Mar 31, 2023
Reliance Infrastructure Limited Report on the Audit of the Standalone Financial Statements
We were engaged to audit the accompanying standalone financial statements of Reliance Infrastructure Limited ("the Company"), which comprise the standalone balance sheet as at March 31, 2023, the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements"), which includes 4 Joint Operations accounted on proportionate basis.
We do not express an opinion on the accompanying standalone financial statements of the Company. Because of the significance of the matter described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these standalone financial statements.
Basis for Disclaimer of Opinion
1. We refer to Note 38 to the standalone financial statements regarding the Company''s exposure to an EPC Company as on March 31, 2023 aggregating to '' 6,505.29 Crore (net of provision of '' 3,972.1 7 Crore). Further, the Company has also provided corporate guarantees aggregating to '' 1,775 Crore on behalf of the aforesaid EPC Company towards borrowings of the EPC Company.
According to the Management of the Company, these amounts have been funded mainly for general corporate purposes and towards funding of working capital requirements of the party which has been engaged in providing Engineering, Procurement and Construction (EPC) services primarily to the Company, its subsidiaries and its associates, the EPC Company will be able to meet its obligation.
As referred in the above note, the Company has further provided Corporate Guarantees of '' 4,895.87 Crore in favour of certain companies towards their borrowings. According to the Management of the Company these amounts have been given for general corporate purposes.
We were unable to obtain sufficient and appropriate audit evidence about the relationship, recoverability and possible obligation towards the Corporate Guarantees given. Accordingly, we are unable to determine the consequential implications arising therefrom in the standalone financial statements of the Company.
2. We refer to Statement of Changes in Equity of the Standalone financial statements wherein the loss on invocation of shares and/or fair valuation of shares held as investments in Reliance Power Limited (RPower) aggregating to '' 5,024.88 Crore for year ended March 31, 2020 was adjusted against the capital reserve instead of charging the same in the Statement of Profit and Loss. The said treatment of loss on invocation and fair valuation of investments was not in accordance with the Ind AS 28 "Investment in Associates and Joint Venture", Ind AS
1 "Presentation of Financial Statements" and Ind AS 109 "Financial Instruments". Had the Company followed the above Ind AS''s the Retained earnings as at March 31, 2022 and March 31, 2023 would have been lower by '' 5,024.88 Crore and Capital Reserve of the Company as at March 31, 2022 and March 31, 2023 would have been higher by '' 5,024.88 Crore.
Emphasis of matter
1. We draw attention to Note No. 44 to the standalone financial statements, wherein the Company has outstanding obligations to its lenders and the Company is also a guarantor for its subsidiaries and associates whose loans have also fallen due which indicate that uncertainty exists that may cast significant doubt on the Company''s ability to continue as a going concern. However, for the reasons more fully described in the aforesaid note the accounts of the Company have been prepared as a Going Concern.
2. We draw attention to Note no. 39(i) to the standalone financial statement, wherein Company has made provision for net receivable from Reliance Power Group aggregating to '' 1 621.1 5 crore and has considered as exceptional item.
3. We draw attention to Note no. 39(ii) to the standalone financial statements, wherein wherein Company has made provision for exposure of KM Toll Road Private Limited aggregating to '' 544.94 crore and has considered as exceptional item.
4. We draw attention to Note no. 39(iii) to the standalone financial statements, wherein Company has made provision for exposure of JR Toll Road Private Limited aggregating to '' 226.56 crore and has considered as exceptional item.
5. We draw attention to Note no. 41 to the standalone financial statements which describes the impairment assessment performed by the Company in respect of its net receivables of '' 2,781.28 Crore in Eight subsidiaries i.e. Toll Road SPV''s Companies (excluding KMTR and JRTR as stated in paragraph 3 & 4 above) in accordance with Ind AS 36 "Impairment of assets"/Ind AS 109 "Financial Instruments". This assessment involves significant management judgment and estimates on the valuation methodology and various assumptions used in determination of value in use/fair value by independent valuation experts/management as more fully described in the aforesaid note. Based on management''s assessment and independent valuation reports, no impairment is considered necessary on the receivables by the management.
Our opinion on the standalone financial statements is not modified in respect of the above matters.
Management''s Responsibility for the Standalone Financial Statements
The Company''s management and Board of Directors are responsible for the matters stated in section 134(5) of the Companies Act 201 3 ("Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, losses and other comprehensive
income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our responsibility is to conduct an audit of the standalone financial statements in accordance with Standards on Auditing and to issue an auditor''s report. However, because of the matter described in the Basis for Disclaimer of Opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these standalone financial statements.
We are independent of the Company in accordance with the Code of Ethics and provisions of the Act that are relevant to our audit of the standalone financial statements in India under the Act, and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics and the requirements under the Act.
Other Matters
1 (i) The standalone financial Statement include the audited
financial statement and other financial information of 2 joint operations, whose financial statement reflect total assets of '' 78.76 Crore as at March 31, 2023, total revenues of '' 41.13 Crore, total net profit/(loss) after tax of '' (1.26) Crore and total comprehensive income/(loss) of '' (1.26) Crore for the year ended March 31, 2023 as considered in this standalone financial Statement. These financial statement and other financial information have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the standalone financial statement, in so far it relates to amounts and disclosures included in respect of these joint operations, is solely based on the reports of the other auditors and the procedures performed by us are as
stated in paragraph above.
(ii) The standalone financial statement includes the unaudited financial statements and other unaudited financial information of 2 Joint Operations, whose financial statements and other financial information reflect total assets of '' 3.45 Crore as at March 31, 2023, total revenue of '' Nil, total net loss after tax and total comprehensive loss of '' Nil for the year ended March 31, 2023 and cash flows (outflow/ inflow) of '' Nil for the year ended March 31, 2023, as considered in the standalone financial statements. These unaudited financial statements and other unaudited financial information have been furnished to us by the management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations is based solely on such unaudited financial statements and other unaudited financial information. In our opinion and according to the information and explanations given to us by the management, these financial statements and other financial information are not material.
Our opinion on the standalone financial statements is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements/ financial information certified by the management.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' Report) Order, 2020 ("the Order") issued by the Central Government in terms of section 143 (11) of the Act, and except for the possible effects, of the matter described in the Basis for Disclaimer of Opinion section, we give in the "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. (A) As required by section 143(3) of the Act, we report that:
a) As described in the Basis for Disclaimer of Opinion section, we were unable to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) Due to the effects/possible effects of the matter described in the Basis for Disclaimer of Opinion section, we are unable to state whether proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d) Due to the effects/possible effects of the matter described in the Basis for Disclaimer of Opinion section, we are unable to state whether the financial statements comply with the Indian Accounting Standards specified under section 133 of the Act.
e) The matter described in the Basis for Disclaimer of Opinion section may have an adverse effect on the functioning of the Company.
f) The Company has defaulted in repayment of the obligations to its lenders and debenture holders which is outstanding as at March 31, 2023. Based on the legal opinion obtained by the Company and based on the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of section 164(2) of the Act.
g) The reservation relating to maintenance of accounts and other matters connected therewith are as stated in the Basis for Disclaimer Opinion section.
h) With respect to the matter to be included in the Auditors'' Report under section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, remuneration paid by the Company to its directors during the current year is in accordance with the provisions of section 197 of the Act.
i) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
(B) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 201 4, in our opinion and to the best of our information and according to the explanations given to us:
i. Except for the possible effects of the matter described in the Basis for Disclaimer of Opinion section, the Company has disclosed the impact of pending litigations as at March 31, 2023 on its financial position in its standalone financial statements - Refer Note 31 to the standalone financial statements.
ii. Except for the possible effects of the matter described in the Basis for Disclaimer of Opinion section, the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a) Management has represented to us that, to the best of it''s knowledge and belief, as disclosed in the notes to the accounts no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) Management has represented to us that, to the best of it''s knowledge and belief, as disclosed in the notes to the accounts no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on our audit procedure conducted that are considered reasonable and appropriate in the circumstances, nothing has come to our attention that cause us to believe that the representation given by the management under paragraph (2) (B) (iv) (a) & (b) contain any material misstatement.
v. The Company has not declared or paid any dividend during the year.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.
Chartered Accountants
Firm''s Registration No:101720W/W100355
Partner
Membership No: 129439
UDIN: 23129439BGXZQM5125
Place: Mumbai
Date: May 30, 2023
Mar 31, 2022
Report on the Audit of the Standalone Financial Statements Disclaimer of Opinion
We were engaged to audit the accompanying standalone financial statements of Reliance Infrastructure Limited ("the Company"), which comprise the standalone balance sheet as at March 31, 2022, the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements"), which includes 5 Joint Operations accounted on proportionate basis.
We do not express an opinion on the accompanying standalone financial statements of the Company. Because of the significance of the matter described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these standalone financial statements.
Basis for Disclaimer of Opinion
1. We refer to Note 38 to the standalone financial statements regarding the Company''s exposure in an EPC Company as on March 31, 2022 aggregating to '' 6,526.82 Crore (net of provision of '' 3,972.1 7 Crore). Further, the Company has also provided corporate guarantees aggregating to '' 1,775 Crore on behalf of the aforesaid EPC Company towards borrowings of the EPC Company.
According to the Management of the Company, these amounts have been funded mainly for general corporate purposes and towards funding of working capital requirements of the party which has been engaged in providing Engineering, Procurement and Construction (EPC) services primarily to the Company and its subsidiaries and its associates and the EPC Company will be able to meet its obligation.
As referred to in the above note, the Company has further provided Corporate Guarantees of '' 4,895.87 Crore in favour of certain companies towards their borrowings. According to the Management of the Company these amounts have been given for general corporate purposes. We were unable to obtain sufficient and appropriate audit evidence about the relationship, recoverability and possible obligation towards the Corporate Guarantees given. Accordingly, we are unable to determine the consequential implications arising therefrom in the standalone financial statements of the Company.
2. We refer to Statement of Changes in Equity of the Standalone financial statements wherein the loss on invocation of shares and/or fair valuation of shares of investments held in Reliance Power Limited (RPower) aggregating to '' 5,024.88 Crore for year ended March 31, 2020 was adjusted against the capital reserve as against charging the same in the Statement of Profit and Loss. The said treatment of loss on invocation and fair valuation of investments was not in accordance with the Ind AS 28 "Investment in Associates and Joint Venture", Ind AS 1 "Presentation of Financial Statements" and Ind AS 109 "Financial Instruments". Had the Company
March 31, 2021 and March 31, 2022 would have been lower by '' 5,024.88 Crore and Capital Reserve of the Company as at March 31, 2021 and March 31, 2022 would have been higher by '' 5,024.88 Crore.
Material Uncertainty Related to Going Concern
We draw attention to Note 50 to the standalone financial statements, wherein the Company has outstanding obligations to lenders and the Company is also a guarantor for its subsidiaries and associates whose loans have also fallen due which indicate that material uncertainty exists that may cast significant doubt on the Company''s ability to continue as a going concern. However,for the reasons more fully described in the aforesaid note the accounts of the Company have been prepared as a Going Concern.
Our opinion on the standalone financial statements is not modified in respect of this matter.
Emphasis of matter
1. We draw attention to Note 44 to the standalone financial statement which describes the impairment assessment in accordance with Ind AS 36 "Impairment of assets" / Ind AS 109 "Financial Instruments" performed by the Company in respect of net receivables of '' 1,677 Crore as at March 31,2022 from Reliance Power Limited associate of the company and its Subsidiaries ("RPower Group") . This assessment involves significant management judgment and estimates on the valuation methodology and various assumptions used in determination of value in use/fair value by independent valuation experts / management as more fully described in the aforesaid note. Based on management''s assessment and independent valuation reports, no impairment is considered necessary on the receivables by the management .
2. We draw attention to Note 14 to the standalone financial statements regarding KM Toll Road Private Limited (KMTR), a subsidiary of the Company, has terminated the Concession Agreement with National Highways Authority of India (NHAI) for Kandla Mundra Road Project (Project) on May 7, 2019, on account of Material Breach and Event of Default under the provisions of the Concession Agreement by NHAI. The Company is confident of recovering its entire investment of '' 544.94 Crore in KMTR, as at March 31, 2022 and no impairment has been considered necessary against the above investment for the reasons stated in the aforesaid note.
3. We draw attention to Note 41 to the standalone financial statements which describes the impairment assessment performed by the Company in respect of its Investments and loans of '' 2954.24 Crore in Nine subsidiaries i.e. Toll Road SPV''s Companies (excluding KMTR as stated in paragraph 2 above) in accordance with Ind AS 36 "Impairment of assets" / Ind AS 109 "Financial Instruments". . This assessment involves significant management judgment and estimates on the valuation methodology and various assumptions used in determination of value in use/fair value by independent valuation experts / management as more fully described in the aforesaid note. Based on management''s assessment and independent valuation reports, no impairment is considered necessary on the receivables by the management.
Our Conclusion on the Statement is not modified in respect
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4. We draw attention to Note 51 to the standalone financial statements, as regards to the management evaluation of COVID - 1 9 impact on the future performance of the Company.
Our opinion on the standalone financial statements is not modified in respect of the above matters.
Management''s Responsibility for the Standalone Financial Statements
The Company''s management and Board of Directors are responsible for the matters stated in section 134(5) of the Companies Act 201 3 ("Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, losses and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our responsibility is to conduct an audit of the standalone financial statements in accordance with Standards on Auditing and to issue an auditor''s report. However, because of the matter described in the Basis for Disclaimer of Opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these standalone financial statements.
We are independent of the Company in accordance with the Code of Ethics and provisions of the Act that are relevant to our audit of the standalone financial statements in India under the Act, and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics and the requirements under the Act.
Other Matters
1. (i) The standalone financial Statements include the
audited financial statements and other financial information of 3 joint operations, whose financial statements reflect total assets of '' 132.32 Crore as at March 31, 2022, total revenues of '' 208.68 Crore, total net profit after tax of '' 3.71 Crore and
total comprehensive income of '' 3.71 Crore for the year ended March 31, 2022 as considered in this standalone financial Statements. These financial statement and other financial information have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the standalone financial statements, in so far it relates to amounts and disclosures included in respect of these joint operations, is solely based on the reports of the other auditors and the procedures performed by us are as stated in paragraph above.
(ii) The standalone financial statement includes the unaudited financial statements and other unaudited financial information of 2 Joint Operations, whose financial statements and other financial information reflect total assets of '' 3.45 Crore as at March 31, 2022, total revenue of '' Nil, total net loss after tax and total comprehensive loss of ''0.24 Crore for the year ended March 31, 2022 and cash flows (outflow/inflow) of '' Nil for the year ended March 31, 2022, as considered in the standalone financial statements. These unaudited financial statements and other unaudited financial information have been furnished to us by the Board of Directors and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of these jointly controlled entities is based solely on such unaudited financial statements and other unaudited financial information. In our opinion and according to the information and explanations given to us by the Board of Directors, these financial statements and other financial information are not material.
