1. We have audited the accompanying standalone financialstatements of GMR Power and Urban Infra Limited ('theCompany'), which comprise the Standalone Balance Sheetas at 31 March 2025, the Standalone Statement of Profitand Loss (including Other Comprehensive Income), theStandalone Statement of Cash Flow and the StandaloneStatement of Changes in Equity for the year then ended,and notes to the standalone financial statements, includingmaterial accounting policy information and otherexplanatory information.
2. In our opinion and to the best of our information andaccording to the explanations given to us, the aforesaidstandalone financial statements give the informationrequired by the Companies Act, 2013 ('the Act') in themanner so required and give a true and fair view inconformity with the Indian Accounting Standards ('Ind AS')specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules, 2015 andother accounting principles generally accepted in India, ofthe state of affairs of the Company as at 31 March 2025,and its profit (including other comprehensive income), itscash flows and the changes in equity for the year ended onthat date.
3. We conducted our audit in accordance with the Standardson Auditing specified under section 143(10) of the Act. Ourresponsibilities under those standards are further describedin the Auditor's Responsibilities for the Audit of theStandalone Financial Statements section of our report. Weare independent of the Company in accordance with theCode of Ethics issued by the Institute of CharteredAccountants of India ('ICAI') together with the ethicalrequirements that are relevant to our audit of the standalonefinancial statements under the provisions of the Act and therules thereunder, and we have fulfilled our other ethicalresponsibilities in accordance with these requirements andthe Code of Ethics. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basisfor our opinion.
4. Key audit matters are those matters that, in our professionaljudgment, were of most significance in our audit of thestandalone financial statements of the current period. Thesematters were addressed in the context of our audit of thestandalone financial statements as a whole, and in formingour opinion thereon, and we do not provide a separateopinion on these matters.
5. We have determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter How our audit addressed the key audit matter1. Revenue recognition and measurement of upfront losses on Long-term construction contracts (refer note 2.2.c forthe material accounting policy and note 33 for disclosures of the accompanying standalone financial statements)
For the year ended 31 March 2025, the Company hasrecognized revenue from Engineering, procurement andconstruction (EPC) contracts of ' 189.18 crore and hasaccumulated provisions for upfront losses amounting to' 2.09 crore as at 31 March 2025.
The Company's revenue primarily arises from constructioncontracts, which is recognised over a period of time inaccordance with the requirements of Ind AS 115, Revenuefrom Contract with Customers, as further explained in note33 to the accompanying standalone financial statements,and which, by its nature, is complex given the significantjudgements involved in the assessment of current and futurecontractual performance obligations.
The Company recognises revenue based on the stage ofcompletion which is determined on the basis of theproportion of value of goods or services transferred as atthe Balance Sheet date, relative to the value of goods orservices promised under the contract.
Our audit procedures for recognition of contract revenue, marginand contract costs, and related receivables and liabilities included,but were not limited to, the following:
• Evaluated the appropriateness of the Company's accountingpolicy for revenue recognition from construction contractsin accordance with Ind AS 115, 'Revenue from Contractswith Customers;
• Assessed the design and implementation of key controls,over the recognition of contract revenue and tested theoperating effectiveness of these controls;
• For a sample of contracts, we have tested theappropriateness of amount recognized as revenue byevaluating key management judgements inherent in thedetermining forecasted contract revenue and costs tocomplete that drive the accounting under the percentageof completion method by performing following procedures:
- reviewed the contract terms and conditions;
Key audit matter
How our audit addressed the key audit matter
The recognition of contract revenue, contract costs and theresultant profit/loss therefore rely on the estimates inrelation to forecast contract revenue and the total cost.These contract estimates are reviewed by the managementon a periodic basis. In doing so, the management is requiredto exercise judgement in its assessment of the valuation ofcontract variations and claims and liquidated damages aswell as the completeness and accuracy of forecast costs tocomplete and the ability to deliver contracts withincontractually determined timelines. The final contract valuescan potentially be impacted on account of various factorsand are expected to result in varied outcomes. Changes inthese judgements, and the related estimates as contractsprogress can result in material adjustments to revenue andmargins/ onerous obligations.
Owing to these factors, we have determined revenuerecognition and provision for upfront losses from EPCcontracts as a key audit matter for the current year audit.
