Reliance Jio underreported its revenue by Rs 63.77 crore for three fiscal years to March 2015. The company didn’t include foreign exchange gains in its adjusted gross revenue (AGR), as per a draft audit report of director general of audit for post and telecommunications.
Telcos have to pay a percentage of AGR to the government as annual licence fee. By underreporting AGR, the company paid less licence fee to the government.
Even though it is a small amount for a company that claims to have invested Rs 1.5 lakh crore in the project, it shows work ethics and the culture of Reliance Jio. It is highly unlikely that the Reliance officials do not know the definition of AGR.
As per a report in ET, Auditor report has been sent to the Reliance Jio for its response. Jio had “realised foreign exchange gain amounting to Rs 63.77 crore” during fiscal years 2012¬13 to 2014¬-15 as per annual financial statements and revenue reconciliation statements the company furnished along with annual revenue statements. The forex gains were Rs 1.29 crore in FY13, Rs 41.67 crore in FY14 and Rs 20.81 crore in FY15.
“However, this gain was not included in the AGR (adjusted gross revenue) for the purpose of revenue share, which resulted in short payment of licence fee,” as per the draft report.
The report also points out that non-¬inclusion of forex gains in AGR is a violation of license conditions. ET has, however, reported that Jio sources told the reporter that the issue had already been settled at the Telecom Disputes Settlement Appellate & Tribunal (TDSAT) in April 2015 and again on December 10 same year and upheld that forex gains should not be part of AGR.