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Auditor Report of GTL Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of GTL Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, the 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, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 control, 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.

Auditor's 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 financial control relevant to the Company's preparation of the financial statements that give 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 systems over financial reporting and 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 Company's Directors, 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 of 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;

a. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2015;

b. in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

c. 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 following matters in the Notes to the standalone financial statements:

a. Note No. 2.8.1 to the standalone financial statements which inter-alia describes the uncertainty related to the outcome of the winding up petition filed against the Company by the holders of Non Convertible Debentures issued by the Company.

b. Note No. 2.39 in the standalone financial statements which describes that the Company has incurred cash losses, its Net worth has been substantially eroded and the Company's current liabilities have exceeded its current assets as at the balance sheet date.

These conditions, along with other matters set forth in the said note, indicate the existence of a material uncertainty that cast significant doubt about the Company's ability to continue as a going concern. However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said Note.

c. Note No. 2.11.3 in the standalone financial statements which states that the book values/market values of certain long term investments of the Company referred to in the said note are lower than their carrying values and non provision for diminution in value of these investments for the reasons stated therein.

d. Note No.2.23.1 in the standalone financial statements regarding managerial remuneration, which is subject to the approval of the Central Government

Our opinion is not modified in respect of these matters.

Other Matter

As at March 31,2015, the Company has a Term Loan and Funded Interest Term Loan liability of Rs. 20.64 Crores. payable to Standard Chartered Bank, one of the banks participating in Corporate Debt Restructuring scheme approved by CDR Empowered Group. The Company has accounted the above liability as per the terms of CDR scheme. However, confirmation of the above liability has not been received.

Our opinion is not modified in respect of this matter.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order,2015, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in the 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 accounts as required by law have been kept by the Company so far as appears from our examination of those books.

c. The reports on the accounts of the branch office of the Company audited under Section 143(8) of the Act by branch auditor have been sent to us and have been properly dealt with by us in preparing this report.

d. The Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

e. 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.

f. The winding up petition filed by the holders of Non Convertible Debentures issued by the Company

as described in sub-paragraph (a) and the going concern matter described in sub-paragraph (b) under the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

g. On the basis of management representation and on the basis of legal opinion obtained by the Company in the context of provisions of section 164(2) of the Act in relation to non payment of dues to the holders of Non Convertible Debentures and on the basis of written representations received from the directors as on 31 March, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

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, 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 - Refer Note No. 2.30 to the standalone financial statements ;

ii. The Company does not have any long-term 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. Unpaid Dividend of Rs. 0.15 Crores pertaining to the years 2000-01 to 2001-02 and 2003-04 to 2006-07 which has not been transferred to the Investor Education and Protection Fund but is held in abeyance on account of pending legal cases is not considered for reporting under this clause

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 Limited on the accounts for the year ended March 31,2015)

(i) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

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

(ii) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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.

According to the information and explanations given to us and on the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material, having regard to the size of the operations of the Company.

According to the information and explanations given to us, the Company has not granted loans, secured or unsecured, to companies, firms and other parties covered in the register maintained under Section 189 of the Act. Accordingly clause (iii) of Paragraph 3 of the Companies (Auditor's Report) Order, 2015 is not applicable to the Company.

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 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 public therefore, the provisions of clause (v) of Paragraph 3 of the Companies Auditor's Report) Order, 2015 are not applicable to the Company.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records & Audit) Rules, 2014 prescribed by the Central Government under section 148 (1) (d) of the Act and are of the opinion that prima facie the prescribed cost 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.

(vii) (a)On the basis of examination of the relevant records and according to the information and explanations given to us, we are of the opinion that the Company, except for payment of Sales Tax, is generally regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Employees' State insurance, Income-tax, Wealth-tax, Service Tax, Value Added Tax,Duty of Customs, Duty of Excise, Cess and other applicable statutory dues.

On the basis of examination of the relevant records and according to the information and explanations given to us, except for Sales Tax dues of Rs. 5.68 Crores, no undisputed amounts payable in respect of Provident Fund, Employees' State insurance, Income-tax, Wealth-tax, Value added Tax, Service Tax, Duty of Customs, Duty of Excise and Cess were outstanding, as at 31st March 2015 for a period of more than six months from the date they became payable.

(b)On the basis of the books of accounts and records of the Company as produced and examined by us , except for disputed Sales tax and Value Added Tax dues as detailed below, there are no dues of Income Tax, Wealth-tax, Service Tax, Duty of customs, Duty of excise and cess which have not been deposited on account of any dispute.

Name of the Statute Nature of Dues Amount (Rs. in Crores)

Central Sales Tax Act, Sales / Vat Tax Dues 6.76 Sales Tax Act & VAT Acts of various States

4.97

0.49

Name of the Statute Year to which the amount Forum where relate dispute is pending

Central Sales Tax Act, 1992-1993,1995-1996, 2006- 1st Appellate Sales Tax Act & VAT 2007, 2008-2009,2009-2010, Authority Acts of various States 2010-2011,2014-2015 & Feb 09 to Dec 10

1995-1996,1997-1998, 2004- 2nd Appellate 2005, 2005-2006,2007-2008, Authority 2008- 2009 & 2009-2010 2009- 2010 Assessing Officer

Out of the above disputed sales tax / value added tax dues, an amount of Rs. 0.91 Crores has been paid by the Company under protest.

