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Auditor Report of Phoenix Mills Ltd.

Mar 31, 2023

To the Members of

THE PHOENIX MILLS LIMITEDReport on the Audit of the Standalone Financial StatementsOPINION

We have audited the accompanying Standalone Financial Statements of THE PHOENIX MILLS LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the Standalone Financial Statements, including a summary of significant accounting policies and other explanatory information. (hereinafter referred to as âStandalone Financial Statementsâ)

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 Companies Act, 2013, as amended (âthe 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, 2023, its profit including other comprehensive income its cash flows and the changes in equity for the year ended on that date.

BASIS OF OPINION

We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditorâs Responsibilities for the Audit of the Standalone Financial Statementsâ section of our report. We are independent of the Company in accordance with the âCode of Ethicsâ issued by the Institute of Chartered Accountants of India 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 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 we have obtained 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 that there are no key audit matters to communicate in our report.

INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITORS REPORT THEREON

The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the Standalone Financial Statements and our auditorâs report thereon.

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

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

RESPONSIBILITIES OF MANAGEMENT FOR THE STANDALONE FINANCIAL STATEMENTS

The Companyâs 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 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) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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 Statements 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 Companyâs 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. Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.

AUDITORâS 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 auditorâs 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¢ I dentify 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 control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to Standalone Financial Statements 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.

â¢ Conclude on the appropriateness of managementâs 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs 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.

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 for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditorâs Report) Order, 2020 (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.

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

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

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

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

(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) 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;

(f) With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ;

(g) In our opinion, managerial remuneration for the year ended March 31, 2023 has been paid/ provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act; except in respect of managerial remuneration paid to the Managing Director and Executive Director of the Company, cumulatively exceeds the limits approved by the shareholders to the tune of Rs. 209.00 lakh. As per the requirements of the Companies Act, 2013, excess amount paid has been reflected as recoverable from them, in the financial statements of the Company as on 31st March 23.

(h) 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 as at March 31, 2023 on its financial position in its Standalone Financial Statements. Refer Note 36 to the Standalone Financial Statements.

ii. The Company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long - term contracts. The Company does not have any derivative contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2023.

iv. (a) Based on the representation provided

by the management and to the best of their knowledge and belief, other than as disclosed in the note no 52 (xi) to the Standalone Financial Statements, no funds have been advanced or loaned or invested by the Company to or in any other persons or entities, including foreign entities, 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, or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) Based on the representation provided by the management and to the best of their knowledge and belief, no funds have been received by the Company from any other persons or entities, including foreign entities, 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, or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on audit procedures that we have considered reasonable and appropriate in the circumstances; nothing has come to our notice that has caused us to believe that the representations under clause iv (a) & iv (b) contain any material misstatement. v. The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with section 123 of the Act.

As stated in Note 56 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 dividend proposed is in accordance with section 123 of the Act.

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 01, 2023 and accordingly, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

For D T S & Associates LLP

Chartered Accountants (Firm Registration No. 142412W/W100595)

Parimal Kumar Jha

Partner

Date: 24th May, 2023 Membership No. 124262

UDIN: 23124262BGXPGI3089 Place: Mumbai,

Mar 31, 2022

THE PHOENIX MILLS LIMITED

Report on the Audit of the Standalone

Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of THE PHOENIX MILLS LIMITED

("the Companyâ), which comprise the Balance Sheet as at March 31, 2022, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Statement of Changes in Equity and the Cash Flow Statement for the year then ended, and notes to the Standalone Financial Statements, including a summary of significant accounting policies and other explanatory information. (hereinafter referred to as "Standalone Financial Statementsâ)

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 Companies Act, 2013, as amended ("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, 2022, its profit including other comprehensive income its cash flows and the changes in equity for the year ended on that date.

Basis of Opinion

Key audit matter

How our audit addressed the key audit matter

(A) Revenue Recognition - License Fees & Other Operating Services

Company owns Phoenix Palladium Mall at Mumbai and earns revenue by giving units on licence basis. Revenue comprises of licence fees, variable licence fees, service charges, parking fees etc. These are accounted as revenue as per the revenue recognition policy described in significant account policies.

Considering Leave & Licence contracts with numerous customers having varied terms and considering the varied type concessions / waiver / relief granted to retailers, we have identified recording of revenue as a key audit matter.

Our audit procedures to assess the appropriateness of revenue recognised

included the following:

â¢ Obtained an understanding of and assessed the design, implementation and operating effectiveness of the Company''s key internal controls over revenue recognition process.

â¢ Tested a sample of contracts, addendum / waiver / concession letters agreed with retailers and testing the revenues recognised with respect thereto by agreeing information back to agreed terms.

â¢ Tested the controls over the licensee''s sale data collated for the purpose of recognising variable revenue share on sample basis.

â¢ Assessed the adequacy of company''s disclosure with respect to revenue recognised.

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 Standalone Financial Statements under the provisions of the Act 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 we have obtained 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 for the financial year ended March 31, 2022. 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. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the Standalone Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the Standalone Financial Statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying Standalone Financial Statements.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the Standalone Financial Statements and our auditor''s report thereon.

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

Responsibilities of Management 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 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) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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 Statements 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.

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

Auditorâs 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 control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to Standalone Financial Statements 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.

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

(c) Based on audit procedures that we have considered reasonable and appropriate in the circumstances; nothing has come to our notice that

may cause the Company to cease to continue as a going concern.

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 for the financial year ended March 31, 2022 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the 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.

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

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

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

(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the

Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) 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) In our opinion, the managerial remuneration for the year ended March 31, 2022 has been paid / provided by the Company to its directors in accordance with the provisions of Section 197 read with Schedule V to the Act;

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

i. The Company has disclosed the impact of pending litigations as at March 31, 2022 on its financial position in its Standalone Financial Statements. Refer Note 37 to the Standalone Financial Statements.

ii. The Company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long - term contracts.

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

iv. (a) Based on the representation provided

by the management and to the best of their knowledge and belief, other than as disclosed in the note no 59 (x) to the Standalone Financial Statements, no funds have been advanced or loaned or invested by the Company to or in any other persons or entities, including foreign entities, 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, or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

has caused us to believe that the representations under clause iv (a) & iv (b) contain any material misstatement.

v. The final dividend paid by the Company during the year in respect of the dividend declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.

For D T S & Associates LLP

Chartered Accountants (Firm Registration No. 142412W/W100595)

Ashish G. Mistry

Partner

Place: Mumbai Membership No.: 132639

Date: 24^th May, 2022 UDIN: 22132639AJNRSX3207

Mar 31, 2021

To the Members of THE PHOENIX MILLS LIMITED

Report on the Audit of Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of The Phoenix Mills Limited ("the Companyâ), which comprise the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as "Standalone Financial Statementsâ).

