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Auditor Report of GTL Infrastructure Ltd.

Mar 31, 2023

GTL INFRASTRUCTURE LIMITED

Report on the Audit of Financial Statements

Qualified Opinion

We have audited the accompanying financial statements of GTL INFRASTRUCTURE LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss including the Other Comprehensive Income, the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “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 matters described in the ‘Basis for Qualified Opinion'' para below, the aforesaid financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of 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 31,2023, its Loss including other Comprehensive Income, its Cash Flows and the Statement of Changes in Equity for the year ended on that date.

Basis for Qualified Opinion

Attention is drawn to Note No. 40 to the financial statements which inter alia states that, the Hon’ble Supreme Court of India held that "Mobile Telecommunication Tower” is a building and State can levy property tax on the same. Pending petitions of the Company before the appropriate Courts, non-receipt of demand notices for property tax in respect of majority of the Telecommunication Towers and also due to Company''s right to recover such property tax amount from certain customers, the company is unable to quantify the amount of property tax to be borne by it and accordingly the Company has not made any provision for the same. We are unable to quantify the amount of the property tax, if any, to be accounted for and its consequential effects on the financial statements.

We conducted our audit in accordance with the Standards on Auditing (“SA”) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the 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 (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the financial statements.

Material Uncertainty Related to Going Concern

We draw attention to the Note no. 59 to the financial statements, regarding preparation of financial statements on going concern basis, notwithstanding the fact that the Company continued to incur the cash losses, net-worth has been fully eroded, defaulted in repayment of principal and interest to its lenders, certain lenders including Edelweiss Asset Reconstruction Company (EARC) have called back the loans, one of the secured lender had applied before the NCLT Mumbai Bench under Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process (CIRP), which was dismissed by NCLT vide its order dated November 18, 2022, against which the secured lender has filed an appeal before the National Company Law Appellate Tribunal, (“NCLAT''''), which is subjudice, in the meantime EARC who is the lead lender of the Company has filed its Intervention Application in abovementioned Appeal and the Company has filed its reply to the appeal as well as EARC intervention application, Aircel, an erstwhile major customer of the Company has filed Insolvency petition before NCLT and various other events resulting into substantial reduction in the tenancy, provisions for impairment for Property, Plant & Equipment (refer Note No. 3(a)(iv) to the financial statements), legal matters in relation to Property Tax and qualified opinion for the same (refer note no. 40 to the Financial Statements and above paragraph heading with “Basis for Qualified Opinion”, respectively), dismissal of Company''s proceedings by the Hon''ble Supreme Court, dismantling of various telecom sites by disgruntled landowners / miscreants and loss of assets (refer note no. 58 to the Financial Statements); these conditions along with other matters set forth in notes to the financial statements indicate that a material uncertainty exists that may cast significant doubt on the Company''s ability to continue as a going concern. The appropriateness of the assumptions of the going concern is critically depended upon the Company''s ability to generate cash flows in future to meet its obligation.

Our opinion is not modified in respect of this matter.

Key Audit Matters (KAM)

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Financial Statements for the year ended March 31, 2023. These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matter

How our audit addressed the key audit matter

1) Property, Plant and Equipment (PPE):

Impairment

Annually Management reviews whether there are any indicators of impairment of the PPE of the Company by reference to the requirements under Indian Accounting Standards (Ind AS) 36 -“Impairment of Assets”. Accordingly, Management has identified impairment indicators (operating losses, significant erosion of net-worth, dismantling of towers etc.) in the Company. As a result, an impairment assessment was required to be performed by the Company by comparing the carrying value of the PPE to their recoverable amount to determine whether impairment was required to be recognised.

For the purpose of the above impairment testing, value in use has been determined by forecasting and discounting future cash flows. These conclusions are dependent upon significant management judgments, including in respect of:

- Estimated utilization, incremental tenancy (growth rate), frequency of assets replacement expenditure to be incurred, disposal values and discount rates applied to future cash flows.

During the year ended March 31, 2023 the management assessed carrying values of PPE and an impairment provision of '' 58,654 Lakhs and losses on account of dismantling of PPE of '' 34,169 Lakhs have been recognised and reduced the aggregate carrying value of PPE to '' 265,154 Lakhs, to their estimated recoverable value, which is the value in use (Refer Note no. 3(a), 35 and 58 to the Financial Statements).

We considered this matter as key audit matter due to the significance of the carrying value of the assets being assessed and due to the level of management judgments required in the assumptions impacting the impairment assessment and the sensitivity of the impairment model.

Our audit procedures included, among others:

- Updating our understanding of management''s annual impairment testing process.

- Assessing internal controls designed for identification of impairment indicators.

- Ensuring that the methodology of the impairment exercise continues to comply with the requirements of Ind AS as adopted, including evaluating management''s assessment of indicators of impairment against indicators of impairment specified within Ind AS 36.

- Assessing the assumptions around the key drivers of the cash flow forecasts including incremental tenancy growth, discount rates, estimated one time settlement with disputed operators, etc.

- Discussing / evaluating potential changes in key drivers as compared to previous year / actual performance with management in order to evaluate whether the inputs and assumptions used in the cash flow forecasts were suitable.

- Testing the arithmetical accuracy of the impairment model prepared by the management and obtaining the fair valuation report of value in use from an independent SEBI registered merchant banker.

- Verifying the completeness of disclosure in the financial statements as per Ind AS 36.

Key Audit Matter

How our audit addressed the key audit matter

2) Litigation Matters and Contingent Liabilities

The Company is subject to number of significant litigations. Major risks identified by the Company in that area related to Service Tax, Property Tax, Legal cases initiated by various rental site owners and by a FCCB holder, Application filed by a lender to the NCLT under IBC for the recovery of loan which was dismissed by NCLT and against which lender has filed an appeal before the National Company Law Appellate Tribunal, (“NCLAT”), which is subjudice, in the meantime EARC who is the lead lender of the Company has filed its Intervention Application in abovementioned Appeal and the Company has filed its reply to the appeal as well as EARC intervention application and now matter is posted for hearing on May 26, 2023, arbitration with the vendors / service providers, etc. The amount of litigation may be significant and estimates of the amounts of provisions or contingent liabilities are subject to significant Management judgment. (Refer Note No. 36, 38(A), 39, & 40 to the Financial Statements)

Due to complexity involved in these litigation matters, management''s judgment regarding recognition and measurement of provisions for these legal proceedings is inherently uncertain and might change over time as the outcomes of the legal cases are determined. Accordingly, it has been considered as a key matter.

Our audit procedure included, among others:

- Assessing the procedures implemented by the Company to identify and gather the risks it is exposed to.

- Obtaining an understanding of the risk analysis performed by the Company, with relating supporting documentation, and reading written statements from internal legal experts, where applicable.

- Discussion with the management on the development in these litigations during the year ended March 31,2023.

- Enquiring from the company''s legal counsel (internal) and study the responses as received from them.

- Verification that the accounting and / or disclosure as the case may be in the financial statements made by the Company is in accordance with the assessment of legal counsel / management.

- Obtaining representation letter from the management on the assessment of these matters as per SA 580 (revised) -Written representations.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company''s Board of Directors is responsible for the other information. The other information comprises the management discussion & analysis and director''s report included in the annual report but does not include the Financial Statements and our auditor''s report thereon. The above information is expected to be made available to us after the date of this auditor''s report.

Our opinion on the Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Financial Statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the above other information, if we conclude that there is material misstatement therein, we are required to communicate the matter to those charged with governance.

Management Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act, with respect to the preparation of these Financial Statements that give a true and fair view of the Financial Position, Financial Performance including Other Comprehensive Income, Cash Flows and the Statement Of Changes in Equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the appropriate accounting policies; making judgements 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 fair presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s 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 financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the 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 control 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 system 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 management''s 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 Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the 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 auditor''s 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 financial statements, including the disclosures,

and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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 financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor''s 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s 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.

2. As required by Section 143(3) of the Act, we report that:

a) 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 effects of matters described in the Basis for Qualified Opinion paragraph above, 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 including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this report are in agreement with the books of account;

d) Except for the effects of matters described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid financial statements comply with the accounting standards specified under section 133 of the Act;

e) The matter described in the ‘Basis for Qualified Opinion'' paragraph above and the matter described under ‘Material Uncertainty Related to Going Concern'' paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f) On the basis of written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2023, from being appointed as a director in terms of section 164(2) of the Act;

g) With respect to the adequacy of the internal financial controls of the Company with reference to these financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.

h) With respect to the other matters to be included in the Auditor''s 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 explanations given to us, the managerial remuneration paid/ payable by the Company to a whole time directors are subject to approval of lenders in accordance with the provisions of section 197 of the Act.

i) With respect to the other matters to be included in the Auditor''s Report in accordance with Rules 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us and as represented by the management:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements in Note No. 36, 38(A) and 39 to the Financial Statements except in respect of property tax as detailed in Note No. 40 to the financial statements where the amount is not quantifiable and which is also a matter of qualified opinion in this report;

ii. The Company has made provisions, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long term contracts including derivative contracts;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. (a) Management has represented to us that, to the best of it''s knowledge and belief, as disclosed in the notes to the financial statements, during the year 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 persons or entities, 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) Management has represented to us that, to the best of it''s knowledge and belief, as disclosed in the notes to the financial statements, during the year no funds have been received by the company from any person(s) or entity(ies), 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

(c) based on our audit procedure

conducted that are considered

reasonable and appropriate in the circumstances, nothing has come to our attention that cause us to believe that the representation given by the management under paragraph (2) (i) (iv) (a) & (b) contain any material misstatement.

v. The company has not declared or paid any dividend during the year and has also not proposed dividend for the year.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1,2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.

