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Auditor Report of Paramount Communications Ltd.

Mar 31, 2023

Independent Auditorsâ Report

The Members of

PARAMOUNT COMMUNICATIONS LIMITEDREPORT ON THE STANDALONE FINANCIAL STATEMENTS
Opinion

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

In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid standalone financial
statements give the information required by the Companies Act,
2013 (âthe Actâ) in the manner so required and give a true and
fair view in conformity with the Indian Accounting Standards
prescribed under section 133 of the Act read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ)
and other accounting principles generally accepted in India, of the
state of affairs of the Company as at 31 March 2023, and its profit,
total comprehensive income, its cash flows and the changes in
equity for the year ended on that date.

Basis of Opinion

We conducted our audit of the standalone financial statements in
accordance with the Standards on Auditing 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 Code of Ethics
issued by the Institute of Chartered Accountants of India together
with the ethical requirements that are relevant to our audit of
the standalone financial statements under the provisions of the
Companies Act, 2013 and the Rule thereunder, and we have fulfilled
our 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 of our
opinion.

Key Audit Matters

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

Information Other than the Standalone financial statements
and Auditorâs Report Thereon

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

In connection with our audit of the standalone financial
statements, our responsibility is to read the other information
and, in doing so, consider whether 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.

If, based on the work we have performed, we conclude that there is
a material misstatement of this other information; we are required
to report that fact. We have nothing to report in this regard.

Managementâs Responsibility for the Financial Statements

The Companyâs Board of Directors is responsible for the matters
stated in section 134(5) of the Act with respect to the preparation
of these standalone financial statements that give a true and fair
view of the financial position, financial performance including
other comprehensive income, cash flows and changes in equity of
the Company in accordance with the Ind AS 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 the
assets of the Company and for preventing and detecting frauds
and other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness
of the accounting records, relevant to the preparation and
presentation of the standalone financial statement that give a true
and fair view and are free from material misstatement, whether
due to fraud or error.

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

The Board of Directors is also responsible for overseeing the
Companyâs financial reporting process.

Auditorsâ Responsibility

Our objectives are to obtain reasonable assurance about whether
the standalone financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditorâs report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with SAs will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these standalone
financial statements.

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

â¢ 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 system
in place and the operating effectiveness of such controls.

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

â¢ Conclude on the appropriateness of managementâs use of the
going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant
doubt on the Companyâs ability to continue as a going
concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditorâs report to the
related disclosures in the standalone financial statements
or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up
to the date of our auditorâs report. However, future events or
conditions may cause the Company to cease to continue as a
going concern.

â¢ Evaluate the overall presentation, structure and content of the

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

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

We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.

We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorâs Report) Order, 2020
(âthe Orderâ) issued by the Central Government of India in
terms of sub-section (11) of section 143 of the Act, we give in
the Annexure ''Aâ a statement on the matters specified in the
paragraph 3 and 4 of the Order, to the extent applicable.

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

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

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

(c) The Standalone Balance Sheet, the Standalone
Statement of Profit and Loss including Other
Comprehensive Income, the Standalone Statement
of Change in Equity and the Standalone Cash Flow
Statement dealt with by this Report are in agreement
with the books of account;

(d) In our opinion, the aforesaid standalone financial
statements comply with the Indian Accounting
Standards specified under Section 133 of the Act, read
with Rule 7 of the Companies (Accounts) Rules, 2015;

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

(f) With respect to the adequacy of the internal financial
controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to
Annexure ''Bâ. Our report expresses an unmodified
opinion on the adequacy and operating effectiveness of
the Companyâs internal financial controls over financial
reporting.

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

i. The Company has disclosed the impact of pending
litigations as at 31st March, 2023 on its financial
position in its standalone financial statements -
Refer Note No 45.

ii. The Company did not have any long-term contracts
including derivative contracts for which there were
any foreseeable losses during the year ended 31st
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 on 31st March, 2023.

iv. a) The management has represented that, to

the best of its knowledge and belief, no funds
(which are material either individually or in
the aggregate) have been advanced or loaned
or invested (either from borrowed funds or
share premium or any other sources or kind
of funds) by the Company to or in any other
persons or entities, including foreign entities
(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
or on the behalf of company (âUltimate
Beneficiariesâ) or provide any guarantee,
security or the like to or on behalf of the
Ultimate Beneficiaries.

b) The management has represented, that,
to the best of its knowledge and belief, no
funds (which are material either individually
or in the aggregate) have been received by
the Company from any persons or entities,
including foreign entities (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 from or on behalf of the Ultimate
Beneficiaries; and

c) Based on such audit procedures as
considered reasonable and appropriate in
the circumstances, nothing has come to our
notice that has caused us to believe that the

representations under sub-clause (i) and (ii)
of Rule 11(e), as provided under (a) and (b)
above, contain any material mis-statement

v. The company has neither proposed nor declared
any dividend during the year.

(h) The managerial remuneration for the year ended 31st
March, 2023 has been paid/ provided for by the Company
to its directors in accordance with the provisions of
Section 197 read with Schedule V to the Act.

(i) Proviso to rule 3(1) of the Companies (Accounts)
Rules, 2014 for maintaining books of accounts using
accounting software which has a feature of recording
audit trail (edit log) facility is applicable to the company
with effect from 01.04.2023, and accordingly, reporting
under Rule 11(g) of Companies (Audit and Auditors)
Rules, 2014 is not applicable for the financial year ended
31st March, 2023.

For P. BHOLUSARIA & CO.

CHARTERED ACCOUNTANTS
Firm Registration No: 000468N

Pawan Bholusaria

Partner

Place: New Delhi M.No.080691

Date: 19.05.2023 UDIN: 23080691BGWMQD2435

Mar 31, 2018

Independent Auditors'' Report

TO THE MEMBERS OF PARAMOUNT COMMUNICATIONS

LIMITED

Report on the Standalone Financial Statements

1. We have audited the accompanying Standalone financial statements of Paramount Communications Limited

("the Company"), which comprise the Balance Sheet as at 31^st March 2018, the Statement of Profit and Loss, including the statement of 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 (hereinafter referred to as "Standalone Financial Statements").

