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Reliance Infrastructure Ltd.

BSE: 500390 Sector: Engineering
NSE: RELINFRA ISIN Code: INE036A01016
BSE 13:06 | 25 Jan 97.60 4.00
(4.27%)
OPEN

91.40

HIGH

98.25

LOW

91.40

NSE 12:59 | 25 Jan 97.25 3.70
(3.96%)
OPEN

92.60

HIGH

98.20

LOW

91.40

OPEN 91.40
PREVIOUS CLOSE 93.60
VOLUME 519736
52-Week high 116.05
52-Week low 27.20
P/E
Mkt Cap.(Rs cr) 2,567
Buy Price 97.25
Buy Qty 536.00
Sell Price 97.60
Sell Qty 424.00
OPEN 91.40
CLOSE 93.60
VOLUME 519736
52-Week high 116.05
52-Week low 27.20
P/E
Mkt Cap.(Rs cr) 2,567
Buy Price 97.25
Buy Qty 536.00
Sell Price 97.60
Sell Qty 424.00

Reliance Infrastructure Ltd. (RELINFRA) - Auditors Report

Company auditors report

To the Members of Reliance Infrastructure Limited

Report on the Audit of the Standalone Financial Statements Disclaimer of Opinion

We were engaged to audit the accompanying standalone financial statements of RelianceInfrastructure Limited ("the Company") which comprise the standalone balancesheet as at March 31 2021 the standalone statement of profit and loss (including othercomprehensive income) standalone statement of changes in equity and standalone statementof cash flows for the year then ended and notes to the standalone financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the standalone financial statements")which includes 5 Joint Operations accounted on proportionate basis.

We do not express an opinion on the accompanying standalone financial statements of theCompany. Because of the significance of the matter described in the Basis forDisclaimer of Opinion section of our report we have not been able to obtainsufficient appropriate audit evidence to provide a basis for an audit opinion on thesestandalone financial statements.

Basis for Disclaimer of Opinion

1. We refer to Note 40 to the standalone financial statements regarding theCompany’s exposure in an EPC Company as on March 31 2021 aggregating to `6491.38 crore (net of provision of ` 3972.17 crore and amount written off during theyear of ` 1009.51 crore). Further the Company has also provided corporate guaranteesaggregating to ` 1775 crore on behalf of the aforesaid EPC Company towards borrowings ofthe EPC Company.

According to the Management of the Company these amounts have been funded mainly forgeneral corporate purposes and towards funding of working capital requirements of theparty which has been engaged in providing Engineering Procurement and Construction (EPC)services primarily to the Company and its subsidiaries and its associates and the EPCCompany will be able to meet its obligation. As referred to in the above note the Companyhas further provided Corporate Guarantees of ` 4895.87 crore in favour of certaincompanies towards their borrowings. According to the Management of the Company theseamounts have been given for general corporate purposes. We were unable to obtainsufficient and appropriate audit evidence about the relationship recoverability andpossible obligation towards the Corporate Guarantees given. Accordingly we are unable todetermine the consequential implications arising therefrom in the standalone financialstatements of the Company.

2. We refer to Statement of Changes in Equity of the Standalone financial statementswherein the loss on invocation of shares and/or fair valuation of shares of investmentsheld in Reliance Power Limited (RPower) aggregating to ` 5024.88 crore for year endedMarch 31 2020 was adjusted against the capital reserve as against charging the same inthe Statement of Profit and Loss. The said treatment of loss on invocation and fairvaluation of investments was not in accordance with the Ind AS 28 "Investment inAssociates and Joint Venture" Ind AS 1 "Presentation of FinancialStatements" and Ind AS 109 "Financial Instruments". Had the Companyfollowed the above Ind AS’s the Retained earnings as at March 31 2020 and March 312021 would have been lower by ` 5024.88 crore and Capital Reserve of the Companyas at March 31 2020 and March 31 2021 would have been higher by ` 5024.88 crore

Material Uncertainty Related to Going Concern

We draw attention to Note 51 to the standalone financial statements wherein theCompany has outstanding obligations to lenders and the Company is also a guarantor for itssubsidiaries and associates whose loans have also fallen due which indicate that materialuncertainty exists that may cast significant doubt on the Company’s ability tocontinue as a going concern. Howeverfor the reasons more fully described in the aforesaidnote the accounts of the Company have been prepared as a Going Concern. Our opinion on thestandalone financial statements is not modified in respect of this matter.

