Auditor Report of Tamilnadu Telecommunications Ltd.

Mar 31, 2025

We have audited the accompanying standalone financial
statements of Tamilnadu Telecommunications Limited, (the
“Company”) which comprise the Balance Sheet as at March
31, 2025, the Statement of Profit and Loss (including the
Statement of Other Comprehensive Income) for the year then
ended, the Cash Flow Statement for the year then ended,
the Statement of Changes in Equity for the year then ended,
and a summary of significant accounting policies and other
explanatory information.

In our opinion and to the best of our information and according
to the explanations given to us, because of the significance of
the matter discussed in the Basis for Adverse Opinion section
of our report, the aforesaid standalone financial statements
do not give a true and fair view in conformity with the Indian
Accounting Standards prescribed under section 133 of the
Act, read with Companies (Indian Accounting Standards)
Rules, 2015, as amended, (“Ind AS”) and other accounting
principles generally accepted in India, of the state of affairs
of the Company as at 31 March 2025, the Loss and total
comprehensive loss, its cash flows and the changes in equity
for the year ended on that date.

Basis for Adverse Opinion

1) We draw attention to Note 1(II)(a) Significant
Accounting Policies & 31 which describes that the
Company''s financial statements have been prepared
using the going concern assumption of accounting.
However, the Company''s accumulated losses of
Rs.2,35,78,744 hundreds (including other
Comprehensive Income) (Previous year Rs. 2,20,02,137
hundreds) has eroded the Net Worth of the Company,
indicating the existence of material uncertainty that
cast doubt about the Company''s ability to continue as
a Going Concern. The Company has not operated its
factory since 2017, and no sales effected for more than
five years. Further, as represented by the company,
the machinery would involve major overhauling cost to
resume operations, and the company is also unable to
obtain support for supply of major raw material required
for manufacture from its supplier. Also, the company
has not bagged any new orders to substantiate the
going concern assumption. Though the company had
received a bid for granting of lease of the manufacturing
facilities and factory premises, and issued Letter of
Award to the lessee, the lessee had not taken over the
premises and the lease income has not generated yet.

Hence, considering the cumulative effect of the factors
detailed above, we conclude that the Going Concern
assumption of the management in preparation of
financial statements is not appropriate.

2) In the view of the significant losses, which have been
incurred by the company during the previous financial
years, the carrying amount of fixed assets needs to be
tested for impairment. The management has not done
impairment testing and in absence of any information
we are unable to comment as to whether any provision
for impairment is required or not.

3) The following financial liability / assets referred to in the
respective note of standalone financial statements, has
been stated at historical cost only, irrespective of the fair
value of the same, which is departure from requirement
of Ind AS 113 (Fair Value Measurement) and Ind AS 109
(Financial Instruments).

a. Amounts due to M/s. Fujikura Limited amounting

to Rs.2,10,061 hundreds (Previous Year

Rs.2,07,991) (In hundreds) (Note No 16)

b. Trade Receivables (considered good) amounting

to Rs.4,67,708 hundreds (Previous Year

Rs.4,67,200) (In hundreds) (Note No 5)

c. Unsecured Trade payables amounting

to Rs.3,67,050 hundreds (Previous Year

Rs.3,60,457) (In hundreds) (Note No 15)

d. Short Term and Long-Term Borrowings due
to Telecommunications Consultants India Ltd
(Parent Company) of Rs.33,90,692 hundreds
(Previous Year Rs.32,51,640 hundreds) (Note No
12 & 14)

Emphasis of Matter

1) We draw attention to Note No. 48 of the other

explanatory notes to the financial statements which
states the reason for non-recognition of amounts due
to the holding Company viz., Telecommunications
Consultants India Limited amounting to Rs. 1,70,22,370
hundreds (Previous Year - Rs. 1,57,85,738 hundreds) at
Fair Value in accordance with Ind AS 109. Our opinion is
not modified in respect of this matter.

2) Attention is invited to Note Nos. 5, 7, 9, 15, 16 & 17 of
the notes to financial statements, where the balances
carried in the Trade receivables, Other Financial
Assets, Other Current assets, Trade payables, Other
Financial liabilities, and Other Current Liabilities are
subject to confirmation from all parties (other than
Telecommunications Consultants India Limited) as
stated in Note No. 29. Our opinion is not modified in
respect of this matter.

3) Attention is invited to Note No. 45 of the other
explanatory notes to the financial statements which
states that the Company has not received information
from vendors regarding their status under the Micro,
Small and Medium Enterprises Development Act, 2006.
Our opinion is not modified in respect of this matter.

Key Audit Matters

Key Audit Matters are those matters that, in our professional
judgement, were of most significance in our audit of financial
statements of the current period. Those matters were
addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. Except for the
matters described in the Basis for Adverse opinion section, we
have determined that there are no other key audit matters to
communicate in our report.

Other Information

The Company''s Board of Directors is responsible for the other
information. The other information comprises the information
included in the Management Discussion and Analysis,
Board''s Report including Annexures to Board''s Report,
Business Responsibility and Sustainability Report, Corporate
Governance and Shareholder''s Information but does not
include the standalone financial statements and our auditor''s
report thereon.

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

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.

The Annual Report is not made available to us at the date of
this auditor''s report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with
Governance for the Financial Statements.