In our opinion and according to the information and explanations given to us the amounts required to be transferred to Investor Education & Protection Fund in accordance with relevant provisions of the Companies Act ,1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time except for unpaid dividend of Rs. 0.15 Crores pertaining to the years 2000-01 to 2001-02 and 2003-04 to 2006-07, which is held in abeyance on account of pending legal cases.

(viii) The accumulated losses of the Company as at the end of the financial year are in excess of 50% of it's networth. The Company has incurred cash loss during the financial year covered by our audit and also in the immediately preceding financial year.

(ix) On the basis of our examination of the records of the Company and according to the information and explanations given to us, the Company has defaulted in repayment of External Commercial Borrowings of Rs. 694.86 Crores which were due for payment in September,2011 and interest of Rs. 93.75 Crores due thereon which relates to the period from December,2011 to March,2015.

The Company has defaulted in repayment of Secured term loan of Rs. 419.55 Crores to the banks which relates to the period from June 2014 to March 2015.

The Company has defaulted in payment of Interest of Rs. 196.54 Crores on Secured Term Loan from banks which relates to the period from June 2014 to March 2015, Interest of Rs. 5.87 Crores on Secured Funded Interest Term loan from the banks which relates to the period from June 2014 to March 2015 and Interest of Rs. 2.48 Crores on Cash Credit facility from the banks which relates to the period from September 2014 to March 2015.

As regards dues payable by the Company to the holders of Rated Redeemable Unsecured Rupee Non-convertible Debentures we invite attention to Note No 2.8.1 to the financial statement which inter-alia states that

"due to certain inter-creditor issues, and pendency of consent by CDR Lenders, the restructuring of NCD as was bilaterally agreed between the Company and

NCD Holders in terms of amendment to the original sanction letter, on March 22, 2014 could not be implemented within the time prescribed under definitive documentation entered into with the NCD holders. While the Company was in the process of obtaining consent of the CDR lenders on bilateral restructuring documents, the Company received a notice on October 27, 2014 from the NCD holder exercising its rights for acceleration of the entire outstanding amount and in January 2015 the NCD holders filed winding up petition against the Company before Hon'ble High Court of Bombay seeking certain urgent / interim reliefs. The CDR and ECB lenders of the Company have also intervened in the proceedings initiated by the NCD holder. The Bombay High Court has asked CDR lenders' position on the NCD holder's treatment on pari-passu basis. The matter is currently sub-judice.

Since all funds of the Company are subject matter of Trust and Retention Account (TRA) which is controlled by CDR lenders, the question of payment to NCD holder does not arise until and unless CDR lenders decide on the issue as directed by the Hon'ble High Court of Bombay ".

In view of the above facts and as the matter is presently subjudice, we are unable to offer any comment on default, if any, in payment of dues to the Holders of Non Convertible debentures issued by the Company.

(x) The Company has given corporate guarantees aggregating to Rs. 581.20 Crores for loans taken by Subsidiary Companies, an associate Company and affiliate Company from banks and financial institutions. It has been explained to us that these guarantees are given in the course of and for furtherance of business interest of the Company and accordingly the terms and conditions of these guarantees are not prejudicial to the interest of the Company. We are, however, unable to comment on the same.

(xi) In our opinion and according to the information and explanations given to us, the Company has not raised new term loan during the year. Therefore, the provisions of clause (xi) of Paragraph 3 of the Companies (Auditor's Report) Order, 2015 are not applicable to the Company.

(xii) To the best of our knowledge and belief and on the basis of our examination of the records of the Company, no material fraud on or by the Company has been noticed or reported during the year, nor we have been informed of any such case by management.

For Godbole Bhave & Co. For Yeolekar & Associates Chartered Accountants Chartered Accountants Firm Reg. No. - 114445W Firm Reg. No. - 102489W M.V. Bhave S. S. Yeolekar Partner Partner Membership No. - 038812 Membership No. -036398 Place: Mumbai Date: 5th May 2015


Mar 31, 2014

We have audited the accompanying financial statements of GTL LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dt.13.09.2013 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.2.37 regarding preparation of financial statements of the Company on going concern basis notwithstanding the fact that the Company has been incurring cash losses and it''s networth 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 dependent upon the company''s ability to raise requisite funds /generate adequate cash flows in future to meet it''s obligations

b. Note No 2.11.5 regarding the book value of non current investments being lower than there carrying value and non provision for diminution in value of these investments for the reasons mentioned therein.

Our opinion is not qualified in respect of these matters.

other Matter

As at March 31,2014, the Company has a Term Loan and Funded Interest Term Loan Liability of Rs. 20.64 Crores payable to Standard Chartered Bank, one of the banks participating in Corporate Debt Restructuring Scheme approved by CDR Empowered Group. The Company has accounted the above liability as per the terms of CDR Scheme. However confirmation of the above liability has not been received.