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 Companies Act, 2013 ("the Act) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2021 , its Profit including Other Comprehensive Income, its Cash Flows and the Statement of Changes in Equity for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing ("SAâ) specified under Section 143(10) of the Companies Act, 2013 (the "Actâ). 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 together with the ethical requirements that are relevant to our audit of the Standalone 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 we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to Note 45 of the Financial Statements, which describes the company''s management evaluation of impact of Covid 19 pandemic on the future business operations and it''s consequential effects on the carrying value of assets (including trade receivables) as on 31^st Mar, 2021. In view of uncertain economic conditions arising out of pandemic, the management''s evaluation of impact in subsequent periods on recoverability of assets (including trade receivables) is highly dependent upon conditions as they evolve. Our opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters (''KAM'') 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.

Key Audit Matter	Response to key audit matter
Revenue Recognition - License Fees & Other Operating	Our audit procedures to assess the appropriateness of
Services	revenue recognised included the following
(Refer Note ''24'' and para ''m'' of significant accounting policies)
Company owns High Street Phoenix Mall at Mumbai	â¢ Obtaining an understanding of and assessing
and earns revenue by giving units on licence basis.	the design, implementation and operating
Revenue comprises of licence fees, variable licence fees, service charges, parking fees etc. These are accounted as revenue as per the revenue recognition policy described in significant account policies.	effectiveness of the Company''s key internal

Key Audit Matter	Response to key audit matter
Considering licence contracts with numerous customer	â¢ Obtaining an understanding of and assessing
having varied terms and considering the varied type	the design, implementation and operating
concessions / waiver / relief granted to retailers for	effectiveness of the Company''s key internal
lockdown and subsequent period considering the restrictions imposed due to Covid-19 pandemic, we	controls over revenue recognition process.
have identified recording of revenue as Key Audit	â¢ Testing a sample of contracts, addendum / waiver
Matter.	/ concession letters agreed with retailers and testing the revenues recognised with respect thereto by agreeing information back to agreed terms. â¢ Testing the controls over the licencee''s sale data collated for the purpose of recognising variable revenue on sample basis. â¢ Assessing the adequacy of company''s disclosure with respect to revenue recognised.

Other Information

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our Auditor''s Report thereon. The Annual Report 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. In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance 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 including Other Comprehensive Income, Cash Flows and the Statement Of Changes in Equity 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, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and fair presentation of the Standalone Financial Statements 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.

Auditorâs Responsibilities for the Audit of the Standalone Financial Statements

Our objective 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 control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, 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.

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 Standalone 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 Standalone Financial statements.

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.

Report on Other Legal and Regulatory Requirements

1. 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 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 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 including Other Comprehensive Income , the Cash Flow Statement and Statement of Changes in Equity dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid Standalone Financial Statements comply with the accounting standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015 , as amended.

e) On the basis of written representations received from the directors as on March 31,2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2021, 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 statement of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial statement;

g) In our opinion, the managerial remuneration for the year ended March 31, 2021 has been paid by the Company to its directors in accordance with the provisions of section 197 read with schedule V to the Act

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

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements as referred to in Note 35 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.

For D T S & Associates LLP

Chartered Accountants

(Firm Registration no.142412W/ W100595)

Ashish G. Mistry

Partner

Membership No.: 132639 Mumbai

Date: 27^th May 2021

UDIN: 21132639AAAABT4990

Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of The Phoenix Mills Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2018, and the Statement of Profit and Loss and(including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as âStandalone Ind AS financial Statementsâ).

Managementâs Responsibility for the 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 Ind AS standalone 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 specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that we are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and fair presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorâs Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the Ind AS Standalone 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 Ind AS Standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the Ind AS Standalone financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2018, and its profit, total comprehensive income , its cash flows and the changes in equity for the year ended on that date.

Other Matters

The comparative financial information of the Company for the year ended March 31, 2017 prepared in accordance with Indian Accounting Standards included in these financial statements, have been audited by the predecessor auditor. The report of the predecessor auditor on the comparative financial information dated May 10, 2017 expressed an unmodified opinion. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. 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 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 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 including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this report are in agreement with the books of account.

d) In our opinion, the aforesaid Ind AS standalone financial statements comply with the Indian Accounting Standards specified under section 133 of the Act, read with relevant rules issued thereunder.

e) On the basis of written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st 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 Rules 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 35 (b) to (d) and Note 36 to the Ind AS financial statements.

ii) The Company did not have any material foreseeable losses on long-term contracts including derivative contracts that require provision under any law or accounting standards 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 Independent Auditorsâ Report referred to in Paragraph 1 under the heading of âReport on other legal and regulatory requirementsâ of our report of even date.

(i) In respect of its fixed assets :

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

b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c) In our opinion and according to the information and explanations given to us, title deeds of immovable properties are held in the name of the company.

(ii) As Company had no inventories during the year, clause (ii) of paragraph of 3 of the Order is not applicable to the Company.

(iii) The Company has not granted loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provision of Clause (iii) of paragraph 3 of the Order is not applicable to the Company.

(iv) In respect of loans, investments, guarantees and security, the Company has complied with the provisions of section 185 and 186 of the Act.

(v) According to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Therefore, the clause (v) of paragraph 3 of the Order is not applicable to the Company.

(vi) To the best of our knowledge and explanations given to us, the Central Government has not prescribed the maintenance of cost records under sub section (1) of Section 148 of the Act in respect of the activities undertaken by the Company.

(vii) In respect of Statutory dues :

a) According to the records of the Company, undisputed statutory dues including provident fund, employeesâ state insurance, income tax, sales tax, service tax, goods & service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues have been regularly deposited with appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues, were outstanding as at March 31, 2018 for a period of more than six months from the date they became payable.

b) According to the records of the Company and the information and explanations given to us, the disputed dues on account of income tax, sales tax, service tax, goods & service tax, duty of customs, duty of excise, value added tax, cess amounting to Rs.3736.16 Lakhs that have not been deposited before appropriate authorities are as under :

Name of Statute	Nature of Dues	Rs. in Lakhs	Period to which the amount relates	Forum where dispute is pending
Income Tax 1961	Income Tax	789.15	A.Y 2011-12	CIT (Appeals)
Income Tax 1961	Income Tax	552.65	A.Y 2012-13	CIT (Appeals)
Income Tax 1961	Income Tax	894.36	AY 2013-14	CIT (Appeals)
Income Tax 1961	Income Tax	1500.00	AY 2015-16	CIT (Appeals)
	Total	3736.16

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of loans to a financial institution or bank or government. Company has not issued any debentures..

(ix) The company has not raised money by way of initial public offer or further public offer (including debt instruments) and in case of term loans taken by the company, the same were applied for the purpose for which those were raised.

(x) Based on the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, 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 Act.

(xii) In our opinion company is not a nidhi company. Therefore, the provisions of clause (xii) of paragraph 3 of the Order are not applicable to the company.