In addition to the above, following disclosures made in theaccompanying standalone financial statements has beenconsidered as fundamental to the users' understanding ofsuch financial statements:
Note 33(i) to the accompanying standalone financialstatements which describes that the Company hasrecognized certain claims in the current year and precedingyears pertaining to Dedicated Freight Corridor Corporation('DFCC') project basis evaluation by the joint venture ('JV')incorporated between the Company and SEW InfrastructureLimited, of JV's entitlement under the contract towardsrecovery of prolonged cost, as further detailed in theaforesaid note.
Based on the legal opinion and favourable award receivedfrom Dispute Adjudicating Board as stated in the said note,the management is of the view that the aforesaid claims asincluded in unbilled revenue as at 31 March 2025 are fullyrecoverable.
- evaluated the identification of performance obligationof the contract;
- evaluated the appropriateness of management'sassessment that performance obligation was satisfiedover time and consequent recognition of revenue usingpercentage of completion method;
- obtained an understanding of the assumptions appliedin determining the forecasted revenue and cost tocomplete;
- assessed management's estimates of the impact torevenue and budgeted costs arising from scopechanges made to the original contracts, claims, disputesand liquidation damages (including prolongationclaims) with reference to supporting documentsincluding variation orders and correspondence betweenthe Company and the customers; and
• Assessed the appropriateness and adequacy of disclosuresmade by the management with respect to revenuerecognised during the year in accordance with applicableaccounting standards.
2. Fair value measurement of investments in subsidiaries, associate and joint ventures (refer note 2.2.o for the materialaccounting policy and note 5 for disclosures of the accompanying standalone financial statements)
The Company has determined the fair value of itsinvestments in unquoted equity shares, includinginstruments in the nature of equity of its subsidiaries,associate and joint ventures as at the year end. Determiningthe fair value of such unquoted investments requires useof valuation techniques which has been performed byindependent valuation experts, applying applicablevaluation methodologies.
The Company has total investment of ' 1,851.53 crore(including classified under held for sale) as at 31 March2025 which constitutes 39.52% of total assets of theCompany. The aforementioned investments are carried attheir respective fair values as at the reporting date as perInd AS 109 - 'Financial Instruments'.
Our audit procedures to assess the reasonableness of fairvaluation of investments included, but were not limited to thefollowing:
• Obtained a detailed understanding of the management'sprocess and controls for determining the fair valuation ofunquoted equity and preference instruments;
• Evaluated the design and tested the operating effectivenessof key controls implemented for fair valuation of theinvestments;
• Obtained the valuation reports of the management'svaluation expert and assessed the expert's professionalcompetence, objectivity and capabilities in performing thevaluation of the investments;
The determination of carrying value of the Company's
• Assessed the appropriateness of the valuation methodology
investments in subsidiaries, associate and joint ventures is
used for the fair valuation computation;
dependent on management's estimates of future cash flows
• Carried out an assessment of forecasts of future cash flows
and their judgment with respect to final determination of
prepared by the management across various sectors and
tariff rates, operational performance of the plants, life
business of the investee companies which involved,
extension plans, availability and market prices of coal and
evaluating the key assumptions including the discount rate
other fuels, restructuring of loans, outcome of litigations,
and comparing the estimates to externally available industry,
etc. in case of investments in entities in the energy business
economic and financial data with the support of our auditor's
and estimation of vehicle traffic and rates and favourable
expert and assessed the appropriateness of the aforesaid
outcomes of litigations etc. in case of investments in
key assumptions;
expressway business.
• Engaged in discussions with the management on the
Owing to the uncertainties involved in forecasting and
performance of the Company's investments as compared
discounting future cash flows, significant management's
to previous year in order to evaluate whether the inputs
judgement and subjectivity involved in estimates and
and assumptions used in the cash flow forecasts were
underlying key assumptions used in the valuation models
suitable;
and the significance of the Company's investments as at
31 March 2025 in context of standalone financial statements,
• Discussed the significant ongoing litigations in the investee
we have determined this as a key audit matter for current
companies which had a material impact to ascertain the
year audit.
