Enter the first few characters of Company and click 'Go'

Auditor Report of HFCL Ltd.

Mar 31, 2023

HFCL Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTSOPINION

We have audited the accompanying standalone financial statements of HFCL LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the 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 "standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the branch auditors, the aforesaid standalone 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, and its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit of the standalone financial statements in accordance with the 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 Standalone 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 standalone 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 obtained by us along with the consideration of audit reports of the branch auditors referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

S. No. Key Audit Matters	Auditor''s Response
1. Customer contracts - accuracy of revenue recognition,	Our procedures included, among others, obtaining an
valuation of contract assets, work in progress (WIP),	understanding of the project execution processes and relevant
trade and other receivables, and accuracy of contract liabilities	controls relating to the accounting for customer contracts.
For the year ended March 31, 2023, revenue from customer contracts amounts to ''4,395.68 crores whereas as at March 31, 2023, contract assets amount to ''318.32 crores, the balance of work in progress (WIP) amounts to ''174.15 crores and retention amounts to ''239.79 crores.	For the revenue recognised throughout the year, we tested selected key controls, including results reviews by management, for their operating effectiveness and performed procedures to gain sufficient audit evidence on the accuracy of the accounting for customer contracts and related financial statement captions.
The application of the revenue accounting standard	These procedures included reading significant new contracts
(Ind AS 115, Revenue from Contracts with Customers)	to understand the terms and conditions and their impact on
involves certain key judgements relating to identification	revenue recognition. We performed enquiries with management
of distinct performance obligations, determination	to understand their risk assessments relating to customer
of transaction price of the identified performance	contracts.
obligations, the appropriateness of the basis used to	On a sample basis, we reconciled revenue to the supporting
measure revenue recognised over a period. Additionally,	documentation, validated costs, tested the mathematical accuracy
revenue accounting standard contains disclosures	of calculations and the adequacy of accounting of customer
which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date.	contracts.

S. No.	Key Audit Matters	Auditor''s Response
	(Refer Notes 31 to the standalone financial statements). During order fulfilment, contractual obligations may need to be reassessed. In addition, change orders or cancelations have to be considered. As a result, total estimated contract costs may exceed total contract	We further performed testing on a sample basis to confirm the appropriate application of revenue recognition policies and to verify valuation of WIP balances. This included reconciling accounting entries to supporting documentation. When doing this, we specifically put emphasis on those transactions occurring close before or after the balance sheet date to obtain sufficient
	revenues and therefore require write-offs of contract assets, receivables and the immediate recognition of the	evidence over the accuracy of cut-off.
	expected loss as a provision.	We further reviewed samples of contracts with unbilled revenues
	Regarding the revenue recognised at a point in time (PIT), the risks include inappropriate revenue recognition	to identify possible delays in achieving milestones, which require change in estimated efforts to complete the remaining
	from revenue being recorded in the wrong accounting	performance obligations.
	period or at amounts not justified as well as overstated	Performed analytical procedures and test of details for
	WIP that requires impairment adjustments.	reasonableness of incurred and estimated efforts.
		Our procedures did not identify any material exceptions.
2.	Valuation of accounts receivable - risk of credit losses	Our audit incorporated the following activities:
	Company has a concentration of credit exposure on a number of major customers mainly Government and large organisation. Some of these major customers are facing difficult business conditions. In order to avoid significant credit losses, proper monitoring and management of	â¢ Assessing and updating our understanding of internal controls over financial reporting with respect to credit risk; â¢ Assessment of the Company''s credit policy outlining authority for approving and responsibility to manage credit limits;
	credit risk is key factor. Accounts receivable is a significant	â¢ Inquiries with committee in order to understand and assess
	item in the Company''s standalone financial statements	governance and follow-up/monitoring of key customers;
	amounting to ''2207.46 crores as of March 31, 2023 and provisions for impairment of receivables is an area which	â¢ Analytical procedures and inquiries with Business Area;
	is influenced by management''s estimates and judgment.	â¢ Detailed testing and assessment of receivables to ensure these
	The provision for impairment of receivables amounted to	are in line with Ind AS, with a focus on significant new provisions.
	''19.29 crores as at March 31,2023.	We had a particular focus in our audit on how Company manages
	Refer Note 15 to the standalone financial statements	credit risk for key customers with respect to credit insurance and procedures for credit management. We also assessed and challenged management''s assumptions and adherence to the Company''s accounting policies with respect to provisions for impairment of receivables.
		The level of the provision made against accounts receivables including credit impaired receivables and accrued balances was deemed appropriate and corresponds to the risks identified.
3.	Recoverability of project and other vendor advances As at March 31, 2023, current financial assets include ''456.86 crores in respect of project and other vendor advances and are pending to be adjusted/settled. Management exercises significant judgment when determining whether to record any impairment loss on advances As the carrying amount of project and other vendor advances accounts for a relatively high proportion of assets, there would be a material impact on the financial statements if such advances cannot be settled on schedule or fail to be recovered /settled. Therefore, we	Our audit procedures involve the following activities: â¢ Assessing and updating our understanding of internal controls over financial reporting with respect to advances given; â¢ Assessment of the Company''s procurement policy outlining authority for approving and responsibility to manage vendor advances; â¢ Inquiries with management in order to understand and assess governance and follow-up/monitoring of key vendors; â¢ Analytical procedures and inquiries with Business Area; â¢ Obtain balance confirmations from selected parties to ensure existence thereof â¢ Review of Purchase orders and/or agreements for selected
	regard the recoverability of project and other vendor	parties and enquire management regarding reasons for
	advances as a key audit matter.	unsettled advances as on date.
	Refer Note 19 to the Standalone Financial Statements.	We agree with management''s view that there is no reduction in the value of the advances outstanding in the books.

S. No.	Key Audit Matters	Auditor''s Response
4.	Recoverability relating to Goods and Services Tax	Our audit procedure involves the following activities:
	recoverable:	â¢	Assessing and updating our understanding of internal
	As at March 31,2023, under other current assets, indirect		control over financial reporting with respect to recording of
	taxes recoverable include ''161.10 crores in respect of		invoices of suppliers
	GST Input Tax credit receivables.	â¢	Reviewing the management continuing process for
	The Company has accounted for input credit on material		reconciliation, updation and follow up with the vendors.
	and services received from suppliers and is carrying out continuous process of reconciliation.		We have relied upon the management''s assessment.
	We focused on management''s estimate of getting input tax credit which involves significant judgment.
	Refer Note 21 to the Standalone Financial Statements.
5.	Recoverability and Contingencies relating to other	We performed the following substantive procedures:
	Indirect tax matters	â¢	Understanding the process of estimation, recording and
	As at March 31,2023, "Indirect Tax Recoverable" includes		reassessing tax provisions and contingencies.
	''4.06 crores in respect of Commercial taxes recoverable which are pending adjudication.	â¢	Involving tax specialists to assist in analyzing the judgements used to determine provisions for tax matters.
	The Company has open/pending tax assessments in		We have involved our internal experts to review the nature of the amounts recoverable, the sustainability and the likelihood of recoverability upon final resolution.
	various states. The determination of provisions and contingent liabilities arising from the open tax assessments make this a particular area of significant judgement.
	We focused on management''s assessment of the likely	â¢	Inspecting the correspondence with tax authorities.
	outcome and quantification of tax exposures which	â¢	Inspecting reports on open tax assessments prepared by the
	involves significant judgement.		Company and other appropriate documentation considered
	Refer Note 21 to the Standalone Financial Statements.		necessary to understand the position and conclusions made by the Company.
		We	also assessed the adequacy of the Company''s financial
		statements disclosure in respect of the tax positions and contingent liabilities.
		We agree with management''s evaluation.

OTHER INFORMATION

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexures to Board''s Report, Business Responsibility and Sustainability Report, Corporate Governance and Shareholder''s Information, but does not include the financial statements and our auditors'' report thereon. The other information comprising the above documents is expected to be made available to us after the date of this auditors'' report.

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon. In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit, or otherwise appears to be materially misstated.

When we read the other information comprising the above documents, if we conclude that there is a material misstatement

therein, we are required to communicate the matter to those charged with governance and take necessary actions as per applicable laws and regulations.

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 Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified 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 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 standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone 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 is also responsible for overseeing the Company''s financial reporting process.

AUDITORS'' RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the standalone 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 standalone financial statements.

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

â¢ Identify and assess the risks of material misstatement of the standalone 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.

â¢ 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.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

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 standalone 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.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

â¢ Obtain sufficient appropriate audit evidence regarding the financial information of the foreign branches of the Company. We are responsible for the direction, supervision and performance of the audit of the standalone financial statements of the Company of which we are the independent auditors. For the foreign branches included in the standalone financial statements, which have been audited by other auditors, such branch auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion. Our responsibilities in this regard are further described in the section titled ''Other Matters'' in this audit report.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

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 standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' 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.

OTHER MATTERS

The Standalone Financial Statements includes financial performance of three foreign branches which reflects total assets of ?75.27 crores, total revenue of ?52.95 crores, Net Profit after tax of ?8.69 crores and total comprehensive income of ?8.42 crores and net cash outflow amounting to ?0.16 crores for the year ended on 31^st March 2023, which were audited by respective independent branch auditors. The independent branch auditor''s report on the financial statements of these branches have been furnished to us by the management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of these branches is solely based on the report of such independent branch auditor''s.

