reliance infrastructure ltd Auditors report


To the Members of Reliance Infrastructure Limited Report on the Audit of the Standalone Financial Statements

Disclaimer of Opinion

We were engaged to audit the accompanying standalone financial statements of Reliance Infrastructure Limited ("the Company"), which comprise the standalone balance sheet as at March 31, 2023, the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements"), which includes 4 Joint Operations accounted on proportionate basis.

We do not express an opinion on the accompanying standalone financial statements of the Company. Because of the significance of the matter described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these standalone financial statements.

Basis for Disclaimer of Opinion

1. We refer to Note 38 to the standalone financial statements regarding the Companys exposure to an EPC Company as on March 31, 2023 aggregating to Rs 6,505.29 Crore (net of provision of Rs 3,972.1 7 Crore). Further, the Company has also provided corporate guarantees aggregating to Rs 1,775 Crore on behalf of the aforesaid EPC Company towards borrowings of the EPC Company.

According to the Management of the Company, these amounts have been funded mainly for general corporate purposes and towards funding of working capital requirements of the party which has been engaged in providing Engineering, Procurement and Construction (EPC) services primarily to the Company, its subsidiaries and its associates, the EPC Company will be able to meet its obligation.

As referred in the above note, the Company has further provided Corporate Guarantees of Rs 4,895.87 Crore in favour of certain companies towards their borrowings. According to the Management of the Company these amounts have been given for general corporate purposes.

We were unable to obtain sufficient and appropriate audit evidence about the relationship, recoverability and possible obligation towards the Corporate Guarantees given. Accordingly, we are unable to determine the consequential implications arising therefrom in the standalone financial statements of the Company.

2. We refer to Statement of Changes in Equity of the Standalone financial statements wherein the loss on invocation of shares and/or fair valuation of shares held as investments in Reliance Power Limited (RPower) aggregating to Rs 5,024.88 Crore for year ended March 31, 2020 was adjusted against the capital reserve instead of charging the same in the Statement of Profit and Loss. The said treatment of loss on invocation and fair valuation of investments was not in accordance with the Ind AS 28 "Investment in Associates and Joint Venture", Ind AS

1 "Presentation of Financial Statements" and Ind AS 109 "Financial Instruments". Had the Company followed the above Ind ASs the Retained earnings as at March 31, 2022 and March 31, 2023 would have been lower by Rs 5,024.88 Crore and Capital Reserve of the Company as at March 31, 2022 and March 31, 2023 would have been higher by Rs 5,024.88 Crore.

Emphasis of matter

1. We draw attention to Note No. 44 to the standalone financial statements, wherein the Company has outstanding obligations to its lenders and the Company is also a guarantor for its subsidiaries and associates whose loans have also fallen due which indicate that uncertainty exists that may cast significant doubt on the Companys ability to continue as a going concern. However, for the reasons more fully described in the aforesaid note the accounts of the Company have been prepared as a Going Concern.

2. We draw attention to Note no. 39(i) to the standalone financial statement, wherein Company has made provision for net receivable from Reliance Power Group aggregating to Rs 1 621.1 5 crore and has considered as exceptional item.

3. We draw attention to Note no. 39(ii) to the standalone financial statements, wherein wherein Company has made provision for exposure of KM Toll Road Private Limited aggregating to Rs 544.94 crore and has considered as exceptional item.

4. We draw attention to Note no. 39(iii) to the standalone financial statements, wherein Company has made provision for exposure of JR Toll Road Private Limited aggregating to Rs 226.56 crore and has considered as exceptional item.

5. We draw attention to Note no. 41 to the standalone financial statements which describes the impairment assessment performed by the Company in respect of its net receivables of Rs 2,781.28 Crore in Eight subsidiaries i.e. Toll Road SPVs Companies (excluding KMTR and JRTR as stated in paragraph 3 & 4 above) in accordance with Ind AS 36 "Impairment of assets"/Ind AS 109 "Financial Instruments". This assessment involves significant management judgment and estimates on the valuation methodology and various assumptions used in determination of value in use/fair value by independent valuation experts/management as more fully described in the aforesaid note. Based on managements assessment and independent valuation reports, no impairment is considered necessary on the receivables by the management.

Our opinion on the standalone financial statements is not modified in respect of the above matters.

