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Auditor Report of Black Box Ltd.

Mar 31, 2023

To the Members of Black Box Limited

Report on the Audit of the Standalone Financial Statements

OPINION

1. We have audited the accompanying standalone financial statements of Black Box Limited (the âCompanyâ), which comprise the Standalone Balance Sheet as at 31 March 2023, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Cash Flows and the Standalone Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.

2. 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 âActâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (âInd ASâ) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2023, and its profit (including Other Comprehensive Income), its cash flows and the changes in equity for the year ended on that date.

BASIS FOR OPINION

3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditorâs 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 (the âICAIâ) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics issued by the ICAI. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

EMPHASIS OF MATTER - NON-COMPLIANCE WITH LAWS AND REGULATIONS

4. We draw attention to Note 47 to the accompanying standalone financial statements which describes the delay in remittance of import payments and repatriation of proceeds of export of goods and services, aggregating to '' 3.28 Crores and '' 17.82 Crores, respectively, outstanding as at 31 March 2023 beyond the timelines stipulated under the Foreign Exchange Management Act, 1999, as amended from time to time. The management has filed necessary applications with the appropriate authority for extension of time period and condonation of such delays. The management is of the view that the fines/ penalties, if any, that may be levied, are currently unascertainable but not expected to be material and accordingly, no adjustments have been made to the accompanying standalone financial statements in respect of aforesaid delays. Our opinion is not modified in respect of this matter.

KEY AUDIT MATTER

5. 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.

6. We have determined the matter described below to be the key audit matter to be communicated in our report.

Key audit matter	How our audit addressed the key audit matter
Revenue Recognition under Ind AS 115,	Our	audit included, but was not limited to, the following
Revenue from Contracts with Customers	procedures performed in respect of revenue recognition:
(''Ind AS 115â)
Refer note 2D(xvii) - âIncome recognitionâ and notes 23 and 42 - âRevenue from contracts with customersâ to the standalone financial statements for the related accounting policy on revenue recognition and details of revenue recognised during the year.	â¢	Evaluated the design and tested the operating effectiveness of internal financial controls relating to the application of revenue accounting standard specifically those relating to identification of the distinct performance obligations and determination of transaction price. Procedures performed included enquiry and observation, reperformance or inspection
Revenue for the Company consists primarily of sale of products and sale of implementation		as applicable, of evidence in respect of operation of these controls.
and maintenance services for networking equipment and communications technology solutions.	â¢	Tested the relevant information technology systemsâ access and change management controls relating to contracts and related information used in recording
Owing to the multiplicity of the Companyâs products and services, compliance with varied customer specifications, and diverse terms of contracts with customers, revenue is determined to be an area involving significant risk and hence,	â¢	and presenting revenue in accordance with the revenue accounting standard. Selected a sample of contracts and performed the following procedures:
requiring significant auditor attention.		o Read, analysed and identified the distinct
Further, the application of Ind AS 115 involves		performance obligations in these contracts;
significant judgements/ material estimates relating to identification of distinct performance obligations, determination of transaction price,		o Compared such performance obligations with those identified and recorded by the management; and
including impact of variable consideration, of the identified performance obligations and the appropriateness of the basis used to measure revenue recognised over a period of time.		o Reviewed contract terms to determine the transaction price including variable consideration, if any, to determine the appropriate transaction price for computing revenue.
Considering the materiality of amounts involved, significance of the area to the standalone financial statements, combined with significant judgements and estimates involved, revenue recognition is considered to be a key audit matter for the current year audit.	â¢	Samples in respect of revenue recorded for sale of products were tested by inspecting either the customer acceptances, invoices and/ or historical trend of collections and disputes. Further, tested sample transactions before and after year end to ensure revenue is recorded in the correct period.
	â¢	In respect of samples relating to fixed maintenance contracts, verified the period of the contract with the customer agreements and verified whether the revenue was recognised appropriately over the period of contract as services were being rendered basis the method of determination of satisfaction of performance obligations in accordance with Ind AS 115.

Key audit matter	How our audit addressed the key audit matter
	â¢ Tested samples of credit notes issued during the year and subsequent to year end, if any to confirm revenue recognised during the period was appropriate.
	â¢ Performed analytical procedures for reasonableness of revenue recorded.
	â¢ Assessed the appropriateness and adequacy of disclosures included in the standalone financial statements, in accordance with the requirements of Ind AS 115.

INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITORâS REPORTTHEREON

7. The Companyâs Board of Directors are 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. The Annual Report is expected to be made available to us after the date of this auditorâs 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.

I n 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 THESTANDALONE FINANCIAL STATEMENTS

8. The accompanying standalone financial statements have been approved by the Companyâs Board of Directors. The Companyâs Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the standalone financial position, standalone financial performance including Other Comprehensive Income, standalone changes in equity and standalone cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

9. I n preparing the standalone financial statements, the Board of Directors are 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 the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

10. Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.

AUDITORâS RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

11. 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 Standards on Auditing 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.

12. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act 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 Act 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 Board of Directorsâ 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; and

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.

13. 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.

14. 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.

15. 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 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

16. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

17. As required by the Companies (Auditorâs Report) Order, 2020 (the âOrderâ) issued by the Central Government of India in terms of section 143(11) of the Act we give in the Annexure - I, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

18. Further to our comments in Annexure - I, as required by section 143(3) of the Act based on our audit, we report, to the extent applicable, that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the accompanying standalone financial statements;

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 standalone financial statements dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

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 disqualified as on 31 March 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 as on 31 March 2023 and the operating effectiveness of such controls, refer to our separate report in Annexure - II wherein we have expressed an unmodified opinion; and

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

i. The Company, as detailed in Note 37A to the standalone financial statements, has disclosed the impact of pending litigations on its standalone financial position as at 31 March 2023;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2023;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2023;

iv. a. The management has represented that, to the best of its knowledge and belief, as disclosed in

Note 51(f) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person or entity, including foreign entity (the âintermediariesâ), 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 (the âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;

b. The management has represented that, to the best of its knowledge and belief, as disclosed in Note 51(f) to the standalone financial statements, no funds have been received by the Company from any person or entity, including foreign entity (the âFunding Partiesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement.

v. The Company has not declared or paid any dividend during the year ended 31 March 2023.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 requires all companies which use accounting software for maintaining their books of account, to use such an accounting software which has a feature of audit trail, with effect from the financial year beginning on 01 April 2023 and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 (as amended) is not applicable for the current financial year.

For Walker Chandiok & Co LLP

Chartered Accountants

Firmâs Registration No.: 001076N/N500013

Bharat Shetty

Partner

Membership No.: 106815

UDIN: 23106815BGYCAM4238

Place: Mumbai

Date : 30 May 2023

Mar 31, 2021

To the Members of AGC Networks Limited

Report on the Audit of the Standalone Financial Statements

OPiNiON

1. We have audited the accompanying standalone financial statements of AGC Networks Limited (âthe Companyâ), which comprise the Standalone Balance Sheet as at 31 March 2021, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Cash Flow Statement and the Standalone Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

2. I n 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 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Indian Accounting Standards (âInd ASâ) specified under section 133 of the Act, of the state of affairs of the Company as at 31 March 2021, and its loss (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

BASiS FOR OpiNiON

3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditorâs Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the standalone financial statements in terms of the Code of Ethics issued by the Institute of Chartered Accountants of India (âICAIâ) and the relevant 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 opinion.

EMpHASiS OF MATTERS4. impact of COViD-19

We draw your attention to note 46 to the accompanying standalone financial statements, which describes the impact of COVID-19 pandemic on the Companyâs operations and on accompanying standalone financial statements as at reporting date. In view of the uncertainties in the economic environment due to the outbreak of COVID-19 pandemic, the impact on the operations of the Company is significantly dependent on the future developments as they evolve.

