To the Members of Reliance Communications Limited
Report on the Audit of the Standalone Financial Statements
Corporate Insolvency Proceedings as per Insolvency and Bankruptcy Code, 2016 (IBC)
The Honble National Company Law Tribunal, Mumbai Bench ("NCLT") admitted an insolvency and bankruptcy petition filed by an operational creditor against Reliance Communications Limited ("the Company") and appointed Resolution Professional (RP) who has been vested with management of affairs and powers of the Board of Directors with direction to initiate appropriate action contemplated with extant provisions of the Insolvency and Bankruptcy Code, 2016 and other related rules.
Qualified Opinion
We have audited the accompanying standalone financial statements of Reliance Communications Limited ("the Company"), which comprise the Standalone Balance Sheet as at March 31, 2024, 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 for the year then ended, and notes to the standalone financial statements including a summary of material accounting policies and other explanatory information ("the standalone financial statements").
In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Companies Act 2013 ("the Act") read with the Companies ( Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, and its loss (including other comprehensive income), its changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
a) We draw attention to Note nos. 2.14, 2.31 and 2.39.2 (d) of the standalone financial statements regarding, "Assets Held for Sale (AHS)" regarding Wireless Spectrum, Towers, Fibre and Media Convergence Nodes (MCNs) along with liabilities continues to be classified as held for sale at the value ascertained at the end of March 31, 2018, for the reasons referred to in the aforesaid notes and impact of the non payment of spectrum instalments due to Department of Telecommunication (DOT). Non determination of fair value of Asset Held for Sale as on the reporting date is not in compliance with Ind AS 105 "Non-Current Assets Held for Sale and Discontinued Operations". Accordingly, we are unable to comment on the consequential impact, if any, on the carrying amount of Assets Held for Sale and on the reported losses for the year ended March 31, 2024.
b) We draw attention to Note nos. 2.31 and 2.48 of the standalone financial statements regarding admission of the Company and its two subsidiaries into Corporate Insolvency Resolution Process ("CIRP"), and pending determination of obligations and liabilities with regard to various claims submitted by the Operational/financial/other creditors and employees including interest payable on loans during CIRP. We are unable to comment the accounting impact thereof pending reconciliation and determination of final obligation.
The Company, accordingly, has not provided interest on borrowings amounting to 4,749 crore for the year ended March 31, 2024 and 24,037 crore up to previous financial year calculated based on the basic rate of interest as per the terms of the loan. The Company further has not provided net foreign exchange loss amounting to 249 crore for the year ended March 31, 2024 and net foreign exchange loss of 3,428 crore up to previous financial year. Had such interest and foreign exchange variation as mentioned above been provided, the reported loss for the year ended March 31, 2024 would have been higher by 4,998 crore and Net worth of the Company would have been lower by
32,463 crore and 27,465 crore as on March 31, 2024 and March 31, 2023 respectively. Non provision of interest and non-recognition of foreign exchange variation is not in compliance with Ind AS 23 "Borrowing Costs" and Ind AS 21 "The Effects of Changes in Foreign Exchange Rates".
c) We draw attention to Note nos. 2.31 and 2.55 of the standalone financial statements, regarding pending comprehensive review of carrying amount of all assets (including investments, receivables and balances lying under Goods & Service Tax) & liabilities and non-provision for impairment of carrying value of the assets and write back of liabilities if any, pending completion of CIRP, various irregularities reported by the forensic auditor M/s BDO India LLP, appointed by one of the lenders, in their forensic audit report for the period from April 01, 2013 to March 31, 2017 as communicated by certain banks. In the absence of comprehensive review as mentioned above for the carrying value of all the assets and liabilities, we are unable to comment that whether any adjustment is required in the carrying amount of such assets and liabilities and consequential impact, if any, on the reported losses for the year ended March 31, 2024. Non determination of fair value of financial assets & liabilities and impairment in carrying amount for other assets and liabilities are not in compliance with Ind AS 109 "Financial Instruments", Ind AS 36 "Impairment of Assets" and Ind AS 37 "Provisions, Contingent Liabilities & Contingent Assets".
d) We draw attention to Note no. 2.53 of the standalone financial statements regarding non adoption of Ind AS 116 "Leases" effective from April 01, 2019 and the consequent impact thereof. The aforesaid accounting treatment is not in accordance with the relevant Ind AS 116.
e) We draw attention to Note no 2.31 of the standalone financial statements, regarding continuous losses incurred by the Company, current liabilities exceeding its current assets, default in repayment of borrowings and default in payment of regulatory and statutory dues and pending application of renewal of telecom licenses. This situation indicates that a material uncertainty exists that may cast significant doubt on the Companys ability to continue as a going concern. The accounts however have been prepared by the management on a going concern basis for the reason stated in the aforesaid note. We however are unable to obtain sufficient and appropriate audit evidence regarding managements use of the going concern basis of accounting in the preparation of the standalone financial statements, in view of ongoing CIRP and matters pending before regulatory authorities, the outcome of which cannot be presently ascertained.
The Networth of the Company excludes the effect of qualification under (a), (c), (d) and (e) above which are non-quantifiable as referred therein.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the standalone financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for qualified opinion on the standalone financial statements.
Emphasis of Matter Paragraph
1. We draw attention to Note no. 2.39.2 (b) of the standalone financial statements, regarding provision of license fee and spectrum usage charges based on management estimates pending special audit from Department of Telecommunications, pursuant to the judgment of Honble Supreme Court of India, vide its order dated October 24, 2019 and status of payment thereof which may undergo revision based on any development in the said matter.
2. We draw attention to Note no. 2.57 of the Statement, regarding audited financial statements for the year ended March 31, 2023 have not been adopted in the Annual General Meeting held on September 30, 2023.
Our opinion is not modified in respect of above matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matters stated in our Basis for Qualified opinion paragraph,qw we have determined the matters described below to be the key audit matters to be communicated in our report.