The Company''s Board of Directors is responsible for the
matters stated in section 134(5) of the Act with respect to the
preparation of these standalone financial statements that give a
true and fair view of the state of affairs (financial position), profit
or loss (financial performance including other comprehensive
income), cash flows and changes in equity of the Company in
accordance with the accounting principles generally accepted
in India, including the Indian Accounting Standards (Ind AS)
specified under section 133 of the Act. This responsibility
also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding of
the assets of the Company and for preventing and detecting
frauds and other irregularities; selection and application of

appropriate accounting policies; making judgements and
estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring
the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.

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

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

Auditor’s Responsibilities for the Audit of the Financial
Statements.

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

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

• Identify and assess the risks of material misstatement of
the 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.

• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that
are appropriate in the circumstances. Under section
143(3)(i) of the Companies Act, 2013, we are also
responsible for expressing our opinion on whether the
company has adequate internal financial controls system
in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management''s use of
the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast
significant doubt on the Company''s ability to continue as a
going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor''s
report to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify our 48
opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor''s report. However,
future events or conditions may cause the Company to
cease to continue as a going concern.

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

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

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

We also provide those charged with governance with a
statement that we have complied with the 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 safe guards.

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

Other Matter

The financial statements of the Company for the year ended
March 31, 2024, included in these financial statements,
have been audited by the V. Narayanan & Co. Chartered

Accountants who expressed an adverse opinion on those
statements vide their report dated May 21,2024. Our opinion
is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order,
2020 (“the Order”), issued by the Central Government
of India in terms of sub-section (11) of section 143 of
the Companies Act, 2013, we give in “Annexure A” a
statement on the matters specified in paragraphs 3 and
4 of the Order, to the extent applicable.

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

a) We have sought and obtained all the information
and explanations which to the best of our
knowledge and belief were necessary for the
purposes of our audit, except for the matters
specified in the emphasis of matters paragraph.

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 except for the matters specified in the
basis of adverse opinion paragraph, emphasis of
matters paragraph.

c) The Balance Sheet, the Statement of Profit and
Loss including Other Comprehensive Income,
Statement of Changes in Equity 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 Ind AS specified
under Section 133 of the Act, read with Rule 7
of the Companies (Accounts) Rules, 2014, except
for the matters specified in the basis of adverse
opinion paragraph and emphasis of matters
paragraph.

e) Our observations in “The Basis for Adverse”
Paragraph here-in-above regarding the
assumption of Going Concern, in our Opinion,
may have adverse effect on the functioning of the
Company.

f) On the basis of the written representations
received from the company that the directors as
on March 31,2025 taken on record by the Board
of Directors, none of the directors is disqualified
as on March 31,2025 from being appointed as a
director in terms of Section 164 (2) of the Act.

g) With respect to the adequacy of the internal
financial controls over financial reporting of the
Company and the operating effectiveness of
such controls, refer to our separate Report in
“Annexure B” which expressed a adverse opinion.

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

i) The Company has disclosed the impact of
pending litigation on its financial position
in its financial statements - Refer Note
No. 30, 38, 39, 42 & 44 to the financial
statements;

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

iii) According to the information and
explanations given to us and based on our
examination of the records, there were no
amounts required to be transferred to the
Investor Education and Protection Fund by
the Company.

iv) (a) The management has represented

that, to the best of its knowledge
and belief, as disclosed in the
Note No.51.16(a) to the financial
statement, no funds 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 (“Intermediaries”),
with the understanding, whether
recorded in writing or otherwise,
that the Intermediary shall directly
or indirectly lend or invest in other
persons or entities identified in
any manner whatsoever (“Ultimate
Beneficiaries”) by or on behalf of the
Company, or provide any guarantee,
security or the like on behalf of the
Ultimate Beneficiaries.

(b) The management has represented,
that, to the best of it''s knowledge
and belief, as disclosed in the
Note No.51.16(b) to the financial
statement, no funds have been
received by the Company from
any persons or entities, including
foreign entities (“Funding Parties”),
with the understanding, whether
recorded in writing or otherwise,
that the company shall, directly or
indirectly, lend or invest in other

persons or entities identified in any
manner whatsoever by or on behalf
of the Funding Party (“Ultimate
Beneficiaries”) or provide any
guarantee, security or the like on
behalf of the Ultimate Beneficiaries.

(c) Based on audit procedures that have

been considered reasonable and
appropriate in the circumstances,
nothing has come to our notice that
has caused us to believe that the
representations under clause (iv)
(a) and (iv) (b) contain any material
misstatement.

v) The Company has neither declared nor
paid any dividend during the year.

vi) During the financial year 2024-25, the
Company uses an accounting software
for maintaining books of accounts, which
does not have the feature of recording
audit trail of each and every transaction,
and does not have the feature of creating
an edit log of each changes made in books
of accounts along with the date when such
changes were made, as required under
Rule 3(1) of Companies (Accounts) Rules,
2004. Additionally, the audit trail has not
been preserved by the company as per the
statutory requirements for record retention.

3) We draw attention to the Note No 47 to the financial
statements, explaining the reasons for non-applicability
of section 197 of the Companies Act, 2013. Accordingly,
reporting under 197(16) of the section is not applicable.

4) Report on the Directions issued by the Comptroller and
Auditor General of India, under Section 143(5) of the
Companies Act, 2013 for conducting audit of accounts
for the year 2024-25 is given below:-

1	Whether the Company	The Company maintains Tally
	has system in place to	Prime as the accounting program
	process all the accounting	for maintenance of books of
	transactions through	accounts. Tally being the only IT
	IT system? If yes, the	system used by the Company,
	implications of processing	not all transactions (including
	of accounting transactions	payroll processing, stock
	outside IT system on the	procurement, stock dispatch
	integrity of the accounts	etc.,) are computerized thereby
	along with the financial	resulting in involvement of human
	implications, if any, may be	intervention. There is no financial
	stated.	implication.