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 to give a true and fair view of the financial position, financial performance including other Comprehensive income, cash flows and the Statement of Changes in Equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2015 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and 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.

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 and the Rules made there under including the accounting standards and matters which are required to be included in the audit report.

5. We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.

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 control relevant to the Company''s preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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.

Opinion

8. 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 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^st March 2018, and its profit including other Comprehensive income, its cash flows and the Statement of Changes in Equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by ''the Companies (Auditor''s Report) Order, 2016'', issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (hereinafter referred to as the "Order"), 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" a statement on the matters specified in paragraphs 3 and 4 of the Order.

10. As required by Section 143 (3) of the Act, 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 purposes of our audit;

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

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

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

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

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

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

i. The Company has disclosed the impact of pending litigations as at 31^st March, 2018 on its financial position in its financial statements -Refer Note No 41

ii. The Company did not have any long-term contracts including derivative contracts as at 31^st March 2018

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 on 31^st March 2018.

Referred to in paragraph 9 of the Independent Auditors'' Report of even date to the members of Paramount Communications Limited on the Standalone financial statements as of and for the year ended 31^st March 2018

i. (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. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account. In our opinion, the frequency of verification is reasonable.

(c) The title deeds of immovable properties, as disclosed in Note 5 on Fixed assets to the financial statements, are held in the name of the Company, except for one free hold land having gross block and net block of '' 60,417,500/-, which is yet to be registered / transferred in the name of company. The same is held in the name of erstwhile partnership firm Paramount Cable Corporation.

ii. The physical verification of inventory (excluding stocks with third parties) have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. The Company has not granted any loans secured or unsecured to Companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it, to the extent applicable to the company.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the records of the Company and

information and explanations given to us and the records of the Company examined by us, the Company has been generally regular in depositing the undisputed statutory dues including provident fund, employees state insurance, income tax, Investor education and protection fund, sales tax, service tax, customs duty, excise duty, cess, goods and service tax and other material statutory dues applicable to it 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 Service Tax, Customs Duty and Excise Duty as at 31^st March 2018 which have not been deposited on account of a dispute are as follows:

Name of the	Nature of the	Amount ''	Period to which the amount relates	Forum where dispute
Statute	Due			is pending
Central Excise Act	Excise Duty	15,450,558	Various years for 2006-07 to 2014-15	CESTAT
Central Excise Act	Excise Duty	22,897,288	Various years for 2014-15 to 2015-16	Commissioner (Appeals)
Finance Act	Service Tax	633,192	Various years for 2005-06 to 2008-09	CESTAT
Finance Act	Service Tax	20,960,043	Various years for 2006-07 to 2009-10	High Court
Customs Act	Customs Duty	1,312,721	2005-06 & 2006-07	CESTAT
Customs Act	Customs Duty	3,550,000	2010-11 & 2011-12	Supreme Court

viii. Consequent upon and pursuant to consent by Foreign Currency convertible Bond Holders (FCCBs) to convert their dues in equity shares and assignment by banks of their borrowings to Asset reconstruction company, we report that the Company has not defaulted in repayment of loans/ borrowings from banks, Assets Reconstruction company and Foreign Currency Convertible Bond Holders (FCCBs) due to aforesaid conversion/ assignment.

ix. The Company has not raised moneys by way of initial public offer (including debt instruments) or term loans. However, the Company has made preferential allotment of equity shares, and the same were utilized for the purpose for which they were raised.

x. 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 material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. As the Company is not a Indi Company and the Niche Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required by the applicable accounting Standard.

xiv. The Company has made preferential allotment of fully paid up equity shares during the year. The company has complied with the requirements of section 42 of the companies Act, 2013, to the extent applicable. The amount raised were used for the purposes for which the funds were raised.

xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India, 1934. Accordingly, provisions of clause 3 (xvi) of the Order are not applicable to the Company.

Referred to in paragraph 10(f) of the Independent Auditors'' Report of even date to the members of Paramount Communications

Limited on the standalone financial statements for the year ended 31^st March 2018

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER

CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE ACT

1. We have audited the internal financial controls over financial reporting of Paramount Communications Limited ("the Company") as of 31^st March 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

MANAGEMENT''S RESPONSIBILITY FOR INTERNAL FINANCIAL

CONTROLS

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

AUDITORS'' RESPONSIBILITY

3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER

FINANCIAL REPORTING

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

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS

OVER FINANCIAL REPORTING

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

OPINION

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^stMarch 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For P. Bholusaria & Co.

Chartered Accountants

Firm Registration No: 000468N

Pawn Bholusaria

Place: New Delhi Partner

Date: 9^th May 2018 Mino. 080691

Mar 31, 2017

Report on the Standalone Financial Statements

1. We have audited the accompanying Standalone financial statements of Paramount Communications Limited(âthe Companyâ), which comprise the Balance Sheet as at 31^st March, 2017, 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.

Managementâs 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 (âthe Actâ) with respect to the preparation of these Standalone financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 and the Rules made thereunder including the accounting standards and matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10)of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.

