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