POLICY ON APPOINTMENT OF AUDITORS AND AUDITING STANDARDS
1. Preamble
1.1. This Auditor Policy is adopted by the IM Board (in respect of, and on behalf of, the Oriental InfraTrust (“Trust”)) and sets out the framework for the appointment, and removal of the Auditor, compliance requirements and the auditing standards to be followed by such Auditor.
1.2. This Auditor Policy shall be effective on and from the InvIT Closing Date.
2. Definitions
2.1. “Accounts” shall mean financial statements of the Trust prepared on a standalone and consolidated basis.
2.2. “Applicable Law” shall have the meaning ascribed to such term in the Trust Deed.
2.3. “Auditor” shall have the meaning ascribed to such term in the Trust Deed.
2.4. “Auditor Policy” shall mean this policy on appointment of auditors and auditing standards adopted by the Investment Manager on behalf of the Trust, as amended from time to time.
2.5. “Big 5 Accounting Firms” shall have the meaning ascribed to such term in the Trust Deed.
2.6. “Corporate Governance Framework” shall have the meaning ascribed to such term in the Trust Deed.
2.7. “Effective Date” shall have the meaning ascribed to such term in the Trust Deed.
2.8. “ICAI” shall have the meaning ascribed to such term in Paragraph 4.4.
2.9. “IFRS” shall have the meaning ascribed to such term in Paragraph 6.3.1.
2.10. “IM Board” shall have the meaning ascribed to such term in the Trust Deed.
2.11. “Investment Manager” shall have the meaning ascribed to such term in the Trust Deed.
2.12. “InvIT Closing Date” shall have the meaning ascribed to such term in the Trust Deed.
2.13. “InvIT Documents” shall have the meaning ascribed to such term in the Trust Deed.
2.14. “Management Fees” shall have the meaning ascribed to such term in the Trust Deed.
2.15. “NHAI” shall have the meaning ascribed to such term in the Trust Deed.
2.16. “Original Trust Deed” shall have the meaning ascribed to such term in the Trust Deed.
2.17. “Parties to the Trust” shall mean the Sponsor(s), the Investment Manager, the Project Manager, the MM Manager andthe Trustee.
2.18. “Person” shall have the meaning ascribed to such term in the Trust Deed.
2.19. “Project Entity” shall have the meaning ascribed to such term in the Trust Deed.
2.20. “SEBI” shall have the meaning ascribed to such term in the Trust Deed.
2.21. “SEBI InvIT Regulations” shall have the meaning ascribed to such term in the Trust Deed.
2.22. “Stock Exchange(s)” shall have the meaning ascribed to such term in the Trust Deed.
2.23. “Trust Deed” shall mean the trust deed dated February 25, 2019 executed by the Sponsors and the Trustee in accordance with Applicable Law through which the Original Trust Deed, stands amended, restated and superseded with effect from the Effective Date, and any other document which amends, supplements, replaces or otherwise modifies the Trust Deed in accordance with the InvIT Documents and Applicable Law, together with all annexures, schedules and exhibits, if any.
2.24. “Trustee” shall have the meaning ascribed to such term in the Trust Deed.
2.25. “Unitholder” shall have the meaning ascribed to such term in the Trust Deed
3. Interpretation
3.1. Capitalized terms used, but not defined herein, shall have the meaning ascribed to such term under the Trust Deed and other InvIT Documents, as applicable.
3.2. In case of any inconsistency between the terms of the Trust Deed and this Auditor Policy, the terms of the Trust Deed shall prevail.
4. Appointment of Auditor and Fees
4.1. The Investment Manager, in consultation with the Trustee, shall appoint the Auditor(s) on behalf of the Trust in accordance with the SEBI InvIT Regulations, other Applicable Law and the InvIT Documents. In this regard, the Investment Manager shall enter into any document or agreement with the Auditor, as may be required from time to time.
4.2. In respect of the Trust, the Investment Manager shall, in consultation with the Trustee, appoint any one of the Big 5 Accounting Firms as the Auditor and determine the remuneration of the Auditor, in accordance with the SEBI InvIT Regulations.