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 the 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 subsection (3C) of section 211 of the Act read with the General Circular 15/2013 dt.13.09.2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013, and

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 Independent AudItors'' report (referred to in paragraph 1 under the heading of "report on other Legal and regulatory requirements" of our report of even date to the members of GtL Limited on the accounts for the year ended March 31,2014)

(i) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

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.

In our opinion, during the year, the Company has not disposed off substantial part of its fixed assets.

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

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.

According to the information and explanations given to us and on the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material, having regard to the size of the operations of the Company.

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 and other parties covered in the register maintained under Section 301 of the Act. Accordingly clause (iii) of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company.

In our opinion and according to the information and explanations given to us, there is an adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for 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 procedures.

(v) Based on the information and explanation provided to us, during the year the Company has not entered into any contracts or arrangements, which were required to be entered in the register maintained u/s 301 of the Companies Act, 1956 and accordingly the provisions of clause 4(v) of the Companies

(Auditor''s Report) Order, 2003 are not applicable to the Company.

(vi) According to the information and explanations given to us, during the year, the Company has not accepted any deposits from public within the meaning of provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Therefore, the provisions of clause 4 (vi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(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 cost 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) On the basis of examination of the relevant records and according to the information and explanations given to us, we are of the opinion that the Company, except for payment of Service Tax, General Sales Tax, Value Added Tax and dues of labour welfare fund, is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection fund, Employees'' State insurance, Income-tax, Wealth-tax, Income Tax deducted at source, Custom duty, Excise-duty, Cess and other applicable statutory dues.

On the basis of examination of the relevant records and according to the information and explanations given to us, except for General Sales Tax of Rs. 4.18 Crores, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection fund, Employees'' State insurance, Income-tax, Wealth-tax, Value added Tax, Service Tax, Custom duty, Excise-duty and Cess were outstanding, as at 31st March 2014 for a period of more than six months from the date they became payable. Amounts due and outstanding for a period exceeding six months as at the year end to be credited to Investor Education and Protection fund of Rs. 0.14 Crores, which are held in abeyance on account of pending legal cases, have not been considered.

On the basis of the books of accounts and records of the Company as produced and examined by us , except for disputed Sales tax as detailed below, there are no dues of Income Tax, customs duty, wealth-tax, service tax, excise duty and cess which have not been deposited on account of any dispute.

Amount Name of the Statute Nature of dues Year to which the amount relates (Rs.in Crores)

Central Sales Tax Act, Sales/Vat Tax 5.39 1992-1993, 1995 1996, 2008- 2009, 2009-2010, Sales Tax Act & VAT of Dues 2010-2011 & Feb 09 to Dec 10 various States

1.51 1995-1996, 1997-1998, 2004- 2005, 2008-2009 & 2009-2010

0.48 2009-2010

2.90 2002-2003, 2005-2006, 2006- 2007 & 2008-2009



Name of the Statue Forum where dispute is pending

Central Sales Tax Act, Sales Tax Act & VAT of various States 1st Appellate Authority

2nd Appellate Authority

Assessing Officer

Tribunal

Out of the above disputed sales tax dues, an amount of Rs. 0.57 Crores has been paid by the Company under protest.

(x) The accumulated losses of the Company as at the end of the financial year are in excess of 50% of it''s networth. The Company has incurred cash loss during the financial year covered by our audit and also in the immediately preceding financial year.

(xi) On the basis of our examination of the records of the Company and according to the information and explanations given to us, the Company has defaulted in repayment of External Commercial Borrowings of Rs. 899.25 Crore due for payment in August, 2011 and interest of Rs. 86.67 Crore due thereon for the period 12th December, 2011 to 31st March, 2014.

The Company has also defaulted in redemption of Rated Redeemable Unsecured Rupee Non-convertible Debentures of Rs. 940 Crores comprising of amount of Rs. 470 Crores due for redemption in February, 2013 and of Rs. 470 Crores due for redemption in February, 2014 and Interest of Rs. 415.50 Crores due to holders of Rated Redeemable Unsecured Rupee Non- convertible Debentures for the period 2nd May, 2011 to 31st March, 2014.

Further the Company has defaulted in repayment of Secured term loan of Rs. 65.72 Crores to the banks relating to the period January 2014 to March 2014, which was due for payment on March 31, 2014.

Interest of Rs. 23.00 Crores on Term Loan and of Rs. 0.81 Crores on Funded Interest Term Loan was due for payment on 31st March ,2014. Out of the above, interest of Rs. 3.13 Crores in respect of Term Loan and of Rs. 0.08 Crores in respect of Funded Interest Term Loan has been paid by the Company subsequent to balance sheet date.

Details of defaults furnished above do not include the cases where the funds are made available by the Company for payments but not appropriated by the banks against the liabilities.

Except for above, there are no defaults in payment of dues to banks considering that the debts of the Company have been restructured under Corporate Debt Restructuring (CDR) scheme.