Our opinion on the standalone financial statements is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements/ financial information certified by the management.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' Report) Order, 2020 ("the Order") issued by the Central Government in terms of section 143 (11) of the Act, and except for the possible effects, of the matter described in the Basis for Disclaimer of Opinion section, we give in the "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2(A) As required by section 143(3) of the Act, we report that:
a) As described in the Basis for Disclaimer of Opinion section, we were unable to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) Due to the effects / possible effects of the matter described in the Basis for Disclaimer of Opinion section, we are unable to state whether proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d) Due to the effects / possible effects of the matter described in the Basis for Disclaimer of Opinion section, we are unable to state whether the financial statements comply with the Indian Accounting Standards specified under section 133 of the Act.
e) The matter described in the Basis for Disclaimer of Opinion section may have an adverse effect on the functioning of the Company.
f) The Company has defaulted in repayment of the obligations to its lenders and debenture holders which is outstanding as at March 31, 2022. Based on the legal opinion obtained by the Company and based on the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a director in terms of section 164(2) of the Act..
g) The reservation relating to maintenance of accounts and other matters connected therewith are as stated in the Basis for Disclaimer Opinion section.
h) With respect to the matter to be included in the Auditors'' Report under section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of section 197 of the Act.
i) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
(B) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. Except for the possible effects of the matter described in the Basis for Disclaimer of Opinion section, the Company has disclosed the impact of pending litigations as at March 31, 2022 on its financial position in its standalone financial statements -Refer Note 31 to the standalone financial statements.
ii. Except for the possible effects of the matter described in the Basis for Disclaimer of Opinion section, the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. Other than for dividend amounting to '' 0.26 Crore pertaining to the financial year 20102011, financial year 2011-12, financial year 2012-13 and financial year 2013-14 were kept in abeyance due to pending litigations amongst the investors, there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a)Management has represented to us that, to the best of it''s knowledge and belief, as disclosed in the notes to the accounts no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b)Management has represented to us that, to the best of it''s knowledge and belief, as disclosed in the notes to the accounts no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
( c)Based on our audit procedure conducted that are considered reasonable and appropriate in the circumstances, nothing has come to our attention that cause us to believe that the representation given by the management under paragraph (2) (B) (iv) (a) & (b) contain any material misstatement.
v. The Company has not declared or paid any dividend during the year.
For Chaturvedi & Shah LLP
Chartered Accountants
Firm Registration No. 101720W/W100355
Parag D. Mehta
Partner
Membership No. 1 13904
UDIN: 221 1 3904AIYQJL8268
Place: Mumbai
Date: May 13, 2022
Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
1. We have audited the accompanying standalone Ind AS financial statements of Reliance Infrastructure Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe standalone Ind AS financial statementsâ).
Managementâs Responsibility for the Standalone Ind AS Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of state of affairs, profit (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
5. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its profits (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Emphasis of matter
We draw attention to the following matters in the Notes to the standalone Ind AS financial statements:
9. We draw attention to Note No. 41 of the standalone Ind AS financial statements regarding the Scheme of Amalgamation (âthe Schemeâ) between Reliance Infraprojects Limited (wholly owned subsidiary of the Company) and the Company sanctioned by the Honâble High Court of Judicature at Bombay vide its order dated March 30, 201 1, wherein the Company, as determined by the Board of Directors, is permitted to adjust foreign exchange/derivative/hedging losses/ gains debited/credited to the Statement of Profit and Loss by a corresponding withdrawal from or credit to General Reserve which overrides the relevant provisions of Ind AS - 1 âPresentation of financial statementsâ. The net gain on account of derivative instruments / forward contracts of Rs.5.79 Crore for the year ended March 31, 2018 has been credited to the Statement of Profit and Loss and an equivalent amount has been transferred to General Reserve. Similarly foreign exchange loss of Rs.17.47 Crore (net off of foreign exchange loss of Rs. Nil attributable to finance cost) for the year ended March 31, 2018 has been debited to Statement of Profit and Loss and an equivalent amount has been withdrawn from General Reserve in terms of the Scheme. Had such transfer / withdrawal not been made, profit before tax for the year ended March 31, 2018 would have been lower by Rs.11.68 Crore and General Reserve would have been higher by an equivalent amount.
10. We draw attention to Note No. 43 of the standalone Ind AS financial statements, wherein pursuant to the Scheme of Amalgamation of Reliance Cement Works Private Limited with Western Region Transmission (Maharashtra) Private Limited (WRTM), wholly owned subsidiary of the Company, which was subsequently amalgamated with the Company with effect from April 1, 2013, WRTM or its successor(s) is permitted to offset any extraordinary/exceptional items, as determined by the Board of Directors, debited to the Statement of Profit and Loss by a corresponding withdrawal from General Reserve, which overrides the relevant provisions of Ind AS - 1 âPresentation of financial statementsâ. The Board of Directors of the Company, in terms of the aforesaid scheme, determined an amount of Rs.411.50 Crore for the year ended March 31, 2018 as an exceptional item being the aggregate of write off of loan of Rs.190.39 Crore given to a subsidiary viz., Mumbai Metro One Private Limited, write-off of investment of Rs.22.61 Crore in another subsidiary viz., Reliance Defence System Private Limited and loss on fair valuation of assets and liabilities considered as held for sale of Rs.198.50 Crore, which has been debited to the Statement of Profit and Loss and an equivalent amount has been withdrawn from General Reserve. Had such withdrawal not been made, profit before tax for the year ended March 31, 2018 would have been lower by Rs.411.50 Crore and General Reserve would have been higher by an equivalent amount.
Our opinion is not modified in respect of above matters.
Other Matter
11. The comparative financial information of the Company for the year ended March 31, 2017 included in these standalone Ind AS financial statements had been jointly audited by Haribhakti & Co. LLP, Chartered Accountants and Pathak H.D. & Associates, Chartered Accountants, whose report dated April 15, 2017 expressed an unmodified opinion on those audited standalone Ind AS financial statements for the year ended March 31, 2017.
Our opinion is not modified in respect of the above matter.
Report on Other Legal and Regulatory Requirements
12. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Aâa statement on the matters specified in paragraphs 3 and 4 of the Order.
13. As required by Section 143(3) of the Act, we report that:
a) 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) 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 Cash Flow Statement 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 Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act; read with paragraphs 9 and 10 above, regarding exercise of option available as per Court Orders which overrides the relevant provisions of IND AS - 1 âPresentation of financial statementsâ;
e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ;
g) With respect to the other matters to be included in the Auditorâs 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 as at March 31, 2018 on its financial position in its standalone Ind AS financial statements. - Refer Note No. 35(a) to the standalone Ind AS financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018; and
iv. The disclosures in the standalone Ind AS financial statements regarding holdings as well as dealings in specified bank notes during the period from 08 November 2016 to 30 December 2016 have not been made since they do not pertain to the financial year ended March 31, 2018.
Referred to in our AuditorsâReport of even date to the members of Reliance Infrastructure Limited on the Standalone Ind AS Financial Statements for the year ended March 31, 2018
(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of its fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets, by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed. However, we are informed that distribution system being underground is not physically verifiable.
(c) According to the information and explanations given to us and based on the examination of the registered sale deeds / transfer deeds / conveyance deeds / possession letters / allotment letters and other relevant records evidencing title/possession provided to us, we report that, the title deeds of all the immovable properties comprising of land and buildings other than self-constructed properties recorded as Property, Plant and Equipment, which are freehold, are held in the name of the Company as at the balance sheet date, except the following:
Particulars of land and Building |
Total number of cases |
Gross Block as on march 31, 2018 (Rs.crore) |
Net Block as on march 31, 2018 (Rs.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 Honâble High Courts. |
Freehold land at Hyderabad |
1 |
4.16 |
4.16 |
Title deeds are not available with company. |
In respect of immovable properties comprising of land and buildings that have been taken on lease and disclosed as Property, Plant and Equipment in the standalone Ind AS financial statements, the lease agreements or other relevant records are in the name of the Company, except the following:
Particulars of land and Building |
Total number of cases |
Gross Block as on march 31, 2018 (Rs.crore) |
Net Block as on march 31, 2018 (Rs.crore) |
Remarks |
Leasehold land at various locations |
3 |
0.35 |
0.30 |
The lease agreements are in the names of erstwhile Companies that merged with the Company under Section 391 to 394 of the Companies Act, 1 956 pursuant to Schemes of Amalgamation as approved by the Honâble High Courts. |
Leasehold land at various locations |
4 |
4.28 |
0.59 |
Lease agreements are not available with company. |
The above reporting does not cover assets taken on Finance Lease and included as Property, Plant and Equipment as per Appendix C to Ind AS 17 âLeasesâ.
(ii) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on 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 us, the Company has not granted any loans, secured or unsecured, to any company, firm, limited liability partnerships or other party covered in the register maintained under Section 189 of the Act. Accordingly, the provisions stated in paragraph 3(iii)(a), (b) & (c) of the Order are not applicable.
(iv) Based on the information and explanations given to us in respect of loans, investments, guarantees and securities, the Company has complied with the provisions of Section 185 and 186 of the Act, to the extent applicable.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Sections 73 to 76 of the Act and the rules framed there under.
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where the maintenance of cost records has been specified by the Central Government under sub-section (1) of Section 148 of the Act and the rules framed there under and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, employeesâstate insurance, income-tax, sales tax, service tax, goods and service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues as applicable except in case of electricity duty on consumption of Electricity and tax on sale of electricity where there have been significant delays in depositing the dues.
(b) According to the information and explanations given to us, there are no undisputed dues in respect of provident fund, employeesâstate insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, goods and service tax, cess as at March 31, 2018 which were outstanding for a period of more than six months from the date they became payable, except for the following dues:
Name of the statute |
Nature of the dues |
Amount1 (Rs.crore) |
Period to which the amount relates |
Due Date |
Date of Payment |
The Maharashtra Electricity Duty Act, 2016 |
Electricity duty on Consumption of Electricity |
1,080.81 |
September 2016 to August 2017 |
End of next month |
Not yet paid |
The Maharashtra tax on sale of electricity Act, 1963 |
Tax on sale of electricity |
134.05 |
September 2016 to August 2017 |
End of next month |
Not yet paid |
âIncluding interest levied under the relevant statute for delay in payment.
(c) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income-tax, sales-tax, service-tax, duty of customs, duty of excise and value added tax as at March 31, 2018 which have not been deposited on account of a dispute are as follows:
Name of the statute |
Nature of dues |
Amount (Rs.crore) |
Period to which the amount relates |
Forum where the dispute is pending |
Delhi Sales Tax Act, 1975 |
Sales Tax |
328.261 * |
2004-2005 |
Department of Trade and Taxes Tribunal, & Divisional Bench of High Court, New Delhi |
Delhi Sales Tax on Works Contract Act, 1999 |
Works Contract Tax |
0.052 |
2004-2005 |
Joint Commissioner (Appeal), Department of Trade and Taxes, New Delhi |
Orissa Sales Tax Act,1947 |
Sales Tax |
3.46 3 |
2001-2002 |
Orissa Sales Tax Tribunal, Cuttack |
West Bengal Value Added Tax Act, 2003 |
VAT |
56.424 |
2010-2011 |
Appellate Additional Commissioner, Kolkata |
West Bengal Value Added Tax Act, 2003 |
VAT |
4.275 |
2008-2009 |
West Bengal Commercial Tax Appellate and Revisional Board, Kolkata |
Madhya Pradesh Value Added Tax Act, 2002 |
VAT |
3.126 |
2009-2010 |
Madhya Pradesh Commercial Tax Appellate Board, Bhopal |
Central Sales Tax Act, 1956 |
Central Sales Tax |
0.197 |
2009-2010 |
Madhya Pradesh Commercial Tax Appellate Board, Bhopal |
Uttar Pradesh Trade Tax Act, 1948 |
Sales Tax |
0.249 |
2009-2010 |
Additional Commissioner Grade II, Appeals II, Noida |
Central Sales Tax Act, 1956 |
Central Sales Tax |
0.0610 |
2010-2011 |
Additional Commissioner Grade II, Appeals II, Noida |
Maharashtra Value Added Tax Act, 2002 |
Sales Tax |
0.0711 |
2008-2009 |
Joint Commissioner (Appeals) of Sales tax, Mumbai |
Uttar Pradesh Trade Tax Act, 1948 |
Sales Tax |
0.0612 |
2006-2007 |
Additional Commissioner Appeals, Trade Tax Department Lucknow |
Central Sales Tax Act, 1956 |
Central Sales Tax |
2.4813 |
2006-2007 |
Additional Commissioner Grade II, Appeals II, Noida |
Uttar Pradesh Value Added Tax Act, 2008 |
VAT |
0.0414 |
2011-2012 |
Additional Commissioner Grade II, Appeals II, Noida |
Uttar Pradesh Trade Tax Act ,1948 |
Sales Tax |
2.2616 |
2007-2008 |
Additional Commissioner Grade II, Appeals II, Noida |
Central Sales Tax Act, 1956 |
Central Sales Tax |
0.0217 |
2011-2012 |
Additional Commissioner Grade II, Appeals II, Noida |
Orissa Sales Tax Act,1947 |
Sales Tax |
0.24 |
2003-2004 |
Orissa Sales Tax Tribunal, Cuttack |
Andhra Pradesh Value Added Tax Act, 2005 |
VAT |
5.3318 |
2010-2011 & 2011-2012 |
Andhra Pradesh VAT Appellate Tribunal, Vishakhapatnam |
Bihar Value Added Tax Act , 2005 |
VAT |
2.17 19 |
201 3-2014, 2014-2015 & 2015-2016 |
Joint Commissioner of Commercial Taxes (Appeal), Bihar |
Income Tax Act, 1961 |
Income Tax |
794.89 (for which the tax authorities are the appellant) |
A.Y. 1983-1984, 2003-2004, 2006-2007, 2007-2008 & 2008-2009 |
Supreme Court |
Income Tax Act, 1961 |
Income Tax |
465.74 (for which the tax authorities are the appellant) |
A.Y.1998-1 999, 1999-2000, 2001-2002, 2002-2003, 2003-2004, 2007-2008, 2008-2009 & 2009-2010 |
Bombay High Court |
Income Tax Act, 1961 |
Income Tax |
24.92 (for which the tax authorities are the appellant) |
A.Y. 2012-2013 |
Income Tax Appellate Tribunal, Mumbai |
Income Tax Act, 1961 |
Income Tax Penalty |
121.32 |
AY 2007-08, 2010-11 and 2015-16 |
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 |
5.16 |
2009-2010 |
Director General of Foreign Trade Policy, Kolkata |
Customs Act, 1962 |
Custom duty |
64.3820 |
April 2012-January 2013 & 2013-2014 |
Custom, Excise and Service Tax Appellate Tribunal, Mumbai |
Customs Act, 1962 |
Custom duty |
10.6521 |
2011-2012 & 2012-2013 |
Custom, Excise and Service Tax Appellate Tribunal, Hyderabad |
Customs Act, 1962 |
Custom duty |
0.1322 |
2011-2012 & 2012-2013 |
Commissioner of Customs (Appeal) Visakhpatanam |
Customs Act, 1962 |
Custom duty |
0.0323 |
2005-2006 |
Commissioner of Customs (Appeal) Kandla Gujarat |
The Central Excise Act, 1944 |
Excise Duty |
0.38 |
March 2011 to June 2015 |
Commissioner Appeal of Goods Service and Tax and Central Excise, Mumbai |
The Central Excise Act, 1944 |
Excise Duty |
0.20 |
July 2015 to September 2016 |
Assistant Commissioner of Central Excise (Appeals-1) , Mumbai |
Finance Act, 1994 |
Service Tax |
1 0.3324 |
2011-2012 & 2012-2013 |
Custom, Excise and Service Tax Appellate Tribunal, Mumbai |
Finance Act, 1994 |
Service Tax |
92.4125 |
October 2011 - December 2016 |
Custom, Excise and Service Tax Appellate Tribunal, Mumbai |
Finance Act, 1994 |
Service Tax |
307.34 |
July 1, 2012 to June 30 2017 |
Commissioner of Central GST & Central Excise , Mumbai |
Includes 1 Rs.7.63 Crore, 2 Rs.5,000, 3 Rs.1.36 Crore, 4 Rs.0.20 Crore, 5 Rs.0.40 Crore, 6 Rs.1.67 Crore, 7 Rs.0.04 Crore, 8 Rs.0.13 Crore, 9 Rs.0.09 Crore, 10 Rs.0.02 Crore 11 Rs.35,000, 12 Rs.0.01 Crore, 13 Rs.0.62 Crore, 14 Rs.0.02 Crore, 15 Rs.0.01 Crore, 16 Rs.0.26 Crore, 17 Rs.0.02 Crore, 18 Rs.1.33 Crore, 19 Rs.0.43 Crore, 20 Rs.23.13 Crore, 21 Rs.3.71 Crore, 22 Rs.0.44 Crore, 23 Rs.0.03 Crore, 24 Rs.5.46 and 25 Rs.20.60 Crore paid / adjusted under protest.