Managements Responsibility for the Standalone Financial Statements

The Companys management and Board of Directors are responsible for the matters stated in section 134(5) of the Companies Act 201 3 ("Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, losses and other comprehensive

income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our responsibility is to conduct an audit of the standalone financial statements in accordance with Standards on Auditing and to issue an auditors report. However, because of the matter described in the Basis for Disclaimer of Opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these standalone financial statements.

We are independent of the Company in accordance with the Code of Ethics and provisions of the Act that are relevant to our audit of the standalone financial statements in India under the Act, and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics and the requirements under the Act.

Other Matters

1 (i) The standalone financial Statement include the audited

financial statement and other financial information of 2 joint operations, whose financial statement reflect total assets of Rs 78.76 Crore as at March 31, 2023, total revenues of Rs 41.13 Crore, total net profit/(loss) after tax of (1.26) Crore and total comprehensive income/(loss) of (1.26) Crore for the year ended March 31, 2023 as considered in this standalone financial Statement. These financial statement and other financial information have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the standalone financial statement, in so far it relates to amounts and disclosures included in respect of these joint operations, is solely based on the reports of the other auditors and the procedures performed by us are as stated in paragraph above.

(ii) The standalone financial statement includes the unaudited financial statements and other unaudited financial information of 2 Joint Operations, whose financial statements and other financial information reflect total assets of Rs 3.45 Crore as at March 31, 2023, total revenue of Nil, total net loss after tax and total comprehensive loss of Nil for the year ended March 31, 2023 and cash flows (outflow/ inflow) of Nil for the year ended March 31, 2023, as considered in the standalone financial statements. These unaudited financial statements and other unaudited financial information have been furnished to us by the management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations is based solely on such unaudited financial statements and other unaudited financial information. In our opinion and according to the information and explanations given to us by the management, these financial statements and other financial information are not material.

Our opinion on the standalone financial statements is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements/ financial information certified by the management.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government in terms of section 143 (11) of the Act, and except for the possible effects, of the matter described in the Basis for Disclaimer of Opinion section, we give in the "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. (A) As required by section 143(3) of the Act, we report that:

a) As described in the Basis for Disclaimer of Opinion section, we were unable to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) Due to the effects/possible effects of the matter described in the Basis for Disclaimer of Opinion section, we are unable to state whether proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.

d) Due to the effects/possible effects of the matter described in the Basis for Disclaimer of Opinion section, we are unable to state whether the financial

statements comply with the Indian Accounting Standards specified under section 133 of the Act.

e) The matter described in the Basis for Disclaimer of Opinion section may have an adverse effect on the functioning of the Company.

f) The Company has defaulted in repayment of the obligations to its lenders and debenture holders which is outstanding as at March 31, 2023. Based on the legal opinion obtained by the Company and based on the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of section 164(2) of the Act.

g) The reservation relating to maintenance of accounts and other matters connected therewith are as stated in the Basis for Disclaimer Opinion section.

h) With respect to the matter to be included in the Auditors Report under section 197(16) of the Act:

In our opinion and according to the information and explanations given to us, remuneration paid by the Company to its directors during the current year is in accordance with the provisions of section 197 of the Act.

i) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 201 4, in our opinion and to the best of our information and according to the explanations given to us:

i. Except for the possible effects of the matter described in the Basis for Disclaimer of Opinion section, the Company has disclosed the impact of pending litigations as at March 31, 2023 on its financial position in its standalone financial statements - Refer Note 31 to the standalone financial statements.

ii. Except for the possible effects of the matter described in the Basis for Disclaimer of Opinion section, the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. (a) Management has represented to us that, to the best of its knowledge and belief, as disclosed in the notes to the accounts no funds have

been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) Management has represented to us that, to the best of its knowledge and belief, as disclosed in the notes to the accounts no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on our audit procedure conducted that are considered reasonable and appropriate in the circumstances, nothing has come to our attention that cause us to believe that the representation given by the management under paragraph (2) (B) (iv) (a) & (b) contain any material misstatement.

v. The Company has not declared or paid any dividend during the year.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

"ANNEXURE A" TO THE INDEPENDENT AUDITORS REPORT ON THE STANDALONE FINANCIAL STATEMENTS OF RELIANCE

INFRASTRUCTURE LIMITED.

(Referred to in Paragraph 1 under the heading of "Report on other legal and regulatory requirements" of our report of even date)

(i) a) (A) The Company is maintaining proper records showing full particulars including quantitative details and situation of Property, Plant and Equipment on the basis of available information.