2	Whether there is any restructuring of an existing loan or cases of waiver/ write off of debts/loans/ interest etc. made by a lender to the Company due to the company’s inability to repay the loan? If yes, the financial impact may be stated.	In the current period under review (FY 2024-25), there is no restructuring of an existing loan or cases of waiver/write off of debts/loans/interest etc. made by a lender to the Company, even though the Company is not regular in repayment of its dues (Principal and Interest) with respect to the borrowings from M/s. Telecommunications Consultants India Limited being one of the promoters of Company.
3	Whether funds received	The Company did not receive any
	/ receivable for specific	funds for specific schemes from
	schemes from Central/	Central/State agencies during the
	State agencies were properly accounted for/ utilized as per its terms and conditions? List the cases of deviation.	Financial Year 2024-25.

For Sundaram and Srinivasan
Chartered Accountants
FRN: 004207S

-Sd/-

UDIN : 25217914BMKYNA7240 P Menakshi Sundaram
Date : May 28, 2025 Partner

Place : Chennai MRN: 217914

---

Mar 31, 2024

Tamilnadu Telecommunications Limited Chennai.

Report on the Standalone Financial Statements Adverse Opinion

We have audited the accompanying standalone financial statements of Tamilnadu Telecommunications Limited, (the “Company”) which comprise the Balance Sheet as at 31 March 2024, the Statement of Profit and Loss (including the Statement of Other Comprehensive Income), the Cash Flow Statement, the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, because of the significance of the matter discussed in the Basis for Adverse Opinion section of our report, the aforesaid standalone financial statements do not give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended,(“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2024, the Loss and total comprehensive loss, its cash flows and the changes in equity for the year ended on that date.

Basis for Adverse Opinion

(a) We draw attention to Note 1(II)(a) & 31 which describes that the Company''s financial statements have been prepared using the going concern assumption of accounting. However, the Company''s accumulated losses of Rs.2,20,02,137 Hundreds (including other Comprehensive Income) (Previous year Rs.2,05,42,224 Hundreds) has eroded the Net Worth of the Company, indicating the existence of material uncertainty that may cast a doubt about the Company''s ability to continue as a Going Concern. The Company has not operated its factory since 2017 and NO sales effected for more than five years. It is also pertinent to note that power connections in the factory were not enabled up to 31.03.2024. Further, as represented by the company, the machinery would involve major overhauling cost to resume operations and the company is also unable to obtain support for supply of major raw material required for manufacture from its supplier. Also, the company has not bagged any new orders to substantiate the going concern assumption. Though the company had received a bid for granting of lease of the manufacturing facilities and factory premises in Maraimalainagar, and issued Letter of Award to the leasee, the lessee had not

taken over the premises and the lease income has not generated yet.

Hence, considering the cumulative effect of the factors detailed above, we conclude that the Going Concern assumption of the management in preparation of financial statements is inappropriate.

(b) The Company has not recognized the following financial liability / asset at fair value in terms of Ind AS 109 (including comparative figures as on 31 March 2023) and Impact of the same on the financial statements is not ascertainable:

i. Amounts due to M/s.Fujikura Limited amounting to Rs. 2,07,991 hundreds (Previous Year-Rs.2,06,756) (In hundreds) (Note No 16)

ii. Trade Receivables (considered good) amounting to Rs. 4,67,200 hundreds (Previous Year-Rs. 6,09,541) (In hundreds) (Note No 5)

iii. Unsecured Trade payables amounting to Rs.3,60,457 hundreds (Previous Year Rs.3,42,963) (In hundreds) (Note No 15).

Emphasis of Matter

1) We draw attention to Note No. 48 of the other explanatory notes to the financial statements which states the reason for non-recognition of amounts due to the holding Company viz., Telecommunications Consultants India Limited amounting to Rs. 1,57,85,738 hundreds (Previous Year - Rs. 1,46,41,843 hundreds) at Fair Value in accordance with Ind AS 109. Our opinion is not modified in respect of this matter.

2) Attention is invited to Note Nos. 5,7,9,15,16 & 17 of the notes to financial statements, where the balances carried in the Trade receivables, Other Financial Assets, Other Current assets, Trade payables, Other Current Financial liabilities, and Other Current Liabilities are subject to confirmation from all parties (other than Telecommunications Consultants India Limited) as stated in Note No. 29. Our opinion is not modified in this respect.

3) Attention is invited to Note No. 45 of the other explanatory notes to the financial statements which states that the Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Our opinion is not modified in this respect.

Key Audit Matters

Key Audit Matters are those matters that, in our professional

judgment, were of most significance in our audit of financial

statements of the current period. Those matters were

addressed in the context of our audit of the financial statements

as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Except for the matters described in the Basis for Adverse opinion section, we have determined that there are no other key audit matters to communicate in our report.

Other Information

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexures to Board''s Report, Business Responsibility and Sustainability Report, Corporate Governance and Shareholder''s Information but does not include the standalone financial statements and our auditor''s report thereon.

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

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.

The Annual Report is not made available to us at the date of this auditor''s report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

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

In preparing the financial statements, Management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to

going concern and using the going concern basis of accounting unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditor’s Responsibilities for the Audit of the Financial Statements

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

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

• I dentify and assess the risks of material misstatement of the 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.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our

opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

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

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

We also provide those charged with governance with a statement that we have complied with the 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 safe guards.