(viii) According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or dues to debenture holders. The Company did not have any loans or borrowings from government during the year.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and in our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were raised.
(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such instance by the management.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the provisions of Section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company and accordingly the provisions of the clause 3(xii) of the Order are not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions entered into by the Company with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable. The details of related party transactions as required under Ind AS 24, Related Party Disclosures specified under Section 133 of the Act, have been disclosed in the standalone Ind AS financial statements.
(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence the provisions of clause 3(xiv) of the Order are not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its Directors or persons connected to them.
(xvi) According to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For B S R & co. LLP For Pathak H. D. & Associates
Chartered Accountants Chartered Accountants
Firm Regn. No: 101248W/ Firm Regn. No. 107783W
W-100022
Bhavesh Dhupelia Vishal D. Shah
Partner Partner
Membership No: 042070 Membership No. 119303
Date : April 23, 2018 Date : April 23, 2018
Place : Mumbai Place : Mumbai
Mar 31, 2017
To the Members of Reliance Infrastructure Limited
Report on the Standalone Ind AS Financial Statements
1. We have audited the accompanying standalone financial statements of Reliance Infrastructure Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the Standalone Ind AS financial statements").
Management''s Responsibility for the Standalone Ind AS
Financial Statements
2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 201 3 ("the Act") with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of state of affairs (financial position), profit (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these Standalone Ind AS financial statements based on our audit.
4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
5. We conducted our audit of the Standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Ind AS financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the Standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the Standalone Ind AS financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS financial statements.
Opinion
8. I n our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs (financial position) of the Company as at March 31, 2017, and its profits (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
We draw attention to the following matters in the Notes to the
Standalone Ind AS financial statements:
9. We draw attention to Note No. 40 of the Standalone Ind AS financial statement regarding the Scheme of Amalgamation (''the Scheme'') between Reliance Infraprojects Limited (wholly owned subsidiary of the Company) and the Company sanctioned by the Hon''ble High Court of Judicature at Bombay vide its order dated March 30, 201 1, wherein the Company, as determined by the Board of Directors, is permitted to adjust foreign exchange / derivative / hedging losses / gains debited/ credited to the Statement of Profit and Loss by a corresponding withdrawal from or credit to General Reserve which overrides the relevant provisions of IND AS - 1 "Presentation of financial statements". The net gain on account of derivative instruments / forward contracts of '' 27.34 Crore for the year ended March 31, 2017 has been credited to Statement of Profit and Loss and an equivalent amount has been transferred to General Reserve. Similarly foreign exchange loss of '' 272.36 Crore (net off of foreign exchange loss of '' Nil attributable to finance cost) for the year ended March 31, 2017 has been debited to Statement of Profit and Loss and an equivalent amount has been withdrawn from General Reserve in terms of the Scheme. Had such transfer / withdrawal not been done, profit before tax for the year ended March 31, 2017 would have been lower by '' 245.02 Crore and General Reserve would have been higher by an equivalent amount.
1 0. We draw attention to Note no. 42 of the Standalone Ind AS financials statement, wherein pursuant to the Scheme of amalgamation of Reliance Cement Works Private Limited with Western Region Transmission (Maharashtra) Private Limited (WRTM), wholly owned subsidiary of the Company, which was subsequently amalgamated with the
Company w.e.f. April 1, 2013, WRTM or its successors is permitted to offset any extra ordinary / exceptional items, as determined by the Board of Directors, debited in the Statement of Profit and Loss by a corresponding withdrawal from General Reserve, which override the relevant provisions of IND AS - 1 "Presentation of financial statements". The Board of Directors of the Company in terms of the aforesaid scheme, determined an amount of Rs, 558.58 Crore for the year ended March 31, 2017 as Exceptional items being write off of EPC Advances as bad debts, which have been debited in the Statement of Profit and Loss and an equivalent amount has been withdrawn from General Reserve. Had such withdrawal not been done, profit before tax for the year ended March 31, 2017 would have been lower by Rs, 558.58 Crore and General Reserve would have been higher by an equivalent amount.
11. We draw attention to Note 39 of the Standalone Ind AS financial Statement regarding termination of Concession Agreement by Delhi Airport Metro Express Private Limited (DAMEPL), a SPV of the Company with Delhi Metro Rail Corporation (DMRC) for reasons stated therein. The matter is sub-judice and the ultimate recovery of the investment of the Company of Rs, 2,339.95 Crore in DAMEPL is dependent upon the outcome of the arbitration proceedings. The net amount outstanding in books of account as on March 31, 2017 is Rs, 726.20 Crore.
Our opinion is not modified in respect of above matters.
Other Matters
12. The comparative financial information of the Company for the year ended March 31, 2016 and the transition date opening balance sheet as at April 1, 201 5 included in these Standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by us whose report for the year ended March 31, 2016 and March 31, 2015 dated May 28, 2016 and May 27, 201 5 respectively expressed an unmodified opinion on those Standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us. Our opinion is not modified in respect of above matter.
Report on Other Legal and Regulatory Requirements
13. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
14. As required by Section 143(3) of the Act, we report that:
a) 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) 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 Cash Flow Statement 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 Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014; as referred to in paragraph 9 and 10 above, the Company has exercised the option available as per court orders which overrides the relevant provisions of IND AS - 1 "Presentation of financial statements".
e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B";
g) With respect to the other matters to be included in the Auditor''s 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 as at March 31, 2017 on its financial position in its Standalone Ind AS financial statements. - Refer Note 34(a) on Contingent Liabilities to the Standalone Ind AS financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts - Refer Note 54 (B) to the Standalone Ind AS financial statements;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2017;
iv. The Company has provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November
8, 2016 to December 30, 2016 and is in accordance with the books of account maintained by the Company - Refer Note 58 to the Standalone Ind AS financial statements.
(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of its fixed assets.
(b) As informed to us, the fixed assets are physically verified by the Management according to a phased program designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed. However, we are informed that distribution system being underground is not physically verifiable.
(c) According to the information and explanations given to us and based on the examination of the registered sale deed / transfer deed / conveyance deed / possession letter / allotment letter and other relevant records evidencing title/ possession provided to us, we report that, the title deeds of all the immovable properties comprising of land and buildings other than self-constructed properties recorded as Property, Plant and Equipment, which are freehold, are held in the name of the Company as at the balance sheet date, except the following:
Particulars of Land and Building |
Total number of cases |
Gross Block as on March 31, 2017 (Rs, Crore) |
Net Block as on March 31, 2017 (Rs, 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 company. |
In respect of immovable properties comprising of land and buildings that have been taken on lease and disclosed as Property, Plant and Equipment in the standalone Ind AS financial statements, the lease agreements or other relevant records are in the name of the Company, except the following:
Particulars of Land and Building |
Total number of cases |
Gross Block as on March 31, 2017 (Rs, Crore) |
Net Block as on March 31, 2017 (Rs, Crore) |
Remarks |
Leasehold land at various locations |
3 |
0.35 |
0.30 |
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 various locations |
4 |
4.28 |
0.59 |
Lease agreements are not available with company. |
The above reporting does not cover assets taken on Finance Lease and included as Property, Plant and Equipment as per Appendix
C to Ind AS 17 "Leases".
(ii) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable. As informed, the discrepancies noticed on 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 us, the Company has not granted any loans, secured or unsecured, to any company, firm, limited liability partnerships or other party covered in the register maintained under Section 189 of the Act. Accordingly, the provisions stated in paragraph 3(iii)(a), (b) & (c) of the Order are not applicable.
(iv) Based on information and explanation given to us in respect of loans, investments, guarantees and securities, the Company has complied with the provisions of Section 185 and 186(1) of the Act. Further, as the Company is engaged in the business of providing infrastructural facilities, the provisions of Section 186[except for sub-section(1)] are not applicable to it.
(v) I n our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Sections 73 to 76 of the Act and the rules framed there under.
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where the maintenance of cost records has been specified by the Central Government under sub-section (1) of Section 148 of the Act and the rules framed there under and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues as applicable except in case of Taxes on Consumption and sales of Electricity where there have been delays in depositing the dues.
(b) According to the information and explanations given to us, undisputed dues in respect of provident fund, employees'' state insurance, income tax, sales tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, which were outstanding, at the yearend for a period of more than six months from the date they became payable are as follows:
Name of the statute |
Nature of the dues |
Amount (Rs, Crore) |
Period to which the amount relates |
Due Date |
Date of Payment |
Maharashtra Electricity Duty Act, 2016 |
Taxes on Consumption and sale of Electricity |
104.78 |
For the month of August, 2016 |
30/09/2016 |
Not yet paid |
(c) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income-tax, sales-tax, service-tax, customs duty, excise duty and value added tax as at March 31, 2017 which have not been deposited on account of a dispute are as follows:
Name of the statute |
Nature of dues |
Amount (Rs, Crore) |
Period to which the amount relates |
Forum where the dispute is pending |
Delhi Sales Tax Act, 1975 |
Sales Tax |
311.741 |
2004-2005 |
Department of Trade and Taxes Tribunal, & Divisional Bench of High Court, New Delhi |
Delhi Sales Tax on Works Contract Act, 1999 |
Works Contract Tax |
0.052 |
2004-2005 |
Joint Commissioner (Appeal), Department of Trade and Taxes, New Delhi |
Orissa Sales Tax Act,1947 |
Sales Tax |
3.463 |
2001-2002 |
Orissa Sales Tax Tribunal, Cuttack |
West Bengal Value Added Tax Act, 2003 |
VAT |
56.424 |
2010-2011 |
Appellate Additional Commissioner, Kolkata |
West Bengal Value Added Tax Act, 2003 |
VAT |
4.275 |
2008-2009 |
West Bengal Appellate and Revisional Board |
Madhya Pradesh Value Added Tax Act, 2002 |
VAT |
3.126 |
2009-2010 |
Madhya Pradesh Commercial Tax Appellate Board, Bhopal |
Central Sales Tax Act, 1956 -Madhya Pradesh |
Central Sales Tax |
0.197 |
2009-2010 |
Madhya Pradesh Commercial Tax Appellate Board, Bhopal |
Madhya Pradesh Entry Tax Act, 1976 |
Entry Tax |
0.488 |
2009-2010 |
Madhya Pradesh Commercial Tax Appellate Board, Bhopal |
Uttar Pradesh Trade Tax Act, 1948 |
Sales Tax |
0.249 |
2009-2010 |
Additional Commissioner Grade II, Appeals II, Noida |
Central Sales Tax Act, 1956 - Uttar Pradesh |
Central Sales Tax |
0.0610 |
2010-2011 |
Additional Commissioner Grade II, Appeals II, Noida |
Maharashtra Value Added Tax Act, 2002 |
Sales Tax |
0.0711 |
2008-2009 |
Joint Commissioner (Appeals) of Sales tax, Mumbai |
Uttar Pradesh Trade Tax Act, 1948 |
Sales Tax |
0.0612 |
2006-2007 |
Additional Commissioner Appeals, Trade Tax Department Lucknow |
Central Sales Tax Act, 1956 - Uttar Pradesh |
Central Sales Tax |
2.4813 |
2006-2007 |
Additional Commissioner Grade II, Appeals II, Noida |
Uttar Pradesh Value Added Tax Act, 2008 |
VAT |
0.0414 |
2011-2012 |
Additional Commissioner Grade II, Appeals II, Noida |
Uttar Pradesh Entry Tax Act, 2007 |
Entry Tax |
0.0515 |
2007-2008 & 2008-2009 |
Additional Commissioner Grade II, Appeals II, Noida |
Name of the statute |
Nature of dues |
Amount (Rs, Crore) |
Period to which the amount relates |
Forum where the dispute is pending |
West Bengal Value Added Tax Act, 2003 |
VAT |
25.4616 |
2011-2012 |
West Bengal Appellate Tribunal |
Uttar Pradesh Trade Tax Act, 1948 |
Sales Tax |
2.2617 |
2007-2008 |
Additional Commissioner Grade II, Appeals II, Noida |
Central Sales Tax Act, 1956 - Uttar Pradesh |
Central Sales Tax |
0.0218 |
2011-2012 |
Additional Commissioner Grade II, Appeals II, Noida |
Orissa Sales Tax Act,1947 |
Sales Tax |
0.24 |
2003-2004 |
Orissa Sales Tax Tribunal, Cuttack |
Andhra Pradesh Value Added Tax Act, 2005 |
VAT |
5.3319 |
2010-2011 & 2011-2012 |
Andhra Pradesh VAT Appellate Tribunal, Vishakhapatnam |
Central Sales Tax Act, 1956 - West Bengal |
Central Sales Tax |
0.15 |
2013-2014 |
Joint Commissioner of Commercial Taxes , West Bengal |
Bihar Value Added Tax Act , 2005 |
VAT |
2.1720 |
2013-2014, 2014-2015 & 2015-2016 |
Joint Commissioner of Commercial Taxes (Appeal), Bihar |
West Bengal Tax on Entry of Goods into Local Areas Act , 2012 |
Entry Tax |
0.35 |
2013-2014 |
Joint Commissioner of Commercial Taxes , West Bengal |
Income Tax Act, 1961 |
Income Tax |
544.27 (for which the tax authorities are the appellant) |
A.Y. 2001-2002, 2002-2003, 2003-2004, 2006-2007, 2007-2008 & 2008-2009 |
Supreme Court |
Income Tax Act, 1961 |
Income Tax |
594.92 (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 |
Bombay High Court |
Income Tax Act, 1961 |
Income Tax |
435.56 (for which the tax authorities are the appellant) |
A.Y. 2010-2011 & 2011-2012 |
Income Tax Appellate Tribunal, Mumbai |
Income Tax Act, 1961 |
Income Tax Penalty |
8.27 |
A.Y. 2010-11 |
CIT (Appeals), Mumbai |
Includes 1 Rs, 7.63 Crore, 2 Rs, 5,000, 3 Rs, 1.36 Crore, 4 Rs, 0.20 Crore, 5 Rs, 0.40 Crore, 6 Rs, 1.67 Crore, 7 Rs, 0.04 Crore, 8 Rs, 0.13 Crore, 9 Rs, 0.09 Crore, 10 Rs, 0.02 Crore 11 Rs, 35,000, 1 2 Rs,0.01 Crore, 13 Rs, 0.62 Crore, 14 Rs, 0.02 Crore, 15 Rs, 0.01 Crore, 16 Rs, 0.84 Crore, 17 Rs, 0.26 Crore, 18 Rs, 0.02 Crore, 19 Rs, 1.33 20 Crore, 20 Rs, 0.43 Crore paid / adjusted under protest.