appropriateness of the outcome considered in the respective
valuation models;
In addition to the above, following disclosures made in the
accompanying standalone financial statements have been
• Tested the arithmetical accuracy of the computations done
considered as fundamental to the users' understanding of
in accordance with the valuation models; and
such financial statements:
• Ensured the appropriateness and adequacy of the related
disclosures in the standalone financial statements in
a. As explained in note 5.2 to the accompanying
Standalone financial statements, the Company has
accordance with the accounting standards.
invested in GMR Consulting Services Limited ('GCSL'),
subsidiary of the Company, which have further invested
in step down subsidiaries. The Company together with
GCSL has investments in GMR Energy Limited ('GEL'), a
subsidiary of the Company, amounting to ' 1,190.38
crore and has outstanding loan (net of impairment)
(including accrued interest) amounting to ' 1,997.52
crore recoverable from GEL as at 31 March 2025. GEL
has further invested in GMR Kamalanga Energy Limited
('GKEL') and GMR Warora Energy Limited ('GWEL'), both
subsidiary companies. The carrying value of investment
of the Company in GEL is dependent upon fair values
of GKEL and GWEL. The aforementioned investments
are designated at their respective fair values as at the
reporting date as per Ind AS 109- 'Financial Instruments'.
The carrying values are based on the respective
valuations performed by an external expert using the
discounted future cash flows method and other matters
as follows:
- Note 5.4 to the accompanying standalone financial
statements which states that the fair value of
investment in GKEL is significantly dependent on
the achievement of certain key assumptions
considered in aforementioned valuation such as
expansion and optimal utilization of existing plant
capacity, and timing and amount of settlement of
disputes with customers and capital creditors,
which are outstanding as on 31 March 2025 as
further explained in the said note.
- Note 5.3 to the accompanying standalone financial
investment in GWEL is also dependent upon
recoverability of claims relating to transmission
charges from Maharashtra State Electricity
Distribution Company Limited (MSEDCL) as
explained below, which are under dispute and
pending settlement / realization as on 31 March
2025, capacity utilization of plant in future years
and certain other key assumptions as considered
in the valuation performed by an external expert
as explained in the said note.
The claims pertain to recovery of transmission charges
from MSEDCL by GWEL. GWEL has disputed the
contention of MSEDCL that the cost of transmission
charges is to be paid by GWEL. However, based on the
Order of the Appellate Tribunal for Electricity ('APTEL')
('the Order') dated 8 May 2015, currently contested by
MSEDCL in the Supreme Court and pending conclusion,
GWEL has accounted for reimbursement of such
transmission charges in the Statement of Profit and Loss
amounting to ' 616.33 crore for the period from 17
March 2014 to 30 November 2020 and accordingly,
GWEL has disclosed the aforesaid transmission charges
and those invoiced directly to MSEDCL, a customer of
GWEL, by Power Grid Corporation Limited for the period
01 December 2020 to 31 March 2025 as contingent
liability, as further described in aforesaid note.
The management of the Company, based on its internal
assessment, legal opinion, certain interim favourable
regulatory orders and valuation assessment made by
an external expert, is of the view that the carrying value
of the aforesaid investment of the Company in GEL,
taking into account the matter described above in
relation to the investment made by GEL in GWEL and
GKEL, is appropriate and accordingly, no adjustments
to the aforesaid balance have been made in the
accompanying standalone financial statements for the
year ended 31 March 2025.
6. The Company's Board of Directors are responsible for theother information. The other information comprises theinformation included in the Annual Report, but does notinclude the standalone financial statements and our auditor'sreport thereon. The Annual Report is expected to be madeavailable to us after the date of this auditor's report.
Our opinion on the standalone financial statements doesnot cover the other information and we will not express anyform of assurance conclusion thereon.
In connection with our audit of the standalone financialstatements, our responsibility is to read the other informationidentified above when it becomes available and, in doingso, consider whether the other information is materiallyinconsistent with the standalone financial statements or our
knowledge obtained in the audit or otherwise appears tobe materially misstated.
