GMR Airports Infrastructure Ltd
Chairman Speech
GMR Group operated airports, during FY 2022-23, handled a total of more
than 100mn passengers (Including passengers handled at Delhi, Hyderabad, Mopa, Cebu and
Medan airports). Our Indian portfolio of airport assets handled ~87mn passengers during FY
2022-23, thus forming a 26.6% market share of all India traffic. Given our enhanced
capacity and strong growth in our markets, we expect to improve this share in the coming
years.
Dear Fellow Stakeholder,
It gives me immense pleasure to welcome you all to the 27th Annual
General Meeting of the Company.
As we cross over from a pre-pandemic to the post-pandemic world, it
gives me pride to say that India not only successfully fought this adversity but has also
emerged stronger and more resilient. India today, under the able leadership of our
Hon'ble Prime Minister Shri Narendra Modi, has emerged as a bright spot in a world
that is economically fragile and geopolitically fractured. In this process, we have begun
a transformational journey towards being a technologically advanced, environmentally
conscious, industrially self-reliant, economically prosperous and a geopolitically
benevolent developed nation. FY 2022-23 was a very exciting year for your company too.
While the pandemic fears receded and air traffic recovered to pre-covid levels, your
company undertook several initiatives and transactions to strengthen its balance sheet
while at the same time building a stronger platform for future growth. In this direction,
you would recall that during FY 2021-22, your company had achieved a key milestone i.e.,
implementation of the demerger of GMR Infrastructure Limited and emergence of two separate
listed entities – GIL (GMR Airports Infrastructure Limited) & GPUIL (GMR Power
and Urban Infrastructure Limited) thereby offering investors separate platforms to
participate in the Group's growth story. In this process, we created the only
pure-play listed airports company in India, which is also India's largest private
Airports platform.
You would also recall, that in 2020 we had entered a strategic
partnership with Paris based Groupe ADP to create a world-class airport platform, whereby
Groupe ADP had purchased a 49% stake in GMR Airports Limited (GAL), a subsidiary of GIL.
At the time of the agreement, it was our endeavor to not only to raise capital, to
strengthen our balance sheet, but also to simplify the corporate structure as we go
forward. Thus, as a next step to the above-mentioned restructuring, during FY 2022-23, the
company has undertaken a significant step to transform GIL and prepare for a new growth
phase by executing a new agreement with Groupe ADP to merge GAL, the existing airport
platform, with GIL in a step approach. The merger is aimed at simplifying the corporate
structure.
The proposed merger is a reflection of the strong partnership between
GMR and Groupe ADP. As a first step, it simplifies the structure of the airport business,
and brings cash flow generating units close to the listed entity. In addition, it will
enable an earlier settlement of the earnouts for GIL, which were agreed at the time of
investment by Groupe ADP in GAL. Further, as a precursor to the merger, Groupe ADP has
subscribed to FCCBs worth approximately €331 million, or about INR 2,932 crores,
issued by GIL, which will be used to further deleverage the company, reduce the contingent
liabilities and strengthen the Balance Sheet for future growth. Post this merger, Groupe
ADP has acknowledged that GMR Group should continue to remain as the largest shareholder
of GIL. At this stage we have already made significant progress in terms of the
implementation of the merger, having received the approval of the Competition Commission
of India along with requisite No Objection Certificates from RBI and both stock exchanges.
We expect to be filing with the NCLT in the near future.
During the year, your company also took major strides towards both
organic and inorganic expansion in terms of passenger handling capacity in geographies
both within and outside India. On the domestic front, I am pleased to inform you that we
commissioned the Manohar International Airport project at Mopa, Goa on December 07, 2022.
The project was inaugurated by the Hon'ble Prime Minister of India on December 11,
2022. The airport commenced domestic operations on January 05, 2023, while the
international operations began on July 21, 2023. This is the first time in India that we
have a two-airport system operating within one city, and our learnings from the same will
allow us to prepare well for similar situations in future. Post the start of operations,
the airport has already achieved the One million passenger mark by April 30, 2023.
Considering the growing demand from airlines and high passenger footfall, we are already
preparing to expand the terminal capacity from the existing 4.4 MPPA to 7.7 MPPA. You may
recall that in December 2022, GMR Airports Limited had announced a partnership with
National Investment and Infrastructure Fund (NIIF), which is a large investment platform
anchored by the Government of India. In terms of this partnership NIIF can invest in
three of your company's airport projects. As a first step, (NIIF), has invested
INR 631 Cr in GMR Goa International Airport Limited in the form of Compulsory Convertible
Debentures (CCD).
On the Bhogapuram front, after the resolution of existing land
acquisition issues, the foundation stone for the project was laid by the Hon'ble
Chief minister of Andhra Pradesh in May 2023. We are at an advanced stage in terms of
finalizing the EPC contractor and achieving financial closure for the project and
accordingly expect to begin construction in the near future.
In terms of organic expansion at our existing airports, a few years ago
we had taken up major expansion projects at our Delhi and Hyderabad airports. These
expansion projects are at advanced stages and expected to be completed within FY 2023-24.
With these projects completed, passenger handling capacity at
Delhi International airport will stand at 100mn passengers per year,
while Hyderabad International airport capacity will be enhanced to 34mn passengers per
year. Accordingly, our airports are well poised to capture the coming growth of
traffic in the coming years. Traffic recovery at both our airports has been strong and we
are preparing to work with both the Air India Group and Indigo to develop both airports as
potential hubs for these airlines.
With respect to Nagpur airport, where GMR had emerged as the highest
bidder in March 2019 and subsequently the bidding process was annulled by the authority in
March 2020, the project remains sub-judice. In positive developments during FY 2022-23, on
August 12, 2022, Hon'ble Supreme Court dismissed the Review Petitions filed by MIHAN
India Limited, Government of Maharashtra, AAI and MoCA. However, we await the conclusion
of all legal processes and execution of necessary concession agreement.
On the international front, as you would remember, GMR had emerged as
the winner for bid to develop and operate Kualanamu International Airport in Medan,
Indonesia in November 2021 in partnership with PT Angkasa Pura II, a state-owned
airport operator of Indonesia. The project scope includes operation, development, and
expansion of the airport over a period of 25 years. After completing all necessary
precedent conditions, we were able to take over operations of the airport in July 2022.
Traffic recovery post COVID at Kualanamu airport has been impressive and it handled a
total of ~5.8mn passengers in CY2022. In line with our strategy of recycling capital, GIL
announced in September 2022, divestment of Group's stake in GMCAC (CEBU airport
Philippines) to Aboitiz InfraCapital. The deal was completed by December 2022 and
consideration with respect to the deal received. We will continue to hold 33% stake in the
asset until September 2024 and will also operate the airport as technical services
provider till December 2026. It will also be eligible to receive additional consideration
as earnouts linked to the financial performance achieved by GMCAC over the period until
December 2026. On an overall basis, GAL operated airports, during FY 2022-23, handled a
total of more than 100mn passengers (Including passengers handled at Delhi, Hyderabad,
Mopa, CEBU and Medan airports). Our Indian portfolio of airport assets handled ~87mn
passengers during FY 2022-23, thus forming a 26.6% market share of all India traffic
(Domestic traffic share of 25.1%; International share of 33.5%). Given our enhanced
capacity and strong growth in our markets, we expect to improve this share in the coming
years. I would however like to assure you that while focusing on these growth initiatives,
our commitment remains on building a stronger and more resilient airport platform.
A very critical part of your company's future growth strategy is
the Airport Adjacencies business. Over the past decade and a half of constructing and
operating various airport assets, we have accumulated rich experience and consciously
built capabilities in various business segments of the airport ecosystem. Building on this
experience and expertise, your company has identified key strategic business segments for
GMR Airports to grow in adjacencies business, including Duty-Free, Retail, Food &
Beverage, Cargo, Carpark, Service business and EPC / PMC business. While our initial
priority would be to target opportunities within the GMR portfolio, we would also evaluate
opportunities in these segments across various geographies. We have created a richly
experienced team to drive our vision for airport adjacencies and have already won
concessions and have started some of the operations at both Goa and Hyderabad airports.
The other critical area for strategic focus is Airport Land Development (ALD). While
during the past few years we have concentrated on airport land monetization via leasing of
land, during FY 2022-23 various self-development initiatives have been taken up. As part
of our strategy, we are moving up the real estate value chain and aim to create greater
value from the precious land banks we control. This will help us in maximizing the
monetization potential of our airport land parcels and also contribute towards improving
the quality and turnaround times for our development projects as we continue to expand our
portfolio of projects.
While the year was broadly positive for your company, we remain
cognizant of the headwinds, which are impacting the global economic and geopolitical
climate. While on one hand, the receding pandemic fears resulted in a strong post-COVID
economic recovery, on the other hand geopolitical scenario turned even more negative.
Ongoing Russia-Ukraine war and post pandemic market demand fueled inflation globally. This
resulted in Central banks across the world acting in unison to tighten liquidity mainly
through increasing interest rates in order to rein inflation. Despite the efforts of
Central Banks, inflation has proven to be rather sticky and the US economy rather
resilient. As a consequence, significant relaxation of interest rates may not happen in a
short time frame resulting in a potential weaker global economy over the short to medium
term.
China lifted its drastic "Zero Covid" policy after following
the same for a long time. The policy resulted in disruptions to China's manufacturing
sector with some companies closing down their China operations, which in turn resulted in
slowdown in China's economy and disruption of global supply chains. Unlike analyst
expectations, China continues to face various headwinds in its post covid recovery.
It is however worth noting that among all the global economic and
geo-political turmoil, India has remained a bright spot. We ended FY 2022-23 on a strong
footing with a GDP growth of ~7% despite negative impact from ongoing Russia-Ukraine
conflict, high levels of inflation and rate hikes by RBI. Initially,
India was particularly hit due to high crude oil and natural gas
prices. However, the government proactively mitigated this challenge by sourcing crude oil
supplies from Russia at a discount to the prevailing pricing.
The continuing Russia-Ukraine conflict, US China disputes and
geo-political reconfiguration post covid is leading to a new world order, in which India
is likely to play a more important role as its economy grows. However, there is likely to
be greater uncertainty in a multi-polar world and developments would need to be tracked
more carefully to assess potential impact and strategy moving ahead.
While an overhang from these geo-political tussles remain, India has
continued its journey to economic transformation. Government initiatives including digital
transformation of economy, reduction in corporate taxes, significant infrastructure
spending, schemes like Production Linked Incentive (PLI) to boost manufacturing,
introduction of GST etc. have started to bear fruits. For the year 2023, India is expected
to be amongst the fastest growing major economies with GDP growth rate forecast of ~6% for
2023. Thus, we remain largely confident that despite a few short to medium term
challenges, given relative attractiveness of Inda in context of concerns about China and
India's tax and PLI incentives, India's long term growth story remains intact.
In addition to the above mentioned, various recent initiatives taken up
by the government benefit our aviation sector as well. The government, in 2017, introduced
the UDAN regional connectivity scheme, which aimed to make air travel more accessible and
affordable for public and thus increase air traffic in Tier II and Tier III cities. This
initiative has had impressive results and has led to a significant increase in air traffic
from Tier II and Tier III cities. The Government has further planned to revive 50 airports
to improve regional air connectivity within India. The Ministry of Civil Aviation
anticipates growing number of airports in India from current 148 to around 230-240 by the
year 2030. Further, the government is also taking appropriate steps to develop large scale
airports (including Delhi airport) as global air traffic hubs.
Given the attractive sector growth prospects, the airline players are
also charting their investments in line with sector growth forecasts. Various airlines
operators including TATA and Indigo have planned a massive expansion of their fleets. They
are also looking to add many wide body planes to enhance reach and contribute towards
developing Indian airports as global air traffic hubs. In fact, the current fleet size in
India is expected to grow from current ~700 to approximately 1,200 to 1,400 by 2030.
However, it may be noted that though long-term aviation growth story in
India is attractive, currently we do face supply side constraints due to weak financial
health of few airlines and enduring engine and maintenance issues. As such, the air
traffic recovery in India has been achieved despite such challenges and the consequent
sharp spike in ticket prices.