For Pathak H.D. & Associates LLP

Chartered Accountants Firm Registration No. 107783W / W100593

Gopal Chaturvedi

Partner

Place : Mumbai Membership No. 090903

Dated : May 11,2023 UDIN No.: 23090903BGXJNA9185


Mar 31, 2021

GTL INFRASTRUCTURE LIMITEDReport on the Audit of the Financial Statements

Qualified Opinion

We have audited the accompanying Financial Statements of GTL INFRASTRUCTURE LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and Statement of Cash Flows for the year then ended and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the 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 matters described in the ‘Basis for Qualified Opinion'' para below, the aforesaid Financial Statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2021 and its loss including other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

Attention is drawn to Note No. 40 to the financial statements which inter alia states that, the Hon''bie Supreme Court of India held that “Mobile Telecommunication Tower” is a building and State can levy property tax on the same. Pending petitions of the Company before the appropriate Courts, non-receipt of demand notices for property tax in respect of majority of the Telecommunication Towers and also due to Company''s right to recover such property tax amount from certain customers, the company is unable to quantify the amount of property tax to be borne by it and accordingly the Company has not made any provision for the same. We are unable to quantify the amount of the property tax, if any, to be accounted for and its consequential effects on the financial statements.

We conducted our audit in accordance with Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the 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 financial statements under the provisions of the Act and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the Financial Statements.

Material Uncertainty Related to Going Concern

We draw attention to the Note no. 40 & 59 to the financial statements, regarding preparation of financial statements on going concern basis, notwithstanding the fact that the Company continue to incurred the cash losses, net-worth has been fully eroded, defaulted in repayment of principal and interest to its lenders, certain lenders have called back the loans, one of the secured lenders has applied before the National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy Code, 2016, Aircel, one of the major customers of the Company has filed Insolvency petition before NCLT and various other events resulting into substantial reduction in the tenancy, provisions for impairment for Property, Plant & Equipment (refer Note No. 3(a)(vi) to the financial statements), dismantling of various telecom sites (refer Note No. 58 to the financial statements); These conditions along with other matters set forth in notes to the financial statements indicate that a material uncertainty exists that may cast significant doubt on the Company''s ability to continue as a going concern. Since 79.34% (by value) of the Company''s borrowing has been assigned by the lenders to the Edelweiss Asset Reconstruction Company Limited (EARC) and expected to have realignment of debt by the EARC in accordance with the Company''s cash flow. The appropriateness of the assumptions of the going concern is critically depended upon the Company''s ability to raise finance and generate cash flows in future to meet its obligation and to restructure its borrowing with the lenders.

Our opinion is not modified in respect of this matter.

Key Audit Matters (KAM)

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Financial Statements for the year ended March 31,2021. These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matter

How our audit addressed the key audit matter

1) Impairment of Property, Plant and Equipment (PPE):

Annually Management reviews whether there are any indicators of impairment of the PPE of the Company by reference to the requirements under Indian Accounting Standards (Ind AS) 36 -“Impairment of Assets”. Accordingly, Management has identified impairment indicators (operating losses, significant erosion of net-worth, dismantling of towers etc.) in the Company. As a result, an impairment assessment was required to be performed by the Company by comparing the carrying value of the PPE to their recoverable amount to determine whether impairment was required to be recognised.

For the purpose of the above impairment testing, value in use has been determined by forecasting and discounting future cash flows.

These conclusions are dependent upon significant management judgments, including in respect of:

- Estimated utilization, incremental tenancy (growth rate), frequency of assets replacement expenditure to be incurred, disposal values and discount rates applied to future cash flows.

During the year ended March 31, 2021 the management assessed carrying values of PPE and an impairment provision of '' 36,888 Lakhs and losses on account of dismantling of PPE of '' 16,314 Lakhs (gross) have been recognised and reduce the aggregate carrying value of PPE to '' 491,614 Lakhs, to their estimated recoverable value, which is the value in use (Refer Note no. 3(a), 36(a) and 58 to the Financial Statements).

We considered this matter as key audit matter due to the significance of the carrying value of the assets being assessed and due to the level of management judgments required in the assumptions impacting the impairment assessment and the sensitivity of the impairment model.

Our audit procedures included, among others:

- Updating our understanding of management''s annual impairment testing process.

- Assessing internal controls designed for identification of impairment indicators.

- Ensuring that the methodology of the impairment exercise continues to comply with the requirements of Ind AS as adopted, including evaluating management''s assessment of indicators of impairment against indicators of impairment specified within Ind AS 36.

- Assessing the assumptions around the key drivers of the cash flow forecasts including incremental tenancy growth, discount rates, estimated one time settlement with disputed operators, etc.

- Discussing/Evaluating potential changes in key drivers as compared to previous year / actual performance with management in order to evaluate whether the inputs and assumptions used in the cash flow forecasts were suitable.

- Testing the arithmetical accuracy of the impairment model prepared by the management and obtaining the fair valuation report of value in use from independent SEBI registered Merchant Banker.

- Verifying the completeness of disclosure in the financial statements as per Ind AS 36.

Key Audit Matter

How our audit addressed the key audit matter

2) Litigation Matters and Contingent Liabilities

The Company is subject to number of significant litigations. Major risks identified by the Company in that area related to Service Tax, Property Tax, Legal cases initiated by various rental site owners and by a FCCB holder, Application filed by a lender to the NCLT under IBC for the recovery of loan, arbitration with the vendors / service providers, etc. The amount of litigation may be significant and estimates of the amounts of provisions or contingent liabilities are subject to significant Management judgment. (Refer Note No. 36(b), 38(A), 39, & 40 to the Financial Statements)

Due to complexity involved in these litigation matters, management''s judgment regarding recognition and measurement of provisions for these legal proceedings is inherently uncertain and might change over time as the outcomes of the legal cases are determined. Accordingly, it has been considered as a key matter.

Our audit procedure included, among others:

- Assessing the procedures implemented by the Company to identify and gather the risks it is exposed to.

- Obtaining an understanding of the risk analysis performed by the Company, with relating supporting documentation, and reading written statements from internal and external legal experts, where applicable.

- Discussion with the management on the development in these litigations during the year ended March 31,2021.

- Enquiring from the company''s legal counsel (internal/ external) and study the responses as received from them.

- Verification that the accounting and / or disclosure as the case may be in the financial statements made by the Company is in accordance with the assessment of legal counsel / management.

- Obtaining representation letter from the management on the assessment of these matters as per SA 580(revised) - Written representations.

Other Information

The Company''s Board of Directors is responsible for the other information. The other information comprises the management discussion & analysis and director''s report included in the annual report but does not include the Financial Statements and our auditor''s report thereon. The above information is expected to be made available to us after the date of this auditor''s report.

Our opinion on the Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Financial Statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the above other information, if we conclude that there is material misstatement therein, we are required to communicate the matter to those charged with governance.

Management’s Responsibility for the Financial Statements

The Company''s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Financial Statements that give a true and fair view of the state of affairs (financial position), loss (financial performance including other comprehensive income), cash flows and the changes in equity of the Company in accordance with the accounting principles generally accepted in India, including Ind AS prescribed under Section 133 of the Act read with relevant rules issued thereunder.

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 Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Financial Statements, the Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor’s Responsibility for the audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s 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 Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the 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 system 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 management''s 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 ability of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the 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 auditor''s 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 Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

directors is disqualified as on March 31,2021 from being appointed as a director in terms of Section 164 (2) of the Act.

g. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”.

h. With respect to the other matters to be included in the Auditor''s 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 explanations given to us, the managerial remuneration paid/ payable by the Company to a whole time director is subject to approval of shareholders in accordance with the provisions of section 197 of the Act.

i. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 as amended, 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 financial statements in Note No. 36(b), 38(A) and 39 to the Financial Statements except in respect of property tax as detailed in Note No. 40 to the financial statements where the amount is not quantifiable and which is also a matter of qualified opinion in this report;

ii. The Company has made provisions, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long term contracts including derivative contracts;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor''s Report) Order, 2016 (“CARO 2016”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of CARO 2016.

For Pathak H.D. & Associates LLP

Chartered Accountants Firm Registration No. 107783W / W100593

Gopal Chaturvedi Partner

Place: Mumbai Membership No. 090903

Dated: June 03, 2021 UDIN No.: 21090903AAAADB9297

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 Financial Statements for the year ended March 31,2021 and are therefore the key audit matters. We describe these matters in our auditor''s 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.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act, we report that:

a. 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 effects of matters described in the Basis for Qualified Opinion paragraph above, 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 Balance Sheet, the Statement of Profit and Loss (Including other comprehensive income), Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account.

d. Except for the effects of matters described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid financial statements comply with the Ind AS prescribed under Section 133 of the Act.

e. The matter described in the ‘Basis for Qualified Opinion''paragraph above and the matter described under Material Uncertainty Related to Going Concern paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f. On the basis of the written representations received from the directors as on March 31,2021 and taken on record by the Board of Directors, none of the


Mar 31, 2018

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of GTL INFRASTRUCTURE LIMITED (“the Company”), which comprise the Balance sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the Ind AS Financial Statements”).