(xiii) In our opinion and according to the information and explanations given to us, all transactions with related parties are in compliance with sections 177 and 188 of the Act and their details have been disclosed in the financial statements etc., as required by the applicable accounting standards.

(xiv) In our opinion and according to the information and explanations given to us, the company has neither made any preferential allotment of shares nor made any fully or partly convertible debenture during the year under review. Therefore, the clause (xii) of paragraph 3 of the Order is not applicable to the company

(xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any noncash transaction with the directors or persons connected with him and covered under section 192 of the Act. Hence, clause (xv) of the paragraph 3 of the Order is not applicable to the Company.

(xvi) To the best of our knowledge and as explained, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For D T S & Associates

Chartered Accountants

FRN : 142412W

Ashish G. Mistry

Partner

M. No. 132639

Place: Mumbai

Dated : 08th May 2018

Mar 31, 2017

AUDITORS'' REPORT

To the Members of The Phoenix Mills Limited Report on the Standalone Ind AS financial statements

We have audited the accompanying Standalone Ind AS financial statements of The Phoenix Mills Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as "standalone Ind AS financial statements").

Management''s Responsibility for the Ind AS financial statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these 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 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and fair 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.

Auditor''s 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.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind

AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

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

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, of the state of affairs of the Company as at 31st March, 2017, its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act , we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

c) The Balance Sheet, Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this report are in agreement with the books of accounts.

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 rules issued there under.

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

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rules 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 no. 34

(b) to (e) and Note no. 35 to the Ind AS financial statements.

iii) There has been no 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 the Standalone Ind AS financial statements as regards to its holdings and dealings in Specified Bank Notes as defined in the Notification S.O. 3407 (E) dated 8th November, 2016 of the Ministry of Finance, during the period from 8th November, 2016 to 30th December, 2016. Based on the audit procedures performed and representations provided to us by the management, we report that the disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the management.

(i) In respect of its fixed assets :

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

b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification.

c) In our opinion and according to the information and explanations given to us, the title deeds of immovable properties are held in the name of the company.

(ii) As the company had no inventories during the year, clause (ii) of paragraph of 3 of the Order is not applicable to the Company.

(iii) The Company has not granted loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the Clause (iii) of paragraph 3 of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of the grant of loans, making investments and providing guarantees and securities.

Name of Statute	Nature of Dues	Rupees in Lakhs	Period to which the amount relates	Forum where dispute is pending
Income Tax 1961	Income Tax	2,236.17	A.Y 2011-12 to A.Y 2013-14	CIT (Appeals)
Income Tax 1961	Income Tax	490.05	AY 2004-05 to AY 2008-09	ITAT
Service Tax
(Finance Act 1994)	Service Tax	203.08	F.Y 2006-07	CESTAT
	Total	2,929.30

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of loan or borrowing to a financial institution, bank, government or dues to debenture holders of the company.

(ix) In our opinion and according to the information and explanations given to us, monies raised by way of the term loans during the year have been applied by the Company for the purposes for which they were raised. The company has not raised money by way of initial public offer or further public offer (including debt instruments) during the year under report.

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

(vii) In respect of Statutory dues :

a) According to the records of the Company, 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 have been regularly deposited with appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues, were outstanding as at March 31, 2017 for a period of more than six months from the date they became payable.

b) According to the records of the Company and the information and explanations given to us, the disputed statutory dues on account of income tax, service tax, amounting to '' 2,929.30 lakhs that have not been deposited before appropriate authorities are as under :

(xii) In our opinion, company is not a nidhi company. Therefore, clause (xii) of paragraph 3 of the Order is not applicable to the company.

(xiii) In our opinion and according to the information and explanations given to us, all transactions with related parties are in compliance with sections 177 and 188 of the Act and details of related party transactions have been disclosed in the standalone Ind AS financial statements etc., as required by the applicable accounting standards.

(xiv) In our opinion and according to the information and explanations given to us, the company has neither made any preferential allotment or private placement of shares or fully or partly convertible debenture during the year under review. Therefore, the clause (xii) of paragraph 3 of the Order is not applicable to the company.

(xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transaction with the directors or persons connected with them and covered under section 192 of the Act. Hence, clause (xv) of the paragraph 3 of the Order is not applicable to the Company.

(xvi) To the best of our knowledge and as explained, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

We have audited the Internal Financial Controls over financial reporting of The Phoenix Mills Limited ("the company") as of 31st March, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year then ended.

Management Responsibility for the Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor''s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, 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 ICAI. 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 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 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 standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with 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 standalone Ind AS financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, 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 31st March, 2017, 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 ICAI.

For A. M. Ghelani & Company For Chaturvedi & Shah

Chartered Accountants Chartered Accountants

Registration No : 103173W Registration No : 101720W

Chintan A. Ghelani Jignesh Mehta

Partner Partner

Membership No.: 104391 Membership No.: 102749

Place: Mumbai Place: Mumbai

Date: 10th May, 2017 Date: 10th May, 2017

Mar 31, 2016

We have audited the accompanying standalone financial statements of The Phoenix Mills Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2016, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and fair presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

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

The procedures selected depend on the auditor''s judgement, 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 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 31st March, 2016, and its profit and its cash flows for the year ended on that date.

Matter of Emphasis

We draw attention to Note no. 36 of the accompanying statement relating to the company''s investment in the equity shares of Entertainment World Developers Limited (EWDL) and the pending realization from EWDL against the put option exercised on Fully Convertible Debentures (FCDs) of Treasure World Developers Private Limited (TWDPL). The net worth of EWDL/ TWDPL has been eroded as per the latest unaudited accounts as at 31st March, 2014. For the reason stated in the aforesaid note, Board has estimated and made provision for impairment of the investment and amount due on the put option on FCD''s of Rs. 10,525,00,000 (including Rs. 2,100,00,000 for the current year) as at 31st March 2016, which is considered adequate.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act , we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

b) 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 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 31st March, 2016 taken on record by the Board of Directors, none ofthe directors is disqualified as on 31st March, 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 "Annexure B".

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rules 11 of the Companies (Audit and Auditors) Rules, 2014, 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 27 (b) to (f) to the financial statements.

ii) The Company did not have any material foreseeable losses on long-term contracts including derivative contracts that require provision under any law or accounting standards for which there were any material foreseeable losses.

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

"Annexure A" to Independent Auditors'' Report referred to in Paragraph 1 under the heading of "Report on other legal and regulatory requirements" of our report of even date.

(i) In respect of its fixed assets :

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

b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c) In our opinion and according to the information and explanations given to us, title deeds of immovable properties are held in the name of the company.

(ii) As Company had no Inventories during the year, clause (ii) of paragraph of 3 of the Order is not applicable to the Company.

(iii) The Company has not granted loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provision of Clause (iii) of paragraph 3 of the Order is not applicable to the Company.

(iv) In respect of loans, investments, guarantees and security, the Company has complied with the provisions of section 185 and 186 of the Act.