Our opinion is not modified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

A. 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.

B. As required by Section 143(3) of the Act, based on our audit, 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) I n 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 reports on the accounts of foreign branch offices audited by independent branch auditors have been furnished to us by the management of the Company and have been properly dealt with by us in preparing this report.

d) the Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other Comprehensive Income, the Standalone Statement of Cash Flows and Standalone Statement of Changes in Equity 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 Ind AS specified under Section 133 of the Act, read with relevant rules made thereunder.

f) On the basis of the 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 over financial reporting of the Company and

the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls with reference to standalone financial statements.

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 remuneration paid by the Company to its directors during the year is 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 standalone financial statements - Refer Note 48 to the standalone financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 48 to the standalone financial statements;

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

iv. (a) The Management has represented that,

to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) 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 person or entity, including foreign entity ("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;

including foreign entity ("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 the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. (a) The final dividend declared and paid by the Company during the year is in accordance with Section 123 of the Act, as applicable.

Annual General Meeting. The amount of dividend proposed is in accordance with section 123 of the Act, as applicable.

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 S Bhandari & Co. LLP For Oswal Sunil & Company

Chartered Accountants Chartered Accountants

Firm Registration No. Firm Registration No. 016520N

000560C/C400334

(P. D. Baid) (Sunil Bhansali)

Partner Partner

Membership No: 072625 Membership No: 054645

UDIN: 23072625BGXCTF5627 UDIN: 23054645BGYNGI5435

Place: New Delhi Place: New Delhi

Date: May 08, 2023 Date: May 08, 2023

Mar 31, 2022

Report on the Audit of the Standalone Financial StatementsOpinion

We have audited the accompanying standalone financial statements of HFCL LIMITED ("the Company"), which comprise the Balance Sheet as at March 31,2022, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the 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 "standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the branch auditors, the aforesaid standalone 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, 2022, and its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

Key Audit Matters

^S,â Key Audit Matters No.	Auditor''s Response
1. Customer contracts - accuracy of revenue recognition,	Our procedures included, among others, obtaining an understanding
valuation of contract assets, work in progress (WIP), trade	of the project execution processes and relevant controls relating to the
and other receivables, and accuracy of contract liabilities	accounting for customer contracts.
For the year ended March 31, 2022, revenue from customer	For the revenue recognized throughout the year, we tested selected key
contracts amounts to '' 4,286.44 Crores whereas as at March 31,	controls, including results reviews by management, for their operating
2022, contract assets amount to '' 146.86 Crores, the balance of	effectiveness and performed procedures to gain sufficient audit evidence
work in progress (WIP) amounts to '' 153.94 Crores and retention	on the accuracy of the accounting for customer contracts and related
amounts to '' 256.61 Crores.	financial statement captions.
The application of the revenue accounting standard (Ind AS 115,	These procedures included reading significant new contracts to
Revenue from Contracts with Customers) involves certain key	understand the terms and conditions and their impact on revenue
judgements relating to identification of distinct performance	recognition. We performed enquiries with management to understand
obligations, determination of transaction price of the identified	their risk assessments relating to customer contracts.
performance obligations, the appropriateness of the basis used to measure revenue recognized over a period. Additionally, revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and	On a sample basis, we reconciled revenue to the supporting documentation, validated costs, tested the mathematical accuracy of calculations and the adequacy of accounting of customer contracts.
periods over which the remaining performance obligations will	We further performed testing on a sample basis to confirm the appropriate
be satisfied subsequent to the balance sheet date.	application of revenue recognition policies and to verify valuation of WIP
Refer Note 31 to the standalone financial statements.	balances. This included reconciling accounting entries to supporting documentation. When doing this, we specifically put emphasis on those
During order fulfilment, contractual obligations may need to	transactions occurring close before or after the balance sheet date to
be reassessed. In addition, change orders or cancelations have	obtain sufficient evidence over the accuracy of cut-off.
to be considered. As a result, total estimated contract costs may exceed total contract revenues and therefore require write-offs of contract assets, receivables and the immediate recognition of the	We further reviewed samples of contracts with unbilled revenues to identify possible delays in achieving milestones, which require change in estimated efforts to complete the remaining performance obligations.

No.

Key Audit Matters

Auditor''s Response

Regarding the revenue recognized at a point in time (PIT), the risks include inappropriate revenue recognition from revenue being recorded in the wrong accounting period or at amounts not justified as well as overstated WIP that requires impairment adjustments.

Performed analytical procedures and test of details for reasonableness of incurred and estimated efforts.

Our procedures did not identify any material exceptions.

Valuation of accounts receivable - risk of credit losses

Company has a concentration of credit exposure on a number of major customers mainly Government and large organisation. Some of these major customers are facing difficult business conditions. In order to avoid significant credit losses, proper monitoring and management of credit risk is key factor. Accounts receivable is a significant item in the Company''s standalone financial statements amounting to '' 2,399.72 crores as of March 31,2022 and provisions for impairment of receivables is an area which is influenced by management''s estimates and judgment. The provision for impairment of receivables amounted to '' 14.94 crores as at March 31, 2022.

Refer Note 15 to the standalone financial statements

Our audit incorporated the following activities:

â¢ Assessing and updating our understanding of internal controls over financial reporting with respect to credit risk;

â¢ Assessment of the Company''s credit policy outlining authority for approving and responsibility to manage credit limits;

â¢ Inquiries with committee in order to understand and assess governance and follow-up/monitoring of key customers;

â¢ Analytical procedures and inquiries with Business Area;

â¢ Detailed testing and assessment of receivables to ensure these are in line with Ind AS, with a focus on significant new provisions.

We had a particular focus in our audit on how Company manage credit risk for key customers with respect to credit insurance and procedures for credit management. We also assessed and challenged management''s assumptions and adherence to the Company''s accounting policies with respect to provisions for impairment of receivables.

The level of the provision made against accounts receivables and accrued balances was deemed appropriate and corresponds to the risks identified.

Recoverability of project and other vendor advances

As at March 31, 2022, current financial assets include '' 318.50 crores in respect of project and other vendor advances and are pending to be adjusted/settled.

Management exercises significant judgment when determining whether to record any impairment loss on advances

As the carrying amount of project and other vendor advances accounts for a relatively high proportion of assets, there would be a material impact on the financial statements if such advances cannot be settled on schedule or fail to be recovered /settled. Therefore, we regard the recoverability of project and other vendor advances as a key audit matter.

Refer Note 19 to the Standalone Financial Statements.

Our audit procedures involve the following activities:

â¢ Assessing and updating our understanding of internal controls over financial reporting with respect to advances given;

â¢ Assessment of the Company''s procurement policy outlining authority for approving and responsibility to manage vendor advances;

â¢ Inquiries with management in order to understand and assess governance and follow-up/monitoring of key vendors;

â¢ Analytical procedures and inquiries with Business Area;

â¢ Obtain balance confirmations from selected parties to ensure existence thereof

â¢ Review of Purchase orders and/or agreements for selected parties and enquire management regarding reasons for unsettled advances as on date.

We agree with management''s view that there is no reduction in the value

of the advances outstanding in the books.

Recoverability relating to Goods and Services Tax recoverable

As at March 31, 2022, under other current assets, indirect taxes recoverable include '' 189.81 crores in respect of GST Input Tax credit receivables.

The Company has accounted for input credit on material and services received from suppliers and is carrying out continuous process of reconciliation.

We focused on management''s estimate of getting input tax credit which involves significant judgment.

Refer Note 21 to the Standalone Financial Statements.

Our audit procedure involves the following activities:

â¢ Assessing and updating our understanding of internal control over financial reporting with respect to recording of invoices of suppliers

â¢ Reviewing the management continuing process for reconciliation, updation and follow up with the vendors.

We have relied upon the management''s assessment.

No.

Key Audit Matters

Auditor''s Response

Recoverability and Contingencies relating to other Indirect tax matters

As at March 31, 2022, "Indirect Tax Recoverable" includes '' 18.23 crores in respect of Commercial taxes recoverable which are pending adjudication.

The Company has open/pending tax assessments in various states. The determination of provisions and contingent liabilities arising from the open tax assessments make this a particular area of significant judgement.

We focused on management''s assessment of the likely outcome and quantification of tax exposures which involves significant judgement.

Refer Note 21 to the Standalone Financial Statements.

We performed the following substantive procedures:

â¢ Understanding the process of estimation, recording and reassessing tax provisions and contingencies.

â¢ Involving tax specialists to assist in analyzing the judgements used to determine provisions for tax matters

â¢ We have involved our internal experts to review the nature of the amounts recoverable, the sustainability and the likelihood of recoverability upon final resolution.

â¢ Inspection the correspondence with tax authorities.

â¢ Inspecting reports on open tax assessments prepared by the Company and other appropriate documentation considered necessary to understand the position and conclusions made by the Company.

We also assessed the adequacy of the Company''s financial statements

disclosure in respect of the tax positions and contingent liabilities.

We agree with management''s evaluation.

Other Information

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexures to Board''s Report, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not include the financial statements and our auditors'' report thereon. The other information comprising the above documents is expected to be made available to us after the date of this auditors'' report.

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit, or otherwise appears to be materially misstated.

When we read the other information comprising the above documents, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions as per applicable laws and regulations.

Management''s Responsibility for the Standalone Financial Statements

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

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

Auditors'' Responsibilities for the Audit of the Standalone Financial Statements

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

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ 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 standalone 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.

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.