As part of the strategy for building a strong and resilient airport
platform, we continue to have strong focus on the passenger experience, sustainability and
digitalization.
Passenger Experience
As one of the critical country wide initiatives, we have taken the lead
in enabling Digi Yatra, the automatic digital processing of flyers, with the benefit of
reduced wait time and making the boarding process faster and more seamless. We have also
recently installed self-baggage drop machines. This innovative passenger-friendly
initiative aims to streamline the baggage drop-off process to reduce wait time
substantially. Usage of Digi Yatra along with self-baggage drop facility by passengers
will enhance overall airport experience of passenger by spending quality time at the
airport.
Such efforts made by our teams have been duly recognized in the form of
various accolades received during the year. Both Delhi and Hyderabad International
airports continue to maintain an ASQ (service quality rating) of 5.00. Further, Delhi
International airport improved its Global Skytrax airport ranking to 36th in the world,
while Hyderabad improved its ranking to 65th. Delhi airport was conferred with "Best
Airport in India and South Asia" in the World Airport Awards by Skytrax, for 5th year
in a row, while it was adjudged the "Cleanest airport in India and South Asia"
for 3rd year in a row. Delhi Airport was also recognized and awarded by ACI as the
"Best Airport in Asia Pacific" by ACI-ASQ for 2022. Similarly, Hyderabad Airport
was recognized as the winner of the 2022 Airport Service Quality (ASQ) Award for Best
Airport of 15 to 25 Million Passengers in Asia-Pacific. It was also conferred the
"Best regional airport in India and South Asia" by Skytrax rankings.
Sustainability
We take great pride in all the assets we have developed as National
Assets of the highest quality, and we have always ensured that we adopt the highest levels
of environmental standards for all our projects. Your company is thus contributing towards
India's target to be a net-zero emission economy by 2070. Our airports being operated
under GMR control are well on track to be Net Zero emission airports by 2030.
Detailed action plans have been prepared for all material issues impacting our ESG rating.
As a group, we are adopting a Climate Resilience Policy which outlines our commitment to
reduce carbon emissions and take actions to minimize climate change impacts. Further, we
have affirmed our alignment with the national and global ambitions of limiting global
warming rise to the 1.5? C by turn of the century.
In this direction, both our major assets i.e., Delhi and Hyderabad
International airports are now sourcing all their energy requirements from renewable
sources. This is managed by a combination of our captive solar plants and sourcing
remaining power from other renewable power plants. We have also undertaken a new
initiative to convert all airport vehicles to EVs. Further, GMR Airports is also working
with Groupe ADP and other consortium partners to conduct a joint study on Sustainable
Aviation Fuels (SAF) and their potential in India. As a result of such initiatives, DIAL
is Asia Pacific's first Level 4+ (Transition) accredited airport and Second Airport
Globally under ACI's Airport Carbon Accreditation program. GHIAL was earlier awarded
Level 3+ Neutrality status under ACI's Airport Carbon Accreditation program.
Corporate Social Responsibility
Corporate Social Responsibility (CSR) has been at the core of the GMR
Group ethos since inception, and thus we have been doing path breaking work on the CSR
front on healthcare, education, sanitation and livelihoods for more than 30 years now.
Your Company has continued this tradition of caring for the communities
and stakeholders as part of its Corporate Social
Responsibility program through GMR Varalakshmi Foundation (GMRVF), the
CSR arm of the GMR Group. The Foundation is currently working across all the asset
locations of the businesses. All the educational institutions under GMRVF performed
exceedingly well during the last year. The student strength of the education wing reached
over 10,000. The Foundation also partnered with about 200 Government schools to ensure
about 30,000 children get quality academic support. GMRIT (GMR Institute of Technology)
continues to be among the top 50 colleges in the country and the top 5 in the State of
Andhra Pradesh, as per rankings given by various education magazines. GMRIT has taken
several initiatives in Blended learning: All curated courses of COURSERA are made
available to the students of GMRIT who are accessing the courses of Machine Learning at
Stanford University and Artificial Intelligence at Arizona University and the University
of Michigan – through the Coursera Platform. Lecture Capture System was established
with UpGrad: more than 2500 lectures are being recorded and used by the students on
campus. GMR Varalakshmi CARE hospital, Rajam was accredited by National Accreditation
Board for Hospitals & Healthcare Providers (NABH) in May 2022. The hospital was also
empaneled with National Board of Examination for Anesthesiology and National Board of
Examination for DNB in Gynecology & Obstetrics. Full-time Neurosurgery Consultation
Services, Dermatology services were also started during the year. The hospital served
1,14,126 outpatients and 9,318 inpatients during FY 2022-23. Mobile Medical Units and
Medical clinics run by the Foundation offered healthcare services to needy people. During
the year, an Early Intervention Center was inaugurated to provide multiple services to
children with disabilities at Shamshabad, near Hyderabad Airport. An Elderly Care and a
Multi-activity center were also inaugurated at Delhi that provides physiotherapy and other
needy services for elderly. Aviation Skill Development Center started operations at Goa on
July 01, 2022 and trained over 900 youth in the first year itself, placing 95% of them in
airport jobs. Vocational training centers of GMRVF operated in full capacity and trained
over 8,000 youth. In line with the Group's value of Social Responsibility,
initiatives such as Hundi for daily donations, Giving Wheel of Fortune etc. were launched
during the year to promote Individual Social Responsibility of employees. For its
exemplary work in the area of CSR, GMR Varalakshmi Foundation received the ‘Mahatma
Award for Covid 19 Humanitarian Effort 2022' for SMILE (Supporting Marginalized
Individuals with Livelihood & Empowerment) project at Delhi and received a plaque of
honor from HelpAge India for the work with elderly people.
Governance
Over the years, your company has built a robust Governance framework,
starting right from the top with a well-structured Family Governance model. In addition to
focus on financial and operational performance, we are equally committed for maintaining
strong corporate governance practices and ethical behavior across every business in the
GMR Group. Our reputation as an ethical and trustworthy Company is our most important
asset. We believe that consistently focusing on good governance and applying the highest
ethical practices in all our activities enables us to uphold the trust of our
stakeholders. Our companies are built around the Group's seven Values and Beliefs
which are the embodiment of every aspect of what we do. These are Humility,
Entrepreneurship, Delivering the promise, Learning & Inner excellence, Respect for
individual, Teamwork & Relationships, and Social Responsibility.
To ensure transparency in transactions across all Group companies and
subsidiaries, we conduct regular and structured assessments by the internal audit teams,
review through an external agency and review by the Audit Committee and the eminent
members of our Board of Directors.
Digitalization & Innovation
Stressing on the importance of inclusion of technology, our Honorable
Prime Minster has said, ""Technology combines 3Ss - speed, simplicity and
service. Technology is fast, technology is simple and technology is a brilliant way to
serve people. It is also a great teacher. The more we learn about technology and the more
we learn through technology, the better it is. Technology empowers the less empowered. If
there is a strong force that brings a change in the lives of those on the margins, it is
technology".
Taking an inspiration from our Honorable Prime Minister's focus on
inclusion of technology and the government's drive towards innovation, your Company
recognizes the need for digital transformation & innovation in all aspects of business
and customer engagement and believes that in the current context companies need to
continuously innovate to grow ahead or they will perish. Technology is revolutionizing our
lives. With the kind of exponential advancement in technology, disruptions are bound to
happen. We are entering into an era of Abundance. Artificial Intelligence is making
rapid strides and transforming the world. To achieve success in such a social, economic
and political environment, we need very different skill sets and very different business
models. We have been driving several initiatives to enhance business prospects in terms of
superior customer experiences, revenue enhancement and cost reduction opportunities as
well as agile and efficient internal processes. The development and deployment of
DigiYatra is also a key development in this regard. Your Company is always at the
forefront in terms of development and adoption of technological innovations. To foster the
innovation culture in your Company and build a philosophy of open innovation that enables
free flow of ideas and resources between GMR and external ecosystem partners, GMR
Innovex, innovation vertical of GMR, has been founded. It interacts, engages, and
collaborates with start-ups, academic research Institutes, ecosystem players and other
companies in developing both digital and non-digital next generation solutions for
example, e-Boarding, Image based passenger processing, full body scanners etc. It has
institutionalized an "Innovex Fellowship Program" to identify talent early and
co-create path breaking solutions in our businesses / industry.
With a major focus on airports and with a broad array of industries
under its span, it is interested in multitude of technologies like Cloud Technologies,
Video Analytics, Computer Vision, Data Sciences, Blockchain, Drone-Tech, Smart Tagging,
Artificial Intelligence / Machine Learning, Contactless Technology, RPA, EV, Autonomous,
AR/VR, IoT, Human Machine Interactions (HMI Bots) and more emerging technologies. GMR
Innovex, now has a SEBI registered CAT-2 fund, which aims to capture value in some of our
group technology engagements with startups and create financial value for the group while
providing strategic depth and expertise in in some of the emerging technology areas.
With the recent Chandrayan-3 mission and our Honorable Prime Minister
Modi ji's passion to fund India's space exploration and advancement, India is
emerging strong as a confident player in the new areas of technology. These developments
inspire us to commit to use technology and Indian talent to make best in class
infrastructure and make our country proud in a global context.
LOOKING AHEAD
Looking ahead for FY 2023-24, in the context of global weakness, we do
expect the business environment in India to improve, especially with respect to inflation
and interest rates. There have been early signs of inflation levels easing in India, which
should gradually lead to a decrease in interest rates. As outlined earlier, we do have
strong confidence in India's expected economic growth over the medium to long term
and India's aviation sector to strengthen on the back of two strong airlines –
Air India and Indigo.
On our business side, we expect to achieve various milestones during FY
2023-24. Capacity expansion projects at DIAL and GHIAL will be completed during the year.
Further, we also expect to get remaining regulatory clearances to complete the reverse
merger between GIL and GAL. In addition to these major milestones, we expect the domestic
and international traffic recovery to continue at all our airports. Other focus areas this
year will be to strengthen our airport platform and enhance value accretion through more
asset light business activities. A few initiatives identified includes third party airport
O&M where Company is in active discussions with airports in Middle East, and Master
Concessioning for non-aero business withing the GMR portfolio with aim to create and
strengthen the GMR brand in this area. From a longer-term perspective, your Company will
continue to further strengthen and expand its footprint in the Airport and ancillary
businesses and build competitive advantage using its know-how and digitalization. Further,
your Company will continue to actively pursue new airport concession opportunities in
India, Southeast Asia, Middle East, Eastern Europe and Africa. Sustainability is core to
our ethos and we will willingly lead initiatives in this regard, well aligned with
national and global climate interests.
We are confident that your Company is well positioned to scale up,
given its vast experience of operating large airports in India and abroad.
To conclude, I would like to take this opportunity to express my
gratitude towards our customers, suppliers and other stakeholders for their confidence and
trust in the GMR Group. I also thank the leadership team of GMR Group for providing
guidance and navigating the organization through challenging phases. Last but not least,
my sincere appreciation for all our employees whose dedication, hard work, sacrifice and
continued contribution has enabled the Group to grow. Coming year holds promise for your
Company and we hope that aviation sector will continue to grow in India and globally, thus
supporting economic growth and generating millions of jobs worldwide. I look forward to
your continued support and encouragement in taking your Company to greater and newer
heights in the future. Thank you again for showing belief and faith in the organization.
Given the faith, it becomes my duty to take it forward to greater heights and towards a
brighter future.
Stay Safe, Stay Healthy,
Thank You,
G M Rao
Chairman, GMR Group
GMR Airports Infrastructure Ltd
Directors Reports
Dear Shareholders,
The Board of Directors present the 27th Annual Report together with the
audited financial statements of the Company for the Financial Year (FY) ended March 31,
2023.
Your Company, GMR Airports Infrastructure Limited (formerly known as
GMR Infrastructure Limited) ("GIL"), is a leading global infrastructure
conglomerate with unparalleled expertise in designing, building, and operating Airports in
India and overseas.