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

Basis for Qualified Opinion

8. We state that âFrom 1^st July, 2016 company has not provided for interest and other dues of Rs.29,917,920/- on borrowings from a bank which have become NPA account as per bank classification and are outstanding at the year end and in respect of which interest has been reversed/not charged in statements provided by the Bank. Amount of interest not provided Rs.29,917,920/-as per the estimate by the management. We further report that loss for the year would have been Rs.33,050,752/ - as against reported figure Rs.3,132,832/- and short term borrowings would have been Rs.526,220,445./- as against reported figure Rs.496,302,525/- and debit balance in surplus would have been Rs.4,420,632,798/- as against reported figure Rs.4,390,714,878/-. (Refer Note 25.2)

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^st March, 2017, and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

10. We draw attention to

a. Note 36 to the financial statements. The accompanying financial statements have been prepared on a going concern basis despite negative net worth, overdue in repayment of loan installments, interest to banks, working capital facilities from banks, overdue in redemption of Foreign Currency Convertible Bonds (FCCBs). The appropriateness of the said basis is inter-alia dependent on Company''s ability to generate profit in future years and meet its financial obligations.

b. For Banks who have assigned and transferred the loan together with all underlying securities thereto and rights etc., to a Securitization and Asset Reconstruction Company (ARC), dues to those banks have been transferred and shown as due to ARC. (Refer Note 9.3)

c. Company has received and accepted Sanction letter / in principle approval with ARC for payment of Rs.373,800,000/towards full & final payment of the amount due & payable to ARC Subject to Company complying with âSchedule of Payments'' referred to in Sanction letter / in principle approval. As per schedule of payment Rs.167,500,000 /- is ought to be paid before 29^th March, 2021 in half yearly installments and Rs.206,300,000/- is ought to be paid before 30^th September, 2021 in half yearly installments. Company has paid all the installments due upto 31^st March, 2017 and is confident of meeting all payment schedules specified in Sanction letter / in principle approval. In opinion of the management the settled amounts with ARC are new borrowing/ liability since the lender is different from earlier lenders and the new borrowings/ liability are on substantially different terms viz as amount of settlement, schedule of payment etc. Hence, this modification is treated as de-recognition of the original liability and the recognition of a new liability.

Accordingly, Company has written back Rs.714,204,200/- as exceptional item (settlement of dues) as difference between loans assigned to ARC by banks & Settlement amount between Company & ARC. (Refer Note 28)

d. In respect of dues to ARC which have been assigned by banks and in respect of which Settlement between company and ARC, no interest has been provided, since, the company is in the process of making settlement with the ARC. As per terms & conditions of Settlements with ARC during the year, no interest was charged by ARC.(Refer Note 25.1)

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

11. As required by âthe Companies (Auditor''s Report) Order, 2016'', issued by the Central Government of India in terms of subsection (11) of section 143 of the Act (hereinafter referred to as the âOrderâ), 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 B 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 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 purposes of our audit.

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

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

(d) In our opinion, the aforesaid Standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

(g) Non provision of interest on borrowings from a bank as described in paragraph 8 under the Basis of Qualified Opinion paragraph above and the going concern matter described in sub-paragraph 10 (a) under the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

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

i. The Company has disclosed the impact of pending litigations as at 31^st March, 2017 on its financial position in its financial statements - Refer Note No. 34.1 & 34.3

ii. The Company did not have any long-term contracts including derivative contracts as at 31^st March, 2017

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 on 31^st March, 2017.

iv. The company has provided requisite disclosures in its financial statements as to holdings as well as dealing in Specified Bank Notes during the period from 8^th November, 2016 to 30^th December, 2016 and these are in accordance with the books of accounts maintained by the company- Refer Note No.38

Referred to in paragraph 11 of the Independent Auditors'' Report of even date to the members of Paramount Communications Limited on the Standalone financial statements as of and for the year ended 31^st March, 2017

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

(c) The title deeds of immovable properties, as disclosed in Note 11 on fixed assets to the financial statements, are held in the name of the Company, except for details as given below:

- In case of Land

Total number of cases:	01
Whether lease hold/ free hold:	Free Hold
Gross Block & Net Block (as at 31.03.2017):	Rs. 2,35,739/-

iii. The Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. There is one party covered in the register maintained under Section 189 of the Act, to which Company has given security deposits as per contractual obligations. (Refer Note 13.1)

(a) In respect of the aforesaid deposit, the terms and conditions under which such deposit was granted are not prejudicial to the Company''s interest.

(b) Since it is a security deposit no schedule for repayment of deposit is applicable and no interest was charged.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

vii. (a) According to the records of the Company and information and explanations given to us and the records of the Company examined by us, the Company has been generally regular in depositing the undisputed statutory dues including provident fund, employees state insurance, income tax, Investor education and protection fund, sales tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it 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 Income Tax, Service Tax, Customs Duty and Excise Duty as at 31^st March, 2017 which have not been deposited on account of a dispute are as follows:

Name of the Statute

Nature of the Due

Amount

Rs.

Period to which the amount relates

Forum where dispute is pending

Central Excise Act

Excise Duty

168,032,379/-

Various years for 2002-03 to 2014-15

CESTAT

40,624,358/-

Various years for 2007-08 to 2015-16

Commissioner

(Appeals)

Name of the Statute	Nature of the Due	Amount Rs.	Period to which the amount relates	Forum where dispute is pending
Finance Act	Service Tax	31,399,088/-	Various years for 2005-06 to 2009-10	CESTAT
		178,378/-	2005-06	Commissioner (Appeals)
Customs Act	Customs Duty	5,247,875/-	2005-06, 2006-07, 2010-11 & 2011-12	CESTAT

viii. Based on our audit procedures and as per the information and explanations given by the management, the Company has defaulted in repayment of loans/ borrowings to banks and Foreign Currency Convertible Bond Holders (FCCBs) as per details given below. (Also refer Note 4.2, 7.2, 9.1& 9.3).

Name of the Leader	Nature of dues	Period of default	Amount of default Rs.
State Bank of India	Rupee Term Loans	From June 2013 to December 2016	297,201,283/-
	Foreign Currency Term Loan	From September 2014 to December 2016	285,219,063/-
	Rupee Working Capital Loans	From November 2014 to December 2016	539,432,964/-
State Bank of Patiala	Rupee Term Loans	From June 2016 to December 2016	15,822,244/-
Standard Chartered Bank	Rupee Term Loans	Since June 2013	92,361,568/-
Dena Bank	Rupee Term Loans	Since June 2016	62,702,601/-
	Rupee Working Capital Loans	Since February 2017	340,171,363/-
Principal amount of Foreign Currency Convertible Bonds (FCCBs)	FCCBs	Since December, 2011	48,87,75,000/-
Premium on redemption of FCCBâs	FCCBs	Since December, 2011	22,26,28,876/-

The above information is in respect of defaults in repayment of principal amounts only.

ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For JAGDISH CHAND & CO.

Firm Registration Number: 000129N

Chartered Accountants

(J.C. Gupta)

Place of signature : New Delhi Partner

Date : 29^th May, 2017 Membership Number: 06107

Mar 31, 2016

INDEPENDENT AUDITORâS REPORT

TO THE MEMBERS OF

PARAMOUNT COMMUNICATIONS LIMITED

Report on the Standalone Financial Statements

1. We have audited the accompanying Standalone financial statements of Paramount Communications Limited (âthe Companyâ), which comprise the Balance Sheet as at 31^st March, 2016, 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.

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 to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 and the Rules made there under including the accounting standards and matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.

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 control 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 audit opinion on the Standalone financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March,

2016, and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

9. We draw attention to

a. Note 36 to the financial statements. The accompanying financial statements have been prepared on a going concern basis despite negative net worth, overdue in repayment of loan installments, interest to banks, working capital facilities from banks, overdue in redemption of Foreign Currency Convertible Bonds (FCCBs). The appropriateness of the said basis is inter-alia dependent on Companyâs ability to generate profit in future years and meet its financial obligations and also dependent on induction of financial investors in the company and/or joint venture with foreign companies.

b. Wherever, interest on borrowings has not been applied by banks, interest on those borrowings has been provided as per best estimates of the management. (Refer Note 25.1)

c. During the year a bank has assigned and transferred the loan together with all underlying securities thereto and rights etc., to a Securitization and Asset Reconstruction Company (Refer Note 9.3)

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

10. As required by âthe Companies (Auditorâs Report) Order, 2016â, issued by the Central Government of India in terms of subsection (11) of section 143 of the Act (hereinafter referred to as the âOrderâ), 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 B 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 purposes of our audit.

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

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

(e) On the basis of written representation received from the directors as on 31^st March, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) The going concern matter described in sub-paragraph 9 (a) under the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

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

i. The Company has disclosed the impact of pending litigations as at 31^st March, 2016 on its financial position in its financial statements - Refer Note No. 34.1 & 34.3

ii. The Company did not have any long-term contracts including derivative contracts as at 31^st March, 2016

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended on 31^st March, 2016

Referred to in paragraph 11 (f) of the Independent Auditorsâ Report of even date to the members of Paramount Communications Limited on the standalone financial statements for the year ended 31^st March, 2016

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

1. We have audited the internal financial controls over financial reporting of Paramount Communications Limited (âthe Companyâ) as of 31^st March, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

2. The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to 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 internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

4 Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the 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 audit opinion on the Companyâs internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

6. A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records 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

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

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st 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 on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

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

(c) The title deeds of immovable properties, as disclosed in Note 11 on fixed assets to the financial statements, are held in the name of the Company, except for details as given below:

- In case of Land :-

Total number of cases:	01
Whether lease hold/ free hold:	Free Hold
Gross Block & Net Block (as at 31.03.2016):	'' 78,86,689/-

(a) In respect of the aforesaid deposit, the terms and conditions under which such deposit was granted are not prejudicial to the Companyâs interest.

(b) Since it is a security deposit no schedule for repayment of deposit is applicable and no interest was charged.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products.We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of Income Tax, Service Tax, Customs Duty and Excise Duty as at 31^st March, 2016 which have not been deposited on account of a dispute are as follows:

Name of the Statute

Nature of the Due

Amount

Period to which the amount relates

Forum where dispute is pending

Central Excise Act

Excise Duty

20,37,57,113/-

Various years for 2002-03 to 2014-15

CESTAT

98,35,976/-

Various years for 2007-08 to 2014-15

Commissioner

(Appeals)

Name of the Statute	Nature of the Due	Amount	Period to which the amount relates	Forum where dispute is pending
Finance Act	Service Tax	3,13,99,088/-	Various years for 2005-06 to 2009-10	CESTAT
		1,78,378/-	2005-06	Commissioner (Appeals)
Customs Act	Customs Duty	52,47,875/-	2005-06, 2006-07, 2010-11 & 2011-12	CESTAT
Income Tax Act,1961	Income tax	4,42,98,650/-	2007-08 & 2008-09	Commissioner (Appeals)

Name of the Leader	Nature of dues	Period of default	Amount of default ''
State Bank of India	Rupee Term Loans	Since June 2013	202,239,737/-
	Foreign Currency Term Loan	Since September 2014	190,146,042/-
	Rupee Working Capital Loans	Since November 2014	539,432,964/-
IDBI Bank Limited	Rupee Term Loans	From November 2014 to March 2016	155,650,327/-
	Rupee Working Capital Loans	From November 2014 to March 2016	312,612,302/-
Standard Chartered Bank	Rupee Term Loans	Since June 2013	85,325,945/-
Principal amount of Foreign Currency Convertible Bonds (FCCBs)	FCCBs	Since December, 2011	499,575,000/-
Premium on redemption of FCCBâs	FCCBs	Since December, 2011	227,548,097/-

The above information is in respect of defaults in repayment of principal amounts only,

xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

For JAGDISH CHAND & CO.

Firm Registration

Number: 000129N

Chartered Accountants

(J.C. Gupta)

Place of signature : New Delhi Partner

Date : 27^th May, 2016 Membership Number: 06107

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of Paramount Communications Limited ("the Company"), which comprise the Balance Sheet as at 31st 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 to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 and the Rules made thereunder including the accounting standards and matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.