Other Matters

The Standalone Financial Statements includes financial performance of two foreign branches which reflects total assets of '' 7.78 Crore, total revenue of '' 3.81 Crore, Net Profit after tax of '' 1.83 Crore and total comprehensive income of '' 1.83 Crore and net cash inflow amounting to '' (0.16) Crore for the year ended on March 31, 2022, which were audited by independent auditors in accordance with the regulations of such foreign countries, and whose reports have been furnished to us by the management, these financial statements have been converted by the management as per accounting principles generally accepted in India which has been considered in the Standalone Financial Statements solely based on such converted financial statements of foreign branches.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

B. As required by Section 143(3) of the Act, based on our audit, 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.

e) I n our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act, read with relevant rules made thereunder.

f) On the basis of the written representations received from the directors as on March 31,2022, taken on record by the Board of Directors, none of the Directors is disqualified as on March 31,2022 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 B".

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 47 to the standalone financial statements;

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

iv. (a) The Management has represented that, to

the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) 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 person or entity, including foreign entity ("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) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("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;

v. (a) The final dividend declared and paid by the Company during the year is in accordance with Section 123 of the Act, as applicable;

(b) As stated in Note 42 to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with section 123 of the Act, as applicable.

For S Bhandari & Co. For Oswal Sunil & Company

Chartered Accountants Chartered Accountants

Firm Registration No. 000560C Firm Registration No. 016520N

(P. D. Baid) (Sunil Bhansali)

Partner Partner

Membership No: 072625 Membership No: 054645

UDIN:22072625AICHQN4912 UDIN:22054645AICAWL9481

Date: April 29, 2022 Date: April 29, 2022

Place: New Delhi Place: New Delhi

Mar 31, 2021

To the Members of HFCL Limited

(formerly Himachal Futuristic Communications Limited)

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of HFCL Limited (formerly Himachal Futuristic Communications Limited) ("the Companyâ), 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 the 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.

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the branch auditors, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Actâ) 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 profit (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013.

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 Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us along with the consideration of audit reports of the branch auditors referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Emphasis of Matter

We draw attention to Note 41 of the standalone financial statements which describes management''s assessment of the impact of COVID-19 pandemic on its business operations and financial results. The said assessment made by the management is highly dependent upon the circumstances as they evolve in subsequent period.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. 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.

S.No. Key Audit Matters	Response to Key Audit Matters
1 Customer contracts - accuracy of revenue recognition,	Our procedures included, among others, obtaining an understanding of the
valuation of contract assets, work in progress (WIP), trade	project execution processes and relevant controls relating to the accounting
and other receivables, and accuracy of contract liabilities	for customer contracts.
For the year ended March 31, 2021, revenue from customer	For the revenue recognized throughout the year, we tested selected key
contracts amounts to INR 4,105.87 Crores whereas as at	controls, including results reviews by management, for their operating
March 31, 2021, contract assets amount to INR 20.63 Crores,	effectiveness and performed procedures to gain sufficient audit evidence on
contract liabilities to INR 30.11 Crores, the balance of work in	the accuracy of the accounting for customer contracts and related financial
progress (WIP) amounts to INR 101.26 Crores and retention	statement captions.
amounts to INR 272.38 Crores	These procedures included reading significant new contracts to understand
The application of the revenue accounting standard (Ind	the terms and conditions and their impact on revenue recognition. We
AS 115, Revenue from Contracts with Customers) involves	performed enquiries with management to understand their risk assessments
certain key judgements relating to identification of distinct	relating to customer contracts.
performance obligations, determination of transaction price	On a sample basis, we reconciled revenue to the supporting documentation,
of the identified performance obligations, the appropriateness	validated costs, tested the mathematical accuracy of calculations and the
of the basis used to measure revenue recognized over a	adequacy of accounting of customer contracts.
period. Additionally, revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date.	We further performed testing on a sample basis to confirm the appropriate application of revenue recognition policies and to verify valuation of WIP balances. This included reconciling accounting entries to supporting documentation. When doing this, we specifically put emphasis on those transactions occurring close before or after the balance sheet date to obtain
Refer Note 31 to the Standalone Financial Statements.	sufficient evidence over the accuracy of cut-off.
During order fulfillment, contractual obligations may need to	We further reviewed samples of contracts with unbilled revenues to identify
be reassessed. In addition, change orders or cancellations have	possible delays in achieving milestones, which require change in estimated
to be considered. As a result, total estimated contract costs may	efforts to complete the remaining performance obligations.
exceed total contract revenues and therefore require write-offs of contract assets, receivables and the immediate recognition	Based on our knowledge gained through contract and project reviews and
of the expected loss as a provision.	also considering the impact of COVID-19, we assessed the need for and the accuracy of provisions and deductions in revenue for variable consideration for expected liquidated damages.

S.No.	Key Audit Matters	Response to Key Audit Matters
	Regarding the revenue recognized at a point in time (PIT), the risks include inappropriate revenue recognition from revenue being recorded in the wrong accounting period or at amounts not justified as well as overstated WIP that requires impairment adjustments.	Performed analytical procedures and test of details for reasonableness of incurred and estimated efforts. Our procedures did not identify any material exceptions.
2	Valuation of accounts receivable - risk of credit losses Company has a concentration of credit exposure on a number of major customers mainly Government and large organisation. Some of these major customers are facing difficult business conditions. In order to avoid significant credit losses, proper monitoring and management of credit risk is key factor. Accounts receivable is a significant item in the Company''s standalone financial statements amounting to INR 2,972.81 Crores as of March 31, 2021 and provisions for impairment of receivables is an area which is influenced by management''s estimates and judgment. The provision for impairment of receivables amounted to INR 9.93 crores as at March 31,2021. Refer to the Note 15 - Trade receivables.	Our audit incorporated the following activities: â¢ Assessing and updating our understanding of internal controls over financial reporting with respect to credit risk; â¢ Assessment of the Company''s credit policy outlining authority for approving and responsibility to manage credit limits; â¢ Understanding the related industry''s external factors and impact of COVID-19; â¢ Inquiries with committee in order to understand and assess governance and follow-up/monitoring of key customers; â¢ Analytical procedures and inquiries with Business Area; â¢ Detailed testing and assessment of receivables to ensure these are in line with Ind AS, with a focus on significant new provisions. We had a particular focus in our audit on how Company manage credit risk for key customers with respect to credit insurance and procedures for credit management. We also assessed and challenged management''s assumptions and adherence to Company''s accounting policies with respect to provisions for impairment of receivables. The level of the provision made against accounts receivables and accrued balances was deemed appropriate and corresponds to the risks identified.
3	Recoverability of Other Advances As at March 31, 2021, current financial assets include INR 399.84 Crores in respect of Advances to vendors and sub-contractors and are pending to be adjusted/settled. Management exercises significant judgment when determining whether to record any impairment loss on advances As the carrying amount of Other Advances accounts for a relatively high proportion of assets, there would be a material impact on the financial statements if such advances cannot be settled on schedule or fail to be recovered /settled. Therefore, we regard the recoverability of Other Advances as a key audit matter. Refer Note 19 to the Standalone Financial Statements.	Our audit procedures involve the following activities: â¢ Assessing and updating our understanding of internal controls over financial reporting with respect to advances given; â¢ Assessment of the Company''s procurement policy outlining authority for approving and responsibility to manage vendor advances; â¢ Inquiries with management in order to understand and assess governance and follow-up/monitoring of key vendors; â¢ Analytical procedures and inquiries with Business Area; â¢ Obtain balance confirmations from selected parties to ensure existence thereof â¢ Review of Purchase orders and/or agreements for selected parties and enquire management regarding reasons for unsettled advances as on date. We agree with management''s view that there is no reduction in the value of the advances outstanding in the books.
4	Recoverability relating to Goods and Services Tax recoverable: As at March 31,2021, under other current assets, indirect taxes recoverable include INR 140.25 crores in respect of GST Input Tax credit receivables. The Company has accounted for input credit on material and services received from suppliers and is carrying out continuous process of reconciliation. We focused on management''s estimate of getting input tax credit which involves significant judgment. Refer Note 21 to the Standalone Financial Statements.	Our audit procedure involves the following activities: â¢ Assessing and updating our understanding of internal control over financial reporting with respect to recording of invoices of suppliers â¢ Reviewing the management continuing process for reconciliation, updation and follow up with the vendors. We have relied upon the management''s assessment.

S.No. Key Audit Matters		Response to Key Audit Matters
5 Recoverability and Contingencies relating to other Indirect	We performed the following substantive procedures:
tax matters	â¢	Understanding the process of estimation, recording and reassessing
As at March 31, 2021, "Indirect Tax Recoverableâ includes		tax provisions and contingencies.
INR 18.23 crores in respect of Commercial taxes recoverable	â¢	Involving tax specialists to assist in analyzing the judgements used to
which are pending adjudication.		determine provisions for tax matters
The Company has open/pending tax assessments in various	â¢	We have involved our internal experts to review the nature of
states. The determination of provisions and contingent liabilities arising from the open tax assessments make this a particular area of significant judgement.		the amounts recoverable, the sustainability and the likelihood of recoverability upon final resolution.
We focused on management''s assessment of the likely outcome	â¢	Inspection the correspondence with tax authorities.
and quantification of tax exposures which involves significant judgement.	â¢	Inspecting reports on open tax assessments prepared by the Company and other appropriate documentation considered necessary to understand the position and conclusions made by the Company.
Refer Note 21 to the Standalone Financial Statements.
	We also assessed the adequacy of the Company''s financial statements disclosure in respect of the tax positions and contingent liabilities.
	We agree with management''s evaluation.