The name of the Company has changed from GMR Infrastructure Limited to
GMR Airports Infrastructure Limited w.e.f September 15, 2022. Further the Registered
Office of the Company has been shifted from Mumbai, Maharashtra to Gurugram, Haryana and
consequently the CIN of the Company has changed from "L45203MH1996PL C281138" to
"L45203HR1996PLC113564".
GMR Group is the largest private airport operator in Asia and one of
the largest globally with current operational passenger handling capacity of more than 100
million annually. The Group operates the iconic Indira Gandhi International Airport at
Delhi (Delhi International Airport), which is the largest airport in India. The Group also
runs Rajiv Gandhi International Airport at Hyderabad (Hyderabad International Airport), a
pioneering greenfield airport known for several technological innovations. The Group is
also operating Manohar International Airport, Mopa, Goa (Goa Airport at Mopa) and Bidar
Airport in Karnataka. With respect to international airports, the Group is operating the
architecturally renowned Mactan Cebu International Airport in Cebu, Philippines, in
partnership with Megawide and Aboitiz InfraCapital Inc. Expanding its overseas footprint,
GMR Group, in collaboration with Angkasa Pura II (AP II), has started operating Kualanamu
International Airport in Medan, Indonesia from July 7, 2022.
The Group is currently developing two major greenfield airport projects
in India and Greece, which includes Airport at Bhogapuram in Andhra Pradesh and Airport at
Heraklion, Crete, Greece in partnership with GEK Terna. Bhogapuram Airport in India is
poised to transform the economy and landscape of the surrounding areas when ready. Crete
Airport in Greece will similarly play a significant role in the local economy of the
region. India's aviation market is expected to grow at an average of 7% p.a. till
2040. Further a mature tariff regime for aero revenue is strengthening the Company's
‘Sustainable Cash Flow Profile'. GMR Group has Proven track record of strategic
partnerships with marquee names like Groupe ADP, Fraport and Malaysia Airports.
As a pioneer in implementing the path breaking Aerotropolis concept in
India, GMR Group is developing unique airport cities on commercial lands available around
its airports in Delhi, Hyderabad and Goa. GMR
Delhi Aerocity is a landmark business, leisure, and experiential
district. Similarly, GMR Hyderabad Aerocity is coming up as a new-age smart business hub.
Performance highlights – FY 2022-23
Performance Highlights of your Company on consolidated basis for the FY
2022-23:
• The Board of Directors of the Company at its meeting held on
March 19, 2023 has approved a Composite Scheme of Amalgamation and Arrangement among GMR
Airports Limited (GAL) and GMR Infra Developers Limited (GIDL) and the Company and their
respective shareholders and creditors, subject to necessary approvals.
• The Company entered into agreement with Groupe ADP to settle the
earnout based on achievement of certain milestone (which was to be settled through the
Bonus Series B, C and D CCPS) agreed at the time of investment by Groupe ADP in GAL at
Rs. 550 crore as full settlement.
• The Company had issued and allotted 6.76% Unlisted Foreign
Currency Convertible Bonds ("FCCB") aggregating Euro 330.817 million equivalent
to Rs. 2,931.77 crore to Aeroports De Paris S.A. (Groupe ADP) with a maturity period of 10
year and 1 day.
• Subscription of FCCB's by Groupe ADP and settlement of
earnouts will be utilized to repay debt of subsidiaries/ fellow subsidiaries for which GIL
had provided security/guarantee.
• During FY 2022-23, the Group has received Rs. 13.9 bn from
divestment of stake in Cebu Airport (GMCAC). GMR will continue to operate as the technical
service provider until December 2026 and will also be entitled to additional deferred
consideration based on the subsequent performance of the airport during the period.
• The Group has entered into a financial partnership with National
Investment and Infrastructure Fund (NIIF) for investing equity capital in three airport
projects including Mopa (Goa) and Bhogapuram (Visakhapatnam, Andhra Pradesh) airports.
Subsequent to the year end, the group has received primary investment of Rs. 6.31 bn from
NIIF in the form of Compulsory Convertible Debenture issued by GMR Goa International
Airport Limited ("GGIAL").
• Goa Airport at Mopa has achieved COD; Domestic operations
commenced from January 5, 2023. Currently, 21 domestic destinations are connected.
International operation have also commenced recently in the month of July, 2023. Land
monetization process for two hotel plots and retail interchange has been initiated.
• Delhi International Airport Limited ("DIAL") has
successfully raised Rs. 10 bn via non-convertible debentures in FY 2022-23 and
additionally raised Rs. 12 bn in Q1 FY 2023-24. GMR Hyderabad International Airport
Limited ("GHIAL") has also raised Rs. 19.9 bn via non-convertible debentures in
FY 2022-23.
• Traffic at GMR operational airports (includes Delhi, Hyderabad,
Goa, Cebu and Medan airport) - Domestic and International passenger traffic of airports up
by 62% YoY and 163% YoY, respectively.
• Domestic Passenger Traffic at Delhi International Airport during
the FY 2022-23 increased by 66% YoY from 32.8 Mn to 49.7 Mn., Domestic Passenger Traffic
at Hyderabad International Airport during the FY 2022-23 increased by 69% YoY from 11 Mn
to 17.6 Mn.
• Delhi and Hyderabad Internatiional Airports expansion works and
Crete Airport construction work is progressing as per schedule.
• Delhi International Airport - Overall progress achieved 86.1% as
on March 31, 2023 w.r.t expansion project and new arrival terminal at T1 Part A
operationalized in February 2023.
• Hyderabad International Airport - Overall progress achieved
85.1% as on March 31, 2023 w.r.t expansion project. East Pier straight portion
commissioned in Q2 FY 2022-23; West Processor (International side) was handed over during
Q3 FY 2022-23; West Pier St portion commissioned in Q1 FY 2023-24.
• Land acquisition is at final stages and financial closure is in
progress at Bhogapuram Airport. Foundation stone laid by State Chief Minister on May 3,
2023. Tender process for selection of EPC contractor is underway. Pre-cursor to Land
handover process; joint survey of land is underway. Financial Closure is underway.
• Hon'ble Supreme Court ("SC") had upheld Bombay
High Court's judgement granting concession rights of Nagpur Airport to GMR. Review
Petition was filed by MoCA in SC challenging the SC order. However, the petition was
dismissed by the SC in its order dated May 09, 2023. However, we await the conclusion of
all legal processes and execution of necessary concession agreement.
• Crete airport (Greece) Project is fully funded mainly through
state grant which is already received. It is a debt free Project. Overall progress of
about 20% was achieved as of March 31, 2023. Terminal building foundation works completed.
Work progressing on multiple fronts - departure bridge, roads, water station building and
police building etc.
Financial results – FY 2022-23
a) Consolidated financial results
(Rs in crore)
Particulars |
March 31, 2023 |
March 31, 2022 |
Continuing operations |
|
|
Income |
|
|
| Revenue from operations |
6,693.40 |
4,600.72 |
| Other income |
595.59 |
358.44 |
Total Income |
7,288.99 |
4,959.16 |
Expenses |
|
|
| Revenue share paid/ payable to concessionaire
grantors |
1,914.72 |
224.02 |
| Operating and other administrative
expenditure |
3,054.89 |
2,274.13 |
| Depreciation and amortization expenses |
1,042.44 |
889.40 |
| Finance costs |
2,343.11 |
2,018.66 |
Total expenses |
8,355.16 |
5,406.21 |
Loss before share of net
loss of investments accounted for using equity method, exceptional items and tax from
continuing operations |
(1,066.17) |
(447.05) |
| Share of profit of investments accounted for
using equity method |
85.97 |
70.70 |
Loss before exceptional items and tax from
continuing operations |
(980.20) |
(376.35) |
| Exceptional items |
254.34 |
(388.26) |
Loss before tax from continuing operations |
(725.86) |
(764.61) |
| Tax expenses/(income) |
114.07 |
(12.30) |
Loss after tax from continuing operations
(i) |
(839.93) |
(752.31) |
EBITDA from continuing operations |
1,723.79 |
2,102.57 |
| (Sales/income from operations – Revenue
share – operating and other admin expenses) |
|
|
Discontinued operations |
|
|
| Loss from discontinued operations before tax
expenses |
- |
(318.33) |
| Tax expenses |
- |
60.75 |
Loss after tax from discontinued
operations (ii) |
- |
(379.08) |
Total loss after tax for the year (A)
(i+ii) |
(839.93) |
(1,131.39) |
Other comprehensive income from continuing
operations |
|
|
| Other comprehensive income to be reclassified
to profit or loss in subsequent periods: |
|
|
| Exchange differences on translation of
foreign operations |
(180.07) |
(101.29) |
| Net movement on cash flow hedges |
(450.71) |
(370.00) |
| Other comprehensive income not to be
reclassified to profit or loss in subsequent periods: |
|
|
| Re-measurement loss on post employment
defined benefit plans (net of taxes) |
(4.84) |
(1.80) |
Other comprehensive income for the year
from continuing operations, net of tax (B) |
(635.62) |
(473.09) |
Other comprehensive income from
discontinued operations |
|
|
| Other comprehensive income to be reclassified
to profit or loss in subsequent periods: |
|
|
| Exchange differences on translation of
foreign operations |
- |
17.57 |
| Other comprehensive income not to be
reclassified to profit or loss in subsequent periods: |
|
|
| Re-measurement loss on post employment
defined benefit plans (net of taxes) |
- |
(0.57) |
Other comprehensive income for the year
from discontinued operations, net of tax (C) |
- |
17.00 |
Other comprehensive income for the year (D
= B + C) |
(635.62) |
(456.09) |
Total comprehensive income for the year,
net of tax (A+D) |
(1,475.55) |
(1,587.48) |
Loss for the year attributable to |
(839.93) |
(1,131.39) |
| a) Equity holders of the parent |
(179.26) |
(1,023.29) |
| b) Non-controlling interests |
(660.67) |
(108.10) |
Total comprehensive income attributable to |
(1,475.55) |
(1,587.48) |
| a) Equity holders of the parent |
(459.38) |
(1,226.89) |
| b) Non-controlling interests |
(1,016.17) |
(360.59) |
| Earnings per equity share (Rs) from
continuing operations |
(0.30) |
(0.98) |
| Earnings per equity share (Rs) from
discontinued operations |
- |
(0.72) |
| Earnings per equity share (Rs) from
continuing and discontinued operations |
(0.30) |
(1.70) |
The revenue increased by 45.49% from Rs. 4,600.72 crore in FY 2021-22
to Rs. 6,693.40 crore in FY 2022-23 mainly due to an increase in aeronautical, duty free,
retails, advertisement, ground handling, hospitality, and parking revenue on account of
increase in traffic and business on significant recovery in demand for air travel with
removal of restrictions on inter-state and international travel, relaxations by the State
Governments, increase in the vaccination drive.