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 control relevant to the Company's preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of 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.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

9. We draw attention to

a. Note 36 to the financial statements. The accompanying financial statements have been prepared on a going concern basis despite negative net worth, overdue in repayment of loan installments, interest to banks, working capital facilities from banks, overdue in redemption of Foreign Currency Convertible Bonds (FCCBs). The appropriateness of the said basis is inter-alia dependent on Company's ability to generate profit in future years and meet its financial obligations and also dependent on induction of financial investors in the company and/or joint venture with foreign companies.

b. Wherever, interest on borrowings has not been applied by banks, interest on those borrowings has been provided as per best estimates of the management. (Refer Note 25.1)

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

10. As required by 'the Companies (Auditor's Report) Order, 2015', issued by the Central Government of India in terms of sub- section (11) of section 143 of the Act (hereinafter referred to as the "Order"), 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 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 purposes of our audit.

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

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

d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

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

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

i) The Company has disclosed the impact of pending litigations as at 31st March, 2015 on its financial position in its standalone financial statements. (Refer Note No. 34.1& 34.3)

ii) The Company did not have any long-term contracts including derivative contracts as at 31st March, 2015

iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended on 31st March, 2015

ANNEXURE TO INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 10 of the Independent Auditors' Report of even date to the members of Paramount Communications Limited on the standalone financial statements as of and for the year ended 31st March, 2015

i. (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. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account. In our opinion, the frequency of verification is reasonable.

ii. (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.

iii. (a) There is one party covered in the register maintained under Section 189 of the Act, to which Company has given deposit as per contractual obligations. Since it is a security deposit no principal amount was due and no interest was charged. (Refer Note 13.1)

(b) In respect of the aforesaid deposit, there is no overdue amount.

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. 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.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed thereunder to the extent notified.

vi. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section(1) of Section 148 of the Act, and are of the opinion that, prime facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the records of the Company and information and explanations given to us and the records of the Company examined by us, the Company has been generally regular in depositing the undisputed statutory dues including provident fund, employees state insurance, income tax, Investor education and protection fund, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it with the appropriate authorities, We are informed there are no undisputed statutory dues as of March 31, 2015 outstanding for a period of more than six months from the date they become payable.

(b) There are no dues in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess that have not been deposited with appropriate authorities on account of any dispute other than those mentioned below :-

Name of the Nature of Amount Statute the Due Rs

Central Excise Excise Duty 74,807,281 Act 10,261,496

Finance Act Service Tax 21,927,668

181,206

Customs Act Customs Duty 5,771,724

Income Tax Income tax 44,298,650 Act, 1961

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

Central Excise Various years for 2002-03 to CESTAT Act 2009-10

Various years for 2007-08 to Commissioner 2013-14 (Appeals)

Finance Act Various years for 2005-06 to CESTAT 2009-10 2005-06 & 2006-07 Commissioner (Appeals)

Customs Act 2005-06, 2006-07, 2010-11 & CESTAT 2011-12

Income Tax 2008-09 & 2009-10 Commissioner Act, 1961 (Appeals)

(c) The amounts required to be transferred to the Investor Education and Protection Fund have been transferred within the stipulated time in accordance with the provisions of the Act, and the rules made thereunder.

viii. The company's accumulated losses at the end of the financial year 31st March, 2015 were more than fifty percent of its net worth. The company has incurred cash losses during the financial year ended 31st March, 2015 and in the immediately preceding financial year.

ix. Based on our audit procedures and as per the information and explanations given by the management, the Company has defaulted in repayment of dues to banks and Foreign Currency Convertible Bond Holders (FCCBs) as per details given below. (Also refer Note 4.2, 7.2 & 9.1).

Nature of Payment FY 2014-2015 Period

Rupee Loans from banks 202,451,703 Since June, 2013

Working Capital Loans from banks 880,409,943 Since November, 2014

Foreign Currency Loans 89,577,884 Since September, 2014

Interest on Loans/Working Capital Loans from banks 552,544,289 Since October, 2013

Principal amount of Foreign Currency Convertible Bonds (FCCBs) 470,700,000 Since December, 2011

Premium on redemption of FCCB's 214,936,015 Since December, 2011

Interest on FCCBs due up to 31st December, 2014 21,284,901 Since January, 2012

x. The company has given guarantee for loans taken by two corporates from banks. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prime facie prejudicial to the interest of the company. (Refer Note 34.2).

xi. The Company has not raised any term loans during the year. Accordingly, the provisions of Clause 3(xi) of the Order are not applicable to the Company.

xii. 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 material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For JAGDISH CHAND & CO. Firm Registration Number: 000129N Chartered Accountants

(J.C. Gupta) Place of signature : New Delhi Partner Date : 27th May, 2015 Membership Number: 06107

Mar 31, 2014

1. We have audited the accompanying financial statements of Paramount Communications Limited (the "Company"), which comprise the Balance Sheet as at 31st March, 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, which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

3. 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.

4. An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 auditors consider 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.

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

Opinion

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

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

Emphasis of Matter

7. We draw attention to :

a) Note 37 to the financial statements. The accompanying financial statements have been prepared on a going concern basis despite negative net worth, defaults in repayment of loan installments and interest to banks and other working capital facilities from banks, default in redemption of Foreign Currency Convertible Bonds (FCCBs) and filing of winding up petition filed against the Company under the Act on behalf of FCCB holders. The appropriation of the said basis is inter-alia dependent on reschedulement of repayments to banks and outcome of winding up petition.

b) Note 24.1 to the financial statements. Managerial Remuneration of Rs.9,032,489/- and Rs.853720 /- to Chairman & CEO and Managing Director for the year ended 31st March, 2014 and for March, 2013 respectively, is as approved by the shareholders by way of postal ballot. However, this is subject to final approval from the Central Government. Pending approval from the Central Government in this regard, the impact thereof on the financial statements to the extent of amount of remuneration that may be disallowed by the Central government, if any, is currently unascertainable

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

8. As required by ''the Companies (Auditor''s Report) Order, 2003'', as amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as the "Order"), 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 Order.