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

a) We have sought and obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purposes of our audit, except for the matters specified in the emphasis of matters paragraph.

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 except for the matters specified in the basis of adverse opinion paragraph, emphasis of matters paragraph.

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity 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 Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, except for the matters specified in the basis of adverse opinion paragraph and emphasis of matters paragraph.

e) Our observations in “The Basis for Adverse” Paragraph here-in-above regarding the assumption of Going Concern, in our Opinion, may have adverse effect on the functioning of the Company.

f) On the basis of the written representations received from the directors as on 31st March, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2024 from being appointed as a director in terms of Section 164 (2) of the Act.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B” which expressed a adverse opinion.

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

i. The Company has disclosed the impact of pending litigation on its financial position in its financial statements - Refer Note No. 30,38,39,42 & 44 to the financial statements;

ii. The Company has made provision, as required under the applicable law or Indian accounting standards, for material

foreseeable losses, if any, on long-term contracts.

iii. According to the information and explanations given to us and based on our examination of the records, there were no amounts required to be transferred to the Investor Education and Protection Fund by the Company

iv. (a) The management has represented

that, to the best of its knowledge and belief, as disclosed in the Note No.51.16(a) to the financial statement, no funds 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 (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Company, or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) The management has represented, that, to the best of it''s knowledge and belief, as disclosed in the Note No.51.16(b) to the financial statement, no funds have been received by the Company from any persons or entities, including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under clause (iv) (a) and (iv) (b) contain any material misstatement.

v. The Company has neither declared nor paid any dividend during the year.

vi. During the financial year 2023-24, the Company uses an accounting software for maintaining books of accounts, which does not have the feature of recording audit trail of each and every transaction, and does not have the feature of creating an edit log of each changes made in books of accounts along with the date when such changes were made, as required under Rule 3(1) of Companies (Accounts) Rules, 2004. Reference is invited to point 4 of Emphasis of Matter paragraph of this report

3. We draw attention to the Note No 47 to the financial statements, explaining the reasons for non-applicability of section 197 of the Companies Act, 2013. Accordingly, reporting under 197(16) of the section is not applicable.

4. Report on the Directions issued by the Comptroller and Auditor General of India, under Section 143(5) of the Companies Act, 2013 for conducting audit of accounts for the year 2023-24 is given below:-

3	Whether funds received	The Company did not receive any
	/ receivable for specific	funds for specific schemes from
	schemes from Central/	Central/State agencies during the
	State agencies were properly accounted for/ utilized as per its terms and conditions? List the cases of deviation.	Financial Year 2023-24.

For M/s. V. Narayanan & Co. Chartered Accountants Firm Registration No 002398S

-Sd/-

Place: Chennai S.U. Sridharan

Date : 21.05.2024 Partner

UDIN : 24019613BKHILE3809 ICAI M. No. 019613

1	Whether the Company has system in place to process all the accounting transactions through IT system? If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications, if any, may be stated.	The Company maintains Tally Prime as the accounting program for maintenance of books of accounts. Tally being the only IT system used by the Company, not all transactions (including payroll processing, stock procurement, stock dispatch etc.,) are computerized thereby resulting in involvement of human intervention. There is no financial implication.
2	Whether there is any restructuring of an existing loan or cases of waiver/ write off of debts/loans/ interest etc. made by a lender to the Company due to the company’s inability to repay the loan? If yes, the financial impact may be stated.	In the current period under review (FY 2023-24), there is no restructuring of an existing loan or cases of waiver/write off of debts/loans/interest etc. made by a lender to the Company, even though the Company is not regular in repayment of its dues (Principal and Interest) with respect to the borrowings from M/s. Telecommunications Consultants India Limited being one of the promoters of Company.

---

Mar 31, 2015

1. We have audited the accompanying financial statements of Tamilnadu Tele communications Limited("the Company"), which comprise the Balance Sheet as at 31stMarch, 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 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 financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

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

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

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 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, 2015;

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

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

Emphasis of Matter

7. Without qualifying our conclusion, we draw , attention to S.No - 3– Note – 25 - Notes to Accounts. As at 31st March 2015, the Company's accumulated losses of Rs. 9400.69 Lakhs has eroded the Net Worth of the Company, indicating the existence of material uncertainity that may cast a doubt about the Company's ability to continue as a going concern. The Company has incurred a loss of Rs.857.49 Lakhs for the year under audit. Based on the mitigating factors discussed in the said note, the Management believes that the Going Concern assumption is appropriate.

Other Matter

8. The Deferred Ta x Asset amounts to Rs.1465.16 Lakhs, as of 31st March 2015, considering all eligible carried forward losses, as per AS 22 – Accounting for Taxes on Income. The same has not been provided for, in the books of account, considering the absence of virtual certainty of earning profits and prudence concept.

Report on Other Legal and Regulatory Requirements

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

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

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

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

d. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement 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 paragraph 7 – Emphasis of Matter, as above, in our opinion, may have adverse effect on the functioning of the Company.

f. On the basis of written representations received from the directors as on 31st March 2015, and 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.

Annexure -I

ANNEXURE TO INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 10 of our report of even date

On the basis of checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

(i) In respect of Fixed Assets:

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

b. As explained to us, fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

(ii) In respect of Inventories:

a. As explained to us, the inventory has been physically verified during the year by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, 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. In our opinion and according to the information and explanations given to us, the Company is

10. As required by the Companies (Auditor's Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub-section(11) of section 143 of the Companies Act, 2013, we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements –Refer S.No.2,10,13,14, and 19 under Note-25 – Notes to Accounts to the financial statements;

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

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

maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material and have been properly dealt with in the books of account.