4.3. The IM Board will decide and approve, based on recommendations of any of the Committees and/or in consultation with the Trustee as required under Applicable Law, the appointment and removal of Auditors in the event that the new auditor of the Trust is one of the Big 5 Accounting Firms.
4.4. The Auditor, so appointed, shall be one who has subjected itself to the peer review process of the Institute of Chartered Accountants of India (“ICAI”) and who holds a valid certificate issued by the peer review board of ICAI.
4.5. The Investment Manager shall appoint anAuditor for a period of not more than 5 (five) consecutive years or such other period prescribed under Applicable Law, provided that the auditor, not being an individual, may be reappointed for a period of another 5 (five) consecutive yearsor such other period prescribed under Applicable Law, subject to approval of the Unitholders in the annual meeting in accordance with the provisions of the SEBI InvIT Regulations.
4.6. The Investment Manager shall have the power to pay the fees, commission and reimbursement of expenses payable to the Auditor as per the terms of such engagement.Any external costs and fees paid to the Auditor, shall be in addition to the Management Fees.
5. Appointment of auditors of the Project Entity
5.1. In respect of the Project Entities, the auditors of the Project Entities shall be appointed from the list of auditors empanelled with NHAI, from time to time, in accordance with the Trust Deed.
5.2. The IM Board will decide and approve, based on recommendations of any of the Committees and/or in consultation with the Trustee as required under Applicable Law, the appointment, removal or recommendation of the statutory and internal auditors of the Project Entities.
5.3. Any change in the auditor of the Project Entity, including any removal or replacement of such auditor, shall require the approval of the Unitholders by way of a Super Majority in accordance with the Trust Deed.
6. Compliance Requirements
6.1. The Investment Manager shall ensure that audit of the Accounts of the Trust by the Auditors is undertaken in accordance with Applicable Law and the InvIT Documents and its report is submitted to the Stock Exchange(s) within the time stipulated by the respective Stock Exchange, if any.
6.2. The Investment Manager shall ensure that the activities of the Auditor appointed by the Investment Manager are in accordance with the SEBI InvIT Regulations and guidelines or circulars issued under the SEBI InvIT Regulations.
6.3. The Auditor shall comply with the following conditions at all times, along with such other conditions that may be prescribed under Applicable Law:
6.3.1. the Auditor shall conduct audit of the Accounts of the Trust and draft the audit report based on the Accounts examined by him, and after taking into account the relevant accounting and auditing standards including the International Financial Reporting Standards (“IFRS”), as may be specified by SEBI and/or the ICAI, from time to time, in this regard;
6.3.2. the Auditor shall, to the best of his information and knowledge, ensure that the Accounts and financial statements give a true and fair view of the state of the affairs of the Trust, including profit or loss and cash flow for the period and such other matters as may be specified;
6.3.3. the Auditor shall have a right of access at all times to the books of accounts and vouchers pertaining to activities of the Trust; and
6.3.4. the Auditor shall have a right to require such information and explanation pertaining to activities of the Trust as he may consider necessary for the performance of his duties as an Auditor from the employees of the Trust or the Parties to the Trust or the Project Entities or any other Person in possession of such information.
7. Removal of the Auditor
In accordance with the Trust Deed, the Auditor(s) may be removed or replaced:
7.1. with the approval of the Unitholders in accordance with Clause 13.5 of the Trust Deed, if the new auditor is a Person other than the Big 5 Accounting Firms; or
7.2. in accordance with the Corporate Governance Framework if the new auditor is one of the Big 5 Accounting Firms.
8. Conflict with Law
8.1. This Auditor Policy shall not contradict with the provisions of any Applicable Law. In case of any discrepancy, the provisions of Applicable Law shall prevail over the provisions of this Auditor Policy.
8.2. Notwithstanding the above, this Auditor Policy will stand amended to the extent of any change in Applicable Law, including any amendment to the SEBI InvIT Regulations, without any action from the Investment Manager or approval of the Unitholders of the Trust.