When we read the Annual Report, if we conclude that thereis a material misstatement therein, we are required tocommunicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with
Governance for the Standalone Financial Statements
7. The accompanying standalone financial statements havebeen approved by the Company's Board of Directors. TheCompany's Board of Directors are responsible for the mattersstated in section 134(5) of the Act with respect to thepreparation and presentation of these standalone financialstatements that give a true and fair view of the financialposition, financial performance including othercomprehensive income, changes in equity and cash flowsof the Company in accordance with the Ind AS specified
under section 133 of the Act and other accounting principlesgenerally accepted in India. This responsibility also includesmaintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assetsof the Company and for preventing and detecting fraudsand other irregularities; selection and application ofappropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design,implementation and maintenance of adequate internalfinancial controls, that were operating effectively for ensuringthe accuracy and completeness of the accounting records,relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free frommaterial misstatement, whether due to fraud or error.
8. In preparing the standalone financial statements, the Boardof Directors is responsible for assessing the Company's abilityto continue as a going concern, disclosing, as applicable,matters related to going concern and using the goingconcern basis of accounting unless the Board of Directorseither intends to liquidate the Company or to ceaseoperations, or has no realistic alternative but to do so.
9. The Board of Directors is also responsible for overseeingthe Company's financial reporting process.
Financial Statements
10. Our objectives are to obtain reasonable assurance aboutwhether the standalone financial statements as a whole arefree from material misstatement, whether due to fraud orerror, and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordancewith Standards on Auditing will always detect a materialmisstatement when it exists. Misstatements can arise fromfraud or error and are considered material if, individually orin the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basisof these standalone financial statements.
11. As part of an audit in accordance with Standards on Auditing,specified under section 143(10) of the Act we exerciseprofessional judgment and maintain professional skepticismthroughout the audit. We also:
• Identify and assess the risks of material misstatementof the standalone financial statements, whether due tofraud or error, design and perform audit proceduresresponsive to those risks, and obtain audit evidencethat is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than forone resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, orthe override of internal control;
• Obtain an understanding of internal control relevantto the audit in order to design audit procedures thatare appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible forexpressing our opinion on whether the Company hasadequate internal financial controls with reference to
financial statements in place and the operatingeffectiveness of such controls;
• Evaluate the appropriateness of accounting policiesused and the reasonableness of accounting estimatesand related disclosures made by management;
• Conclude on the appropriateness of Board of Directors'use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a materialuncertainty exists related to events or conditions thatmay cast significant doubt on the Company's ability tocontinue as a going concern. If we conclude that amaterial uncertainty exists, we are required to drawattention in our auditor's report to the relateddisclosures in the standalone financial statements or, ifsuch disclosures are inadequate, to modify our opinion.Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report.However, future events or conditions may cause theCompany to cease to continue as a going concern; and
• Evaluate the overall presentation, structure and contentof the standalone financial statements, including thedisclosures, and whether the standalone financialstatements represent the underlying transactions andevents in a manner that achieves fair presentation.
12. We communicate with those charged with governanceregarding, among other matters, the planned scope andtiming of the audit and significant audit findings, includingany significant deficiencies in internal control that we identifyduring our audit.
13. We also provide those charged with governance with astatement that we have complied with relevant ethicalrequirements regarding independence, and to communicatewith them all relationships and other matters that mayreasonably be thought to bear on our independence, andwhere applicable, related safeguards.
14. From the matters communicated with those charged withgovernance, we determine those matters that were of mostsignificance in the audit of the standalone financialstatements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor'sreport unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances,we determine that a matter should not be communicated inour report because the adverse consequences of doing sowould reasonably be expected to outweigh the publicinterest benefits of such communication.
Report on Other Legal and Regulatory Requirements
15. As required by section 197(16) of the Act, based on ouraudit, we report that the Company has paid remunerationto its directors during the year in accordance with theprovisions of and limits laid down under section 197 readwith Schedule V to the Act.
16. As required by the Companies (Auditor's Report) Order, 2020('the Order') issued by the Central Government of India interms of section 143(11) of the Act we give in the AnnexureI, a statement on the matters specified in paragraphs 3 and4 of the Order, to the extent applicable.