(iii) We are informed that there is no Company, firm or party to be listed in the register referred to in Section 189 of Companies Act, 2013 except Telecommunications Consultants India Limited (TCIL).

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

(v) The company has not accepted any deposits from public. Hence we have no comments to offer in respect of the same.

(vi) We have broadly reviewed the books of accounts maintained by the company pursuant to the rules made by the Central Government for maintenance of cost records under Sec 148(1) of the Companies Act 2013 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

(vii) In respect of Statutory Dues:

a. The Company has been generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty, Customs Duty, Value added Tax, Cess and other material statutory dues with the appropriate authorities during the year as applicable to it except the Property Ta x amounting to Rs.32,27,400/-.We are informed by the Company that efforts are made to get exemption being a sick Company . We arealso informed that there are no employees who are eligible to becovered under Employees State Insurance scheme.

b. The details of disputed dues of Sales Tax and Customs Duty which have not been deposited, as on 31st March 2015 are as given below

S. No. Name of Nature of dues Amount (in Rs.) Forum where Statute pending

1. Sales Tax Additional sales Tax 1,86,08,794/- Honourable High Court of Madras 2. Sales Tax Non-Submission of 22,95,000/- Commercial Sales

C-forms tax officer.

3. Customs Duty Difference in 31,55,226/- Commissioner of

classification of customs, Chennai Telecommunication

Grade Optic Fibre Cables.

Report on the directions issued by the Comptroller and Auditor General of India, under Section 143(5) of the Companies Act 2013.

Tamilnadu Telecommunications Limited – Statutory Audit for the Year ended 31st March 2015.

On the basis of checks as we considered appropriate and according to the information and explanations given to us, during the course of our audit, we report that:

1. If the Company has been selected for disinvestment, a complete status report in terms of valuation of Assets (including intangible assets and land) and Liabilities (including Committed & General Reserves) may be examined including the mode and present stage of disinvestment process.

The Company has not been selected for disinvestment and hence reporting on this direction does not arise.

2. Please report whether there are any cases of Waiver/ Write-off of debts/loans/interest etc. if yes, the reasons there for and the amount involved.

There were no cases of waiver/write-off of debts, loans/interest etc. during the year.

3. Whether proper records are maintained for inventories lying with third parties & Assets received as gift from Government or other authorities.

There were no inventories lying with third parties and no assets have been received by the company as gift from Government or other authorities, during the year.

4. A report on age- wise analysis of pending legal/ arbitration cases including the reasons of

(viii) The accumulated losses of the company as at 31st March 2015 is more than 50% of its Net worth. The Company has incurred cash loss of Rs.826.59 lakhs during the financial year covered by our audit. The Company has incurred cash loss in the immediately preceding financial year.

(ix) The Company has not borrowed any sums from Banks or Financial Institutions or Debenture holders during the year and hence the question of default in repayment of dues to Banks or Financial Institutions or Debenture holders does not arise.

(x) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. Hence we have no comments to offer, in this regard.

(xi) No term loans were obtained by the company during the year under audit.

(xii) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

pendency and existence/ effectiveness of monitoring mechanism for expenditure on all legal cases (foreign and local) may be given.

Age-wise analysis of pending legal/arbitration cases is as given below:-

S.No. Pending Legal/ 0 - 3 Years 4 - 5 Years More than Arbitration cases 5 Years

1. Commercial Tax - - 1

2. Sales Tax - - 1

3. Custom Duty - - 1

4. Income Tax - - 1

5. Other cases (BSNL) - 1 1

6. Arbitration cases 1 - 2 Total 1 1 7 The details of the above cases are given in S.no.10, 13, 14, 19 and 2 of Note no.25- Notes to Accounts to the financial statements.

As informed to us, the pendency of legal/ arbitration cases is due to legal formalities in Court/arbitration proceedings.

The legal expenses are incurred in accordance with the delegation of powers laid down, in this regard.

For S.VENKATRAM & CO

Chartered Accountants

(FRN: 004656S)

R. Kandavelu Place: New Delhi Partner

Date: 29th May, 2015 (M.No.12811)

---

Mar 31, 2014

We have audited the accompanying financial statements of M/s. Tamilnadu Telecommunications Limited, which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the 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 auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by The Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

Without qualifying our conclusion, we draw attention to Note No: 3 in the Notes to Accounts. As at March 31, 2014, the Company''s accumulated losses of Rs. 85,30,96,915 has eroded the networth of the Company, indicating the existence of a material uncertainly that may cast a doubt about the Company''s ability to continue as a going concern. The Company has incurred a loss of Rs. 10,23,23,490 for the year under audit. Based on the mitigating factors discussed in the said note, the Management believes that the Going Concern assumption is appropriate.

Other Matter:

The deferred tax asset amounts to Rs.14,46,08,827 as on 31st March 2014 considering all eligible carried forward losses as per AS-22-Accounting for Taxes on Income. The same has not been provided for in the books of account, considering the absence of virtual certainty of earning profits and Prudence concept.

Report on Other Legal and Regulatory Requirements

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

2. As required by section 227(3) of the Act, we report that:

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

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

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

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

e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

The Annexure referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our Report of even date.