For each matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditors responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
| Key Audit Matter | How our audit addressed the Key Audit Matter |
| 1. Revenue Recognition | |
| The accuracy and completeness of revenue amounts recorded is an inherent industry risk. The revenue is categorised broadly into service and wholesale revenue. Service revenue mainly consists of income from fixed line, broadband, rentals and installations. | Our audit procedures included, amongst others, the following: |
| Testing the end-to-end reconciliation from business support systems to billing and to the general ledger; | |
| Wholesale revenue comprises revenue from interconnection, external administration, capacity sales and from resellers. | Performing tests on the accuracy of customer bill generation process on a sample basis and testing of a sample of the credits and discounts applied to such customer bills; |
| We considered revenue recognition as a key audit matter as the amount involved is material to the financial statements and due to the complexity of the systems and processes used to record revenue. The accounting policy and relevant disclosures relating to revenue are set out in notes 1.12 and 2.24 respectively, to the standalone financial statements. | Performed substantive analytical procedures over the significant revenue streams; |
| Involving verification of controls surrounding revenue invoicing; | |
| Assessed transactions taking place before and after year-end to ensure that revenue was recognised in the appropriate period; | |
| Performing specific procedures to test the accuracy and completeness of adjustments, and performing procedures to ensure that the revenue recognition criteria adopted by the Company is in line with the companys accounting policies. |
2. Valuation and disclosure of accrual estimates for legal claims, litigations, regulatory matters and contingencies and deposits against the same legal matters including provision of license fee and spectrum usage charges, pursuant to the judgment of Honble Supreme Court of India, vide its order dated October 24, 2019
| The Company is involved as a party in legal proceedings, including regulatory and other governmental proceedings. The Company has also deposited substantial amounts with regulatory authorities against the demands in dispute, which has been classified as deposit. | Our audit procedures included, amongst others, testing the effectiveness of the Companys internal controls around the identification and evaluation of claims/provisions, proceedings and investigations at different levels in the Company, and the recording and continuous re-assessment of the related (contingent) liabilities and provisions and disclosures. We inquired with both internal legal staff including Resolution |
| This area is significant to our audit, since the accounting and disclosure for (contingent) legal liabilities is complex and judgmental (due to the difficulty in predicting the outcome of the matter and estimating the potential impact if the outcome is unfavourable), and the amounts Involved are, or can be, material to the financial statements as a whole. Further reference is made to Note no. 2.36 Contingent Liabilities and note no. 2.39.2 (b) on provision of Licence fees and Spectrum Usage Charges. | |
| Professional (RP) as well as with the Companys financial staff in respect of ongoing investigations or claims, proceedings and investigations, inspected relevant correspondence, inspected the minutes of the meetings of the Audit Committee and requested a confirmation from the groups in-house responsible officials and RP. For claims settled during the year, we vouched the payments, as appropriate, and read the related orders to verify whether the settlements were properly accounted for. | |
| We also assessed the adequacy of the Companys disclosure around legal claims, litigations, regulatory matters and contingencies as included in Note no. 2.36, Contingent Liabilities. We consider managements conclusion on the predicted outcome and estimation of potential impact reasonable, and we assessed that the disclosures in Note nos. 2.36 and 2.39.2(b) are reasonable. |
| Information Other than the Standalone Financial Statements and Auditors Report Thereon | Responsibility of Management and Those Charged with Governance for the Standalone Financial Statements |
| The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Boards Report including Annexures to Boards Report but does not include the standalone financial statements and our auditors report thereon. | The standalone financial statements, which is the responsibility of the Companys Management is relied upon by the Resolution Professional based on the assistance provided by the Directors and taken on record by the Resolution Professional as fully described in Note no. 2.62 of standalone financial statements. |
| Our opinion on the standalone financial statements do not cover the other information and we do not express any form of assurance conclusion thereon. | The Companys Management is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income/(loss), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act. |
| In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard. | |
| This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and |
design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, Directors
/ Resolution Professional (RP) is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Director /RP either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Director /RP are also responsible for overseeing the Companys financial reporting process.
Auditors Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of Board of Directors and Resolution Professional use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matter
(a) Pursuant to applications filed by Ericsson India Pvt. Ltd. before the National Company Law Tribunal, Mumbai Bench ("NCLT") in terms of Section 9 of the Insolvency and Bankruptcy Code, 2016 read with the rules and regulations framed thereunder ("Code"), the NCLT had admitted the applications and ordered the commencement of corporate insolvency resolution process ("CIRP") of Reliance Communications Limited ("the Company") and two of its subsidiaries namely Reliance Infratel Limited (RITL, ceased w.e.f December 22, 2022) and Reliance Telecom Limited (RTL) (collectively, the "Corporate Debtors") vide its orders dated May 15, 2018. The committee of creditors ("CoC") of the Corporate Debtors, at the meetings of the CoC held on May 30, 2019, in terms of Section 22 (2) of the Code, resolved with the requisite voting share, to replace the Interim Resolution Professionals with the Resolution Professional ("RP") for the Corporate Debtors, which has been confirmed by the NCLT in its orders dated June 21, 2019 (published on the website of the NCLT on June 28, 2019).
(b) During an earlier year, Reliance Communication Infrastructure Limited (RCIL) a wholly owned subsidiary of the Company, had been admitted by NCLT for resolution process under the Code and Mr. Anish Nanavaty was appointed as the Resolution Professional by the NCLT. On December 19, 2023, Honble NCLT has approved the resolution plan submitted by a resolution applicant as approved by CoC, accordingly Mr. Anish Niranjan Nanavaty has ceased to be the RP of RCIL, and RCIL is currently under the supervision of a Monitoring Committee (of which the erstwhile RP is a member) constituted under the provisions of the approved resolution plan. The implementation of the approved resolution plan is currently pending.
(c) Further, during the earlier year Reliance Tech Services Limited (RTSL) a wholly owned subsidiary of the Company, has been admitted by NCLT on August 4, 2020 for resolution process under the Code and Mr. Anjan Bhattacharya has been appointed as the Resolution Professional by the NCLT. During the previous year, NCLT vide order dated March 03, 2023 ordered the liquidation of the RTSL and appointed Mr. Ashok Mittal as Liquidator.