Other Information

The Company''s Board of Directors is responsible for the preparation of other information. The other information comprises the information included in the in the Management Discussion and Analysis, Board''s Report including Annexures to Board''s Report, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not include the financial statements and our auditor''s report thereon. The other information comprising the above documents is expected to be made available to us after the date of this auditor''s report.

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

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 Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified 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 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 standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

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

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Obtain sufficient appropriate audit evidence regarding the financial information of the Foreign branches of the Company. We are responsible for the direction, supervision and performance of the audit of the standalone financial statements of the Company of which we are the independent auditors. For the branches included in the standalone financial statements, which have been audited by other auditors, such branch auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion. Our responsibilities in this regard are further described in the section titled ''Other Matters'' in this audit report.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period 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.

Other Matter

The Standalone Financial Statements includes financial performance of two foreign branches which reflects total assets of INR 3.23 Crore, total revenue of INR NIL Crore and net cash inflow amounting to INR 1.19 Crore for the year ended on 31^st March 2021, which were audited by independent auditors in accordance with the regulations of such foreign countries and whose reports have been furnished to us and has been considered in the Standalone financial statements solely based on such audited financial statements.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

A. As required by the Companies (Auditor''s Report) Order, 2016 ("the Orderâ), 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" a statement on the matters specified in paragraphs 3 and 4 of the Order.

B. 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 reports on the accounts of foreign branch offices audited by independent branch auditors of the Company 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 including other comprehensive income, the statement of cash flows and the statement of changes in equity 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 Indian Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder.

(f) On the basis of the written representations received from the directors as on 31^st March, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 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 over financial reporting of the Company 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 remuneration paid by the Company to its directors during the year is 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, 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 47 to the financial statements;

ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 47 to the financial statements;

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

For S. Bhandari & Co. For Oswal Sunil & Company

Chartered Accountants Chartered Accountants

Firm Registration No. 000560C Firm Registration No. 016520N

(P. D. Baid) (Sunil Bhansali)

Partner Partner

Membership No: 072625 Membership No: 054645

UDIN: 21072625AAAABF5430 UDIN: 21054645AAAAAS2924

Place: Jaipur Place: New Delhi

Date: May 10, 2021 Date: May 10, 2021

Mar 31, 2018

1. Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Indian Accounting Standards (Ind AS) financial statements of Himachal Futuristic Communications Limited (âthe Companyâ), which comprise the balance sheet as at 31 March 2018, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information.

2. Managementâs Responsibility for the Standalone Ind AS Financial Statements

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, 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 the Indian Accounting Standards (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 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.

3. Auditorâs 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 statement 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 misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs 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 Companyâs 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 the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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.

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 including the Ind AS, of the state of affairs of the Company as at 31 March, 2018, and its profits including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

5. Other Matter

The comparative financial statements of the Company for the year ended March 31,2017 were audited by predecessor auditor. The report of the predecessor auditor on comparative financial statements for the year ended 31st March, 2017 dated 10th May, 2017 expressed an unqualified opinion. Our opinion is not modified in respect of this matter.

6. Report on Other Legal and Regulatory Requirements

A. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) 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 âAnnexure-Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.

B. 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 statement of cash flows and the 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 Indian Accounting Standards specified under Section 133 of the Act read with relevant rule issued thereunder;

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

(f) 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 âAnnexure Bâ;

(g) with respect to the other matters to be included in the Auditorâs 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 standalone Ind AS financial statements - Refer Note 44 to the standalone Ind AS financial statements.

(ii) The Company has made provision, as required under any law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.

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

(Referred to in âParagraph-Aâ under âReport on Other Legal and Regulatory Requirementsâ section of our report to the Members of Himachal Futuristic Communications Limited of even date)

1. In respect of the companyâs fixed assets, we report that:

(a) The Company has maintained proper records showing full particulars including quantitative details and situations of its Fixed Assets.

(b) Fixed assets have been physically verified by the management during the year and there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets and as informed, no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanation given to us, the title deeds of movable properties are held in the name of the Company except the following:

Particular of Assets	Gross Value of Assets	WDV of Assets	Remark
Leasehold Land at Solan	28,29,496/-	21,28,833/-		Refer Note No.3
Telangana Land (Freehold)	6,24,20,300/-	6,24,20,300/-		Refer Note No.3

2. As per the information furnished, the Inventories have been physically verified by the management at reasonable intervals during the year. In our opinion, having regard to the nature and location of stocks, the frequency of physical verification is reasonable.

3. In respect of the 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 Companies Act, 2013:

(a) During the year the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

(b) In respect of opening balances the schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations.

4. In our opinion and according to the information and explanations given to us, the company has, in respect of loans, investments, guarantees, and security provisions, complied with section 185 and 186 of the Companies Act, 2013.

5. According to the information and explanation given to us, The Company has not accepted any deposits, within the directives issued by the Reserve Bank of India, and the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013. Hence the provisions of clause 3(v) are not applicable to the Company.

6. Pursuant to the rules made by the Central Government, the maintenance of Cost Records have been prescribed u/s. 148(1) of the Companies Act, 2013. We are of the view that prima facie the prescribed accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

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

(a) According to the records examined by us, the Company has been regular in depositing undisputed statutory dues with the appropriate authorities in respect of provident fund, employeesâ state insurance, income-tax, VAT, service tax, excise duty, GST and other material statutory dues, though there have been a slight delay in a few cases.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employeesâ State Insurance, Income Tax, Sales Tax, Service Tax, Value Added Tax, Goods and Service Tax, Customs Duty, Excise Duty, Cess, GST and other material statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues of Sales Tax/ VAT, Income Tax, Excise Duty and Service Tax which has not been deposited on account of disputes and the forum where the dispute is pending, are as under:

Name of the statute	Nature of dues	Amount in Rs.	Period to which the amount relates	Forum where dispute is pending	Remarks
Value Added Tax Act	Sales Tax	2,37,42,719/-	1997-1998 & 1998-1999	Honâble High Court of Punjab & Haryana.	Rs.50,00,000/- Paid for Stay
Delhi Value Added Tax Act	VAT	2,10,76,837/-	2009-2010 & 2010-2011	Addl. Commissioner, Department of Trade & Taxes, New Delhi	Rs.16,00,000/- Paid for Stay
Central Excise Act	Excise Duty	1,72,24 7/-	2006-2007	Office of Deputy Commissioner of Central Excise, Shimla	Nil
Custom Tariff Act	Custom Duty	1,97,54,154/-	2001-2002 & 2003-2004	Supreme Court, New Delhi	Liability of Rs.1,97,54,154/-already paid by Company under Protest
Central Excise Tariff Act	Excise Duty	82,17,348/-	2005-2006	Central, Excise and Service Tax Appellate Tribunal, Mumbai	Provision already made amounting to Rs.47,25,005/-

8. According to the information and explanations given to us and records examined by us, the Company has not defaulted in repayment of dues to financial institution or banks or government or debenture holders as to the Balance Sheet date, in view of the Reworked Package approved by the Corporate Debt Restructuring (CDR) Empowered Group as explained in Note. 55.

9. Based on our examinations of the records and information and explanations given to us, the company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year.

10. 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 has been noticed or reported during the course of our audit.

11. According to the information and explanation given to us and the books of accounts verified by us, the Managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with the Schedule V to the Companies Act.

12. The Company is not a Nidhi company, hence the provisions of clause 3(xii) are not applicable to the Company.

13. 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 Companies Act 2013 where applicable and details of such transactions have been disclosed in the Financial Statements as required by the applicable accounting standards.

14. According to information and explanations given to us, the Company during the year has made preferential allotment of 4.50 crore convertible warrants during the year. The requirement of Section 42 of Companies Act, 2013 have been complied with and the amount raised has been used for the purpose for which it was raised.

15. According to the information and explanation given to us and the books of accounts verified by us, the company has not entered into any non-cash transaction with directors or persons connected with him and hence the provision of clause 3(xv) are not applicable to the Company.

16. The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and hence the provision of clause 3(xvi) are not applicable to the Company.

To the Members of Himachal Futuristic Communications Limited

We have audited the internal financial controls over financial reporting of Himachal Futuristic Communications Limited (âthe Companyâ) as of March, 31, 2018 in conjunction with our audit of the Standalone Ind AS financial statements of the company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

The Companyâs 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 control over Financial Reporting issued by the Institute of Chartered Accountants of India. 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 the Companyâs 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.

Auditorâs Responsibility

Our responsibility is to express an opinion on the companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on audit of Internal financial controls over financial reporting (the âGuidance Noteâ) and the standards on auditing as specified under Section 143 (10) of the companies act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and, both issued by Institute of Chartered Accountants of India. 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 were 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 control 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, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the Standalone 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 internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, 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 financial statements in accordance with the generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the Company; (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the 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, 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 on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

For S Bhandari & Co. For Oswal Sunil & Company

Chartered Accountants Chartered Accountants

Firm Registration No. 000560C Firm Registration No. 016520N

(P. D. Baid) (Sunil Bhansali)

Partner Partner

Membership No: 072625 Membership No: 054645

Place: New Delhi

Date: May 3rd, 2018

Mar 31, 2017

1. Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Indian Acccounting Standards (Ind AS) financial statements of HIMACHAL FUTURISTIC COMMUNICATIONS LIMITED (âthe Companyâ), which comprise the balance sheet as at 31 March 2017, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as âstandalone Ind AS financial statementsâ).