(xii) In our opinion and according to the explanations given to us and based on the information available, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities. Therefore, the provisions of clause 4 (xii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(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 or 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 guarantees aggregating to Rs. 594.79 Crores for loans taken by Subsidiary Companies, an associate Company and affiliate Company from banks and financial institutions. It has been explained to us that these guarantees are given in the course of and for furtherance of business interest of the Company and accordingly the terms and conditions of these guarantees are not prejudicial to the interest of the Company. We are, however, unable to comment on the same.

(xvi) In our opinion and according to the information and explanations given to us, the Company has not raised new term loan during the year. Therefore, the provisions of clause 4 (xvi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xvii) On an overall examination of the Balance sheet of the Company as at 31st March, 2014 and related information made available and representations by the management more specifically regarding restructuring under process relating to External Commercial Borrowings and Rated Redeemable Unsecured Rupee Non-convertible Debentures , we are of the opinion that short term funds of Rs. 306.88 have been used for long term purposes.

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

(xix) The Company had created security in respect of 92978 Compulsorily Convertible Debentures (CCDs) aggregating to Rs. 0.93 Crores issued to the lender during the year. These CCDs got converted in to Equity Shares of the Company and no CCDs are outstanding as on March 31,2014.

The ''Rated Redeemable Unsecured Rupee Non Convertible Debentures'' issued by the Company in the earlier years on private placement basis are unsecured and therefore, no security is created in respect of these debentures.

(xx) The Company has not raised any money through public issue during the year and therefore, the provisions of clause 4(xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xxi) To the best of our knowledge and belief and on the basis of our examination of the records of the Company, no material fraud on or by the Company has been noticed or reported during the year, nor we have been informed of any such case by management.

For Godbole Bhave & Co. For Yeolekar & Associates

Chartered Accountants Chartered Accountants

Firm Reg. No. - 114445W Firm Reg. No. - 102489W

M. V. Bhave s. s. Yeolekar

Partner Partner

Membership No. – 038812 Membership No. –036398

Place: Mumbai Date : 20th May, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of GTL LIMITED ("the Company”), which comprise the Balance Sheet as at March 31, 2013, and 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.

Other Matter

The Company has a Term Loan and Funded Interest Term Loan Liability of Rs. 20.64 Cr. towards Standard Chartered Bank, one of the bank participating in Corporate Debt Restructuring Scheme approved by CDR Empowered Group. The Company has accounted above liability as per the terms of CDR Scheme. However confirmation of above liability has not been received. 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 Companies Act, 1956;

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.

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

(i) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

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.

In our opinion, during the year, the Company has not disposed off substantial part of its fixed assets.

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

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.

According to the information and explanations given to us and on the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(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 procedure commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for 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 procedures.

(v) Based on the information and explanation provided to us, during the year the Company has not entered into any contracts or arrangements, which were required to be entered in the register maintained u/s 301 of the Companies Act, 1956 and accordingly the provisions of clause 4(v) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(vi) According to the information and explanations given to us, during the year, the Company has not accepted any deposits from public within the meaning of provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.Therefore, the provisions of clause 4 (vi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(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) On the basis of examination of the relevant records and according to the information and explanations given to us, we are of the opinion that the Company, except for payment of Service Tax, General Sales Tax, Value added Tax and dues of labour welfare fund, is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection fund, Employees’ State insurance, Income-tax, Wealth-tax, Custom duty, Excise-duty, Cess and other applicable statutory dues.

On the basis of examination of the relevant records and according to the information and explanation given to us, except for Service Tax of Rs. 1.21 Cr. and General Sales Tax of Rs. 2.20 Cr., no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Value Added Tax, Custom duty, Excise-duty and Cess were outstanding, as at 31st March 2013 for a period of more than six months from the date they became payable. Amounts due and outstanding for a period exceeding six months as at period end to be credited to Investor Education and Protection fund of Rs. 0.03 Cr., which are held in abeyance of pending legal cases, have not been considered.

On the basis of books of accounts and records of the Company as produced and examined by us, except for disputed Sales tax and Income tax dues as detailed below, there are no dues of custom duty, wealth–tax, service tax, excise duty and cess which have not been deposited on account of any dispute.

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

Central Sales Tax Act, Sales Sales/Vat Tax Dues 6.50 1992-1993, 1995-1996, 2002-2003, Tax Act & VAT of various 2005-2006, 2006-2007, 2007-2008, States 2009-2010 & 2010-2011

2.09 1995-1996, 1997-1998, 2004-2005,

2005-2006, 2007-2008, 2009-2010 & 2010-2011

0.50 2009-2010

Income Tax Act, 1961 Income Tax 0.77 2004-2005

NAME Forum where dispute is pending

Central Sales Tax Act, Sales 1st Appellate Authority

2nd Appellate Authority

Central Sales Tax Act, Sales Assessing Officer CIT Appeals

Out of the above disputed sales tax and Income tax dues, amount of Rs. 2.06 Cr. and Rs. 0.40 Cr. respectively has been paid by the Company under protest.

(x) The accumulated losses of the Company as at the end of the financial year are not in excess of 50% of it’s net worth. The Company has incurred cash loss during the financial year covered by our audit and also in the immediately preceding financial year.