(d) The standalone financial statements of the Company shall be signed by the Chairperson or Managing Director or Whole Time Director or in absence of all of them, it should be signed by any Director of the Company who is duly authorized by the Board of Directors to sign the standalone financial statements. As mentioned in Note No 2.62 of the standalone financial statements, in view of the ongoing Corporate Insolvency Resolution Process, the powers of the Board of Directors stand suspended and are exercised by the Resolution Professional.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that: (a) Except for the matters stated in Basis for Qualified Opinion paragraph above, we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) Except for the possible effects of the matters described in the Basis of Qualified opinion paragraph above and matter stated in paragraph 2(j)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of Cash Flows and Standalone Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with Rule 7 of the Companies (Indian Accounting Standards) Rules, 2015 as amended, except requirement of Ind AS 105 "Non-Current Assets Held for Sale and Discontinued Operations", Ind AS 23 "Borrowing Cost" , Ind AS 21 "Effects of Changes in foreign exchanges", Ind AS 36 "Impairment of Assets", Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets", Ind AS 109 "Financial Instruments" and Ind AS 116 "Leases" with regard to matters described in the Basis of Qualified Opinion paragraph above.
(e) The matters described under the Basis for Qualified Opinion paragraph above and Qualified Opinion paragraph of "Annexure B" to this report, in our opinion, may have an adverse effect on functioning of the Company and on the amounts disclosed in standalone financial statements of the Company; (f) On the basis of the written representations received from two directors of the Company as on March 31, 2024 taken on record by the Board of Directors and based on legal opinion obtained by the Company with regard to non-payment of debenture holders due, these two directors are not disqualified as on March 31, 2024 from being appointed as a director in terms of Section 164 (2) of the Act. Further as mentioned in Note no. 2.52 of the standalone financial statements, other directors of the Company have resigned from the position of director, however their resignation has not been accepted for the reason stated in the said note and Company has not received declarations from these directors in this regard, accordingly we are unable to comment whether these directors are disqualified as on March 31, 2024 from being appointed as a director in terms of Section 164(2) of the Act.
(g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above and paragraph 2(b) on reporting under section 143(3)(b) of the Act above and paragraph 2(j)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended). (h) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
(i) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended: In our opinion and to the best of our information and according to the explanation given to us, the managerial remuneration has been paid / provided in accordance with the requisite approval by shareholders as mandated by the provisions of section 197 read with schedule V of the Act.
The Ministry of Corporate Affairs has not prescribed other details under section 197(16) which are required to be commented upon by us.
(j) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements; ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company; iv. (a) The Management has represented to us that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented to us that, to the best of its knowledge and belief, no funds have been received by the Company from any person or entity, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and (c) Based on our audit procedure that has been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement. v. The Company has not declared or paid any dividend during the year. vi. Based on our examination which included test checks, the Company has used accounting software SAP and other peripheral applications for maintaining its books of account for the financial year ended March 31, 2024, which has a feature of recording audit trail (edit log) facility. However, as stated in note no. 2.59, no audit trail has been enabled at the database level for logging any direct changes in database in accounting software SAP and other peripheral applications for the year ended March 31, 2024. Further, the audit trail facility has been operated throughout the year for all relevant transactions recorded in the software except in one peripheral application wherein audit logs are available only from January 2024 to March 2024. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with. vii. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 01, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2024.
| For Pathak H. D. & Associates LLP |
| Chartered Accountants |
| Firms Registration No: 107783W/W100593 |
‘Annexure A to the Independent Auditors Report - March 31, 2024
Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements section of our report in the Independent Auditors Reports of even date to the members of Reliance Communications Limited on the standalone financial statements for the year ended March 31, 2024
(i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment including Assets Held for Sale.
(B) The Company is maintaining proper records showing full particulars of Intangible Assets.
(b) We are informed that the Company physically verifies its assets over a three year period. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this policy, the Company has physically verified some of the Property, Plant and Equipment including Asset Held for Sale on sample basis which is not under electronic surveillance and certain assets which are under electronic surveillance and no material discrepancies were identified on such physical verification.
(c) According to the information and explanations given to us and records examined by us, the title deeds of all immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in Note 2.50.1 of the standalone financial statements, are held in the name of the Company, except for the following where the Company is in the process of transferring the title deeds in its name as these were acquired through various schemes of arrangement entered in the earlier years:
| Sr. No. | Description of Property | Gross carrying value ( in Crore) | Title deed Held in name of | Whether title deeds held in name of promoter, director or relative of promoter/ director | Property held since date (Financial Year) | Reason for not being held in the name of the Company |
| 1 | Leasehold Land | 12 | Reliance Communications Infrastructure | Subsidiary Company | April 01, 2006 | |
| Limited & Reliance Telecom Limited | ||||||
| 2 | Freehold Land | 133 | Reliance Communications Infrastructure | Subsidiary Company | April 01, 2006 | Transfer under court |
| Limited & Reliance Telecom Limited | approved scheme | |||||
| 3 | Buildings | 245 | Reliance Communications Infrastructure | Subsidiary Company | April 01, 2006 | |
| Limited & Reliance Telecom Limited |
(d) Based on the records examined by us and information and explanation given to us by the Company, the Company during the year has not revalued its Property, Plant and Equipment or intangible assets. Hence, the reporting requirements under clause 3(i)(d) of the Order is not applicable to the Company.
(e) According to the information and explanation and representation given to us by the management, no proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(ii) (a) According to the information and explanation given to us and records examined by us, the management of the Company has conducted physical verification of its inventories at regular intervals and in our opinion the coverage and procedure of such verification by the management is appropriate. As explained to us and on the basis of records examined by us, the value of discrepancies noticed on physical verification by the management did not exceed 10% or more in aggregate of each class of inventory.
(b) Based on the records examined by us and information and explanation and representation given to us, the
Company had been sanctioned working capital limits from banks in the earlier years, on the basis of security of current assets. However, since the Company is undergoing CIR process, the Company has not filed quarterly returns and statements with such banks. (Refer note 2.19.5)
(iii) (a) Based on the examination of records of the Company and according to the information and explanation given to us, during the year, the Company has not provided guarantee or provided security or granted any loans or any advances in the nature of loans, secured or unsecured to any Company, Limited Liability Partnerships, Firms or any other parties. Accordingly, the reporting requirement under clause 3(iii)(a) and (b) of the Order is not applicable to the Company.
(b) According to the information and explanation and records examined by us in respect of the loans and advances in nature of loans, the schedule of repayment of principal and payment of interest has not been stipulated or are not available for our verification, hence we are unable to comment whether the repayment or receipts are regular.