Management’s Responsibility for the Ind AS Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies act, 2013 (“the Act”) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the state of affairs (financial position), losses (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the Accounting Principles Generally Accepted in India, including Indian Accounting Standards (''Ind AS'') prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements.

The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s directors, as well as evaluating the overall presentation of the Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.

Basis for Qualified Opinion

Attention is drawn to Note No. 42 to the Ind AS financial statements which inter alia states that, the Hon''ble Supreme Court of India held that “Mobile Telecommunication Tower” is a building and State can levy property tax on the same. The Special Leave Petition filed against the above order has been dismissed by the Hon''ble Supreme Court. The appeal filed with Bombay High Court by the Company contesting the manner, quantum, component of property tax has been dismissed. Appeal was preferred against the same to the Hon''ble Supreme Court and the Hon''ble Supreme Court has granted stay. The matter being still sub judice, non-receipt of demand notices for property tax in respect of majority of the Telecommunication Towers and also due to Company''s right to recover such property tax amount from certain customers, the Company is unable to quantify the amount of property tax to be borne by it and accordingly has not made any provision for the same. In the light of above, we are unable to quantify the amount of the property tax, if any, to be accounted for by the Company and its consequential effects on the Ind AS financial statements.

Qualified Opinion

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 matters described in the “Basis for Qualified Opinion” paragraph above, the aforesaid Ind AS financial statements 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, of the state of affairs of the Company as at March 31, 2018 and its loss, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matters

We draw attention to the:

a. Note no. 31.1 to the Ind AS financial statements'' regarding managerial remuneration paid to a whole time director is in excess of the limits prescribed under the Act. The Company has applied to the Central Government for necessary approval which is awaited.

b. Note nos. 3.8 and 53 to the Ind AS financial statements which inter alia state that, Aircel, one of the major customers of the Company, has filed the insolvency petition before National Company Law Tribunal (NCLT), the Company has impaired its non-current assets and the Reserve Bank of India (RBI) withdrew the Strategic Debt Restructuring (SDR) guidelines resulting into uncertainty in the Debt Resolution process. The Company, however, continues to prepare its Ind AS financial statements on going concern basis and classify its rupee term loans borrowing as per SDR terms, since the Company as stated in note no. 53, has envisaged option to right size debt either through ARC debt sale process initiated by the lenders or in accordance with revised RBI guidelines.

Our opinion is not modified in respect of these matters. Other Matter

As mentioned in Note no. 43 to the Ind AS financial statements, during the year the scheme of Arrangement for the merger of Chennai Network Infrastructure Limited (CNIL) with the Company has been approved by the National Company Law Tribunal, at Mumbai and Chennai and the scheme became effective from December 22, 2017 having the appointed date April 1, 2016. The comparatives for the previous years have been restated by the Management of the Company to give the effect of the said scheme by including the financial statements of CNIL which are audited by other auditor, M/s Arvind Mahajan & Associates, Chartered Accountants, Mumbai for the year ended March 31, 2017 and March 31, 2016 and by giving such adjustments and effects as are required by the scheme of Arrangement. Our Audit has been restricted for the year ended on March 31, 2018. We have traced the comparative figures as at March 31st 2017 and 1st April 2016, from the information as certified and provided by the Management of the Company.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act, we report that:

a. 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. 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 Balance Sheet, the Statement of Profit and Loss (Including other comprehensive income), the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid Ind AS financial statements comply with the Ind AS prescribed under Section 133 of the Act.

e. The matter described in the ''Basis for Qualified Opinion'' paragraph above and the going concern matter described in subparagraph (b) under the “Emphasis of Matters” paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f. On the basis of the written representations received from the directors as on March 31, 2018 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.

g. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”.

h. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 as amended, 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 Ind AS financial statements in Note No. 38, 40 and 41 to the Ind AS financial statements except in respect of property tax as detailed in note no 42 to the Ind AS financial statements where the amount is not quantifiable and which is also a matter of qualified opinion in this report;

ii. The Company has made provisions, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long term contracts including derivative contracts;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor''s Report) Order, 2016 (“CARO 2016”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of CARO 2016.

(Referred to in paragraph 1 (g) under ‘Report on Other Legal and Regulatory Requirements’ of our report of even date to the members of GTL Infrastructure Limited on the Ind AS financial statements for the year ended March 31, 2018)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of GTL INFRASTRUCTURE LIMITED (''the Company'') as of March 31, 2018 in conjunction with our audit of the Ind As financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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 (''the Guidance Note'') issued by the Institute of Chartered Accountants of India (ICAI). 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 company''s 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 Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note issued by the ICAI and the Standards of Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 over financial reporting 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 system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 auditor''s judgement, including the assessment of the risks of material misstatement of the Ind AS 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 audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting 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 Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the Ind AS financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, 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 over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

(Referred to in paragraph 2 under the heading “Report on Other Legal and Regulatory Requirements” of our report of even date to the members of GTL INFRASTRUCTURE LIMITED on the Ind AS financial statements for the year ended March 31, 2018)

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment on the basis of available information.

b. As explained to us, the Company has physically verified certain assets, in accordance with a phased program of verification, which in our opinion is reasonable, having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification as compared with the available records.

c. According to the information and explanations given to us, the title deeds of immovable properties are held in the name of the Company except in respect of following immovable properties as detailed below:

(Rs. in Lakhs)

Sr.

No.

Particulars of the Building

Leasehold/

Freehold

Net Book Value

Remarks

1

Land at Sudhagad, Raigad (Pledged with the Bank)

Freehold

38

The title deed is in the name of Chennai Network Infrastructure Limited (CNIL) which got merged with the Company pursuant to the scheme of arrangement (Refer Note no. 43 to the Ind AS Financial Statements)

2

Building at Wanawadi, Pune (Pledged with the Bank)

Freehold

563

The title deed is in the name of Global Electronic Commerce services Limited, which was merged with GTL Limited (the seller)

Further, as informed to us, in respect of 8 immovable properties having the Net Book Value of Rs. 3,457 Lakhs (Including 7 immovable properties having Net Book Value of Rs.3,456 Lakhs in respect of which the original title deeds have been deposited with the lenders as security) have been verified based on the photocopies of the documents for those immovable properties and based on such documents, the title deeds are held in the name of the company.

ii. As explained to us, inventories have been physically verified during the year by the management and in our opinion the frequency of verification is reasonable. Discrepancies noticed on physical verification of the inventories between the physical inventories and book records were not material, having regard to the size of the operations of the Company and the same have been properly dealt with.

iii. The Company has not granted any loan, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. Therefore, clause (iii) of paragraph 3 of the CARO 2016 is not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, in respect of grant of loans, making investments and providing guarantees and securities.

v. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of section 73 to 76 of the Act and the Rule framed there-under. Therefore, clause (v) of paragraph 3 of the CARO 2016 is not applicable to the Company.

vi. According to the information and explanations given to us, the Central Government has not prescribed the cost records to be maintained under sub-Section (1) of Section 148 of the Act in respect of business activities carried on by the Company. Therefore, clause (vi) of paragraph 3 of the CARO 2016 is not applicable to the Company.

vii. According to the information and explanations given to us, in respect of statutory dues:

a. The Company has been generally regular in depositing undisputed statutory dues, including provident fund, employees'' state insurance, income tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues as applicable, with the appropriate authorities during the year. According to information and explanation given to us, no undisputed amounts payable in respect of such statutory dues were outstanding as at 31st March, 2018 for a period of more than six months from the date they become payable.

b. The disputed statutory dues of income tax, sales tax, entry tax, value added tax and service tax aggregating to Rs.17,078 Lakhs that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Name of the Statutes

Nature of the Dues

Period to which it relates

Rs. in Lakhs (*)

Forum where the dispute is pending

The Central Sales Tax Act,

Sales Tax / VAT /

2008-09,2010-11to 2016-17

12,665

High Court

1956 and Sales Tax Acts of various States

Entry Tax

2009-10 & 2010-11

7

Appellate Tribunal

2009-10

1

Additional Commissioner (Appeal)

2008-09 to 2014-15

38

Joint Commissioner (Appeal )

2010-11

43

Sr. Joint Commissioner (Appeal )

2011-12 & 2012-13

7

Sr. Joint Commissioner

2007-08to 2010-11,2013-14

191

Deputy Commissioner (Appeal)

2007-08

2

Deputy Commissioner

2013-14

41

Assistant Commissioner (Appeals)

2008-09 to 2017-18

336

Assessing Authority

2006-07

3

Appellate Board

The Finance Act, 1994

Service Tax

2012-13 to 2016-17

3,374

Commissioner (Appeal)

The Income Tax Act, 1961

Income Tax

2011-12

370

Deputy Commissioner

Total

17,078

(*) Net of amount deposited under protest

Property Tax:

As detailed in Note No. 42 to the Ind AS Financial Statements, the Company has disputed various matters related to Property tax payable on its telecommunication towers in respect of which it is not possible to quantify the amount in dispute.