The revenue share paid / payable to concessionaire grantors was lower
in FY 2021-22 on account of Annual Fee/ Monthly Annual fee (MAF) waiver. The Group invoked
Force Majeure post outbreak of COVID-19 "A Pandemic" as provided under Article
16 of Operation Management and Development Agreement (OMDA) and claimed that it would not
be in a position to perform its obligation to prepare Business Plan and pay Annual Fee/
Monthly Annual fee to Airports Authority of India (AAI). However, during FY 2022-23, there
is significant improvement in business operations resulting increase in revenue share paid
/payable.
b) Standalone financial results
(Rs in crore)
Particulars |
March 31, 2023 |
March 31, 2022 |
Continuing operations |
|
|
| Revenue from operations |
64.47 |
21.33 |
| Other operating income |
37.47 |
17.73 |
| Other income |
24.15 |
1.00 |
| Operating and other administrative
expenditure |
120.44 |
43.97 |
| Depreciation and amortization expenses |
0.35 |
0.91 |
| Finance costs |
116.30 |
78.98 |
Loss before exceptional items and tax from
continuing operations |
(111.00) |
(83.80) |
| Exceptional items |
120.57 |
(16.79) |
Profit/ (loss) before tax from continuing
operations |
9.57 |
(100.59) |
| Tax expenses |
- |
58.72 |
Profit/ (loss) after tax from continuing
operations (i) |
9.57 |
(159.31) |
Discontinued operations |
|
|
| Loss from discontinued operations before tax
expenses |
- |
(150.47) |
| Tax expenses |
- |
- |
Loss after tax from discontinued
operations (ii) |
- |
(150.47) |
Profit/ (loss) after tax for the year
(i+ii) |
9.57 |
(309.78) |
| Net surplus in the statement of profit and
loss - balance as per last financial statements |
3,454.49 |
2,122.60 |
| Re-measurement gains on defined benefit plans
(net of taxes) |
(0.20) |
(0.62) |
| Transfer from fair valuation through other
comprehensive income (‘FVTOCI') |
- |
1,674.97 |
| Transfer on account of composite scheme of
arrangement |
- |
(32.68) |
Surplus available for appropriation |
3,463.86 |
3,454.49 |
| Appropriations |
- |
- |
Net surplus in the statement of profit or
loss |
3,463.86 |
3,454.49 |
| Earnings per equity share (Rs) from
continuing operations |
0.02 |
(0.26) |
| Earnings per equity share (Rs) from
discontinued operations |
- |
(0.25) |
| Earnings per equity share (Rs) from
continuing and discontinued operations |
0.02 |
(0.51) |
The revenue increased by 160.98% from Rs. 39.06 crore in FY 2021-22 to
Rs. 101.94 crore in FY 2022-23 mainly due to an increase in interest income on loan given
to Group companies and management services.
Exceptional items comprises reversal/ (provision) for impairment in
carrying value of investments, loans/ advances/ other receivables carried at amortised
cost (net) There are no material changes or commitments except those already disclosed in
this report, affecting the financial position of the company which have occurred between
the end of the FY 2022-23 and the date of this report.
Dividend
Your Directors have not recommended any dividend on equity shares for
FY 2022-23.
Appropriation to Reserves
The major reserves of the Company on standalone basis for FY 2022-23
and the previous year is as follows:
(Rs in crore)
Particulars |
March 31, 2023 |
March 31, 2022 |
| General reserve |
174.56 |
174.56 |
Surplus in statement of profit
and loss |
3,463.86 |
3,454.49 |
| Capital reserve |
141.75 |
141.75 |
Foreign currency monetary
translation reserve (‘FCMTR') |
(33.80) |
(20.21) |
Fair valuation through other
comprehensive income (‘FVTOCI') reserve |
17,093.60 |
6,037.65 |
Equity component of foreign
currency convertible bond (‘FCCB') |
479.35 |
- |
Total |
21,319.32 |
9,788.24 |
Management Discussion and Analysis Report (MDA)
In terms of the provisions of Regulation 34 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ("Listing
Regulations"), the Management's Discussion and Analysis is set out in this
Annual Report.
State of Affairs of the Company and its Subsidiaries
Brief overview of the developments of the Company and each of the major
subsidiaries' business is presented below. Further, MDA, forming part of this Report, also
brings out review of the business operations of major subsidiaries and jointly controlled
entities.
Composite Scheme of Amalgamation and Arrangement
The Board at its meeting held on March 19, 2023, approved the Composite
Scheme of Amalgamation and Arrangement amongst GMR Airports Infrastructure Limited
("GIL/Company"), GMR Airports Limited ("GAL"), a subsidiary of the
Company and GMR Infra Developers Limited ("GIDL"), a wholly owned subsidiary of
the Company and their respective shareholders and creditors ("Scheme"), which,
inter-alia, proposes to merge and consolidate the businesses of: (i) GAL into and with
GIDL; and (ii) the merged GIDL into and with the Company in each case , on a going concern
basis subject to the requisite approval of the shareholders and creditors of the Company,
the National Company Law Tribunal ("NCLT"), and other approvals as may be
required.
The Company has received the No Observation Letter ("NOC")
from the stock exchanges for the Scheme. The NOC from the Reserve Bank of India has also
been received for the Scheme.
The proposed Merger has also been approved by the Competition
Commission of India ("CCI") under Green Channel route.
Airport Sector
The Company's airport business comprises of six operating airports
viz., Delhi International Airport, Hyderabad International Airport, Goa Airport at Mopa
& Bidar Airport at Karnataka in India, Mactan Cebu International Airport in
Philippines and Kualanamu International Airport in Medan, Indonesia. Further one asset is
under construction viz., Crete International Airport in Greece. Also, post signing of the
Bhogapuram International Airport (new Vishakhapatnam Airport) concession agreement in June
2020, the Company has been working on various preparatory activities even as the
authorities seek clearances to meet their obligations for initiating the construction
work. The foundation stone of the project has been laid and joint survey of land is
underway.
GMR Group is actively pursuing opportunities for new airports as and
when they arise. We are actively tracking the next round of regional airports being
privatized by the Government of India. On the international front, in the near future, the
Group is strategically focusing on opportunities in South and Southeast Asia and the
Middle East. We recently started operations at the brown field Kualanamu International
Airport in Medan, Indonesia in a joint venture with Indonesian government entity, Angkasa
Pura II. This development will further open a path for us to expand in one of the fastest
growing aviation markets, i.e. Indonesia. The Group also continues to legally pursue the
right to develop Nagpur Airport.
We also continue to explore opportunities in Africa and Central &
Eastern Europe. GMR Airports is looking to drive growth not only through Airport
Concessions, but also through provision of airport related services including EPC, Project
Management, Engineering & Maintenance, Duty Free, Cargo, other non-aero concessions
etc. FY 2022-23 was marked by an impressive post-pandemic traffic recovery. As the COVID
waves across the world receded, most of the countries rationalized and then removed travel
restrictions. India being a large domestic market, recovered faster than other
geographies. By the end of the year FY 2022-23, domestic traffic rose to well above
pre-COVID levels. International traffic also exhibited a strong and robust recovery and is
expected to surpass pre-COVID levels by FY 2023-24. During this challenging period, both
airports and the airlines have evolved to be more operationally flexible to deal with
abrupt changes in business scenario and regulations. Given this robust recovery, the
sector has seen renewed investments to cope with rising demand.
Various new airlines came up and existing ones started to resume with
capacity expansion initiatives.
An overview of the operations at our assets during the year is briefly
given below:
Delhi International Airport Limited (DIAL)
DIAL is a subsidiary of the Company and its shareholding comprises of
GMR Airports Limited ("GAL") (64%), Airports Authority of India (AAI) (26%) and
Fraport AG Frankfurt Airport Services Worldwide (Fraport) (10%). DIAL entered into a
long-term agreement to operate, manage and develop the Delhi International Airport.
Highlights of FY 2022-23:
FY 2022-23 was the first fiscal year post onset of Covid-19 where
Indian Aviation Sector did not face any major disruptions from Covid-19 and exhibited
tremendous recovery in passenger traffic throughout the FY.
During the year we had unrestricted scheduled operation for domestic
and international movement. While in FY 2022-23, Delhi International Airport domestic
traffic reached pre-COVID level, International traffic recovered to about 88% of pre-COVID
level by fiscal year end. Cargo volume recovery was lower and remained below pre-COVID
levels in FY 2022-23.
Throughout the year, DIAL proactively engaged with all stakeholders in
pushing passenger growth through various passenger experience initiatives. One such major
initiative was the launch of DigiYatra which is a path-breaking solution for passenger
processing by the use of facial recognition technology.
Operational Performance:
DIAL witnessed significant growth of traffic at Delhi International in
FY 2022-23. Passenger traffic at Delhi International was 65.3 mn in FY 2022-23, a growth
of 66.1% over previous year with 140.0% growth in international traffic and 51.4% growth
in domestic traffic. During the year, Delhi International Airport handled 429,964 Air
Traffic Movements (ATMs) and clocked 0.90 MMT cargo volume. Cargo volumes experienced an
overall de-growth of 3.1% over previous year, driven by 8.7% de-growth in international
cargo. Intermittent lockdown in China, higher inflation in US and Europe and supply chain
disruption due to Russia-Ukraine war were key factors which led de-growth in cargo tonnage
in the fiscal year. Domestic cargo on the other hand grew by 7.5%.
Hon'ble Minister of Civil Aviation kicked off DigiYatra (a contactless
biometric passenger processing platform) at Delhi International Airport on December 01,
2022. DIAL has deployed DigiYatra infrastructure across all the touch points in Terminal 3
& Terminal 2 at Delhi International Airport, New Delhi.
DIAL's focus on operational excellence and customer experience backed
by a strong organizational culture has helped sustain its leadership position in Airport
Service Quality. As a result, DIAL was once again recognized as the Best Airport for
service quality in the region by ACI and Best Airport in South Asia by Skytrax. Delhi
International Airport has improved its world ranking to 36 and is the only Indian airport
among Top 40 airports in the world Skytrax ranking.
Capacity augmentation initiatives of FY 2022-23
Despite operational and logistical challenges thrown by the pandemic
during past couple of years, DIAL continued to focus on its expansion plan of airside
infrastructure and terminal capacity as per the approved Major Development Plan in order
to cater to the future growth in passenger and air traffic. The Phase 3A expansion
includes, among others, expansion of Terminal 1 and Terminal 3, construction of a fourth
runway along with enhancement of airfields and construction of taxiways, which will expand
capacity of Delhi International Airport to 100 Mn passengers annually. Cumulative physical
progress on phase 3A expansion as on March 31, 2023 is ~86%. As part of phase 3A, all work
related to dual elevated Eastern Cross Taxiways (ECT) and 4th runway have been completed.
All balance works are expected to be completed and commissioned during FY 2023-24.
Awards and Accolades of FY 2022-23
• Delhi International Airport has once again emerged as Best
Airport in the 'over 40 million passengers per annum (MPPA)' category in Asia Pacific
region by ACI in the Airport Service Quality Programme (ASQ) for the 5th time in a row in
2022 rankings.
• In the newest category in ACI ASQ award, DIAL has been bestowed
with 'Cleanest Airport' in the Asia Pacific region award
• Delhi International Airport has been voted as Best Airport in
India / South Asia for 5th consecutive years in Skytrax ranking.
• In terms of Skytrax world airports ranking, Delhi International
Airport jumped from rank 50 in 2020 to 45th in 2021 and further to current rank of 36.
• Delhi International Airport was conferred 'Best Airport' in the
country in the ASSOCHAM's 14th International Conference cum Awards on Civil Aviation
Sustainability Focus
DIAL always has a strong focus on Sustainability and has received
various awards and accolades in this regard for many years now:
• "Green Airports Recongnition" by ACI- Asia Pacific in
5 years in a row (2023, 2021, 2020, 2019, 2018 and 2017).
• National Award for Excellence in Energy Management from the
Confederation of Indian Industry (CII), in the year (2022, 2021, 2020, 2019 and 2018.
• Wings India Environment & Sustainability Award 2022.
• FICCI Water Award in 2022.
• For its operational usage, DIAL is switching to Electric
Vehicles from the current conventional vehicles in phase wise manner.
GMR Hyderabad International Airport Limited (GHIAL)
GHIAL is a subsidiary of the Company and its shareholding comprises of
GAL (63%), AAI (13%), Government of Telangana (13%) and MAHB (Mauritius) Private Limited
(11%) and has a long-term agreement to operate, manage and develop the Hyderabad
International Airport.
Highlights of FY 2022-23:
With the effects of COVID-19 decreasing across the globe, India lifted
all restrictions on international air travel from the end of March 2022. During the first
quarter of FY 2022-23, an increase in COVID-19 cases raised concerns of a 4th Wave but no
significant impact was felt on air traffic. No fresh restrictions were imposed by the
Government of India which helped air traffic to slowly climb back to near pre-COVID
numbers.