(c) According to the information and explanation and records examined by us in respect of the loans and advances in nature of loans, the schedule of repayment of interest has not been stipulated or are not available for our verification, hence we are unable to comment whether total amount is overdue for more than ninety days. In absence of sufficient and appropriate evidence, we are unable to comment on reasonable steps have been taken by the Company for recovery of the principal and Interest thereon.
(d) According to information and explanations given to us and books of accounts and records examined by us, the Company has not renewed the loans granted to various parties as on March 31, 2019.
(e) Based on our verification of records of the Company and information and explanation given to us, the Company has granted loans or advance in nature of loans in earlier years, either repayable on demand or without specifying any terms or period of repayment are as follows:
( in Crore)
| Particulars | All Parties | Promoters | Related Parties |
| Aggregate amount of loans/ advances in nature of loans | |||
| - Repayable on demand (A) | 27 | - | 27 |
| - Agreement does not specify any terms or period of repayment (B) | 6,233 | - | 6,048 |
| Total (A+B) | 6,260 | - | 6,075 |
| Percentage of loans/ advances in nature of loans to the total loans | 100% | - | 97.04% |
(iv) As per information and explanation provided to us and on the basis of verification of records of the Company, the Company during the year has not granted any loan, made investment and provided guarantees and securities to the parties covered under section 185 and 186 of the Act. Further, as the Company is engaged in the business of providing infrastructure facilities, the provisions of section 186 [except of subsection (1)] is not applicable to the Company (Refer note no. 2.58). Accordingly, the reporting requirement under clause 3(iv) of the Order is not applicable to the Company.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public in accordance with relevant provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, the reporting requirement under clause 3(v) of the Order is not applicable to the Company. (vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under subsection 1 of Section 148 of the Act, in respect of telecommunication activities and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.
(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, we observed that there are delays in amounts deposited with appropriate authorities for amounts deducted/accrued in the books of account in respect of undisputed statutory dues including provident fund, income tax, goods and services tax, service tax, duty of customs, sales tax, value added tax, entry tax, employees state insurance, cess and other material statutory dues. According to the information and explanations given to us, undisputed amounts payable in respect of provident Fund, income tax, goods and services tax, sales tax, value added tax, employees state insurance and other material statutory dues which were in arrears as at March 31, 2024 for a period of more than six months from the date they became payable are as under:
| Name of Statute | Nature of Dues | Amount ( In Crore) | Period to which the amount relates | Due Date | Date of Payment |
| Maharashtra Value Added Tax Act, 2002 | Value Added Tax Payable | 0.36 | FY 2017-18 | Various Dates | Unpaid |
| Delhi Value Added Tax Act, 2004 | Value Added Tax Payable | 0.04 | FY 2017-18 | Various Dates | Unpaid |
| Karnataka Value Added Tax Act, 2003 | Value Added Tax Payable | 0.05 | FY 2017-18 | Various Dates | Unpaid |
| Orissa Value Added Tax Act, 2004 | Value Added Tax Payable | 0.001 | FY 2017-18 | Various Dates | Unpaid |
| Gujarat Value Added Tax Act, 2003 | Value Added Tax Payable | 0.41 | FY 2017-18 | Various Dates | Unpaid |
| Gujarat CST Act, 1956 | Central Sales Tax Payable | 0.03 | FY 2017-18 | Various Dates | Unpaid |
| Karnataka CST Act, 1956 | Central Sales Tax Payable | 0.07 | FY 2017-18 | Various Dates | Unpaid |
| Andhra Pradesh CST Act, 1956 | Central Sales Tax Payable | 0.36 | FY 2017-18 | Various Dates | Unpaid |
| Punjab CST Act, 1956 | Central Sales Tax Payable | 0.42 | FY 2017-18 | Various Dates | Unpaid |
| Rajasthan CST Act, 1956 | Central Sales Tax Payable | 0.002 | FY 2017-18 | Various Dates | Unpaid |
| Madhya Pradesh CST Act, 1956 | Central Sales Tax Payable | 0.003 | FY 2017-18 | Various Dates | Unpaid |
| Name of Statute | Nature of Dues | Amount ( In Crore) | Period to which the amount relates | Due Date | Date of Payment |
| Jharkhand CST Act, 1956 | Central Sales Tax Payable | 0.004 | FY 2017-18 | Various Dates | Unpaid |
| Chhattisgarh CST Act, 1956 | Central Sales Tax Payable | 0.01 | FY 2017-18 | Various Dates | Unpaid |
| Himachal Pradesh CST Act, 1956 | Central Sales Tax Payable | 0.005 | FY 2017-18 | Various Dates | Unpaid |
| Maharashtra Value Added Tax Act, 2002 | Works Contract Tax Payable | 0.26 | FY 2017-18 | Various Dates | Unpaid |
| Rajasthan Value Added Tax Act, 2003 | Works Contract Tax Payable | 0.03 | FY 2017-18 | Various Dates | Unpaid |
| Uttarakhand Value Added Tax Act, 2005 | Works Contract Tax Payable | 0.006 | FY 2017-18 | Various Dates | Unpaid |
| Andhra Pradesh Value Added Tax Act, 2005 | Works Contract Tax Payable | 0.01 | FY 2017-18 | Various Dates | Unpaid |
| Haryana Value Added Tax Act, 2003 | Works Contract Tax Payable | 0.007 | FY 2017-18 | Various Dates | Unpaid |
