Reliance Communications Ltd Directors Report.

To the Members of Reliance Communications Limited

Report on the Audit of the Standalone Financial Statements

Corporate Insolvency Proceedings as per Insolvency and Bankruptcy Code, 2016 (IBC)

The Honble National Company Law Tribunal, Mumbai Bench ("NCLT") admitted an insolvency and bankruptcy petition filed by an operational creditor against Reliance Communications Limited ("the Company") and appointed Resolution Professional (RP) who has been vested with management of affairs and powers of the Board of Directors with direction to initiate appropriate action contemplated with extant provisions of the Insolvency and Bankruptcy Code, 2016 and other related rules.

Qualified Opinion

We have audited the standalone financial statements of Reliance Communications Limited ("the Company"), which comprise the balance sheet as at March 31, 2022, and the statement of Profit and Loss, and the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information ("the standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Companies Act 2013 ("the Act") read with the Companies ( Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, its changes in equity, and its loss (including other comprehensive loss) and its cash flows for the year ended on that date.

Basis for Qualified Opinion

a) We draw attention to Note no. 2.14, 2.31 and 2.39.2 (b) of the standalone financial statements regarding, "Assets Held for Sale (AHS)" regarding Wireless Spectrum, Towers, Fibre and Media Convergence Nodes (MCNs) along with liabilities continues to be classified as held for sale at the value ascertained at the end of March 31, 2018, for the reasons referred to in the aforesaid note and impact of the non payment of spectrum instalments due to Department of Telecommunication (DOT). Non determination of fair value of Asset Held for Sale as on the reporting date is not in compliance with Ind AS 105 "Non-Current Assets Held for Sale and Discontinued Operations". Accordingly, we are unable to comment on the consequential impact, if any, on the carrying amount of Assets Held for Sale and on the reported losses for the year ended March 31, 2022.

b) We draw attention to Note no. 2.31 and 2.48 of the standalone financial statements regarding admission of the Company and its four subsidiaries into Corporate Insolvency Resolution Process ("CIRP"), and pending determination of obligations and liabilities with regard to various claims submitted by the Operational/financial/other creditors and employees including interest payable on loans during CIRP We are unable to comment the accounting impact thereof pending reconciliation and determination of final obligation.

The Company accordingly, has not provided interest on borrowings amounting to Rs. 4,491 crore for the year ended March 31, 2022 and Rs. 15,090 crore up to March 31, 2021 calculated based on the basic rate of interest as per the terms of the loan. The Company further has not provided net foreign exchange loss amounting to Rs. 541 crore for the year ended March 31, 2022 and net foreign exchange loss of Rs. 1,601 crore up to the previous financial year. Had such interest and foreign exchange variation as mentioned above been provided, the reported loss for the year ended March 31, 2022 would have been higher by Rs. 5,032 crore and Net worth of the Company would have been lower by Rs. 21,723 crore and Rs. 16,691 crore as on March 31, 2022 and March 31, 2021 respectively. Non provision of interest and non-recognition of foreign exchange variation is not in compliance with Ind AS 23 "Borrowing Costs" and Ind AS 21 "The Effects of Changes in Foreign Exchange Rates".

c) We draw attention to Note no. 2.31 of the standalone financial statements, regarding pending comprehensive review of carrying amount of all assets (including investments and balances lying under Goods & Service Tax) & liabilities and non-provision for impairment of carrying value of the assets and write back of liabilities if any, pending implementation of the approved resolution plan. In the absence of comprehensive review as mentioned above for the carrying value of all the assets and liabilities, we are unable to comment that whether any adjustment is required in the carrying amount of such assets and liabilities and consequential impact, if any, on the reported losses for the year ended March 31, 2022. Non determination of fair value of financial assets & liabilities and impairment in carrying amount for other assets and liabilities are not in compliance with Ind AS 109 "Financial Instruments", Ind AS 36 "Impairment of Assets" and Ind AS 37 "Provisions, Contingent Liabilities & Contingent Assets".

d) We draw attention to Note no. 2.53 of the standalone financial statements regarding non adoption of Ind AS 116 "Leases" effective from April 01,2019 and the consequent impact thereof. The aforesaid accounting treatment is not in accordance with the relevant Ind AS 116.

e) We draw attention to Note no 2.31 of the standalone financial statements, regarding continuous losses incurred by the Company, current liabilities exceeding its current assets, default in repayment of borrowings and default in payment of regulatory and statutory dues and pending application of renewal of telecom licenses. This situation indicates that a material uncertainty exists that may cast significant doubt on the Companys ability to continue as a going concern. The accounts however have been prepared by the management on a going concern basis for the reason stated in the aforesaid note. We however are unable to obtain sufficient and appropriate audit evidence regarding managements use of the going concern basis of accounting in the preparation of the standalone financial statements, in view of ongoing CIRP and matters pending before regulatory authorities, the outcome of which cannot be presently ascertained.