The India aviation industry was constrained by the available capacity
of aircrafts as airlines had to ground some aircrafts due to maintenance issues arising
out of lack of availability of spare parts, partly due to Russia-Ukraine crisis. Also,
Pratt & Whitney had not made available the required engines for aircrafts for some of
the airlines, which also affected the aircrafts availability. Over 75 aircrafts were
grounded in the year, which accounts for 10-12% of Indian fleet. This resulted in demand
outstripping the supply of aircrafts and led to increase in ticket pricing and slower
growth of traffic. As a result, Domestic traffic was lower as compared with the estimated
figures for the year. However, international traffic remained robust and the final total
traffic figure for FY 2022-23 was 21.00 million passengers.
Operational Performance:
During the FY, Hyderabad International Airport handled 21.00 million
passengers, over 1,60,597 Air Traffic Movements ("ATMs") and more than 1,42,338
Metric Tonnes ("MTs") of Cargo. On a year-on-year basis, passenger movements and
ATMs witnessed a growth of 69% and 40%, respectively. Cargo witnessed around 2% YoY
growth. By end of the year, Hyderabad International Airport was connected to 66 domestic
destinations as compared to pre-COVID level of 55 domestic destinations and 18
international destinations as compared to 16 pre-COVID destinations. A key route addition
was the Goa Airport at Mopa. A few domestic routes were lost due to internal issues of the
airlines, with some routes being temporarily stopped. Some new international routes which
were started during the year:
• Dhaka by IndiGo
• Baghdad by Fly Baghdad
• Don Mueang by Nok Air
The following new airlines commenced operations from Hyderabad during
the year:
• Kuwait Airways
• Nok Air
• Fly Baghdad
• Akasa Air
Medical tourism was leveraged to start operations to Dhaka and Baghdad
but at the same time destinations like Chicago and Male were stopped due to unviability.
On the Cargo front, Amazon started, for the first time in India, Prime
Air (Quikjet) weekly cargo operations from Hyderabad International Airport. Lufthansa
resumed its Boeing 77F freighter with routing FRA-BOM-HYD-FRA. During February 2023,
Hyderabad hosted the first-ever E-Prix in the country with Hyderabad International Airport
playing an integral part in transporting these E-vehicles by operating 6 charter flights
carrying them.
Capacity augmentation initiatives FY 2022-23
As part of the expansion works, further progress was made during the
year. On airside, various taxiways and passenger boarding bridge (PBB) stands were
commissioned. At Passenger Terminal Building (PTB), straight portion of east pier and some
levels of west processor were opened for operations. Overall, by March 2023 ~85% of
airport expansion works were completed. The balance works are expected to be completed
and commissioned by FY 2023-24.
Passenger Experience initiatives FY 2022-23
Continuing with our relentless focus to offer the best possible service
quality and passenger experience and achieve world-class levels of operational efficiency,
several new milestones were attained during the year.
• Hyderabad International Airport Environment Compliance Oversight
Committee was established and organized its first meeting with GHIAL's subsidiaries
and other stakeholder to discuss environmental compliance status
• Hajj operations re-started post COVID-19
• Soft launch of DigiYatra commenced on August 18, 2022 at Entry
and PESC
• 16 AEDs (Automated External Defibrillator) were installed at
various locations in PTB on December 25, 2022
• India's largest Arrival Duty Free store inaugurated at
International Arrivals Hyderabad International Airport also focuses on creating and
delivering a well-rounded shopping, retail and commercial services experience for the
passengers and visitors, which in turn provides a strong and fast-growing source of
revenues for the airport. Few such initiatives include:
• Music curation has been done exclusively for Hyderabad
International Airport, which plays instrumental music as per different times of the day.
• The check-in hall & all the washrooms in the terminal
installed with natural fragrances
• Consultant Chef appointed to enhance the gastronomic experience
for passengers/customers at the Airport
• Trials for DigiYatra underway at Hyderabad International Airport
• Trials for real time passenger feedback kiosks has been
completed and will be rolled out in FY 2023-24
• Pillar numbering for arrival forecourt was initiated
• Standardised signages at car park, main access road and
forecourts in process.
Awards and Accolades
• Ranked 65th at the 2023 Skytrax World Airport Award,
winner of:
• Best Regional Airport in India and South Asia
• Best Airport in India and South Asia
• Winner of the 2022 Airport Service Quality (ASQ) Award
for Best Airport of 15 to 25 Million Passengers in Asia-Pacific
• Received Platinum Award in 11th National CII POKA YOKE 2022
competition
• Won Gold Recognition at the CII Excellence Summit for its
Business Excellence journey
• Winner of the "Airport with the best use of
Technology" at ASSOCHAM's 14th Civil Aviation Conference
• Received ACI World's ‘Voice of Customer'
Recognition for the 2nd time in a row in 2022.
Sustainability Focus
GHIAL has always had a strong focus on Sustainability and has received
various awards and accolades in this regard for many years now:
• Received the ACI Green Airport recognition 2022 - Silver for the
Best Carbon emission Management
• Won the CII National Awards For "National Energy
Leader" & "Excellent Energy Efficient Unit" Categories
• ~ 20 vehicles converted to Electric to reduce the Carbon
footprint
• >80% conversion to LED lights across the Terminal
• Single-use plastic banned with effect from July 01, 2022
• Opened a biodiesel fuel station
• Set up EV charging stations at the airport
In addition to the above, some of the continuing best environment
practices include:
• LEED certified Terminal Building which allows maximum natural
lighting, and other features that enable optimal use of energy and water.
• Effective implementation of the "Reduce-Reuse-Recycle"
principle in the overall water usage within the airport.
• Efficient rainwater harvesting and ground water recharging
processes.
• Efficient solid waste management processes and compost
generation to meet 100% internal demands to develop a beautiful landscape within the
airport precincts.
• Robust process to effectively reduce aircraft noise &
emission levels by collaboratively engaging with airline operators and Air Traffic Service
providers to bring in best practices like single engine taxi, Fixed Electrical Ground
Power to reduce use of aircraft Auxiliary Power Units (APU), Continuous Descent Approach
Operations, etc.
GMR Goa International Airport Limited (GGIAL)
GGIAL declared Commercial Operations Date (COD) on December 07, 2022
and started its domestic commercial operations on January 05, 2023. During the year, GGIAL
joined hands with the National Infrastructure Investment Fund (NIIF), who have invested
Rs. 631 crores in GMR Goa International Airport Limited in the form of Compulsory
Convertible Debentures (CCD).
Post start of operations, the airport achieved 1 million passengers
mark on April 30, 2023. The airport currently handles around 75 ATMs per day with peak
hour capacity of 13 ATMs. During Q1 of FY 2023-24, the airport handled 968k Domestic
Passengers and 6467 ATMs. Further, with necessary approvals from governments and relevant
agencies in-place, the airport launched international operations in July 2023.
Considering, growing demand from airlines and high passenger footfall, we are already
planning expansion in the terminal capacity from the existing 4.4 MPPA to 7.7 MPPA.
Airport Economic Regulatory Authority (AERA) extended the validity of
Ad hoc tariff order released in August 2022 till September 2023. The final order for MYTP
is expected during Q2 FY 2023-24. The construction works for 6-lane expressway connecting
NH 66 to the Airport is in full swing at multiple locations and is likely to be
operational by March 2024. Upon completion, the expressway will provide a seamless
transition for passengers to and from the airport.
Sustainability Focus
Sustainability as one of core concepts, Goa Airport at Mopa is designed
to remain "Green Airport" by design itself. GGIAL has received various awards
and accolades in this regard:
• Indian Green Building Council (IGBC) Platinum level
Certification for New Building
• "Construction Health, Safety & Environment"
Achievement
Award and "Best Construction Project" from Construction
Industry Development Council, under Planning Commission, NITI Aayog, GoI during 14th
Vishwakarma Awards 2023, New Delhi (April 12, 2023)
• 21st Annual Greentech Safety Award 2023 under ‘Construction
Safety' category by Greentech Foundation, New Delhi (May 29, 2023)
• ‘Plaque of Excellence' in recognition of "Best
Environmental Practices" from Goa State Pollution Control Board, GoG on the occasion
of World Environment Day, June 05, 2023.
• Various initiatives under our "5 Years Road Map of Carbon
Neutrality Level 3+ Program" viz., installation, commissioning of 5 MW onsite solar
power generation unit as renewable energy, EV buses and EV ground equipment by ground
handling agency, etc.
• Across the entire airport, 100% LED lighting system have been
adopted in all Buildings and Airfield Ground Lighting (AGL) systems, facilitating Energy
Conservation.
• To reduce Green House Gas (GHG) Emissions from Auxiliary Power
Units (APUs) of Aircrafts, Bridge Mounted Equipment (BME) with Fixed electrical ground
power (FEGP) & PreConditioned Air Supply (PCA) systems provided.
• Rainwater Harvesting and Ground Water Recharge executed as per
approval of Water Resources Department, Government of Goa.
• 100% of treated Sewage Treated Plant (STP) water will be reused
for Cooling Tower make-up, toilet flushing through dual plumbing system and irrigation for
horticultural purposes making the Airport a Zero Liquid Discharge Unit.
• 500 nos. indigenous trees transplanted within the project site
• About 165 Acre of land with existing tree cover left undisturbed
within project site.
• As a part of compensatory tree afforestation plan, 5 Lac Tree
Saplings have already been planted in and around the airport project site within Goa State
through Goa State Bio-diversity Board (GSBB), GoG.
• ‘Integrated Waste Management Plan' (approved by Goa
State Pollution Control Board, GoG) in place through dedicated agency and infrastructure.
• Single-use plastic banned with effect from July 01, 2022.
GMR Megawide Cebu Airport Corporation (GMCAC)
GMCAC, a JV between GMR group (40%) and Megawide Corporation (60%),
entered into a concession agreement with Mactan Cebu International Airport Authority for
development and operation of
Mactan-Cebu International Airport (Cebu Airport) for 25 years. GMCAC
took operational responsibility of the airport in November 2014, and has been successfully
operating the airport, since then. On December 16, 2022, GMR Group and Megawide
Corporation entered into a Deed of Assignment with Aboitiz Infracapital, Inc. (AIC), as a
consequence of which, as of December 31, 2022, GMCAC is owned 33 1/3% each by MCC, GMR and
AIC. Further, as per the agreement, GMR will continue to operate the airport as a
technical services provider till December 2026.
Highlights of FY 2022-23:
The impact of COVID-19 pandemic continued in CY2022 also, but the
recovery of traffic has gained momentum. The passenger footfall for CY2022 was recorded at
~5.5 Mn, consisting of 4.8Mn Domestic passengers and ~0.7 Mn International passengers,
witnessing a 420% growth from ~1.3Mn overall traffic in CY2021. The total traffic has
recovered to 44% of pre-pandemic levels.
In line with our strategy to churn assets and redeploy capital in high
growth opportunities, GMR Airports International BV (GAIBV), a stepdown subsidiary of the
Company holding stake in GMCAC has entered into a transaction with Aboitiz InfraCapital
Inc (AIC) on December 16, 2022, for sale of stake. However, we would continue to remain a
33% shareholder until September 2024 and also operate as a technical services provider to
GMCAC until December 2026 and would also be entitled to additional deferred consideration
based on the performance of GMCAC for the period between 2023 and 2026. Further details on
GMCAC are provided in MDA forming part of this report.
Medan Airport
GMR participated in a bid via GMR Airports Limited and its step-down
subsidiaries for managing, developing and improving the performance of Kualanamu
International Airport which was held by Angkasa Pura II (APII). GMR was awarded the
contract in November 2021 and it entered into a strategic partnership with APII. GMR now
holds 49% stake in the project SPV. With the award of this contract, GMR became the first
Indian airport operator to win a bid to develop and operate an Indonesian Airport. The SPV
took charge of Commercial Operations on July 7, 2022.