(v) According to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Therefore, the clause (v) of paragraph 3 of the Order is not applicable to the Company.

(vi) To the best of our knowledge and explanations given to us, the Central Government has not prescribed the maintenance of cost records under sub section (1) of Section 148 of the Act in respect of the activities undertaken by the Company.

(vii) In respect of Statutory dues :

a) According to the records of the Company, 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 have been regularly deposited with appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues, were outstanding as at March 31, 2016 for a period of more than six months from the date they became payable.

b) According to the records of the Company and the information and explanations given to us, the disputed dues on account of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess amounting to Rs. 333,096,927/- that have not been deposited before appropriate authorities are as under :

Name of Note of Dues Amount in Period to which Forum where Statute Rupees the amount dispute is relates pending

Income Tax Income Tax 223,616,564 A.Y 2010-11 to CIT (Appeals) 1961 A.Y 2013-14

Income Tax Income Tax 89,172,431 A.Y 2004-05 to ITAT 1961 A.Y 2010-11

Service Tax

(Finance Act Service Tax 20,307,932 F.Y 2006-07 CESTAT 1994)

Total 333,096,927

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to a financial institution or bank or to government and dues to debenture holders of the company.

(ix) Accordingly to information and explanation given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and in case of terms loans raised by the company has been applied for the purposes for which those are raised.

(x) Based on the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, 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 Act.

(xii) In our opinion company is not a nidhi company. Therefore, the provisions of clause (xii) of paragraph 3 of the Order are not applicable to the company.

(xiii) In our opinion and according to the information and explanations given to us, all transactions with related parties are in compliance with sections 177 and 188 of the Act and their details have been disclosed in the financial statements etc., as required by the applicable accounting standards.

(xiv) In our opinion and according to the information and explanations given to us, the company has made qualified institutional placement of equity shares during the year under review. The Company has complied with requirements of section 42 of the Act and amount raised have been used for the purpose for which funds were raised.

(xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transaction with the directors or persons connected with him and covered under section 192 of the Act. Hence, clause (xv) of the paragraph 3 of the Order is not applicable to the Company.

(xvi) To the best of our knowledge and as explained, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For A. M. Ghelani & Company For Chaturvedi & Shah

Chartered Accountants Chartered Accountants

Registration No : 103173W Registration No : 101720W

Chintan A. Ghelani Jignesh Mehta

Partner Partner

Membership No.: 104391 Membership No.: 102749

Place: Mumbai Place: Mumbai

Date: 13th May, 2016 Date: 13th May, 2016

Mar 31, 2015

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

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and fair presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the 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 financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, its profit and its cash flows for the year ended on that date.

Matter of Emphasis

We refer to Note no. 35 of the accompanying financial statements relating to the company's investment in equity shares of Entertainment World Developers Limited (EWDL) and the pending realization from EWDL against the put option exercised on Fully Convertible Debentures (FCDs) of Treasure World Developers Private Limited (TWDPL). For the reason stated in the aforesaid note, the provision of Rs.84,25,00,000/- made for diminution of the above investments is considered adequate at this stage.

Our opinion is not qualified in respect of this matter

Report on Other Legal and Regulatory Requirements

1 As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of section 143 of the Act (18 of 2013), we give in the Annexure, a statement on the matters specified in paragraph 3 and 4 of the Order.

2 As required under provisions of 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 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 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 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164(2) of the Act.

f) With respect to the other matters to be included in the Auditor's Report in accordance with Rules 11 of the Companies (Audit and Auditors) Rules, 2014, 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 the pending litigations on its financial position vide Notes 27 (b), (c), (d) and (f) to the financial statements.

ii) The Company did not have any long term contracts including derivative contracts that require provision under any law or accounting standards for which there were any material foreseeable losses.

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

Annexure referred to in paragraph 1 under the heading Report on other legal and regulatory requirements of our report of even date

i) In respect of its Fixed Assets :

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

b. As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

ii) The Company did not have any inventory during the year under audit. Therefore, the provisions of Clause (ii) of paragraph 3 of the Order are not applicable to the Company.

iii) The Company has not granted any loans, secured or unsecured to companies, firm or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause (iii) (a) and Clause (iii) (b) of paragraph 3 of the Order are not applicable to the Company.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business for the purchases of fixed assets and for the sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

v) According to the information and explanations given to us, the company has not accepted any deposits within the meaning of provisions of section 73 to 76 or any other relevant provisions of the Act and rules framed hereunder. Therefore, provisions of Clause (v) of paragraph 3 of the Order are not applicable to the company.

vi) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under sub section (1) of Section 148 of the Act in respect of the activities undertaken by the Company.

vii) In respect of Statutory dues :

a. According to the records of the Company, undisputed statutory dues including Provident Fund, Employees' State Insurance, Income- Tax, Sales-Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues have been regularly deposited with appropriate authorities.According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31,2015 for a period of more than six months from the date of becoming payable.

b. According to the information and explanations given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value added tax, Cess on account of any dispute, which have not been deposited excepting the following:-

Name of Note Amount in Period Forum Statute of Rupees to which where Dues the dispute amount is relates pending

Income Tax Act Income 193,91 1,510 2007-08 to CIT 1961 Tax 2012-13 (Appeals)

Income Tax Act Income 42,817,917 2004-05 to ITAT 1961 Tax 2011-12

Service Tax Service 40,615,864 2006-07 CESTAT (Finance Act 1994) tax

Total 277,345,291

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

viii) The Company does not have any accumulated losses at the end of the financial year. The company has not incurred any cash losses during the financial year covered by audit and in the immediately preceding financial year.

ix) According to the records examined by us and the information and explanation given to us, we are of the opinion that the company has not defaulted in re-payment of dues to financial institution and banks. The Company has not borrowed any funds by way of issue of debentures.

x) According to information and explanation given to us the Company has not given guarantee for loans taken by others from Banks or Financial Institutions during the year. Therefore, the provisions of clause (x) of paragraph 3 of the Order are not applicable to the Company.

xi) According to information and explanation given to us, we are of the opinion that the term loans raised during the year were applied for the purpose for which the loans were obtained.

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

For A. M. Ghelani & Company For Chatuvedi & Shah Chartered Accountants Chartered Accountants Registration No : 103173W Registration No : 101720W

Chintan A. Ghelani Amit Chaturvedi Partner Partner Membership No. 104391 Membership No. : 103141

Place: Mumbai Date: 28th May, 2015

Mar 31, 2014

We have audited the accompanying financial statements of Te Phoenix Mills Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notifed under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Afairs in respect of Section 133 of the Companies Act, 2013. Tis responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. Te procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the efectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of afairs of the Company as at March 31, 2014;

(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.

