Corporate Governance Ratings ICRA ratings on GMR Ltd.

Presented by:Mahima Nigam Mansi goelNikita BerryManpreet kaur

INTRODUCTION OF GMR

• Founded in 1978 by Grandhi Malikakarjuna Rao

• Fastest growing infrastructure company

• Global presence with infrastructure operating assets and projects

• Group's commitment to inclusive growth is achieved through its CSR

INTRODUCTION TO ICRA

• It evaluates company’s business conduct and practices• It assigns CGRs on a six point scale • Its not a certificate of statutory compliance • It is designed on following key variable -Ownership Structure -Governance Structure and Management Process -Board structure and Processes -Stakeholder Relationship -Transparency and Disclosure -Financial Discipline -Ethical Practices

OWNERSHIP STRUCTURE

• Family members have the maximum share in the company

• Good number of shares to non family members in order to make process fair

• Different types of board members with balanced powers

GOVERNANCE STRUCTURE AND MANAGEMENT PROCESSES

• Every strategic decision and policy is formed by the directors on the board

• Meetings held for the board members have descent attendance

• Code of conduct is well informed to every member of the company

Conduct of Annual/Extraordinary General Meetings (AGMs/EGMs) and the extent of disclosures at such meetings

Procedures for transfer and registration of shares and payment of dividend

Company’s responsiveness to investor complaints

Timeliness of release of any market sensitive information

History of penalties levied by regulators for violations of statutory provisions, if any

STAK

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NSH

IP

TRANSPERANCY AND DISCLOSURES• Listed companies have to meet several statutory requirements on disclosures,

financial results, and information that must be part of their published accounts. However, there is a fine line between the right amount of disclosures and revealing too much information to your competitors. Therefore, it is important to disclose the exact amount of information.

• Now, GMR has gone ahead and disclosed pertinent information regarding their business.

• They have given complete information regarding their subsidiaries, their business and their modus operandi.

• They have disclosed information regarding their liabilities, short term as well as long term, as well as their mode of repayment of the long term liabilities.

• They have also given other details about the contingent liabilities they have, coupled with how they will overcome it should they arise.

• Based on the above grounds, we have given GMR a rating of 4/6 for the disclosures done by them. They have disclosed relevant and important information to the shareholders, to the maximum extent possible, therefore we have given them a high rating in this regard.

FINANCIAL DISCIPLINE• Business segments in which the company operates

Airports •Delhi International Airport Private Limited (DIAL)•GMR Hyderabad International Airport Limited (GHIAL)

Energy •Kakinada•Chennai Power Plant

Highway & Urban Infrastructure •6 Highways project Annunity & Toll based•SEZs in Krishnagiri and Kakinada & 2 Aerotropolis around the Delhi and Hyderabad Airports

• Subsidiary Companies: It has 121 subsidiary companies apart from other joint ventures /

associate companies. They are formed either directly or as step-down subsidiaries or in certain

cases by acquisition of a majority stake in existing enterprises. The Company maintains operational linkage with few companies and

financial and legal linkage with the others

• Dividend Policy: GMR dividend policy is to retain the earnings for reinvestment in large

capital projects in order to provide long term share holding value to its investors and hence the company believes in not paying out dividends.

In terms of Financial Discipline, GMR has co-integration between the various diversified sectors of operations and also maintain a large and well balanced subsidiaries to manage operational & financial performance.

Code of conduct:

• Code of Conduct (the “Code”) is intended to serve as a basis in maintaining the standards of business conduct for GMR Infrastructure Limited (the “Company”) and compliance with principles of Corporate Governance and legal requirements.

• Informing board directors of changes in board position.• Avoid apparent conflict in interest of company by making

disclosures.• Ensure security of all confidential information available.• Compliance with all government rules and regulations.• Other than spokesperson no director should be involved in

media.

ETHICAL PRACTICES

Whistle blower policy

To maintain high level of legal, ethical and moral standards and to provide a gateway for employees the Company has a Whistle Blower Policy in place, applicable to the Company and its subsidiaries. This mechanism has been communicated to all concerned and posted on the Group's intranet.

CSR initiative• GMR Varalakshmi Foundation (GMRVF) is the Corporate

Social Responsibility arm of the GMR Group.• Its mandate is to develop social infrastructure and enhance the

quality of life of communities around the locations where the Group has a presence.

GMR in newsShares of GMR Infrastructure Ltd. have fallen about 10 per cent since August 17 in Mumbai after India's Comptroller and Auditor General pulled up the government for what it said was undue favours shown to a GMR-led consortium that bagged the contract for the upgrade of the international airport in New Delhi in 2006.

CONCLUSION

PARAMETERS SCORING( 1 to 6, 1 being the highest)

Ownership Structure 2Governance Structure and Management Process

1

Board Structure and Processes 1.5Stakeholders Relationship 2Transparency and Disclosure 2Financial Discipline 1.5Ethical Practices 2Overall Rating 1.7

Thank you…