*As per the terms of the contract the amount is recoverable from the customers. The amount reported above includes interest of Rs, 181.77 Crore.
(viii) According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders.
(ix) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and in our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were raised.
(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such instance by the management.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the provisions of Section 197 read with Schedule V to the Act.
(xii) I n our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company and accordingly the provision of the clause 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions entered into by the Company with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable.
The details of related party transactions as required under Ind AS 24, Related Party Disclosures specified under Section 133 of the Act, have been disclosed in the Standalone Ind AS financial statements.
(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence the provision of clause 3(xiv) of the Order is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its Directors or persons connected to its Directors.
(xvi) According to the information and explanation given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1 934.
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Reliance Infrastructure Limited ("the Company") as of March 31, 2017 in conjunction with our audit of the Standalone Ind AS financial statements of the Company for the year ended on that date. Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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 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 Company''s 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 Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, specified under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, 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 over financial reporting 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 over financial reporting and their operating effectiveness.
Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 auditor''s judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS 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 audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting 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 Ind AS 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 Company''s assets that could have a material effect on the Standalone Ind AS financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, 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 over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting 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.
For Haribhakti & Co. LLP For Pathak H. D. & Associates
Chartered Accountants Chartered Accountants
Firm Regn. No: 103523W / W100048 Firm Regn. No: 107783W
Bhavik L. Shah Vishal D. Shah
Partner Partner
Membership No.122071 Membership No. 1 19303
Place : Mumbai Place : Mumbai
Date : April 15, 2017 Date : April 15, 2017
Mar 31, 2016
1. We have audited the accompanying standalone financial statements of
Reliance Infrastructure Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2016, the Statement of Profit and Loss,
the Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
management''s Responsibility for the Standalone financial Statements
2. The Company''s Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("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 and cash fows of the Company in accordance with the
accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the standalone
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
4. We have taken into account the provisions of the Act, the
accounting and auditing standards and matters which are required to be
included in the audit report under the provisions of the Act and the
Rules made there under.
5. We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the standalone financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the standalone financial statements.
The procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the standalone
financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal financial control
relevant to the Company''s preparation of the standalone financial
statements that give a true and fair view in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of the accounting policies used
and the reasonableness of the accounting estimates made by the
Company''s Directors, as well as evaluating the overall presentation of
the standalone financial statements.
We believe that the audit evidence we have obtained is suffcient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
6. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2016, and its Profits and its
cash fows for the year ended on that date.
Emphasis of matter We draw attention to the following matters in the
Notes to the standalone financial statements:
7. We draw attention to Note no. 34 of the standalone financial
statements regarding the Scheme of Amalgamation (''the Scheme'') between
Reliance Infraprojects Limited (wholly owned subsidiary of the Company)
and the Company sanctioned by the Hon''ble High Court of Judicature at
Bombay vide its order dated March 30, 2011, wherein the Company, as
determined by the Board of Directors, is permitted to adjust foreign
exchange/derivative/hedging contracts losses / gains debited/credited
to the Statement of Profit and Loss by a corresponding withdrawal from
or credit to General Reserve which overrides the relevant provisions of
Accounting Standard 5 (AS 5) "Net Profit or Loss for the Period, Prior
Period Items and Changes in Accounting Policies". The net foreign
exchange gain of Rs, 36.72 Crore has been credited to the Statement of
Profit and Loss and an equivalent amount has been transferred to General
Reserve. Similarly, foreign exchange loss of Rs, 252.50 Crore
attributable to fnance cost and net loss on account of derivative
instrument / forward contracts of Rs, 27.04 Crore have been debited to
the Statement of Profit and Loss and an equivalent amount has been
withdrawn from General Reserve. Had such transfer / withdrawal not been
done, Profit before tax for the year ended March 31, 2016 would have
been lower by Rs, 242.82 Crore and General Reserve would have been higher
by an equivalent amount.
8. We draw attention to Note no. 37 of the standalone financial
statements, wherein in terms of the Scheme of amalgamation of Reliance
Cement Works Private Limited with Western Region Transmission
(Maharashtra) Private Limited (WRTM), wholly owned subsidiary of the
Company, which was subsequently amalgamated with the Company w.e.f.
April 1, 2013, WRTM or its successors is permitted to offset any extra
ordinary / exceptional items, as determined by the Board of Directors,
debited in the Statement of Profit and Loss by a corresponding
withdrawal from General Reserve, which override the relevant provisions
of Accounting Standard 5 (AS-5) ''Net Profit or loss for the Period,
Prior Period Items and Changes in Accounting Policies''. The Board of
Directors of the Company in terms of the aforesaid scheme, determined
an amount of Rs, 948.62 Crore for the year ended March 31, 2016 as
Exceptional items being bad debts of Rs, 143.97 Crore in respect of Goa
power station and investment write off of Rs, 804.65 Crore comprising of
Rs, 355.56 Crore being investment in an associate viz Delhi Airport Metro
Express Private Limited, and investments in subsidiaries viz Mumbai
Metro One Private Limited and GF Toll Road Private Limited of Rs, 305
Crore and Rs, 144.09 Crore respectively in view of the losses incurred
upto March 31, 2016 by the said Subsidiaries, which have been debited
in the Statement of Profit and Loss and an equivalent amount has been
withdrawn from General Reserve. Had such withdrawal not been done,
Profit before tax for the year ended March 31, 2016 would have been
lower by Rs, 948.62 Crore and General Reserve would have been higher by
an equivalent amount.
9. We draw attention to Note no. 33 of the standalone financial
statements, regarding termination of Concession Agreement by Delhi
Airport Metro Express Private Limited (DAMEPL), a SPV of the Company
with Delhi Metro Rail Corporation (DMRC) for reasons stated therein.
The matter is sub-judice and the ultimate recovery of the investment of
the Company of Rs, 2,060.86 Crore in DAMEPL is dependent upon the outcome
of the arbitration proceedings. The net amount outstanding in books of
account as on March 31, 2016 is Rs, 447.10 Crore.
Our opinion is not modifed in respect of above matters.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditor''s Report) Order, 2016 ("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.
11. As required by Section 143 (3) of the Act, we report that:
(a) 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) 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, and the Cash
Flow Statement 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 Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014; as referred
to in paragraph 7 and 8 above, the Company has exercised the option
available as per court orders which overrides the relevant provisions
of Accounting Standard 5 (AS-5) ''Net Profit or loss for the Period,
Prior Period Items and Changes in Accounting Policies''.
(e) On the basis of the written representations received from the
directors as on March 31, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2016
from being appointed as a director in terms of Section 164 (2) of the
Act.
(f) With respect to the adequacy of the internal financial controls over
financial reporting of the Company and the operating effectiveness of
such controls, refer to our separate Report in "Annexure B".
(g) With respect to the other matters to be included in the Auditor''s
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 financial statements  Refer Note 26(a) on
Contingent Liabilities to the standalone financial statements;
ii. The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long term contracts including derivative contracts  Refer Note 47
to the standalone financial statements;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of its fixed
assets.
(b) As informed to us, the fixed assets are physically verified by the
Management according to a phased program designed to cover all the
items over a period of three years which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets.
Pursuant to the program, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies between the book records and the physical inventory have
been noticed. However, we are informed that distribution system being
underground is not physically verifiable.
(c) According to the information and explanations given to us and based
on the examination of the registered sale deed / transfer deed /
conveyance deed /possession letter/allotment letter and other relevant
records evidencing title/possession provided to us, we report that, the
title deeds of all the immovable properties comprising of land and
buildings other than self-constructed properties recorded as fixed
assets, which are freehold, are held in the name of the Company as at
the balance sheet date, except the following:
Particulars of Land Total number Gross Block as Net Block as
and Building of cases on march 31, on march 31,
2016 2016
(Rs, crore) (Rs, crore)
Freehold land at 12 114.14 114.14
various locations
Building at
various 3 1.53 1.19
locations
Freehold land at 1 0.70 0.70
Hyderabad
Particulars of Land Remarks
and Building
Freehold land at The title deeds are in the names of erstwhile
various locations 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.
Building at
various
locations
Freehold land at Title deeds are not available with the
Company
Hyderabad
In respect of immovable properties comprising of land and buildings
that have been taken on lease and disclosed as fixed asset in the
standalone financial statements, the lease agreements or other relevant
records are in the name of the Company, except the following:
Particulars of Land Total number Gross Block as Net Block as
and Building of cases on march 31, on march 31,
2016 2016
(Rs, crore) (Rs, crore)
Leasehold land at 3 0.35 0.31
various locations
Leasehold land at 4 4.28 0.64
various locations
Particulars of Land Remarks
and Building
Leasehold land at The lease agreements are in the names of
various locations 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
Lease agreements are not available with
the
various locations Company
(ii) The inventory (excluding stocks with third parties) has been
physically verified by the management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable. As informed, the discrepancies noticed on 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 us, the Company has not granted any loans, secured or
unsecured, to any company, frm, limited liability partnerships or other
party covered in the register maintained under Section 189 of the Act.
Accordingly, the provisions stated in paragraph 3(iii)(a), (b) & (c) of
the Order are not applicable.
(iv) Based on information and explanation given to us in respect of
loans, investments, guarantees and securities, the Company has complied
with the provisions of Section 185 and 186(1) of the Act. Further, as
the Company is engaged in the business of providing infrastructural
facilities, the provisions of Section 186[except for sub-section(1)]
are not applicable to it.
(v) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the provisions of Sections 73 to 76 of the Act and the rules
framed there under.
(vi) We have broadly reviewed the books of account maintained by the
Company in respect of products where the maintenance of cost records
has been specified by the Central Government under sub-section (1) of
Section 148 of the Act and the rules framed there under and we are of
the opinion that prima facie, the prescribed accounts and records have
been made and maintained. We have not, however, made a detailed
examination of the records with a view to determine whether they are
accurate or complete.
(vii) (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing the undisputed statutory dues
including provident fund, employees'' state insurance, income-tax, sales
tax, service tax, customs duty, excise duty, value added tax, cess and
other material statutory dues as applicable except in case of Taxes on
Consumption and sales of Electricity where there have been delays in
depositing the dues.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees''
state insurance, income-tax, sales tax, service tax, customs duty,
excise duty, value added tax, cess and other material statutory dues as
applicable were outstanding, at the year end, for a period of more than
six months from the date they became payable.
(c) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income-tax, sales-tax, service-tax, customs duty, excise duty and value
added tax as at March 31, 2016 which have not been deposited on account
of a dispute are as follows:
Name of the statute Nature of dues Amount Period to which
(Rs,crore) the amount relates
Delhi Sales Tax Act,
1975 Sales Tax 129.961 2004-2005
Delhi Sales Tax on
Works Contract Works Contract 0.052 2004-2005
Act, 1999 Tax
Orissa Sales Tax
Act,1947 Sales Tax 3.463 2001-2002
West Bengal Value
Added Tax Act, VAT 56.624 2010-2011
2003
West Bengal Value
Added Tax Act, VAT 4.675 2008-2009
2003
Madhya Pradesh
Value Added Tax VAT 3.126 2009-2010
Act, 2002
Central Sales Tax
Act, 1956 - Central
Sales 0.197 2009-2010
Madhya Pradesh Tax
Madhya Pradesh
Entry Tax Act,
1976 Entry Tax 0.488 2009-2010
Uttar Pradesh
Trade Tax Act,
1948 Sales Tax 0.249 2009-2010
Central Sales
Tax Act, 1956 Â
Uttar Central Sales 0.0610 2010-2011
Pradesh Tax
Maharashtra Value
Added Tax Act, Sales Tax 0.0711 2008-2009
2002
Uttar Pradesh
Trade Tax Act,
1948 Sales Tax 0.0612 2006-2007
Central Sales
Tax Act, 1956 Â
Uttar Central Sales 2.4813 2006-2007
Pradesh Tax
Uttar Pradesh
Value Added Tax Act, VAT 0.0414 2011-2012
2008
Uttar Pradesh
Entry Tax Act,
2007 Entry Tax 0.0515 2007-2008 &
2008-2009
Customs Act,
1962 Custom Duty 17.9316 2011-12
West Bengal
Value Added
Tax Act, VAT 25.46 2011-12
2003
Finance Act,
1994 Service Tax 2.53 2004-2006
Name of the forum where the
Statute dispute is pending
Delhi sales Sales tax tribunal, New Delhi
tax Act 1975 & Divisional Bench of Delhi
High Court
Delhi sales Tax Deputy Commissioner (Appeal),
on work Act 1999 Dept of Trade and Tax,
New Delhi
orissa sales Tax Act Orissa Sales Tax Tribunal, Cuttack
1947
West Bengal Valu Appellate Additional
Added Tax Act 2003 Commissioner, Kolkata
West Bengal Valu West Bengal Appellate Tribunal
Added Tax act
Mandhya
Pradhesh valu Tax Madhya Pradesh Commercial Tax
act 2002 Appellate Board, Bhopal
Centrol sales Tax Madhya Pradesh Commercial Tax
1965 Appellate Board, Bhopal
Mandhya Pradhesh tax Madhya Pradesh Commercial Tax
Act 1976 Appellate Board, Bhopal
Uttar Pradhesh Entry Additional Commissioner Grade II,
Tax Act 1976 Appeals II, Noida
Centrol sales act Additional Commissioner Grade II,
1956 Appeals II, Noida
Maharastra Valu Added Joint Commissioner (Appeals) of
tax Act 2002 Sales tax, Mumbai
Uttar Pradhesh tax Act Additional Commissioner Appeals,
1948 Trade Tax Department Lucknow
central Sales Act Additional Commissioner Grade II,
1956 Appeals II, Noida
Uttar Pradhesh Valu Added Additional Commissioner Grade II,
tax 2008 Appeals II, Noida
Uttar Pradhesh Tax Act Additional Commissioner Grade II,
2007 Appeals II, Noida
Customs Act 1962 Customs, Excise and Service Tax
Appellate Tribunal, Chennai
west Bengal Vales West Bengal Appellate Tribunal
added Tax 2003
Finance Act Customs, Excise and Service
1994 Tax Appellate Tribunal, New Delhi
Name of the statute Nature of
dues Amount Period to which
(Rs, crore) the amount
relates
Uttar Pradesh Trade
Tax Act, 1948 Sales Tax 2.2617 2007-2008
Central Sales
Tax Act, 1956
 Uttar Central Sales 0.0218 2011-12
Pradesh Tax
Central Sales
Tax Act, 1956 Â Central Sales 1.9919 2011-12
Maharashtra Tax
Income Tax Act,
1961 Income Tax 544.27 A.Y.
(for which 2001-2002,
the tax
2002-2003,
authorities
are the
appellant) 2003-2004,
2006-2007,
2007-2008
&2008-2009
Income Tax Act,
1961 Income Tax 651.21 A.Y.
(for which 1978-1979,
the tax
1998-1999,
authorities are
the appellant) 1999-2000,
2001-2002,
2002-2003,
2003-2004,
2004-2005,
2005-2006,
2007-2008,
2008-2009 &
2009-2010
Income Tax Act,
1961 Income Tax 435.56 A.Y.
(for which 2010-2011 &
the tax 2011-2012
authorities
are the
appellant)
Income Tax Act,
1961 Income Tax 24.3020 A.Y.
2012-2013
Income Tax Act,
1961 Income Tax 8.27 AY 2010-11
Penalty
Income Tax Act,
1961 TDS 6.03 A.Y.
2008-2009,
2009-2010,
2010-2011 &
2011-2012
Name of the forum where the
Statute dispute is pending
Uttar Pradhesh Trade Additional Commissioner Grade II,
Tax Act 1948 Appeals 11, Noida
Central Sales tax Act Additional Commissioner Grade II,
1956 Appeals II, Noida
central sales tax Act Joint Commissioner (Appeals) of
1956 Maharastra Sales tax, Mumbai
Income Tax Act 1961 Supreme Court
Income Tax act 1961 Bombay High Court
Income Tax Act ,1961 Income Tax Appellate
Tribunal, Mumbai
Income Tax Act, 1961 CIT (Appeals), Mumbai
Income Tax Act,1961 CIT (Appeals), Mumbai
Income Tax Act,1961 CIT (Appeals), Mumbai
Includes 1 Rs, 7.63 Crore, 2 Rs, 5,000, 3 Rs, 1.36 Crore, 4 Rs, 0.20
Crore, 5 Rs, 0.40 Crore, 6 Rs, 1.67 Crore,7 Rs, 0.04 Crore, 8 Rs, 0.13
Crore, 9 Rs, 0.09 Crore, 10 Rs, 0.02 Crore 1z1 Rs, 35,000, 12 Rs, 0.01
Crore, 13 Rs, 0.62 Crore, 14 Rs, 0.02 Crore, 15 Rs, 0.01 Crore, 16 Rs,
0.58 Crore, 17 Rs, 0.26 Crore, 18 Rs, 0.02 Crore, 19 Rs, 1.99 Crore, 20
Rs, 24.30 Crore paid / adjusted under protest.