Highlights of FY 2022-23:
Medan Airport was able to achieve several notable achievements as well
as service improvements. After the takeover, there was a significant increase in the
domestic passenger service charge (PSC) by 27% and the international PSC by 16%, leading
to a positive financial impact and growth for the airport. In 2022, more than 75% of the
routes that were operational in 2019 have been restored, showcasing a successful recovery
from the impact of pandemic. Traffic reached 5.9 Mn in CY 2022, which is 72% of the 2019
traffic.
The excellence of Medan Airport was acknowledged when it was
shortlisted for the prestigious Routes Asia award. Furthermore, management has been able
to attract new routes with Qatar Airways announcing a flight between Qatar and Medan in
January 2024 and Batik Air has scheduled direct flights to Chennai in August 2023. These
new routes will enhance connectivity and open opportunities for travelers. Airlines have
also increased frequencies on the existing routes and new airlines have also started
operating on existing routes. In terms of service improvements, Kualanamu International
Airport has focused on enhancing the passenger experience. The terminal underwent a
thorough deep internal and external cleaning, ensuring a clean and pleasant environment.
Targeted improvements were implemented to enhance the Umrah passenger experience, catering
to the specific needs of this group. Furthermore, refurbishment of the toll gate and the
removal of obsolete infrastructure was carried out, creating additional space and
improving overall functionality. Operational improvements have also been prioritized. The
airport increased its security staff to enhance the terminal's passenger handling
capacity and ensure a safe environment. Additional trolley management staff were employed
for repairs and regular maintenance, and Critical equipment repairs have been completed,
ensuring smooth operations and minimizing disruptions.
Safety and security remain paramount at Kualanamu International
Airport. The completion of the Emergency Exercise and Security Exercise, along with
mandatory training for ARFF (Aircraft Rescue and Firefighting) personnel reflects the
airport's commitment to maintaining high safety standards and preparedness in
emergencies. Medan Airport is also gearing up for an Immediate Capacity Augmentation phase
in 2023. This strategic initiative aims to increase the terminal capacity from the current
10 million passengers to 15 million passengers. The company has recognized the need for
expansion due to the growing demand and is in the final stages of securing the funding
required to execute this project.
Crete International Airport
GMR Airports and its Greek partner, TERNA, signed a concession
agreement with the Greek State for design, construction, financing, operation, maintenance
of the new international airport of Heraklion at Crete in Greece. The concession period is
35 years including the design and construction phase of five years. Concession commenced
on February 6, 2020. With the award of this contract, GMR became the first Indian airport
operator to win a bid to develop and operate a European airport. This is also GMR
Group's first foray into the European Union region.
Highlights of FY 2022-23:
Overall construction progress of the airport is ~20 %. During the year,
concreting works of the terminal building commenced. Concreting works of Basement slab and
lower mezzanine slab of terminal building have been completed, while arrival slab
concreting works are in progress. Major part of laying and compaction of base and sub-base
for Apron area was completed during the year and lean concrete paving works are in
progress. Laying of compaction of Base is progressing well at Runway & Taxiway sites.
The EPC contractor has requested an extension of the construction
timeline by 24 months due to changes in design suggested by State Advisors and COVID
related delays. The state has approved the extension of COD to February 06, 2027 and has
also agreed to fund an additional EPC claim of Euro 104.9 MN.
Airport Adjacencies
GAL has emerged as a strong platform for both India and International
concessions. As part of our Airport Platform strategy, we have initiated the journey to
build strong portfolios of adjacency businesses under GAL given our experience of more
than one and half decade in the Airports services value chain.
We achieved instant success as GAL was awarded the concession for
Kannur Duty Free in February 2021, amidst the challenges associated due to the COVID
pandemic.
GAL is actively pursuing Non-Aero Master Concession opportunities.
Under the Master Concession contract, often various non-Aero services are bundled together
including duty free & retail, car park, advertising, F&B and lounges. There has
been a noticeable shift at various airports towards the master concession model due to its
benefits both to the Airport and the concessionaire and GAL would look to leverage this
opportunity.
As a testament to our strong focus and efforts, GAL operationalized
various Non-Aero services at Goa Airport at Mopa simultaneously to the commissioning of
the Airport. Duty free operations also began along with the International operations in
July 2023.
To strengthen its focus on hospitality, GAL formalized an F&B Joint
Venture business with India's leading F&B operator. The joint venture 'GMR Hospitality
Limited' ('GHL') took over F&B operations at Goa Airport at Mopa.
GAL also acquired the license to develop and operate the cargo terminal
services at Goa Airport at Mopa. The state-of-the-art cargo facility will be ready &
operationalized by Q2 FY 2023-24 in sync with the beginning of the international
operations. GAL initiated the domestic cargo handling and processing through an interim
terminal along with the Airports commencement date.
During the year, GAL was awarded the Non-Aero Master Concession of GMR
Hyderabad International Airport Limited (‘GHIAL'). The concession entails
Retail, Duty Free and Retail related services. In addition, we are currently evaluating
multiple opportunities in the cargo, duty free and services business across our focus
geographies and believe that in the short to medium term we will have more adjacency
businesses to add to our overall portfolio. For example, on the International front, GAL
was amongst the 13 successful applicants who were qualified for the world's biggest
duty-free tender in Spain.
Airport Land Development (ALD)
FY 2022-23 has been a breakthrough year for ALD with topline revenue
from various Airport Land Development Businesses touching Rs. 610 Crore. Several marquee
transactions were concluded at both Delhi and Hyderabad. Simultaneously development of key
investment projects were initiated, notably DIAL's self-development project of a
prestigious commercial office development, which was initiated in the year. Given the
nature and expanse of ALD works, the team has developed capability in all streams of the
project development cycle. The sale transaction of Amazon warehousing assets at Aerocity
Hyderabad has demonstrated ALD's capability to recycle capital and has established
the important precedence that leased land can also be monetized.
Aerocity Delhi
On the transaction side, DIAL completed the international competitive
bidding process and awarded to Chalet Hotels Limited (CHL) the right to develop a Hotel at
the Terminal-3 of Delhi International Airport. CHL is an owner, developer, and asset
manager of high-end hotels in key metro cities of India and is also listed on Indian stock
exchanges. The upcoming terminal hotel will have 350-400 rooms along with other amenities
matching standards of international airport terminal hotels. The transaction has been done
through an innovative structure whereby DIAL shall develop and deliver the cold shell and
CHL shall complete the interiors and other fit outs and operate the Hotel while paying
Revenue Share to DIAL subject to a Minimum Guaranteed License Fees. The hotel is expected
to be commissioned by FY 2025-26.
During FY 2022-23, as a significant step towards creating portfolio of
investment projects, DIAL initiated the development of a commercial building of approx. 6
Lakh sft. gross leasable area in the Gateway District of Aerocity. The proposed building
is envisaged as a Ground
+ 6 floors building and will have 3 basements. The commercial building
will host multi-tenanted offices, corporate amenities and ancillary retail and F&B.
The building is expected to be completed in FY 2025-26. Construction works were initiated
in the month of March 2023.
In addition, Airbus awarded the EPC contract to GAL for construction of
their headquarters and training center at the Terminal District, Near MLCP, Opposite
Terminal -3 in May 2022. The facility will be built on a 1.1 acre land parcel and is
expected to be completed in 15 months.
Further, pre-construction activities including design & planning
commenced for the various construction projects including Terminal Hotel, GA Annex, which
are proposed to be undertaken during FY 2022-23 and FY 2023-24.
The infrastructure development works at the two new districts
–Gateway & Downtown Districts of Aerocity Delhi have also gathered momentum as
the development works for the Office & Integrated Retail developments being done by
Bharti Realty led consortiums are progressing.
In the existing operational Hospitality District, the activation of the
GMR Square was fully revived post pandemic with continued focus on the digital marketing
including Aerocity Live magazine, Social media handles on Facebook, LinkedIn and
Instagram. Additionally new Retail areas with best-in class Indian brands were added to
GMR Square to add to the world class experience offered for global and domestic visitors
to GMR Aerocity.
Aerocity Delhi operations received ISO certification for environment
and energy management in FY 2022-23.
Aerocity Hyderabad
The year under review has been a successful year for Hyderabad ALD.
Notable transactions, both land lease and Build To Suit (BTS), were executed.
As a testament to ALD's capability in recycling of capital
deployed on projects, the sale transaction of Amazon warehousing facilities was concluded
with CPPIB backed Indospace Core Ventures. The transaction generated value of Rs. 188
crore. The on-ground handover of the facilities is expected to close in Q1 FY 2023-24.
GMR Hyderabad Aerospace & SEZ Ltd (GHASL) leased 7.18 acres land in
the non-processing area of the SEZ to M/s Amara Raja Batteries Ltd for setting up a
Research and Development Innovation Centre. GHASL also executed Agreement To Lease (ATL)
with Schneider Electric Pvt. Ltd (SEPL) for Lease of Build to Suit facility of approx.
3,80,000 sqft in two phases on approx. 18 acres of land; Phase 1 is approx. 2,10,000 sqft
and Phase 2 is 1,70,000 sqft. The ATL executed by GHASL with Skyroot Aerospace was amended
revising the area of the BTS facility for assembly of small satellite launch vehicles from
24,000 sqft to 56,000 sqft and facility will be handed over in Q2 FY 2023-24. Safran
announced the setting up of Engine MRO in the SEZ land on 23.5 acres and signed land lease
agreement with GHASL. In line with its strategy to build businesses at GAL, it has been
targeting EPC business for ALD related projects within the group. Accordingly, GAL was
awarded the Design & Build Contract from GHASL for the construction of the Schneider
facility at an award value of Rs. 49 Crore. GAL was also awarded the EPC contract for the
Safran MRO facility at an award value of Rs. 236 crore. The EPC contract in GAL for 1
million sqft of warehousing facility with ESR GMR Logistics Park Pvt. Ltd (GLPPL) with
contract value of Rs. 265 crores was completed and handed over in Q4 FY 2022-23.
Safran Aircraft Engines project received Industrial Project of the Year
Award at Realty Plus South Conclave 2022. This project also received Edge Certification
from IFC for inclusion of Green Building elements in design and construction.
GMR Hyderabad Aerotropolis Ltd (GHAL) executed lease deed with Amity
for the lease of 20 acres land for setting up University at Aerocity Hyderabad.
Substantial leasing of Tower-2 was completed with renowned tenants including HDFC Bank,
Speed Infra, Skycell, APFT and SGD Pharma. Food Court at Tower 2 also commenced
operations. The destination Retail project i.e. Interchange saw pre-leasing LOIs signed
with RBL bank, Best Sellers, Specta Eyewear, Third Culture Care, Kamal Watch Co, Punjab
Grill etc.
FY 2022-23 also marked a breakthrough year for the Novotel Hotel with
its highest ever top line of Rs. 85 Crores despite being under renovation.
In addition to above mentioned major transactions, we continue to
strengthen the AeroCity Hyderabad Brand further with effective Social Media marketing
through purely organic efforts. We have already achieved 4000+ B2B followers on LinkedIn.
Aerocity Goa
ALD submitted the City Side Development Plan to Government of Goa for
approval. Terminal District comprising of approx. 23 acres has been identified as the
first target area for monetization and will comprise of hotel, convention centre and
retail areas. The first set of monetization for hotel development on 2 plots is expected
to take place during first half of FY 2023-24.
Raxa Security Services Limited (RAXA)
Raxa, a pioneer in providing security services, with ISO 9001:2015, ISO
18788:2015, ISO 29993:2017 and ISO 45001:2018 certifications, is the security arm of GMR
Group. Raxa was established in the year 2005 to take care of the security of the assets of
national importance that the Group has created. Since 2011, apart from providing security
to GMR Group assets, the company has also been providing its service to other reputed
external clients. Its portfolio of clients includes renowned companies in Aviation,
Manufacturing, Pharmaceutical, IT, Hospitality & Educational sectors as well as
Government establishments.
Currently, Raxa employs more than 8,000 security personnel. During the
year, Raxa bagged contracts from a large number of premier clients.