The Networth of the Company excludes the effect of qualification under (a), (c), (d) and (e) above which are non-quantifiable as

referred therein.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the standalone financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for qualified opinion.

Emphasis of Matter Paragraph

We draw attention to Note no. 2.39.2 (a) of the standalone financial statements, regarding provision of license fee and spectrum usage charges based on management estimates pending special audit from Department of Telecommunications,

pursuant to the judgment of Honble Supreme Court of India, vide its order dated October 24, 2019 and status of payment thereof which may undergo revision based on any development in the said matter.

Our opinion is not modified in respect of above matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matters stated in our Basis for Qualified opinion paragraph we have determined the matters described below to be the key audit matters to be communicated in our report.

For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditors responsibilities for the audit of the standalone financial statements section of our report, including in relation to these

matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

Key Audit Matter How our audit addressed the Key Audit Matter
1. Revenue Recognition
The accuracy and completeness of revenue amounts recorded is an inherent industry risk. The revenue is categorised broadly into service and wholesale revenue. Service revenue mainly consists of income from fixed line, broadband, rentals and installations. Wholesale revenue comprises revenue from interconnection, external administration, capacity sales and from resellers. Our audit procedures included, amongst others, the following:
We considered revenue recognition as a key audit matter as the amount involved is material to the financial statements and due to the complexity of the systems and processes used to record revenue. The accounting policy and relevant disclosures relating to revenue are set out in notes 1.12 and 2.24 respectively, to the standalone financial statements. • Testing the end-to-end reconciliation from business support systems to billing and to the general ledger;
• Performing tests on the accuracy of customer bill generation process on a sample basis and testing of a sample of the credits and discounts applied to such customer bills;
• Performed substantive analytical procedures over the significant revenue streams;
• Involving verification of controls surrounding revenue invoicing;
• Assessed transactions taking place before and after year-end to ensure that revenue was recognised in the appropriate period;
• Performing specific procedures to test the accuracy and completeness of adjustments, and performing procedures to ensure that the revenue recognition criteria adopted by the Company is in line with the companys accounting policies.

2. Valuation and disclosure of accrual estimates for legal claims, litigations, regulatory matters and contingencies and deposits against the same legal matters including provision of license fee and spectrum usage charges, pursuant to the judgment of Honble Supreme Court of India, vide its order dated October 24, 2019

Key Audit Matter How our audit addressed the Key Audit Matter
The Company is involved as a party in legal proceedings, including regulatory and other governmental proceedings. The Company has also deposited substantial amounts with regulatory authorities against the demands in dispute, which has been classified as deposit. This area is significant to our audit, since the accounting and disclosure for (contingent) legal liabilities is complex and judgmental (due to the difficulty in predicting the outcome of the matter and estimating the potential impact if the outcome is unfavourable), and the amounts Involved are, or can be, material to the financial statements as a whole. Further reference is made to Note no. 2.36 Contingent liabilities and note no. 2.39.2 (a) on provision of Licence fees and Spectrum Usage Charges. Our audit procedures included, amongst others, testing the effectiveness of the Companys internal controls around the identification and evaluation of claims/provisions, proceedings and investigations at different levels in the Company, and the recording and continuous re-assessment of the related (contingent) liabilities and provisions and disclosures. We inquired with both internal legal staff including Resolution Professional (RP) as well as with the Companys financial staff in respect of ongoing investigations or claims, proceedings and investigations, inspected relevant correspondence, inspected the minutes of the meetings of the Audit Committee and requested a confirmation from the groups in-house responsible officials and RP. Also the Company has obtained legal opinions in past against these disputes. For claims settled during the year, we vouched the payments, as appropriate, and read the related orders to verify whether the settlements were properly accounted for.
We also assessed the adequacy of the Companys disclosure around legal claims, litigations, regulatory matters and contingencies as included in Note no. 2.36, Contingent liabilities.
We consider managements conclusion on the predicted outcome and estimation of potential impact reasonable and we assessed that the disclosures in Note no. 2.36, Contingent liabilities are reasonable.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Boards Report including Annexures to Boards Report but does not include the standalone financial statements and our auditors report thereon. Our opinion on the standalone financial statements do not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. When we read the report containing other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibility of Management and Those Charged with Governance for the Standalone Financial Statements

The standalone financial statements, which is the responsibility of the Companys Management is relied upon by the Resolution Professional based on the assistance provided by the Directors and taken on record by the Resolution Professional as fully described in Note no. 2.58 of standalone financial statements. The Companys Management is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance (changes in equity) and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the accounting Standards 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 statement 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, Directors / Resolution Professional (RP) is 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 Director /RP either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Director /RP are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

(a) Pursuant to applications filed by Ericsson India Pvt. Ltd. before the National Company Law Tribunal, Mumbai Bench ("NCLT") in terms of Section 9 of the Insolvency and Bankruptcy Code, 2016 read with the rules and regulations framed thereunder ("Code"), the NCLT had admitted the applications and ordered the commencement of corporate insolvency resolution process ("CIRP") of Reliance Communications Limited ("the Company") and two of its subsidiaries namely Reliance Infratel Limited (RITL) and Reliance Telecom Limited (RTL) (collectively, the "Corporate Debtors") vide its orders dated May 1 5,

2018. The committee of creditors ("CoC") of the Corporate Debtors, at the meetings of the CoC held on May 30,

2019, in terms of Section 22 (2) of the Code, resolved with the requisite voting share, to replace the Interim Resolution Professionals with the Resolution Professional ("RP") for the Corporate Debtors, which has been confirmed by the NCLT in its orders dated June 21, 2019 (published on the website of the NCLT on June 28, 201 9).