(xi) On the basis of our examination of the records of the Company and according to the information and explanations given to us, the Company has defaulted in repayment of External Commercial Borrowings of Rs. 815.70 Crore due for payment on August, 2011 and interest of Rs. 44.67 Crore due thereon for the period 12th December, 2011 to 19th March, 2013.

Further the Company has also defaulted in redemption of Rated Redeemable Unsecured Rupee Non-convertible Debentures of Rs. 470 Cr. due for redemption in February, 2013 and Interest of Rs. 250.90 Cr. due to holders of Rated Redeemable Unsecured Rupee Non-convertible Debentures for the period 2nd May, 2011 to 3rd February, 2013.

Interest of Rs. 0.25 Crore on Funded Interest Term Loan and of Rs. 0.08 Crore on Cash credit facility was due for payment on 31st March, 2013.Out of the above, interest of Rs. 0.15 Cr. in respect of Funded Interest Term Loan and entire interest in respect of Cash Credit facility has been paid by the Company subsequent to balance sheet date.

Except for above defaults, there are no defaults in payment of dues to banks as debts of the Company have been restructured under Corporate Debt Restructuring (CDR) scheme.

(xii) In our opinion and according to the explanations given to us and based on the information available, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities. Therefore, the provisions of clause 4 (xii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(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 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 guarantees aggregating to Rs. 580.77 Cr. for loans taken by Subsidiary Companies, an associate Company and an affiliate Company from banks and financial institutions. It has been explained to us that these guarantees are given in the course of and for furtherance of business interest of the Company and accordingly the terms and conditions of these guarantees are not prejudicial to the interest of the Company. We are, however, unable to comment on the same.

(xvi) In our opinion and according to the information and explanations given to us, the Company has not raised new term loan during the year. Therefore, the provisions of clause 4 (xvi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xvii) On an overall examination of the Balance sheet of the Company as at 31st March, 2013 and 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 been used for long term purposes.

(xviii) The Company, during the year, has made a preferential allotment of 18,360,835 Equity shares of Rs. 10 each fully paid up aggregating to Rs. 18.36 Cr. on conversion of 0% Compulsorily Convertible Debentures (CCDs) to a party covered in the 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 Corporate Debt Restructuring Scheme and in accordance with the 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 18,784,046, 1% Compulsorily Convertible Debentures (CCDs) of Rs. 100 each aggregating to Rs. 187.84 Cr. issued to the lenders during the year. These CCDs got converted in to Equity Shares of the Company and no CCDs are outstanding as on March 31, 2013.

The ''Rated Redeemable Unsecured Rupee Non Convertible Debentures’ issued by the Company in the earlier years on private placement basis are unsecured and therefore, no security is created in respect of these debentures.

(xx) The Company has not raised any money through public issue during the year and therefore, the provisions of clause 4(xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xxi) To the best of our knowledge and belief and on the basis of our examination of the records of the Company, no material fraud on or by the Company has been noticed or reported during the year, nor we have been informed of any such case by management.

For Godbole Bhave & Co. For Yeolekar & Associates

Chartered Accountants Chartered Accountants

A.S. MAHAJAN S.S. YEOLEKAR

Partner Partner

Membership Number 100483 Membership Number 36398

FRN NO. 114445W FRN NO. 102489W

Place: Mumbai Date: 8th May, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of GTL Limited, as at 31st March 2012, Statement of Profit And Loss and also the Cash Flow Statement for the period 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government 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 the Annexure referred above, we report that:

(i) 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;

(ii) 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;

(iii) 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;

(iv) In our opinion, the Balance Sheet, Statement of Profit And Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the directors as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) The balances of Funded interest Term Loan from banks aggregating to Rs. 77,41,64,733/- are not confirmed and are subject to reconciliation.

(vii) We invite your attention to note no.2.3, wherein Company's liability of Rs. 1,400 Crore towards debenture holders has been classified as noncurrent liability. As per the maturity profile of the debenture liability furnished in note no.2.3.5 an amount of Rs. 470 Crores is due for repayment within Twelve months of the balance sheet date i.e 31st March, 2012 and accordingly should have been classified as current maturities of long term debts under the heading current liabilities as required by Schedule VI of the Companies Act, 1956. In view of the above the company's noncurrent liabilities have been shown higher by Rs. 470 Crores and correspondingly the current liabilities have been shown lower to that extent.

We further invite attention to note no 2.25 wherein the net exchange gain of Rs. 6.08 Crore has been classified as other expenses. The same should have been classified as other income as required by Schedule VI of the Companies Act,1956. ln view of the above the company's other expenses have been shown lower by Rs. 6.08 Crore and correspondingly the other income has been shown lower to that extent. This however does not have any impact on loss for the period.

(viii) In our opinion and to the best of our information and according to the explanations given to us, they said accounts read together with the Significant Accounting Policies and notes thereon subject to our comment in paragraph (vl) and (vii) above 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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012.