| Himachal Pradesh Value Added Tax Act, 2005 | Works Contract Tax Payable | 0.008 | FY 2017-18 | Various Dates | Unpaid |
| Punjab Value Added Tax Act, 2005 | Works Contract Tax Payable | 0.01 | FY 2017-18 | Various Dates | Unpaid |
| Kerala Value Added Tax Act, 2003 | Works Contract Tax Payable | 0.009 | FY 2017-18 | Various Dates | Unpaid |
| Chhattisgarh Value Added Tax Act, 2003 | Works Contract Tax Payable | 0.0010 | FY 2017-18 | Various Dates | Unpaid |
| Orissa Value Added Tax Act, 2004 | Works Contract Tax Payable | 0.01 | FY 2017-18 | Various Dates | Unpaid |
| Madhya Pradesh Value Added Tax Act, 2003 | Works Contract Tax Payable | 0.01 | FY 2017-18 | Various Dates | Unpaid |
| Tamilnadu Value Added Tax Act, 2006 | Works Contract Tax Payable | 0.0011 | FY 2017-18 | Various Dates | Unpaid |
| West Bengal Value Added Tax Act, | Works Contract Tax Payable | 0.0012 | FY 2017-18 | Various Dates | Unpaid |
| Income Tax Act, 1961 | Tax Deducted at source | 13.68 | FY 2017-18 & F.Y 2018-19 | Various Dates | Unpaid |
| Professional Tax Act – Various States | Profession Tax | 0.34 | FY 2018-19 onwards | Various Dates | Unpaid |
| The Labour Welfare Fund Act, 1953 | Labour Welfare Fund | 0.01 | FY 2018-19 onwards | Various Dates | Unpaid |
1 22,295, 2 39,091, 3 44,197, 4 37,898, 5 6,306, 6 5,401, 7 6,591, 8 1,459, 9 49,992, 10 40,722, 11 24,382 and 12 1,055 (b) According to the information and explanations given to us and the records of the Company examined by us, details of statutory dues referred to in clause vii (a) above, which have not been deposited as on March 31, 2024 on account of disputes are given below:
| Name of Statue | Nature of Dues | Amount* ( In Crore) | Period | Forum |
| Central Sales Tax, Bihar | Central Sales Tax | 0.04 0.43 | 2005-06 2011-12 | Appellate Tribunal Asst. Commissioner of Commercial Taxes |
| Central Sales Tax, Chhattisgarh | Central Sales Tax | 0.001 | 2011-12 | Dy. Commissioner (Appeals) |
| Central Sales Tax, Madhya Pradesh | Central Sales Tax | 0.03 | 2011-12 to 2013-14 | Dy. Commissioner (Appeals) |
| Central Sales Tax, Maharashtra | Central Sales Tax | 0.27 | 2011-12 | Dy. Commissioner of Commercial Taxes |
| 0.35 | 2013-14 | Dy. Commissioner of Commercial Taxes | ||
| Central Sales Tax, Orissa | Central Sales Tax | 0.002 | 2009-10 | Addl. Commissioner (Appeals) |
| 0.02 | Oct 06 to March 09 | Sales Tax Appellate Tribunal | ||
| Central Sales Tax, Uttar Pradesh | Central Sales Tax | 0.07 | 2006-07 | High Court |
| 0.08 | 2010-11 | Additional Commissioner (Appeals) | ||
| 0.50 | 2013-14 | Dy. Commissioner of Commercial Taxes | ||
| 1.25 | 2014-15 | Dy. Commissioner of Commercial Taxes | ||
| Central Sales Tax, Uttarakhand | Central Sales Tax | 0.12 | 2009-10 to 2010-11 | Dy. Commissioner of Commercial Taxes |
| 0.14 | 2012-13 | Jt. Commissioner of Commercial Taxes (Appeals) |
| Name of Statue | Nature of Dues | Amount* ( In Crore) | Period | Forum |
| Central Sales Tax, West Bengal | Central Sales Tax | 0.70 | 2007-08, | Tax Revision Board Jt. Commissioner |
| 2014-15, | ||||
| 2015-16 | ||||
| 0.51 | 2016-17 | Commercial Tax Officer | ||
| Central Sales Tax, Punjab | Central Sales Tax | 0.05 | 2010-11 | Dy. Excise and Taxation Commissioner (Appeals) |
| 4.68 | 2011-12 to | Asst. Commissioner of Commercial Taxes | ||
| 2016-17 | ||||
| Central Sales Tax, Kerala | Central Sales Tax | 0.003 | 2017-18 | Sales Tax Officer |
| Entry Tax, Bihar | Entry Tax | 0.38 | 2007-08 to | Commercial Tax Appellate Tribunal |
| 2008-09 | ||||
| 0.25 | 2011-12 | Asst. Commissioner of Commercial Taxes | ||
| Entry Tax, Chhattisgarh | Entry Tax | 0.63 | 2006-07 to | Commercial Tax Tribunal |
| 2007-08 | ||||
| 0.25 | 2010-11 to | Dy. Commissioner (Appeals) | ||
| 2011-12 | ||||
| Entry Tax, HimachalPradesh | Entry Tax | 1.01 | 2010-11 to | High Court |
| 2013-14 | ||||
| Entry Tax, Madhya Pradesh | Entry Tax | 0.48 | 2002-03 to | Asst. Commissioner of Commercial Taxes |
| 2003-04 | ||||
| 1.53 | 2005-06 to | MP Taxation Board | ||
| 2007-08 & | ||||
| 2010-11 | ||||
| 0.07 | 2008-09 | Commercial Tax Appellate Board | ||
| 0.21 | 2011-12 | Dy. Commissioner (Appeals) | ||
| Entry Tax, Orissa | Entry Tax | 0.08 | 2009-10 | Addl. Commissioner (Appeals) |
| 0.05 | Oct 06-March | Sales Tax Appellate Tribunal | ||
| 09 | ||||
| Entry Tax, Uttar Pradesh | Entry Tax | 0.13 | 2003-04 | Commercial Tax Tribunal |
| 0.04 | 2013-14, | Dy. Commissioner of Commercial Taxes | ||
| 2014-15 | ||||
| Entry Tax, West Bengal | Entry Tax | 0.35 | 2014-15, | Revisional Board |
| 2015-16 | ||||
| Entry Tax, Rajasthan | Entry Tax | 1.70 | 2013-14 to | Appellate Authority |
| 2014-15 | ||||
| 14.73 | 2005-06, | Supreme Court | ||
| 2007-08 to | ||||
| 2012-13 | ||||
| Entry Tax, Punjab | Entry Tax | 0.01 | Oct 2012 to | High Court |
| Dec 2012 | ||||
| VAT, Bihar | VAT | 0.24 | 2005-06 | Commercial Tax Tribunal |
| 8.33 | 2011-12 | High Court | ||
| VAT, Haryana | VAT | 1.15 | 2011-12 | Commercial Tax Tribunal |
| VAT, Kerala | VAT | 0.01 | 2006-07 | Deputy Commissioner (Appeals) |
| 8.05 | 2010-11 & | High Court | ||
| 2012-13 to | ||||
| 2014-15 | ||||
| 0.02 | 2011-12 | Deputy Commissioner (Appeals) | ||
| VAT, Punjab | VAT | 0.05 | 2010-11 | Deputy Commissioner (Appeals) |
| 7.84 | 2010-11 to | Asst. Commissioner of Commercial Taxes | ||
| 2016-17 | ||||
| VAT, Uttarakhand | VAT | 0.78 | 2009-10 to | Dy. Commissioner of Commercial Taxes |
| 2010-11 | ||||
| 0.43 | 2007-08 & | Jt. Commissioner (Appeals) | ||
| 2012-13 |
| Name of Statue | Nature of Dues | Amount* ( In Crore) | Period | Forum |