(b) During an earlier year, Reliance Communication Infrastructure Limited (RCIL) a wholly owned subsidiary of the Company, had been admitted by NCLT for resolution process under the Code and Mr. Anish Nanavaty was appointed as the Resolution Professional by the NCLT.

(c) Further, during the previous year Reliance Tech Services Limited (RTSL) a wholly owned subsidiary of the Company, has been admitted by NCLT on August 4, 2020 for resolution process under the Code and Mr. Anjan Bhattacharya has been appointed as the Resolution Professional by the NCLT.

(d) The standalone financial statements of the Company shall be signed by the Chairperson or Managing Director or Whole Time Director or in absence of all of them, it should be signed by any Director of the Company who is duly authorized by the Board of Directors to sign the standalone financial statements. As mentioned in Note No 2.58 of the standalone financial statements, in view of the ongoing Corporate Insolvency Resolution Process, the powers of the board of directors stand suspended and are exercised by the Resolution Professional.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

As required by Section 143(3) of the Act, we report that:

(a) Except for the matters stated in Basis for Qualified Opinion paragraph above, we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) Except for the possible effects of the matters described in the Basis of Qualified opinion paragraph above, in our opinion, 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 Balance Sheet, the Statement of Profit and Loss, the Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with Rule 7 of the Companies (Indian Accounting Standards) Rules, 2015 as amended, except requirement of Ind AS 1 05 "NonCurrent Assets Held for Sale and Discontinued Operations", Ind AS 23 "Borrowing Cost" , Ind AS 21 "Effects of Changes in foreign exchanges", Ind AS 36 "Impairment of Assets", Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets", Ind AS 109 "Financial Instruments" and Ind AS 116 "Leases" with regard to matters described in the Basis of Qualified Opinion paragraph above.

(e) The matters described under the basis for qualified opinion paragraph above and Qualified Opinion paragraph of "Annexure B" to this report in our opinion, may have an adverse effect on functioning of the Company and on the amounts disclosed in standalone financial statements of the Company.

(f) On the basis of the written representations received from two directors of the Company as on March 31, 2022 taken on record by the Board of Directors and based on legal opinion obtained by the Company with regard to nonpayment of debenture holders due, these two directors are not disqualified as on March 31,2022 from being appointed as a director in terms of Section 164 (2) of the Act. Further as mentioned in Note no. 2.52 of the standalone financial statements, other directors of the Company have resigned from the position of director, however their resignation has not been accepted for the reason stated in the said note and Company has not received declarations from these directors in this regard, accordingly we are unable to comment whether these directors are disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164(2) of the Act.

(g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.

(h) 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".

(i) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanation given to us, the managerial remuneration has been paid / provided in accordance with the requisite approval by shareholders as mandated by the provisions of section 197 read with schedule V of the Act.

The Ministry of Corporate Affairs has not prescribed other details under section 197(16) which are required to be commented upon by us.

(j) 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, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 2.36 to the standalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and

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) The management has represented to us that, to the

best of its knowledge and belief 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 person or entity, 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) The management has represented to us that, to the best of its knowledge and belief no funds have been received by the Company from any person or entity, 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; and

(c) Based on our audit procedure that has been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.

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

For Pathak H. D. & Associates LLP
Chartered Accountants
Firms Registration No: 107783W/W100593
Jigar T. Shah
Partner
Membership No: 161851
UDIN: 22161851ALPAUV6734
Date : May 28, 2022
Place: Mumbai

‘Annexure A to the Independent Auditors Report - March 31,

With reference to the Annexure A referred to in the Independent Auditors Report to the Members of Reliance Communications Limited (the Company) on the standalone financial statements for the year ended March 31, 2022, we report the following:

(i) (a) (A) The Company has maintained proper records

showing full particulars, including quantitative details and situation of property, plant and equipment.

(B) The Company is maintaining proper records showing full particulars of Intangible Assets.

(b) We are informed that the Company physically verifies its assets over a three year period. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this policy,

the Company has physically verified some of the Property, Plant and Equipment on sample basis which is not under electronic surveillance and certain assets which are under electronic surveillance and no material discrepancies were identified on such physical verification.