2. Managementâs Responsibility for the Financial Statements

3. Auditorâs Responsibility

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

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 standalone Ind AS financial statements are free from material misstatement.

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.

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 including the Ind AS, of the financial position of the Company as at 31 March, 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

5. Report on Other Legal and Regulatory Requirements

A. As required by the Companies (Auditorâs Report) Order,

2016 (âthe Orderâ) 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 a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

B. 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, the statement of cash flows and the 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 Accounting Standards specified under Section 133 of the Act read with relevant rule issued thereunder;

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 43 to the financial statements.

ii. The Company has made provision, as required under any law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts - Refer Note 43 to the financial statements.

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

iv. the Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 60 to the standalone Ind AS financial statements.

ANNEXURE - A TO THE AUDITORâS REPORT

The Annexure referred to in Independent Auditorâs Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31 March, 2017, we report that:

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situations of its Fixed Assets.

(b) Fixed assets have been physically verified by the management during the year and there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets and as informed, no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanation given to us, the title deeds of immovable properties are held in the name of the Company except the following

Particular of Assets	Gross Value of Assets	WDV of Assets	Remark
Leasehold Land at Solan	Rs. 2,829,496/-	Rs. 2,188,400/-	Refer Note No. 11

2. As per the information furnished, the Inventories have been physically verified by the management at reasonable intervals during the period. In our opinion, having regard to the nature and location of stocks, the frequency of physical verification is reasonable.

3. As per the information furnished, the Company has not granted any secured or unsecured loans to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act.

In view of the above, provisions of clause 3(iii)(b) and (c) of the Order are not applicable.

5. According to the information and explanation given to us, The Company has not accepted any deposits, whether the directives issued by the Reserve Bank of India, and the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013. Hence the provisions of clause 3(v) are not applicable to the Company.

7. (a) According to the information and explanations given to us and records examined by us, the Company has been regular in depositing undisputed statutory dues with the appropriate authorities in respect of provident fund, employeesâ state insurance, income-tax, VAT, service tax, excise duty and other material statutory dues, though there have been a slight delay in a few cases. According to the information and explanations given to us no undisputed arrears of statutory dues were outstanding as at 31st March, 2017 from the date they become payable.

(b) According to the records of the Company, the dues of Sales Tax/ VAT, Income Tax, Excise Duty and Service Tax which has not been deposited on account of disputes and the forum where the dispute is pending, are as under:

Name of the Statute	Nature of the dues	Amount in Rs.	Period to which the amount relates	Forum where dispute is pending
1. Sales Tax Act	Sales Tax	18,742,719	1997-1998 & 1998-1999	Honâble High Court of Punjab & Haryana.
2. Value Added Tax Act	VAT	19,476,838	2009-2010 & 2010-2011	Addl. Commissioner, Department of Trade & Taxes, New Delhi
3. Central Excise Act	Excise Duty	806,000	2003-2004 & 2004-2005	Central Excise and Service Tax Appellate Tribunal, New Delhi
4. Service Tax	Service Tax	1,397,894	2006-2007 & 2007-2008	Central Excise and Service Tax Appellate Tribunal, New Delhi
5. Central Excise Act	Excise Duty	34,92,343	2006-2007	Central Excise and Service Tax Appellate Tribunal, Mumbai

9. Based on our examinations of the records and information and explanations given to us, the Company has applied the term loans for the purpose for which they were obtained. Also, during the year the Company has raised inter corporate loans which on an overall basis, have been applied for the purposes for which they were obtained.

10. 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 has been noticed or reported during the course of our audit.

12. The Company is not a Nidhi Company, hence the provisions of clause 3(xii) are not applicable to the Company.

14. According to information and explanations given to us, the Company during the year, has not made any preferential allotment as private placement of shares or fully or partly convertible debentures, hence the provision of clause 3(xiv) are not applicable to the Company.

16. The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and hence the provision of clause 3(xvi) are not applicable to the Company.

For KHANDELWAL JAIN & CO.

Chartered Accountants

Firm Registration No. 105049W

Manish Kumar Singhal

Partner

Membership No: 502570

Place: New Delhi

Dated: 10th May, 2017

Mar 31, 2016

To the Members of Jindal Poly Films Limited Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Jindal Poly Films Limited (âthe Companyâ) which comprise the Balance sheet as at March 31, 2016, the statement of Profit and Loss, 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 (âthe Actâ) 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 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.

Auditor''s Responsibility

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

We conducted our audit of standalone 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the 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 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 the 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 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 March 31, 2016, and its Profit and its Cash Flow for the year ended on that date.

Emphasis of Matter

We draw attention to Note No. 31.16 to the standalone Financial statements, in respect of Investment of Rs. 39.29 Crores in the zero percent Redeemable Preference share Capital (Redeemable at a premium of 10% within 15 years from the date of allotment) and Rs. 249.00 crores as zero percent Optionally Convertible Preference shares of Jindal India Powertech Limited (JPIL), a group-sPV Company. 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, 2016 (âthe Orderâ), as amended, issued by the Central government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure Aâ 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 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 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. On the basis of written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of section 164 (2) of the Act.

f. 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 âAnnexure Bâ.

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 standalone Financial statements - Refer Note 28.2 to the standalone Financial statements;

ii. The Company did 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.

âANNEXURE Aâ TO THE INDEPENDENT AUDITORS'' REPORT

Referred to in paragraph 1 under âReport on Other Legal and Regulatory Requirements'' of our report of even date to the financial statements of the Company for the year ended March 31, 2016:

1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) Fixed Assets except discontinued undertaking, have been physically verified by the management in a phased manner, designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the company and nature of its business. In accordance with this programme, certain fixed assets were physically verified during the year and no material discrepancies were noticed on such verification.

2) (a) The management has conducted the physical verification of inventory at reasonable intervals.

b) The discrepancies noticed on physical verification of the inventory as compared to books records which has been properly dealt with in the books of account were not material.

3) In respect of loans, secured or unsex cured, granted by the Company to the parties covered in the register maintained under section 189 of the Companies Act, 2013:

(a) The Company has granted loans to four companies, being not prima facie, prejudicial to the interest of the Company. The maximum amount involved during the year was Rs 2503 lacs the year-end balance of loan granted to such companies was Rs. 973.163 Lacs.

(b) The interest payments are regular and the principal amounts are being received /renewed on the due dates.

4) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and I86 of the Companies Act, 2013 In respect of grant of loans, making investments, providing guarantees and security.

5) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits are not applicable to the Company.

6) We have broadly reviewed the cost records maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records, u/s 148(1) of the Companies Act, 2013 and are of opinion that prima facie the prescribed records and accounts have been maintained by the company. However, we have not made a detailed examination of these records to verify whether they are accurate or complete.

7) (a) According to information and explanations given to us and on the basis of our examination of the books of account, and

records, 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 with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2016 for a period of more than six months from the date on when they become payable.

(b) According to the information and explanations given to us, details of dues of income tax, sales tax, Custom Duty, Wealth Tax, Excise Duty and Cess which have not been deposited as on 31^st March, 2016 on account of any dispute are given below:

Nature of the Statute	Nature of the dues	Amount Disputed (Rs/Lacs)	Forum where dispute is pending
1. Income Tax Act	Income Tax demand	14.14	A.O. F.Y 1994-95
	Income Tax demand	391.45	CIT(A) GZB F.Y.1998-99
	Income Tax demand	78.55	ITAT 2005-2006
	Income Tax demand	29.63	ITAT 2009-2010
	Income Tax demand	172.55	CIT(A) F.Y 2013-2014
	Income Tax demand	17.98	CIT(A) F.Y 2006-07
	Income Tax demand	5.06	CIT(A) F.Y 2007-08
	Income Tax demand	203.5	CIT(A) F.Y 2008-09
2. sales Tax Act	sales Tax Demand	1026.96	sales Tax Tribunal (2002-03 TO 2007-2008)
3. Excise Duty	Demand	1920.29	High court
4. Customs Duty	Demand	804.80
5. service Tax	Demand	97.16	Tribunal Mumbai year 2008-2011
	Demand	78.82	Tribunal Delhi year 2002-2008
	Demand	14.21	Commissioner/ JT commissioner year 20062011

8) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company has not taken any loan either from financial institutions or from the government and has not issued any debentures.

9) Based upon the audit procedures performed and the information and explanations given by the management, the company has not raised moneys by way of initial public offer or further public offer including debt instruments and term Loans. Accordingly, the provisions of clause 3 (ix) of the Order are not applicable to the Company.

10) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.

11) Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act;

12) The Company is not a Nidhi Company. Therefore, the provisions of clause 4 (xii) of the Order are not applicable to the Company.

13) In our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the standalone Financial statements as required by the applicable accounting standards.

14) In our opinion and according to information and explanations available to us, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company.

15) Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non-cash transactions with directors or directors of its holding, subsidiary or associates company or persons connected with them. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company.

16) In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company.

âANNEXURE Bâ TO THE INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF JINDAL POLY FILMS LIMITED

Referred to in paragraph 2(f) under âReport on Other Legal and Regulatory Requirements'' of our report of even date:

We have audited the internal financial controls over financial reporting of Jindal Poly Films Limited (âthe Companyâ) as of March 31, 2016 in conjunction with our audit of the standalone 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, âthe 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 issued by the Institute of Chartered Accountants of Indiaâ(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.