| VAT, West Bengal | VAT | 4.23 | 2005-06, | Tax Revision Board |
| 2007-08 to | ||||
| 2008-09, | ||||
| 2014-15 & | ||||
| 2015-16 | ||||
| 0.03 | 2012-13 | Jt. Commissioner of Commercial Taxes (Appeals) | ||
| 41.01 | 2016-17 | Commercial Tax Officer | ||
| VAT/Sales Tax, Uttar Pradesh | VAT/Sales Tax | 0.24 | 2003-04 | UP Trade Tax Tribunal |
| 0.93 | 2004-05 | High Court | ||
| 0.52 | 2005-06, Jan | Dy. Commissioner of Commercial Taxes | ||
| 08 to March 08 | ||||
| 0.20 | 2010-11 | Addl. Commissioner (Appeals) | ||
| 4.21 | 2013-14 & | Dy. Commissioner of Commercial Taxes | ||
| 2014-15 | ||||
| VAT, Chhattisgarh | VAT | 0.01 | 2011-12 | Dy. Commissioner (Appeals) |
| Finance Act, 1994 | CENVAT Credit | 2.42 | 01.4.2004 to | Commissioner, CGST & Central Excise |
| 31.3.2015 | ||||
| 3.21 | 01.4.2010 to | Commissioner, CGST & Central Excise | ||
| 31.03.2014 | ||||
| 1.32 | 2014-15 | Commissioner, CGST & Central Excise | ||
| Finance Act, 1994 | Service Tax | 497.28 | Oct 2011 to | |
| May 2013 | ||||
| 81.48 | July 2012 to | |||
| June 2017 | Commissioner CGST & Central Excise | |||
| 8,874.14 | April 2016 to | Commissionerate, Belapur | ||
| June 2017 | ||||
| 1,020.31 | April 2016 to | |||
| June 2017 | ||||
| Central GST Act, 2017 and | 2.49 | July 2017 to | Additional Commissioner Adjudication | |
| Himachal Pradesh GST Act, 2017 | June 2018 | (DGGSTI) | ||
| Central GST Act, 2017 and Goa GST Act, 2017 | 1.06 | July 2017 to June 2018 | Additional Commissioner Adjudication (DGGSTI) | |
| Central GST Act, 2017 and Puducherry GST Act, 2017 | 0.40 | July 2017 to June 2018 | Additional Commissioner Adjudication (DGGSTI) | |
| Central GST Act, 2017 and Telangana GST Act, 2017 | 29.52 | July 2017 to June 2018 | Additional Commissioner Adjudication (DGGSTI) | |
| Central GST Act, 2017 and Uttar Pradesh GST Act, 2017 | 40.89 | July 2017 to June 2018 | Additional Commissioner Adjudication (DGGSTI) | |
| Central GST Act, 2017 and Uttarakhand GST Act, 2017 | 1.06 | July 2017 to June 2018 | Additional Commissioner Adjudication (DGGSTI) | |
| Central GST Act, 2017 and Jammu & Kashmir GST Act, 2017 | Goods and Service Tax (GST) | 4.09 | July 2017 to June 2018 | Additional Commissioner Adjudication (DGGSTI) |
| Central GST Act, 2017 and Haryana GST Act, 2017 | 21.17 | July 2017 to June 2018 | Additional Commissioner Adjudication (DGGSTI) | |
| Central GST Act, 2017 and Jharkhand GST Act, 2017 | 1.39 | July 2017 to June 2018 | Additional Commissioner Adjudication (DGGSTI) | |
| Central GST Act, 2017 and Gujarat GST Act, 2017 | 19.75 | July 2017 to June 2018 | Additional Commissioner Adjudication (DGGSTI) | |
| Central GST Act, 2017 and Kerela GST Act, 2017 | 13.67 | July 2017 to June 2018 | Additional Commissioner Adjudication (DGGSTI) | |
| Central GST Act, 2017 and Andhra Pradesh GST Act, 2017 | 13.66 | July 2017 to June 2018 | Additional Commissioner Adjudication (DGGSTI) | |
| Central GST Act, 2017 and Rajasthan GST Act, 2017 | 15.24 | July 2017 to June 2018 | Additional Commissioner Adjudication (DGGSTI) |
| Name of Statue | Nature of Dues | Amount* ( In Crore) | Period | Forum |
| Central GST Act, 2017 and Orissa GST Act, 2017 | 3.36 | July 2017 to June 2018 | Additional Commissioner Adjudication (DGGSTI) | |
| Central GST Act, 2017 and Delhi GST Act, 2017 | 5.18 | July 2017 to June 2018 | Additional Commissioner Adjudication (DGGSTI) | |
| Central GST Act, 2017 and Bihar GST Act, 2017 | 2.92 | July 2017 to June 2018 | Additional Commissioner Adjudication (DGGSTI) | |
| Central GST Act, 2017 and Delhi GST Act, 2017 | 0.97 | July 2017 to March 2018 | Sales Tax Officer, Delhi | |
| Central GST Act, 2017 and Karnataka GST Act, 2017 | Goods and Service Tax (GST) | 22.54 | July 2017 to March 2019 | Deputy Commissioner of Commercial Taxes, Bengaluru |
| Central GST Act, 2017 and | 12.43 | July 2017 to | Assistant Commissioner of Goods and | |
| Kerala GST Act, 2017 | June 2018 | Service Tax, Kerala | ||
| Central GST Act, 2017 and Madhya Pradesh GST Act, 2017 | 1.01 | July 2017 to January 2020 | Deputy Commissioner of Commercial Taxes, Bhopal | |
| Central GST Act, 2017 and Rajasthan GST Act, 2017 | 0.44 | July 2017 to March 2018 | Joint Commissioner of Goods and Service Tax, Rajasthan | |
| Central GST Act, 2017 and Tamil Nadu GST Act, 2017 | 4.25 | 2018-19 to 2020-21 | Additional Commissioner of Goods and Service Tax | |
| Income Tax Act, 1961 | Income Tax | 292.82 | 2009-10 & 2010-11 | Bombay High Court |
| Income Tax Act, 1961 | Income Tax | 0.44 | 2009-10, 2010-11 & 2011-12 | Commissioner of Income Tax (Appeals) |
| Income Tax Act, 1961 | Income Tax | 1.24 | 2010-11, 2011-12 & 2012-13 | Bombay High Court |
| Income Tax Act, 1961 | Income Tax | 90.00 | Various years | Supreme Court / High Court |
| Income Tax Act, 1961 | Income Tax | 181.48 | 2014-15 | Commissioner of Income Tax (Appeals) |
| Income Tax Act, 1961 | Income Tax | 30.11 | 2016-17 | Commissioner of Income Tax (Appeals) |
| Income Tax Act, 1961 | Income Tax | 12.80 | 2018-19 | Commissioner of Income Tax (Appeals) |
| Income Tax Act, 1961 | Income Tax | 128.33 | 2015-16 | Commissioner of Income Tax (Appeals) |
| Income Tax Act, 1961 | Income Tax | 0.16 | 2019-20 | Commissioner of Income Tax (Appeals) |
*Net of amounts paid/deposited under protest
1 26,723, 2 49,382 and 3 26,256
(viii) According to information and explanation given to us and representation given by the management, there were no transactions relating to previously unrecorded income that were surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).