9. 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 dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

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

Referred to in paragraph ''8'' of the Independent Auditors'' Report to the Members of Paramount Communications Limited on the financial statements for the year ended 31st March, 2014

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

(b) As explained to us, the Company has a programme of physically verifying all its fixed assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and the nature of its fixed assets. In accordance with this programme, a portion of the fixed assets were physically verified by the management during the year. The discrepancies noticed on such verification between the physical balances and the fixed assets records were not material and have been properly dealt with in the books of account.

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

(ii) (a) During the year, the inventories have been physically verified by the management. In our opinion, the frequency of

verification is reasonable.

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

(c) On the basis of our examination of the record of inventories, we are of the opinion that, the Company is maintaining proper records of inventories. The discrepancies noticed on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) (a) There is one party covered in the register maintained under Section 301 of the Companies Act, 1956 to which

Company has given deposit as per contractual obligations. The maximum amount involved during the year was Rs.18,000,000/- and the year end balance of deposit granted to such party was Rs.18,000,000/-. (Refer Note 13.1)

(b) In our opinion, terms and conditions on which deposit has been given to such party listed in the register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company. No interest was charged from the party, since this is deposit against premises taken on rent.

(c) No principal amount was due for repayment, no interest was charged from the party, since this was deposit against premises taken on rent.

(d) In respect of aforesaid deposit, there is no overdue amount more than Rupees one Lac.

(e) The company has not taken any secured / unsecured loans from firms or other parties covered in register maintained under Section 301 of the Companies Act, 1956.

(f) 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. Therefore the provision of clause 4(iii) (f) & (g) of the said Order are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems, commensurate with the size of the Company and the nature of its business with regard to the purchase of inventories, fixed assets and with regard to the sale of goods. There are no sale of services during the year. Further, on the basis of our examination 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 aforesaid internal control system.

(v) (a) According to the information and explanations given to us, we are of the opinion that during the year, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs in respect of any party have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) As, 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, paragraph 4(vi) of the order is not applicable.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 209 (1)(d) of the Companies Act, 1956 and are of the opinion that, prime facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) a) According to the records of the Company and information and explanations given to us and the records of the Company examined by us, the Company has been generally regular in depositing the undispu -ted statutory dues including provident fund, employees state insura -nce, income tax, Investor education and protection fund, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it with the appropriate author -ities, We are informed there are no undisputed statutory dues as of March 31, 2014 outstanding for a period of more than six months from the date they become payable.

(b) There are no dues in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess that have not been deposited with appropriate authorities on account of any dispute other than those mentioned below :-

Name ofthe Statute Nature of Due Amount Period to which the amont relates

Central Excise Act Excise Duty 74,807,281 Various years for 2002-03 to 2009-10

2,566,120 2007-08 & 2008-09

Finance Act Service Tax 21,927,668 Various years for 2005-06 to 2009-10

178,378 2005-06 & 2006-07

Customs Act Custom Duty 5,771,724 2005-06, 2006-07, 2010-11 & 2011-12

Name of the Statute Forum where dispute is pending

Central Excise Act CESTAT

Finance Act Commissioner (Appeals) CESTAT

Customs Act Commissioner (Appeals) CESTAT

(x) The company''s accumulated losses at the end of the financial year 31st March, 2014 were more than fifty percent of its net worth. The company has incurred cash losses during the financial year ended 31st March, 2014 and in the immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, the Company has defaulted in repayment of dues to banks and Foreign Currency Convertible Bond Holders (FCCBs) as per details given below. (Also refer Note 4.2, 7.2 & 9.1).

Natue of Due Default Rs Period of Default

Rupee Loans from banks 225,424,887 Since June, 2013

Working Capital Loans from banks 97,434,093 Since January,2014 (overdrawn)

Interest on Loans/working capital 123,531,305 Since October,2013 loans from banks

Principal amount of Foreign Currency 452,175,000 Since Decembe,2011 Convertible Bonds (FCCBs)

Premium on redemption of FCCBs 205,958,186 Since December2011

Interest on FCCBs due up to 31st 13,865,875 Since January,2012 December, 2013

(xii) As the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, paragraph 4(xii) of the Order is not applicable.

(xiii) As the Company is not a chit fund / nidhi / mutual benefit funds / society to which the provisions of special statute relating to chit fund are applicable, paragraph 4(xiii) of the Order is not applicable.

(xiv) As the Company is not dealing or trading in shares, securities, debentures and other investments, paragraph 4(xiv) of the Order is not applicable.

(xv) The company has given guarantee for loans taken by two corporates from banks. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prime facie prejudicial to the interest of the company. (Refer Note 34 (ii) & (iii)).

(xvi) The Company has not raised any term loans. Accordingly, the provisions of Clause 4(xvi) of the Order are not applicable to the Company.

(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 during the year short term funds have not been used to finance long term investments.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year. Accordingly, the provisions of Clause 4 (xviii) of the Order are not applicable to the company.

(xix) The Company has not issued any debentures during the year and does not have any debentures outstanding as at the beginning of the year and at the year end on which it is required to create security or charge. Accordingly, the provisions of Clause 4(xix) of the Order are not applicable to the Company.

(xx) The Company has not raised any money by a public issue during the year. Accordingly, the provisions of Clause 4(xx) of the order are not applicable.

(xxi) 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 material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For JAGDISH CHAND & CO. Firm Registration Number: 000129N Chartered Accountants

(J.C. GUPTA) Place of signing: New Delhi Partner Date : 29th May, 2014 Membership Number 6107

Mar 31, 2012

1. We have audited the attached Balance Sheet of PARAMOUNT COMMUNICATIONS LIMITED as at 31st March, 2012 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. We invite your attention to the following:

a) Note no 37 to the financial statements. The accompanying financial statements have been prepared on a going concern basis despite significant erosion of net worth, defaults in repayments to banks and redemption of Foreign Currency Convertible Bonds (FCCBs). The appropriation of the said basis is interalia dependent on successful implementation of Corporate Debt Restructuring (CDR) package.

b) No provision for diminution in the value of investment in shares of Paramount Wires & Cables Limited (Associate) and Paramount holdings Limited (Subsidiary) has been made. In the opinion of the management diminution in the value of these investments is temporary in nature( Refer note no12.1)

We have not qualified our opinion in respect of the matters referred in the paragraphs 4 (a) & 4(b) above.