Auditors'' 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 on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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 judgment, including the assessment of the risks of material misstatement of the 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 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 financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Opinion

In our opinion, 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, 2016, based on âthe 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 issued by the Institute of Chartered Accountants of Indiaâ.

For Kanodia Sanyal & Associates

Chartered Accountants

FRN: 008396N

(R.K.Kanodia)

Place : Delhi Partner

Date : 30^th May, 2016 Membership no.: 016121

Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying fnancial statements of Himachal Futuristic Communications Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Proft and Loss and Cash Flow Statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information.

2. Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows 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"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor''s Responsibility

Our responsibility is to express an opinion on these fnancial 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 fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial 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 fnancial 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 fnancial statements. We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinion.

4. Basis of Qualifed Opinion

a) With regard to the trade receivable outstanding for a long period as mentioned in Note No. 37, we are unable to comment on the extent of realisability and consequently on the adequacy of provision for doubtful debts made by the Company. Impact thereof on the proft for the year, if any, is unascertainable.

b) As mentioned in Note No. 41, balances of some of the trade receivable, trade payable, lenders and loans and advances are subject to confrmations, reconciliation and adjustments, if any.

The effect of items mentioned at paragraph 4(a) and (b) above on proft for the year, assets, liabilities and reserves is unascertainable.

5. Qualifed Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matters described in the Basis of Qualifed Opinion paragraph the effect of which is unascertainable and read together with the other notes, 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, 2013;

(b) in the case of the Statement of Proft and Loss, of the proft for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash fows for the year ended on that date.

6. Report on Other Legal and Regulatory Requirements

A. 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 specifed in paragraphs 4 and 5 of the Order.

B. As required by 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 Proft 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 Proft and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (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 disqualifed 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 Companies Act, 1956.

ANNEXURE TO THE AUDITORS'' REPORT

Annexure referred to in paragraph 3 of the Auditors'' Report of even date to the Members of Himachal Futuristic Communications Limited on the accounts for the year ended 31st March, 2013;

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situations of its Fixed Assets.

(b) All the assets have been physically verifed by the management during the year but there is a regular programme of verifcation which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets and as informed, no material discrepancies were noticed on such verifcation.

(c) During the year, the Company has not disposed off any substantial part of the fxed assets, which affects the going concern status of the company.

(ii) (a) As per the information furnished, the Inventories have been physically verifed by the management at reasonable intervals during the year. In our opinion, having regard to the nature and location of stocks, the frequency of physical verifcation is reasonable.

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

(c) The Company is maintaining proper records of Inventory. In our opinion, the discrepancies noticed on physical verifcation of stocks were not material in relation to the operation of the Company and the same have been properly dealt with in the books of account.

(iii) (a) As per the information furnished, the Company has not granted any loans, secured or unsecured to and from companies, frms and other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii) (a), (b), (c) and (d) of the Order are not applicable.

(b) As per the information furnished, the Company has not taken any loans, secured or unsecured from companies, frms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, Clause 4 (iii) (e), (f) and (g) of the said Order is not applicable.

(iv) In our opinion and according to 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 with regard to purchase of inventory and fxed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(v) Based on the audit procedure applied by us and according to the information and explanations provided by the management, during the year, there has been no contract or arrangement that needed to be entered into the register maintained under section 301 of the Companies Act, 1956. Accordingly, Clause 4 (v)(b) of the said Order is not applicable.

(vi) The Company has not accepted any deposits from the public within the meaning of the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956.

(vii) In our opinion, the Company has an internal audit system commensurate with the size of the Company 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. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and records examined by us, the Company has generally been regular in depositing undisputed statutory dues with the appropriate authorities in respect of provident fund, employees'' state insurance, income tax deducted at source, wealth tax, excise duty, service tax and sales tax/works contract tax though there has been a slight delay in a few cases. According to information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2013 for period of more than six months from the date they become payable.

(b) According to the records of the Company, the dues of Sales tax, which have not been deposited on account of disputes and the forum where the dispute is pending, are as under:

Name Nature Amount in Period to Forum where of the Rs. which the dispute is of the dues amount Pending Statute relates

1. Sales Sales 18,742,719 1997-1998 & Hon''ble High Tax Act Tax 1998-1999 Court of Punjab & Haryana.

2. Sales Sales 21,241,396 2009-2010 & Addl. Tax Act Tax 2010-2011 Commissioner, Department of Trade & Taxes, New Delhi

Total 39,984,115

(x) There are no accumulated losses of the Company at the end of the fnancial year. The Company has not incurred cash losses during the fnancial year covered by our audit and in the immediately preceding fnancial year.

(xi) According to the information and explanations given to us and records examined by us, in view of the Reworked Package approved by the Corporate Debt Restructuring (CDR) Empowered Group as explained in Note No. 33, the Company has not defaulted in repayment of dues to fnancial institution or banks or debenture holders as at the Balance Sheet date

(xii) Based on our examination of the records and information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) As per the information and explanations given to us the provisions of any Special Statute applicable to Chit Fund do not apply to the Company. The Company is also not a nidhi/mutual beneft fund/ society.

(xiv) The Company has maintained proper records of transactions and contracts in respect of trading in shares, securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the Company in its own name, except 65,00,000 shares of AB Corp Limited, which are pledged with Oriental Bank of Commerce ltd. (erstwhile GTBL).

(xv) Based on our examination of the records and information and explanations given to us, the Company has given corporate/counter guarantees for loans taken by group companies, from banks and fnancial institutions. As one of the businesses of the Company is to promote the companies and also the long term involvement with those companies, the guarantees have not been considered prima facie, prejudicial to the interest of the Company.

(xvi) Based on our examinations of the records and information and explanations given to us during the year no term loan with repayment period beyond 36 months has been obtained. However, during the year the Company has raised inter corporate loans which on an overall basis, have been applied for the purposes for which they were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company as at the end of the year, funds raised on short term basis have, prima facie, not been used for long term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Act.

(xix) The Company has not issued any secured debentures during the year.

(xx) The Company has not raised any money by public issue during the year ended March 31, 2013.

(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 has been noticed or reported during the course of our audit.

FOR KHANDELWAL JAIN & CO.

Chartered Accountants

Firm Registration No: 105049W

(Akash Singhal)

Place: New Delhi Partner

Date : 29th April, 2013 Membership No. 103490

Mar 31, 2012

1. We have audited the attached Balance Sheet of Himachal Futuristic Communications Limited (the Company) as at 31st March, 2012, the Statement of Profit & Loss and also the Cash Flow statement 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 have 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 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 of India in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks as considered appropriate and according to the information and explanations given to us during the course of the audit, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

4. a) As mentioned in Note No. 33, the Company has accounted for the impact of Rework Package approved by the CDR Empowered Group after complying with most of the terms and conditions stipulated therein, though compliance of few of them is still in process.

b) With regard to the sundry debtors outstanding for a long period as mentioned in Note No. 37, we are unable to comment on the extent of realisability and consequently on the adequacy of provision for doubtful debts made by the Company. Impact thereof on the profit for the year, if any, is unascertainable.

c) As mentioned in Note No. 41, balances of some of the sundry debtors, creditors, lenders and loans and advances are subject to confirmations, reconciliation and adjustments, if any.

d) As stated in Note No. 30, the Company has paid remuneration to managerial personnel during the year for which approval of central government is pending.

The effect of items mentioned at paragraph 4(a), (b), (c) and

(d) above is unascertainable, and hence the consequential cumulative effect thereof on profit for the year, assets, liabilities and reserves is unascertainable.

5. Further to our comments in the Annexure referred to above paragraph, we report that:-

a) We have obtained all the information and explanations, which, to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

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

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

e) On the basis of written representations received from the directors, as on 31 st March, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on above date 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 subject to para 4 above and read together with the other notes and the significant accounting policies 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 31st March, 2012;

(ii) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS' REPORT

Annexure referred to in paragraph 3 of the Auditors' Report of even date to the Members of HIMACHAL FUTURISTIC COMMUNICATIONS LIMITED on the accounts for the year ended 31st March, 2012;

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situations of Fixed Assets.

(b) As per the information and explanations given to us, there is a phased programme of physical verification of fixed assets adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.

(c) During the period, the Company has not disposed off any substantial part of the fixed assets, which affects the going concern status of the company.

(ii) (a) As per the information furnished, the Inventories have been physically verified by the management at reasonable intervals during the year. In our opinion, having regard to the nature and location of stocks, the frequency of physical verification is reasonable.

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

(c) The Company is maintaining proper records of Inventory. In our opinion, the discrepancies noticed on physical verification of stocks were not material in relation to the operation of the Company and the same have been properly dealt with in the books of account.

(iii) (a) As per the information furnished, the Company has not granted any loans, secured or unsecured to and from companies, firms and other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii) (a), (b), (c) and (d) of the Order are not applicable.

(b) As per the information furnished, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, Clause 4 (iii) (e), (f) and (g) of the said Order is not applicable.

(iv) In our opinion and according to 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 with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(v) Based on the audit procedure applied by us and according to the information and explanations provided by the management, during the year, there has been no contract or arrangement that needed to be entered into the register maintained under section 301 of the Companies Act, 1956. Accordingly, Clause 4 (v)(b) of the said Order is not applicable.

(vi) The Company has not accepted any deposits from the public within the meaning of the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956.

(vii) In our opinion, the Company has an internal audit system commensurate with the size of the Company 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. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and records examined by us, the Company has generally been regular in depositing undisputed statutory dues with the appropriate authorities in respect of provident fund, employees ' state insurance, income tax deduced at source, wealth tax, excise duty, service tax and sales tax/ works contract tax though there has been a slight delay in few cases. According to information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2012 for period of more than six months from the date they become payable.

