Reliance Infrastructure Ltd Directors Report.

Dear Shareowners,

Your Directors present the 91st Annual Report and the audited financial statements for the financial year ended March 31, 2020.

Financial performance and state of the Companys affairs

The standalone financial performance of the Company for the financial year ended March 31, 2020 is summarised below:

Particulars

Financial year ended March 31, 2020

*Financial year ended March 31, 2019

Rs. in crore ** US $ Rs. in crore ** US $
Million Million
Total Income 3,339 443 3,581 518
Gross Profit before depreciation 1,061 141 1,185 171
Depreciation 65 9 82 12
Exceptional Items-(Expenses)/Income - - (6,181) (894)
Profit/(Loss) before taxation 996 132 (5,078) (734)
Tax expenses (Net) (including deferred tax and tax for earlier years) (35) (5) (191) (28)
Net profit from discontinuing operation - - 3,974 575
Profit/(Loss) after taxation 1,031 137 (913) (132)
Balance of profit brought forward from previous year (675) (92) 626 96
Other comprehensive income recognised directly in retained earnings 3 1 6 1
Profit available for appropriations 359 46 (281) (35)
Dividend paid out on equity shares during the year (including tax on dividend) (Net) - - 297 43
Transfer to Debenture Redemption Reserve 56 7 97 14
Balance carried to Balance Sheet 303 39 (675) (92)

*Figures of previous year have been regrouped and reclassified wherever required. Figures for the previous year pertaining to Mumbai Power Business have been considered as part of discontinued operation.

** @ Rs. 75.3245 = US $ 1 Exchange rate as on March 31, 2020 (Rs. 69.1550 = US $ 1 Exchange rate as on March 31, 2019).

Financial Performance

During the year under review, your Company earned an income of Rs 3,339 crore against Rs 3,581 crore in the previous year. The Company earned a profit of Rs 1,031 crore for the year as compared to loss of Rs 913 crore in the previous year.

The performance and financial position of the subsidiary companies and associate companies are included in the consolidated financial statements of the Company and presented in the Management Discussion and Analysis forming part of this Annual Report.

The outbreak of COVID-19 pandemic has significantly impacted businesses around the world. The Government of India ordered a nationwide lockdown, initially for 21 days which was extended twice and now valid till May 17, 2020 to prevent community spread of COVID-19 in India. This has resulted in significant reduction in economic activities. With respect to operations of the Company, it has impacted its business by way of interruption in construction activities, supply chain disruption, unavailability of personnel, closure/lock down of various other facilities etc. Few of the construction activities are already commenced albeit in a limited manner. The Company has considered various internal and external information including assumptions relating to economic forecasts up to the date of approval of these financials for assessing the recoverability of various receivables, which includes unbilled receivables, investments, goodwill, contract assets and contract costs. The assumptions used by the company have been tested through sensitivity analysis and the company expects to recover the carrying amount of these assets based on the current indicators of future economic conditions.

Further the Company has availed protections available to it as per various contractual provisions to reduce the impact of COVID-19. The aforesaid evaluation is based on projections and estimations which are dependent on future development including government policies. Any changes due to the changes in situations/circumstances will be taken into consideration, if necessary, as and when it crystallizes.

Dividend

During the year under review, the Board of Directors has not recommended dividend on the equity shares of the Company.

Business Operations

The Company is amongst the leading player in the country in the Engineering and Construction (E&C) segment for power, roads, metro and other infrastructure sectors. The Company is also engaged in implementation, operation and maintenance of several projects in defence sector and infrastructural areas through its special purpose vehicles.

Management Discussion and Analysis

The Management Discussion and Analysis for the year under review as stipulated under Regulation 34(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations), is presented in a separate section forming part of this Annual Report.

Issue and redemption of Non-Convertible Debentures

The Company has not carried out any fresh issue of Non Convertible Debentures in the current financial year.