viii. As mentioned in Note no. 53 to the Ind AS Financial Statements, the rupee term loan lenders of the Company had invoked the Strategic Debt Restructuring (SDR) in accordance with the Reserve Bank of India (RBI) guidelines on September 20, 2016. In accordance with the terms of SDR, there were no financial defaults by the Company to its rupee term loan lenders as on March 31, 2018. Pursuant to RBI Circular dated February 12, 2018 SDR guidelines have been withdrawn and hence on technical ground some of the lenders have classified the Company''s rupee term loan borrowings as Non Performing Assets (NPA) as on March 31, 2018. Further, the “Series B” FCCB Bonds also got exchanged with new Series of FCCBs and hence the Company did not default in respect of FCCBs as on March 31, 2018. In respect of foreign currency term loan from Deutsche Investitions-undEntwicklungsgesellschaft mbH (DEG), the Company has defaulted for Rs.2,668 lakhs (having Rs.378 lakhs for a period of less than 100 days and Rs.2,290 lakhs for a period more than 100 days) as on March 31, 2018.

ix. According to the information and explanations given to us, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, clause (ix) of paragraph 3 of the CARO 2016 is not applicable to the Company.

x. Based on our audit procedures performed for the purpose of reporting the true and fair view of the Ind AS financial statements and on the basis of information and explanations given by the management, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

xi. According to the information and explanations given to us and based on our examination of the records, the Company, in respect of remuneration of Rs.50 Lakhs paid to Whole Time Director which is in excess of the limit prescribed in the schedule V to the Act, the requisite approval sought by the Company from the Central Government as mandated by the provisions of section 197 read with schedule V of the Act, is awaited.

xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Therefore, clause (xii) of paragraph 3 of the CARO 2016 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 and details of such transactions have been disclosed in the Ind AS financial statements as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. The Company has allotted equity shares to the rupee term loan lenders pursuant to the SDR, scheme of arrangement for the merger of CNIL with the Company and on conversion of FCCBs. Further new series of FCCBs have been issued to the existing FCCB holders in exchange of old FCCBs. Therefore, clause (xiv) of paragraph 3 of the CARO 2016 is not applicable to the Company.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Therefore, clause (xv) of paragraph 3 of the CARO 2016 is not applicable to the Company.

xvi. In our opinion and according to the information and explanations provided to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For Chaturvedi & Shah For Yeolekar & Associates

Chartered Accountants Chartered Accountants

Firm Reg. No. 101720W Firm Reg. No. 102489W

R. Koria CA S. S. Yeolekar

Partner Partner

Membership No. 35629 Membership No. 036398

Place : Mumbai

Dated : May 08, 2018


Mar 31, 2017

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of GTL INFRASTRUCTURE LIMITED (“the Company”), which comprise the Balance sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the Standalone Ind AS Financial Statements”).

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the Accounting Principles Generally Accepted in India, including Indian Accounting Standards (‘Ind AS’) prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Basis for Qualified Opinion

Attention is drawn to Note No. 40 to the Standalone Ind AS Financial Statements, the Hon’ble Supreme Court of India held that “Mobile Telecommunication Tower” is a building and State can levy property tax on the same. Pending Special Leave Petition before the Hon’ble Supreme Court in this regard, other petitions of the Company before other appropriate Courts, non-receipt of demand notices for property tax in respect of majority of the Telecommunication Towers and also due to company’s right to recover such property tax amount from certain customers, the company is unable to quantify the amount of property tax to be borne by it and accordingly has not made any provision for the same.

We are unable to quantify the amount of the property tax, if any, to be accounted for and its consequential effects on the Standalone Ind AS Financial statements.

Qualified Opinion

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 matters described in the “Basis for Qualified Opinion” paragraph above, the aforesaid standalone Ind AS financial statements 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, of the state of affairs of the Company as at March 31, 2017, and its loss, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

We draw attention to the:

a. Note no. 4.1 regarding Company’s Investment through Tower Trust in its associate company Chennai Network Infrastructure Limited (CNIL) amounting to Rs.181,572 Lakhs as at March 31, 2017. The associate has incurred cash losses and whose net worth has been eroded substantially. However, no provision for diminution in the value of investment has been considered necessary by the management for the reasons stated therein.

b. Note no. 29.1 regarding managerial remuneration paid to a whole time director which is in excess of the limits prescribed under the Act. The Company has applied to the Central Government for necessary approval which is awaited.

c. Note no. 41 regarding Scheme of Amalgamation (the scheme) between CNIL and the Company pending for the necessary modifications and approvals and preparation of standalone Ind AS financial statements without giving effect of this scheme and to give the effect as and when the scheme becomes effective.

d. Note no. 44 regarding preparation of the Standalone Ind AS Financial Statements of the Company on a going concern basis notwithstanding the fact that the Company has been incurring cash losses and its net worth has been fully eroded as on March 31, 2017. Standalone Ind AS Financial Statements have been prepared on going concern basis for the reasons stated in the said note. The appropriateness of assumption of going concern is critically dependent upon the Company’s ability to raise requisite finance / generate cash flows in future to meet its obligations.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act, we report that:

a. 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. 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 Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and 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 Ind AS financial statements comply with the Ind AS prescribed under Section 133 of the Act.

e. The going concern matter described in subparagraph (d) under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f. On the basis of the written representations received from the directors as on March 31, 2017 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

g. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”.

h. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 read with Notification no. G.S.R. 307 (E) dated 30th March 2017, 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 Ind AS financial statements in Note Nos. 36, 38 and 39 to the standalone Ind AS financial statements except in respect of property tax as detailed in Note No. 40 to the standalone Ind AS financial statements where the amount is not quantifiable and which is also a matter of qualified opinion in this report;

ii. The Company has made provisions, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long term contracts including derivative contracts;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. The Company has provided the requisite disclosures in the standalone Ind AS financial statements as regards to its holdings and dealings in Specified Bank Notes as defined in the Notification S.O 3407(E) dated November 08, 2016 of the Ministry of Finance, during the period from November 08, 2016 to December 30, 2016 and based on audit procedure performed and the representation provided by the Management we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the management (refer to Note No 10.1 of Standalone Ind AS Financial Statements).

2. As required by the Companies (Auditor’s Report) Order, 2016 (“CARO 2016”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of CARO 2016.

ANNEXURE - B TO INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 2 under the heading “Report on Other Legal and Regulatory Requirements” of our report of even date to the members of GTL INFRASTRUCTURE LIMITED on the standalone Ind AS financial statements for the year ended March 31, 2017)

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipments on the basis of available information.

b. As explained to us, the Company has physically verified certain assets, in accordance with a phased program of verification, which in our opinion is reasonable, having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification as compared with the available records.

c. According to the information and explanations given to us, the title deeds of immovable properties are held in the name of the Company except in respect of one of the immovable properties as detailed below:

(Rs. in Lakhs)

Sr. No.

Particulars of the Building

Leasehold/ Freehold

Net Book Value

Remarks

Building at Wanawadi, Pune (Pledged with the Bank)

Freehold

572

The title deed is in the name of Global Electronic Commerce services Limited, which was merged with GTL Limited (the seller)

1

Further, as informed to us, in respect of 8 immovable properties having the Net Book Value of Rs.3,584 Lakhs (Including 7 immovable properties having Net Book Value of Rs.3,582 Lakhs in respect of which the original title deeds have been deposited with the lenders as security) have been verified based on the photocopies of the documents for those immovable properties and based on such documents, the title deeds are held in the name of the Company.

ii. As explained to us, inventories have been physically verified during the year by the management and in our opinion the frequency of verification is reasonable. Discrepancies noticed on physical verification of the inventories between the physical inventories and book records were not material, having regard to the size of the operations of the Company and the same have been properly dealt with.

iii. In respect of loans, secured or unsecured, granted by the Company to companies, firms, Limited liability partnerships or other parties covered in the register maintained under section 189 of the Act:

a. The Company has given advances in the nature of loan to one such party, and in our opinion and according to the information given to us, the rate of interest and other terms and conditions on which the loan has been granted to the body corporate listed in the register maintained under section 189 of the Act were not, prima facie, prejudicial to the interest of the Company.

b. The schedule of repayment of principal and payment of interest has been stipulated and repayments of principal amounts and /or receipts of interest have been regular as per the stipulations.

c. There are no overdue amounts as at the year-end in respect of both principal and interest.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, in respect of grant of loans, making investments and providing guarantees and securities.

v. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the provision of sections 73 to 76 of the Act and the Rules framed thereunder. Therefore, the provisions of paragraph 3 (v) of the CARO 2016 are not applicable to the Company.

vi. According to the information and explanations given to us, the Central Government has not prescribed the cost records to be maintained under sub-Section (1) of Section 148 of the Act in respect of business activities carried on by the Company. Therefore the provisions of paragraph 3(vi) of the CARO 2016 are not applicable to the Company.

vii. According to the information and explanations given to us in respect of statutory dues:

a. The Company has been generally regular in depositing undisputed statutory dues, including provident fund, employees’ state insurance, income tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues as applicable, with the appropriate authorities during the year. According to information and explanation given to us, no undisputed amounts payable in respect of such statutory dues were outstanding as at March 31, 2017 for a period of more than six months from the date they become payable.