Matter of Emphasis:

We draw attention to Note no. 35 of the financial statements relating to the company''s investment in equity shares of Entertainment World Developers Limited (EWDL) and the pending realization from EWDL against the put option exercised on Fully Convertible Debentures (FCDs) of Treasure World Developers Private Limited (TWDPL). Te networth of EWDL has been eroded as per the unaudited accounts as at 31st March, 2014. Te Company is of the opinion, for the reasons stated in the aforesaid note, that no provision is considered necessary toward the diminution in the value of the equity investments in EWDL as well as the dues towards the put option on the TWDPL FCDs from EWDL.

Our opinion is not qualifed in this matter.

Report on other legal and regulatory requirements

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

2. As required by sub-section (3) of section 227 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 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, 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 Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards notifed under the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Afairs in respect of Section 133 of the Companies Act, 2013;

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

Annexure referred to in paragraph (1) under the heading Report on other legal and regulatory requirements of our Report of even date Re: Te Phoenix Mills Limited ("the Company")

1) In respect of its Fixed Assets: -

a) Te Company has maintained proper records showing the particulars and situation of its fixed assets.

b) According to the information and explanations given to us, the fixed assets were physically verifed by the management in accordance with the phased programme of verifcation, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. Te discrepancies noticed on physical verifcation were not material and have been properly dealt with in the books of accounts.

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

2) Te Company does not have any inventory during the year under audit. Terefore, the provisions of clause (ii) of paragraph 4 the Order are not applicable to the Company.

3) In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or parties covered in the register maintained under section 301 of the Companies Act, 1956: -

a) Te Company has granted unsecured loans [interest free as well as interest bearing] to 11 parties covered in the Register maintained under section 301 of the Companies Act, 1956. Te said Loans have been partly squared up during the year under report. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs. 4,520,605,162/- and the year-end balance is Rs. 3,595,521,142/-.

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

c) As per the information and explanations given to us, the principal amounts and interest, wherever applicable, of the said loans are repayable on demand and there is no repayment schedule. Terefore the question of overdue amounts does not arise.

d) Te Company has not taken loans from any parties listed in the register maintained under section 301 of the companies act, 1956, and therefore requirements of Clauses (iii) (e), (iii) (f) and (iii) (g) of the paragraph 4 of the Order are not applicable.

4) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and for the sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control systems in respect of the above areas.

5) In respect of contracts or arrangements referred to in section 301 of the Companies Act, 1956, in our opinion and according to the information and explanations given to us, we state that:

a) the transactions made in pursuance of contracts or arrangements that needed to be entered in the register maintained under section 301 of the companies Act 1956 have been so entered.

b) these transactions have been made at prices which appear prima facie reasonable having regards to the prevailing market prices at the relevant time, as well as the information available with the Company.

6) According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. Terefore the provisions of clause (vi) of paragraph 4 of the Order are not applicable.

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

8) As per the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the business activities conducted by the Company during the year.

9) a) As per the information and explanations given to us, the Company has generally been regular in depositing the undisputed statutory dues including Provident Fund, Service Tax and other statutory levies as applicable to the Company with the appropriate authorities and there were no undisputed amounts payable in respect of such dues which have remained outstanding as at 31st March, 2014 for a period of more than six months from the date they became payable. In respect of the service tax liabilities as given in note no. 38, we are unable to comment as the matter is subjuidice.

b) Te disputed statutory dues aggregating to Rs. 218,363,930/- that have not been deposited on account of disputed matters pending before the appropriate authorities are as under:

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

Income Tax Income 196,176,277 A.Y 2004-05 CIT Act 1961 Tax to 2011-12 (Appeals)

Income Tax Income 233,455 A.Y 2004-05 ITAT Act 1961 Tax

Service Tax Service 20,307,932 2006-07 CESTAT (Finance tax Act 1994)

10) Te Company does not have accumulated losses at the end of the financial year. Te Company has not incurred cash losses in the financial year under report as well as in the immediately preceding financial year.

11) Based on our audit procedures and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions/banks. Te Company has not borrowed any funds by way of issue of debentures.

12) In our opinion, the company has maintained adequate documents and records where it has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion, the Company is not a chit fund / nidhi / mutual benefit fund / society. Terefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14) Te Company has maintained proper records of the transactions and contracts in respect of dealing in shares, securities and other investments and timely entries have been made therein. All shares, securities and other investments have been held by the Company in its own name except securities pledged with the banks/ financial institutions.

15) Te Company has given guarantees for loans taken by others from banks and financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

16) Based on information and explanations given to us by the management, the term loans have been applied for the purpose for which they were raised.

17) According to the information and explanations given to us and the records examined by us, the funds raised on short term basis have prima facie, not been used during the year for long term investments.

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

19) Te Company has not issued any debentures. Terefore, the provisions of clause (xix) of paragraph 4 of the Order are not applicable.

20) Te Company has not raised any monies by way of public issues during the year.

21) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we have not come across any instance of material fraud on or by the Company, noted or reported during the course of our audit.

For A. M. Ghelani & Company For Chaturvedi & Shah

Chartered Accountants Chartered Accountants,

(Firm Registration (Firm Registration No.103173W) No.101720W)

Chintan A. Ghelani Amit Chaturvedi

Partner Partner

Membership No: 104391 Membership No: 103141

Place: Mumbai Date : 28th May, 2014

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of The Phoenix Mills Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2013'' the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

b) In the case of the Statement of Profit and Loss, of the Profit of the Company for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

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 specified in paragraphs 4 and 5 of the Order.

b) As required under provisions of section 227(3) of the Companies Act, 1956: we report that:

i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

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

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

iv) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the accounting standards referred to in subsection (3C) of section 211 of the Act;

v) on the basis of the written representations received from the directors as on 31st March, 2013 and taken on record, none of the directors is disqualified as on 31st March, 2013 from being appointed as a director in terms of section 274(1)(g) of the Act.

Re: The Phoenix Mills Limited ("the Company")

1) In respect of its Fixed Assets: -

a) The Company has maintained proper records showing the particulars and situation of its fixed assets.

b) According to the information and explanations given to us, the fixed assets were physically verified by the management in accordance with the phased programme of verification, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. The discrepancies noticed on physical verification were not material and have been properly dealt with in the books of accounts.

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

2) The Company does not have any inventory during the year under audit. Therefore, the provisions of clause (ii) of paragraph 4 the Order are not applicable to the Company.

3) In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or parties covered in the register maintained under section 301 of the Companies Act, 1956: -

a) The Company has granted unsecured loans [interest free as well as interest bearing] to 9 parties covered in the Register maintained under section 301 of the Companies Act, 1956. The said Loans have been partly squared up during the year under report. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs. 3,699,361,919 and the year-end balance is Rs. 2,585,816,333.

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

c) As per the information and explanations given to us, the principal amounts and interest, wherever applicable, of the said loans are repayable on demand and there is no repayment schedule. Therefore the question of overdue amounts does not arise.

d) The Company has not taken loans from any parties listed in the register maintained under section 301 of the companies act, 1956, and therefore requirements of Clauses (iii) (e), (iii) (f) and (iii) (g) of the paragraph 4 of the Order are not applicable.

4) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and for the sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control systems in respect of the above areas.

5) In respect of contracts or arrangements referred to in section 301 of the Companies Act, 1956, in our opinion and according to the information and explanations given to us, we state that:

a) the transactions made in pursuance of contracts or arrangements that needed to be entered in the register maintained under section 301 of the companies Act 1956 have been so entered.

b) these transactions have been made at prices which appear prima facie reasonable having regards to the prevaling market prices at the relevant time, as well as the information available with the Company.

6) According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. Therefore the provisions of clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

8) As per the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the business activities conducted by the Company during the year.

9) a) As per the information and explanations given to us, the Company has generally been regular in depositing the undisputed statutory dues including Provident Fund, Service Tax and other statutory levies as applicable to the Company with the appropriate authorities and there were no undisputed amounts payable in respect of such dues which have remained outstanding as at 31st March, 2013 for a period of more than six months from the date they became payable. In respect of the service tax liabilities as given in note no. 37, we are unable to comment as the matter is subjuidice.

b) The disputed statutory dues aggregating to Rs. 148,238354/- that have not been deposited on account of disputed matters pending before the appropriate authorities are as under:

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

Income Income 1,20,972,257 2003-04 CIT (Appeals) Tax Act Tax to 1961 2010-11

Central Excise 1,646,266 1986-87 Commissioner Excise Act. Duty to (Appeals) 1944 1992-93 - As directed by CEGAT

Service Tax Service 20,307,932 2006-07 CESTAT (Finance tax Act 1994)

10) The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses in the financial year under report as well as in the immediately preceding financial year.

11) Based on our audit procedures and explanations given to us, the Company has not defaulted in repayment of dues to financial Institutions/banks. The Company has not borrowed any funds by way of issue of debentures.

12) In our opinion and according to the information and explanations given to us, the Company has not granted loans/ advances on the basis of security by way of pledge of shares, debentures and other securities and therefore, the provisions of the clause (xii) of paragraph 4 of the Order are not applicable.

13) In our opinion, the Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14) The Company has maintained proper records of the transactions and contracts in respect of dealing in shares, securities and other investments and timely entries have been made therein. All shares, securities and other investments have been held by the Company in its own name except securities pledged with the banks/ financial institutions.

15) According to information and explanation given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. Therefore, the provisions of clause (xv) of the Order are not applicable to the Company.

16) The Company has not raised new term loans during the year. Therefore, the provisions of clause (xvi) of the Order are not applicable to the Company.

17) According to the information and explanations given to us and the records examined by us, the funds raised on short term basis have prima facie, not been used during the year for long term investments.

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

19) The Company has not issued any debentures. Therefore, the provisions of clause (xix) of paragraph 4 of the Order are not applicable to the Company.

20) The Company has not raised any monies by way of public issues during the year.

21) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we have not come across any instance of material fraud on or by the Company, noted or reported during the course of our audit.

For A. M. Ghelani & Company For Chaturvedi & Shah

Chartered Accountants Chartered Accountants,

(Firm Registration (Firm Registration

No.103173W) No.101720W)

Chintan A. Ghelani Amit Chaturvedi

Partner Partner

Membership No: 104391 Membership No: 103141

Place: Mumbai

Date: 30th May, 2013

Mar 31, 2012

1. We have audited the attached Balance Sheet of THE PHOENIX MILLS LIMITED as at 31st March, 2012, the Statement of Profit and Loss and 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 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, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent applicable to the Company.

4. Further to our comments in the Annexure referred to in paragraph 3 above we report that:

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

(b) In our opinion, the company has kept proper books of account as required by law so far as 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 accounts.

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

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

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and other notes thereon give the information required by The Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:- i) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2012 ;

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

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

ANNEXURE TO AUDITORS' REPORT

(Referred to in Paragraph 3 of our report of even date)

1) In respect of its Fixed Assets: -

a) The Company has maintained proper records showing the particulars and situation of its fixed assets.

b) According to the information and explanations given to us, the fixed assets were physically verified by the management in accordance with the phased programme of verification, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. The discrepancies noticed on physical verification were not material and have been properly dealt with in the books of accounts.

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

2) The Company does not have any inventory during the year under audit. Therefore, the provisions of clause (ii) of paragraph 4 of the Order are not applicable to the Company.

3) In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or parties covered in the register maintained under section 301 of the Companies Act, 1956: -

a) The Company has granted interest free unsecured loans to four wholly owned subsidiaries and interest bearing unsecured loans to four subsidiaries and one other companies covered in the Register maintained under section 301 of the Companies Act, 1956. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs. 3,468,045,479 and the year-end balance is Rs. 2,278,042,652.

b) In our opinion and according to the information and explanations given to us, the terms and conditions of such interest free loans given to the subsidiaries and the loans given to the other companies covered in the Register maintained under section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company.

c) As per the information and explanation given to us, the principal amounts and interest, wherever applicable, of the said loans are repayable on demand and there is no repayment schedule. Therefore the question of overdue amounts does not arise.

d) In respect of interest the same is payable on demand and therefore the question of overdue amounts does not arise.

e) The Company has not taken loans from any parties listed in the Register maintained under Section 301 of the Companies Act, 1956, and therefore requirements of Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not applicable

4) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and also for the sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control systems in respect of the above areas.

5) In respect of contracts or arrangements referred to in section 301 of the Companies Act, 1956, there were no transactions which needed to be entered in the register maintained under section 301 of the Companies Act 1956. Therefore clause (v) (a) & (b) of paragraph 4 of the Order are not applicable.

6) According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. Therefore the provisions of clause (vi) of paragraph 4 of the order are not applicable to the Company.

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

8) As per the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the business activities conducted by the company during the year.

9) a) As per the information and explanations given to us, the Company has generally been regular in depositing the undisputed statutory dues including Provident Fund, Service Tax and other statutory levies as applicable to the Company with the appropriate authorities and there were no undisputed amounts payable in respect of such dues which have remained outstanding as at 31st March, 2012 for a period of more than six months from the date they became payable. In respect of the service tax liabilities as given in note no 21 , we are unable to comment as matter is subjuidice.

b) The disputed statutory dues aggregating to Rs. 53,642,608 that have not been deposited on account of disputed matters pending before the appropriate authorities are as under.

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

Income Income 51,996,382 2003-04 CIT (Appeals) Tax Act, Tax to 1961 2010-11

Central Excise 1,646,226 1986-87 Commissioner Excise Duty to (Appeals) Ã As Act, 1944 1992-93 directed by CEGAT

10) The Company does not have accumulated losses at the end of the financial year. The company has not incurred cash losses in the financial year under report as well as in the immediately preceding financial year.

11) Based on our audit procedures and explanations given to us, the company has not defaulted in repayment of dues to financial Institutions/banks. The company has not borrowed any funds by way of issue of debentures.