During the year, the Company has redeemed Non-Convertible Debentures aggregating to Rs 30.80 Crore. There was delay/default by the Company in redemption of Non Convertible Debentures, payment of interest and recall by the debenture holder to the extent of Rs 906.58 Crore as on March 31, 2020. The Company is engaged in various initiatives to monetize its assets and to unlock the value of its businesses and to thereby significantly reduce its overall leverage.

Deposits

The Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 (‘the Act) and the Companies (Acceptance of Deposits) Rules, 2014. There are no unclaimed deposits, unclaimed/unpaid interest, refunds due to the deposit holders or to be deposited with the Investor Education and Protection Fund as on March 31, 2020.

Particulars of Loans, Guarantees or Investments

The Company has complied with provisions of Section 186 of the Act, to the extent applicable with respect to Loans, Guarantees or Investments during the year.

Pursuant to Section 186 of the Act, details of the Investments made by the Company are provided in the standalone financial statement (Please refer to Note No. 7 to the standalone financial statement).

Subsidiary Companies, Associates and Joint venture

During the year under review, Reliance Sealink One Private Limited ceased to be the Subsidiary of the Company and Gullfoss Enterprises Private Limited became an associate of the Company. Further, Reliance Power Limited ceased to be an associate of the Company.

The summary of the performance and financial position of the each of the subsidiary and associate company are presented in Form AOC-1 and in Management Discussion and Analysis report forming part of this Annual Report. Also, a report on the performance and financial position of each of the subsidiaries, associates and joint ventures as per the Act is provided in the consolidated financial statement.

The Policy for determining material subsidiary company, as approved by the Board, may be accessed on the Companys website at https://www.rinfra.com/documents/1142822/1189698/ Policy_for_Determination_of_Material_Subsidiary_updated.pdf

Standalone and Consolidated Financial Statements

The audited financial statements of the Company are drawn up, both on standalone and consolidated basis, for the financial year ended March 31, 2020, in accordance with the requirements of the Companies (Indian Accounting Standards) Rules, 2015 (Ind-AS) notified under Section 133 of the Act, read with relevant rules and other accounting principles. The Consolidated Financial Statements have been prepared in accordance with Ind-AS and relevant provisions of the Act based on the financial statements received from subsidiaries, associates and joint ventures, as approved by their respective Board of Directors.

Directors

In terms of the provisions of the Act, Shri S Seth, Director of the Company retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.

At the Annual General Meeting held on September 30, 2019, the Members have approved the appointment of Shri Punit Garg, as Whole-Time Director designated as Executive Director of the Company for a period of three years commencing from April 6, 2019 and Ms. Manjari Kacker was appointed as an Independent Director with effect from June 14, 2019 for a term of five consecutive years. Further, Ms. Ryna Karani, Shri S S Kohli and Shri K Ravikumar were re-appointed as Independent Directors for second term of five years to hold office from September 20, 2019 to September 19, 2024.

During the year, Shri Jai Anmol Ambani and Shri Jai Anshul Ambani were appointed as Additional Directors with effect from October 9, 2019. They have resigned from the Board effective from January 31, 2020.

Lt. Gen. Syed Ata Hasnain (Retd.) was appointed as Additional Director in the capacity of Independent Director with effect from October 9, 2019. He resigned as an Independent Director with effect from March 18, 2020, pursuant to his appointment as a Member of the National Disaster Management Authority by the Government of India.

Shri B. C. Patnaik, ceased to be Director on September 30, 2019, in terms of Section 161 of the Act.

The Board places on record its sincere appreciation for the valuable contribution made by Shri B. C. Patnaik, Shri Jai Anmol Ambani, Shri Jai Anshul Ambani and Lt. Gen. Syed Ata Hasnain (Retd.) during their tenure as Directors of the Company.

A brief profile of Shri S. Seth along with requisite details as stipulated under Regulation 36(3) of the Listing Regulations is provided in this Annual Report.

The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Act and the Listing Regulations. The details of programme for familiarisation of Independent Directors with the Company, nature of the industry in which the Company operates and related matters are uploaded on the website of the Company at the link https://www. rinfra.com/documents/1142822/1182645/Familiarisation_ programme.pdf. In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are the persons of high integrity and repute. They fulfill the conditions specified in the Act and the Rules made thereunder and are independent of the management.