Raxa is undoubtedly the only private security company in India that
provides high-level security training and has a 5S certified State-of-the-Art training
center, called Raxa Academy, spread over a 100-acre campus. The Academy is affiliated to
MEPSC (Management & Entrepreneurship and Professional Skills Council) under the NSDC /
Ministry of Skill Development and Entrepreneurship and has been accorded the recognition
of "Centre of Excellence" in the security sector by MEPSC. It is a center for
higher learning in security and safety and provides both short-term and long-term
specialized training for various levels.
Raxa Academy has successfully implemented the Learning Management
System for running online courses. During the year, it has started an industry focused
Drone Pilot Training course. It also conducted several short duration thematic security
courses, including its flagship Corporate Security and Advanced Management Course for
senior security professionals as well as Leadership Course. More than providing
man-guarding solutions, Raxa is well known in the industry for its technical security
solutions. Raxa's Technical Division provides integrated technical security solutions
with the latest proven technologies either independently or in association with its
specialist technology partners. The scope of the solutions includes Access Control, CCTV
surveillance, Fire Alarm & Public Address system, Perimeter Intrusion Detection
System, Anti-sabotage and Anti-terrorism measures, Command & Control Centers, etc.
Raxa has recently established a dedicated cyber division to provide
digital security, in addition to physical security. It is the only security company in
India that can provide the entire range of security solutions from physical to electronic
to cyber security. Together with its highly acclaimed partners, it offers a wide range of
cyber solutions. Leveraging from the expertise of GMR group in aviation and the inherent
strength of Raxa in providing security solutions, Raxa has formed a dedicated consultancy
division to provide consultancy services, particularly in the aviation sector.
During the year, Raxa has entered into partnership with several
specialized technical/ cyber/ Drone security solution providers such as Redinent, Sectona
(Cyber) and Skyvenger (Drone business), NASSCOMM, DSCI, Sectona for Cyber solutions to
further enhance its security capabilities. It has also established a dedicated fire
division to offer end-to-end fire-fighting solutions.
Consolidated Financial Statements
In accordance with the Companies Act, 2013 and Ind AS 110 -Consolidated
Financial Statements read with Ind AS 28 –Investments in Associates and Joint
Ventures, the audited consolidated financial statements are provided in the Annual Report.
Holding, Subsidiaries, Associate Companies and Joint Ventures
As on March 31, 2023, the Company has 26 subsidiary companies and 14
associate companies including joint ventures. During the year under review, GMR
Hospitality Limited became the subsidiary of the Company. Further, during the year,
Globemerchants Inc. became the associate and SSP- Mactan Cebu Corporation (SMCC) and
Mactan Travel Retail Group Co. ceased to be associates of the Company.
However after the closure FY 2022-23, GMR Hyderabad Airport
Assets Limited ceased to be the subsidiary of the Company. The complete
list of subsidiary companies and associate companies (including joint ventures) as on
March 31, 2023 in terms of the Companies Act, 2013 is provided as "Annexure
A" to this Report. The Policy for determining material subsidiaries may be
accessed on the Company's website at the link:
https://investor.gmrinfra.com/pdf/4_Policy_on_Material_subsidiaries.pdf. Report on the
highlights of performance of subsidiaries, associates and joint ventures and their
contribution to the overall performance of the Company has been provided in Form AOC-1 as "Annexure-
B" to this Report and therefore not reported here to avoid duplication.
The financial statements of the subsidiary companies have also been
placed on the website of the Company at
https://investor.gmrinfra.com/annual-account-of-subsidaries
Directors' Responsibility Statement
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the following
statements in terms of Section 134(5) of the Companies Act, 2013: a) that in the
preparation of the annual accounts for the year ended March 31, 2023, the applicable
accounting standards have been followed along with proper explanation relating to material
departures, if any; b) that such accounting policies as mentioned in Note no. 2 of the
Notes to the Financial Statements have been selected and applied consistently and judgment
and estimates have been made that are reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company as at March 31, 2023 and of the profit of the
Company for the year ended on that date; c) that proper and sufficient care has been taken
for the maintenance of adequate accounting records in accordance with the provisions of
the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities; d) that the annual accounts have been prepared
on a going concern basis; e) that proper internal financial controls to be followed by the
Company have been laid down and that the financial controls are adequate and are operating
effectively; f) that proper systems have been devised to ensure compliance with the
provisions of all applicable laws and that such systems are adequate and operating
effectively.
Corporate Governance
The Company continues to follow the Business Excellence framework,
based on world class Malcolm Baldrige Framework for Performance Excellence which was
adopted by GMR Group in the year 2010. With over a decade now, the deployment of the GBEM
framework has taken roots in over 15+ Group Businesses. Various Continuous Improvement and
Break-Through Innovation initiatives under the umbrella of GBEM have yielded tremendous
benefits to various Group Companies in terms of Cost Savings and new avenues for revenue
generation. The key initiatives like 5S, Kaizens, Idea Factory, CIPs [Continuous
Improvement Projects] and regular BE Assessments have been implemented with lot of rigor
and enthusiasm. A Governance Structure is in place along with timely Rewards and
Recognitions to GMRites contributing to these initiatives, has helped to grow and sustain
these initiatives. Your Company works towards continuous improvement in governance
practices and processes, in compliance with the statutory requirements.
The Report on Corporate Governance as stipulated under relevant
provisions of SEBI LODR forms part of this Annual Report. The requisite Certificate from
the Practicing Company Secretary confirming compliance with the conditions of Corporate
Governance is attached to the said Report.
Business Responsibility and Sustainability Report
As stipulated under Regulation 34(2)(f) of SEBI LODR, read with
Circular No. SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated May 10, 2021 issued by the Securities
and Exchange Board of India (SEBI) the Business Responsibility and Sustainability Report
describing the initiatives taken by the Company from Environmental, Social and Governance
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 2022-23 with related parties referred in Section 188(1) of the Companies
Act, 2013 were in the ordinary course of business and on arm's length basis. During
the year, the Company had not entered into any contract / arrangement / transaction with
related parties referred in Section 188(1) of the Companies Act, 2013 which could be
considered material in accordance with the policy of the Company on materiality of related
party transactions. Since all the related party transactions were in ordinary course of
business and at arm's length basis, Form AOC-2 is not applicable.
The Policy on related party transactions as approved by the Board may
be accessed on the Company's website at the link: https://
investor.gmrinfra.com/pdf/Revised GIL_Policy on Related Party Transaction-wef Feb 09,
2022-uploaded on website.pdf. Your Directors draw attention of the members to Note no. 31
to the standalone financial statement which sets out related party disclosures.
Corporate Social Responsibility (CSR)
The Corporate Social Responsibility Policy (CSR Policy), of the Company
indicating the activities to be undertaken by the Company, may be accessed on the
Company's website at the link: https://investor.gmrinfra.com/pdf/Amendment to CSR
POLICY-GIL(9.08.pdf .
The details of the CSR Committee are provided in the Corporate
Governance Report which forms part of this Annual Report The Company has identified the
following focus areas towards the community service / CSR activities, which inter alia
include:
• Education
• Health, Hygiene & Sanitation
• Empowerment & Livelihoods
• Community Development
The Company, as per the approved policy, may undertake other need-
based initiatives in compliance with Schedule VII to the Companies Act, 2013. During the
year under review, the Company was not required to spend any amount on CSR as it did not
have any profits. Accordingly, it has not spent any amount on CSR activities. However, the
Company, through its subsidiaries/ associate companies, spent an amount of Rs. 18.47
Crores during the year on CSR activities. The details of such activities carried out with
the support of GMR Varalakshmi Foundation (GMRVF), Corporate Social Responsibility arm of
the GMR Group, have been highlighted in Management Discussion and Analysis. The Annual
Report on CSR activities is annexed as "Annexure C" to this Report.
Risk Management and Environmental Social and Governance (ESG) journey
The Board of Directors of the Company has a Risk Management Committee
which is responsible for monitoring and reviewing the risk management plan and ensuring
its effectiveness. The Audit Committee has an additional oversight in the area of
financial risks and controls. In addition, the updates on Enterprise Risk Management (ERM)
activities are shared on a regular basis with Management Assurance Group (MAG), the
Internal Audit function of the Group.
The Company has in place the Risk Management Policy duly approved by
the Board of Directors designed to identify, assess and mitigate risks appropriately.
Currently, in opinion of the Board, there are no risks that threaten
the existence of the Company. However, details of the risk concerns, threats
Identification, assessment, profiling, treatment and monitoring including ESG concerns are
covered in MDA section, which forms part of this Report.
Internal Financial Controls
The Company has put in place policies and procedures including the
design, implementation and monitoring of internal controls over its operations to ensure
orderly and efficient conduct of its businesses, including adherence to Company's
policies and procedures, safeguarding of assets, prevention and detection of fraud,
accuracy and completeness of accounting records and timely preparation of reliable
financial disclosures under the Companies Act, 2013.
These controls and processes have been embedded and integrated with SAP
and / or other allied IT applications which have been implemented. During the year under
review, these controls were reviewed and tested by the Management Assurance Group of the
Company. The Statutory Auditors of the Company have also tested the Internal Controls over
financial reporting.
There were no reportable material weaknesses observed in the design or
operating effectiveness of the controls except in few areas, where the risk has been
identified as low and there is a need to further strengthen the controls. Corrective and
preventive actions, as appropriate are taken by the respective functions.
Directors and Key Managerial Personnel
During the year under review, Mr. Madhva B. Terdal upon completion of
his tenure on August 07, 2022, ceased to be a whole-time Director of the Company and
continues to serve as a Non-executive & Non-Independent Director of the Company. There
were no other changes in the Directors and Key Managerial Personnel of the Company during
the year.
In accordance with the provisions of the Companies Act, 2013, the
Articles of Association of the Company, Mr. Srinivas Bommidala and Mr. G.B.S Raju,
Directors, retire by rotation at the ensuing Annual General Meeting of the Company and
being eligible have offered themselves for re-appointment. The Nomination and Remuneration
Committee ("NRC") and the Board on the basis of performance evaluation,
recommend the re-appointment of Mr. Srinivas Bommidala and Mr. G.B.S Raju as Directors of
the Company, liable to retire by rotation.
The Board of Directors at its meeting held on August 14, 2023 had based
on the recommendation of the NRC and considering the remarkable contribution of Mr. G.M.
Rao in growth of the GMR Group and also considering that it is crucial for the Company to
have Mr. G.M. Rao on the Board, had recommended for approval of the shareholders, the
continuation of Mr. G.M. Rao as a Director of the Company post attaining the age of 75
years in terms of requirement of Regulation 17(1A) of the SEBI LODR. Mr. G.M. Rao is the
founder of the GMR Group. Over the last 4 decades, he has successfully established GMR
Group, as one of the most recognized brands in the country.
In view of his leadership, strategic inputs, management skills,
stakeholders' relationships, governance acumen as well as operational guidance
towards the growth of the Company, The Board is of opinion that it is crucial for the
Company to have him on the Board.
The brief resumes and other details relating to the directors who are
proposed to be appointed/ re-appointed, as required to be disclosed as per the provisions
of the SEBI Listing Regulations/Secretarial Standard are given in the Annexure to the
Notice of the 27th AGM.
Board Evaluation
Annual performance evaluation of the Board, its Committees and
Individual Directors pursuant to the provisions of the Companies Act, 2013 and the
corporate governance requirements under SEBI LODR have been carried out. The performance
of the Board and its committees was evaluated based on the criteria like composition and
structure, effectiveness of processes, information and functioning etc.
The Board and the Nomination and Remuneration Committee reviewed the
performance of the Individual Directors on the criteria such as contribution of the
Individual Directors to the Board and committee meetings like preparedness on the issues
to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In
addition, the Chairman was also evaluated on the key aspects of his role.
A senior non-independent Director of the Company also had a one-on-one
interaction with the Independent Directors to have further insight on the governance
aspects and effectiveness of the Board process.
The Independent Directors at their separate meeting held during the
year had also reviewed the performance of the Non-Independent Directors, Chairman and the
Board as a whole.