5. a) We state that no provision has been made for premium on redemption of US $ 7.5 million1% Foreign Currency Convertible Bonds (FCCBs) due on 23rd November, 2011 amounting to Rs 195,636,955/- (gross of tax) for the year ended 31st March, 2012. In our opinion, this accounting treatment is not in accordance with current accounting standards i.e. AS-16. (Refer Note 36)

b) We further report that had observation made in Paragraph 5 (a) above been considered, other current liabilities would have been Rs 1,244,827,546/- as against reported figure of other current liabilities Rs 1,049,190,591/- and securities premium account would have been Rs 714,084,279/- as against reported figure of securities premium account Rs 909,721,234/- .

6. 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 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) Except as stated in para 5(a) above, In our opinion, the Balance Sheet, Profit & Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and notes thereon give the information required by the Companies Act, 1956, in the manner so required and subject to the effect of the matter stated in paragraphs 5(a) & 5(b) above give a true and fair view in conformity with the accounting principles generally accepted in India;

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

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

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

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

(b) As explained to us, the Company has a programme of physically verifying all its fixed assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and the nature of its fixed assets. In accordance with this programme, some of the fixed assets were physically verified by the management during the year. The discrepancies noticed on such verification between the physical balances and the fixed assets records were not material and have been properly dealt with in the books of account.

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

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

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

(c) On the basis of our examination of the record of inventories, we are of the opinion that, the Company is maintaining proper records of inventories. The discrepancies noticed on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) (a) There is one party covered in the register maintained under Section 301 of the Companies Act, 1956 to which Company has given deposit as per contractual obligations. The maximum amount involved during the year was Rs 18,000,000/- and the year end balance of deposit granted to such party was Rs 18,000,000/- (Refer Note 13.1).

(b) In our opinion, terms and conditions on which deposit has been given to party listed in the register maintained under Section 301 of Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company. No interest was charged from this party, since this is deposit against premises taken on rent.

(c) As per stipulation no repayment was due from the party and no interest was charged from this party, since this was deposit against premises taken on rent. (Refer Note13.1).

(d) There is no overdue amount of deposit granted to the party listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The company has taken deposit from one party covered in register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs 86,00,000/- and the year end balance of deposit taken from the party was Rs Nil .

(f) In our opinion, the rate of interest and other terms and conditions on which deposit has been taken from Companies, firms or other parties listed in the register maintained under Section 301 of Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(g) The Company is regular in repaying the principal amounts as stipulated and also in the payment of interest where applicable in case of deposits taken from Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems, commensurate with the size of the Company and the nature of its business with regard to the purchase of inventories, fixed assets and with regard to the sale of goods. There are no sales of services during the year. Further, on the basis of our examination and according to the information and explanations given to us, we have not come across nor have been informed of any continuing failure to correct major weaknesses in the internal control system.

(v) (a) According to the information and explanations given to us, we are of the opinion that during the year, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs in respect of any party have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) As, the Company has not accepted any deposits from the public, paragraph 4(vi) of the order is not applicable.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956 and are of the opinion that, prime facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) According to the records of the Company and information and explanations given to us and the records of the Company examined by us, the Company has been generally regular in depositing the undisputed statutory dues including provident fund, employees state insurance, income tax, Investor education and protection fund, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it with the appropriate authorities, We are informed there are no undisputed statutory dues as of March 31, 2012 outstanding for a period of more than six months from the date they become payable.

(b) There are no dues in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess that have not been deposited with appropriate authorities on account of any dispute other than those mentioned below :-

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

Income Tax Income Tax 774,327 2007-08 Commissioner Act (Appeals)

Central Excise Duty 74,336,296 Various years for CESTAT Excise Act 2002-03 to 2009-10

Excise Duty 69,150 2008-09 Commissioner (Appeals)

Finance Act Service Tax 24,348,909 Various years for CESTAT 2005-06 to 2010-11

Service Tax 411,686 Various years for Commissioner 2005-06 & 2010-11 (Appeals)

Customs Act Custom Duty 1,836,570 2005-06 & 2006-07 Commissioner (Appeals)

(x) The company's accumulated losses at the end of the financial year were more than fifty percent of its net worth .The company has incurred cash losses during the financial year and in the immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, the Company has defaulted in repayment of principal amount of Rs 360,616,477/- of Term Loans from banks which were due for repayment on 31st March, 2012. Further the Company has defaulted in repayment of Rs 580,911,955./- (inclusive of premium on redemption of 195,636,955/-) upon redemption on 23rd November, 2011 of Foreign currency Convertible Bonds (FCCBs). Interest on FCCBs of Rs.675,042/- due as on 31st December, 2011 has also not been paid and is overdue. (Refer Note 4.2 & 9.2).

(xii) As the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, paragraph 4(xii) of the order is not applicable.

(xiii) As the Company is not a chit fund / nidhi / mutual benefit funds / society to which the provisions of special statute relating to chit fund are applicable, paragraph 4(xiii) of the order is not applicable.

(xiv) As the Company is not dealing or trading in shares, securities, debentures and other investments, paragraph 4(xiv) of the order is not applicable.

(xv) The company has given guarantee for loans taken by two corporates from banks. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prime facie prejudicial to the interest of the company (Refer Note 35 (ii), (iii) & (iv)).

(xvi) In our opinion and on the basis of information and explanations given to us, the Company has not obtained any term loans 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 during the year short term funds have not been used to finance long term investments.

(xviii) During the year, the company has allotted equity shares on preferential basis to a company covered in the Register maintained under Section 301 of the Companies Act, 1956, consequent upon conversion of warrants. The price at which, these equity shares have been issued has been determined as per the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2009, which in our opinion , is not prejudicial to the interest of the company.