5. Non-compliance with laws and regulations

We draw attention to note 45 to the accompanying standalone financial statements, which describes the delay in remittance of import payments and repatriation of proceeds of export of goods and services, aggregating to

'' 2.10 Crores and '' 4.56 Crores, respectively, outstanding as at 31 March 2021 beyond the timelines stipulated under the Foreign Exchange Management Act, 1999, as amended from time to time. The management has filed necessary applications with the appropriate authority for extension of time period and condonation of such delays. The management is of the view that the fine / penalties, if any, that may be levied, are currently unascertainable but not expected to be material and accordingly, no adjustments have been made to the accompanying standalone financial statements in respect of the fine / penalties that may be levied on account of such delays.

Our opinion is not modified in respect of matters reported in paragraphs 4 and 5 above.

Key Audit Matter

6. 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 year. 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.

7. We have determined that there are no key audit matters to communicate in our report.

information other than the Standalone Financial Statements and Auditorâs Report thereon

8. The Companyâs Board of Directors are 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. The Annual Report is expected to be made available to us after the date of this auditorâs 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.

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

9. The accompanying standalone financial statements have been approved by the Companyâs Board of Directors. The Companyâs Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and

completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

10. In preparing the standalone financial statements, Board of Directors are 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 Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

11. Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.

Auditorâs Responsibilities for the Audit of the Standalone Financial Statements

12. 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 Standards on Auditing 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.

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

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 Act, 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; and

14. 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.

15. 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.

16. 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 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

17. As required by section 197(16) of the Act, based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

18. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure I, a statement on the matters specified in paragraphs 3 and 4 of the Order.

19. Further to our comments in Annexure I, as required by section 143(3) of the Act, based on our audit, we report, to the extent applicable, that:

a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the accompanying standalone financial statements;

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 standalone financial statements dealt with by this report are in agreement with the books of account;

d) in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

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 are disqualified as on 31 March 2021 from being appointed as a director in terms of section 164(2) of the Act;

f) we have also audited the internal financial controls with reference to standalone financial statements of the Company as on 31 March 2021 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 02 August 2021 as per Annexure II expressed unmodified opinion; and

g) with respect to the other matters to be included in the Auditorâs Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information

and according to the explanations given to us:

i. the Company, as detailed in note 33 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2021;

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2021;

iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2021; and

iv. t he disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 November 2016 to 30 December 2016, which are not relevant to these standalone financial statements. Hence, reporting under this clause is not applicable.

For Walker Chandiok & Co LLP

Chartered Accountants

Firmâs Registration No.: 001076N/N500013

Bharat Shetty

Partner

Membership No.: 106815

UDIN: 21106815AAAACR3162Place : Mumbai

Date : 02 August 2021

Mar 31, 2018

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of AGC Networks Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managementâs Responsibility for the Standalone Financial Statements

2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (âInd ASâ) 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 appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorâs Responsibility

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

4. 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.

5. 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 these standalone financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Companyâs preparation of the 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 the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone financial statements.

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

Basis for Qualified Opinion

8. As stated in Note 42 to the standalone financial statements, during the year ended 31 March 2015, the Company had recognised sale of two properties, classified as fixed assets under previous GAAP, having carrying values of Rs. 0.74 crores and Rs. 0.35 crores, and recorded profit on such sale amounting to Rs. 40.85 crores and Rs. 5.19 crores respectively (net of incidental selling expenses amounting to Rs. 3.04 crores and Rs. 0.35 crores). In our opinion, the significant risks and rewards of ownership of the said properties were not transferred when such sale was recognised. The Company has not rectified the said error in these first Ind AS financial statements, and therefore, recognition of such sale and the accounting treatment followed by the Company is not in accordance with the principles laid under Indian Accounting Standard (Ind AS) 16 âProperty, Plant and Equipmentâ.

Had the Company followed the principles of Ind AS 16 and corrected the error in accordance with Ind AS 101: First-time Adoption of Indian Accounting Standards, the carrying value of current tax assets (net), and property, plant and equipment as at 1 April 2016 would have been higher by Rs. 3.27 crores and Rs. 1.09 crores respectively, and other financial liabilities, current financial asset (receivable for sale of property) and retained earnings as at that date would have been lower by Rs. 0.19 crores, Rs. 47.32 crores and Rs. 42.77 crores respectively.

Further, in our opinion, the significant risks and rewards of ownership in respect of one of the said properties having a carrying value of Rs. 0.35 crores as at 31 March 2015 were transferred in April 2016 while the significant risks and rewards of ownership in respect of the other property having a carrying value of Rs. 0.74 crores as at 31 March 2015 have not been transferred until 31 March 2018.

Had the Company followed the principles of Ind AS 16, and corrected the aforementioned errors in accordance with Ind AS 8 in the current year financial statements, other income for the year ended 31 March 2018 would have been higher by Rs. Nil (31 March 2017: Rs. 5.19 crores) while depreciation expense would have been higher by Rs. 0.04 crores (31 March 2017: Rs. 0.05 crores). The carrying value of property, plant and equipment and current tax assets(net) as at 31 March 2018 would have been higher by Rs.0.74 crores (31 March 2017: Rs. 0.74 crores) and by Rs. 3.27 crores (31 March 2017: Rs. 3.27 crores) respectively. The other financial liabilities and current financial assets (receivable from sale of property) as at 31 March 2018 would have been lower by Rs. 0.16 crores (31 March 2017: Rs. 0.16 crores) and Rs. 23.55 crores (31 March 2017: Rs. 47.32 crores) respectively. The resulting impact of the above correction in errors would have resulted into decrease in retained earnings as at 31 March 2018 by Rs. 37.58 crores (31 March 2017: Rs. 37.58 crores).

Qualified Opinion

9. In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 including Ind AS specified under Section 133 of the Act, of the state of affairs of the Company as at 31 March 2018, and its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Other Matter

10. The Company had prepared separate sets of standalone financial statements for the year ended 31 March 2017 and 31 March 2016 in accordance with Accounting Standards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) on which we issued auditorâs reports dated 24 May 2017 and 19 May 2016 respectively. These separate sets of standalone financial statements have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS, which have also been audited by us. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

11. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.

12. Further to our comments in Annexure I, as required by Section 143(3) of the Act, we report that:

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

b) except for the effects of the matters described in the Basis for Qualified Opinion paragraph, 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 standalone financial statements dealt with by this report are in agreement with the books of account;

d) except for the effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under Section 133 of the Act;

e) the matter described in paragraph 8 under the Basis for Qualified Opinion paragraph, in our opinion, may have an adverse effect on the functioning of the Company;

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

g) the qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph;

h) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31 March 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 29 May 2018 as per Annexure II expressed a qualified opinion;

i) 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 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. the Company, as detailed in Note 36 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position;

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;

iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 November 2016 to 30 December 2016 which are not relevant to these standalone financial statements. Hence, reporting under this clause is not applicable.

Annexure I to the Independent Auditorâs Report of even date to the members of AGC Networks Limited, on the standalone financial statements for the year ended 31 March 2018

Annexure I

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.

(b) The property, plant and equipment have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the property, plant and equipment is reasonable having regard to the size of the Company and the nature of its assets.

(c) The title deeds of all the immovable properties (which are included under the head âproperty, plant and equipmentâ) are held in the name of the Company.

(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies between physical inventory and book records were noticed on physical verification.

(iii) The Company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnerships (LLPs) or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order are not applicable.

(iv) In our opinion, the Company has not entered into any transaction covered under Sections 185 and 186 of the Act. Accordingly, the provisions of clause 3(iv) of the Order are not applicable.

(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) The Central Government has not specified maintenance of cost records under sub-section (1) of Section 148 of the Act, in respect of Companyâs products/ services. Accordingly, the provisions of clause 3(vi) of the Order are not applicable.