12) In our opinion and according to the information and explanations given to us, the company has not granted loans/advances on the basis of security by way of pledge of shares, debentures and other securities and therefore, the provisions of the clause (xii) of paragraph 4 of the Order are not applicable.

13) In our opinion, the Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14) The company has maintained proper records of the transactions and contracts in respect of dealing in shares, securities and other investments and timely entries have been made therein. All shares, securities and other investments have been held by the Company in its own name except securities pledged with the banks/ financial institutions.

15) According to information and explanation given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. Therefore, the provisions of clause (xv) of paragraph 4 of the Order are not applicable to the Company.

16) Based on information and explanations given to us by the management, the term loans have been applied for the purpose for which they were raised.

17) According to the information and explanations given to us, and the records examined by us, the funds raised on short term basis have prima facie, not been used during the year for long term investments.

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

19) The Company has not issued any debentures. Therefore, the provisions of clause (xix) of paragraph 4 of the Order are not applicable to the Company.

20) The Company has not raised any monies by way of public issues during the year.

21) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we have not come across any instance of material fraud on or by the Company, noted or reported during the course of our audit.

For A. M. Ghelani & Company For Chaturvedi & Shah

Chartered Accountants Chartered Accountants,

(Firm Registration (Firm Registration

No.:103173W) No.:101720W)

Chintan A. Ghelani Amit Chaturvedi

Partner Partner

Membership No.: 104391 Membership No.: 103141

Place: Mumbai

Date : 29th May, 2012

Mar 31, 2011

1. We have audited the attached Balance Sheet of THE PHOENIX MILLS LIMITED as at 31st March, 2011, the profit and Loss Account and 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 conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specifed in paragraphs 4 and 5 of the said Order, to the extent applicable to the Company.

4. Further to our comments in the Annexure referred to in paragraph 3 above we report that:

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

b) In our opinion, the company has kept proper books of account as required by law so far as appears from our examination of those books.

c) The Balance Sheet, the profit and Loss Account and the Cash fow Statement dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet, the profit and Loss Account and the Cash Flow Statement dealt by this report are in compliance with the mandatory Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956.

e) On the basis of the 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 are disqualifed as on 31st March 2011 from being appointed as directors in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and other notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:- i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011 ;

ii) In the case of the profit and Loss Account, of the profit of the Company for the year ended on that date; and

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

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

1. In respect of its Fixed Assets: -

a ) The Company has maintained proper records showing the par ticulars and situation of its fixed assets.

b) According to the information and explanations given to us, the fixed assets were physically verifed by the management in accordance with the phased programme of verifcation, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. The discrepancies noticed on physical verifcation were not material and have been properly dealt with in the books of accounts.

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

2. In respect of its inventories:

a) According to the information and explanations given to us, the stocks of fnished goods have been physically verifed by the management during the year. In our opinion, the frequency of verifcation is reasonable. The company did not have any stocks at the end of the year.

b) According to the information and explanations given to us, in our opinion, the procedures for the physical verifcation of stocks 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. The discrepancies noticed on verifcation between the physical stocks and book records were not material, having regard to the size of the operations of the Company.

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

a) The Company has granted interest-free unsecured loans to three wholly owned subsidiaries and interest-bearing unsecured loans to one subsidiary and three other companies covered in the Register maintained under section 301 of the Companies Act, 1956. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs. 2,366,286,959 and the year-end balance is Rs. 1,847,840,057.

b) In our opinion and according to the information and explanations given to us, the terms and conditions of such loans given, including interest thereon, wherever applicable, to the subsidiaries and the other companies, covered in the Register maintained under section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company.

c) As per the information and explanation given to us, the principal amounts and interest, wherever applicable, of the said loans are repayable on demand and there is no repayment schedule. Therefore, the question of overdue amounts does not arise.

d) The Company has not taken loans from any parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control systems in respect of the above areas.

5. In respect of transactions covered under section 301 of the Companies Act, 1956, in our opinion and according to the information and explanations given to us;

a) The transactions made in pursuance of contracts or arrangements, that needed to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) These transactions have been made at prices which are comparable to similar transactions entered into with other parties.

6. According to the information and explanations given to us, the company has not accepted any deposits from the public during the year. Therefore the provisions of clause (vi) of paragraph 4 of the order are not applicable to the company.

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

8. As per the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the business activities conducted by the company during the year.

9. a) As per the information and explanations given to us, the company has generally been regular in depositing the undisputed statutory dues including Provident Fund, Employee's State

Insurance, Income Tax and Sales Tax with the appropriate authorities and there were no undisputed amounts payable in respect of such dues which have remained outstanding as at 31st March, 2011 for a period of more than six months from the date they became payable. In respect of the service tax liabilities, as given in Note No Ã B (4) of Schedule "R", we are unable to comment, as the matter is subjudice.

b) The disputed statutory dues aggregating to Rs. 9,873,314 that have not been deposited on account of the matters pending before the appropriate authorities are as under:-

Name of the Income Tax Central Excise Statute Act 1961 Act 1944

Nature of Dues Income Tax Excise Duty

Amount Rs. 8,227,088 1,646,226

Period to which 2001-02 to 1986-87 to

the amount 2007-08 1992-93

relates

Forum where CIT (Appeals) Commissioner

dispute is (Appeals) Ã As

pending directed by CEGAT

10. The Company does not have accumulated losses at the end of the financial year. The company has not incurred cash losses in the financial year under report as well as in the immediately preceding financial year.

11. Based on our audit procedures and explanations given to us, the company has not defaulted in repayment of dues to financial Institutions/banks. The company has not borrowed any funds by way of issue of debentures.

12. In our opinion and according to the information and explanations given to us, the company has not granted loans/advances on the basis of security by way of pledge of shares, debentures and other securities and therefore, the provisions of the clause (xii) of paragraph 4 of the Order are not applicable.

13. In our opinion, the Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. The company has maintained proper records of the transactions and contracts in respect of dealing in shares, securities and other investments and timely entries have been made therein. All shares, securities and other investments have been held by the Company in its own name except securities pledged with the banks/ financial institutions.

15. As at the end of the year, the company has not given any guarantee for loans taken by others. The guarantees given by the company in the previous financial years for the loan taken by its subsidiary has been released during the year. According to the information and explanations given to us, we are of the opinion that the terms and conditions of the said guarantee were prima facie not prejudicial to the interest of the company.

16. The Company has not raised new terms loans during the year. The term loans outstanding at the beginning of the year have prima facie, been applied for the purposes for which they were obtained.

17. According to the information and explanations given to us, and the records examined by us, the funds raised on short term basis have prima facie, not been used during the year for long term investments.

18. 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 Companies Act, 1956.

19. The company has not issued any debentures. Therefore, the provisions of clause (xix) of paragraph 4 of the Order are not applicable to the Company.

20. In an earlier financial year, the company had raised money by way of placement of equity shares to qualified institutions. The balance unutilized money as at the beginning of the year has been fully utilized during the year. The company has not raised any money by public issues, during the year.

21. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we have not come across any instance of material fraud on or by the Company, noted or reported during the course of our audit.

For A. M. Ghelani & Company For Chaturvedi & Shah

Chartered Accountants Chartered Accountants

FRN :103173W FRN : 101720W

Chintan A. Ghelani Amit Chaturvedi

Partner Partner

Membership No: 104391 Membership No: 103141

Place: Pune

Date: 30th July, 2011

Mar 31, 2010

1. We have audited the attached Balance Sheet of THE PHOENIX MILLSLIMITED as at 31st March,2010,the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on ouraudit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards requirethatwe plan and perform theaudit 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 basisforouropinion.

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, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order,totheextentapplicabletothe Company.

4. Furtherto our comments in the Annexure referred to in paragraph 3 above we reportthat:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposesof ouraudit.

(b) In our opinion, the company has kept proper books of account as required by law so far as appearsfrom ourexamination of those books.

(c) The Balance Sheet, the Profit and Loss Account and the Cash flow Statement dealt with by this report are in agreement with the books of accounts.

(d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt by this report are in compliance with the mandatory Accounting Standards referred to in Section 211(3C) ofthe Companies Act, 1956.

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

(f) In ouropinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and other notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generallyacceptedinlndia:-

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

ii) In the case of the Profit and Loss Account,of the Profit of the Companyfortheyearended 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 Auditors Report (Referred to in Paragraph 3 of our report of even date)

1) Inrespect of its Fixed Assets:-

a) The Company has maintained proper records showing the particulars and situation of its fixed assets.

b) According to the information and explanations given to us, the fixed assets were physically verified by the management in accordance with the programme of verification, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. The discrepancies noticed on physical verification were not material and have been properly dealt with in the books of accounts.

c) During the year, the Company has not disposed off anysubstantial part of thefixed assets.

2) a) According to the information and explanations

given to us, the stock of finished goods have been physically verified by the management at theendoftheyear. lnouropinion,thefrequency of verification is reasonable.

b) According to the information and explanations giventous,inouropinion,the procedures forthe physical verification of stocks 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. The discrepancies noticed on verification between the physical stocks and book records were not material, having regard to the size of the operations of the Company.

3) In respect of loans,securedorunsecured,grantedor taken by the company to/from companies, firms or parties covered in the register maintained under section 301of the CompaniesAct, 1956:-

a) The Company has granted unsecured loans to three wholly owned subsidiaries and two other companies covered in the Register maintained under section 301 of the Companies Act, 1956. In respect of the said loans, the maximum amount outstandingat anytime duringthe year is Rs. 2,67,37,81,922/-and the year-end balance isRs. 2,04,92,05,733/,

b) In ouropinion and accordingtothe information and explanations given to us, the terms and conditions of such loans given to the Wholly owned subsidiaries and to the other companies covered in the Register maintained undersection 301 ofthe Companies Act, 1956 are not prima facie prejudicial to the interest ofthe Company.

c) As per the information and explanation given to us, the principal amounts and interest, wherever applicable, of the said loans are repayable on demand and there is no repayment schedule. Therefore, the question of overdue amounts does notarise.

d) The company had not taken loans from any parties listed in the Register maintained under section 301ofthe CompaniesAct, 1956

4) In ouropinion and accordingto the information and explanations given to us, there is an adequate internal control system commensurate with the size ofthe companyand the nature of its business forthe purchase of inventory and fixed assets and also for the sale of goods and services. Duringthe course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal controlsystemsinrespectoftheaboveareas.

5) In respect of transactions covered undersection 301 of the Companies Act, 1956, in our opinion and according to the information and explanations given to us;

a) The transactions made in pursuance of contracts or arrangements, that needed to be entered in the register maintained under section 301 ofthe Companies Act, 1956 have been so entered.

b) These transactions have been made at prices which are comparable to similar transactions entered into with other parties.

6) According to the information and explanations given to us, the company has not accepted any deposits from the public during the year. Therefore the provisions of clause (vi) of paragraph 4 of the order arenotapplicabletothecompany.

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

8) As per the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209(l)(d) ofthe CompaniesAct, 1956 in respect of the business activities conducted by the company duringthe year.

9) a) As perthe information and explanations given to us, the company has generally been regular in depositing the undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax and Sales Tax with the appropriate authorities and there were no undisputed amounts payable in respect of such dues which have remained outstanding as at 31st March, 2010 for a period of more than six monthsfromthe date they became payable

b) The statutory dues that have not been deposited on account of disputes pending before the appropriate authorities are Excise duty amounting toRs. 1,13,76,598 for the period from 1986-87 to 1992-93 where the dispute is pending before The Commissioner (Appeals) as directed by CEGAT.

10) The Company does not have accumulated losses at the end of the financial year. The company has not incurred cash losses in the financial year under report as well as in the immediately preceding financial year.

11) As per the information and explanations given to us, the company has not defaulted in repayment of dues to financial Institutions/banks. The company has not borrowed any funds by way of issueof debentures.

12) According to the information and explanations given to us, the company has not granted loans/advances on the basis of security by way of pledge of shares, debentures and other securities and therefore, the provisions of the clause (xii) of paragraph 4 of the Orderarenotapplicable.

13) In ouropinion, the Company is not a chitfund/ nidhi/ mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are notapplicable to the Company.

14) In our opinion, the company has maintained proper records of the transactions and contracts in respect of dealing in shares, securities and other investments and timely entries have been made therein. All shares, securities and other investments have been held by the Company in its own name except the securities pledged with the banks/ financial institutions.

15) According to the information and explanations given to us and the records examined by us, the company has given a guarantee for loan taken by its subsidiary from financial institutions. In our opinion, based on the information and explanations given to us, the

terms and conditions of the same are prima facie not prejudicialtotheinterestofthecompany.

16) As per the information and explanations given to us, the term loans have prima facie, been applied forthe purpose forwhich they wereobtained.

17) According to the information and explanations given to us, and the records examined by us, the funds raised on shortterm basis have prima facie, not been used duringtheyearforlongterm investments.

18) According to the information and explanations given to us, the company has not made any preferential allotment of shares, during the year, to parties and companies covered in the Register maintained under section 301ofthe Companies Act, 1956.

19) The company has not issued any debentures and hence the question of creating any securities in respectthereof does notarise.

20) During the earlier year, the company had raised money by way of placement of equity shares to qualified institutions. We have verified the end use of the money raised as disclosed by the Management in the Notes to accounts.

21) 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 duringtheyear.

For A. M. Ghelani & Company For Chaturvedi & Shah

Chartered Accountants Chartered Accountants

Chintan A. Ghelani Amit Chaturvedi

Partner Partner

Membership No: 104391 Membership No: 103141

Registration No: 103173W Registration No: 101720W

Place: Mumbai

Date: 28th July, 2010

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