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

1. (a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year so as to affect the going concern assumption.

2. (a) As explained to us, the inventories have been physically verified during the year by the Management at reasonable intervals.

(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 nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification as compared to the books.

3. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has taken loans from, from Companies, firms and other parties covered in the register maintained u/s 301 of the Act. The number of parties and the amount involved are given below:

No. of Parties: 1

Balance outstanding as at 31st March, 2014:

Bridge Loan: Rs. 11,65,73,000

Working Capital Loan: Rs. 57,10,523

Maximum amount outstanding at any time during the year:

Bridge Loan: Rs. 11,65,73,000

Working Capital Loan: Rs. 301,66,969

(c) The rate of interest and the terms and conditions of the loan are not prejudicial to the interest of the Company.

(d) In respect of the above loans, the Bridge Loan is payable as early as possible by arranging for alternative source of funds and Working Capital Loan is payable on receipt of trade realizations in the escrow account maintained for the purpose on revolving basis.

(e) As far as overdue amount is concerned, as per the agreement dated 14/10/2010, the Bridge Loan is repayable as early as possible by arranging alternative source of funds and therefore it is overdue.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories, purchase of fixed assets & with regard to sale of goods and services. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. a) In our opinion and according to the information and explanations given to us, contracts or agreements in respect of which the particulars need to be entered into the register maintained under section 301 of the Act have been so entered by the company .

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts/arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 lakhs in respect of each party during the year have been made at prices which appear reasonable as per information available with the company.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

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

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales tax, Service Tax, Customs duty, Excise duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us, outstanding statutory due as on 31st of March, 2014 for a period of more than six months from the date they became payable is as follows:

S. Nature of due Amount (Rs. ) No

1 Property tax payable 31,75,650

(b) According to the information and explanations given to us, the dues in respect of CST and Customs Duty, which have not been deposited on account of dispute and the forum where the dispute is pending is as under:

S. Name of Nature of dues Amount(Rs. ) Forum where No. Statute pending

1. CST Additional 1,86,08,794/- Honourable High sales tax Court of Madras.

2. Customs Difference in 31,55,226/- Commissioner of Duty classification of Customs, Chennai Telecommunica-tion Grade Optic Fibre Cables

3. Sales Tax Non-Submission of 22,95,000/- Commercial Sales Department C-forms tax Officer, Chengalpatu

10. The accumulated losses of the Company at the end of the financial year, has exceeded the Net Worth of the Company.

The Company has also incurred cash losses during the financial year and immediately preceding financial year.

11. The Company has not borrowed any sums from Banks or financial institutions and hence question of default in repayment of dues to financial institution or bank does not arise.

12. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi / mutual benefit fund/ society. Therefore, the provisions of clause (xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

14. The Company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause (xiv) of Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. In our opinion, the Company has not taken any term loans during the year.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

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

19. The Company has no outstanding debentures during the period under audit.

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

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For Ramesh and Ramachandran Chartered Accountants FRN:002981S G.Suresh

Place : New Delhi (Partner) Date : 29/05/2014 Membership No. :029366

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of M/s. Tamilnadu Telecommunications Limited, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

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

Auditor

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

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

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

Inchon

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by The Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Emphasis of Matter

Without qualifying our conclusion, we draw attention to Note No: 3 in the Notes to Accounts. As at March 31, 2013, the Company''s accumulated losses of Rs. 75,07,73,425 has eroded the net worth of the Company, indicating the existence of a material uncertainty that may cast a doubt about the Company''s ability to continue as a going concern. The Company has incurred a loss of Rs. 8,48,49,176 for the year under audit. Based on the mitigating factors discussed in the said note, the Management believes that the Going Concern assumption is appropriate.

bet Matter

The deferred tax asset amounts to Rs. 9,20,23,736 as on 31sl March

2013 considering all eligible carried forward losses as per AS-22-Accounting for Taxes on Income. The same has not been provided for in the books of account, considering the absence of virtual certainty of earning profits and Prudence concept.

Report on Other Leboa and Regulator Requirements

1. 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, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

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

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

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

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

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

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

1. (a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year so as to affect the going concern assumption.

2. (a) As explained to us, the inventories have been physically verified during the year by the Management at reasonable intervals.

(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 nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventories and no material discrepancies Were noticed on physical verification as compared to the books.

3. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has taken loans from, from Companies, firms and other parties covered in the register maintained u/s 301 of the Act. The number of parties and the amount involved are given below:

(c) , The rate of interest and the terms and conditions of the loan are not prejudicial to the interest of the Company.

(d) In respect of the above loans, the Bridge Loan is payable as early as possible by arranging for alternative source of funds and Working Capital Loan is payable'' on receipt of trade realizations in the escrow account maintained for the purpose on revolving basis. (e) As far as overdue amount is concerned, as per the agreement dated 14/10/2010, the Bridge Loan is repayable as early as possible by arranging alternative source of funds and therefore it is overdue.

4. In our opinion and according to the information and explanations - given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories, purchase of fixed assets & with regard to sale of goods and services. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal '' controls has been noticed.

5. a) In our opinion and according to the information and explanations given to us, contracts or agreements in I respect of which the particulars need to be entered into '' the register maintained under section 301 of the Act have been so entered by the company.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts/arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 lakhs in respect of each party during the year have been made at prices which appear reasonable as per information available with the company.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

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

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1 )(d) of the Companies Act, 1956 and or of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales tax, Service Tax, Customs duty, Excise duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities.