(c) According to the information and explanations given to us and records examined by us, the title deeds of all immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in Note 2.50.1 of the standalone financial statements, are held in the name of the Company, except for the following where the Company is in the process of transferring the title deeds in its name as these were acquired through various schemes of arrangement entered in the earlier years

Sr. Description of No. Property Gross carrying value (Rs in crore) Title deed Held in name of Whether title deeds held in name of promoter, director or relative of promoter/ director Property held since date (Financial Year) Reason for not being held in the name of the Company
1 Leasehold Land 12 Reliance Communications Infrastructure Limited & Reliance Telecom Limited Subsidiary Company April 01,2006 Transfer under court approved scheme
2 Freehold Land 133 Reliance Communications Infrastructure Limited & Reliance Telecom Limited Subsidiary Company April 01,2006
3 Buildings 245 Reliance Communications Infrastructure Limited & Reliance Telecom Limited Subsidiary Company April 01,2006

(d) Based on the records examined by us and information and explanation given to us by the Company, the Company during the year has not revalued its Property, Plant and Equipment or intangible assets, hence, the requirements of the said clause i(d) of paragraph 3 of the Order is not applicable to the Company.

(e) According to the information and explanation 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 (45 of 1988) and rules made thereunder.

(ii) (a) According to the information and explanation given

to us and records examined by us, the management of the Company has conducted physical verification of its inventories at regular intervals and in our opinion the coverage and procedure of such verification by the management is appropriate. As explained to us and on the basis of records examined by us, the value of discrepancies noticed on physical verification by the management did not exceed 10% or more in aggregate of each class of inventory.

(b) Based on the records examined by us and information and explanation and representation given to us, the Company had been sanctioned working capital limits from banks in the earlier years, on the basis of security of current assets. As there was no requirement to file quarterly returns, the Company has not filed the same with such banks. (Refer note 2.19.5).

(iii) (a) According to information and explanations given to us and books of accounts and records examined by us, during the year the Company has not given any loans or advances and guarantees or security to subsidiaries, joint ventures, associates and others. Hence, the reporting requirements under clause (iii)(a)(A) and (B) of paragraph 3 of the Order is not applicable.

(b) In our opinion and according to information and explanations given us and on the basis of our audit procedures, the Company has not made any investments or provided any guarantees or given security and has not granted loans or any advances in the nature of loans during the year. Accordingly the reporting requirements under clause (iii)(b) of paragraph 3 of the Order is not applicable.

(c) According to the information and explanation and records examined by us in respect of the loans and advances in nature of loans, the schedule of repayment of principal and payment of interest has not been stipulated or are not available for our verification, hence we are unable to comment whether the repayment or receipts are regular.

(d) According to the information and explanation and records examined by us in respect of the loans and advances in nature of loans, the schedule of repayment of interest has not been stipulated or are not available for our verification, hence we are unable to comment whether total amount is overdue for more than ninety days. 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.

(e) According to information and explanations given to us and books of accounts and records examined by us, the Company has not renewed the loans granted to various parties as on March 31, 2019.

(f) Based on our verification of records of the Company and information and explanation given to us, the Company had granted loans or advance in nature of loans in earlier years, either repayable on demand or without specifying any terms or period of repayment are as follows:

(Rs in crore)

Particulars All Parties Promoters Related Parties
Aggregate amount of loans/ advances in nature of loans
- Repayable on
demand (A)
- Agreement does not specify any terms or period of repayment (B) 6,557 - 6,557
Total (A+B) 6,557 - 6,557
Percentage of loans/ advances in nature of loans to the total loans 100% - 100%

(iv) As per information and explanation provided to us and on the basis of verification of records of the Company, the Company during the year has not granted any loan, made investment and provided guarantees and securities to the parties covered under section 185 and section 186 of the Act. Accordingly, clause (iv) of paragraph 3 of the Order is not applicable to the Company.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public in accordance with relevant provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, clause (v) of paragraph 3 of the Order is not applicable to the Company. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under subsection 1 of Section 148 of the Act, in respect of telecommunication activities and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, we observed that there are delays in amounts deposited with appropriate authorities for amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, income tax, goods and services tax, service tax, duty of customs, sales tax, value added tax, entry tax, employees state insurance, cess and other material statutory dues. According to the information and explanations given to us, undisputed amounts payable in respect of provident Fund, income tax, goods and services tax, sales tax, value added tax, employees state insurance and other material statutory dues which were in arrears as at March 31, 2022 for a period of more than six months from the date they became payable are as under:

Name of Statute Nature of Dues Amount (Rs in crore) Period to which the amount relates Due Date Date of Payment
Maharashtra Value Added Tax Act, 2002 Value Added Tax Payable 0.36 FY2017-18 Various Dates Unpaid
Delhi Value Added Tax Act, 2004 Value Added Tax Payable 0.04 FY2017-18 Various Dates Unpaid
Karnataka Value Added Tax Act, 2003 Value Added Tax Payable 0.05 FY2017-18 Various Dates Unpaid
Orissa Value Added Tax Act, 2004 Value Added Tax Payable 0.001 FY2017-18 Various Dates Unpaid
Gujarat Value Added Tax Act,2003 Value Added Tax Payable 0.41 FY2017-18 Various Dates Unpaid
Gujarat CST Act,1956 Central Sales Tax Payable 0.03 FY2017-18 Various Dates Unpaid
Karnataka CST Act,1956 Central Sales Tax Payable 0.07 FY2017-18 Various Dates Unpaid
Andhra Pradesh CST Act,1956 Central Sales Tax Payable 0.36 FY2017-18 Various Dates Unpaid
Punjab CST Act,1956 Central Sales Tax Payable 0.42 FY2017-18 Various Dates Unpaid
Rajasthan CST Act,1956 Central Sales Tax Payable 0.002 FY2017-18 Various Dates Unpaid
Madhya Pradesh CST Act,1956 Central Sales Tax Payable 0.003 FY2017-18 Various Dates Unpaid
Jharkhand CST Act,1956 Central Sales Tax Payable 0.004 FY2017-18 Various Dates Unpaid
Chhattisgarh CST Act,1956 Central Sales Tax Payable 0.01 FY2017-18 Various Dates Unpaid
Himachal Pradesh CST Act,1956 Central Sales Tax Payable 0.005 FY2017-18 Various Dates Unpaid
Maharashtra Value Added Tax Act, 2002 Works Contract Tax Payable 0.26 FY2017-18 Various Dates Unpaid
Rajasthan Value Added Tax Act, 2003 Works Contract Tax Payable 0.03 FY 2017-18 Various Dates Unpaid
Uttarakhand Value Added Tax Act,2005 Works Contract Tax Payable 0.006 FY 2017-18 Various Dates Unpaid
Andhra Pradesh Value Added Tax Act,2005 Works Contract Tax Payable 0.01 FY 2017-18 Various Dates Unpaid
Haryana Value Added Tax Act,2003 Works Contract Tax Payable 0.007 FY 2017-18 Various Dates Unpaid
Himachal Pradesh Value Added Tax Act,2005 Works Contract Tax Payable 0.008 FY 2017-18 Various Dates Unpaid
Punjab Value Added Tax Act,2005 Works Contract Tax Payable 0.01 FY 2017-18 Various Dates Unpaid
Kerala Value Added Tax Act,2003 Works Contract Tax Payable 0.009 FY 2017-18 Various Dates Unpaid
Chhattisgarh Value Added Tax Act,2003 Works Contract Tax Payable 0.0010 FY 2017-18 Various Dates Unpaid
Orissa Value Added Tax Act,2004 Works Contract Tax Payable 0.01 FY 2017-18 Various Dates Unpaid
Madhya Pradesh Value Added Tax Act,2003 Works Contract Tax Payable 0.01 FY 2017-18 Various Dates Unpaid
Income Tax Act, 1961 Tax Deducted at source 13.28 FY 2017-18 & F.Y 2018-19 Various Dates Unpaid
Professional Tax Act - Various States Profession Tax 0.56 FY 2018-19 onwards Various Dates Unpaid

 

1Rs 22,295, 2 Rs 39,091,344,197, 4 Rs 37,898, 5 Rs 6,306, 6 Rs 5,401, 7 Rs 6,591, 8 Rs 1,459, 9 Rs 49,992 and 10 Rs 40,722.

(b) Details of statutory dues referred to in clause vii (a) above, which have not been deposited as on March 31, 2022 on account of disputes are given below:

Name of Statue Nature of Dues Amount* (Rs in crore) Period Forum
Central Sales Tax, Bihar Central Sales Tax 0.04 2005-06 Appellate Tribunal
0.43 2011-12 Asst. Commissioner of Commercial Taxes
Central Sales Tax, Chhattisgarh Central Sales Tax 0.001 2011-12 Dy. Commissioner (Appeals)
Central Sales Tax, Madhya Pradesh Central Sales Tax 0.03 2011-12 to 2013-14 Dy. Commissioner (Appeals)
Central Sales Tax, Maharashtra Central Sales Tax 0.27 2011-12 Dy. Commissioner of Commercial Taxes
0.35 2013-14 Dy. Commissioner of Commercial Taxes
Central Sales Tax, Orissa Central Sales Tax 0.002 2009-10 Addl. Commissioner (Appeals)
0.02 Oct 06 to March 09 Sales Tax Appellate Tribunal
Central Sales Tax, Uttar Pradesh Central Sales Tax 0.07 2006-07 High Court
0.08 2010-11 Additional Commissioner (Appeals)
0.50 2013-14 Dy. Commissioner of Commercial Taxes
1.25 2014-15 Dy. Commissioner of Commercial Taxes
Central Sales Tax, Uttarakhand Central Sales Tax 0.12 2009-10 to 2010-11 Dy. Commissioner of Commercial Taxes
0.14 2012-13 Jt. Commissioner of Commercial Taxes (Appeals)
Central Sales Tax, West Bengal Central Sales Tax 0.34 2007-08 Tax Revision Board Jt. Commissioner
0.36 2014-15 Commercial Taxes
Central Sales Tax, Punjab Central Sales Tax 0.05 2010-11 Dy. Excise and Taxation Commissioner (Appeals)
Central Sales Tax, Kerala Central Sales Tax 0.003 2017-18 Sales Tax Officer
Entry Tax, Bihar Entry Tax 0.38 2007-08 to 2008-09 Commercial Tax Appellate Tribunal
0.25 2011-12 Asst. Commissioner of Commercial Taxes
Entry Tax, Chhattisgarh Entry Tax 0.63 2006-07 to 2007-08 Commercial Tax Tribunal
0.25 2010-11 to 2011-12 Dy. Commissioner (Appeals)
Entry Tax, Himachal Pradesh Entry Tax 1.01 2010-11 to 2013-14 High Court
Entry Tax, Madhya Pradesh Entry Tax 0.48 2002-03 to 2003-04 Asst. Commissioner of Commercial Taxes
1.58 2005-06 to 2008-09 & 2010-11 MP Taxation Board
0.21 2011-12 Dy. Commissioner (Appeals)
Entry Tax, Orissa Entry Tax 0.08 2009-10 Addl. Commissioner (Appeals)
0.05 Oct 06-March 09 Sales Tax Appellate Tribunal
Entry Tax, Uttar Pradesh Entry Tax 0.13 2003-04 Commercial Tax Tribunal
0.02 2013-14 Dy. Commissioner of Commercial Taxes
0.02 2014-15 Dy. Commissioner of Commercial Taxes
Entry Tax, West Bengal Entry Tax 0.17 2014-15 Jt. Commissioner Commercial Taxes
0.18 2015-16 Commercial Tax officer
Entry Tax, Rajasthan Entry Tax 1.70 2013-14 to 2014-15 Appellate Authority
14.73 2005-06, 2007-08 to 2012-13 Supreme Court
Entry Tax, Punjab Entry Tax 0.01 Oct 2012 to Dec 2012 High Court
VAT, Bihar VAT 0.24 2005-06 Commercial Tax Tribunal
8.33 2011-12 High Court
VAT, Haryana VAT 1.15 2011-12 Commercial Tax Tribunal
VAT, Kerala VAT 0.01 2006-07 Deputy Commissioner (Appeals)
2.79 2010-11 High Court
0.02 2011-12 Deputy Commissioner (Appeals)
0.32 2012-13 High Court
2.80 2013-14 High Court
2.15 2014-15 High Court
VAT, Punjab VAT 0.05 2010-11 Deputy Commissioner (Appeals)
VAT, Uttarakhand VAT 0.78 2009-10 to 2010-11 Dy. Commissioner of Commercial Taxes
0.03 2007-08 Jt. Commissioner (Appeals)
0.41 2012-13 Jt. Commissioner of Commercial Taxes (Appeals)
VAT, West Bengal VAT 4.17 2005-06, 2007-08 to 2008-09 Tax Revision Board
0.03 2012-13 Jt. Commissioner of Commercial Taxes (Appeals)
0.02 2014-15 Jt. Commissioner Commercial Taxes
0.35 2008-09 Dy. Commissioner of Sales Tax
0.14 2015-16 Jt. Commissioner
VAT/Sales Tax, Uttar Pradesh VAT/Sales Tax 0.24 2003-04 UP Trade Tax Tribunal
0.93 2004-05 High Court
0.52 2005-06, Jan 08 to March 08 Dy. Commissioner of Commercial Taxes
0.20 2010-11 Addl. Commissioner (Appeals)
2.38 2013-14 Dy. Commissioner of Commercial Taxes
1.83 2014-15 Dy. Commissioner of Commercial Taxes
VAT, Chhattisgarh VAT 0.02 2011-12 Dy. Commissioner (Appeals)
Finance Act, 1994 CENVAT Credit 2.42 01.4.2004 to 31.3.2015 Commissioner, CGST & Central Excise
3.21 01.4.2010 to 31.03.2014 Commissioner, CGST & Central Excise
1.32 2014-15 Commissioner, CGST & Central Excise
Finance Act, 1994 Service Tax 497.28 Oct 2011 to May 2013 Commissioner CGST & Central Excise Commissionerate, Belapur
81.48 July 2012 to June 2017
8,874.14 April 2016 to June 2017
1,020.31 April 2016 to June 2017
Income Tax Act, 1961 Income Tax 292.82 2009-10 & 2010-11 Income Tax Appellate Tribunal
Income Tax Act, 1961 Income Tax 0.44 2009-10, 2010-11 & 2011-12 Commissioner of Income Tax (Appeals)
Income Tax Act, 1961 Income Tax 0.67 2010-11 & 2011-12 High Court
Income Tax Act, 1961 Income Tax 90.00 Various years Supreme Court / High Court
Income Tax Act, 1961 Income Tax 181.48 2014-15 Dy. Commissioner of Income Tax
Income Tax Act, 1961 Income Tax 30.11 2016-17 Dy. Commissioner of Income Tax
Income Tax Act, 1961 Income Tax 12.80 2018-19 Commissioner of Income Tax (Appeals)
Income Tax Act, 1961 Income Tax 128.33 2015-16 Commissioner of Income Tax (Appeals)

*Net of amounts paid/deposited under protest Rs 26,723, 2 Rs 49,382 and 3 Rs 26,256.