(b) in the case of Statement of Profit And Loss, of the loss for the period ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the period ended on that date Referred to in paragraph 3 of our report of even date on the accounts of GTL Limited for the period ended 31st March 2012 On the basis of such checks as considered appropriate and in terms of the information and explanations given to us, we report as under:

(i) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

The physical verification of fixed assets was not carried out during the period and accordingly we are unable to comment on discrepancies if any as compared to book records.

In our opinion, during the period, the Company has not disposed off substantial part of its fixed assets.

(ii) The inventory has been physically verified during the period by the management. In our opinion, the frequency of verification is reasonable.

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.

On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) The Company has neither taken for granted any loans, secured or unsecured, from/to companies, firms and other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4 (iii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(iv) In our opinion, there is an adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for 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 procedures.

(v) Based on the information and explanation provided to us, during the period the Company has not entered into any contracts or arrangements, which were required to be entered in the register maintained u/s 301 of the Companies Act, 1956 and accordingly the provisions of clause 4(v) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(vi) During the period, the Company has not accepted any deposits from public within the meaning of provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Therefore, the provisions of clause 4 (vi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(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 Central Government under section 209(1)(d) of the Companies Act,1956 and are of the opinion that prima facie the prescribed cost records have been maintained. The contents of these records have not been examined by us.

(ix) On the basis of our examination of the records of the Company, we are of the opinion that the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection fund, Employees' State Insurance, Income-tax, Wealth-tax, Custom duty, Excise-duty, Cess and other applicable statutory dues. The delays have been observed in payment of Service Tax , Value added Tax, Income Tax deducted at source and dues of labour welfare fund.

On the basis of our examination of the records of the Company, except for Value added Tax dues of Rs. 1,00,06,064/-, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection fund, Employees' State insurance, Income-tax, Wealth-tax, Service Tax, Custom duty, Excise-duty and Cess were outstanding, as at 31st March 2012 for a period of more than six months from the date they became payable. Amounts due and outstanding for a period exceeding six months as at the period end to be credited to Investor Education and Protection fund of Rs. 3,01,310/-, which are held in abeyance on account of pending legal cases, have not been considered.

On the basis of the books of accounts and records of the Company as produced and examined by us , except for disputed Sales tax dues as detailed below, there are no dues of customs duty, wealth-tax, income Tax, service tax, excise duty and cess which have not been deposited on account of any dispute.

Year to which Forum where Name of the Nature of Amount the lamount dispute is Statute Dues (Rs. in lakhs) relates pending

Central Sales Sales/Vat 10,724.31 1992-1993, 1st Appellate Authority Tax Act,Sales Tax Dues 1995-1996,

Tax Act & VAT of 2002-2003,

various States 2005-2006,

2006-2007,

2008-2009,

2009-2010 &

2010-2011,

208.64 1995-1996, 2nd Appellate Authority

1997-1998,

2004-2005,

2005-2206,

2007-2008,

2009-2010 &

2010-2011

Out of the above disputed sales tax dues, an amount of Rs. 2.25 Crores has been paid by the Company under protest.

(x) The accumulated losses of the Company as at the end of the financial period are not in excess of 50% of its net worth. The Company has incurred cash loss during the financial period covered by our audit. The cash loss was not incurred in the immediately preceding financial year.

(xi) On the basis of our examination of the records of the Company, the Company has defaulted in repayment of External Commercial Borrowings of Rs. 763.35 Crore due for payment on August, 2011 and interest of Rs. 11.48 Crore thereon for the period 12th December, 2011 to 19th March, 2012.

Interest of Rs. 105.33 Crore to holders of 8% Rated Redeemable Unsecured Rupee Non-convertible Debentures for the period 2nd May, 2011 to 3rd February, 2012 was overdue for payment as at 31st March, 2012.

Interest of Rs. 0.23 Crore on Funded interest Term Loan and of Rs. 2.01 Crore on Cash credit facility was due for payment on 31st March, 2012. Out of which an amount of Rs. 2.21 Crores has been paid by the Company subsequent to balance sheet date.

Except for above defaults there, are no defaults in payment of dues to banks as the debts of the Company has been restructure under Corporate Debt Restructuring (CDR) scheme.

(xii) The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities. Therefore, the provisions of clause 4 (xii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(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 are not applicable to the Company.

(xiv) In our opinion, the Company's business activities do not comprise of dealing in shares, securities, debentures or other investments.

Therefore, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xv) The Company has not issued any new guarantees during the period under audit. In our opinion and as explained to us, the terms and conditions of continuing guarantees given by the Company for loans taken by others from banks or financial institutions, are prima facie not prejudicial to the interest of the Company.

(xvi) The Company has not raised new term loan during the period. Therefore, the provisions of clause 4(xvi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xvii) On an overall examination of the Balance Sheet of the Company as at 31st March, 2012 and 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 been used for long term purposes.

(xviii) The company has not made preferential allotment of shares to parties and/or to the companies covered in the register maintained under section 301 of the Companies Act 1956. Therefore, the provisions of clause 4(xviii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xix) The debentures issued on private placement basis by the Company are unsecured and therefore, the provisions of clause 4(xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xx) The Company has not raised any money through public issue during the period and therefore, the provisions of clause 4(xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xxi) To the best of our knowledge and belief and on the basis of our examination of the records of the Company, no material fraud on or by the Company has been noticed or reported during the period, nor we have been informed of any such case by management.