(b) According to the records of the Company, the dues of Sales tax, which have not been deposited on account of disputes and the forum where the dispute is pending, are as under:

Name Nature Amount in Period to Forum where of the of the Rs. which the dispute is pending Statute dues amount relates

1. Sales Sales 18,742,719 1997-1998 & Hon'ble High Tax Act Tax 1998-1999 Court of Punjab & Haryana.

2. Income Income 82,160,582 A/Y 2002-2003 Commissioner Tax Act Tax & 2003-2004 of Income Tax (Appeal), New Delhi

Total 100,903,301

(x) There are no accumulated losses of the Company at the end of the financial year. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial period.

(xi) According to the information and explanations given to us and records examined by us, in view of the Rework Package approved by the Corporate Debt Restructuring (CDR) Empowered Group as explained in Note No. 33, the Company has not defaulted in repayment of dues to financial institution or banks or debenture holders as at the Balance Sheet date.

(xii) Based on our examination of the records and information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) As per the information and explanations given to us the provisions of any Special Statute applicable to Chit Fund do not apply to the Company. The Company is also not a nidhi/mutual benefit fund/society.

(xiv) The Company has maintained proper records of transactions and contracts in respect of trading in shares, securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the Company in its own name except 65,00,000 shares of AB Corp Limited, which are pledged with OBC (erstwhile GTBL) and held in OBC's name.

(xv) Based on our examination of the records and information and explanations given to us, the Company has given corporate/counter guarantees for loans taken by group companies, from banks and financial institutions. As one of the businesses of the Company is to promote the companies and also the long term involvement with those companies, the guarantees have not been considered prima facie, prejudicial to the interest of the Company.

(xvi) Based on our examinations of the records and information and explanations given to us during the year no term loan with repayment period beyond 36 months has been obtained. However, during the year the Company has raised inter corporate loans which on an overall basis, have been applied for the purposes for which they were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company as at the end of the year, funds raised on short term basis have, prima facie, not been used for long term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Act.

(xix) The Company has not issued any secured debentures during the year.

(xx) The Company has not raised any money by public issue during the period ended March 31, 2012.

(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 has been noticed or reported during the course of our audit.

For KHANDELWAL JAIN & CO.,

Firm Registration No. 105049W

Chartered Accountants,

(Akash Shinghal)

Place: New Delhi Partner

Dated: 30th May, 2012 Membership No: 103490

Mar 31, 2011

1. We have audited the attached Balance Sheet of Himachal Futuristic Communications Limited (the Company) as at 31st March, 2011, the Profit & 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 CompanyÃs management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have 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 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 (AuditorsÃ Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks as considered appropriate and according to the information and explanations given to us during the course of the audit, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

4. a) As mentioned in Note B-9 of Schedule 19, the

Company has accounted for the impact of Rework Package approved by the CDR Empowered Group after complying with most of the terms and conditions stipulated therein, though compliance of some of them is still in process and individual acceptance of one of lender is still awaited.

b) With regard to the sundry debtors outstanding for a long period as mentioned in Note B-17 of Schedule 19, we are unable to comment on the extent of realisability and consequently on the adequacy of provision for doubtful debts made by the Company. Impact thereof on the Profit for the period, if any, is unascertainable.

c) As mentioned in Note B-21 of Schedule 19, balances of some of the sundry debtors, creditors, lenders and loans and advances are subject to confirmations, reconciliation and adjustments, if any.

d) As stated in Note B-5 of Schedule 19, the Company has paid remuneration to managerial personnel during the period for which approval of central government is pending.

The effect of items mentioned at paragraph 4(a), (b), (c) and (d) above is unascertainable, and hence the consequential cumulative effect thereof on Profit for the period, assets, liabilities and reserves is unascertainable.

5. Further to our comments in the Annexure referred to above paragraph, we report that:- a) We have obtained all the information and explanations, which, to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, 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 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 31st March, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on above date 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 subject to para 4 above and read together with the other notes and the significant accounting policies 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 31st March, 2011;

(ii) In the case of the Profit and Loss Account, of the Profit for the period ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cash flows for the period ended on that date.

ANNEXURE TO THE AUDITORSÃ REPORT

Annexure referred to in paragraph 3 of the AuditorsÃ Report of even date to the Members of HIMACHAL FUTURISTIC COMMUNICATIONS LIMITED on the accounts for the period ended 31st March, 2011;

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situations of Fixed Assets.

(b) As per the information and explanations given to us, there is a phased programme of physical verification of fixed assets adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.

(c) During the period, the Company has not disposed off any substantial part of the fixed assets. However, at the period end the Company has determined the impairment loss on certain fixed assets amounting to Rs.795,275,065/-.

(ii) (a) As per the information furnished, the Inventories have been physically verified by the management at reasonable intervals during the period. In our opinion, having regard to the nature and location of stocks, the frequency of physical verification is reasonable.

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

(c) The Company is maintaining proper records of Inventory. In our opinion, the discrepancies noticed on physical verification of stocks were not material in relation to the operation of the Company and the same have been properly dealt with in the books of account.

(iii) (a) As per the information furnished, the Company has not granted any loans, secured or unsecured to and from companies, firms and other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii) (a), (b), (c) and (d) of the Order are not applicable.

(b) As per the information furnished, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the

Companies Act, 1956. Accordingly, Clause 4 (iii) (e), (f) and (g) of the said Order is not applicable.

(iv) In our opinion and according to 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 with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(v) Based on the audit procedure applied by us and

according to the information and explanations provided by the management, during the period, there has been no contract or arrangement that needed to be entered into the register maintained under section 301 of the Companies Act, 1956. Accordingly, Clause 4 (v)(b) of the said Order is not applicable.

(vi) The Company has not accepted any deposits from the public within the meaning of the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956.

(vii) Although the Company is having internal Audit System, the same needs to be strengthened further in terms of frequency of reporting to make it commensurate with the size of the Company and nature of its business.

(viii) The Central Government has prescribed maintenance of the cost records under section 209(1)(d) of the Companies Act, 1956 in respect of one of the product of the Company. We have broadly REVIEWed the accounts and records of the Company in this connection and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records.

(ix) (a) According to the information and explanations given to us and records examined by us, the Company has generally been regular in depositing undisputed statutory dues with the appropriate authorities in respect of provident fund, employeesÃ state insurance, income tax deduced at source, wealth tax, excise duty, service tax and sales tax/works contract tax though there has been a slight delay in a few cases. According to information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2011 for period of more than six months from the date they become payable.

(b) According to the records of the Company, the dues of Sales tax, which have not been deposited on account of disputes and the forum where the dispute is pending, are as under:

Name Nature of Amount Period to Forum of the the dues in Rs. which the where Statute amount relates dispute is pending

1. Sales Sales Tax 18,742,719 1997-1998 & HonÃble Tax Act 1998-1999 High Court of Punjab & Haryana.

2. Income Income 82,160,582 A/Y 2002-2003 Commis- Tax Act Tax & 2003-2004 sioner of Income Tax (Appeal), New Delhi

Total 100,903,301

(x) There are no accumulated losses of the Company at the end of the financial period. The Company has not incurred cash loss during the period. However, in the immediately preceding financial period, the Company had incurred cash loss.

(xi) According to the information and explanations given to us and records examined by us, in view of the Rework Package approved by the Corporate Debt Restructuring (CDR) Empowered Group as explained in Note No. B-9 of schedule 19, the Company has not defaulted in repayment of dues to financial institution or banks or debenture holders as at the Balance Sheet date.

(xii) Based on our examination of the records and information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) As per the information and explanations given to us the provisions of any Special Statute applicable to Chit Fund do not apply to the Company. The Company is also not a nidhi/mutual benefit fund/society.

(xiv) The Company has maintained proper records of transactions and contracts in respect of trading in shares, securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the Company in its own name, except 65,00,000 shares of AB Corp Limited, which are pledged with OBC (erstwhile GTBL).

(xv) Based on our examination of the records and information and explanations given to us, the Company has given corporate/counter guarantees for loans taken by group companies, from banks and financial institutions. As one of the businesses of the Company is to promote the companies and also the long term involvement with those companies, the guarantees have not been considered prima facie, prejudicial to the interest of the Company.

(xvi) Based on our examinations of the records and information and explanations given to us during the period no term loan with repayment period beyond 36 months has been obtained. However, during the period the Company has raised inter corporate loans which on an overall basis, have been applied for the purposes for which they were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company as at the end of the period, funds raised on short term basis have, prima facie, not been used for long term investment.

(xviii) The Company has not made any preferential allotment of shares during the period to parties and companies covered in the register maintained under section 301 of the Act.

(xix) The Company has not issued any secured debentures during the period.

(xx) The Company has not raised any money by public issue during the period ended March 31, 2011.

(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 has been noticed or reported during the course of our audit.

For KHANDELWAL JAIN & CO.,

Firm Registration No. 105049W Chartered Accountants,

(Akash Shinghal)

Place: New Delhi Partner

Dated: 30th May, 2011 Membership No: 103490

Sep 30, 2010

1. We have audited the attached Balance Sheet of Himachal Futuristic Communications Limited (the Company) as at 30th September, 2010, the profit & 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 Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have 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 fi -nancial 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 signifi cant 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 of India in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks as considered appropriate and according to the information and explanations given to us during the course of the audit, we enclose in the Annexure hereto a statement on the matters specifi ed in paragraphs 4 and 5 of the said Order to the extent applicable.

