Reliance Inf S Regulatory News (RIFS)

Notes:

1. The Board has recommended dividend of ` 8.50 per equity share for the year 2015-16.

2. a) The Group has opted for amortising the foreign exchange fluctuation gain / (loss) on the long term foreign currency monetary items over the balance life of depreciable assets / long term monetary items, as the case may be. Accordingly, the Group has carried forward unamortised portion of net gain of ` 258.29 crore to "Foreign Currency Monetary Items Translation Difference Account" as on March 31, 2016.

b) Pursuant to the option exercised under the Scheme of Amalgamation of Reliance Infraprojects Limited with the Parent Company sanctioned by the Hon'ble High Court of Judicature at Bombay, net foreign exchange loss of ` 101.02 crore and ` 242.82 crore (net off of foreign exchange loss of ` 35.69 crore and ` 252.50 crore attributable to finance cost) for the quarter and year ended March 31, 2016 of the Parent Company has been debited to the Statement of Profit and Loss and an equivalent amount has been withdrawn from General Reserve.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 done, the Profit before tax for the quarter and year ended March 31, 2016 would have been lower by ` 101.02 crore and ` 242.82 crore respectively and General Reserve would have been higher by an equivalent amount. The treatment prescribed under the Scheme 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". This matter has been referred to by the Auditors in their report.

3. Unrealised gains amounting to ` 211.77 crore and ` 338.46 crore during the quarter and year ended March 31, 2016, pertaining to EPC contracts entered into with associate companies, have not been eliminated as prescribed by a Scheme of Amalgamation between Reliance Bhavnagar Power Private Limited and Reliance Jamnagar Power Private Limited and Reliance Infrastructure Engineers Private Limited with the Parent Company sanctioned by the Hon'ble High Court of Judicature at Bombay in February 2013. The Parent Company considers that the prescribed accounting treatment leads to a more accurate reflection of the results of the working of the Parent Company. Had the relevant provisions of Accounting Standard 23 (AS -23) ''Accounting for Investments in Associates in Consolidated Financial Statements" been followed, the Profit after tax and carrying cost of associate for the quarter and year ended March 31, 2016 would have been lower by ` 211.77 crore and ` 338.46 crore respectively. This matter has been referred to by the Auditors in their report.

4. During the year ended March 31, 2016 in respect of its EPC and Contracts business, the Group has changed its policy of determining the stage of completion of a contract from progress billing raised as a proportion of total contract value to cost incurred till date as a proportion of estimated total project cost. Accordingly, the profit before tax for the quarter and year ended March 31, 2016 is lower by ` 120.93 crore.

5. 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 Parent Company, which was subsequently amalgamated with the Parent Company w.e.f. April 1, 2013, the Board of Directors of the Parent Company during the quarter and year ended March 31, 2016 determined an amount of ` 499.53 crore as Exceptional items being bad debts ` 143.97 crore in respect of Goa Power Station and write off of investment of ` 355.56 crore in Delhi Airport Metro Express Private Limited debited to Statement of Profit and Loss and an equivalent amount has been withdrawn from the General Reserve and credited to the Statement of Profit and Loss. Had such withdrawal not been done, the Profit before tax for the quarter and year ended March 31, 2016 would have been lower by ` 499.53 crore and General Reserve would have been higher by an equivalent amount. The treatment prescribed under the Scheme 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'. This matter has been referred to by the Auditors in their report.

6. During the quarter and year ended March 31, 2016, Reliance Sea Link One Private Limited (RSOPL), subsidiary of the Parent Company, has terminated the concession agreement in relation to implementation of Western Freeway Sea Link with Maharashtra State Road Development Corporation Limited and accordingly the capital expenditure incurred for the project amounting to `  40.94 crore has been written off as an Exceptional Item in the Statement of Profit & Loss.

7. The Board of Directors of the Parent Company at its meeting held on March 16, 2016 approved the scheme of restructuring envisaging transfer of various operating divisions of the Parent Company, namely Dahanu Thermal Power Station (DTPS), Goa Power Station, Samalkot Power Station, Mumbai Power Transmission Division, Mumbai Power Distribution Division and Windmill Division (together considered Power Business) to its wholly owned subsidiary viz Reliance Electric Generation and Supply Private Limited, with effect from April 1, 2016 subject to sanction by the Bombay High Court and other requisite approvals. Since the scheme of restructuring is between Parent Company and its wholly owned subsidiary, there is no impact in the consolidated financial statements.

8. During the quarter, Parent Company has signed share purchase agreement with Birla Corporation Limited for sale of its investment in wholly owned subsidiary Reliance Cement Company Private Limited (RCCPL), subject to regulatory approvals. RCCPL has an integrated cement capacity of 5.08 mtpa at Maihar, Madhya Pradesh and Kundanganj, Uttar Pradesh and a grinding unit of 0.5 mtpa at Butibori, Maharashtra. The details of above discontinuing operation disclosures of RCCPL is as under;

(` Crore)

9. During the quarter, Reliance E-Generation and Management Private Limited has been incorporated as a subsidiary of the Parent Company.

10. Delhi Electricity Regulatory Commission (DERC) issued its Tariff Order on September 29,2015 to two joint ventures namely BSES Rajdhani Power Limited (BRPL) and BSES Yamuna Power Limited (BYPL)(JVs), whereby it has trued up the revenue gap upto March 31,2014 with certain dis-allowances. The JVs have preferred appeal against the Order before Appellate Tribunal for Electricity (APTEL). Based on the legal opinion, the impact of such disallowances, which are subject matter of appeal, has not been considered in the computation of regulatory asset. This matter has been referred to by the Auditors in their report.