For Godbole Bhave & Co. For Yeolekar & Associates

Chartered Accountants Chartered Accountants

A.S. Mahajan S.S. Yeolekar

Partner Partner

Membership Number 100483 Membership Number 36398

FRN No. 114445W FRN No. 102489W

Mumbai

May 22, 2012


Jun 30, 2011

1. We have audited the attached balance sheet of GTL Limited, as at 30th June 2011, the profit and loss account and also the cash flow statement for the period 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government 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 the Annexure referred to above, we report that:

(i) 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;

(ii) 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;

(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the directors, as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the directors were disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) Unsecured loan payable to ICICI Bank is subject to confirmation;

(vii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to our comment in paragraph (vi) above 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:

(a) in the case of the balance sheet, of the state of affairs of the Company as at 30th June, 2011.

(b) in the case of the profit and loss account, of the profit for the period ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the period ended on that date.

Referred to in paragraph 3 of our report of even date on the accounts of GTL Limited for the period ended 30th June, 2011

On the basis of such checks as considered appropriate and in terms of the information and explanations given to us, we report as under:

(i) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

All the fixed assets have not been physically verified by the management during the year but there is a regular programme 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 verification.

In our opinion, during the year, the Company has not disposed off substantial part of the Fixed Assets.

(ii) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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.

On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) The Company has neither taken nor granted any loans, secured or unsecured, from/to companies, firms and other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4 (iii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(iv) In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for 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 procedure.

(v) Based on the audit procedures applied by us, we are of the opinion that the transactions made in pursuance of contracts or arrangements, which were required to be entered in the register maintained u/s 301 of the Companies Act, 1956, have been so entered.

In our opinion, the transactions made, during the year, aggregating in value of Rupees Five Lakhs or more per party, in pursuance of contracts or arrangements entered into register maintained under section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except that in case of transaction of provisioning and availment of services, no comparable price instances were available in view of the uniqueness of these transactions.

(vi) During the period, the Company has not accepted any deposits from public within the meaning of provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.Therefore, the provisions of clause 4 (vi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

(viii) As explained to us, the Central Government has not prescribed the maintenance of Cost records under clause (d) of sub section (i) of Section 209 Companies Act, 1956, in respect of the business activities of the Company.

(ix) On the basis of our examination of the records of the Company, we are of the opinion that the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection fund, Employees' State insurance, Income-tax, Sales-tax, Wealth-tax, Custom duty, Excise- duty, Cess and other applicable statutory dues.The company has not paid service tax dues of Rs. 2,821.32 lacs for the month April, May & June,11.

On the basis of our examination of the records of the Company, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection fund, Employees' State insurance, Income- tax, Sales-tax, Wealth-tax, Service Tax, Custom duty, Excise-duty and Cess were outstanding, as at 30th June, 2011 for a period of more than six months from the date they became payable.

On the basis of the books of accounts and records of the Company as produced and examined by us , except for disputed Sales tax dues and Income Tax dues as detailed below, there are no dues of customs duty, wealth-tax, service tax, excise duty and cess which have not been deposited on account of any dispute.

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

Income Tax Income Tax 195.72 2003-2004 CIT (Appeal) Act, 1961 Dues

Central Sales Sales Tax 11,313.00 1995-1996, 1st Appellate Tax Act & Dues Authority 2005-2006, Sales Tax Act of various 2006-2007,

States 2007-2008, 2008-2009,

2009-2010 & 2010-2011

205.49 1997-1998, 2nd Appellate Authority 2004-2005 & 2010-2011

(x) The Company does not have accumulated losses as at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) On the basis of our examination of the records of the Company, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders except for amount of Rs. 7,325.21 lacs due in respect of overdue bills of exchange.

(xii) The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities. Therefore, the provisions of clause 4 (xii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(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 are not applicable to the Company.

(xiv) In our opinion, the Company's business activities do not comprise of dealing in shares, securities, debentures or other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xv) In our opinion, the terms and conditions of guarantees given by the Company for loans taken by others from banks or financial institutions, are prima facie not prejudicial to the interest of the Company.

(xvi) In our opinion the term loans have been applied for the purposes for which they were raised. Pending utilizations have been temporarily placed as fixed deposit with banks.

(xvii) On an overall examination of the Balance sheet of the Company as at 30th June,2011 and 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 been used for long term purposes.