Emphasis of matter

1. We draw attention to Note 38 to the standalone financial statements regarding theScheme of Amalgamation (‘the Scheme’) between Reliance Infraprojects Limited(wholly owned subsidiary of the Company) and the Company sanctioned by the Hon’bleHigh Court of Judicature at Bombay vide its order dated March 30 2011 wherein theCompany as determined by the Board of Directors is permitted to adjust foreignexchange/derivative/hedging losses/gains debited/credited to the Statement of Profit andLoss by a corresponding withdrawal from or credit to General Reserve which overrides therelevant provisions of Ind AS – 1 ‘Presentation of financial statements’.The net foreign exchange loss of ` 51.75 crore for the year ended March 31 2021 has beendebited to Statement of Profit and Loss and an equivalent amount has been withdrawn fromGeneral Reserve in terms of the Scheme. Had such withdrawal not been made loss before taxfor the year ended March 31 2021 would have been higher by ` 51.75 crore and GeneralReserve would have been higher by an equivalent amount.

2. We draw attention to Note 14 to the standalone financial statements regarding KMToll Road Private Limited (KMTR) a subsidiary of the Company has terminated theConcession Agreement with National Highways Authority of India (NHAI) for Kandla MundraRoad Project (Project) on May 7 2019 on account of Material Breach and Event of Defaultunder the provisions of the Concession Agreement by NHAI. The Company is confident ofrecovering its entire investment of ` 544.94 crore in KMTR as at March 31 2021 and noimpairment has been considered necessary against the above investment for the reasonsstated in the aforesaid note.

3. We draw attention to Note 45 to the standalone financial statements which describesthe impairment assessment performed by the Company in respect of its receivables of `2380.78 crore from Reliance Power Limited and its subsidiaries (RPower Group) inaccordance with Ind A S 36 "Impairment of assets" / Ind AS 109 "FinancialInstruments". This assessment involves significant management judgment and estimateson the valuation methodology and various assumptions used in determination of value inuse/fair value by independent valuation experts / management as more fully described inthe aforesaid note. Based on management’s assessment and independent valuationreports no impairment is considered necessary on the receivables.

4. We draw attention to Note 42 to the standalone financial statements which describesthe impairment assessment performed by the Company in respect of its Investments and loansof ` 3473.18 crore in ten subsidiaries i.e. Toll Road SPV’s Companies (includingKMTR as stated in paragraph 2 above) in accordance with Ind AS 36 "Impairment ofassets" / Ind AS 109 "Financial Instruments". This assessment involvessignificant management judgment and estimates on the valuation methodology and variousassumptions used by the management as more fully described in the aforesaid note. Based onmanagement’s assessment no impairment is considered necessary on the investments andloans.

5. We draw attention to Note 52 to the standalone financial statements as regards tothe management evaluation of COVID – 19 impact on the future performance of theCompany.

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

Management’s Responsibility for the Standalone Financial Statements

The Company’s management and Board of Directors are responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thestate of affairs losses and other comprehensive income changes in equity and cash flowsof the Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company’s ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company’s financialreporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our responsibility is to conduct an audit of the standalone financial statements inaccordance with Standards on Auditing and to issue an auditor’s report. Howeverbecause of the matter described in the Basis for Disclaimer of Opinion section of ourreport we were not able to obtain sufficient appropriate audit evidence to provide abasis for an audit opinion on these standalone financial statements.

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

Other Matters

1. (i) The standalone financial statements include the audited financial statements andother financial information of 3 joint operations whose financial Statement includestotal assets of ` 286.60 crore as at March 31 2021 total revenues of ` 303.74crore total net profit/(loss) after tax of ` (1.51) crore and total comprehensive income/ (loss) of ` (1.51) crore for theyear ended March 31 2021 as considered in thisStandalone Financial Statement. These financial statement and other financial informationhave been audited by other auditors whose reports have been furnished to us by theManagement and our opinion on the standalone financial statements in so far it relates toamounts and the disclosures included in respect of these joint operations is solely basedon the reports of the other auditors and the procedures performed by us are as stated inparagraph above.