(vii) (a) Undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(b) The dues outstanding in respect of income-tax, sales-tax, service-tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:

Name of the statute	Nature of dues	Amount (Rs. in Crore)	Amount Paid under protest (Rs. in Crore)	Period to which the amount relates	Forum where dispute is pending
The Central Excise Act, 1944	Demand on account of incorrect duty credit/short payment	0.47	0.04	1991-92 to 1996-97	Customs Excise and Service Tax Appellate Tribunal
Finance Act, 1994	Service tax demand on RTU activation and penalty thereon	0.50	0.05	2006-07, 2007-08 and 2011-12	Commissioner of Central Excise and Service Tax - Appeals
Finance Act, 1994	Service tax demand on RTU activation and penalty thereon	4.17	0.35	2003-04 to 2006-07	Customs Excise and Service Tax Appellate Tribunal
Finance Act, 1994	Service tax demand on Royalty payment	0.74	-	2004-05 to 2006-07	Commissioner of Central Excise and Service Tax - Appeals

Finance Act, 1994	Excise Duty on CT 3 Clearance and Incorrect Input Tax Credit of Service Tax paid on Foreign Service Provider	4.73	0.05	2003-04 to 2007-08	Customs Excise and Service Tax Appellate Tribunal
Finance Act, 1994	Service tax demand along with penalty on excess cenvat utilisation	7.04	0.50	2004-05 to 2007-08	Commissioner of Central Excise and Service Tax - Appeals
Finance Act, 1994	Interest and penalty on Service tax payable under reverse charge as a recipient of foreign service	0.06	0.03	2005-06	Commissioner of Central Excise and Service Tax - Appeals
Finance Act, 1994	Service tax penalty under reverse charge mechanism.	0.38	-	2017-18	Commissioner Appeals, Ahmedabad
Finance Act, 1994	Service tax penalty under reverse charge mechanism.	0.21	-	2017-18	Appeal yet to be filed with Commissioner Appeals, Ahmedabad
The Customs Act, 1962	Demand for the payment of custom duty on Royalty Payments	6.60	-	Various Financial Years	Customs Excise and Service Tax Appellate Tribunal
West Bengal Sales Tax, 1994	Interest on Works Contract tax / Sales tax	0.03	-	2003-04, 2005-06 and 2006-07	Assistant Commissioner of Commercial Taxes, West Bengal
Kerala Value added Tax Act, 2003	Differential VAT rate demand	0.08	-	2008-09	Kerala VAT Tribunal
Kerala Value Added Tax Act, 2003	Non-submissions of F-forms	0.08	0.03	2009-10 and 2011-12	Assistant Commissioner Appeals
Maharashtra Value Added Tax Act, 2002	Demand on account of disallowance of Works Contract Tax TDS credit and applicability of VAT on service tax	0.77	0.28	2008-09, 2010-11 and 2011-12	Joint Commissioner of Sales Tax Appeals
Uttar Pradesh Value Added Tax Act, 2008	VAT and interest payable on the basis of regular assessment	0.28	0.08	2008-09	Additional Commissioner Appeals
Gujarat Value added tax Act, 2003	Demand on Non receipt of statutory forms	0.74	0.26	2011-12	Gujarat VAT Tribunal
Gujarat Value added tax Act, 2003	Demand on Non receipt of statutory forms	1.74	0.43	2012-13	Joint Commissioner of Commercial Tax (Appeals)
Gujarat Value added tax Act, 2003	Non receipt of C/I/F Forms, Disallowance of Input tax Credits and Levy of Penalty	0.23	0.06	2013-14	Joint Commissioner of Commercial Tax (Appeals)
Income Tax Act, 1961	Reopening of assessment u/s 147.	0.62	0.62	2003-04	High Court
Income Tax Act, 1961	Tax and penalty on deferred revenue treated as revenue.	20.26	20.26	2004-05, 2005-06 and 2006-07	Income Tax Appellant Tribunal (ITAT)
Income Tax Act, 1961	Penalty levied on concealment of Income u/s 271(1)(C )	0.28	0.28	2007-08	Commissioner of Income Tax (Appeal)
Income Tax Act, 1961	Tax and penalty on deferred revenue treated as revenue.	5.53	5.53	2009-10	Commissioner of Income Tax (Appeal)
Income Tax Act, 1961	Demand on account of disallowance of certain expenditures	4.73	4.73	2011-12	Income Tax Appellant Tribunal (ITAT)
Income Tax Act, 1961	Demand on account of disallowance of expenditure incurred towards employee separation scheme (Re-assessment)	0.55	0.55	2008-09	Commissioner of Income Tax (Appeal)

Income Tax Act, 1961	Penalty levied on concealment of income u/s 271(1)(C)	2.22	-	2010-11	Commissioner of Income Tax (Appeal)
Income Tax Act, 1961	Demand on account of disallowance of certain expenditures	4.43	-	2012-13	Commissioner of Income Tax (Appeal)
Income Tax Act, 1961	Demand on account of disallowance of provision of expenses, renovation expense & unearned revenue	11.94	^-	2013-14	Commissioner of Income Tax (Appeal)

(viii) The Company has not defaulted in repayment of loans or borrowings to any financial institution or a bank or government during the year. The Company did not have any outstanding debentures during the year.

(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). The Company did not have any term loans outstanding during the year. Accordingly, the provisions of clause 3(ix) of the Order are not applicable.

(x) No fraud by the Company or on the company by its officers or employees has been noticed or reported during the period covered by our audit.

(xi) The Company has not paid or provided for any managerial remuneration. Accordingly, the provisions of Clause 3(xi) of the Order are not applicable.

(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.

(xiii) In our opinion, all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable Ind AS.

(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.

(xv) In our opinion, the Company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act.

(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

Annexure II to the Independent Auditorâs Report of even date to the members of AGC Networks Limited, on the standalone financial statements for the year ended 31 March 2018

Annexure II

Independent Auditorâs Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)

1. In conjunction with our audit of the standalone financial statements of AGC Networks Limited (âthe Companyâ) as at and for the year ended 31 March 2018, we have audited the internal financial controls over financial reporting (âIFCoFRâ) of the Company as at that date.

Managementâs Responsibility for Internal Financial Controls

2. The Companyâs Board of Directors 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 (âthe Guidance Noteâ). 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 the Companyâs business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditorâs Responsibility

3. Our responsibility is to express an opinion on the Companyâs IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (âICAIâ) and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (âthe Guidance Noteâ) 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 IFCoFR were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, 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 auditorâs judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

6. A companyâs IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs IFCoFR include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of IFCoFR, 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 IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Basis of Qualified Opinion

8. In our opinion, according to the information and explanations given to us and based on our audit, the following material weakness has been identified in the operating effectiveness of the Holding Companyâs IFCoFR as at 31 March 2018:

The Companyâs internal financial control over evaluation of accounting of non-routine transactions was not operating effectively. During the year, this has resulted in non-reversal of transaction for sale of one property for risk and rewards were not transferred till the reporting date, due to inappropriate evaluation of timing of transfer of risk and reward during an earlier year. This has led to misstatements of current tax assets (net), property, plant and equipment, current financial assets, other financial liabilities, other income, depreciation and resultant impact on the retained earnings as at 31 March 2018.

9. A âmaterial weaknessâ is a deficiency, or a combination of deficiencies, in IFCoFR, such that there is a reasonable possibility that a material misstatement of the Companyâs annual or interim financial statements will not be prevented or detected on a timely basis.

Qualified Opinion

10. In our opinion, the Company has, in all material respects, adequate IFCoFR as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance note, and except for the effects of the material weakness described above in the Basis for Qualified Opinion paragraph, on the achievement of the objectives of the control criteria, the Companyâs IFCoFR were operating effectively as at 31 March 2018.

11. We have considered the material weakness identified and reported above in the Basis for Qualified Opinion paragraph in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company as at and for the year ended 31 March 2018, and the material weakness has affected our opinion on the standalone financial statements of the Company and we have issued a qualified opinion on the standalone financial statements.