(B) The Company is maintaining proper records showing full particulars of intangible assets on the basis of available information.

b) As explained to us, Property, Plant & Equipment have been physically verified by the management in a phased manner over a period of three years, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. Pursuant to the program, a portion of the Property, Plant and Equipment has been physically verified by the Management during the year and no material discrepancies between the book records and the physical assets were noticed on such verification.

c) According to the information and explanations given to us and on the basis of our examination of the registered sale deeds/transfer deeds/conveyance deeds/possession letters/allotment letters and other relevant records evidencing title/ possession provided to us, we report that, the title deeds of all the immovable properties comprising of land and buildings other than self-constructed properties recorded as Property, Plant and Equipment, which are freehold, are held in the name of the Company as at the balance sheet date, except the following (Refer Note No.4 to the Standalone Financial Statement)

Description of Property Gross carrying value ( in crore) Held in the name of Whether promoter, director or their relative or employee Period

held

Reason for not being in the name of the Company
Freehold land at Goa (*) 0.59 Title deeds are in the name of erstwhile company No Since April - 1999 The title deeds are in the names of erstwhile companies that merged with the Company under Section 391 to 394 of the Companies Act, 1956 pursuant to Schemes of Amalgamation as approved by the Honble High Courts.

* Net of Impairment Provision of Rs 18 crores.

I n respect of immovable properties comprising of land and buildings that have been taken on lease and disclosed as Property, Plant and Equipment in the standalone financial statements, the lease agreements and/or other relevant records are in the name of the Company, except the following (Refer Note No. 4 to the Standalone Financial Statement):

Description of Property Gross Carrying Value (Rs in crore) Held in the name of Whether promoter, director or their relative or employee Period Held Reason for not being in the name of the Company
Leasehold land at Goa 0.35 The lease agreements are in the name of erstwhile company No Since

December-2001

The lease agreements are in the names of erstwhile companies that merged with the Company under Section 391 to 394 of the Companies Act, 1956 pursuant to Schemes of Amalgamation as approved by the Honble High Courts.

d) According to information and explanations given to us and books of accounts and records examined by us, during the year the Company has not revalued its Property, Plant and Equipment and intangible assets.

e) According to information, explanations and representation given to us by the management, no proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

(ii) a) As explained to us and on the basis of the records examined by us, and based on audit report of joint operations, in our opinion, physical verification of the inventories have been conducted at reasonable intervals by the management and having regard to the size and nature of business of the Company and nature of its inventory, the coverage and procedures of such verification by the management is appropriate. As explained to us and on the basis of the records examined by us, the value of the discrepancies noticed on physical verification by management did not exceed 10% or more in aggregate of each class of inventory.

b) In our opinion and according to information and explanation given to us, the Company has been sanctioned working capital limits in excess of rupees Five Crores, in aggregate, from Banks which are secured on the basis of security of current assets. The quarterly returns or statements filed by the Company upto Quarter ended December 31, 2022 in respect of current assets held by it and offered as security with such Banks are in agreement with the unaudited books of account of the Company of respective quarters and no material discrepancies have been observed as stated in Note No.18.1 of the Standalone Financial Statements.

(iii) With respect to investments made in or any guarantee or security provided or any loans or advances in the nature of loans, secured or unsecured, granted during the year by the Company to companies, firms, Limited Liability Partnerships or any other parties:

a) During the year the Company has provided loans, advances in the nature of loans, Provided guarantees and securities to companies are as follows :

Rs In Crore

Particulars Guarantees Loans
Aggregate amount granted/ provided during the year
Subsidiaries - 113.03
Joint Ventures - -
Associates - -
w - -
Balance outstanding as at balance sheet date in respect of abc ve cases
Subsidiaries 1,824.51 665.15
Joint Ventures - -
Associates 178.41 414.32
Others* 6,842.87 4,054.05

*Others include, Loans granted or advances in the nature of loan granted to EPC company amounting to Rs 4,013.08 Crore (net of provision Rs 3,829.14 Crore), and corporate guarantee provided on behalf of the EPC company amounting to Rs 1,775 Crore and corporate guarantee provided of Rs 4,895.87 Crore on behalf of certain companies towards their borrowings outstanding as on March 31, 2023, as the matter referred to in the Basis for Disclaimer of Opinion section in the audit report in respect of which we are unable to comment for the reasons described therein.