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

(xx) The Company has not raised any money by a public issue during the year. Accordingly, paragraph 4(xx) of the order is not applicable.

(xxi) Based upon the audit procedures performed and 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 ended March 31, 2012.

For JAGDISH CHAND & CO.

CHARTERED ACCOUNTANTS

(J.C. GUPTA)

Place : New Delhi PARTNER

Dated : 25th July, 2012 M. No. 6107

Firm Registration Number: 000129N

Mar 31, 2010

1. We have audited the attached Balance Sheet of PARAMOUNT COMMUNICATIONS LIMITED as at 31st March, 2010 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of subsection (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 in Paragraph 3 above, we report that:

a) We have obtained all the information and explanations, which to the best 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 & Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

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

ii. in the case of the Profit & 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 of the Company for the year ended on that date.

Annexure referred to in paragraph 3 of the AuditorsÃ Report to the Members of Paramount Communications Limited on the accounts for the year ended March 31, 2010

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

(b) As explained to us, the Company has a programme of physically verifying all its fixed assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and the nature of its fixed assets. In accordance with this programme, some of the fixed assets were physically verified by the management during the year. The discrepancies noticed on such verification between the physical balances and the fixed assets records were not material and have been properly dealt with in the books of account.

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

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

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

(c) On the basis of our examination of the record of inventories, we are of the opinion that, the Company is maintaining proper records of inventories. The discrepancies noticed on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) (a) There is one party covered in the register maintained under Section 301 of the Companies Act, 1956 to which Company has given deposit as per contractual obligations. The maximum amount involved during the year was Rs1,80,00,000/- and the year end balance of deposit granted to such party was Rs.1,80,00,000/-. (Refer Note No 23 of Schedule "V")

(b) In our opinion, terms and conditions on which deposit has been given to party listed in the register maintained under Section 301 of Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company. No interest was charged from this party, since this is deposit against premises taken on rent.

(c) As per stipulation no repayment was due from the party and no interest was charged from this party, since this was deposit against premises taken on rent. (Refer Note No 23 of Schedule "V").

(d) There is no overdue amount of deposit granted to the party listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The company has taken deposits from two Companies covered in register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 1,57,00,000/- and the year end balance of deposits taken from parties was Rs. 8,87,865/-.

(f) In our opinion, the rate of interest and other terms and conditions on which deposits have been taken from Companies, firms or other parties listed in the register maintained under Section 301 of Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(g) The Company is regular in repaying the principal amounts as stipulated and also in the payment of interest where applicable in case of deposits taken from Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems, commensurate with the size of the Company and the nature of its business with regard to the purchase of inventories, fixed assets and with regard to the sale of goods. There are no sale of services during the year. Further, on the basis of our examination and according to the information and explanations given to us, we have not come across nor have been informed of any continuing failure to correct major weaknesses in the internal control system.

(v) (a) According to the information and explanations given to us, we are of the opinion that during the year, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs in respect of any party have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) As, the Company has not accepted any deposits from the public, paragraph 4(vi) of the order is not applicable.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956 and are of the opinion that, prime facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) According to the records of the Company and information and explanations given to us and the records of the Company examined by us, the Company has been regularly depositing the undisputed statutory dues including provident fund, employees state insurance, income tax, Investor Education and Protection fund, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it with the appropriate authorities. We are informed there are no undisputed statutory dues as of March 31,2010 outstanding for a period of more than six months from the date they become payable.

(b) There are no dues in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess that have not been deposited with appropriate authorities on account of any dispute other than those mentioned below :-

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

Income Tax Act Income Tax 2,64,47,220 2003-04 & Appeal pending before 2004-05 Commissioner of Income Tax (Appeals)

Income Tax 26,73,452 2005-06 & Appeal effects/ rectification to 2007-08 be done by Income Tax Authorities

Central Excise Act Excise Duty 5,52,52,571 2007-08 & 2008-09 CESTAT

Excise Duty 69,150 2007-08 Commissioner (appeals)

Finance Act Service Tax 8,11,930 2008-09 Commissioner (appeals)

Customs Act Custom Duty 18,36,570 2008-09 Commissioner (appeals)

(x) The Company does not have accumulated losses as at the year ended March 31, 2010. Further, the Company has not incurred cash losses during the year ended March 31, 2010, however the company incurred cash losses in the immediately preceding financial year ended March 31, 2009.

(xi) According to the records of the Company examined by us and on the information and explanations given to us, the Company has not defaulted in repayment of dues to banks or financial institution during the year. The Company has not issued debentures during the year.

(xii) As the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, paragraph 4(xii) of the order is not applicable.

(xiii) As the Company is not a chit fund / nidhi / mutual benefit funds / society to which the provisions of special statute relating to chit fund are applicable, paragraph 4(xiii) of the order is not applicable.

(xiv) As the Company is not dealing or trading in shares, securities, debentures and other investments, paragraph 4(xiv) of the order is not applicable.

(xv) The company has given guarantee for loans taken by a corporate from banks. According to the information and explanations given to us, we are of the opinion that the term and conditions thereof are not prime facie prejudicial to the interest of the company (Refer Note No 2 (i) & (ii) of Schedule "V").

(xvi) We are informed that the Company has obtained term loans during the year and term loans were applied for the purposes 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 during the year short term funds have not been used to finance long term investments.

(xviii) According to the information and explanation given to us 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 has not issued any debentures during the year.

(xx) The Company has not raised any money by a public issue during the year. Accordingly, paragraph 4(xx) of the order is not applicable.

(xxi) Based upon the audit procedures performed and 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 ended March 31, 2010.

For JAGDISH CHAND & CO. CHARTERED ACCOUNTANTS

(J.C. GUPTA) Place : New Delhi PARTNER

Dated : 28th May, 2010 M. No. 6107

Firm Registration Number: 000129N

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