Policy on Directors' Appointment and Remuneration
The Company has devised a Nomination and Remuneration Policy ("NRC
Policy") which inter alia sets out the guiding principles for identifying and
ascertaining the integrity, qualification, expertise and experience of the person for the
appointment as Director, Key Managerial Personnel (KMP) and Senior Management Personnel.
The NRC Policy further sets out guiding principles for the Nomination and Remuneration
Committee for determining and recommending to the Board the remuneration of Managerial
Personnel, KMP and Senior Management Personnel. There has been no change in the NRC Policy
during the year.
The Company's NRC Policy for Directors, Key Managerial Personnel
and Senior Management is available on the Company website at
https://investor.gmrinfra.com/pdf/1_Nomination_Remuneration_Policy.pdf.
In recognition of the importance of having a diverse Board toward
success of the organization, the Company has adopted the Board Diversity Policy. The
Policy provides for having an appropriate blend of functional and industry experts on the
Board, diversity in terms of cultural backgrounds, gender and skillset etc.
Declaration of Independence
The Company has received necessary declarations from all the
Independent Directors confirming that they meet the criteria of independence as prescribed
both under Section 149(6) of the Companies Act, 2013 ("Act") and Regulation 16
of SEBI LODR and there has been no change in the circumstances affecting their status as
Independent Directors of the Company. The Company has also received a declaration from all
the Independent Directors that they have registered their names in the Independent
Directors Data Bank.
Further, the Independent Directors have confirmed that they have
complied with the Code for Independent Directors prescribed in Schedule IV to the Act and
also complied with the Code of Conduct for Directors and Senior Management Personnel,
formulated by the Company.
Auditors and Auditors' Report Statutory Auditors
M/s Walker Chandiok & Co. LLP, Registration No. (001076N/ N500013),
were appointed as Statutory Auditors of the Company for a term of 5 (five) years from the
conclusion of the 23rd Annual General Meeting (AGM) held on September 16, 2019, till the
conclusion of the 28th Annual General Meeting of the Company. The Auditors' Report
does not contain any qualification, reservation, adverse remark. The notes on financial
statement referred in Auditor's Report are self -explanatory and do not call for
further comment.
Pursuant to provisions of Section 143(12) of the Companies Act, 2013,
neither the Statutory Auditors nor Secretarial Auditors have reported any incident of
fraud to the Audit Committee or Board during the period under review.
Cost Auditors
Maintenance of cost records and requirement of cost audit as prescirbed
under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable to
the business activities carried out by the Company.
Secretarial Auditors
The Board had appointed M/s. V. Sreedharan & Associates, Company
Secretaries in Practice, to conduct Secretarial Audit for the FY 2022-23. The Secretarial
Audit Report of the Company as prescribed under Section 204 of the Companies Act, 2013
read with Regulation 24A of the Listing Regulations, for the FY ended March 31, 2023 is
annexed herewith as "Annexure D" to this Report. The Secretarial Audit
report does not contain any qualification, reservation or adverse remarks.
Further, the Secretarial Audit reports of material unlisted
subsidiaries of the Company incorporated in India, as required under Regulation 24A of the
SEBI LODR for the FY ended March 31, 2023 have been annexed as "Annexure D-1 to
D-4".
It may be noted that based on the audited financial statements of the
Company as on March 31, 2023, the Company has only 4 material subsidiaries i.e. GMR
Airports Limited, Delhi International Airport Limited, GMR Hyderabad International Airport
Limited and Delhi Duty Free Services Private Limited during the year under review.
Secretarial Standards
The Company has complied with the applicable Secretarial Standards
issued by the Institute of Company Secretaries of India.
Disclosures: CSR Committee
The CSR Committee comprises Dr. Emandi Sankara Rao as Chairman, Mr.
B.V.N. Rao and Mr. Sadhu Ram Bansal as members.
Audit Committee
The Audit Committee comprises of Mr. Subba Rao Amarthaluru as Chairman,
Dr. Emandi Sankara Rao, Dr. Mundayat Ramachandran, Mr. Sadhu Ram Bansal, as members.
All the recommendations made by the Audit Committee were accepted by
the Board during the year.
Further details on the above committees and other committees of the
Board are given in the Corporate Governance Report.
Vigil Mechanism
The Company has a Whistle Blower Policy, which provides a platform to
disclose information regarding any purported malpractice, fraud, impropriety, abuse or
wrongdoing within the Company, confidentially and without fear of reprisal or
victimization. Your Company has adopted a whistleblowing process as a channel for
receiving and redressing complaints from employees, directors and third parties, as per
the provisions of the Companies Act, 2013, SEBI LODR and Securities and Exchange Board of
India (Prohibition of Insider Trading) Regulations, 2015. The details of the Whistle
Blower Policy are provided in the Corporate Governance Report and also hosted on the
website of the Company https://investor.gmrinfra.com/pdf/GMR_Policy_Whistle_Blower.pdf.
Number of Meetings of the Board
A calendar of Board Meetings is prepared and circulated in advance to
the Directors. During the year under review, Seven (7) Board Meetings were held, the
details of which are given in the Corporate Governance Report that forms part of this
Annual Report. The intervening gap between two consecutive board meetings was within the
period prescribed under the Companies Act, 2013 and SEBI LODR.
Particulars of Loans, Guarantees and Investments
A statement regarding Loans/ Guarantees given and Investments made
covered under the provisions of Section 186 of the Companies Act, 2013 is made 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 exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies
Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is provided in "Annexure
E" to this report.
Annual Return
Pursuant to Section 134 and Section 92(3) of the Companies Act, 2013,
as amended, draft of the Annual Return for the FY 2022-23 has been placed on the Company
website at https://investor.gmrinfra.com/annual-reports .
Particulars of Employees and related disclosures
The information required under Section 197(12) of the Companies Act,
2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 (including amendments thereto), is attached as "Annexure F"
to this Report. The information required under Rule 5(2) and (3) of The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including amendments
thereof), is provided in the Annexure forming part of this Report. In terms of the first
proviso to Section 136 of the Companies Act, 2013, the Report and Accounts are being sent
to the members excluding the aforesaid Annexure. Any member interested in obtaining the
same may write to the Company Secretary at the Registered Office of the Company.
Dividend Distribution Policy
The Board has adopted Dividend Distribution Policy in terms of
Regulation 43A of SEBI LODR. The Dividend Distribution Policy is disclosed on the website
of the Company at the link: https://
investor.gmrinfra.com/pdf/GMR_Dividend_Distribution_Policy.pdf.
Developments in Human Resources and Organization Development
The Company has robust process of human resources development which is
described in detail in Management Discussion and Analysis section under the heading
"Developments in Human Resources and Organization Development at GMR Group".
Changes in Share capital
During the year under review, there is no change in the Authorized
share capital of the Company and it stood at 1455,00,00,000/-divided into 1355,00,00,000
equity shares of Rs. 1/- (Rupee one only) each and 10,00,000 (Ten lakhs) preference shares
of Rs. 1,000/-(Rupees One Thousand only) each.
There was no change in the issued and paid-up share capital of the
Company.
Debentures
During the year under review, the Company has not issued any
debentures.
Foreign Currency Convertible Bonds
Pursuant to the approval of the shareholders of the Company granted at
the 26th Annual General Meeting held on September 27, 2022, the Board of Directors at its
meeting held on March 17, 2023, had approved issuance of 3,30,817 Foreign Currency
Convertible Bonds ("FCCBs) of face value Euro 1,000 each aggregating to Euro 330.817
million equivalent to Rs. 2,931.77 crore to Aeroports De Paris S.A. ("ADP"),
subject to necessary regulatory approval. Upon receipt of necessary regulatory approval,
the Management Committee of the Board had on March 24, 2023 allotted 3,30,817 FCCBs of
face value of Euro 1,000 each aggregating to Euro 330.817 million to ADP ("FCCB
Holder") with a maturity period of 10 years and 1 day. The FCCBs carry an interest
rate of 6.76% p.a. on a simple interest basis. Interest will accrue on a yearly basis and
first interest instalment is payable on date of expiry of five years and subsequently
every year thereafter.
The FCCB holder can exercise the conversion option at any time on or
after the day following the 5th anniversary of the Closing Date i.e. March 24, 2023. The
price at which each of the Shares will be issued upon conversion will initially be Rs.
43.67 (calculated by reference to a premium of 10% ) over and above the Regulatory Floor
Price of
Rs. 39.70 per share) but will be subject to adjustment as per the terms
of FCCBs. The principle amount of FCCBs together with any accrued but uncapitalised or
unpaid interest upto the date of conversion may be converted into Equity Shares of the
company. The principle amount of FCCBs, if converted would have accounted for 67,06,00,981
equity shares of the Company.
Further the outstanding FCCBs aggregating to US$ 25 million issued to
Kuwait Investment Authority (KIA) shall account for 111,24,16,667 equity shares of the
Company (as per original entitlement) if converted.
Environment Protection and Sustainability
Since inception, sustainability has remained at the core of our
business strategy. Besides economic performance, safe operations, environment conservation
and social well-being have always been at the core of our philosophy of sustainable
business. The details of initiatives/ activities on environment protection and
sustainability are described in Business Responsibility and Sustainability Report forming
part of this Annual Report. The Company is also publishing Sustainability Report which is
available on the website of the Company at www.gmrinfra.com
Change in the Name and Registered office of the Company
Pursuant to Special Resolution passed on August 27, 2022 by way of
Postal Ballot, the name of the Company was changed from GMR Infrastructure Limited to
"GMR Airports Infrastructure Limited" w.e.f September 15, 2022.
The Shareholders of the Company at the 26th Annual General Meeting held
on September 27, 2022 had approved shifting of Registered Office of the Company from the
State of Maharashtra to the State of Haryana, subject to the approval of the Central
Government (Power delegated to Regional Director). Pursuant to receipt of the approval for
shifting of Registered Office from the Regional Director, Western Region, the Board of
Directors had approved the situation of the new Registered Office at Gurugram, Haryana
with effect from June 22, 2023. Consequent to shifting of Registered Office the CIN of the
Company has also changed to "L45203HR1996PLC113564"
Change in the nature of business, if any
There are no changes 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 or tribunals impacting the going concern status and Company's operations in
future.
Deposits
During the year under review, the Company has not accepted any deposit
from the public. There are no unclaimed deposits/ unclaimed/ unpaid interest, refunds due
to the deposit holders or to be deposited to the Investor Education and Protection Fund as
on March 31, 2023.
Compliance by Large Corporates:
Your Company does not fall under the Category of Large
Corporates as defined under SEBI vide its Circular SEBI/HO/DDHS/
CIR/P/2018/144 dated November 26, 2018, as such no disclosure is required in this regard.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013
Your Company has in place an Anti-Sexual Harassment Policy in line with
the requirements of the Sexual Harassment of Women at the Workplace (Prevention,
Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set
up to address complaints received regarding sexual harassment. All employees (permanent,
contractual, temporary, trainees) are covered under this Policy.
There were no sexual harassment complaint pending or received during
the year ended March 31, 2023.
Proceeding under Insolvency and Bankruptcy Code and Onetime settlement a)
There are no proceedings initiated/pending against your Company under the Insolvency and
Bankruptcy Code, 2016 which materially impact the business of the Company. b) During the
year under review, the Company has not made any one-time settlement Other than the matters
disclosed in this Report, there are no other events or transactions during the year that
require disclosures to be made in terms of the provisions of Companies Act, 2013.
Acknowledgements
Your Directors thank the lenders, banks, financial institutions,
business associates, joint venture partners and other stakeholders, Government of India,
State Governments in India, regulatory and statutory authorities, shareholders and the
society at large for their valuable support and co-operation. Your Directors also thank
the employees of the Company and its subsidiaries for their continued contribution,
commitment and dedication.
|
For and on behalf of the Board |
|
GMR Airports Infrastructure Limited |
|
(Formerly known as GMR Infrastructure
Limited) |
|
G. M. Rao |
| Place: New Delhi |
Chairman |
| Date: August 14, 2023 |
(DIN: 00574243) |