b) In our opinion and according to information and explanations given us and on the basis of our audit procedures, except for the matter referred to in the Basis for Disclaimer of Opinion section in the audit report in respect of which we are unable to comment for the reasons described therein, the investments made, guarantee provided, security given and the terms and conditions of all loans and advances in the nature of loans and guarantee provided are, prima facie, not prejudicial to Companys interest.

c) According to the books of accounts and records examined by us in respect of the loans and advances in the nature of loans, where the schedule of repayment of principal and payment of interest has been stipulated, the repayments or receipts are generally regular as per stipulated terms, except for the matter referred to in the Basis for Disclaimer of Opinion section in the audit report in respect of which we are unable to comment for the reasons described therein, where repayment of principal of Rs 4,013.08 Crore (net of provision Rs 3,829.14 Crore) and payment of interest of Rs 1,443.08 Crore (Net of provision Rs 143.03 Crore) by EPC company is delayed from March 31, 2020 i.e. 1095 days as on March 31, 2023. According to information and explanations given to us, as a matter of prudence, the Company has not recognised interest on the above since April 1, 2020.

d) According to the books of accounts and records examined by us in respect of the loans, there is no amount overdue for more than ninety days, except for the matter referred to in the Basis for Disclaimer of Opinion section in the audit report in respect of which we are unable to comment for the reasons described therein. In absence of sufficient and appropriate

evidence, we are unable to comment on reasonable steps have been taken by the company for recovery of the principal and Interest thereon, where in one of the case Rs 5,456.16 Crore (net of provision 3,972.1 7 Crore) including principal of Rs 4,013.08 Crore and Interest of Rs 1,443.08 Crore is overdue for more than ninety days. According to information and explanations given to us, as a matter of prudence the Company has not recognised interest on the above since April 01, 2020.

e) In our opinion and according to information and explanation given and the books of accounts and records examined by us, loans granted which have fallen due during the year have been renewed or extended as stated below and no fresh loans have been granted to settle the over dues of existing loans given to the same parties.

Particulars Aggregate amount of existing loans renewed or extended (Rs In Crore ) Percentage of the aggregate to the total loans or advances in the nature of loans granted during the year
Subsidiaries 564.53 48.95%
Associates 547.52 47.48%
Others 41.22 3.57%

f) The Company has not granted any loans or advances in the nature of loans, either repayable on demand or without specifying any terms or period of repayment to Companies, firms, Limited Liability Partnerships or any other parties. Accordingly, the requirement to report on clause 3(iii)(f) of the order is not applicable to the Company.

iv. Based on the information and explanations given to us in respect of loans, investments, guarantees and securities, except for the matter referred to in the Basis for Disclaimer of Opinion section in the audit report in respect of which we are unable to comment for the reasons described therein, the Company has complied with the provisions of Section 185 and 186 of the Act, to the extent applicable. Further, as the Company is engaged in the business of providing infrastructural facilities, the provisions of Section 186 [except for sub-section (1)] are not applicable to it.

v. According to the information and explanations given to us, the Company has not accepted any deposits or amounts which are deemed to be deposits within the meaning of provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Therefore, the clause (v) of paragraph 3 of the Order is not applicable to the Company.

vi. We have broadly reviewed the books of accounts maintained by the company pursuant to the rules made by the central Government for the maintenance of cost records under section 148 of the Act and we are of the opinion the prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii In respect of Statutory dues :

a) According to the information and explanation given to us and on the basis of our examination of the records of the Company, undisputed statutory dues including Provident Fund, National Pension fund, employees state insurance, duty of customs, cess and any other material statutory dues have generally been regularly deposited with appropriate authorities, except for the dues towards Goods & Service Tax, Professional Tax and Tax Deducted at Source delayed by 1 Day to 365 Days to deposit with the appropriate authorities. Further, the Company has not paid until date, dividend distribution tax payable in respect of dividend declared during the financial year 2017-18.

b) According to the information and explanations given to us, there were no undisputed amounts payable in respect of the aforesaid dues, which were outstanding as March 31, 2023 for a period of more than six months from the date they became payable, except for the following dues:

Statement of Arrears of Statutory Dues Outstanding for More than Six Months

Name of the Statute Nature of the Dues Amount (Rs in crore) Period to which amount is relates Due Date Date of Payment
Income Tax Act, 1961 Dividend Distribution Tax Rs 25.49* 2017-18 18th September, 2018 Not Yet Paid