(ix) (a) In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of loans or borrowings and interest thereon from banks & financial institutions, which were not paid as at Balance Sheet date. The lender wise details of principal and interest are as under:
| Name of Lender | Amount ( in crore) Principal | Period (No. of Days) Principal | Amount ( in crore) Interest | Period (No. of Days) Interest |
| Loan From Bank/Financial Institutions | ||||
| Burlington Loan Management DAC | 163 | 2303 | - | - |
| Shubh Holding Pte Ltd | 2,460 | 2590 | - | - |
| Bank Of Baroda | 1,837 | 2581 | 11 | 2560 |
| Bank Of India | 644 | 2558 | 9 | 2560 |
| Bank Of Maharashtra | 473 | 2510 | - | - |
| Name of Lender | Amount ( in crore) Principal | Period (No. of Days) Principal | Amount ( in crore) Interest | Period (No. of Days) Interest |
| Canara Bank | 622 | 2467 | - | - |
| Central Bank Of India | 258 | 2558 | 3 | 2560 |
| Corporation Bank (Merged with Union Bank) | 583 | 2580 | 8 | 2560 |
| Dena Bank(Merged with Bank Of Baroda) | 250 | 2245 | - | - |
| Deutsche Bank | 530 | 2303 | 1 | 2478 |
| China Development Bank | 2,236 | 2590 | 128 | 2592 |
| Industrial And Commercial Bank Of China | 1,194 | 2590 | 33 | 2592 |
| Export Bank Of China | 2,433 | 2590 | 47 | 2592 |
| IDBI Bank | 721 | 2562 | 9 | 2560 |
| Indian Overseas Bank | 120 | 2558 | 1 | 2560 |
| RCOM Bond | 1,955 | 1242 | - | - |
| Oriental Bank Of Commerce (Merged with Punjab National Bank) | 189 | 2558 | 2 | 2560 |
| Punjab National Bank | 623 | 2559 | - | - |
| State Bank Of India | 2,228 | 2558 | 21 | 2560 |
| Syndicate Bank (Merged With Canara Bank) | 705 | 2581 | 5 | 2560 |
| SC Lowy Financials (HK) Ltd | 2,175 | 2225 | - | - |
| UCO Bank | 681 | 2558 | 9 | 2560 |
| Union Bank Of India | 742 | 2558 | 3 | 2560 |
| United Bank of India (Merged with Punjab National Bank) | 424 | 2558 | 2 | 2560 |
| Vijaya Bank (Merged with Bank Of Baroda) | 16 | 2147 | - | - |
| II) Debenture | ||||
| Life Insurance Corporation Of India | 3,750 | 2245 | - | - |
| III) Other Loan | ||||
| Industrial Finance Corporation of India Limited | 200 | 2574 | 4 | 2576 |
| India Infrastructure Finance | 248 | 2375 | 4 | 2591 |
| Asset Care and Reconstruction Enterprises Limited | 492 | 2569 | - | - |
| ACRE – 144 Trust (assignment by Standard Chartered Bank) | 1,072 | 2547 | - | - |
| Deep Industrial Finance Limited | 260 | 1582 | - | - |
| Pearl Housing Finance Limited | 260 | 1582 | - | - |
| Shriyam Auto Fin Ltd | 260 | 1582 | - | - |
| Traitrya Construction Finance Limited | 260 | 1582 | - | - |
| Vishvakarma equipment finance Limited | 142 | 1582 | - | - |
| Neptune Steel Strips Limited | 68 | 1553 | - | - |
| Reliance Capital Limited | 1,000 | 1827 | 3 | 1828 |
| Other Lenders | 7,660 | Various Dates | 68 | Various Dates |
| Total | 39,934 | 371 |
Apart from outstanding of Interest mentioned above, the Company has not provided interest expense of
4,749 crore for the year and 24,037 crore upto March 31, 2024 in respect of Loan taken from banks, financial intuitions and other lenders and therefore it has not been disclosed above.
The Company has not obtained any loans from Government.
(b) According to the information and explanations given to us and on the basis of the audit procedures and representation received from management, we report that the Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority. However, the Company has received show cause notice from certain banks as to why the Company should not be declared wilful defaulter (refer note 2.55).
(c) In our opinion and information and explanation given to us and based on the examination of records of the Company, the Company has not raised term loans from any lender during the year and hence reporting under clause 3(ix)(c) of the Order is not applicable to the Company.