b. The disputed statutory dues of sales tax, Entry Tax and Value Added Tax aggregating to Rs.1,159 Lakhs that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Name of the Statutes

Nature of the Dues

Period to which it relates

Rs. in Lakhs(*)

Forum where the dispute is pending

Central Sales Tax Act, 1956 and Sales Tax Acts of various States

Sales Tax / VAT / Entry Tax

2008-09

91

High Court

2009-10 and 2010-11

7

Appellate Tribunal

2008-09 and 2009-10

188

Commissioner (Appeal)

2007-08, 2008-09, and 2009-10

139

Additional Commissioner (Appeal )

2008-09, 2009-10, 201011, 2013-14 and 2014-15

9

Joint Commissioner (Appeal )

2010-11 to 2011-12

46

Sr. Joint Commissioner (Appeal )

2007-08 to 2010-11

676

Deputy Commissioner (Appeal)

2006-07

3

Assistant Commissioner

Total

1,159

(*) Net of amount deposited under protest

viii. Based on our audit procedures and information and explanations given by the management, and considering the Corporate Debt Restructuring (CDR) scheme and other restructuring schemes with foreign lender and FCCB holders, we are of the opinion that as on March 31, 2017 the Company has defaulted in repayment of loans to banks and financial institutions aggregating to Rs.33,156 Lakhs. Lender wise details of such default are as under:

(Rs. in Lakhs)

Sr. No.

Bank / Financial Institution

Amount of default as at the balance sheet date

Below 100 days

Above 100 days

1

Indian Overseas Bank

3,613

2,674

2

Punjab National Bank

933

485

3

Corporation Bank

456

315

4

Union Bank of India

2,704

1,842

5

Bank of Baroda

2,002

1,168

6

Oriental Bank of Commerce

389

258

7

Andhra Bank

1,273

726

8

Bank of India

1,755

950

9

Central Bank of India

1,370

831

10

Canara Bank

447

330

11

IDBI Bank

194

140

12

Vijaya Bank

196

139

13

LIC of India

491

292

14

State Bank of Bikaner and Jaipur

98

65

15

Indian Bank

663

355

16

State Bank of India

1,242

693

17

State Bank of Patiala

196

114

18

State Bank of Travancore

196

109

19

United Bank of India

900

535

20

Dena Bank

321

160

21

Axis Bank

263

120

22

Deutsche Investitions-undEntwicklunasaesellschaft mbH (DEG)

261

892

Total

19,963

13,193

ix. According to the information and explanations given to us, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, provisions of paragraph 3 (ix) of the CARO 2016 are not applicable to the Company.

x. Based on our audit procedures performed for the purpose of reporting the true and fair view of the standalone Ind AS financial statements and on the basis of information and explanations given by the management, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

xi. According to the information and explanations given to us and based on our examination of the records the Company, in respect of remuneration of Rs.50 Lakhs paid to a Whole Time Director, the requisite approval sought by the Company from the Central Government as mandated by the provisions of section 197 read with Schedule V of the Act, is awaited.

xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Therefore, the provisions of paragraph 3 (xii) of the CARO 2016 are 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 and details of such transactions have been disclosed in the standalone Ind AS financial statements etc. as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Therefore, the provisions of paragraph 3 (xiv) of the CARO 2016 are not applicable to the Company.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Therefore, the provisions of paragraph 3 (xv) of the CARO 2016 are not applicable to the Company.

xvi. In our opinion and according to information and explanations provided to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For Chaturvedi & Shah For Yeolekar & Associates

Chartered Accountants Chartered Accountants

Firm Reg. No. 101720W Firm Reg. No. 102489W

R. Koria CA S. S. Yeolekar

Partner Partner

Membership No. 35629 Membership No. 036398

Place: Mumbai

Dated: April 27, 2017


Mar 31, 2015

We have audited the accompanying standalone financial statements of GTL INFRASTRUCTURE LIMITED ("the Company"), which comprise the Balance sheet as at 31st March, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies act, 2013 ("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 and cash flows of the Company in accordance with the Accounting Principles Generally Accepted in India (Indian GAAPs), including Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements 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, of the state of affairs of the Company as at 31st March, 2015 and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the:

a. Note no. 29 regarding outstanding trade receivables and other current assets, which are subject to confirmation but considered good for the reasons mentioned therein.

b. Note no. 30 regarding Scheme of Arrangement under section 391 to 394 of the Companies Act, 1956 pending for the necessary modifications and approvals and preparation of financial statements without giving any effect of this scheme and to give the effect as and when the scheme becomes effective.

c. Note no. 31 regarding preparation of the financial statements of the Company on a going concern basis notwithstanding the fact that the Company has been incurring cash losses and its net worth has been substantially eroded as on the Balance Sheet date. These financial statements have been prepared on a going concern basis for the reasons stated in the said note. The appropriateness of assumption of going concern is critically dependent upon the Company's ability to raise requisite finance/generate cash flows in future to meet its obligations.

d. Note no. 22.1 regarding Managerial Remuneration, which is subject to the approval of Central Government.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("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 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) 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) 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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement 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 Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) The going concern matter described in subparagraph (c) under the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on 31st March, 2015 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) With respect to the other matters to be included in the Auditor's 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 financial statements as referred to in Note No. 26 and 27 to the standalone financial statements.

ii. The Company does not have any longterm contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of GTL Infrastructure Limited on the accounts for the year ended 31st March, 2015)

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. As explained to us, the Company has physically verified certain assets, in accordance with a phased program of verification, which in our opinion is reasonable, having regard to the size of the Company and the nature of its business. No material discrepancies were noticed on such physical verification as compared with the available records.

ii. In respect of its inventories:

a. As explained to us, inventories have been physically verified during the year by the management. In our opinion the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. According to the information and explanations given to us and on the basis of our examination of inventory records, we are of the opinion that the Company is maintaining proper records of inventory. Discrepancies noticed on physical verification of the inventories between the physical inventories and book records were not material, having regard to the size of the operations of the Company, and the same have been properly dealt with.

iii. In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the register maintained under section 189 of the Act:

a. The Company has given advances in the nature of loan to one such party, and as per the information and explanations given to us, the above advances along with the interest are not due for repayment.

b. As the loan is repayable on demand, the question of overdue amount does not arise.

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 and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of Clause (v) of paragraph 3 of the Order are not applicable to the Company.

vi. According to the information and explanations given to us, the Central Government has not prescribed the cost records to be maintained under sub-Section (1) of Section 148 of the Act in respect of activities carried on by the Company. Therefore the provisions of Clause (vi) of paragraph 3 of the Order are not applicable to the Company.

vii. According to the information and explanations given to us in respect of statutory dues:

a. The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of such statutory dues were outstanding as at 31st March, 2015 for a period of more than six months from the date they became payable except in case of Gram Panchayat and Municipal Corporation dues of Rs. 30,607,185 and Rs. 2,734,926 respectively.

b. The disputed statutory dues of Income tax, Sales tax, Wealth tax, Service tax, Duty of Customs, Duty of Excise, Value added tax and Cess aggregating to Rs. 101,399,353 that have not been deposited on account of Disputed matters pending before appropriate authorities are as under:

Name of the Nature of the Period to which the Amount Statute Dues amount relates (in Rs.)

Central Sales Sales Tax/ 2008-09 9,128,394 Tax Act, 1956 Trade Tax/VAT 2006-07, 2009-10 981,928 and Sales Tax and Entry Tax & 2010-11 Acts of various 2009-10 77,979 states

2007-08 to 2011-12 81,505,729

2007- 08 & 2009-10 2,733,283

2008- 09 to 2010-11 2,366,759 and 2013-14 & 2014-15

2010-11 to 2010-11 4,605,281

Total 101,399,353

Name of the Forum where dispute is pending Statute

Central Sales High Court Tax Act, 1956 Sales Tax Tribunal and Sales Tax Acts of various Commissioner (Appeals) states Deputy Commissioner (Appeals)

Additional Commissioner (Appeals)

Joint Commissioner (Appeal)

Sr. Joint Commissioner Sales Tax

(*) Net of amount deposited under protest

c. There is no delay in transferring amounts, required to be transferred, to Investor Education and protection fund in accordance with the relevant provision of the Companies Act, 1956 and rule made there-under.

viii. The Company has accumulated losses at the end of the financial year which are more than fifty percent of its net worth. The Company has incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

ix. Based on our audit procedures and information and explanations given by the management, and considering the Corporate Debt Restructuring (CDR) scheme and other restructuring schemes with foreign lender and FCCB holders, we are of the opinion that as on 31st March, 2015 the Company has not defaulted in repayment of dues to financial institutions and banks, except in the repayment of the principal amount of secured rupee term loan of Rs. 146,649,026 where the period of default was less than 30 days and interest thereon of Rs. 31,807,844 where the period of default was more than 60 days .

x. The Company has given corporate guarantees aggregating to Rs. 8,310,000,000 for loan taken by Chennai Network Infrastructure Limited (CNIL), an Associate / erstwhile subsidiary of the Company, from banks and financial institutions as at 31st March, 2015. CNIL is in the process of the amalgamation with the Company as mentioned in Note No. 30 to the standalone financial statements. The management is of the opinion that since these guarantees were given when CNIL was the subsidiary of the Company and CNIL is getting merged with the Company, the terms and conditions of the Corporate Guarantee are not prejudicial to the interest of the Company. We are, however, unable to comment on the same.

xi. The Company has not raised any new term loans during the year under audit. To the best of our knowledge and according to the information and explanations given to us the term loans outstanding at the beginning of the year have been applied for the purposes for which they were raised.

xii. In our opinion and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For Chaturvedi & Shah For Yeolekar & Associates Chartered Accountants Chartered Accountants Firm Reg. No. - 101720W Firm Reg. No. - 102489W

R. Koria S. S. Yeolekar Partner Partner Membership No. - 35629 Membership No. - 36398

Place: Mumbai Date: 6th May, 2015


Mar 31, 2014

We have audited the accompanying financial statements of GTL INFRASTRUCTURE LIMITED ("the Company"), which comprises Balance sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Principles Generally Accepted in India (Indian GAAPs), including Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of corporate affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements 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 31,2014;

ii. in the case of the Statement of Profit and Loss, of the loss of the Company 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.