For Walker Chandiok & Co LLP

Chartered Accountants

Firmâs Registration No.: 001076N/N500013

per Nikhilesh Nagar,

Partner

Membership No.: 079597

Place : Mumbai

Date : 29 May 2018

Mar 31, 2016

To the Members of AGC Networks Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of AGC Networks Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managementâs Responsibility for the Standalone Financial Statements

2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone 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 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorâs Responsibility

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

5. 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 financial statements are free from material misstatement.

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

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

Basis for Qualified Opinion

8. As stated in Note 28 (b) to the Standalone financial statements, during the year ended 31 March 2015 the Company had recognized sale of properties having aggregate carrying value of Rs, 1.09 crores and profit on such sale amounting to Rs, 46.04 crores (net of incidental selling expenses amounting to Rs, 3.39 crores) under âexceptional itemsâ. In our opinion, as the significant risks and rewards for the said properties had not been transferred, recognition of such sale was not in accordance with the principles laid under Accounting Standard (AS) 9 Revenue Recognition and the sale should have been reversed during the year ended 31 March 2016. Had the Company followed principles of AS 9 and reversed the sale transaction during the year ended 31 March 2016, the prior period items and loss before tax would have been higher by Rs, 46.04 crores each. (March 2015: Exceptional items and profit before tax would have been lower by Rs, 46.04 crores each). Tax expense for the year ended 31 March 2016 would have been lower by Rs, 3.27 crores (March 2015: Rs, 3.27 crores). Long-term loans and advances and carrying value of tangible assets as at 31 March 2016 would have been higher by Rs, 3.27 crores (March 2015: Rs, 3.27 crores) and Rs, 1.09 crores (March 2015: Rs, 1.09 crores) respectively; reserves and surplus, other current assets and other current liabilities as at that date would have been lower by Rs, 42.77 crores (March 2015: Rs, 42.77 crores), Rs, 47.32 crores (net of Rs, 3.20 crores received during the year) (March 2015: Rs, 50.52 crores) and Rs, 0.19 crores (March 2015: Rs, 3.39 crores), respectively. Our audit opinion on the financial statements for the year ended 31 March 2015 was qualified in respect of this matter.

Qualified Opinion

9. I n our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraph, 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 31 March 2016, and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

b. except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 standalone financial statements dealt with by this report are in agreement with the books of account;

d. except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 (as amended);

e. the matter described in Basis for Qualified Opinion paragraph in our opinion, may have an adverse effect on the functioning of the Company;

f. on the basis of the written representations received from the directors as on 31 March 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164(2) of the Act;

g. the qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph;

h. we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as at 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 19 May 2016 as per Annexure II expressed a qualified opinion.

i. 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. as detailed in Note 37 to the standalone financial statements, the Company has disclosed the impact of pending litigations on its standalone financial position;

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

Annexure I

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

(b) The fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.

(iii) (a) The Company has not granted any loan, secured or unsecured to companies, firms, limited liability partnerships (LLPs) or other parties covered in the register maintained under Section 189 of the Act during the year. Accordingly, the provision of clauses (a) of the Order is not applicable

(b) The principal and the interest for the loan granted to foreign subsidiary in an earlier year was repayable on demand and the entire amount of loan has been repaid during the year as stipulated.

(c) There is no overdue amount in respect of loan granted to foreign subsidiary. Accordingly, the provisions of clause (c) of the Order is not applicable.

(iv) In our opinion, the Company has not entered into any transaction covered under sections 185 and 186 of the Act. Accordingly, the provisions of clause 3(iv) of the Order are not applicable.

(v) I n our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable to the Company.

(vi) The Central Government has not specified maintenance of cost records under sub-section (1) of Section 148 of the Act, in respect of Companyâs products / services. Accordingly, the provisions of clause 3(vi) of the Order are not applicable.

(vii) (a) Undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax,

duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(b) The dues outstanding in respect of income-tax, sales-tax, and service tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:

Name of the statute	Nature of dues	Amount (Rs, in Crore)	Amount Paid Under Protest (Rs, in Crore)	Period to which the amount relates	Forum where dispute is pending
The Central Excise Act,1944	Demand on account of incorrect duty credit/short payment	0.47	0.04	1991-92 to 1996-97	Customs Excise and Service Tax Appellate Tribunal
Finance Act,1994	Service tax demand on RTU activation and penalty thereon	0.50	0.05	2006-07, 2007-08 & 2011-12	Commissioner of Central Excise and Service Tax - Appeals
Finance Act,1994	Service tax demand on RTU activation and penalty thereon	4.17	0.35	2003-04 to 2006-07	Customs Excise and Service Tax Appellate Tribunal
Finance Act,1994	Service tax demand on Royalty payment	0.74	-	2004-05 to 2006-07	Commissioner of Central Excise and Service Tax - Appeals
Finance Act,1994	Excise Duty on CT 3 Clearance and Incorrect Input Tax Credit of Service Tax paid on Foreign Service Provider	4.73	0.05	2003-04 to 2007-08	Customs Excise and Service Tax Appellate Tribunal
Finance Act,1994	Service tax demand along with penalty on excess cenvat utilization	7.04	0.50	2004-05 to 2007-08	Commissioner of Central Excise and Service Tax - Appeals
The Customs Act,1962	Demand for the payment of custom duty on Royalty Payments	6.60	-	Various Financial Years	Customs Excise and Service Tax Appellate Tribunal
Finance Act,1994	Interest and penalty on Service tax payable under reverse charge as a recipient of foreign service	0.06	0.03	2005-06	Commissioner of Central Excise and Service Tax - Appeals
West Bengal Sales Tax,1994	Interest on Works Contract tax / Sales tax	0.03	-	2003-04, 2005-06 & 2006-07	Assistant Commissioner of Commercial Taxes, West Bengal
Kerala Value added Tax act, 2003	Differential VAT rate demand	0.08	-	2008-09	Kerala VAT Tribunal
Uttar Pradesh Value Added Tax Act, 2008	VAT and interest payable on the basis of regular assessment	0.28	0.08	2008-09	Additional Commissioner Appeals
Maharashtra Value Added Tax Act, 2002	Demand on account of disallowance of Works Contract Tax, TDS credit and applicability of VAT on service tax	0.09	0.02	2009-10	Joint Commissioner of Sales Tax Appeals
Kerala Value Added Tax Act, 2003	Non-submissions of F-forms	0.05	0.02	2011-12	Assistant Commissioner Appeals
Kerala Value Added Tax Act, 2003	Non-submissions of F-forms	0.03	0.01	2009-10	Assistant Commissioner Appeals
Maharashtra Value Added Tax Act, 2002	Demand on account of disallowance of Works Contract Tax, TDS credit and applicability of VAT and service tax	0.54	0.20	2008-09	Joint Commissioner of Sales Tax Appeals
Maharashtra Value Added Tax Act, 2002	Demand on account of disallowance of Works contract Tax, TDS credit and applicability of VAT and service tax	0.13	0.08	2010-11	Joint Commissioner of Sales Tax Appeals
Maharashtra Value Added Tax Act, 2002	Demand on account of disallowance of Works contract Tax, TDS credit and applicability of VAT and service tax	0.18	''	2011-12	Joint Commissioner of Sales Tax Appeals
Gujarat Value added tax act, 2003	Demand on Non-receipt of statutory forms	0.74	-	2011-12	Gujarat VAT Tribunal
Income Tax Act, 1961	Reopening of assessment u/s 147	0.62	0.62	2003-04	Income tax Appellant Tribunal (ITAT)
Income Tax Act, 1961	Tax and penalty on deferred revenue treated as revenue	13.01	13.01	2004-05	Income tax Appellant Tribunal (ITAT)
Income Tax Act, 1961	Tax and penalty on deferred revenue treated as revenue	2.13	2.13	2005-06	Income tax Appellant Tribunal (ITAT)
Income Tax Act, 1961	Tax and penalty on deferred revenue treated as revenue	5.12	5.12	2006-07	Income tax Appellant Tribunal (ITAT)

Name of the statute	Nature of dues	Amount (Rs, in Crore)	Amount Paid Under Protest (Rs, in Crore)	Period to which the amount relates	Forum where dispute is pending
Income Tax Act, 1961	Penalty levied on concealment of Income u/s 271(1)(C)	0.28	0.28	2007-08	Commissioner of Income tax (Appeal)
Income Tax Act, 1961	Tax and penalty on deferred revenue treated as revenue	5.53	5.53	2009-10	Commissioner of Income tax (Appeal)
Income Tax Act, 1961	Tax and penalty on deferred revenue treated as revenue	5.00	-	2011-12	Dispute Resolution Panel
Income Tax Act, 1961	Penalty levied on concealment of Income u/s 271(1)(C)	1.89	-	2008-09	Commissioner of Income tax (Appeal)

(viii) The Company has not defaulted in repayment of loans or borrowings to any bank or financial institution or government during the year. The Company did not have any outstanding debentures during the year.