* Including Interest of Rs 5.88 crore.

c) According to the information and explanations given to us, there are statutory dues referred to in sub-clause (a) which have not been deposited with the appropriate authority on account of any dispute are as follows:

Statement of Disputed Dues

Name of Statute Nature of due Amount ( Rs In Crore) Period for which the amount relates Forum where the dispute is pending
Delhi Sales Tax on Works Contract Act, 1999 Works Contract Tax 0.051 2004-2005 Joint Commissioner (Appeal), Department of Trade and Taxes, New Delhi
West Bengal Value Added Tax Act, 2003 VAT 56.422 2010-2011 West Bengal Commercial Tax Appellate and Revisional Board, Kolkata
West Bengal Value Added Tax Act, 2003 VAT 4.273 2008-2009 West Bengal Commercial Tax Appellate and Revisional Board, Kolkata
Madhya Pradesh Value Added Tax Act, 2002 VAT 3.124 2009-2010 Madhya Pradesh Commercial Tax Appellate Board, Bhopal
Central Sales Tax Act, 1956 Central Sales Tax 0.195 2009-2010 Madhya Pradesh Commercial Tax Appellate Board, Bhopal
Madhya Pradesh Entry Tax Act 1976 Entry Tax 0.496 2009-2010 Madhya Pradesh Commercial Tax Appellate Board, Bhopal
Uttar Pradesh Entry Tax Act, 2007 Entry Tax 0.057 2007- 2008

2008- 2009

Additional Commissioner Grade II, Appeals II, Noida
Maharashtra Value Added Tax Act, 2002 VAT 15.368 2008- 2009

2009- 2010 & 2011-2012

Maharashtra Sales Tax Tribunal, Mumbai
Maharashtra Value Added Tax Act, 2002 VAT 15.699 2013- 2014

2014- 2015

Senior Joint Commissioner (Appeals) of Sales tax, Mumbai
Andhra Pradesh Value Added Tax Act, 2005 VAT 5.3310 2011-2012 Andhra Pradesh VAT Appellate Tribunal, Vishakhapatnam
Bihar Value Added Tax Act , 2005 VAT 2.2811 2013- 2014,

2014- 2015

2015- 2016 &

2016- 17

Joint Commissioner of Commercial Taxes (Appeal), Bihar
Income Tax Act, 1961 Income Tax 163.32 (for which the tax authorities are the appellant) A.Y.

2001 -2002,

2002- 2003

2003- 2004,

2006- 2007,

2007- 2008 &

2008- 2009

Supreme Court
Income Tax Act, 1961 Income Tax 992.42 (for which the tax authorities are the appellant) A.Y.

1 998-1999,

1 999-2000, 2001 -2002,

2002- 2003,

2003- 2004,

2007- 2008,

2008- 2009,

2009- 2010,

2010- 2011, 201 1 -2012, 2012-2013

Bombay High Court
Name of Statute Nature of due Amount ( Rs In Crore) Period for which the amount relates Forum where the dispute is pending
Income Tax Act, 1961 Income Tax 40.43 AY 2020-21 Income Tax Appellate Tribunal, Mumbai
Income Tax Act, 1961 Income Tax Penalty 437.03 AY

2014-2015,

2019-2020,

2021-2022

CIT (Appeals), Mumbai
Foreign Trade (Development and Regulation ) Act ,1992 Duty Drawback 295.36 2008-2009 Supreme Court
Foreign Trade (Development and Regulation ) Act ,1992 Duty Drawback 6.10 2009-2010 Director General of Foreign Trade Policy, Kolkata
Customs Act, 1962 Custom duty 66.2012 April 2012- January 2013 & 2013-2014 Custom, Excise and Service Tax Appellate Tribunal, Mumbai
Customs Act, 1962 Penalty 145.00 2012-2013 Additional Director General DRI (Adjudication), Mumbai
Customs Act, 1962 Custom duty 3.21 2016-2017 Commissioner (Preventive) Vijayavada
Customs Act, 1962 Custom duty 0.67 2018-19 Commissioner of Customs (Appeals), New Delhi
The Central Excise Act, 1944 Excise Duty 0.20 July 2015 to September 2016 Assistant Commissioner of Central Excise (Appeals-1) , Mumbai
Goods & Service Tax GST 0.14 2017-18 Deputy Commissioner (Appeals), Goods and Service Tax, Rajasthan