Emphasis of Matter We draw attention to the:

a. Note No. 34 regarding Scheme of Arrangement under section 391 to 394 of the Act pending for the necessary modifications and approvals and preparation of financial statements without giving any effect of this scheme and to give the effect as and when the scheme becomes effective.

b. Note No. 35 regarding preparation of the financial statements of the Company on a going concern basis notwithstanding the fact that the Company has been incurring cash losses and its net worth has been substantially eroded as on the Balance Sheet date. These financial statements have been prepared on a going concern basis for the reasons stated in the said note. The appropriateness of assumption of going concern is critically dependent upon the Company''s ability to raise requisite finance/generate cash flows in future to meet its obligations.

c. Note No. 12.1 regarding capital advance given to certain vendors, in respect of which the Company is negotiating with them for the recovery of these advances. The management is confident of recovering substantial amount out of these advances and the provision for doubtful advances aggregating to Rs.600,000,000 against same has been considered sufficient by them.

d. Note No. 11.3 regarding the book value of non-current investments being lower than their carrying value and non provision for diminution in value of these investments for the reasons mentioned therein.

e. Note No. 33 regarding outstanding trade receivables and other current assets, which are subject to confirmation but considered good for the reasons mentioned therein.

Our opinion is not qualified in respect of these matters

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required under provisions of section 227(3) of the Act, 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 purpose 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 comply with the

Accounting Standards referred to in sub-section (3C) of section 211 of the Act read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of corporate affairs in respect of section 133 of the Companies Act, 2013.

e. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Act.

Annexure to Auditors'' Report

(Referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of GTL Infrastructure Limited on the accounts for the year ended 31st March, 2014)

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the Company has physically verified certain assets, in accordance with a phased program of verification, which in our opinion is reasonable, having regard to the size of the Company. No material discrepancies were noticed on such physical verification.

c. In our opinion, the Company has not disposed off substantial part of fixed assets during the year which has an impact on the going concern status of the Company.

ii. In respect of its inventories:

a. As explained to us, inventories have been physically verified by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. According to the information and explanations given to us and on the basis of our examination of inventory records, we are of the opinion that the Company is maintaining proper records of inventory. As explained to us, discrepancies noticed on physical verification of the inventories between the physical inventories and book records were not material, having regard to the size of the operations of the Company, and the same have been properly dealt with.

iii. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under section 301 of the Act:

a. The Company has given advances in the nature of loan to a party in respect of which maximum amount involved during the year was Rs. 3,391,395,602 and the year-end balance was Rs. 2,265,493,079.

b. In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions are not prima facie prejudicial to the interest of the Company.

c. As per the information and explanations given to us, the above advances are repayable on demand.

d. As the loans are repayable on demand, the question of overdue amounts does not arise.

e. The Company has not taken loans from any such parties hence provisions of sub clause (e) to (g) are not applicable to the Company for the year under audit.

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 also for the sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. Based on information and explanation given to us, in our opinion, the transactions made in pursuance of the contracts or arrangements, entered in the register maintained under section 301 of the Companies Act, 1956, and aggregating during the year to Rs. 5 lacs or more in respect of each party, have been made at prices, which are reasonable. The Company has not entered into transactions of similar nature with any other party.

vi. According to the information and explanations given to us, the Company has not accepted any deposits from the public and hence directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed there under are not applicable for the year under audit.

vii. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

viii. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Government of India under section 209(1) (d) of the Act and are of the opinion that prima facie the prescribed records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

ix. According to the information and explanations given to us in respect of statutory dues:

a. The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of such statutory dues were outstanding as at March 31,2014 for a period of more than six months from the date they became payable except for Gram Panchayat and Municipal Taxes aggregating to Rs. 35,025,705.

b. The disputed statutory dues aggregating to Rs. 1,455,004,166 that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Name of the Nature of the Period to which the amount Amount Statute Dues relates (in Rs.) (*)

Central Sales Tax Sales Tax/Trade 2008-09 9,128,394 Act, 1956 and Tax/VAT and Entry Sales Tax Acts of Tax 2006-07, 2009-10 & 2010-11 981,928 various states

2009-10 12,229,970

2007-08 to 2010-11 11,284,961

2007- 08 & 2009-10 2,733,283

2008- 09 to 2010-11 2,170,358

2009- 10 to 2010-11 14,355,055

Central Excise Service Tax 2006-07 to 2011-12 1,402,120,217 Act,1944

Total 1,455,004,166

Name of the Statute Forum where dispute is pending

Central Sales Tax Act, 1956 and Sales Tax Acts of various states High Court

Sales Tax Tribunal

Appellate Commissioner, Sales Tax (Appeal )

Deputy Commissioner (Appeals)

Additional Commissioner (Appeals)

Joint Commissioner (Appeal)

Sr. Joint Commissioner Sales Tax

Central Excise Act,1944 Commissioner (Appeals) Service Tax

Total

(*) Net of amount deposited under protest as mentioned in Note No. 30 to the financial statements.

x. The Company has accumulated losses at the end of the financial year, which is more than fifty percent of its net worth. The Company has incurred cash losses during the year covered by the audit and in the immediately preceding financial year.

xi. Based on our audit procedures, information and explanations given by the management, and considering the Corporate Debt Restructuring (CDR) scheme and other restructuring schemes with foreign lender and FCCB holders, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or bond holders except for overdue amount of interest aggregating to Rs. 653,625,908 due to banks and financial institutions.

xii. In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company 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 or a nidhi/ mutual benefit fund/society. Therefore the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

xiv. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures & other investments. The Company has maintained proper records of transactions and contracts in respect of investments in shares and Mutual funds and timely entries have been made therein. All the investments in shares and mutual funds have been held by the Company in its own name.

xv. The Company has given corporate guarantee aggregating to Rs. 8,310,000,000 for loans taken by Chennai Network Infrastructure Limited (CNIL), an Associate/erstwhile subsidiary of the Company, from banks and financial institutions as at 31st March, 2014. CNIL is in the process of the amalgamation with the Company as mentioned in Note No. 34 to the financial statements. The management is of the opinion that since these guarantees were given when CNIL was the subsidiary of the Company and CNIL is getting merged with the Company, the terms and conditions of the Corporate Guarantee are not prejudicial to the interest of the Company. We are, however, unable to comment on the same.

xvi. The Company has not raised any new term loans during the year under audit. To the best of our knowledge and according to the information and explanations given to us the term loans outstanding at the beginning of the year have been applied for the purposes for which they were raised.

xvii. On the basis of review of utilization of funds, which is based on overall examination of the Balance Sheet of the Company as at March 31,2014, related information as made available to us and as represented to us, by the management, we are of the opinion, that funds raised on short term basis have not prima facie been utilized for long term purposes.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

xix. During the year, the Company has not issued any debenture and hence clause 4 (xix) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company.

xx. During the year covered by our report the Company has not raised any money by public issue.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the course of our audit.

For Chaturvedi & Shah For Yeolekar & Associates

Chartered Accountants Chartered Accountants

Firm Reg. No. - 101720W Firm Reg. No. - 102489W

R. KORIA S. S. YEOLEKAR

Partner Partner

Membership No. - 35629 Membership No. - 36398

Place: Mumbai Date : May 21,2014


Mar 31, 2013

Report on the Financial statement

We have audited the accompanying financial statements of GTL INFRASTRUCTURE LIMITED ("the Company”)'' which comprises Balance Sheet as at March 31'' 2013'' the Statement of Profit and Loss and Cash Flow Statement for the year then ended'' and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position'' financial performance and cash flows of the Company in accordance with the Accounting Principles Generally Accepted in India (Indian GAAPs)'' including Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act'' 1956 ("the Act”). This responsibility includes the design'' implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement'' whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on

Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment'' including the assessment of the risks of material misstatement of the financial statements'' whether due to fraud or error. In making those risk assessments'' the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management'' as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. opinion

In our opinion and to the best of our information and according to the explanations given to us'' the financial statements 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'' 2013;

ii. in the case of the Statement of Profit and Loss'' of the loss of the Company 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.

emphasis of Matter

We draw attention to Note No.30 regarding Scheme of Arrangement under section 391 to 394 of the Act pending for the necessary modifications and approvals and preparation of account without giving any effect of this scheme and to give the effect as and when the scheme becomes effective. Our opinion is not qualified in respect of this matter.