(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments).The Company did not raise any term loan during the year. Accordingly provisions of clauses 3(ix) of the Order are not applicable to the Company.

(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.

(xi) Managerial remuneration for the year ended 31 March 2016 has been paid and provided in accordance with the requisite approvals mandated by the provisions of section 197 of the Act read with Schedule V to the Act.

(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, the provisions of clause 3(xii) of the Order are not applicable to the Company.

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

(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partially convertible debentures.

(xv) In our opinion, the Company has not entered into any non-cash transactions with directors or persons connected with them.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Annexure II

Independent Auditorâs Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the

Companies Act, 2013 (âthe Actâ)

1. I n conjunction with our audit of the standalone financial statements of AGC Networks Limited (âthe Companyâ) as of and for the year ended 31 March 2016, we have audited the internal financial controls over financial reporting (IFCoFR) of the Company as of that date.

Managementâs Responsibility for Internal Financial Controls

2. The Companyâs Board of Directors is responsible for establishing and maintaining internal financial controls based on 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 (the âGuidance Noteâ). 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 the companyâs business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditorsâ Responsibility

3. Our responsibility is to express an opinion on the Companyâs IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India (ICAI) and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note 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 IFCoFR were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining an understanding of IFCoFR, 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 auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

6. A companyâs IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs IFCoFR includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of IFCoFR, 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 IFCoFR to future periods are subject to the risk that IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Basis of Qualified Opinion

8. I n our opinion, according to the information and explanations given to us and based on our audit, the following material weakness has been identified in the operating effectiveness of the Companyâs IFCoFR as at 31 March 2016:

The Companyâs internal financial control over evaluation of accounting of non-routine transactions was not operating effectively. This has, during the year, resulted in non-reversal of transaction for sale of properties recorded in the previous year due to inappropriate evaluation of timing of transfer of risk and reward. This has led to misstatements of long-term loans and advances, tangible assets, other current assets, other current liabilities, prior period items, tax expense and resultant impact on the loss before tax and the reserves and surplus as at and for the year ended 31 March 2016.

9. A âmaterial weaknessâ is a deficiency or a combination of deficiencies in IFCoFR, such that there is a reasonable possibility that a material misstatement of the companyâs annual or interim financial statements will not be prevented or detected on a timely basis.

Qualified Opinion

10. I n our opinion, the Company has, in all material respects, maintained adequate IFCoFR as at 31 March 2016, 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, and except for the effects of the material weakness described above in the Basis for Qualified Opinion paragraph, the Companyâs IFCoFR were operating effectively as at 31 March 2016.

11. We have considered the material weakness identified and reported above in determining the nature, timing and extent of audit test applied in our audit of the 31 March 2016 standalone financial statements of the Company and the material weakness has affected our opinion on the standalone financial statements of the Company and we have issued a qualified opinion on the standalone financial statements.

For Walker Chandiok & Co LLP

(Formerly Walker, Chandiok & Co)

Chartered Accountants

Firmâs Registration No.: 001076N/N500013

per Adi P. Sethna

Partner

Membership No.: 108840

Place : Mumbai

Date : 19 May 2016

Mar 31, 2015

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

Management's Responsibility for the Standalone Financial Statements

2. 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 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

4. 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.

5. 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 financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls 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 the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

7. 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.

Basis for Qualified Opinion

8. As stated in Note 28(d) to the financial statements, during the year the Company has recognized sale of properties having aggregate carrying value of Rs 1.09 crores and profit on such sale amounting to Rs.46.04 crores (net of incidental selling expenses amounting to Rs 3.39 crores) under 'exceptional items'. In our opinion, as the significant risks and rewards for the said property have not been transferred during the year ended 31 March 2015, recognition of such sale is not in accordance with the principles laid under Accounting Standard (AS) 9 Revenue Recognition. Had the Company not recognized such sale, loss after tax for the year ended 31 March 2015 would have been higher by Rs 46.04 crores; tax expense would have been lower by Rs 3.27 crores; non-current loans and advances would have been higher by Rs 3.27 crores and the reserves and surplus, other current assets and other current liabilities as at that date would have been lower by Rs 42.77 crores, Rs 50.52 crores and Rs 3.39 crores, respectively. Further the carrying value of tangible assets as at 31 March 2015 would have been higher by Rs 1.09 crores.

Qualified Opinion

9. In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 31 March 2015, and its loss and its cash flows for the year ended on that date.

Other Matter

10. The audit of financial statements for the year ended 31 March 2014, included in the Statement was carried out and reported by S.R. Batliboi & Associates LLP vide their qualified audit report dated 30 May 2014 respectively, whose audit report has been furnished to us and which has been relied upon by us for the purpose of our audit of the Statement. Our audit report is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

11. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

b. except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 standalone financial statements dealt with by this report are in agreement with the books of account;

d. except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 (as amended);

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

f. 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. as detailed in Note 36 to the standalone financial statements, the Company has disclosed the impact of pending litigations on its standalone financial position

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.

Annexure to the Independent Auditor's Report of even date to the members of AGC Networks Limited on the standalone financial statements for the year ended 31 March 2015

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

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

(b) The fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year, except for goods in transit and stocks lying with customers.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies between physical inventory and book records were noticed on physical verification.

(iii) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 (the Act). Accordingly, the provisions of clauses 3(iii)(a) and 3(iii)(b) of the Order are not applicable.

(iv) In our opinion, 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 goods and services. In our opinion, there is no continuing failure to correct major weakness in the internal control system.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) To the best of our knowledge and belief, the Central Government has not specified maintenance of cost records under sub-section (1) of Section 148 of the Act, in respect of Company's products and services. Accordingly, the provisions of clause 3(vi) of the Order are not applicable.

(vii) (a) 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 other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable

(b) The dues outstanding in respect of income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess on account of any dispute, are as follows:

Annexure to the Independent Auditor's Report of even date to the members of AGC Networks Limited on the standalone financial statements for the year ended 31 March 2015

Name of the Nature of dues Amount (Rs. Amount Paid statute in crores) Under Protest (Rs. in crores)

The Central Excise Demands on account of 0.47 0.04 Act, 1944 incorrect duty credit / short payment

Finance Act, 1994 Service tax on RTU acti 0.40 0.05 vation and penalty thereon

Finance Act, 1994 Service tax on RTU acti 4.17 0.35 vation and penalty thereon

Finance Act, 1994 Service tax Demand on 0.74 - Royalty Payment

Finance Act, 1994 Excise Duty on CT 3 4.73 0.05 Clearance and Incorrect Input Tax Credit of Service Tax paid on Foreign Service Provider

Finance Act, 1994 Service tax demand along 7.04 0.50 with penalty on excess CEN VAT utilization

The Customs Act, Demand of payment of 6.60 - 1962 Customs Duty on Royalty Payments

Finance Act, 1994 Interest and Penalty on 0.06 0.03 Service tax payable under reverse charge as a Recipient of Foreign Service

West Bengal Sales Interest on works Contract 0.03 - Tax Act, 1994 tax/Sales tax

Kerala Value Differential VAT rate demand 0.08 - Added Tax Act, 2003

Gujarat Value VAT & Interest payable 0.22 0.01 Added Tax Act, on the basis of Regular 2003 Assessment