17. Further to our comments in Annexure I, as required by
section 143(3) of the Act based on our audit, we report, to
the extent applicable, that:
a) We have sought and obtained all the information andexplanations which to the best of our knowledge andbelief were necessary for the purpose of our audit ofthe accompanying standalone financial statements;
b) Except for the matters stated in paragraph 17 (i)(vi)below on reporting under Rule 11(g) of the Companies(Audit and Auditors) Rules, 2014 (as amended), in ouropinion, proper books of account as required by lawhave been kept by the Company so far as it appearsfrom our examination of those books;
c) The standalone financial statements dealt with by thisreport are in agreement with the books of account;
d) In our opinion, the aforesaid standalone financialstatements comply with Ind AS specified under section133 of the Act;
e) The matters described in paragraph 2(a) under the keyaudit matters section in paragraph 5 above, in ouropinion, may have an adverse effect on the functioningof the Company;
f) On the basis of the written representations receivedfrom the directors and taken on record by the Board ofDirectors, none of the directors is disqualified as on 31March 2025 from being appointed as a director in termsof section 164(2) of the Act;
g) The modification relating to the maintenance ofaccounts and other matters connected therewith areas stated in paragraph 17(b) above on reporting undersection 143(3)(b) of the Act and paragraph 17(i)(vi)below on reporting under Rule 11(g) of the Companies(Audit and Auditors) Rules, 2014 (as amended);
h) With respect to the adequacy of the internal financialcontrols with reference to financial statements of theCompany as on 31 March 2025 and the operatingeffectiveness of such controls, refer to our separatereport in Annexure II wherein we have expressed anunmodified opinion; and
i) With respect to the other matters to be included in theAuditor's Report in accordance with rule 11 of theCompanies (Audit and Auditors) Rules, 2014 (asamended), in our opinion and to the best of ourinformation and according to the explanations givento us:
i. The Company, as detailed in note 34(II) to thestandalone financial statements, has disclosed theimpact of pending litigations on its financialposition as at 31 March 2025;
ii. The Company, as detailed in note 33(h) to thestandalone financial statements, has madeprovision as at 31 March 2025, as required underthe applicable law or accounting standards, formaterial foreseeable losses, if any, on long-termcontracts including derivative contracts;
iii. There were no amounts which were required tobe transferred to the Investor Education andProtection Fund by the Company during the yearended 31 March 2025;
iv. a. The management has represented that, to the
best of its knowledge and belief, other thanas disclosed in note 50(iv) to the standalonefinancial statements, no funds have beenadvanced or loaned or invested (either fromborrowed funds or securities premium or anyother sources or kind of funds) by theCompany to or in any persons or entities,including foreign entities ('theintermediaries'), with the understanding,whether recorded in writing or otherwise, thatthe intermediary shall, whether, directly orindirectly lend or invest in other persons orentities identified in any manner whatsoeverby or on behalf of the Company ('the UltimateBeneficiaries') or provide any guarantee,security or the like on behalf the UltimateBeneficiaries;
b. The management has represented that, to thebest of its knowledge and belief, as disclosedin note 50(v) to the standalone financialstatements, no funds have been received bythe Company from any persons or entities,including foreign entities ('the FundingParties'), with the understanding, whetherrecorded in writing or otherwise, that theCompany shall, whether directly or indirectly,lend or invest in other persons or entitiesidentified in any manner whatsoever by or onbehalf of the Funding Party ('UltimateBeneficiaries') or provide any guarantee,security or the like on behalf of the UltimateBeneficiaries; and
c. Based on such audit procedures performedas considered reasonable and appropriate inthe circumstances, nothing has come to ournotice that has caused us to believe that themanagement representations under sub¬clauses (a) and (b) above contain any materialmisstatement.
v. The Company has not declared or paid anydividend during the year ended 31 March 2025;and
vi. As stated in note 45 to the standalone financialstatements and based on our examination whichincluded test checks, the Company, in respect offinancial year commencing on 1 April 2024, hasused an accounting software for maintaining itsbooks of account which has a feature of recordingaudit trail (edit log) facility and the same has beenoperated throughout the year for all relevanttransactions recorded in the software, except thataudit trail feature was not enabled at the database
level upto 24 May 2024. Further, during the course of our audit we did not come across any instance of audit trailfeature being tampered with in respect of the accounting software where such feature is enabled and logs maintained.The audit trail feature has been preserved by the Company as per the statutory requirements for record retentionfrom the date the audit trail was enabled for the accounting software.
Chartered AccountantsFirm's Registration No.: 001076N/N500013
Partner
Place: New Delhi Membership No.: 062191
Date: 19 May 2025 UDIN: 25062191BMMMJP2790