4. a) As stated in Note 13 of Schedule 19, the Company has accounted for the impact of modifi ed CDR package after complying with most of the terms and conditions stipulated therein, however compliance of some of them are still in process. The company is also not regular in payment of its dues including interest thereon to the lenders and may be liable to consequential withdrawal of any of the reliefs granted earlier.

b) As stated in Note 15 of Schedule 19, the Company has, in terms of the CDR package, provided for interest on ballooning basis at the rate specifi ed for the period which is higher then the rate on YTM basis i.e. @ 8.5% per annum, resulting in the higher loss for the period by Rs. 172.60 millions. Had the interest been provided on YTM basis, the cumulative provision for interest and accumulated losses upto 30th September 2010 would have been higher by Rs. 46.35 millions.

c) With regard to the sundry debtors outstanding for a long period as stated in Note 19 of Schedule 19, we are unable to comment on the extent of realisability and consequently on the adequacy of provision for doubtful debts made by the Company. Impact thereof on the loss for the period, if any, is unascertainable.

d) As stated in Note 23 of Schedule 19, balances of some of the sundry debtors, creditors, lenders and loans and advances are subject to confi rmations, reconciliation and adjustments, if any.

e) As stated in Note 9 of Schedule 19, the Company has paid remuneration to managerial personnel during the period for which approval of central government is pending.

f) As stated in Note 21 of Schedule 19, the Company is in process of determining the impairment loss, if any, on its assets as per Accounting Standard - 28 "Impairment of Assets" issued by The Institute of Chartered Accountants of India and will give effect thereto upon such determination. As such we are unable to express any opinion as to the effect thereof on the value of Assets and loss for the period.

The effect of items mentioned at paragraph 4(a), (c), (d), (e) and (f) above is unascertainable, and hence the consequential cumulative effect thereof on loss for the period, assets, liabilities and reserves is unascertainable. If the observation at paragraph 4(b) above had been considered, the loss for the period would have been lower by Rs. 172.60 millions and accumulated losses upto 30th September 2010 and the current liabilities and provisions would have been higher by Rs. 46.35 millions.

5. Further to our comments in the Annexure referred to above paragraph, we report that:- a) We have obtained all the information and explanations, which, to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, 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 Accounting Standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956 except AS 28 - Impairment of Assets (Refer para 4(f) above)

e) On the basis of written representations received from the directors, as on 30th September, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on above date 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 subject to para 4 above and read together with the other notes and the signifi cant accounting policies 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 30th September, 2010;

(ii) In the case of the profit and Loss Account, of the loss for the period ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cash flows for the period ended on that date.

ANNEXURE TO THE AUDITORS REPORT Annexure referred to in paragraph 3 of the Auditors Report of even date to the Members of HIMACHAL FUTURISTIC COMMUNICATIONS LIMITED on the accounts for the period ended 30th September, 2010;

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situations of Fixed Assets.

(b) As per the information and explanations given to us, there is a phased programme of physical verifi cation of fixed assets adopted by the Company and no material discrepancies were noticed on such verifi cation. In our opinion, the frequency of verifi cation is reasonable, having regard to the size of the Company and nature of its business.

(c) During the period, the Company has not disposed off any substantial part of the fixed assets.

(ii) (a) As per the information furnished, the Inventories have been physically verifi ed by the management at reasonable intervals during the period. In our opinion, having regard to the nature and location of stocks, the frequency of physical verifi cation is reasonable.

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

(c) The Company is maintaining proper records of Inventory. In our opinion, the discrepancies noticed on physical verifi cation of stocks were not material in relation to the operation of the Company and the same have been properly dealt with in the books of account.

(iii) (a) As per the information furnished, the Company has not granted any loans, secured or unsecured to and from companies, fi rms and other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii) (a), (b), (c) and (d) of the Order are not applicable.

(b) As per the information furnished, the Company has not taken any loans, secured or unsecured from companies, fi rms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, Clause 4 (iii) (e), (f) and (g) of the said Order is not applicable.

(iv) In our opinion and according to 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 with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(v) Based on the audit procedure applied by us and according to the information and explanations provided by the management, during the period, there has been no contract or arrangement that needed to be entered into the register maintained under section 301 of the Companies Act, 1956. Accordingly, Clause 4 (v) (b) of the said Order is not applicable.

(vi) The Company has not accepted any deposits from the public within the meaning of the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956.

(vii) The Company is having internal audit system which needs to be strengthened further to make it commensurate with the size of the Company and nature of its business.

(viii) The Central Government has prescribed maintenance of the cost records under section 209(1)(d) of the Companies Act, 1956 in respect of one of the product of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records.

(ix) (a) According to the information and explanations given to us and records examined by us, the Company has not been regular in depositing undisputed statutory dues with the appropriate authorities in respect of provident fund, employees state insurance, income tax deduced at source, income tax, wealth tax, excise duty, service tax and sales tax/works contract tax. According to information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 30th September 2010 for period of more than six months from the date they become payable.

(b) According to the records of the Company, the dues of Sales tax, which have not been deposited on account of disputes and the forum where the dispute is pending, are as under:

Name Nature Amount of the of the in Rs. In Statute dues millions

Sales Sales 18.74 Tax Act Tax

Total 18.74

Name of the Statue Period to Forum which the where amount dispute is relates pending

Sales Tax Act 1997-1998 Honble & High Court of Punjab 1998-1999 & Haryana.

(x) The accumulated losses of the Company, after giving effect of the Composite Scheme of Arrangement and Amalgamation between Sunvision Engineering Company Private Limited (SECPL) and the Company, are not more than fi fty percent of its net worth at the end of the financial period. The Company has incurred cash loss during the period. In the immediately preceding financial year also, the Company had incurred cash loss.

(xi) According to the information and explanations given to us and records examined by us, the Company has defaulted in repayment of dues to financial institution or banks in respect of the following:-

Name of Nature Period of Lender of the Default/ Dues delay

ARCIL Principal Sept, 2010 (ICICI)

ARCIL Interest April, 2005 (ICICI) to Sept, 2010

OBC Principal April, 2007 (eGTBL) to Sept, 2010

Interest February, OBC 2004 to (eGTBL) Sept, 2010

IDBI Principal April, 2007 to Sept, 2010

IDBI Interest April, 2007 to Sept, 2010

Bank of Principal April, 2007 Baroda to Sept, 2010

Bank of Interest April, 2007 Baroda to Sept, 2010

Union Principal January, Bank of 2009 to India Sept, 2010

Union Interest January, Bank of 2009 to Sept, Inia 2010

State Bank Principal October, of India 2008 to Sept, 2010

State Bank Interest October, of India 2008 to Sept, 2010

Name of Lender Maximum Overdue Overdue Amount during as on the period 30.09.10 (Rs. In (Rs. In millions) millions)

ARCIL (ICICI) 10.59 0.72

ARCIL (ICICI) 387.09 387.09

OBC (eGTBL) 370.18 370.18

OBC (eGTBL) 134.91 134.91

IDBI 259.13 259.13

IDBI 370.72 370.72

Bank of Baroda 72.84 72.84

Bank of Baroda 39.21 39.21

Union Bank of India 133.34 133.34

Union Bank of India 29.76 29.76

State Bank of India 439.37 439.37

State Bank of India 116.68 116.68

Note: In view of the One Time Settlement (OTS) with some of the lenders, as explained in note no 13(f) and (g) of schedule 19, the Company has not defaulted in repayment of dues to said lenders as on Balance Sheet Date.

(xii) Based on our examination of the records and information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) As per the information and explanations given to us the provisions of any Special Statute applicable to Chit Fund do not apply to the Company. The Company is also not a nidhi/ mutual benefi t fund/society.

(xiv) The Company has maintained proper records of transactions and contracts in respect of trading in shares, securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the Company in its own name. The company is in the process of getting the investment of erstwhile SECPL registered in its own name.

(xv) Based on our examination of the records and information and explanations given to us, the Company has given corporate/ counter guarantees for loans taken by group companies, from banks and fi nancial institutions. As one of the businesses of the Company is to promote the companies and also the long term involvement with those companies, the guarantees have not been considered prima facie, prejudicial to the interest of the Company.

(xvi) Based on our examinations of the records and information and explanations given to us during the period no term loan with repayment period beyond 36 months has been obtained. However, during the period the Company has raised inter corporate loans which on an overall basis, have been applied for the purposes for which they were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company as at the end of the period, funds raised on short term basis have, prima facie, not been used for long term investment.

(xviii) The Company has not made any preferential allotment of shares during the period to parties and companies covered in the register maintained under section 301 of the Act.

(xix) The Company has not issued any secured debentures during the period. The Company has created securities/charges in respect of 15,704,000 Zero Coupon Premium Bonds (ZCPBs) of Rs. 100 each issued under the CDR package approved on 6th April 2004. However, no securities/charges is created in respect of 10,937,000 ZCPBs of Rs. 100 each issued under the said CDR package, as the status-quo on the existing security is maintained by each lender for its exposure.

(xx) The Company has not raised any money by public issue during the period ended September 30, 2010.

(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 has been noticed or reported during the course of our audit.

For KHANDELWAL JAIN & CO.,

Firm Registration No. 105049W

Chartered Accountants,

(Akash Shinghal) Place: New Delhi Partner

Dated: 28th February, 2011 Membership No: 103490

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article