According to the information and explanations given to us, outstanding statutory due as on 31st of March, 2013 for a period of more than six months from the date they became payable is as follows:

No. Nature of due Amount (Rs.)

1 Property tax payable 31,37,750

(b) According to the information and explanations given to . us, the dues in respect of CST and Customs Duty, which have not been deposited on account of dispute and the forum where the dispute is pending is as under:

S. No. Name of Nature of dues Amount (Rs.) Forum where Statute pending

1. CST Additional sales 1,86,08,794/- Honourable High Court of Madras.

2. Customs Difference in 31,55,226/- Commissioner Duty classification of of Customs, Telecommunication Chennai Grade Optic Fibre Cables

10. The accumulated losses of the Company at the end of the financial year, has exceeded the Net Worth of the Company. The Company has also incurred cash losses during the financial year and immediately preceding financial year.

11. The Company has not borrowed any sums from Banks or financial institutions and hence question of default in repayment of dues to financial institution or bank does not arise.

12. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/ society. Therefore, the provisions of clause (xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

14. The Company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of Clause (xiv) of Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. In our opinion, the Company has not taken any term loans , during the year.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2013, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

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

19. The Company has no outstanding debentures during the period under audit.

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

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For Ramesh and Ramachandran

Chartered Accountants

FRN:002981S

Y. Sridhar

Place : New Delhi (Partner)

Date : 30/05/2013 Membership No. :028149

---

Mar 31, 2012

1) We have audited the attached Balance Sheet of Tamilnadu Telecommunications Limited, as at March 31, 2012, the Statement of Profit and Loss and the cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2) We conducted our audit in accordance with 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 . misstatements. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes, asserting the accounting principles used and significant estimates made by management, as well as evaluating the overall'financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4) Without qualifying our conclusion, we draw attention to Note No: 3 in the Notes to accounts. As at March 31, 2012, the Company’s accumulated losses of Rs.55,81,13,192/- has eroded the net worth of the Company, indicating the existence of a material uncertainty that may cast a doubt about the Company’s ability to continue as a Going Concern. The company has incurred a loss of Rs. 13,32,81,519/- for the year under audit. Based on the mitigating factors discussed in the said Note, the Management believes that the Going Concern assumption is appropriate.

5) Further to our comments in the Annexure referred to in Paragraph (3) above, we report that the company has not provided for any deferred tax liability in the books, in respect of the timing difference on the depreciation of fixed assets, by charge to the Statement of Profit and Loss. The deferred tax liability not provided works out to Rs. 1,40,69,076/- as on March 31, 2012. This is contrary to the requirements of AS 22 - Accounting for Taxes on Income and has resulted in an understatement of loss for the year by* Rs. 1,40,69,076/-. As a result, the accumulated debit balance in Surplus and liabilities have been understated to the same extent. Consequently the Earnings per Share

¦ would increase to Rs.(3.23).

6) Subject to the effect of the matter stated in paragraph ¦5 above, we report that:

a. We have obtained all the information and _ explanations which to the best of our knowledge

* and belief were necessary for the purposes of

our audit;

b. In our opinion, proper books of account as required by law have been kept by the Company, so fs 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

t with by this report are in compliance with the ’ Accounting Standards referred to in Sub- section (3C) of section 211 of the Companies Act. 1956, except for the non-compliance of AS 22 - Accounting for Taxes on Income, reported In paragraph 5 above;

e. Disclosure in terms of Clause (g) of sub-section

- (1) of section 274 of the Companies Act, 1956

is not required as per Notification No: GSR 829(E) dated 21-10-2003 issued by the Department of Company Affairs, as the Company is a Subsidiary bf Telecommunications Consultants India Limited which is a Government Company in terms of section 617 of the Companies Act, 1956 and

f. In oyr opinion and to the besVof our information and according to the explanations given to us, EXCEPT for the matter specified in paragraph S above, the said Accounts read 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 Balance Sheet, of the state

- of affairs of the Company as at March

31, 2012;

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT

OF EVEN DATE

1) a) The Company has maintained proper records showing

tull particulars including quantitative details and situation of Fixed Assets.

b) As explained to us, all the Fixed Assets have been physically verified by the Management during the year in accordance with a program of verification, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) The company has not disposed off a substantial part of its Fixed Assets during the year.

2) a) As explained to us, the inventories have been

physically verified during the year by the Management at reasonable intervals. . - . 1

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) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification as compared to the book records.

3) a) The Company has not granted any loan, secured or . unsecured to companies, firms or other patties covered

in the register maintained under section 301 of the Act.

b) The Company has taken loans, from Companies, Firms or other parties covered in the Register maintained U/s 301 of the Act. The number of parties and the amount involved are given below:

No. of Party : 1

Balance Outstanding on March 31, 2012:

Bridge loan Rs. 11,65,73,000/-

- Working capital Loan Rs. 10,44,151/-

Maximum amount outstanding at any

' Time during the year :

Bridge loan Rs. 11,65,73,000/-

Working capital loan Rs. 4,18,58,798/-

c) The Rate of Interest and the terms and conditions of Loan are not prima facie prejudicial to the interest of the Company.

d) In respect of the above loans the Bridge Loan is payable as early as possible by arranging for alternative source of funds and Working Capital Loan is payable on receipt of Trade Realizations in the escrow account maintained for this purpose on revolving basis.

e) As far as overdue amount is concerned, as per the terms of agreement dated 14-10-2010, the Bridge Loan

is repayable as early as possible by arranging alternative source of funds and therefore it is overdue. _

4) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and with regard to sate of goods and servioes. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal control system.