*As per the terms of the contract the amount is recoverable from the
customers.
(viii) According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of loans or borrowings to any financial institution or bank
or Government or dues to debenture holders.
(ix) The Company has not raised any money by way of initial public
offer or further public offer (including debt instruments) and in our
opinion and according to the information and explanations given to us,
on an overall basis, the term loans have been applied for the purposes
for which they were raised except for term loan aggregating to Rs, 100
Crore obtained from Financial Institution for capital expenditure and
investment in infrastructure projects which, as explained, pending
utilization has been kept in cash credit account.
(x) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud by the Company or on the Company by its officers or
employees, noticed or reported during the year, nor have we been
informed of any such instance by the management.
(xi) In our opinion and according to the information and explanations
given to us, the Company has paid / provided managerial remuneration in
accordance with the provisions of Section 197 read with Schedule V to
the Act.
(xii) In our opinion and according to the information and explanations
given to us, the Company is not a Nidhi Company and accordingly the
provision of the clause 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and
based on our examination of the records of the Company, transactions
entered into by the Company with the related parties are in compliance
with Sections 177 and 188 of the Act, where applicable.
The details of related party transactions as required under Accounting
Standard (AS) 18, Related Party Disclosures specified under Section 133
of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014
have been disclosed in the financial statements.
(xiv) During the year, the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible
debentures and hence the provision of clause 3(xiv) of the Order is not
applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, during the year the Company has not entered into any
non-cash transactions with its Directors or persons connected to its
Directors.
(xvi) According to the information and explanation given to us, the
Company is not required to be registered under Section 45-IA of the
Reserve Bank of India Act, 1934.
for Pathak H. D. & Associates for Haribhakti & co. LLP
Chartered Accountants Chartered Accountants
Firm Regn. No: 107783W Firm Regn. No: 103523W
Vishal D. Shah Bhavik L. Shah
Partner Partner
Membership No. 119303 Membership No.122071
Place : Mumbai Place : Mumbai
Date : May 28, 2016 Date : May 28, 2016
Mar 31, 2015
1. We have audited the accompanying standalone financial statements of
Reliance Infrastructure Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2015, the Statement of Profit and Loss,
the Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
2. The Company's Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("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 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, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes 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 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 financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors' Responsibility
3. Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
4. We have taken into account the provisions of the Act, the
accounting and auditing standards and the matters which are required to
be included in the audit report under the provisions of the Act and the
Rules made thereunder.
5. We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the standalone financial
statements are free from material misstatement. An audit involves
performing procedures to obtain audit evidence about the amounts and
the disclosures in the standalone financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the standalone financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls.
An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting estimates made
by the Company's Directors, as well as evaluating the overall
presentation of the standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
6. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2015, and its profits and its
cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to the following matters in the Notes to the
standalone financial statements:
7. We draw attention to Note no. 33 of the standalone financial
statements regarding termination of Concession Agreement by Delhi
Airport Metro Express Private Limited (DAMEPL), a SPV of the Company
with Delhi Metro Rail Corporation (DMRC) for reasons stated therein.
The matter is sub-judice and the ultimate recovery of the investment of
the Company of Rs. 1,702.10 crore in DAMEPL is dependent upon the
outcome of the arbitration proceedings. The net amount outstanding in
books of account as on March 31, 2015 is Rs. 443.90 crore.
8. We draw attention to Note no. 34 of the standalone financial
statements regarding the Scheme of amalgamation between Reliance
Infraprojects Limited (wholly owned subsidiary of the Company) and the
Company, sanctioned by the Hon'ble High Court of Judicature at Bombay
vide order dated March 30, 201 1, wherein the Company, as determined by
its Board of Directors, is permitted to adjust foreign
exchange/derivative/hedging contracts losses/gains debited/credited in
the Statement of Profit and Loss by a corresponding withdrawal from or
credit to General Reserve, which override the relevant provisions of
Accounting Standard 5 (AS-5) 'Net Profit or loss for the Period, Prior
Period Items and Changes in Accounting Policies'. Pursuant to the
option exercised under the above scheme, the net foreign exchange gain
of Rs. 117.25 crore for the year ended March 31, 2015 has been credited
to Statement of Profit and Loss and an equivalent amount has been
transferred to General Reserve. Similarly, foreign exchange loss of Rs.
236.1 1 crore attributable to finance cost and net loss on account of
derivative instrument/ forward contract of Rs. 16.59 crore have been
debited to the Statement of Profit and Loss and an equivalent amount
has been withdrawn from General Reserve. Had such transfer/ withdrawal
not been done, profit before tax would have been lower by Rs. 135.45
crore and General Reserve would have been higher by an equivalent
amount.
9. We draw attention to Note no. 36 of the standalone financial
statements wherein pursuant to the Capital Reduction Scheme entered into
by Reliance Power Transmission Limited (RPTL) (wholly owned subsidiary
of the Company) sanctioned by the Hon'ble High Court of Judicature at
Bombay vide order dated October 31, 2014, RPTL has reduced its equity
share capital and securities premium account to the tune of Rs. 606.49
crore. Accordingly, the Company has also written off its investment in
RPTL by an equivalent amount and debited the same in the Statement of
Profit and Loss.
10. We draw attention to Note no. 35 of the standalone financial
statements, wherein the Hon'ble High Court of Judicature at Bombay vide
order dated July 15, 2014 subject to certain approvals had approved the
Scheme of Amalgamation of two wholly owned Subsidiaries of the Company
viz. Western Region Transmission (Maharashtra) Private Limited (WRTM)
and Western Region Transmission (Gujarat) Private Limited (WRTG) with
the Company w.e.f. April 1, 2013 (Appointed date). All requisite
approvals have been obtained; however, certain procedural formalities
with Central Electricity Regulatory Commission (CERC) are required to
be completed. Pending completion of procedural formalities, the Company
has given effect to the substance of the Scheme and accordingly these
subsidiaries have been amalgamated with the Company during the year
ended March 31, 2015 with effect from the Appointed date.
11. We draw attention to Note no. 39 of the standalone financial
statements, wherein pursuant to the Scheme of amalgamation between
Western Region Transmission (Maharashtra) Private Limited (WRTM) and
Reliance Cement Works Private Limited sanctioned by the Hon'ble High
Court of judicature at Bombay on April 25, 2014, WRTM or its successors
is permitted to offset any extra ordinary/exceptional items, as
determined by the Board of Directors, debited in the Statement of
Profit and Loss by a corresponding withdrawal from General Reserve,
which override the relevant provisions of Accounting Standard 5 (AS-5)
'Net Profit or loss for the Period, Prior Period Items and Changes in
Accounting Policies'. The Company being
the successor of WRTM shall now be entitled to all the rights and the
privileges of and shall be liable to fulfill all the obligations of and
shall follow all the policies applicable to WRTM as if successor was
the transferee company. During the year ended March 31, 2015, the Board
of Directors of the Company in terms of the aforesaid scheme,
determined an amount of Rs. 1,924.15 crore as Exceptional items being
loss on reduction in value of investment in RPTL of Rs. 606.49 crore
and write off of investments aggregating to Rs. 1,317.66 crore
comprising of investment in Mumbai Metro Transport Private Limited Rs.
59.46 crore and Delhi Airport Metro Express Private Limited Rs.
1,258.20 crore, which have been debited in the Statement of Profit and
Loss and an equivalent amount has been withdrawn from General Reserve.
Had such withdrawal not been done, profit before tax would have been
lower by Rs. 1,924.15 crore and General Reserve would have been higher
by an equivalent amount.
Our opinion is not modified in respect of above matters.
Report on Other Legal and Regulatory Requirements
12. As required by the Companies (Auditor's Report) Order, 2015 ("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
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
13. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose of our audit.
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books.
c. The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement 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 Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014; as
referred to in paragraph 8 and 11 above, the Company has exercised the
option available as per court orders which overrides the relevant
provisions of Accounting Standard 5 (AS-5) 'Net Profit or loss for the
Period, Prior Period Items and Changes in Accounting Policies'.
e. On the basis of written representations received from the directors
as on March 31, 2015 and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015, from being
appointed as a director in terms of Section 164(2) of the Act.
f. 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 financial statements - Refer Note 26(a) to
the standalone financial statements;
ii. Provision has been made for material foreseeable losses, if any,
on long term contracts including derivative contracts - Refer Note 52
to the standalone financial statements;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to Auditors' Report on Standalone Financial Statements
Referred to in our Auditors' Report of even date to the members of
Reliance Infrastructure Limited on the Standalone financial statements
for the year ended March 31,2015
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of its fixed
assets.
(b) As informed to us, the fixed assets are physically verified by the
Management according to a phased program designed to cover all the
items over a period of three years which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets.
Pursuant to the program, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies between the book records and the physical inventory have
been noticed. However, we are informed that distribution system being
underground is not physically verifiable.
(ii) (a) The inventory (excluding stocks with third parties) has been
physically verified by the management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on 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 us, the Company has not granted any loan, secured or
unsecured, to any company, firm or other party covered in the register
maintained under Section 189 of the Act. Accordingly, the provisions
stated in paragraph 3(iii)(a) and (b) of the Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct any major weaknesses in
the aforesaid internal control system of 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
within the provisions of Sections 73 to 76 of the Act and the rules
framed there under.
(vi) We have broadly reviewed the books of account maintained by the
Company in respect of products where the maintenance of cost records
has been specified by the Central Government under sub-section (1) of
Section 148 of the Act and the rules framed there under and we are of
the opinion that prima facie, the prescribed accounts and records have
been made and maintained. We have not, however, made a detailed
examination of the records with a view to determine whether they are
accurate or complete.
(vii) (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing the undisputed statutory dues
including provident fund, employees' state insurance, income- tax, sales
tax, wealth tax, service tax, customs duty, excise duty, value added
tax, cess and other material statutory dues as applicable, with the
appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees'
state insurance, income- tax, sales tax, wealth tax, service tax,
customs duty, excise duty, value added tax, cess and other material
statutory dues as applicable were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(c) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise
duty, value added tax and cess as at March 31, 2015 which have not been
deposited on account of a dispute are as follows:
Name of the statute Nature of Amount
dues (Rs. Crore)
Delhi Sales Tax Act, 2004 Sales Tax 129.96 1*
Delhi Sales Tax on Works Contract Works 0.05 2
Act, 1999 Contract Tax
Orissa Sales Tax Act,1947 Sales Tax 3.46 3
West Bengal Value Added Tax Act, VAT 177.53 4
2003
West Bengal Value Added Tax Act, VAT 56.62 5
2003
West Bengal Value Added Tax Act, VAT 4.67 6
2003
Madhya Pradesh Value Added Tax VAT 3.12 7
Act, 2002
Central Sales Tax Act, 1956 - Central Sales 0.19 8
Madhya Pradesh Tax
Madhya Pradesh Entry Tax Act, Entry Tax 0.48 9
1976
Uttar Pradesh Commercial Tax Sales Tax 0.24 10
Act, 1948
Central Sales Tax Act, 1956 Central Sales 0.06 11
- Uttar Pradesh Tax
Maharashtra Value Added Tax Sales Tax 0.07 12
Act, 2002
Uttar Pradesh Trade Tax Sales Tax 1.39 13
Act, 1948
Central Sales Tax Act, 1956 Central Sales 2.48 14
- Uttar Pradesh Tax
Uttar Pradesh VAT Act, 2008 VAT 0.04 15
Uttar Pradesh Entry Tax Entry Tax 0.04 16
Act, 2007
Customs Act, 1962 Custom Duty 17.93 17
West Bengal Value Added VAT 25.46
Tax Act, 2003
Finance Act, 1994 Service Tax 2.53
Uttar Pradesh Commercial Tax Sales Tax 1.68 18
Act, 1948
Uttar Pradesh VAT Act, 2008 VAT 0.12 19
Uttar Pradesh Commercial Tax Sales Tax 2.85 20
Act, 1948
Gujarat Commercial Tax Act, VAT 0.21
2003
Central Sales Tax Act, 1956 - Central Sales 0.02 21
Uttar Pradesh Tax
Income Tax Act, 1961 Income Tax 344.77
Income Tax Act, 1961 Income Tax 217.63
(for which the tax
authorities are the
appellant)
Income Tax Act, 1961 Income Tax 239.66 22
Income Tax Act, 1961 TDS 6.03
The Water (Prevention and Water Cess 0.73
Control Pollution) Cess
Act, 1977
Name of the statute Period to which
the amount
relates
Delhi Sales Tax Act, 2004 2004-05
Delhi Sales Tax on Works Contract 2004-05
Act, 1999
Orissa Sales Tax Act,1947 2001-02
West Bengal Value Added Tax Act, 2009-10
2003
West Bengal Value Added Tax Act, 2010-11
2003
West Bengal Value Added Tax Act, 2008-09
2003
Madhya Pradesh Value Added Tax 2009-10
Act, 2002
Central Sales Tax Act, 1956 - 2009-10
Madhya Pradesh
Madhya Pradesh Entry Tax Act, 2009-10
1976
Uttar Pradesh Commercial Tax 2009-10
Act, 1948
Central Sales Tax Act, 1956 2010-11
- Uttar Pradesh
Maharashtra Value Added Tax 2008-09
Act, 2002
Uttar Pradesh Trade Tax 2006-07
Act, 1948
Central Sales Tax Act, 1956 2006-07
- Uttar Pradesh
Uttar Pradesh VAT Act, 2008 2011-12
Uttar Pradesh Entry Tax 2007-08 &
Act, 2007 2008-09
Customs Act, 1962 2011-12
West Bengal Value Added 2011-12
Tax Act, 2003
Finance Act, 1994 2004-06
Uttar Pradesh Commercial Tax 2005-06 &
Act, 1948 2008-09
Uttar Pradesh VAT Act, 2008 2010-11
Uttar Pradesh Commercial Tax 2007-08
Act, 1948
Gujarat Commercial Tax Act, 2010-11
2003
Central Sales Tax Act, 1956 - 2011-12
Uttar Pradesh
Income Tax Act, 1961 A.Y.