(ii) The Standalone financial statement includes the unaudited financial statements andother financial information of 2 Joint Operations whose financial statements/financialinformation reflect total assets of ` 3.77 crore as at March 31 2021 total revenue of `Nil net profit/ (loss) after tax of ` Nil and total comprehensive income/(loss) of ` Nilfor the year ended March 31 2021 respectively and cash flows (outflow/inflow) of ` Nilfor the year ended March 31 2021 as considered in this standalone financial statements.These unaudited financial statements and other financial information have been furnishedto us by the Board of Directors and our opinion on the standalone financial statements inso far as it relates to the amounts and disclosures included in respect of these jointlycontrolled entities is based solely on such unaudited financial statements and otherfinancial information. In our opinion and according to the information and explanationsgiven to us by the Board of Directors these financial statements and other financialinformation are not material.

2. The comparative audited standalone financial statements of the Company for the yearended March 31 2020 included in these standalone financial statements had been audited byPathak H.D. & Associates LLP Chartered Accountants whose reports dated May 8 2020expressed a Disclaimer of Opinion on those audited standalone financial statements foryear ended March 31 2020.

Our opinion on the standalone financial statements is not modified in respect of theabove matters with respect to our reliance on the work done and the reports of the otherauditors and the financial statements and other financial information certified by themanagement.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors’ Report) Order 2016 ("theOrder") issued by the Central Government in terms of section 143 (11) of the Act andexcept for the possible effects of the matter described in the Basis for Disclaimer ofOpinion section we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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

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

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

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

d) Due to the effects / possible effects of the matter described in the Basis forDisclaimer of Opinion section we are unable to state whether the financial statementscomply with the Indian Accounting Standards specified under section 133 of the Act.

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

f) The Company has defaulted in repayment of the obligations to its lenders anddebenture holders which is outstanding as at March 31 2021. Based on the legal opinionobtained by the Company and based on the written representations received from thedirectors as on March 31 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2021 from being appointed as a director in termsof section 164(2) of the Act.

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

h) With respect to the matter to be included in the Auditors’ Report under section197(16) of the Act: In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of section 197 of the Act.

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

(B) With respect to the other matters to be included in the Auditors’ Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. Except for the possible effects of the matter described in the Basis for Disclaimerof Opinion section the Company has disclosed the impact of pending litigations as atMarch 31 2021 on its financial position in its standalone financial statements - ReferNote 32 to the standalone financial statements.

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

iii. Other than for dividend amounting to ` 0.18 crore pertaining to the financial year2010-2011 financial year 2011-12 and financial year 2012-13 were kept in abeyance due topending litigations amongst the investors there has been no delay in transferringamounts required to be transferred to the Investor Education and Protection Fund by theCompany.

For Chaturvedi & Shah LLP

Chartered Accountants

Firm’s Registration No:101720W/W100355

Parag D. Mehta

Partner

Membership No: 113904

UDIN: 21113904AAAABI6196

Date: May 28 2021

Place: Mumbai

Annexure A to Auditors’ Report

Referred to in our Auditors’ Report of even date to the members of RelianceInfrastructure Limited on the Standalone financial statements for the year ended March 312021

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of its fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assetsby which all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the program a portion ofthe fixed assets has been physically verified by the Management during the year and nomaterial discrepancies between the book records and the physical assets were noticed onsuch verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the registered sale deeds / transfer deeds / conveyance deeds / possessionletters / allotment letters and other relevant records evidencing title/possessionprovided to us we report that the title deeds of all the immovable properties comprisingof land and buildings other than self-constructed properties recorded as Property Plantand Equipment which are freehold are held in the name of the Company as at the balancesheet date except the following:

Particulars of Land and Building Total number of cases Gross Block as on March 31 2021 (` Crore) Net Block as on March 31 2021 (` Crore) Remarks
Freehold land at various locations 2 18.60 18.60 The title deeds are in the names of erstwhile companies that merged with the Company under Section 391 to 394 of the Companies Act 1956 pursuant to Schemes of Amalgamation as approved by the Hon’ble High Courts.
Freehold land at Hyderabad 1 4.16 4.16 Title deeds are not available with the Company.