Key Managerial Personnel

Shri Punit Garg was appointed as an Executive Director and Chief Executive Officer of the Company with effect from April 6, 2019. Shri Paresh Rathod has been appointed as Company Secretary and Compliance Officer of the Company with effect from August 16, 2019. At the Board Meeting held on May 8, 2020, Shri Pinkesh R Shah was appointed as Chief Financial Officer of the Company in the place of previous incumbent Shri Sridhar Narasimhan.

Evaluation of Directors, Board and Committees

The Nomination and Remuneration Committee of the Board of the Company has devised a policy for performance evaluation of the Directors, Board and its Committees, which includes criteria for performance evaluation.

Pursuant to the provisions of the Act and Regulation 17(10) of the Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of the committees of the Board. The Board performance was evaluated based on inputs received from all the Directors after considering the criteria such as Board Composition and structure, effectiveness of Board/Committee processes and information provided to the Board, etc.

Policy on appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Employees

The Nomination and Remuneration Committee of the Board has devised a policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Employees. The Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors, which has been put up on the Companys website at https://www.rinfra.com/documents/1142822/1182645/ Remuneration-Policy.pdf and also is attached as Annexure A.

Directors Responsibility Statement

Pursuant to the requirements under Section 134(5) of the Act with respect to Directors Responsibility Statement, it is hereby confirmed that:

i. In the preparation of the annual financial statement for the financial year ended March 31, 2020, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

ii. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2020 and of the profit of the Company for the year ended on that date;

iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors had prepared the annual financial statement for the financial year ended March 31, 2020, on a going concern basis;

v. The Directors had laid down proper internal financial controls to be followed by the Company and such internal financial controls are adequate and are operating effectively; and

vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Contracts and Arrangements with Related Parties

All contracts, arrangements and transactions entered into by the Company during the financial year under review with related parties were on an arms length basis and in the ordinary course of business.

There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons, which could have potential conflict with the interest of the Company at large.

During the year, the Company has not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with the policy of Company on materiality of related party transactions.

All Related Party Transactions were placed before the Audit Committee for approval. Omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website at the link: https://www.rinfra.com/ documents/1142822/1189698/Related_Party_Transactions_ Policy_updated.pdf. Your Directors draw attention of the Members to note 34 to the standalone financial statement which sets out related party disclosures pursuant to Ind-AS and Schedule V of Listing Regulations.

Material Changes and Commitments if any, affecting the financial position of the Company

There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.

Meetings of the Board

A calendar of Meetings is prepared and circulated in advance to the Directors. During the financial year ended March 31, 2020, six Board Meetings were held. Details of the meetings held and attended by each Director are given in the Corporate Governance Report forming part of this Annual Report.

Audit Committee

The Audit Committee of the Board of Directors comprises of majority of Independent Directors namely Ms. Manjari Kacker, Shri S S Kohli, Shri K Ravikumar, Ms. Ryna Karani, and Shri Punit Garg, Executive Director and Chief Executive Officer. Ms. Manjari Kacker, Independent Director, is the Chairperson of the Committee. During the year, all the recommendations made by the Audit Committee were accepted by the Board.

Auditors and Auditors Report

M/s. Pathak H.D. & Associates LLP, Chartered Accountants, who were appointed as statutory auditors of the Company to hold office for a term of 4 (four) consecutive years at the 87th Annual General Meeting of the Company held on September 27, 2016, would be completing their second term of appointment upon conclusion of the 91st Annual General Meeting of the Company and accordingly, cannot be re-appointed.

The Board, on recommendation of the Audit Committee, has proposed the appointment of M/s. Chaturvedi & Shah LLP, Chartered Accountants as the Statutory auditors of the Company for a term of 5 years until the conclusion of 96th Annual General Meeting of the Company, subject to approval of Members in ensuing Annual General Meeting.