(xviii) The company has not made preferential allotment of shares to parties and/or to the companies covered in the register maintained under section 301 of the Companies Act 1956.Therefore, the provisions of clause 4(xviii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xix) The debentures issued on private placement basis by the Company are unsecured and therefore, the provisions of clause 4(xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xx) The Company has not raised any money through public issue during the year and therefore, the provisions of clause 4(xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xxi) To the best of our knowledge and belief and on the basis of our examination of the records of the Company, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For Godbole Bhave & Co. For Yeolekar & Associates Chartered Accountants Chartered Accountants A.S. Mahajan S.S. Yeolekar Partner Partner Membership Number 100483 Membership Number 36398 FRN No. 114445W FRN No. 102489W

Mumbai August 18, 2011


Mar 31, 2010

1. We have audited the attached balance sheet of GTL Limited, as at 31st March 2010, the profit and loss account and also the cash flow statement 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government 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 the Annexure referred to above, we report that:

(i) 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;

(ii) 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;

(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

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

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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:

(a) in the case of the balance sheet, of the state of affairs of the Company as at 31st March, 2010.

(b) in the case of the profit and loss account, of the profit for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date

Annexure to Auditors Report

Referred to in paragraph 3 of our report of even date on the accounts of GTL Limited for the year ended 31st March, 2010

On the basis of such checks as considered appropriate and in terms of the information and explanations given to us, we report as under:

(i) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

All the fixed assets have not been physically verified by the management during the year but there is a regular programme 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 verification.

In our opinion, during the year, the Company has not disposed off substantial part of the Fixed Assets.

(ii) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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.

On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) The Company has neither taken nor granted any loans, secured or unsecured, from/to companies, firms and other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4 (iii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(iv) In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for 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 procedure.

(v) Based on the audit procedures applied by us, we are of the opinion that the transactions made in pursuance of contracts or arrangements, which were required to be entered in the register maintained u/s 301 of the Companies Act, 1956, have been so entered.

In our opinion, the transactions made, during the year, aggregating in value of Rupees Five Lakhs or more per party, in pursuance of contracts or arrangements entered into register maintained under section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except that in case of transaction of provisioning and availment of services, no comparable price instances were available in view of the uniqueness of these transactions.

(vi) During the year, the Company has not accepted any deposits from public within the meaning of provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.Therefore, the provisions of clause 4 (vi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(vii) In our opinion, the Company hasan internal auditsystem commensurate with the size and nature of its business.

(viii) As explained to us, the Central Government has not prescribed the maintenance of Cost records under clause (d) of sub section (i) of Section 209 Companies Act, 1956, in respect of the business activities of the Company.

(ix) On the basis of our examination of the records of the Company, we are of the opinion that the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection fund, Employees State insurance, Income-tax, Sales-tax, Wealth-tax, Service Tax, Custom duty, Excise-duty, Cess and other applicable statutory dues.

On the basis of our examination of the records of the Company, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection fund, Employees State insurance, Income- tax, Sales-tax, Wealth-tax, Service Tax, Custom duty, Excise-duty and Cess were outstanding, as at 31st March, 2010 for a period of more than six months from the date they became payable.

On the basis of the books of accounts and records of the Company as produced and examined by us , except for disputed Sales tax dues and Income Tax dues as detailed below, there are no dues of customs duty, wealth-tax, service tax, excise duty and cess which have not been deposited on account of any dispute.

Name of the Nature of Amount (Rs. Year to Forum where

Statute Dues in lakhs) which the dispute is

amount pending relates

Income Tax Income Tax 14.47 2002-2003 CIT (Appeal)

Act, 1961 Dues

80.58 2005-2006 CIT (Appeal)

20.40 2006-2007 CIT (Appeal)

Central Sales Sales Tax 9,489.96, 1995-1996, IstAppellate Tax Act& Dues 2002-2003, Authority

SfaleS.Tax Act 2004-2005,

of various

States 2005-2006,

2006-2007, 2007-2008 & 2009-2010 8.27 1995-1996 2nd Appellate

1997-1998 Authority

(x) The Company does not have accumulated losses as at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) On the basis of our examination of the records of the Company, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

(xii) The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

Therefore, the provisions of clause 4 (xii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(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 are not applicable to the Company.

(xiv) In our opinion, the Companys business activities do not comprise of dealing in shares, securities, debentures or other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xv) In our opinion, the terms and conditions of guarantees given by the Company for loans taken by others from banks or financial institutions, are prima facie not prejudicial to the interest of the Company.

(xvi) In our opinion the term loans have been applied for the purposes for which they were raised or pending utilization have been temporarily placed as fixed deposit with banks.

(xvii) On an overall examination of the Balance sheet of the Company as at 31st March,2010 and 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 been used for long term purposes.

(xviii) The company has not made preferential allotment of shares to parties and/or to the companies covered in the register maintained under section 301 of the Companies Act 1956.Therefore, the provisions of clause 4(xviii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xix) During the year company has issued unsecured debentures on private placement basis and therefore, the provisions of clause 4(xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xx) The Company has not raised any money through public issue during the year and therefore, the provisions of clause 4(xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xxi) To the best of our knowledge and belief and on the basis of our examination of the records of the Company, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For Godbole Bhave & Co. For Yeolekar & Associates

Chartered Accountants Chartered Accountants

A.S. Mahajan S.S. Yeolekar

Partner Partner

Membership Number 100483 Membership Number 36398

FRN No. 114445W FRN No. 102489W

Mumbai April 20, 2010



 
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