2001- 02,
2002- 03,
2003- 04,
2004- 05,
2005- 06,
2007- 08,
2008- 09 &
2009- 10
Income Tax Act, 1961 A.Y.
2010-11
Income Tax Act, 1961 A.Y. 2011-12
& A.Y. 2012-13
Income Tax Act, 1961 A.Y.
2008-09 -
2011-12
The Water (Prevention and 1998-99
Control Pollution) Cess
Act, 1977
Name of the statute Forum where the dispute is
pending
Delhi Sales Tax Act, 2004 Sales tax tribunal, New Delhi &
Divisional Bench of Delhi
High Court
Delhi Sales Tax on Works Contract Deputy Commissioner (Appeal),
Act, 1999 Dept of Trade and Tax, New Delhi
Orissa Sales Tax Act,1947 Orissa Sales Tax Tribunal,
Cuttack
West Bengal Value Added Tax Act, Deputy Commissioner, Kolkata
2003
West Bengal Value Added Tax Act, Appellate Additional
2003 Commissioner, Kolkata
West Bengal Value Added Tax Act, West Bengal Appellate Tribunal
2003
Madhya Pradesh Value Added Tax Madhya Pradesh Commercial Tax
Act, 2002 Appellate Board, Bhopal
Central Sales Tax Act, 1956 - Madhya Pradesh Commercial Tax
Madhya Pradesh Appellate Board, Bhopal
Madhya Pradesh Entry Tax Act, Madhya Pradesh Commercial Tax
1976 Appellate Board, Bhopal
Uttar Pradesh Commercial Tax Joint Commissioner Appeals,
Act, 1948 Trade Tax Lucknow
Central Sales Tax Act, 1956 Joint Commissioner Appeals,
- Uttar Pradesh Lucknow
Maharashtra Value Added Tax Joint Commissioner (Appeals)
Act, 2002 of Sales tax, Mumbai
Uttar Pradesh Trade Tax Additional Commissioner
Act, 1948 Appeals, Trade Tax Department
Lucknow
Central Sales Tax Act, 1956 Additional Commissioner Grade
- Uttar Pradesh II, Appeals II, Noida
Uttar Pradesh VAT Act, 2008 Additional Commissioner
Appeals, Lucknow
Uttar Pradesh Entry Tax Additional Commissioner
Act, 2007 Appeals, Trade Tax Department
Lucknow
Customs Act, 1962 Customs, Excise and Service
Tax Appellate Tribunal,
Chennai
West Bengal Value Added Joint Commissioner Appeals,
Tax Act, 2003 Kolkata
Finance Act, 1994 Customs, Excise and Service
Tax Appellate Tribunal, New
Delhi
Uttar Pradesh Commercial Tax Additional Commissioner Grade
Act, 1948 II, Appeal II, Noida
Uttar Pradesh VAT Act, 2008 joint Commissioner (Appeals)
Trade Tax, Lucknow
Uttar Pradesh Commercial Tax Additional Commissioner
Act, 1948 Appeals, Trade Tax Department,
Lucknow
Gujarat Commercial Tax Act, Joint Commissioner of
2003 Commercial Tax (Appeals),
Gujarat
Central Sales Tax Act, 1956 - Additional Commissioner
Uttar Pradesh Appeals, Lucknow
Income Tax Act, 1961 Bombay High Court
Income Tax Act, 1961 Income Tax Appellate Tribunal,
Mumbai
Income Tax Act, 1961 CIT (Appeals), Mumbai
Income Tax Act, 1961 CIT (Appeals), Mumbai
The Water (Prevention and Bombay High Court
Control Pollution) Cess
Act, 1977
Includes 1 Rs. 7.63 crore, 2 Rs. 5,000, 3 Rs. 1.36 crore, 4 Rs.0.40
crore, 5 Rs.0.20 crore, 6 Rs.0.40 crore, 7 Rs. 1.67 crore, 8 Rs.0.04
crore, 9 Rs.0.13 crore, 10 Rs.0.09 crore, 11 Rs. 0.02 crore 12 Rs.
35,000, 13 Rs. 1.34 crore, 14 Rs.0.62 crore, 15 Rs.0.02 crore, 16
Rs.0.01 crore, 17 Rs.0.58 crore, 18 Rs.1.68 crore, 19 Rs.0.12 crore, 20
Rs.1.26 crore, 21 Rs. 0.02 crore, 22 Rs.215.36 crore paid/adjusted
under protest.
*As per the terms of the contract the amount is recoverable from the
customers.
(d) The Company has transferred the amount required to be transferred
to Investor Education and Protection Fund in accordance with the
relevant provisions of the Companies Act, 1956 (1 of 1 956) and rules
made thereunder within the time limit prescribed.
(viii) The Company has no accumulated losses as at March 31, 2015 and
it has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
(ix) According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders.
(x) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company.
(xi) In our opinion and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
(xii) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management except in case of
theft of electricity reported by the vigilance department of the
Company, the amount of which, as informed to us, is not material.
For Haribhakti & Co. LLP For Pathak H. D. & Associates
Chartered Accountants Chartered Accountants
Firm Regn. No: 103523W Firm Regn. No: 107783W
Bhavik L. Shah Vishal D. Shah
Partner Partner
Membership No. 122071 Membership No. 11 9303
Date: May 27, 2015 Date: May 27, 201 5
Place: Mumbai Place: Mumbai
Mar 31, 2014
1. We have audited the accompanying financial statements of Reliance
Infrastructure Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2014, the Statement of profit and Loss and the
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
2. Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards notifed under the Companies Act, 1956 ("the
Act") read with the General Circular 15/2013 dated 13th September 2013
of the Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is suffcient and
appropriate to provide a basis for our audit opinion.
Opinion
4. In our opinion and to the best of our information and according to
the explanations given to us, the financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Statement of profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
5. We draw attention to Note no. 33 of the financial statements
regarding termination of Concession Agreement by Delhi Airport Metro
Express Private Limited (DAMEPL), a SPV of the Company with Delhi Metro
Rail Corporation (DMRC) for reasons stated therein. As the matter is
sub-judice, the ultimate recovery of the investment of the Company of Rs.
1,450.20 Crore in DAMEPL is dependent upon the outcome of the
arbitration proceedings. Our opinion is not qualifed in respect of
this matter.
6. We draw attention to Note no. 34 of the financial statements
regarding the Scheme of amalgamation between Reliance Infraprojects
Limited (wholly owned subsidiary of the Company) and the Company,
sanctioned by the Hon''ble High Court of Judicature at Bombay vide order
dated March 30, 2011, wherein the Company, as determined by its Board
of Directors, is permitted to adjust foreign exchange and derivative
losses / gains debited / credited in the Statement of profit and Loss by
a corresponding withdrawal from or credit to General Reserve, which
override the relevant provisions of Accounting Standard 5 (AS-5) ''Net
profit or loss for the Period, Prior Period Items and Changes in
Accounting Policies''. Pursuant to the option exercised under the above
scheme, the net foreign exchange gain of Rs. 101.46 Crore for the year
ended March 31, 2014 has been credited to Statement of profit and Loss
and an equivalent amount has been transferred to General Reserve.
Similarly, foreign exchange loss of Rs. 361.32 Crore attributable to
finance cost and net loss on account of derivative instruments of Rs.
52.30 Crore have been debited to Statement of profit and Loss and an
equivalent amount has been withdrawn from General Reserve. Had the
Scheme not prescribed the above treatment, profit before tax would have
been lower by Rs. 312.16 Crore and General Reserve would have been higher
by an equivalent amount. Our opinion is not qualifed in respect of this
matter.
Report on Other Legal and Regulatory Requirements
7. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
8. As required by section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. the Balance Sheet, Statement of profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, Statement of profit and Loss, and
Cash Flow Statement comply with the Accounting Standards notifed under
the Companies Act, 1956("the Act") read with the General Circular
15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs
in respect of section 133 of the Companies Act, 2013; as referred to in
paragraph 6 above, the Company has exercised the option available as
per court orders which overrides the relevant provisions of Accounting
Standard 5 (AS-5).
e. on the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualifed as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
Annexure to Auditors'' Report Referred to in our Auditors'' Report of
even date to the members of Reliance Infrastructure Limited on the
financial statements for the year ended March 31, 2014
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of its fixed
assets.
(b) As informed to us, the fixed assets are physically verifed by the
Management according to a phased program designed to cover all the
items over a period of three years which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets.
Pursuant to the program, a portion of the fixed assets has been
physically verifed by the Management during the year and no material
discrepancies between the book records and the physical inventory have
been noticed. However, we are informed that distribution system being
underground is not physically verifable.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed of
by the Company during the year.
(ii) (a) The inventory (excluding stocks with third parties) has been
physically verifed by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verifcation is
reasonable.
(b) In our opinion, the procedures of physical verifcation of inventory
followed by the Management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verifcation of inventory as compared
to book records were not material.
(iii) The Company has neither granted nor taken any loan, secured or
unsecured, from any company, firm or other party covered in the register
maintained under Section 301 of the Act. Accordingly, provisions of
clause 4(iii)(b)(c)(d)(f)and (g) of the Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct any major weaknesses in
the aforesaid internal control system.
(v) According to the information and explanations given to us, there
have been no contracts or arrangements referred to in Section 301 of
the Act during the year that need to be entered in the register
required to be maintained under that Section. Accordingly, the
question of commenting on transactions made in pursuance of such
contracts or arrangements does not arise.
(vi) The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act, and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing the undisputed statutory dues
including provident fund, investor education and protection fund,
employees'' state insurance, income-tax, sales tax, wealth tax, service
tax, customs duty, excise duty, cess and other material statutory dues
as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
sales tax, wealth tax, service tax, customs duty, excise duty, cess and
other material statutory dues as applicable were outstanding, at the
year end, for a period of more than six months from the date they
became payable.
(c) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income-tax, sales-tax, wealth- tax, service-tax, customs duty, excise
duty and cess as at March 31, 2014 which have not been deposited on
account of a dispute are as follows:
Name of the
statute Nature of dues Amount Period to which the
(Rs. Crore) amount relates
Delhi Sales 1*
Tax Act, 1975 Sales Tax 129.96 2004-2005
Delhi Sales Tax
on Works 2
Contract Act, Works Contract 0.05 2004-2005
1999 Tax
Orissa Sales 3
Tax Act,1947 Sales Tax 3.46 2001-2002
West Bengal
Value Added 4
Tax Act, 2003 VAT 177.53 2009-2010
West Bengal
Value Added 5
Tax Act, 2003 VAT 56.62 2010-2011
West Bengal
Value Added 6
Tax Act, 2003 VAT 4.67 2008-2009
Name of the statue Forum where the dispute is pending
Delhi Sales Tax Act, 1975 Sales tax tribunal, New Delhi &
Divisional
Bench of Delhi High Court
Delhi Sales Tax on Works
Contract Act,
1999 Deputy Commissioner (Appeal), Dept of
Trade and Tax, New Delhi
Orissa Sales Tax Act,1947 Orissa Sales Tax Tribunal, Cuttack
West Bengal Value Added Tax
Act, 2003 Calcutta High Court
West Bengal Value Added Tax
Act, 2003 Appellate Additional Commissioner,
Kolkata
West Bengal Value Added Tax
Act, 2003 West Bengal Commercial Tax Appellate &
Revisional Board, Kolkata
Name of the
statute Nature of dues Amount Period to which the
(Rs. Crore) amount relates
Madhya Pradesh
Value Added 7
Tax Act, VAT 3.12 2009-2010
2002
Central Sales
Tax Act, 1956 8
- Madhya Central Sales Tax 0.19 2009-2010
Pradesh
Madhya Pradesh
Entry Tax 9
Act, 1976 Entry Tax 0.48 2009-2010
Central Sales
Tax Act, 1956 10
- Rajasthan Central Sales Tax 0.51 2005-06 & 2006 -2007
Maharashtra
Value Added 11
Tax Act, 2002 Sales Tax 0.07 2008-2009
Uttar Pradesh
Trade Tax 12
Act, 1948 Sales Tax 5.00 2005-2006, 2006-
2007 & 2007-2008
Central Sales
Tax Act, 1956
 Uttar 13
Pradesh Central Sales Tax 3.18 2006-2007, 2007-
2008 & 2009-2010
Uttar Pradesh
VAT Act, 2008 VAT 0.47 2007-2008 &
2008-2009
Uttar Pradesh
Entry Tax Act, 14
2007 Entry Tax 0.04 2007-2008 &
2008-2009
Finance Act,
1994 Service Tax 2.53 2004-2006
Income Tax
Act, 1961 Income Tax 405.37 A.Y.
(for which 1978-1979,
the tax 1998-1999,
authorities 1999-2000,
are the 2001-2002,
appellant) 2002-2003,
2003-2004,
2004-2005,
2005-2006 &
2007-2008
Income Tax
Act, 1961 Income Tax 306.44 A.Y.
(for which 2009-2010
the tax
authorities
are the
appellant)
Income Tax
Act, 1961 Income Tax 256.96 A.Y. 2010-2011
Income Tax
Act, 1961 TDS 6.03 A.Y. 2008-2009 &
2011-2012
The Water
(Prevention
and Control Water Cess 0.73 1998-1999
Pollution)
Cess Act, 1977
Name of the statue Forum where the dispute is pending
Madhya Pradesh Value Added Tax
Act,
2002 Madhya Pradesh Commercial Tax Appellate
Board, Bhopal
Central Sales Tax Act,
1956 - Madhya Pradesh Madhya Pradesh Commercial Tax Appellate
Board, Bhopal
Madhya Pradesh Entry Tax
Act, 1976 Madhya Pradesh Commercial Tax Appellate
Board, Bhopal
Central Sales Tax Act, 1956
- Rajasthan Assistant Commissioner, Works contract
and Leasing Tax, Kota
Maharashtra Value Added Tax
Act, 2002 Joint Commissioner (Appeals)of Sales tax,
Mumbai
Uttar Pradesh Trade Tax Act,
1948 Additional Commissioner Grade II, Appeals
II, Noida
Central Sales Tax Act, 1956
 Uttar Prades Additional Commissioner Grade II, Appeals
II, Noida
Uttar Pradesh VAT Act, 2008 Additional Commissioner Grade II, Appeals
II, Noida
Uttar Pradesh Entry Tax Act,
2007 Additional Commissioner Grade II, Appeals
II, Noida
Finance Act, 1994 Customs, Excise and Service Tax Appellate
Tribunal, New Delhi
Income Tax Act, 1961 Bombay High Court
Income Tax Act, 1961 Income Tax Appellate Tribunal, Mumbai
Income Tax Act, 1961 CIT (Appeals), Mumbai
Income Tax Act, 1961 CIT (Appeals), Mumbai
The Water (Prevention and
Control
Pollution) Cess Act, 1977 Bombay High Court
Includes 1Rs. 7.63 Crore, 2 Rs. 5,000, 3 Rs. 1.36 Crore, 4 Rs. 0.40 Crore, 5 Rs.
