $270 million .
• Read more at:
http://economictimes.indiatimes.com/articleshow/55094693.cms?
utm_source=contentofinterest&utm_medium=text&utm_campaign
=cppst

27. Conclusion
• Presently the group is under debt pressure.
• The key to turnaround in the company’s prospects hinge on the energy business and monetization
of assets in various verticals, such as airports.
• The company has high debt and there has to be some capital infusion or sale of assets, say
analysts.
• Currently, while the airport vertical remains profitable, the power division is incurring losses,
though this has reduced in the December quarter. Passenger and cargo traffic continues to grow
well (20 per cent and nine per cent year-on-year and in the quarter).
• The power vertical, though, is seeing improvement, led by thermal assets; however, gas
availability remains a problem. With government efforts on improving of gas supplies, things
should improve.
• Though debt remains high, looking at the management’s efforts on reducing these, analysts' fair
values for the stock, even after factoring the concerns, stand substantially higher than current
prices. Analysts at Edelweiss have a target price of Rs 23 and those at IDFC at Rs 17. The
consensus target price of analysts polled on Bloomberg during February is Rs 17.25.