Includes 1 Rs 5,000, 2 0.20 Crore, 30.40 Crore, 4 Rs 1.67 Crore, 50.04 Crore, 60.13 Crore, 70.01 Crore, 80.79 Crore, 9 0.84 Crore, 10 Rs 1.33 Crore, 110.47 Crore and 12 Rs 31.99 Crore paid/adjusted under protest.

viii According to the information and explanations given to us and representation given to us by the management, there were no transactions relating to previously unrecorded income that were surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 (43 of 1961) during the year. (Refer Note No. 23(e) to the Standalone Financial Statement.)

ix. a) According to the information and explanations given to us and based on examination of the records of the Company, the Company has defaulted in repayment of loans or borrowings to financial institution or bank or dues to debenture holders for the following instances in repayment of principal and interest amount. The Company did not have any loans or borrowings from government during the year.

i) The Company has defaulted in repayment of following dues to the banks and debenture holders during the year, which were paid on or before the Balance Sheet date. (Refer Note No. 17.4 & 18.2 to the Standalone Financial Statement):

Nature of Borrowing Including Debt Securities Name of Lender Amount paid on or before Balance Sheet Date (Rs in crore) No. of days delay (Days)
Principal Interest Principal Interest
A) Term Loans/ Working Capital Loan from Banks / Financial Institution Jammu & Kashmir Bank 10.00 - 1,445 -
Yes Bank 402.36 - 939 -
SREI Equipment Finance Limited - 3.00 - 1,288
State Bank of India 37.93 - 145 -
B) Non Convertible Debenture Debenture Holders 82.27 132.89 152 499

ii) The Company has defaulted in repayment of following dues to the banks and debenture holders during the year, which were not paid as at the Balance Sheet date. (Refer Note No. 17.4 & 18.2 to the Standalone Financial Statement):

Nature of Borrowing Including Debt Securities Name of Lender Amount not paid on Due Date Rs In Crore No. of days unpaid (Days)
Principal Interest Principal Interest
A) i) Term Loans from Banks / Financial Institution Jammu & Kashmir Bank 61.24 44.87 1,482 1,552
Canara Bank 37.45 62.02 1,473 1,319
J C Flowers Asset Reconstruction Private Limited 1,612.57 507.27 1,060 761
A) ii) Working Capital Loan from Banks including Interest Canara Bank 376.83 - 1,647 -
ICICI Bank 22.61 - 473 -
B) Non Convertible Debentures Debenture holder 977.00 578.29 1,166 1,103

b) In our opinion, and according to the information and explanations given to us, the Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority. (Refer Note No. 17.7 to the Standalone Financial Statement.)

c) The Company has not taken any term loan during the year and there are no unutilised term loans at the beginning of the year and hence, reporting under clause 3(ix)(c) of the Order is not applicable to the Company.

d) According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the financial statements of the Company, we report that, prima facie, no funds raised on short-term basis have been used during the year for long-term purposes by the Company.

e) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.

f) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies.

(x) a) The Company has not raised money by way of initial public offer or further public offer (including debt instruments) and

hence reporting under clause 3(x)(a) of of the Order is not applicable to the Company. b) In our opinion, and according to the information and explanations given to us, the company has made private placement

of Equity Shares during the year and the requirements of section 42 of the Companies Act, 2013 have been complied. In our opinion and according to the explanations given to us the money raised by way of private placement of Equity Shares were applied for the purposes for which they were raised. Further as on March 31, 2023, funds amounting to Rs 300.40 crore are pending to be utilised.

(xi) a) According to the information and explanation given to us and on the based on our examination of the records of the

company, except for the matter referred to in the Basis for Disclaimer of Opinion section in the audit report, in respect of which we are unable to comment on potential implications for the reasons described therein, no fraud by the Company or fraud on the Company has been noticed or reported during the year.

b) During the year, no report under sub-section 12 of section 143 of the Companies Act, 2013 has been filed by cost auditor/Secretarial auditor or by us in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.

c) As represented to us by the management, there are no whistle blower complaints received by the Company during the year.

(xii) In our opinion, the Company is not a nidhi company. Hence, reporting under clause 3(xii) of the Order are not applicable to the Company.