11. NTPC Limited served notice to JVs for regulation (suspension) of power supply on February 01,2014 due to delay in payments. The JVs appealed against the notice before the Hon'ble Supreme Court (SC) and prayed for suitable direction from Hon'ble SC to DERC for providing cost reflective tariff and giving a roadmap for liquidation of the accumulated Regulatory Assets. The Hon'ble SC inter-alia in its interim order directed the JVs to pay the current dues. The JVs sought modification of the said order, so as to allow them to pay 70% of the current dues, are awaiting decision of the Hon'ble Supreme Court, which is reserved. This matter has been referred to by the Auditors in their report.

12. Pursuant to the direction of the Department of Power (GoNCTD) on January 07,2014, the Comptroller Auditor General of India (CAG) conducted audit of two JVs and submitted the draft audit report. The JVs challenged the direction of GoNCTD before the Hon'ble High Court of Delhi (HC). The Hon'ble HC in its order dated October 30,2015 set aside the directions of GoNCTD and directed that "all actions taken pursuant to the directions and all acts undertaken in pursuance thereof are infructuous".The aggrieved parties have filed an appeal against the Hon'ble HC judgement before the Hon'ble SC which was listed on April 08, 2016. Next date shall be known in due course. This matter has been referred to by the Auditors in their report.

13. Delhi Airport Metro Express Private Limited (DAMEPL), a SPV of the Parent Company, had terminated the Concession Agreement with Delhi Metro Rail Corporation (DMRC) for the Delhi Airport Metro Line and the operations were taken over by DMRC with effect from July 1, 2013. As per the terms of the Concession Agreement, DMRC is now liable to pay DAMEPL a Termination Payment, which is estimated at ` 2,823 crore, as the termination has arisen owing to DMRC's Event of Default. The matter has been referred to arbitration and the process for the same is continuing. Pending final outcome of the arbitration, the Parent Company continues to fund the statutory and other obligations of DAMEPL post take over by DMRC and accordingly has funded ` 64.00 crore and ` 358.76 crore during the quarter and year ended March 31, 2016. The total investment made by the Parent Company in DAMEPL upto March 31, 2016 amounts to ` 2,060.86 crore.

The Parent Company had reviewed the progress in settlement of various claims and also on overall review of financial position of DAMEPL, the Company considered it prudent to write off ` 355.56 crore during the year out of the above investment. An amount of ` 1,258.20 crore was also written off during the previous year ended March 31, 2015. However, as legally advised, DAMEPL's claims for the termination payments are considered fully enforceable. This matter has been referred to by the Auditors in their report. The share of loss of Parent Company in DAMEPL amounting to ` 3.20 crore for the year ended March 31, 2016, aggregating to ` 429.09 crore, has been netted of against the Sub-ordinate Debts disclosed under Non-current investment.

14. The listed non convertible debentures aggregating ` 4,392.33 crore as on March 31, 2016 are secured by way of first pari passu charge on the Company's certain fixed assets and Regulatory Assets, second mortgage on Company's certain fixed assets and pledge of certain investments and assets cover thereof exceeds hundred percent of the principal amount of the said debentures.

15. The Board of Directors in their meeting held on February 8, 2016, approved the scheme of amalgamation of wholly owned subsidiary Reliance Concrete Private Limited with the Parent Company. Since the scheme has not yet been sanctioned by the Hon'ble High Court, the subsidiary has not been merged with the Parent Company.

16. Details of due date wise obligations in respect of Secured Non Convertible debentures outstanding as on March 31, 2016 are as follows:

* Interest and Principal amount of the above debentures have been paid.

17. The Group has identified four business segments as reportable viz. 'Power', 'Engineering, Procurement and Construction (EPC) and Contracts, 'Infrastructure', and 'Cement'. The Power segment is engaged in generation, transmission and distribution of electrical power at various locations. EPC and Contracts segment, renders comprehensive value added services in construction, erection, commissioning and contracting. Infrastructure segment includes businesses with respect to development, operation and maintenance of toll roads, metro rail transit system and contracting. Cement segment includes manufacturing and sale of all types of cements, limestone, clinkers and other by-products thereof.

18. Parent Company's long term rating by India Ratings and Research Private Limited has been retained as IND A+/RWN & IND AA-(SO)/RWN; rating by CARE Ratings has been retained as CARE A+/RWN; ratings by CRISIL and Brickworks Ratings have changed from CRISIL A/RWN to CRISIL A-/RWN and BWR AA/stable to BWR AA-/stable respectively.

19. The Company has opted to publish consolidated financial results. Standalone financial results, for the quarter and year ended March 31, 2016 can be viewed on the websites of the Company, National Stock Exchange of India Limited and BSE Limited at www.rinfra.com, www.nseindia.com, and www.bseindia.com respectively. Key standalone financial information is given below:

(` crore)

20. After review by the Audit Committee, the Board of Directors of the Company has approved the consolidated financial results at their meeting held on May 28, 2016.

21. In terms of SEBI circular CIR/CFD/CMD/56/2016 dated May 27, 2016,the Parent Company hereby declares that the auditors have issued audit reports with unmodified opinion on the annual audited consolidated financial result for the year ended March 31, 2016

22. The figures for the quarters ended March 31, 2016 and March 31, 2015 are the balancing figures between the audited figures in respect of the full financial years and the published figures of the nine months ended December 31, 2015 and December 31, 2014 respectively. Figures of the previous period / year have been regrouped / reclassified wherever considered necessary.

For and on behalf of the Board of Directors

Place: Mumbai Anil D. Ambani

Date: May 28, 2016 Chairman