0.20 Crore, 6 Rs. 0.40 Crore, 7 Rs. 1.56 Crore, 8 Rs. 0.04 Crore, 9 Rs. 0.13
Crore, 10 Rs. 0.20 Crore, 11 Rs. 35,000, 12 Rs. 0.12 Crore, 13 Rs. 0.80 Crore,
14 Rs. 0.01 Crore, paid under protest.
*As per the terms of the contract the amount is recoverable from the
customers.
(x) The Company has no accumulated losses as at March 31, 2014 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial yea r.
(xi) According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities.
(xiii) In our opinion, the Company is not a chit fund / nidhi / mutual
benefit fund/ society. Therefore, the provisions of clause 4(xiii) of
the Order are not applicable to the Company.
(xiv) In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments. Therefore, the provisions
of clause 4(xiv) of the Order are not applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained except for term loans of Rs.
600 Crore which have been utilized towards repayment of cash credit
facility obtained by the Company.
(xvii) On the basis of an overall examination of the balance sheet of
the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short- term
basis which have been used for long-term investment.
(xviii)During the year, the Company has not made any preferential
allotment of shares to companies covered in the register maintained
under Section 301 of the Act.
(xix) The Company has created security or charge in respect of all the
debentures outstanding at the year end except for one series of Non
Convertible Debentures of Rs. 700 Crore issued during the year, wherein
the charge or security is yet to be created.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management except in case of
theft of electricity reported by the vigilance department of the
Company, the amount of which, as informed to us, is not material.
For Haribhakti & Co. For Pathak H. D. & Associates
Chartered Accountants Chartered Accountants
Firm Regn. No: 103523W Firm Regn. No: 107783W
Rakesh Rathi Vishal D. Shah
Partner Partner
Membership No.45228 Membership No. 119303
Date : May 19, 2014 Date : May 19, 2014
Place : Mumbai Place : Mumbai
Mar 31, 2013
Report on the Financial Statements
1. We have audited the accompanying financial statements of Reliance
Infrastructure Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2013, the Statement of Profit and Loss, the Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
2. Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1 956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
4. In opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of matter
5. We draw attention to Note no. 35 of the financial statements
regarding the Scheme of amalgamation between Reliance Infraprojects
Limited (wholly owned subsidiary of the Company) and the Company,
sanctioned by the Hon''ble High Court of Judicature at Bombay vide order
dated March 30, 201 1, wherein the Company, as determined by its Board
of Directors, is permitted to adjust the exceptional items debited to
the Statement of Profit and Loss by a corresponding withdrawal from
''Provision for Extraordinary and Exceptional items'' created out of
General Reserve, which override the relevant provisions of Accounting
Standard 5 (AS-5) ''Net Profit or loss for the Period, Prior Period
Items and Changes in Accounting Policies''. The Company has during the
year identified exceptional items aggregating to Rs. 692.53 Crore,
which has been debited to Statement of Profit and Loss and an
equivalent amount has been withdrawn from the Provision for
Extraordinary and Exceptional items and credited to Statement of Profit
and Loss as per the Scheme. Had the Scheme not prescribed the above
treatment, profit before tax would have been lower by Rs. 692.53 Crore
and General Reserve would have been higher by equivalent amount. Our
opinion is not qualified in respect of this matter.
6. We draw attention to Note no. 34 of the financial statements
detailing the accounting treatment given to the Scheme of amalgamation
between Reliance Bhavnagar Power Private Limited and Reliance
Infrastructure Engineers Private Limited and Reliance Jamnagar Power
Private Limited (wholly owned subsidiaries of the Company) and the
Company, sanctioned by the Hon''ble High Court of Judicature at Bombay
vide order dated February 22, 2013. Pursuant to the Scheme, all assets
and liabilities (Net) amounting to Rs. 1,149.77 Crore, of the
subsidiaries have been recorded in the books of the Company at their
respective fair values, and corresponding equivalent amount is credited
to the Capital Reserve and the Company has written off the investments
held in these subsidiaries amounting to Rs. 1,147.32 Crore in the
Statement of Profit and Loss and an equivalent amount has been
withdrawn from General Reserve. Had the Scheme not prescribed the above
treatment and the Company followed the accounting treatment prescribed
under Accounting Standard 1 4 relating to ''Accounting for
Amalgamations'', General Reserve would have been higher by Rs. 1,147.32
Crore and Capital Reserve would have been lower by an equivalent
amount. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
7. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order,
8. As required by section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Act; as referred to in
paragraph 5 above, the Company has exercised the option available as
per court orders which overrides the relevant provisions of Accounting
Standard 5 (AS-5).
e. on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub- section (1) of
section 274 of the Act.
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of its fixed
assets.
(b) As informed to us, the fixed assets are physically verified by the
Management according to a phased program designed to cover all the
items over a period of three years which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets.
Pursuant to the program, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies between the book records and the physical inventory have
been noticed. However, we are informed that distribution system being
underground is not physically verifiable.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
(ii) (a) The inventory (excluding stocks with third parties) has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
(iii) The Company has neither granted nor taken any loan, secured or
unsecured, from any company, firm or other party covered in the
register maintained under Section 301 of the Act. Accordingly,
provisions of clause 4(iii)(b)(c)(d)(f) and (g) of the Order are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
(v) According to the information and explanations given to us, there
have been no contracts or arrangements referred to in Section 301 of
the Act during the year to be entered in the register required to be
maintained under that Section. Accordingly, the question of commenting
on transactions made in pursuance of such contracts or arrangements
does not arise.
(vi) The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under,
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act, and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made
a detailed examination of the records with a view to determine whether
they are accurate or complete.
(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing the undisputed statutory dues
including provident fund, investor education and protection fund,
employees'' state insurance, income-tax, sales tax, wealth tax, service
tax, customs duty, excise duty, cess and other material statutory dues
as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
sales tax, wealth tax, service tax, customs duty, excise duty, cess and
other material statutory dues as applicable were outstanding, at the
year end, for a period of more than six months from the date they
became payable.
(c) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise
duty and cess as at March 31, 2013 which have not been deposited on
account of a dispute are as follows:
Name of the statute Nature of Amount
dues (Rs. Crore)
Delhi Sales Tax Act, 1975 Sales Tax 129.961*
Works Contract Act, 1999 Works 0.05
Contract Tax
Orissa Sales Tax Act, 1947 Sales Tax 3.462
West Bengal Commercial
Tax Act Sales Tax 177.13
Name of the Statute Period to
which the Forum where the
dispute is pending
amount relates
Delhi Sales Tax Act 1975 2004-2005 Divisional Bench of
Delhi High Court
Works Contract Act 1999 2004-2005 Deputy Commissioner
(Appeal IV) of Sales Tax,
New Delhi
Orissa Sales Tax Act 1947 2001 -2002 Sales Tax Tribunal, Cuttack
West Bengal Commercial
Tax Act 2009-2010 Calcutta High Court
Name of the statute Nature of Amount
dues (Rs. Crore)
Madhya Pradesh Commercial
Tax Sales Tax 0.883
Act
Madhya Pradesh Commercial
Tax Entry Tax 0.114
Act
Uttar Pradesh Commercial
Tax Act Sales Tax 6.26
Uttar Pradesh Commercial Tax Act Sales Tax 3.935
Uttar Pradesh Commercial Tax Act Sales Tax 2.896
Uttar Pradesh Entry Tax Act Sales Tax 0.01
Uttar Pradesh Commercial Tax Act Sales Tax 18.05
Uttar Pradesh Entry Tax Act Sales Tax 0.17
Uttar Pradesh Commercial Tax Act Sales Tax 0.24
Finance Act, 1994 Service Tax 2.53
Income Tax Act, 1961 Income Tax 668.30
(for which the tax
authorities are
the appellant)
Income Tax Act, 1961 Income Tax 382.16
(for which the tax
authorities are
the appellant)
Income Tax Act, 1961 Income Tax 144.53
Income Tax Act, 1961 Income Tax 5.72
Income Tax Act, 1961 Income Tax 0.02
The Water (Prevention and Control Water Cess 0.73
Pollution) Cess Act, 1977
Name of the Statute Period to
which the Forum where the
dispute is pending
amount relates
Madhya Pradesh Commercial
Tax Act 2009-2010 Madhya Pradesh Commercial
Tax Appellate Board,Bhopal
Madhya Pradesh Commercial
Tax Act 2009-2010 Madhya Pradesh Commercial
Tax Appellate Board, Bhopal
Uttar Pradesh Commercial
Tax Act 2005-2006 Assessing officer
Uttar Pradesh Commercial
Tax Act 2006-2007 Dy. Commissioner, Khand-7,
Lucknow
Uttar Pradesh Commercial
Tax Act 2007-2008 Addl Commissioner, Trade
Tax Dept, Lucknow
Uttar Pradesh Entry Tax
Act 2007-2008 Dy. Commissioner, Khand-7,
Lucknow
Uttar Pradesh Commercial
Tax Act 2008-2009 Assessing officer
Uttar Pradesh Entry Tax Act 2008-2009 Assessing officer
Uttar Pradesh Commercial
Tax Act 2009-2010 Jt. Commissioner, Trade
Tax Dept
Finance Act 1994 2004-2006 Customs, Excise and Service
Tax Appellate Tribunal,
New Delhi
Income Tax Act 1961 A.Y. Bombay High Court
1978-1979,
1988-1989
1996-1997,
1998-1999,
1999-2000,
2001-2002,
2002-2003,
2003-2004,
2004-2005,
2005-2006 and
2007-2008
Income Tax Act 1961 A.Y 2006-2007
and Income Tax Appellate
Tribunal,
2008-2009 Mumbai
Income Tax Act 1961 A.Y. 2010-2011 CIT (Appeals), Mumbai
Income Tax Act 1961 A.Y. 2008-2009,
2011-2012 CIT (Appeals), Mumbai
Income Tax Act 1961 A.Y. 1999-2000 Income Tax Appellate
Tribunal, Hyderabad
The Water Cess Act 1977 1998-1999 Bombay High Court
1Rs. 7.63 Crore, 2 Rs. 1.36 Crore, 3 Rs. 0.92 Crore, 4 Rs. 0.09 Crore,
5 Rs. 0.63 Crore, 6 Rs. 0.09 Crore, includes amount paid under protest.
*As per the terms of the contract, the amount is recoverable from the
customers.
(x) The Company has no accumulated losses as at March 31, 2013 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year,
(xi) According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the balance sheet date.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities.
(xiii) In our opinion, the Company is not a chit fund / nidhi / mutual
benefit fund/ society. Therefore, the provisions of clause 4(xiii) of
the Order are not applicable to the Company
(xiv) In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments. Therefore, the
provisions of clause 4(xiv) of the Order are not applicable to the
Company
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company,
(xvi) In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
(xvii) On the basis of an overall examination of the balance sheet of
the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short-term basis
which have been used for long-term investment.
(xviii) During the year, the Company has not made any preferential
allotment of shares to Companies covered in the register maintained
under Section 301 of the Act.
(xix) The Company has created security or charge in respect of
debentures issued and outstanding at the year-end.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management except in case of
theft of electricity reported by the vigilance department of the
Company, the amount of which, as informed to us, is not material.
For Haribhakti & Co. For Pathak H. D. & Associates
Chartered Accountants Chartered Accountants
Firm Regn. No. 103523W Firm Regn. No.107783W
Rakesh Rathi Vishal D. Shah
Partner Partner
Membership No. 45228 Membership No. 119303
Date : May 14, 2013
Place : Mumbai
Mar 31, 2012
1. We have audited the attached Balance Sheet of Reliance
Infrastructure Limited (the "Company") as at March 31, 2012, the
related Statement of Profit and Loss and Cash Flow Statement for the
year ended on that date annexed thereto, which we have signed under
reference to this report. These financial statements are the
responsibility of the Company's Management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004
(together the "Order"), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of 'The Companies Act, 1956'
(the 'Act') and on the basis of such checks of the books and records of
the Company as we considered appropriate and according to the
information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
4. Without qualifying our opinion, we draw attention to Note no. 35 of
the financial statements regarding the Scheme of amalgamation between
Reliance Infraprojects Limited (wholly owned subsidiary of the Company)
and the Company, sanctioned by the Hon'ble High Court of Judicature at
Bombay vide order dated March 30, 201 1, wherein the Company, as
determined by its Board of Directors, is permitted to adjust the
exceptional items debited to the Statement of Profit and Loss by a
corresponding withdrawal from 'Provision for Extraordinary and
Exceptional items' created out of General Reserve, which override the
relevant provisions of Accounting Standard 5 (AS-5) 'Net Profit or loss
for the Period, Prior Period Items and Changes in Accounting Policies'.
The Company has during the year identified exceptional items
aggregating to Rs. 933.42 Crore which has been debited to Statement of
Profit and Loss and an equivalent amount has been withdrawn from the
Provision for Extraordinary and Exceptional items and credited to
Statement of Profit and Loss as per the Scheme. Had the Scheme not
prescribed the above treatment, profit before tax would have been lower
by Rs. 933.42 Crore and General Reserve would have been higher by
equivalent amount.
5. Without qualifying our opinion, we draw attention to Note no. 34 of
the financial statements detailing the accounting treatment given to
the Scheme of arrangement between five wholly owned subsidiaries and
the Company and demerger of container business of another wholly owned
subsidiary in the Company, sanctioned by Hon'ble High Court of
Judicature at Bombay vide order dated April 20, 2012. Pursuant to the
Scheme, all assets and liabilities (Net) amounting to Rs. 1,212.60 Crore,
of the subsidiaries have been recorded in the books of the Company at
their respective book value, and corresponding equivalent amount is
credited to the Capital Reserve and the Company has written off the
investments held in five subsidiaries amounting to Rs. 987 Crore in the
Statement of Profit and loss and an equivalent amount has been
withdrawn from General reserve. Had the Scheme not prescribed the above
accounting treatment, General Reserve would have been higher by Rs.
1,212.60 Crore and Capital Reserve would have been lower by an
equivalent amount.
6. Further to our comments in the Annexure referred to in paragraph 3,
4 & 5 above, we report that:
(a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purposes of
our audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Act; as referred in paragraph (4) above, the Company has exercised
the option available as per court orders which overrides the relevant
provisions of Accounting Standard 5 (AS- 5).
(e) On the basis of written representations received from the
directors, as on March 31, 2012 and taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2012
from being appointed as a director in terms of clause (g) of sub-
section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto, give the information
required by the Act, in the manner so required, and give a true and
fair view in conformity with the accounting principles generally
accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
(ii) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of its fixed
assets.
(b) As informed to us, the fixed assets are physically verified by the
Management according to a phased program designed to cover all the
items over a period of 3 years which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets.