The Company has received a consent letter from M/s. Chaturvedi & Shah LLP, to the effect that their appointment, if made, would be within the limits prescribed under Section 141(3)(g) of the Act, and that they are not disqualified from appointment as statutory auditors in terms of Section 141 of the Act read with Section 139 of the Act and the Rules made there under. The Auditors in their report to the Members have given a Disclaimer of Opinion for the reasons set out in the para titled Basis of Disclaimer of Opinion. The relevant facts and the factual position have been explained in the Note 40 & 42 of the Notes on Accounts. It has been explained that:

(a) the Reliance Group of companies of which the Company is a part, supported an independent company in which the Company holds less than 2% of equity shares ("EPC Company") to inter alia undertake contracts and assignments for the large number of varied projects in the fields of Power (Thermal, Hydro and Nuclear), Roads, Cement, Telecom, Metro Rail, etc. which were proposed and/or under development by the Reliance Group. To this end along with other companies of the Reliance Group the Company funded EPC Company by way of project advances, subscription to debentures and inter corporate deposits.

The activities of EPC Company have been impacted by the reduced project activities of the companies of the Reliance Group. While the Company is evaluating the nature of relationship; if any, with the independent EPC Company, based on the analysis carried out in earlier years, the EPC Company has not been treated as related party.

Given the huge opportunity in the EPC field particularly considering the Government of Indias thrust on infrastructure sector coupled with increasing project and EPC activities of the Reliance Group, the EPC Company with its experience will be able to achieve substantial project activities in excess of its current levels, thus enabling the EPC Company to meet its obligations. The Company is reasonably confident that the provision will be adequate to deal with any contingency relating to recovery from the EPC Company.

(b) During the year, the loss on invocation of pledge of shares of Reliance Power Limited (RPower) held by the Company has been adjusted against the capital reserve since this is an extremely rare circumstance where even though the value of long term strategic investment is high, the same is being disposed off at much lower value for the reasons beyond the control of the Company, thereby causing the said loss to the Company. Hence, being the capital loss, the same has been adjusted against the capital reserve.

Further, due to the aforesaid invocation, investment in RPower has been reduced to 12.77% of its paid-up share capital. Accordingly, in terms of Ind AS 28 on Investments in Associates and Joint Venture, RPower ceases to be an associate of the Company. Although this being strategic investment and Company continues to be promoter of RPower, due to the invocations of the shares by the lenders for the reasons beyond the control of the Company the balance investments in RPower have been carried at fair value in accordance with Ind-AS 109 on Financial Instruments and valued at current market price and loss on fair valuation being the capital loss, has been adjusted against the capital reserve.

The other observations and comments given by the Auditors in their report, read together with notes on financial statements are self explanatory and hence do not call for any further comments under section 134 of the Act.

Cost Auditors

Pursuant to the provisions of the Act and the Companies (Audit and Auditors) Rules, 2014, the Board of Directors have appointed M/s. V J Talati & Co. Cost Accountants, as the Cost Auditors of the Company for conducting the cost audit of the Engineering, Procurement and Construction Division & Power Generation Division of the Company for the financial year ending March 31, 2021, and their remuneration is subject to ratification by the Members at the ensuing Annual General Meeting of the Company.

The Provisions of Section 148(1) of the Act are applicable to the Company and accordingly the Company has maintained cost accounts and records in respect of the applicable products for the year ended March 31, 2020.

Secretarial Standards

During the year under review, the Company has complied with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India.

Secretarial Audit and Annual Secretarial Compliance Report

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s. Ashita Kaul & Associates, Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. There is no qualification, reservation or adverse remark made by the Secretarial Auditor in the Secretarial Audit Report except for delay in filing of the financial results for the quarter and financial year ended March 31, 2019. The Board states that the delay in filing of financial results was due to the postponement of meeting of the Board of Directors of Reliance Power Limited, an Associate Company. The same has also been disclosed to the Stock Exchanges. The Audit Report of the Secretarial Auditors for the financial year ended March 31, 2020 is attached hereto as

Annexure B.