(viii) According to information and explanation given to us and representation given by the management, there were no transactions relating to previously unrecorded income that were surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

(ix) (a) In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of

loans or borrowings and interest thereon from banks & financial institutions, which were not paid as at Balance Sheet date. The lender wise details of principal and interest are as under:

Name of Lender Amount (Rs in crore) Period (No.of Days) Amount (Rs in crore) Period (No. of Days)
Principal Principal Interest Interest
I) Loan From Bank
Burlington Loan Management DAC 163 1572 - -
Shubh Holding Pte Ltd 2,460 1859 - -
Bank Of Baroda 1,837 1850 11 1829
Bank Of India 644 1827 9 1829
Bank Of Maharashtra 473 1779 - -
Canara Bank 622 1736 - -
Central Bank Of India 258 1827 3 1829
Cooperation Bank (Merged with Union Bank) 583 1849 8 1829
Dena Bank(Merged with Bank Of Baroda) 250 1514 - -
Deutsche Bank 530 1572 1 1747
China Development Bank 2,236 1859 128 1861
Industrial And Commercial Bank Of China 1,194 1859 33 1861
Export Bank Of China 2,433 1859 47 1861
IDBI Bank 721 1831 9 1829
Indian Overseas Bank 120 1827 1 1829
RCOM Bond 1,955 - - -
Oriental Bank Of Commerce(Merged with Punjab National Bank) 189 1827 2 1829
Punjab National Bank 623 1828 - -
Standard Chartered Bank 1,072 1816 - -
State Bank Of India 2,228 1827 21 1829
Syndicate Bank(Merged With Canara Bank) 705 1850 5 1829
SC Lowy Financials(HK) Ltd 2,175 1494 - -
UCO Bank 681 1827 9 1829
Union Bank Of India 742 1827 3 1829
United Bank of India(Merged with Punjab National 424 1827 2 1829
Bank) Vijaya Bank(Merged with Bank Of Baroda) 16 1416

-

-

II) Debenture
Life Insurance Corporation Of India 3,750 1514 - -
III) Other Loan
Industrial Finance Corporation of India Limited 200 1843 4 1845
India Infrastructure Finance Corporation Limited 248 1644 4 1860
Asset Care and Reconstruction Enterprises Limited 492 1838 - -
Deep Industrial Finance Limited 260 851 - -
Pearl Housing Finance Limited 260 851 - -
Shriyam Auto Fin Ltd 260 851 - -
Traitrya Construction Finance Limited 260 851 - -
Vishvakarma equipment finance Limited 142 851 - -
Neptune Steel Strips Limited 68 822 - -
Reliance Capital Limited 1,000 1096 3 1097
Other Lenders 7,660 Various Dates 68 Various Dates
Total 39,934 371

Annexure B to the Independent Auditors Report - March 31, 2022

Apart from outstanding of Interest mentioned above, the Company has not provided interest expense of Rs 4,491 crore for the year and Rs 19,581 crore upto March 31, 2022 in respect of Loan taken from banks, financial instutions and other lenders and therefore it has not been disclosed above.

The Company has not obtained any loans from Government.

(b) According to the information and explanations given to us and on the basis of the audit procedures and representation received from management, we report that the Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority. However the Company has received show cause notice from certain banks as to why the Company should not be declared wilful defaulter (refer note 2.55).

(c) In our opinion and information and explanation given to us and based on the examination of records of the Company, the Company has not raised term loans from any lender during the year and hence reporting under clause ix(c) of paragraph 3 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 standalone financial statements of the Company, we report that no funds raised on short term basis have been used for longterm purposes.

(e) According to the information and explanations given to us and on an overall examination of the standalone financial statements of the Company, we report that during the year 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) In our opinion and according to the information and explanations given to us, 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) In our opinion, and according to information and

explanations given to us, the Company has not raised money by way of initial public offer or further public offer (including debt instruments) and hence the provision of clause x(a) of paragraph 3 of the Order is not applicable to the Company.

(b) In our opinion and according to the information and explanation given to us, the Company during the year has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause x(b) of paragraph 3 of the Order is not applicable to the Company.

(xi) (a) Based on the audit procedures performed by us and

according to the information and explanations given to us, no material fraud by the Company or on the Company has been noticed or reported during the year.