Uttar Pradesh VAT & Interest payable 0.28 0.08 Value Added Tax on the basis of Regular 2008 Assessment Act,

Maharashtra Value Demand on account of 0.09 0.02 Added Tax Act, disallowance of Works 2002 Contract Tax TDS credit and applicability of VAT on service tax

Kerala Value Non - Submission of F- 0.05 0.02 Added Tax Act, Forms 2003

Kerala Value Non - Submission of F- 0.03 0.01 Added Tax Act, forms 2003

Maharashtra Value Demand on account of 0.54 0.20 Added Tax Act, disallowance of Works 2002 Contract Tax TDS credit and applicability of VAT on service tax

Income Tax Tax and Penalty on 21.00 14.83 Act, 1961 Defferred revenue treated as revenue based on Billing

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

The Central Excise Act, 1991-92 to 1996-97 Customs, Excise & Service 1944 Tax Appellate Tribunal

Finance Act, 1994 2006-07 and 2007-08 Joint Commissioner of Central Excise

Finance Act, 1994 2003- 04 to 2006-07 Customs, Excise & Service Tax Appellate Tribunal

Finance Act, 1994 2004- 05 to 2006-07 Commissioner of Central Excise & Service tax Appeals

Finance Act, 1994 2003- 04 to 2007-08 Customs, Excise & Service Tax Appellate Tribunal

Finance Act, 1994 2004- 05 to 2007-08 Commissioner of Central Excise

The Customs Act, 1962 Various financial Customs, Excise Years & Service Tax Appellate Tribunal

Finance Act 1994 2005-06 Commissioner of Central Excise - Appeals

West Bengal Sales 2003-04, Assistant Tax Act 1994 2005-06 and 2006-07 Commissioner Commercial Taxes

Kerala Value 2008-09 Karnataka VAT Added Tax Act Tribunal 2003

Gujarat Value 2008-09 Joint Commissioner Added Tax Act Of 2003 Commercial Tax

Uttat Pradesh 2008-09 Additional Value Added Tax Commissioner Act 2008 Appeals

Maharastra Value 2002-03 Joint Commissioner Added Tax Act of Sales Tax Appeals 2002

Kerala Value 2011-12 Assistant Added Tax Act Commissioner 2003 Appeals

Kerala Value 2008-09 Assistant Added Tax Act Commissioner 2003 Appeals

Maharashtra Value 2008-09 Joint Commissioner Added Tax Act of Sales Tax 2002

Income Tax 2004-05, 2005-06, CIT (A) for FY 2009- Act 1961 2007-08, 2009-10, 10 and 2010-11 2010-11 and ITAT for other financial years.

(c) The Company has transferred the amount required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder within the specified time.

(viii) In our opinion and after considering the effect of the qualification stated in paragraph 8 of the Independent Auditors Report on the figures of accumulated losses, net-worth and cash losses, the Company's accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses in the current and the immediately preceding financial year.

(ix) The Company has not defaulted in repayment of dues to any bank. The Company did not have any loans from financial institutions or any outstanding debentures during the year.

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

(xi) In our opinion, the Company has applied the term loan for the purpose for which the loan was obtained.

(xii) No fraud on or by the Company has been noticed or reported during the period covered by our audit.

For Walker Chandiok & Co LLP (Formerly Walker, Chandiok & Co) Chartered Accountants Firm's Registration No.: 001076N/N500013

per Adi P. Sethna Partner Membership No.: 108840

Place : Mumbai Date : 27 May 2015

Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards notified under the Companies Act, 1956, read with General Circular 8/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness 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 sufficient and appropriate to provide a basis for our audit opinion.

Basis for Qualified Opinion

The Company has certain trade and other receivables aggregating to Rs. 85 million, which in our opinion are doubtful of recovery. Had the company recorded a provision for these receivables in the financial statements, the loss after tax for the year would have been higher by Rs. 85 million, trade and other receivables and reserves and surplus would have been lower by Rs. 85 million.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion, the financial statements give the information required by the Companies Act, 1956 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

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 section 227(3) of the Act, we report that:

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

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

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

(d) In our opinion, except for the possible effects of the matter stated in the basis for qualified opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956, read with General Circular 8/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs;

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

Annexure to the Independent Auditors'' Report

Re: AGC Networks Limited

Referred to in Paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) There was no disposal of a substantial part of fixed assets during the year.

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

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification carried out during the year.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(iii)(a) to (d) of the Order are not applicable to the Company and hence not commented upon, (b) According to information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(iii)(e) to (g) of the Order are not applicable to the Company and hence not commented upon, (iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets. However, internal control system for purchases of inventory and sale of goods and services is inadequate since some of these were inappropriately recognised in earlier years and have been reversed in the current year. Except for the above, during the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

(v) (a) In our opinion, there are no contracts or arrangements that need to be entered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(v)(b) of the Order is not applicable to the Company and hence not commented upon.

(vi) The Company has not accepted any deposits from the public.

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

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Act for the products of the Company.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including employees'' state insurance, income-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it, except for profession tax and investor education and protection fund where there has been slight delays in few cases. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable, except investor education and protection fund which were outstanding, at the year end, for a period of more than six months from the date they become payable, are as follows:

Name of the statute Nature of dues Amount Period to (Rs. Millions) which the amount relates

Companies Act, 1956 Investor Education 0.36 2005-2006 and Protection Fund

Name of the Statute Due Date Date of Payment

Companies Act 1956 30-09-2013 21-05-2014

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the Nature of dues Amount statute (Rs. Millions)

The Central Demands on account of 4.31 Excise Act, incorrect duty credit / short 1944 payment

Finance Act, Service tax on RTU activation 3.52 1994 and penalty thereon

Finance Act, Service tax on RTU activation 38.20 1994 and penalty thereon

Finance Act, Interest and Penalty on 0.30 1994 Service tax payable under reverse charge as a Recipient of Foreign Service

Finance Act, Service tax Demand on 7.41 1994 Royalty Payment

The Customs Demand of payment of 66.00 Act, 1962 Customs Duty on Royalty Payments

Finance Act, Excise Duty on CT 3 46.80 1994 Clearance and Incorrect Input Tax Credit of Service Tax paid on Foreign Service Provider

Finance Act, Service tax demand along 65.40 1994 with penalty on excess CENVAT utilization

West Bengal Interest on works Contract 0.29 Sales Tax Act, tax/Sales tax 1994

Kerala Value Differential VAT rate demand 0.80 Added Tax Act, 2003

Gujarat Value VAT & Interest payable on the 2.07 Added Tax basis of Regular Assessment Act, 2003

Uttar Pradesh VAT & Interest payable on the 1.96 Value Added basis of Regular Assessment Tax Act, 2008

Income Tax Tax and Penalty on Deferred 120.81 Act, 1961 revenue treated as revenue based on Billing

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

The Central Excise Act, 1944 1991-92 to 1996-97 Customs, Excise & Service Tax Appellate Tribunal

Finance Act, 1994 2006-07 and 2007- Joint Commissioner of 08 Central Excise

Finance Act, 1994 2003-04 to 2006-07 Customs, Excise & Service Tax Appellate Tribunal

Finance Act, 1994 2005-06 Commissioner of Central Excise - Appeals

Finance Act, 1994 2004-05 to 2006-07 Commissioner of Central Excise & Service tax Appeals

The Customs Act, 1962 Various financial Customs, Excise & Service years Tax Appellate Tribunal

Finance Act, 1994 2003-04 to 2007-08 Customs, Excise & Service Tax Appellate Tribunal

Finance Act, 1994 2004-05 to 2007-08 Commissioner of Central Excise

West Bengal Sales Tax Act, 1994 2003-04, Assistant Commissioner 2005-06 and 2006- Commercial Taxes 07

Kerala Value Added Tax Act, 2003 2008-09 Karnataka VAT Tribunal

Gujarat Value Added Tax Act, 2003 2008-09 Joint Commissioner Of Commercial Tax

Uttar Pradesh Value Added Tax Act, 2008 2008-09 Additional Commissioner- Appeals

Income TaxAct, 1961 2006-2007, 2008- CIT (Appeals) 2009,2010-2011

(x) The Company''s accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash loss during the year. In the immediately preceding financial year, the Company had not incurred cash loss.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that funds amounting to Rs. 546 million raised on short term basis in the form of cash credit facility from banks have been used for long-term investment representing acquisition of fixed assets and funding of losses.