Report on other legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order'' 2003 ("the Order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act'' we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required under provisions of section 227(3) of the Act'' 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 purpose 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 comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act.

e. On the basis of written representations received from the directors as on March 31'' 2013'' and taken on record by the Board of Directors'' none of the directors is disqualified as on March 31'' 2013'' from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

Annexure to Auditors’ Report

(Referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements” of our report of even date)

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars'' including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us'' the Company has physically verified certain assets'' in accordance with a phased program of verification'' which in our opinion is reasonable'' having regard to the size of the Company. No material discrepancies were noticed on such physical verification.

c. In our opinion'' the Company has not disposed off substantial part of fixed assets during the year and the going concern status of the Company is not affected.

ii. In respect of its inventories:

a. As explained to us'' inventories have been physically verified by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us'' the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. According to the information and explanations given to us and on the basis of our examination of inventory records'' we are of the opinion that the Company is maintaining proper records of inventory. As explained to us'' there were no material discrepancies noticed on physical verification of inventories as compared to the book records.

iii. According to the information and explanations given to us'' the Company has not granted or taken loans'' secured or unsecured'' to or from companies'' firms or other parties covered in the register maintained under section 301 of the Act. Accordingly'' clause (iii) of Paragraph 4 of the Companies (Auditors’ Report) Order 2003 is not applicable to the Company.

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 also for the sale of services. During the course of our audit'' we have not observed any continuing failure to correct major weaknesses in internal control system.

v. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act'' 1956:

a. In our opinion and according to the information and explanations given to us'' the transactions made in pursuance of contracts or arrangements'' that need to be entered in the register maintained under section 301 of the Companies Act'' 1956 have been so entered.

b. Based on information and explanation given to us'' in our opinion'' the transactions made in pursuance of the contracts or arrangements'' entered in the register maintained under section 301 of the Companies Act'' 1956'' and aggregating during the year to Rs. 5 lacs or more in respect of each party'' have been made at prices'' which are reasonable. The Company has not entered into transactions of similar nature with any other party.

vi. According to the information and explanations given to us'' the Company has not accepted any deposits from the public and hence directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed there under are not applicable for the year under audit.

vii. In our opinion'' the Company has an internal audit system commensurate with the size and nature of its business.

viii. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules'' 2011 prescribed by the Government of India under section 209 (1) (d) of the Act and are of the opinion that prima facie the prescribed records have been maintained. We have'' however'' not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

ix. According to the information and explanations given to us in respect of statutory dues:

a. The Company has generally been regular in depositing undisputed statutory dues'' including Provident Fund'' Employees’ State Insurance'' Income tax'' Sales tax'' Wealth tax'' Service tax'' Customs Duty'' Excise Duty'' Cess and any other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us'' no undisputed amounts payable in respect of such statutory dues were outstanding as at March 31'' 2013 for a period of more than six months from the date they became payable except for Gram Panchayat and Municipal Taxes aggregating to Rs. 22''963''394.

b. The disputed statutory dues aggregating to Rs. 59''417''478 that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Name of the statute Nature of the Dues period to which the Amount Forum where dispute is pending amount relates (in Rs.) (*)

Central Sales Tax Act'' 1956 and Sales Tax/ Trade Tax/ 2007-08 to 2010-11 50''759''937 Deputy Commissioner (Appeals) Sales Tax Acts of various states VAT and Entry Tax 2007-08 & 2009-10 2''733''283 Additional Commissioner (Appeals)

2008-09 to 2010-11 4''942''330 Joint Commissioner (Appeal)

2006-07 '' 2009-10 & 981''928 Sales Tax Tribunal

2010-11

total 59''417''478

(*) Net of amount deposited under protest as mentioned in Note No. 25 to the financial statements.

x. The Company has accumulated losses at the end of the financial year'' which is less than fifty percent of its net worth. The Company has incurred cash losses during the year covered by the audit and in the immediately preceding financial year.

xi. Based on our audit procedures'' information and explanations given by the management'' and considering the Corporate Debt Restructuring (CDR) scheme and other restructuring schemes with foreign lender and FCCB holders'' we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions'' banks or bond holders.

xii. In our opinion and according to the explanations given to us and based on the information available'' no loans and advances have been granted by the Company 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 or a nidhi/mutual benefit fund/society. Therefore the provisions of clause 4 (xiii) of the Companies (Auditor’s Report) Order'' 2003 are not applicable to the Company.

xiv. In our opinion and according to the information and explanations given to us'' the Company is not a dealer or trader in shares'' securities'' debentures & other investments. The Company has maintained proper records of transactions and contracts in respect of investments in shares and Mutual funds and timely entries have been made therein. All the investment in shares and mutual funds have been held by the Company in its own name.

xv. The Company has given corporate guarantee aggregating to Rs. 10''810''000''000 for loans taken by Chennai Network Infrastructure Limited (CNIL)'' the erstwhile subsidiary of the Company'' from banks and financial institutions as at 31st March'' 2013. CNIL is in the process of the amalgamation with the Company as mentioned in Note no.30 to the financial statements. The management is of the opinion that since these guarantees were given when CNIL was the subsidiary of the Company and CNIL is getting merged with the Company'' the terms and conditions of the Corporate Guarantee are not prejudicial to the interest of the Company. We are'' however'' unable to comment on the same.

xvi. To the best of our knowledge and according to the information and explanations given to us the term loans outstanding at the beginning of the year and those raised during the year have been applied for the purposes for which they were raised.

xvii. On the basis of review of utilization of funds'' which is based on overall examination of the Balance Sheet of the Company as at March 31'' 2013'' related information as made available to us and as represented to us'' by the management'' we are of the opinion'' that funds raised on short term basis have not prima facie been utilized for long term purposes.

xviii. During the year'' the Company has made preferential allotment of 71''329''113 equity shares of Rs. 10/- each on conversion of 9''016''000 Compulsorily Convertible Debentures (CCDs) to a Company covered in the Register maintained under Section 301 of the Act. According to the information & explanation given to us these shares are issued in terms of Corporate Debt Restructuring Scheme and in accordance with Securities and Exchange Board of India (Issue Of Capital and Disclosure Requirements) Regulations'' 2009 and accordingly'' the prices at which these shares are issued are not prima facie prejudicial to the interest of the Company.

xix. The Company had created security in respect of 110''162''087 Compulsorily Convertible Debentures (CCDs) issued during the year. Subsequently these CCDs got converted in to Equity Shares of the Company and as on March 31'' 2013 no CCDs were outstanding.

xx. During the year covered by our report the Company has not raised any money by public issue.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us'' no fraud on or by the Company was noticed or reported during the course of our audit.

For chaturvedi & shah For yeolekar & Associates

Chartered Accountants Chartered Accountants

Firm Reg. No. - 101720W Firm Reg. No. - 102489W

R. Koria s. s. yeolekar

Partner Partner

Membership No. – 35629 Membership No. – 36398

Mumbai Date: 9th May 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of GTL INFRASTRUCTURE LIMITED, as at March 31, 2012 and also the Statement of Profit and Loss and Cash Flow Statement of the Company for the year ended on that date annexed thereto. 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 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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the 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 issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our opinion we draw your attention to the

i. Note No. 27 regarding Scheme of Arrangement under Section 391 to 394 of the Companies Act, 1956 pending for the necessary approvals and preparation of accounts without giving any effects of this scheme and to give the effects as and when the scheme will be effective.

ii. Note No. 4.3 regarding the accounting treatment of redemption premium on Foreign Currency Convertible Bonds (FCCB).

5. Further to our comments in Annexure referred to in para 3 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 such 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 mandatory Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956;

e) On the basis of the written representations received from the directors as on March 31, 2012 and taken on records by the Board of Directors, we report that 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 Companies Act 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and notes thereon, give the information required by the Companies Act, 1956, 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 Statement of Profit and Loss, of the Loss of the Company for the year ended on that date; and (iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to the Auditors' Report (Referred to in Paragraph 3 of our Report of even date)

As required by the Companies (Auditor's Report) Order, 2003 issued by Central Government of India in terms of Section 227 (4A) of the Companies Act 1956, and on the basis of such checks as we considered appropriate, we further report that;-

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the Company has physically verified certain assets, in accordance with a phased program of verification, which in our opinion is reasonable, having regard to the size of the Company. The discrepancies noticed at the time of such verification were properly dealt with in the books of accounts.

c. During the year, the Company has disposed off certain Fixed Assets. However, it has no effect on the going concern status of the Company.

ii. In respect of its inventories:

a. As explained to us, inventories have been physically verified by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. According to the information and explanations given to us and on the basis of our examination of inventory records, we are of the opinion that the Company is maintaining proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records.

iii. According to the information and explanations given to us, the Company has not granted or taken any loans, secured or unsecured to or from companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clause (iii) of Paragraph 4 of the Companies

(Auditors' Report) Order 2003, is not applicable to the Company. 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 also for the sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v. According to the information and explanations given to us, there is no contract or arrangement referred to in section 301 of the Companies Act, 1956 that need to be entered in the register required to be maintained under that section.