Pursuant to the program, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies between the book records and the physical inventory have
been noticed. However, we are informed that distribution system being
underground is not physically verifiable.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
(ii) (a) The inventory (excluding stocks with third parties) has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
(iii) The Company has neither granted nor taken any loan, secured or
unsecured, from any company, firm or other party covered in the
register maintained under Section 301 of the Act. Accordingly,
provisions of clause 4(iii)(b)(c)(d)(f) and (g) of the Order are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
(v) According to the information and explanations given to us, there
have been no contracts or arrangements referred to in Section 301 of
the Act during the year to be entered in the register required to be
maintained under that Section. Accordingly, the question of commenting
on transactions made in pursuance of such contracts or arrangements
does not arise.
(vi) The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act, and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing the undisputed statutory dues
including provident fund, investor education and protection fund,
employees' state insurance, income-tax, sales tax, wealth tax, service
tax, customs duty, excise duty, cess and other material statutory dues
as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance, income-tax,
sales tax, wealth tax, service tax, customs duty, excise duty, cess and
other material statutory dues as applicable were outstanding, at the
year end, for a period of more than six months from the date they
became payable.
(c) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise
duty and cess as at March 31, 2012 which have not been deposited on
account of a dispute are as follows:
Name of the
statute Nature of Amount Period to
which the Forum where the
dispute is pending
dues (Rs.Crore) amount
relates
Delhi Sales
Tax Act, 1975 Sales Tax 129.96* 2004-2005 Divisional Bench
of Delhi High Court
Works
Contract
Act, 1999 Works 0.05 2004-2005 Deputy Commissioner
(Appeal IV) of
Contract Sales Tax, New Delhi
Tax
Orissa Sales
Tax Act, 1947 Sales Tax 3.46** 2001-2002 Sales Tax Tribunal,
Cuttack
Finance
Act, 1994 Service Tax 2.71 2004-2006 Customs, Excise and
Service Tax
Appellate Tribunal,
New Delhi
Income Tax
Act, 1961 Income Tax 1,276.03 A.Y. Bombay High Court
(for which 1978-1979,
the tax
auth
oities 1988-1989
are the 1996-1997,
appellant)
1998-1999,
1999-2000,
2001-2002,
2002-2003,
2003-2004,
2004-2005,
2005-2006
and
2007-2008
Income Tax
Act, 1961 Income Tax 382.16 A.Y 2006-
2007 and Income Tax
Appellate Tribunal,
Mumbai
Income Tax
Act,1961 Income Tax 0.02 A.Y Income Tax
Appellate Tribunal,
1999-2000 Hyderabad
The Water
(Prevention
and Control
Pollution)
Cess Act,
1977 Water Cess 0.73 1998-1999 Bombay High Court
* Includes amount of Rs. 7.50 crore paid under protest.
* As per the terms of the contract the amount is recoverable from the
customers.
** Includes amount of Rs. 0.55 crore paid under protest.
(x) The Company has no accumulated losses as at March 31, 2012 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
(xi) According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the balance sheet date.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities.
(xiii) In our opinion, the Company is not a chit fund / nidhi / mutual
benefit fund/ society. Therefore, the provisions of clause 4(xiii) of
the Order are not applicable to the Company.
(xiv) In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments. Therefore, the
provisions of clause 4(xiv) of the Order are not applicable to the
Company.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company.
(xvi) In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained except for term loans
aggregating Rs. 600 Crore obtained from banks for capital expenditure
which, as explained, pending utilization is invested in fixed deposit
with banks and in mutual fund units.
(xvii)On the basis of an overall examination of the balance sheet of
the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short-term basis
which have been used for long- term investment.
(xviii)During the year, the Company has not made any preferential
allotment of shares to companies covered in the register maintained
under Section 301 of the Act.
(xix) The Company has created security or charge in respect of
debentures issued and outstanding at the year-end.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management except in case of
theft of electricity reported by the vigilance department of the
Company, the amount of which, as informed to us, is not material.
For Haribhakti & Co. For Pathak H. D. & Associates
Chartered Accountants Chartered Accountants
Firm Regn. No. 103523W Firm Regn. No.107783W
Rakesh Rathi Vishal D. Shah
Partner Partner
Membership No. 45228 Membership No. 119303
Date : May 25, 2012
Place : Mumbai
Mar 31, 2011
1. We have audited the attached Balance Sheet of Reliance
infrastructure Limited (the "Company") as at March 31 2011, and the
related Profit and Loss Account and Cash Flow Statement for the year
ended on that date annexed thereto, which we have signed under
reference to this report. These financial statements are the
responsibility of the Company's Management. Our responsibility is to
express an opinion on these financial statements based on our audit,
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are fire of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion
3. As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004
(together the "Order"), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of The Companies Act, 1956'
(the 'Act') and on the basis of such checks of the books and records of
the Company as we considered appropriate and according to the
information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purposes of
our audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from the
directors, as on March 31, 2011 and taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2011
from being appointed as a director in terms of clause (g) of sub-
section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, the information
required by the Act, in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2011
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date
Annexure referred to in paragraph 3 of the Auditors' Report of even
date to the members of Reliance infrastructure Limited on the financial
statements for the year ended March 31, 2011
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of its fixed
assets,
(b) As informed to us, the fixed assets are physically verified by the
Management according to a phased program designed to cover all the
items over a period of 3 years which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets.
Pursuant to the program, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies between the book records and the physical inventory have
been noticed. However, we are informed that distribution system being
underground is not physically verifiable
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed of
by the Company during the year
(ii) (a) The inventory (excluding stocks with third parties) has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business,
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material,
(iii) The Company has neither granted nor taken any loan secured or
unsecured, from any company, firm or other party covered in the register
maintained under Section 301 of the Act. Accordingly, provisions of
clause 4(iii)(b)(c)(d)(f) and (g) of the order are not applicable
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system
(v) According to the information and explanations given to us, there
have been no contracts or arrangements referred to in Section 301 of
the Act during the year to be entered in the register required to be
maintained under that Section. Accordingly, the question of commenting
on transactions made in pursuance of such contracts or arrangements
does not arise
(vi) The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under,
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business,
(viii) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act, and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete
(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing the undisputed statutory dues
including provident fund, investor education and protection fund,
employees' state iinsurance, income-tax, sales tax, wealth tax, service
tax, customs duty, excise duty, cess and other material statutory dues
as applicable, with the appropriate authorities
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Act, we are not in a
position to comment upon the regularity or otherwise of the Company in
depositing the same
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance income-tax,
sales tax, wealth tax, service tax, customs duty, excise duty, cess and
other material statutory dues as applicable were outstanding, at the
year end, for a period of more than six months from the date they
became payable
(c) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise
duty and cess as at March 31, 2011 which have not been deposited on
account of a dispute, are as follows
Name of
the statute Nature of Amount Period to which the
amount relates
dues (Rs. Crore)
Works contract
Act Works 0.05 2004-2005
1999 contract
Tax
Orissa Sales
Tax Act Sales Tax 3.46* 2001-2002
1947
Finance Act
1994 Service Tax 2.71 2004-2006
income Tax Act
1961 income Tax 1,192.58 A.Y.
(for which the 1973-1979,
1996-1997, 1998-
tax authorities 1999-2000, 2001 -2002,
are the 2002-2003,
appellant) 2003-2004, 2004-2005
and 2005- 2006
income Tax
Act, 1961 income Tax 2.54 A.Y
1998-1999 and 1999-2000
income Tax
Act, 1961 income Tax 10.02 A.Y 1999-2000
Name of the Statue Forum where the dispute is pending
Works contract Act,
1999 Deputy Commissioner (Appeal IV) of Sales
Tax,
New Delhi
Orissa Sales Tax Act,
1947 Sales Tax Tribunal, Cuttack
Finance Act, 1994 Customs, Excise and Service Tax Appellate
Tribunal, New Delhi
income Tax Act, 1961 Bombay High Court
income Tax Act, 1961 income Tax Appellate Tribunal, Mumbai
income Tax Act, 1961 income Tax Appellate Tribunal, Hyderabad
* includes amount of Rs. 0.55 Crore paid under protest,
(x) The Company has no accumulated losses as at March 31 2011 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year,
(xi) According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the balance sheet date
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities,
(xiii) In our opinion, the Company is not a chit fund / nidhi / mutual
benefit fund/ society. Therefore, the provisions of clause 4(xiii) of
the order are not applicable to the Company
(xiv) In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments. Therefore, the
provisions of clause 4(xiv) of the order are not applicable to the
Company
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the Interest of the Company
(xvi) In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained
(xvii)On the basis of an overall examination of the balance sheet of
the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short-term basis
which have been used for long-term investment except for a short term
loan of Rs. 75 Crore obtained from a bank for capital expenditure has
been used accordingly
(xviii)The Company has made preferential allotment of shares to a
Company covered in the register maintained under Section 301 of the Act
during the year. In our opinion and according to the information and
explanations given to us, the price at which such shares have been
issued is not prejudicial to the Interest of the Company
(xix) The Company has created security or charge in respect of
debentures issued and outstanding at the year-end
(xx) The Company has not raised any money by public issues during the
year,
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management except in case of
theft of electricity reported by the vigilance department of the
Company, the amount for which is not ascertainable
For Haribhakti & Co. For Pathak H.D. & Associates
Firm Regn. No. 103523W Firm Regn. No. 107783W
Chartered Accountants Chartered Accountants
Rakesh Rathi Vishal D. Shah
Partner Partner
Membership No. 45228 Membership No. 119303
Place: Mumbai
Date: May 27, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Reliance
Infrastructure Limited (the "Company") as at March 31, 2010, and the
related profit and Loss Account and Cash Flow Statement for the year
ended on that date annexed thereto, which we have signed under
reference to this report. These financial statements are the
responsibility of the Companys Management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
(together the "Order"), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of The Companies Act, 1956
(the Act) and on the basis of such checks of the books and records of
the Company as we considered appropriate and according to the
information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we reporzt that:
(a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purposes of
our audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from the
directors, as on March 31, 2010 and taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2010
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, in the prescribed
manner, the information required by the Act, and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2010;
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure referred to in paragraph 3 of Auditors Report of even date to
the members of Reliance Infrastructure Limited on the Financial State-
ments for the year ended March 31, 2010
1. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fxed
assets.
(b) The fxed assets are physically verifed by the Management according
to a phased programme designed to cover all the items over a period of
3 years which, in our opinion, is reasonable having regard to the size
of the Company and the nature of its assets. Pursuant to the programme,
a portion of the fxed assets has been physically verifed by the
Management during the year and no material discrepancies between the
book records and the physical inventory have been noticed. However, we
are informed that distribution system being underground is not
physically verifable.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fxed assets has not been disposed of
by the Company during the year. Also refer Note 12 on Schedule 16 of
the financial statements regarding Scheme of Restructuring.
2. (a) The inventory (excluding stocks with third parties) has been
physically verifed by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confrmed by them. In our opinion, the frequency of verifcation is
reasonable.
(b) In our opinion, the procedures of physical verifcation of inventory
followed by the Management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verifcation of inventory as compared
to book records were not material.
3. (a) The Company has granted unsecured loans, to one company covered
in the register maintained under Section 301 of the Act. The maximum
amount involved during the year and the year- end balance of such loans
aggregates to Rs. 18.30 Crore and Rs. 9.36 Crore, respectively.
(b) In our opinion, the rate of interest and other terms and conditions
of such loans are not prima facie prejudicial to the interest of the
Company.
(c) In respect of the aforesaid loans, the parties are repaying the
principal amounts as stipulated and are also regular in payment of
interest, where applicable.
(d) In respect of the aforesaid loans, there is no overdue amount more
than Rupees One Lakh.
(e) The Company has not taken any loans, secured or unsecured, from
companies, frms or other parties covered in the register maintained
under Section 301 of the Act.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fxed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
5. According to the information and explanations given to us, there
have been no contracts or arrangements referred to in Section 301 of
the Act during the year to be entered in the register required to be
maintained under that Section. Accordingly, the question of commenting
on transactions made in pursuance of such contracts or arrangements
does not arise.
6. The Company has not accepted any deposits fom the public within the
meaning of Sections 58A and 58AA of the Act and the rules framed there
under.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act, and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made
a detailed examination of the records with a view to determine whether
they are accurate or complete.
9. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is regular in depositing the undisputed statutory dues including
provident fund, investor education and protection fund, employees
state insurance, income-tax, sales tax, wealth tax, service tax,
customs duty, excise duty, cess and other material statutory dues as
applicable, with the appropriate authorities. Further, since the
Central Government has till date not prescribed the amount of cess
payable under section 441A of the Act, we are not in a position to
comment upon the regularity or otherwise of the Company in depositing
the same. (b) According to the information and explanations given to
us and the records of the Company examined by us, the particulars of
dues of income-tax, sales-tax, wealth-tax, service-tax, customs duty,
excise duty and cess as at March 31, 2010 which have not been deposited
on account of a dispute, are as follows:
Name of the statute Nature of
dues Amount Period to which the
amount relates
(Rs.Crore)
Works Contract
Act, 1999 Works Contract Tax 0.05 2004-05
Orissa Sales
Tax Act, 1947 Sales Tax 3.16 2000-02
Finance Act,
1994 Service Tax 2.71 2004-06
Income Tax
Act, 1961 Income Tax 391.41 2001-02, 2003-04
and 2006-07
Income Tax
Act, 1961 Income Tax 66.83 1978-79, 1998-99,
1999-00, 2001-02,
2002-03, 2003-04,
2004-05 and 2005-06
Income Tax
Act, 1961 Income Tax 1.56 1996-97
Income Tax
Act, 1961 Income Tax 0.02 1999-00
Name of the statue Forum where the dispute is pending
Works Contract Act, 1999 Deputy Commissioner (Appeal IV) of
Sales Tax, New Delhi
Orissa Sales Tax Act, 1947 Orissa High Court
Finance Act, 1994 Customs, Excise and Service Tax
Appellate Tribunal, New Delhi
Income Tax Act, 1961 Bombay High Court
Income Tax Act, 1961 Bombay High Court
Income Tax Act, 1961 Income Tax Appellate Tribunal, Mumbai
Income Tax Act, 1961 Income Tax Appellate Tribunal,
Hyderabad
10. The Company has no accumulated losses as at March 31, 2010 and
it has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
11. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the balance sheet date.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund/ societies are not applicable to the
Company.
14. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
15. In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company.
16. In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
17. On the basis of an overall examination of the balance sheet of the
Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-term
basis which have been used for long-term investment.
18. The Company has made preferential allotment of shares / warrants
to a company covered in the register maintained under Section 301 of
the Act during the year. In our opinion and according to the
information and explanations given to us, the price at which such
shares have been issued is not prejudicial to the interest of the
Company.
19. The Company has created security or charge in respect of
debentures issued and outstanding at the year-end.
20. The Company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management except in case of
theft of electricity reported by the vigilance department of the
Company, the amount for which is not ascertainable.
For Price Waterhouse For Chaturvedi & Shah
From RIS..
Firm Regn. No: 301112E Firm Regn. No: 101720W
Chartered Accountants Chartered Accountants
Partha Ghosh C D Lala
Partner Partner
Membership No. 55913 Membership No. 35671
Place : Mumbai
Date : November 22, 2010