In respect of immovable properties comprising of land and buildings that have beentaken on lease and disclosed as Property Plant and Equipment in the standalone financialstatements the lease agreements or other relevant records are in the name of the Companyexcept the following:

Particulars of Land and Building Total number of cases Gross Block as on March 31 2021 (` Crore) Net Block as on March 31 2021 (` Crore) Remarks
Leasehold land at various locations 3 0.35 0.29 The lease agreements are in the names of erstwhile companies that merged with the Company under Section 391 to 394 of the Companies Act 1956 pursuant to Schemes of Amalgamation as approved by the Hon’ble High Courts.
Leasehold land at MIDC 1 0.02 0.01 Lease agreement is not available with the Company.

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of such verification is reasonable. The discrepancies noticedon physical verification of inventory as compared to book records were not material.

(iii) In our opinion and according to the information and explanations given to usexcept for the matter referred to in the Basis for Disclaimer of Opinion section in theaudit report in respect of which we are unable to comment for the reasons describedtherein the Company has not granted any loans secured or unsecured to any companyfirm limited liability partnerships or other party covered in the register maintainedunder Section 189 of the Act.

(iv) Based on the information and explanations given to us in respect of loansinvestments guarantees and securities except for the matter referred to in the Basis forDisclaimer of Opinion section in the audit report in respect of which we are unable tocomment for the reasons described therein the Company has complied with the provisions ofSection 185 and 186 of the Act to the extent applicable. Further as the Company isengaged in the business of providing infrastructural facilities the provisions of Section186[except for sub-section (1)] are not applicable to it.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning the directivesissued by the Reserve Bank of India provisions of Section 73 to 76 of the Act any otherrelevant provisions of the Act and the relevant rules framed thereunder.

(vi) We have broadly reviewed the books of account maintained by the Company in respectof Generation of electricity services where the maintenance of cost records has beenspecified by the Central Government under sub-section (1) of Section 148 of the Act andthe rules framed there under and we are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. We have not however made a detailedexamination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company in our opinion the Company is generallyregular in depositing the undisputed statutory dues including provident fundemployees’ state insurance income-tax goods and service tax duty of customs cessand other material statutory dues as applicable except for dues towards tax deducted atsource where there have been delays in depositing such dues in a few number of cases.Further the Company has not paid until date dividend distribution tax payable in respectof dividend declared during the financial year 2017-18.

(b) According to the information and explanations given to us there are no undisputeddues in respect of provident fund employees’ state insurance income tax duty ofcustoms goods and services tax and cess as at March 31 2021 which were outstanding for aperiod of more than six months from the date they became payable except for the followingdues:

Name of the statue Nature of the dues Amount (` Crore) Period to which the amount relates Due Date Date of Payment
Income Tax Act 1961 Dividend Distribution Tax 20.791 2017-18 18 September 2018 Not yet paid
Income Tax Act 1961 Tax Deducted at source 1.242 Upto September 2020 Various Dates Not yet paid

*Including interest of 1 ` 1.18 crore and 2 ` 0.28 crore.

(c) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of income-tax sales-tax works contracttax service-tax duty of customs duty of excise and value added tax as at March 31 2021which have not been deposited on account of a dispute are as follows:

Name of the statute Nature of dues Amount (` Crore) Period to which the amount relates Forum where the dispute is pending
Delhi Sales Tax on Works Contract Act 1999 Works Contract Tax 0.051 2004-2005 Joint Commissioner (Appeal) Department of Trade and Taxes New Delhi
West Bengal Value Added Tax Act 2003 VAT 56.422 2010-2011 West Bengal Commercial Tax Appellate and Revisional Board Kolkata
West Bengal Value Added Tax Act 2003 VAT 4.273 2008-2009 West Bengal Commercial Tax Appellate and Revisional Board Kolkata
Madhya Pradesh Value Added Tax Act 2002 VAT 3.124 2009-2010 Madhya Pradesh Commercial Tax Appellate Board Bhopal
Central Sales Tax Act 1956 Central Sales Tax 0.195 2009-2010 Madhya Pradesh Commercial Tax Appellate Board Bhopal
Madhya Pradesh Entry Tax Act 1976 Entry Tax 0.496 2009-2010 Madhya Pradesh Commercial Tax Appellate Board Bhopal
Uttar Pradesh Entry Tax Act 2007 Entry Tax 0.057 2007-2008 2008-2009 Additional Commissioner Grade II Appeals II Noida
Maharashtra Value Added Tax Act 2002 VAT 15.368 2008-2009 2009-2010 & 2011-2012 Maharashtra Sales Tax Tribunal Mumbai
Maharashtra Value Added Tax Act 2002 VAT 15.699 2014-2015 Senior Joint Commissioner (Appeals) of Sales tax Mumbai
Andhra Pradesh Value Added Tax Act 2005 VAT 5.3310 2011-2012 Andhra Pradesh VAT Appellate Tribunal Vishakhapatnam
Bihar Value Added Tax Act 2005 VAT 2.2811 2013-2014 2014-2015 2015-2016 & 2016-17 Joint Commissioner of Commercial Taxes (Appeal) Bihar
Income Tax Act 1961 Income Tax 225.95 (for which the tax authorities are the appellant) A.Y. 2001-2002 2002-2003 2003-2004 2006-2007 2007-2008 and 2008-2009 Supreme Court
Income Tax Act 1961 Income Tax 915.26 (for which the tax authorities are the appellant) A.Y. 1998-1999 1999-2000 2001-2002 2002-2003 2003-2004 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 Bombay High Court
Income Tax Act 1961 Income Tax 153.35 AY 2015-16 Income Tax Appelate Tribunal Mumbai
Income Tax Act 1961 Income Tax Penalty 353.79 AY 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 & 2016-2017 CIT (Appeals) Mumbai
Foreign Trade (Development and Regulation ) Act 1992 Duty Drawback 296.50 2008-2009 Supreme Court
Foreign Trade (Development and Regulation ) Act 1992 Duty Drawback 6.10 2009-2010 Director General of Foreign Trade Policy Kolkata
Customs Act 1962 Custom duty 66.2012 April 2012- January 2013 & 2013-2014 Custom Excise and Service Tax Appellate Tribunal Mumbai
Customs Act 1962 Penalty 145.00 2012-2013 Additional Director General DRI (Adjudication) Mumbai
Customs Act 1962 Custom duty 9.39 (for which the departments are the appellant) 2011-2012 & 2012-2013 Custom Excise and Service Tax Appellate Tribunal Hyderabad
Customs Act 1962 Custom duty 3.21 2016-2017 Commissioner (Preventive) Vijayavada
The Central Excise Act 1944 Excise Duty 0.20 July 2015 to September 2016 Assistant Commissioner of Central Excise (Appeals-1) Mumbai

Includes 1 ` 5000 2 ` 0.20 crore 3 ` 0.40 crore 4` 1.67 crore 5 ` 0.04 crore 6 ` 0.13 crore 7 ` 0.01crore 8 ` 0.79 crore 9 ` 0.84 crore 10 ` 1.33crore 11 ` 0.47 crore and 12 ` 31.99 crore paid / adjusted underprotest.

(viii) According to the information and explanations given to us and based onexamination of the records of the Company the Company has defaulted in repayment of loansor borrowings to financial institution or bank or dues to debenture holders for thefollowing instances in repayment of principal and interest amount. The Company did nothave any loans or borrowings from government during the year.

Name of the lenders Amount of defaults as at March 31 2021 (` Crores)

Period of default as at March 31 2021 (days)

Principal Interest Principal Interest
A) Term Loans/ Working Capital Loan from Banks / Financial Institution
Jammu & Kashmir Bank 75.00 22.90 841 821
Canara Bank 352.81 37.08 917 588
Yes Bank 2017.33 9.13 329 58
Srei Equipment Finance Limited 17.65 7.14 487 670
B) Debentures 765.70 264.34

365 to 558 days Your attention is also drawn to note no 17.2 and 18.2 of standalone financial statement

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and in our opinion and according to theinformation and explanations given to us the term loans have been applied for thepurposes for which they were raised.