vi. According to the information and explanations given to us, the Company has not accepted any deposits from the public and hence directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under are not applicable for the year under audit.

vii. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

viii. The Central Government has not prescribed maintenance of cost records, for the year, under section 209 (1) (d) of the Companies Act, 1956 in respect of any of the services provided by the Company.

ix. According to the information and explanations given to us in respect of statutory dues:

a. The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of such statutory dues were outstanding as at March 31, 2012 for a period of more than six months from the date they became payable except for dues relating to Gram panchayat tax and municipal tax aggregating to Rs. 8,477,476.

c. The disputed statutory dues aggregating to Rs. 132,061,680 that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Period to which the Amount (in Rs) Forum where dispute Name of the Statute Nature of the Dues amount relates (*) is pending

2006-07 to 2010-11 65,964,066 Deputy Commissioner (Appeals)

Central sales Tax Act, 1956 and Sales Tax / Trade Tax / 2007-08 to 2009-10 7,587,993 Additional Commissioner (Appeals)

Sales Tax Acts of various states VAT and Entry Tax 2008-09 42,482,942 Joint Commissioner (Appeal)

2006-07 and 2008-09 16,026,679 Sales Tax Tribunal Total 132,061,680

(*) Net of amount deposited under protest as mentioned in Note No. 25 (v) to Financial Statements.

x. The Company has accumulated losses at the end of the financial year, which is less than fifty percent of its net worth. The Company has incurred cash losses during the year but had not incurred cash losses in the immediately preceding financial year.

xi. Based on our audit procedures, information and explanations given by the mangagement and considering the Corporate Debt Restructuring (CDR) scheme, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions, banks or bond holders except for Foreign Currency Term Loan of Rs. 277,890,240 in respect of which the repayment terms have since been amended w.e.f. May 14, 2012 and after taking into consideration such revised terms, there is no overdue amount.

xii. In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company 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 or a nidhi/mutual benefit fund/society. Therefore the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Comapny.

xiv. The Company has maintained proper records of transactions and contracts in respect of shares and other securities and timely entries have been made therein. The investments are held by the Company in its own name.

xv. The Company has given corporate guarantees aggregating to Rs. 10,810,000,000 for loans taken by the subsidiary company from banks and financial institutions as at 31st March, 2012. The subsidiary is in the process of the amalgamation with the Company as mentioned in Note No. 25. The management is of the opinion that the terms and conditions are not prejudicial to the interests of the Company- We are, however, unable to comment on the same.

xvi. The Company has raised new term loans during the year. To the best of our knowledge and according to the information and explanations given to us the term loans outstanding at the beginning of the year and those raised during the year were prima facie been used for the purpose for which they were raised.

xvii. On the basis of review of utilization of funds, which is based on overall examination of the Balance Sheet of the Company as at March 31, 2012, related information as made available to us and as represented to us, by the management, we are of the opinion, that funds raised on short term basis have not prima facie been utilized for long term purposes.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

xix. During the year, the Company has not issued any debenture and hence clause 4 (xix) of Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

xx. During the year covered by our report the Company has not raised any money by public issue.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the course of our audit.

For CHATURVEDI & SHAH For YEOLEKAR & ASSOCIATES

Chartered Accountants Chartered Accountants

Firm Reg. No. - 101720W Firm Reg. No. - 102489W

R. KORIA S. S. YEOLEKAR

Partner Partner

Membership No. - 35629 Membership No. - 36398

Mumbai

Date : May 17, 2012


Mar 31, 2010

1. We have audited the attached Balance Sheet of GTL INFRASTRUCTURE LIMITED, as at March 31,2010 and also the Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the 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 (Auditors Report) Order. 2003 issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in Annexure referred to in para 3 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 such books;

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956;

e) On the basis of the written representations received from the directors as on March 31, 2010 and taken on records by the Board of Directors, we report that none of the directors is disqualified as on March 31,2010, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and notes thereon, in particular Note No. 9 of Schedule P regarding the accounting treatment of redemption premium on Foreign Currency Convertible Bonds (FCCB), give the information required by the Companies Act, 1956, 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, 2010;

ii) in the case of Profit and Loss Account, of the loss of the Company for the year ended on that date; and

iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure tO the Auditors Report (Referred to in Paragraph 3 of our Report of even date)

As required by the Companies (Auditors Report) Order, 2003 issued by Central Government of India in terms of Section 227 (4A) of the Companies Act 1956, and on the basis of such checks as we considered appropriate, we further report that:-

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the Company has physically verified certain assets, in accordance with a phased program of verification, which in our opinion is reasonable, having regard to the size of the Company. No material discrepancies were noticed on such physical verification.

c. During the year, the Company has disposed off certain Fixed Assets. However it has no effect on the going concern status of the company. ii. In respect of its inventories:

a. As explained to us, inventories have been physically verified by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. According to the information and explanations given to us and on the basis of our examination of inventory records, we are of the opinion that the Company is maintaining proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records.

iii. In respect of loans, secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained under section 301 of the companies Act 1956:

a. The Company has not granted any loan to such parties. Consequently the provisions of clauses (iii) (b), (iii) (c) and (iii) (d) of paragraph 4 of the Companies (Auditors Report) Order, 2003 are not applicable.

b. The Company has taken loan from a party covered in the register maintained under section 301 of the Companies Act, 1956 in respect of which maximum amount involved during the year and year end balance was Rs. 2,800,000,000.

c. In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loan taken are not prima facie prejudicial to the interest of the Company.

d. The principal amount of loan taken and interest thereon were not due for payment as on 31st March, 2010 and hence question of overdue amount does not arise.

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 also for the sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v. According to the information and explanations given to us, there are no contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered in the register required to be maintained under that section.

vi. According to information and explanations given to us, the Company has not accepted any deposits from the public and hence directives issued by the Reserve Bank of India andthe provisions of sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under are not applicable for the year under audit.

vii. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

viii. The Central Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 in respect of any of the services provided by the Company. Therefore the provisions of Clause (viii) of paragraph 4 of the Companies (Auditors) Report Order, 2003 are not applicable.

ix. According to the information and explanations given to us in respect of statutory dues:

a. The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of such statutory dues were outstanding as at March 31,2010 for a period of more than six months from the date they became payable.

c. The disputed statutory dues aggregating to Rs. 42,887,287 that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Name of the Statute Nature of the Dues Period to which Amount (in Rs.) Forum where dispute

the amount relates (*) is pending

The Punjab VAT Act, 2005 Sales Tax 2007-08 165,683 Deputy Excise & Taxation Commissione (Appeal)

The Andhra Pradesh VAT Act, 2005 Sales Tax 2008-09 18,128,394 Deputy Commissioner of Taxes (Appeal)

The Uttar Pradesh VAT Act, 2008 Sales Tax 2008-09 23,554,908 Joint Commissioner of Taxes (Appeal)

The Madhya Pradesh VAT Act, 2002 Entry Tax 2006-07 1,038,302 Deputy Commissioner of Taxes (Appeal)

Total 42,887,287

l Net nf amnnnt riennsiteri nnrler nrntest as mentioned innote 1 nf schedule P tr Amounts

x. The Company has accumulated losses at the end of the financial year, which is less than fifty percent of its net worth. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

xi. Based on our audit procedures and information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or bond holders.

xii. In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company 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 or a nidhi/mutual benefit fund/society. Therefore the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

xiv. The Company has maintained proper records of transactions and contracts in respect of shares and other securities and timely entries have been made therein. The investments are held by the Company in its own name.

xv. According to the information and explanations given to us, as on 31st March, 2010 the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. The Company has raised new term loans during the year. To the best of our knowledge and according to the information and explanations given to us the term loans outstanding at the beginning of the year and those raised during the year were prima facie been either used for the purpose for which they were raised or pending utilisation been temporarily kept with banks.

xvii. On the basis of review of utilization of funds, which is based on overall examination of the Balance Sheet of the Company as at March 31, 2010, related informations as made available to us and as represented to us, by the management, we are of the opinion, that funds raised on short term basis have not prima facie been utilized for long term purposes.

xviii. During the year the company has made preferential allotments of 106,058,940 equity shares of Rs. 10 each, against the conversion of preferential convertible warrants, at a price of Rs. 40 per share to a Company covered under register maintained under section 301 of the Companies Act, 1956. According to the information & explanation given to us these shares are issued in terms of Securities And Exchange Board Of India (Disclosure And Investor Protection) Guidelines, 2000 and accordingly, the prices at which these shares are issued are not prima facie prejudicial to the interest of the company.

xix. During the year, the Company has not issued any debenture and hence clause 4 (xix) of Companies (Auditors Report) Order, 2003 is not applicable to the Company.

xx. We have verified the end-use of money raised by issue of Foreign Currency Convertible Bonds and the same is disclosed by the management in Note no. 9 of Schedule P to accounts.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the course of our audit.

For Chaturvedi & Shah For Yeolekar & Associates

Chartered Accountants Chartered Accountants

R. Koria S. S. Yeolekar

Partner Partner

Membership No. - 35629 Membership No. - 36398

Firm Reg. No. - 101720W Firm Reg. No. - 102489W

Mumbai

Date: April 29,2010

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