(xiii) According to the information and explanation given to us and on the based on our examination of the records of the company, except for the matter referred to in the Basis for Disclaimer of Opinion section in the audit report in respect of which we are unable to comment for the reasons described therein, transactions entered into by the Company with the related parties are in compliance with sections 177 and 188 of the Act, where applicable and the details of related party transactions as required by the applicable accounting standards have been disclosed in the standalone financial statements.

(xiv) a) In our opinion, and according to the information and explanations given to us, the Company has an internal audit system

commensurate with the size and nature of its business.

b) We have considered the internal audit reports of the Company issued till date, for the period under audit.

(xv) According to the information and explanation given to us and based on our examination of the records of the Company, except for the matter referred to in the Basis for Disclaimer of Opinion section in the audit report, in respect of which we are unable to comment on any potential implications for the reasons described therein, the Company has not entered into any non-cash transaction with directors or persons connected with him as referred to in Section 192 of the Act.

(xvi) a) To the best of our knowledge and as explained, the Company is not required to be registered under section

45-IA of the Reserve Bank of India Act, 1934.

b) In our opinion, and according to the information and explanations provided to us and on the basis of our audit procedures, the Company has not conducted any Non-Banking Financial or Housing Finance activities during the year as per the Reserve bank of India Act 1934.

c) In our opinion, and according to the information and explanations provided to us, the Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India.

d) As represented by the management, the group does not have any registered core investment company (CIC) as part of the group as per the definition of group contained in Core Investment Companies (Reserved Bank) Directions, 2016.

(xvii) I n our opinion, and according to the information and explanations provided to us, the Company has incurred cash losses of Rs 822.49 Crore in the current financial year and Rs 413.81 Crore in the immediately preceding financial year. Unquantified impact in the Basis of Disclaimer of Opinion section in audit report has not been taken into consideration for the purpose of making comments in respect of this clause.

(xviii) There has been no resignation of the statutory auditors during the year. Therefore, reporting under clause 3(xviii) of the Order are not applicable to the Company.

(xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions above, nothing has come to our attention, which indicates and causes us to believe that material uncertainty exists as on the date of the audit report, that the Company is not capable of meeting all its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date.

We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(Also refer the paragraph 1 of Emphasis of matter section of our main Report and Note No. 44 to the standalone financial statements).

(xx) According to the information and explanations given to us and on the basis of our audit procedures, The Corporate Social Responsibility (CSR) contribution under section 135 of the Act is not applicable to the Company. Therefore, reporting under clause 3(xx) (a) & (b) of the Order are not applicable to the Company. (Refer Note No. 36 to the Standalone Financial Statement).

Annexure B to Auditors Report

Annexure B to the Independent Auditors Report on the standalone financial statements of Reliance Infrastructure Limited for year ended March 31, 2023

Report on the internal financial controls with reference to the aforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013

We were engaged to audit the internal financial controls with reference to the standalone financial statements of Reliance Infrastructure Limited (hereinafter referred to as "the Company") as of March 31, 2023, in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management are responsible for establishing and maintaining internal financial controls based on the internal control with reference to the standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Controls over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (hereinafter referred to as "the Act").

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit conducted in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India.

Because of the matter described in the Disclaimer of Opinion section below, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on internal financial controls with reference to the standalone financial statements of the Company.

Meaning of Internal Financial controls with Reference to Standalone Financial Statements

A companys internal financial controls with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial controls with reference to standalone financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect

the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the standalone financial statements.

Disclaimer of Opinion

As at March 31, 2023, the Company has investments in and amounts recoverable from a party aggregating to Rs 6,505.29 Crore (net of provision of Rs 3,972.17 Crore) as also corporate guarantees aggregating to Rs 1,775 Crore given by the Company in favour of the aforesaid party towards borrowings of the aforesaid party from various companies including certain related parties of the Company.

Further, the Company provided Corporate Guarantees of Rs 4,895.87 Crore in favour of certain parties towards their borrowings.

We were unable to evaluate about the relationship, recoverability and possible obligation towards the Corporate Guarantees given. Accordingly, we are unable to determine the consequential implications arising therefrom in the standalone financial statements of the Company.

Because of the above reasons, we are unable to obtain sufficient appropriate audit evidence to provide a basis for our opinion whether the Company had adequate internal financial controls with reference to standalone financial statements and whether such internal financial controls were operating effectively as at March 31, 2023.

We have considered the disclaimer reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company, and the disclaimer has affected our opinion on the standalone financial statements of the Company and we have issued a Disclaimer of Opinion on the standalone financial statements of the Company.