(d) According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the standalone financial statements of the Company, we report that no funds raised on short term basis have been used for long-term purposes.
(e) According to the information and explanations given to us and on an overall examination of the standalone financial statements of the Company, we report that during the year the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.
(f) In our opinion and according to the information and explanations given to us, the Company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies. (x) (a) In our opinion, and according to information and explanations given to us, the Company has not raised money by way of initial public offer or further public offer (including debt instruments) and hence the provision of clause 3(x)(a) of the Order is not applicable to the Company. (b) In our opinion and according to the information and explanation given to us, the Company during the year has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause 3(x)(b) of the Order is not applicable to the Company.
(xi) (a) Based on the audit procedures performed by us and according to the information and explanations given to us, no material fraud by the Company or on the Company has been noticed or reported during the year. Also refer notes nos. 2.54, 2.55 and 2.60 of standalone financial statements.
(b) According to the information and explanations given to us, no report under sub-section (12) of section 143 of the Act has been filed by the auditors in form ADT-4 as prescribed under rule 13 of the Companies (Audit and Auditors) Rules, 2014 with the Central Government. (c) As represented to us by the Management, no whistle blower complaints have been received by the Company during the year.
(xii) As the Company is not a Nidhi company. Accordingly, reporting under clause 3(xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable. The details of such related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards. (xiv) (a) In our opinion and based on our examination, the Company has an internal audit system commensurate with the size and nature of its business.
(b) We have considered the internal audit reports of the Company issued till date, for the period under audit.
(xv) According to the information and explanations given to us and based on our examination of the records, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, reporting under clause 3(xv) of the Order is not applicable to the Company. (xvi) (a) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
(b) On the basis of examination of records and according to the information and explanation given to us by the Company, the Company has not conducted any Non-Banking Financial or Housing Finance activities hence the reporting requirements under clause 3(xvi)(b) of the Order is not applicable.
(c) In our opinion and according to the information and explanations given to us, the Company is not a Core Investment Company as defined in the regulations made by the Reserve Bank of India.
(d) As represented by the management, the Group does not have more than one Core Investment Company as part of the Group as per the definition of Group contained in the Core Investment Companies (Reserve Bank) Directions, 2016.
(xvii)Based on the examination of records, the Company has incurred cash losses of 10,686 crore in the financial year 2023-24 and 14,808 crore in immediately preceding financial year.
(xviii)There has been no resignation of the statutory auditors during the year.
(xix) As referred to in Basis for Qualified Opinion paragraph (e) in our main audit report and as disclosed in Note no. 2.31 and 2.50.8 to the standalone financial statements which also includes financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors/ Resolution Professional and management plans and based on our examination of the evidence supporting the assumptions, there exists a material uncertainty that may cast a significant doubt on the Companys ability to continue as a going concern as on the date of audit report and the capability of the Company for meeting its liabilities existing at the date of balance sheet, as and when they fall due within a period of one year from the balance sheet date. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.
(xx) Based on the examination of records of the Company and information and explanations given to us, due to losses incurred, the conditions and requirements of section 135 of the act is not applicable to the Company. Hence, reporting under clause 3(xx)(a) and 3(xx)(b) of the Order is not applicable to the Company.
| For Pathak H. D. & Associates LLP |
| Chartered Accountants |
| Firms Registration No: 107783W/W100593 |
‘Annexure B to the Independent Auditors Report - March 31, 2024
Annexure B to the Independent Auditors Report on the standalone financial statements of Reliance Communications Limited for the year ended March 31, 2024
Report on the Internal Financial Controls with respect to standalone financial statement under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘‘the Act)
(Referred to in paragraph 2(h) under ‘Report on other legal and regulatory requirements section of our report of even date to the members of Reliance Communications Limited for the year ended March 31, 2024)
We have audited the internal financial controls with reference to standalone financial statements of Reliance Communications Limited ("the Company") as of March 31, 2024 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the "Guidance Note"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and standards issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls with reference to standalone financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a Basis for our Qualified Opinion on the Companys internal financial controls with reference to standalone financial statements.
Meaning of Internal Financial Controls with reference to standalone financial statements
A Companys internal financial control with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial control with reference to standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companys assets that could have a material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls with reference to standalone financial statements
Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial control with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Basis for Qualified Opinion
According to the information and explanations given to us and based on our audit, the following material weaknesses and deficiencies has been identified in the operating effectiveness of the Companys internal financial controls with reference to standalone financial statements as at March 31, 2024: i. The Companys internal process with regard to confirmation and reconciliation of Balances of trade receivables, trade payables & other liabilities and loan & advances which are not providing for adjustments, which are required to be made to the carrying values of such assets and liabilities. (Read with Note no. 2.31). ii. The Companys internal control process in respect of closure of outstanding entries in Bank Reconciliation Statements which are pending to be reconciled. iii. In respect of delays in payment of certain statutory dues and filing of certain statutory returns during the year with the respective authorities. iv. In respect of transactions carried out by Director of foreign subsidiary company without obtaining the adequate approvals from the Management of the Company (Refer Note 2.60). v. The Companys internal financial control with regard to the compliance with the applicable Indian Accounting Standards and evaluation of carrying values of assets and liabilities and other matters, as fully explained in Basis for Qualified Opinion paragraph of our main report, resulting in the Company not providing for adjustments, which are required to be made, to the standalone financial statements.
A ‘material weakness is a deficiency, or a combination of deficiencies, in internal financial control with reference to standalone financial statements, such that there is a reasonable possibility that a material misstatement of the Companys standalone financial statements will not be prevented or detected on a timely basis.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the effects / possible effects of the material weaknesses described above under Basis for Qualified Opinion paragraph on the achievement of the objectives of the control criteria, the Company has, in all material respects an adequate internal financial controls with reference to standalone financial statements and such internal financial controls were operating effectively as at March 31, 2024, based on the internal financial control with reference to the standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note.
We have considered material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company for the year ended March 31, 2024 and these material weaknesses affect our opinion on standalone financial statements of the Company for the year ended March 31, 2024 [our audit report dated May 29, 2024, which expressed an Qualified Opinion on those standalone financial statements of the Company].
| For Pathak H. D. & Associates LLP |
| Chartered Accountants |
| Firms Registration No: 107783W/W100593 |
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