(x) According to the information and explanations given to us except for the matterreferred to in Basis for Disclaimer of Opinion section in the audit report in respect ofwhich we are unable to comment on any potential implications for the reasons describedtherein no fraud by the Company or fraud on the Company by its officers and employees hasbeen noticed or reported during the course of our audit.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the provisions ofSection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company and accordingly the provisions of clause 3(xii) of theOrder are not applicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company except for the matter referred to in the Basisfor Disclaimer of Opinion section in the audit report in respect of which we are unable tocomment for the reasons described therein transactions entered into by the Company withthe related parties are in compliance with Sections 177 and 188 of the Act whereapplicable and the details of related party transactions as required by the applicableaccounting standards have been disclosed in the standalone financial statements.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence the provisions ofclause 3(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company except for the matter referred to in Basis forDisclaimer of Opinion section in the audit report in respect of which we are unable tocomment on any potential implications for the reasons described therein the Company hasnot entered into non-cash transactions with directors or persons connected with them.Accordingly the provisions of clause 3(xv) of the Order are not applicable to theCompany.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly the provisions of clause 3(xvi) of the Order are not applicable to theCompany.

For Chaturvedi & Shah LLP

Chartered Accountants

Firm’s Registration No:101720W/W100355

Parag D. Mehta

Partner

Membership No: 113904

UDIN: 21113904AAAABI6196

Date: May 28 2021

Place: Mumbai

Annexure B to Auditors’ Report

Annexure B to the Independent Auditor’s Report on the standalone financialstatements of Reliance Infrastructure Limited for year ended March 31 2021

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

We were engaged to audit the internal financial controls over financial reporting ofReliance Infrastructure Limited (hereinafter referred to as "the Company") as ofMarch 31 2021 in conjunction with our audit of the standalone financial statements ofthe Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management are responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Controls over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India(‘ICAI’). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany’s policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013(hereinafter referred to as "the Act").

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting with reference to financial statements based on ouraudit conducted in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing prescribed under section 143(10) of the Actto the extent applicable to an auditof internal financial controls both issued by the Institute of Chartered Accountants ofIndia.

Because of the matter described in the Disclaimer of Opinion section below we were notable to obtain sufficient appropriate audit evidence to provide a basis for an auditopinion on internal financial controls system over financial reporting with reference tothe standalone financial statements of the Company.

Meaning of Internal Financial controls over financial reporting with Reference toFinancial Statements

A company’s internal financial controls over financial reporting with reference tofinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of Standalone financial statementsfor external purposes in accordance with generally accepted accounting principles. Acompany’s internal financial controls over financial reporting with reference tofinancial statements include those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company’s assets that could havea material effect on the financial statements.

Disclaimer of Opinion

1. As at March 31 2021 the Company has investments in and amounts recoverable from aparty aggregating to ` 6491.38 crore (net of provision of ` 3972.17 crore and amountwritten off during the year of ` 1009.51 crore) as also corporate guarantees aggregatingto ` 1775 crore given by the Company in favour of the aforesaid party towards borrowingsof the aforesaid party from various companies including certain related parties of theCompany. Further the Company provided Corporate Guarantees of ` 4895.87 crore in favourof certain parties towards their borrowings.

We were unable to evaluate about the relationship recoverability and possibleobligation towards the Corporate Guarantees given. Accordingly we are unable to determinethe consequential implications arising therefrom in the standalone financial statements ofthe Company.

Because of the above reasons we are unable to obtain sufficient appropriate auditevidence to provide a basis for our opinion whether the Company had adequate internalfinancial controls over financial reporting with reference to standalone financialstatements and whether such internal financial controls were operating effectively as atMarch 31 2021.

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

For Chaturvedi & Shah LLP

Chartered Accountants

Firm’s Registration No:101720W/W100355

Parag D. Mehta

Partner

Membership No: 113904

UDIN: 21113904AAAABI6196

Date: May 28 2021

Place: Mumbai

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