Also refer Note no. 2.31 and 2.54 of the standalone financial statements.

(b) According to the information and explanations given to us, no report under sub-section (12) of section 143 of the Act has been filed by the auditors in form ADT-4 as prescribed under rule 13 of the Companies (Audit and Auditors) Rules, 2014 with the Central Government.

(c) As represented to us by the Management, no whistle blower complaints have been received by the Company during the year.

(xii) As the Company is not a Nidhi company. Accordingly, clause (xii) of paragraph 3 of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable. The details of such related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

(xiv) (a) In our opinion and based on our examination, 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 explanations given to us and based on our examination of the records, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, clause (xv) of paragraph 3 of the Order is not applicable to the Company.

(xvi) (a) The Company is not required to be registered under

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

(b) On the basis of examination of records and according to the information and explanation given to us by the Company, the Company has not conducted any Non-Banking Financial or Housing Finance activities hence the reporting requirements under clause xvi(b) of paragraph 3 of the Order is not applicable.

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

(d) As represented by the management, the Group does not have more than one Core Investment Company as part of the Group as per the definition of Group contained in the Core Investment Companies (Reserve Bank) Directions, 2016.

(xvii) Based on the examination of records, the Company has incurred cash losses of Rs 9,927crore in the financial year 2021-22 and Rs 8,698 crore in immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors during the year.

(xix) As referred to in Basis for Qualified Opinion paragraph (e) in our main audit report and as disclosed in note 2.31 and 2.50.8 to the standalone financial statements which also includes 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/ Resolution Professional and management plans and based on our examination of the evidence supporting the assumptions, there exists a material uncertainty that may cast a significant doubt on the Companys ability to continue as a going concern as on the date of audit report and the capability of the Company for meeting 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 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.

(xx) Based on the examination of records of the Company and information and explanations given to us, due to losses incurred, the conditions and requirements of section 135 of the act is not applicable to the Company hence, clause xx(a) and xx(b) of paragraph 3 of the Order is not applicable.

For Pathak H. D. & Associates LLP
Chartered Accountants
Firms Registration No: 107783W/W100593
Jigar T. Shah
Partner
Membership No: 161851
UDIN: 22161851ALPAUV6734
Date : May 28, 2022
Place: Mumbai

Report on the Internal Financial Controls under Clause

(i) of Sub-section 3 of Section 143 of the Act

We have audited the internal financial controls with reference to standalone financial statements of Reliance Communications Limited ("the Company") as of March 31, 2022 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 is responsible for establishing and maintaining internal financial controls based on the internal control with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial 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 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. We conducted our audit in accordance with 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 and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the Companys internal financial controls system with reference to standalone financial statements.

Meaning of Internal Financial Controls with reference to standalone financial statements

A companys internal financial control 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 control with reference to standalone financial statements includes 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 standalone 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.

Inherent Limitations of Internal Financial Controls with reference to standalone financial statements

Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial control with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Basis for Qualified Opinion

According to the information and explanations given to us and based on our audit, the following material weaknesses has been identified in the operating effectiveness of the Companys internal financial controls with reference to standalone financial statements as at March 31, 2022:

i. The Companys internal process with regard to confirmation and reconciliation of Balances of trade receivable, trade payables & other liabilities and loan & advances which are not providing for adjustments, which are required to be made to the carrying values of such assets and liabilities. (Read with Note no. 2.31).

ii. The Companys internal control process in respect of closure of outstanding entries in Bank Reconciliation Statements which are pending to be reconciled.

iii. In respect of delays in payment of certain statutory dues and filing of certain statutory returns during the year with the respective authorities.

iv. The Companys internal financial control with regard to the compliance with the applicable Indian Accounting

Standards and evaluation of carrying values of assets and liabilities and other matters, as fully explained in basis for qualified opinion paragraph of our main report, resulting in the Company not providing for adjustments, which are required to be made, to the standalone financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal financial control with reference to standalone financial statements, such that there is a reasonable possibility that a material misstatement of the Companys standalone financial statements will not be prevented or detected on a timely basis.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects / possible effects of the material weaknesses described above under Basis for Qualified Opinion paragraph on the achievement of the objectives of the control criteria, the Company has, in all material respects an adequate internal financial controls system with reference to standalone financial statements and such internal financial controls with reference to standalone financial statements were operating effectively as at March 31, 2022, based on the internal financial 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 Financial Controls Over Financial Reporting issued by the ICAI.

We have considered material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company for the year ended March 31, 2022 and these material weaknesses affect our opinion on standalone financial statements of the Company for the year ended March 31, 2022 [our audit report dated May 28, 2022, which expressed an qualified opinion on those standalone financial statements of the Company].

For Pathak H. D. & Associates LLP
Chartered Accountants
Firms Registration No: 107783W/W100593
Jigar T. Shah
Partner
Membership No: 161851
UDIN: 22161851ALPAUV6734
Date : May 28, 2022
Place: Mumbai