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

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) 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 are not aware of any fraud on or by the Company noticed or reported during the year except that the management of the Company has identified certain instances of inappropriate recognition of revenue and costs during the earlier years aggregating to Rs. 180 million and Rs. 36 million respectively which have been reversed during the current year.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm registration number: 101049W

per Shyamsundar Pachisia

Partner

Membership No.: 49237

Place: Mumbai Date : 30 May 2014

Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the 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 judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

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

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

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

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 section 227(3) of the Act, we report that:

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

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

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

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

(e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to Auditors'' Report

Annexure referred to in paragraph [3] of our report of even date

Re: [AGC Networks Limited] (''the Company'')

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) There was no disposal of a substantial part of fixed assets during the year.

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

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification carried out at the end of the year.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly. the provisions of clause 4(iii)(a) to (d) of the Order are not applicable to the Company and hence not commented upon.

(b) According to information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly. the provisions of clause 4(iii)(e) to (g) of the Order are not applicable to the Company and hence not commented upon.

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

(v) (a) In our opinion, there are no contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(v)(b) of the Order is not applicable to the Company and hence not commented upon.

(vi) The Company has not accepted any deposits from the public.

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

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause

(d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products of the Company.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it, except provident fund, works contract tax and sales tax where there have been a slight delays and in case of professional tax which have not generally been regularly deposited with the appropriate authorities though the delays in deposit have not been serious.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable, except professional tax which were outstanding, at the year end, for a period of more than six months from the date they became payable, are as follows:

Name of statue Nature of dues Amount (in Rs.)

Gujarat Professional Tax act 1976 Professional Tax - 13,300 Gujarat

Professions, Trades Callings, and Professional Tax - 81,945 Employment''s Act, 1992 (Tamil Nadu) Tamil Nadu

Name Period to which the Due Date Date of amounts relates Payment

Gujarat Professional Tax act 1976 Mar-12 21-Apr-12 20-May-13

Professions, Trades Callings, and Mar-12 to Aug-12 15-Sep-12 10-May-13

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty excise duty and cess on account of any dispute, are as follows:

Name of the statute Nature of dues Amount (Rs. Millions)

The Central Excise Demands on account of 4.31 Act, 1944 incorrect duty credit / short payment

Finance Act, 1994 Service tax on RTU activation 3.52 and penalty thereon

Finance Act, 1994 Service tax on RTU activation 41.70 and penalty thereon

Finance Act, 1994 Interest and Penalty on 0.30 Service tax payable under reverse charge as a Recipient of Foreign Service

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

Finance Act, 1994 1991-92 to 1996-97 Customs, Excise & Service Tax Appellate Tribunal

Finance Act, 1994 2006-07 and 2007-08 Joint Commissioner of Central Excise

Finance Act, 1994 2003-04 to 2006-07 Customs, Excise & Service Tax Appellate Tribunal

Finance Act, 1994 2005-06 Commissioner of Central Excise Appeals

Name of the statute Nature of dues Amount (Rs. Millions)

Finance Act, 1994 Service tax Demand on 7.41 Royalty Payment

The Customs Act, Demand of payment of 66.00 1962 Customs Duty on Royalty Payments

Finance Act, 1994 Excise Duty on CT 3 46.80 Clearance and Incorrect Input Tax Credit of Service Tax paid on Foreign Service Provider

Finance Act, 1994 Service tax demand along 70.40 with penalty on excess CENVAT utilization

West Bengal Sales Interest on works Contract 0.29 Tax Act, 1994 tax/Sales tax Kerala Value Added Differential VAT rate demand 0.80 Tax Act, 2003

Gujarat Value Added VAT & Interest payable on the 2.88 Tax Act, 2003 basis of Regular Assessment

Uttar Pradesh Value VAT & Interest payable on the 1.96 Added Tax Act, 2008 basis of Regular Assessment

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

Finance Act, 1994 2004-05 to 2006-07 Commissioner of Central Excise & Service tax Appeals

Finance Act, 1994 Various financial years Customs, Excise & Service Tax Appellate Tribunal

Finance Act, 1994 2003-04 to 2007-08 Customs, Excise & Service Tax Appellate Tribunal

Finance Act, 1994 2004-05 to 2007-08 Commissioner of Central Excise

Finance Act, 1994 2003-04, 2005-06 and Assistant Commissioner 2006-07 Commercial Taxes

Finance Act, 1994 2008-09 Karnataka VAT Tribunal

Finance Act, 1994 2008-09 Joint Commissioner Of Commercial Tax

Finance Act, 1994 2008-09 Additional Commissioner- Appeals

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company we report that no funds raised on short-term basis have been used for long-term investment.

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

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) 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 report that no fraud on or by the Company has been noticed or reported during the year.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm registration number: 101049W

per Shyamsundar Pachisia

Partner

Membership No.: 49237

Place: Mumbai

Date : 28 May 2013

Mar 31, 2012

1. We have audited the attached Balance Sheet of AGC Networks Limited ('the Company') as at March 31, 2012 and also 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 (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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

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

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

vi. In our opinion and to the best of our information and according to the explanations given to us, they said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2012;

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

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

Annexure to Auditors Report

Annexure referred to in paragraph [3] of our report of even date

Re: [AGC Networks Limited] ('the Company')

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) There was no substantial disposal of fixed assets during the year.

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

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification carried out at the end of the year.

(iii) (a) According to the information and explanation given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly the provisions of clauses 4(iii)(a) to (d) of the order are not applicable to the Company and hence not commented upon.

(b) According to the information and explanation given to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly the provisions of clauses 4(iii)(e) to (g) of the order are not applicable to the Company and hence not commented upon.

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

(v) (a) In our opinion, there are no contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(v)(b) of the Order is not applicable to the Company and hence not commented upon.

(vi) The Company has not accepted any deposits from the public.

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

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products of the Company.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases relating to professional tax, works contract tax and sales tax.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income-tax, wealth- tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the Nature of dues Amount Period to which Forum where statute (Rs. Million) the amount relates dispute is pending

The Central Excise Act, Demands on account of 4.31 1991-92 to 1996-97 Customs, Excise & 1944 incorrect duty credit / Service Tax short payment Appellate Tribunal

Finance Act, 1994 Service tax on RTU 3.52 2006-07 and 2007-08 Customs, Excise &

activation and penalty Service Tax Appel late thereon Tribunal

Finance Act, 1994 Service tax on RTU activation 7.41 2004-05 to 2006-07 Commissioner of Service and penalty thereon Tax, Appeals

West Bengal Sales Interest on works Contract 0.29 2003-04, 2005-06 Assistant Commissioner Tax Act, 1994 tax/Sales tax and 2006-07 Commercial Taxes

West Bengal Sales VAT & Interest payable on the 4.44 2008-09 Joint Commissioner Of Tax Act, 1994 basis of an Ex- Parte Assessment Commercial Tax

Kerala Value Added Differential VAT rate demand 0.73 2008-09 Deputy Commissioner of Tax Act, 2003 Appeals

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) The Company did not have any term loans outstanding during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

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

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) 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 report that no fraud on or by the Company has been noticed or reported during the year.