Pursuant to Circular No.CIR/ CFD/ CMD1/ 27/ 2019 dated February 08, 2019, issued by the SEBI, the Company has obtained Annual Secretarial Compliance Report from a Practicing Company Secretary on compliance of all applicable SEBI Regulations and circulars/ guidelines issued there under and the copy of the same shall be submitted with the Stock Exchanges within the prescribed due date.

Annual Return

As required under Section 134 (3)(a) of the Act, the Annual Return for the year 2018-2019 and 2019-20 is put up on the Companys website and can be accessed at https://www.rinfra. com/web/rinfra/annual-return.

Particulars of Employees and related disclosures

In terms of the provisions of Section 197(12) of the Act read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annual Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, also forms part of this Annual Report.

However, having regard to the provisions of second proviso to Section 136(1) of the Act, the Annual Report, excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The particulars as required to be disclosed in terms of Section 134(3) (m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014 are given in Annexure C forming part of this Report.

Corporate Governance

The Company has adopted the "Reliance Group-Corporate Governance Policies and Code of Conduct" which sets out the systems, processes and policies confirming to the international standards. The report on Corporate Governance as stipulated under Regulation 34(3) read with para C of Schedule V of the Listing Regulations is presented in a separate section forming part of this Annual Report.

A certificate from M/s. Ashita Kaul & Associates, Practising Company Secretary, confirming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.

Whistle Blower Policy (Vigil Mechanism)

In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any, of the directors and employees. The details of the same have been stated in the Report on Corporate Governance and the policy can also be accessed on the Companys website at the link: https://www. rinfra.com/documents/1142822/1189698/Whistle_Blower_ Policy_updated.pdf

Risk Management

The Board of the Company has constituted a Risk Management Committee which consists of majority of independent directors and also senior managerial personnel of the Company. The details of the Committee and its terms of reference, etc. are set out in the Corporate Governance Report forming part of this Report. The Company has a robust Business Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhances Companys competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.

The framework has different risk models which help in identifying risk trend, exposure and potential impact analysis at a Company level as also separately for business segment. The risks are assessed for each project and mitigation measures are initiated both at the project as well as at the corporate level. More details on Risk Management indicating development and implementation of Risk Management policy including identification of elements of risk and their mitigation are covered in Management Discussion and Analysis section, which forms part of this Report.

Compliance with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company is committed to upholding and maintaining the dignity of women employees and it has in place a policy which provides for protection against sexual harassment of women at work place and for prevention and redressal of such complaints. During the year under review, no such complaints were received. The Company has also constituted an Internal Compliance Committee under the sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Corporate Social Responsibility

The Company has constituted Corporate Social Responsibility (CSR) Committee in compliance with the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Committee has formulated a CSR Policy indicating the activities to be undertaken by the Company. The CSR policy may be accessed on the Companys website at the link: https://www.rinfra.com/ documents/1142822/1182645/RInfra-CSR-Policy.pdf. The CSR Committee of the Board consist of Ms. Ryna Karani as Chairperson, Shri S S Kohli, Shri K Ravikumar and Shri Punit Garg as the Members.The disclosure with respect to CSR activities forming part of this Report is given as Annexure D.

Order, if any, passed by the regulator or courts or tribunals

No orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations.

Internal Financial Controls and their adequacy

The Company has in place adequate internal financial controls with reference to financial statement, across the organization. The same is subject to review periodically by the internal audit cell for its effectiveness. During the financial year, such controls were tested and no reportable material weakness in the design or operations were observed.

Business Responsibility Report

Business Responsibility Report for the year under review as stipulated under the Listing Regulations is presented under separate section forming part of this Annual Report.

Acknowledgements

Your Directors would like to express their sincere appreciation for the co-operation and assistance received from shareholders, debenture holders, debenture trustees, bankers, financial institutions, government authorities, regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff.

For and on behalf of the Board of Directors
Anil Dhirubhai Ambani
Chairman
Place: Mumbai
Date : May 08, 2020