For S.R. BATLIBOI & ASSOCIATES

Firm registration number: 101049W

Chartered Accountants

per Shyamsundar Pachisia

Partner

Membership No.: 49237

Place : Mumbai

Date : 10 May 2012

Mar 31, 2011

1. We have audited the attached Balance Sheet of AGC Networks Limited (the Company) as at March 31, 2011 and also the Profit and Loss account and the cash flow statement for the six months period ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We 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 (as amended) (the Order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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

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

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

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2011;

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

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

Annexure referred to in paragraph 3 of our report of even date Re: AGC Networks Limited (the Company)

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

(b) Fixed assets have been physically verified by the management during the period and no material discrepancies were identified on such verification.

(c) There was no disposal of a substantial part of fixed assets during the period.

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

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clauses 4 (iii) (a) to (d) of the Order are not applicable to the Company and hence not commented upon.

(b) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of the clauses 4 (iii) (e) to (g) of the Order are not applicable to the Company and hence not commented upon.

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

(v) According to the information and explanations provided by the management, in our opinion, there are no contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956.

(vi) The Company has not accepted any deposits from the public.

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

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products of the Company.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales- tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441A of the Companies Act,1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other material statutory dues which were outstanding, at the period end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, custom duty, excise duty and cess on account of any dispute, are as follows:

Name of the Nature of dues Amount statute (Rs. in 000)

The Central Excise Demands on account 4,310 Act, 1944 of incorrect duty credit / short payment

Finance Act, 1994 Service tax on RTU 3,518 activation and penalty thereon

Finance Act, 1994 Service tax on RTU 7,413 activation and penalty thereon

West Bengal Sales Interest on works 291 Tax Act, 1994 Contract tax/Sales tax

Kerala Value Added Differential VAT 727 Tax Act, 2003 rate demand

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

The Central Excise Act, 1944 1991-92 to 1996-97 Customs, Excise & Service Tax Appellate Tribunal

Finance Act, 1994 2006-07 and 2007-08 Customs, Excise & Service Tax Commissioner Appeals

Finance Act, 1994 2004-05 to 2006-07 Commissioner of Service Tax, Appeals

West Bengal Sales Tax Act, 1994 2005-06 and 2006-07 Assistant Commissioner (Commercial Taxes)

Kerala Value Added Tax Act, 2003 2008-09 Deputy Commissioner of Appeals

(x) The Company has no accumulated losses at the end of the financial period and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) The Company did not have any term loans outstanding during the period.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

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

(xix) The Company did not have any outstanding debentures during the period.

(xx) The Company has not raised any money by public issues during the period.

(xxi) 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 report that no fraud on or by the Company has been noticed or reported during the period.

For S.R. BATLIBOI & ASSOCIATES

Firm registration number: 101049W Chartered Accountants

per Shyamsundar Pachisia

Partner

Membership No.: 49237

Place : Mumbai Date : 23 May 2011

Sep 30, 2010

1. We have audited the attached Balance Sheet of AGC Networks Limited (formerly Avaya GlobalConnect Limited), as at September 30, 2010, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disdosures in the financial statements. An audit ateo 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, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to 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, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

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

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

(e) On the basis of written representations received from the directors, as on September 30, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on September 30, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, 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 September 30, 2010;

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

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

Annexure to Auditors Report [Referred to in paragraph 3 of the Auditors Report of even date to the members of AGC Networks Limited (formerly Avaya GlobalConnect Limited) on the financial statements for the year ended September 30, 2010]

1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

(b) The fixed assets of the Company have been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

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

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

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that most items of inventory purchased and goods and services sold are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. According to the information and explanations given to us, there have been no contracts or arrangements referred to in Section 301 of the Act during the year to be entered in the register required to be maintained under that Section. Accordingly, the question of commenting on transactions made in pursuance of such contracts or arrangements does not arise.

6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

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

8. The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the Company.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income- tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales-tax, value added tax, service tax and excise duty as at September 30, 2010 which have not been deposited on account of a dispute, are as follows :

Name of the Nature of dues Amount statute Rs. in 000

The Central Excise Demands on account 4,310 Act, 1944 of incorrect duty credit / short payment

Finance Act, 1994 Service Tax on RTU 3,518 activation and penalty theron

Finance Act, 1994 Service tax demand on 7,413 royalty and penalty thereon

West Bengal Sales Interest on works 472 Tax Act, 1994 contract tax / sales tax

Kerala Value Added Differential VAT rate 772 Tax Act, 2003 demand

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

The Central Excise Act, 1944 1991-92 to 1996-97 Customs, Excise & Service Tax Appellate Tribunal

Finance Act, 1994 2006-07 and 2007-08 Customs, Excise & Service Tax Appellate Tribunal

Finance Act, 1994 2004-05 to 2006-07 Commissioner of Service Tax, Appeals

West Bengal Sales Tax Act, 1994 2003-04, 2005-06 Assistant and 2006-07 Commissioner (Commercial Taxes)

Kerala Value Added Tax Act, 2003 2008-09 Deputy Commissioner of Appeals

10. The Company has no accumulated losses as at September 30, 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

16. The Company has not obtained any term loans.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment.

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 Act during the year.

19. The Company has not issued any debentures.

20. The Company has not raised any money by public issues during the year.

21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

For Lovelock & Lewes

Firm Registration Number: 301056E Chartered Accountants

Sharmila A. Karve

Place: Mumbai Partner

Date: November 15, 2010 Membership Number: F43229

Sep 30, 2009

1. We have audited the attached Balance Sheet of Avaya GlobalConnect Limited, as at September 30, 2009, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

(a) Without qualifying our opinion, we draw attention to Note 3 of Schedule 20 to the financial statements. As stated therein, Managerial remuneration for the year ended September 30, 2009 includes Rs. 0.53 crore, paid/payable to the Manager / Managing Director, subject to the approval of the Central Government of India, for which an application has been made. The appointment and remuneration of the Manager / Managing Director from April 1, 2009 is also subject to the approval of the shareholders;

(b) 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;

(c) 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;

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

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

(f) On the basis of written representations received from the directors, as on September 30, 2009 and taken on record by the Board of Directors, none of the directors is disqualified as on September 30, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(g) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act 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 September 30, 2009;

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

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

Annexure to Auditors Report

[Referred to in paragraph 3 of the Auditors Report of even date to the members of Avaya GlobalConnect Limited on the financial statements for the year ended September 30, 2009]

1. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets of the Company have been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

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

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

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that most items of inventory purchased and goods and services sold are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. According to the information and explanations given to us, there have been no contracts or arrangements referred to in Section 301 of the Act during the year to be entered in the register required to be maintained under that Section. Accordingly, commenting on transactions made in pursuance of such contracts or arrangements does not arise.

6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

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

8. The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the Company.

9. (a) According to the information and explanations given to us and the records of the Company examined

by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income- tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales-tax, service tax and excise duty as at September 30, 2009 which have not been deposited on account of a dispute, are as follows -

Name of the Nature of dues Amount statute (Rs. Crores)

The Central Excise Demands on account 1.53 Act, 1944 of incorrect duty credit / short payment

The Central Excise Service Tax, including 7.22 Act, 1944 applicable interest and penalty thereon

West Bengal Sales Interest on works 0.04 Tax Act, 1994 contract tax / sales tax

Name of the Staute Financial year to Forum where the which the amount dispute is pending relates

The Central Excise Act, 1944 1991-92 to Customs, Excise & 2002-03 Service Tax Appellate Tribunal

The Central Excise Act, 1944 2003-04 to Customs, Excise & 2007-08 Service Tax Appellate Tribunal

West Bengal Sales Tax Act, 1994 2003-04 and Assistant 2005-06 Commissioner (Commercial Taxes)

10. The Company has no accumulated losses as at September 30, 2009 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

16. The Company has not obtained any term loans.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment.

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 Act during the year.

19. The Company has not issued any debentures.

20. The Company has not raised any money by public issues during the year.

21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

Sharmila A. Karve

Partner Membership Number F43229

For and on behalf of Place: Mumbai Lovelock & Lewes

Date : November 24, 2009 Chartered Accountants

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