5) a) Particulars of Contracts or arrangements referred to in

section 301 of the Companies Act, 1956 have been so entered in .the Register maintained for such purpose.

b) In our opinion and according to the information and. explanations given to us, the transactions made in pursuance of contracts I arrangements entered in the

- Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs.5,00,000 lakhs in respect of each party during the year have

been made at prices which appear reasonable as per information available with the Company.

6) According to the information and explanations given to us, the company has not accepted any deposit from the Public. , Therefore the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

8) As explained to us, as per Notification of the Ministry of Corporate Affairs dated June 03,2011, the Company is required to maintain Cost Records for the Financial Year under Audit.

The prescribed Cost Records are yet to be maintained by the Company.

9) a) The Company has been generally regular in depositing

undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sates tax, Service tax, Customs duty, Excise duty, Cess and Municipal Profession Tax with the appropriate authorities. We however noticed delay in remittance in some of the months.

b) According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were in arrears as at March 31, 2012 for the period of more than Six Months from the date they become payable.

c) According to the records of the Company, the dues in respect of CST and Customs Duty, which have not been deposited on account of dispute and the forum where the dispute is pending is as under;

SI. No Name of Nature of Amount Forum where Statute dues (Rs.) pending

1. CST Additional Sales 1,86,08,794/- Madras High Court

2. Customs Difference in 31,55,226/- Commisioner Act classification of of Customs, Telecommunication Chennai Grade Optic Fibre Cables

10) The accumulated losses of the Company at the end of the- financial year, has exceeded the Net Worth of the Company. The Company has also incurred Cash losses during the Financial Year and in the immediately preceding Financial Year.

11) The Company has not borrowed any loan from financial institution, banks etc., Therefore the provisions of Clause (xi) . of paragraph 4 of the Order are not applicable to the Company.

12) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore the provisions of Clause (xii) of paragraph 4 of the Order are not applicable to the Company.

13) The Company is not a Nidhi, Mutual Benefit Fund or a Society. Therefore the provisions of Clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14) The Company is not dealing or trading in shares, securities, debentures and other investments. Therefore the provisions of Clause (xiv) of paragraph 4 of the Order are not applicable to the Company.

15) According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from Banks and Financial Institutions. Therefore the provisions of Clause (xv) of paragraph 4 of the Order are not applicable to the Company.

16) The Company has not availed any Term Loan, during the year. Therefore the provisions of Clause (xvi) of paragraph 4 of the Order are not applicable to the Company.

17) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that no funds raised on short term basis have been used for long term investment.

18) The Company has not made any preferential allotment of shares to Parties and Companies covered in the Register maintained under section 301 of the Companies Act, 1956 during the year.

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

20) The Company has not raised any money by way of public issues during the year. Therefore the provisions of Clause (xx) of paragraph 4 of the Order are not applicable to the Company.

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

For M. Kuppuswamy PSG & Co.

Chartered Accountants

Firm Regn. No. 001616S

M.K.KRISHNAN

New Delhi Partner

May 30, 2012 M.No: 020116

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Tamilnadu Telecommunications Limited, as at 31st March 2011, and also the Profit and Loss account and the Cash Flow Statement for the year ended on the 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 jn India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4. The Impact on the accounts could not be ascertained due to adjustments if any required on account of non confirmation of balances of Debtors, Creditors and Loans and Advances as referred in Note No.3.

5. No provision is made for an amount of Rs. 365.40 lakhs (Previous year Rs.352 lakhs) in the financial statements for certain long outstanding debtors for which the recoverability -is dependent on judgement of Court of Law as referred to in Note No.4. The loss for the year would have been higher by the said amount and consequential impact in accumulated losses in profit and loss account, reserves and surplus.

6. Subject to the above and Further to our comments in the Annexure referred , we report that:

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

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

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

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

(v) As informed to us and based on the verification of records , we report that none of the directors is disqualified as on 31st March 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

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

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011;

(b) in the case of the Profit and Loss Account, 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.

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

1. The provisions of the following clauses of Companies (Auditor's Report) Order, 2003 as amended are not applicable to the company for the year.

a) Clause 4(iii) with regard to loans granted to parties covered in the register maintained under section 301 of the Companies Act, 1956 as there were no such transactions.

b) Clause 4(vi) with regard to acceptance of deposits from the public since the company has not accepted any deposits.

c) Clause 4(xii) with regard to loans granted against pledge of securities since no loans have been granted by the company.

d) Clause 4(xiii) with regard to special statutes applicable to chit funds and nidhis since the company has not carried on such business.

e) Clause 4(xiv) with regard to trading in securities since the company did not carry on such activities.

f) Clause 4(xv) with regard to guarantee given for loans taken by others from bank or financial institutions as the company had not given any guarantees.

g) Clause 4(xvi) with regard to term loan and its application, since no term loan is outstanding in the books.

h) Clause 4(xix) with regard to securities to be created in respect of debentures since no debentures was issued during the year. And

i) Clause 4(xx) with regard to money raised by public issue since no money was raised by public issue during the year.

2. The Company has maintained adequate records for fixed assets to show full particulars including quantitative details and the situation of fixed assets. The assets were physically verified by the management during the year and no material discrepancies were noticed on such verification.

3. The Company has not during the year disposed off any substantial part of fixed assets, which would give rise to the question of impairment of status of the company as a going concern.

4. The management has conducted physical verification of inventory at reasonable intervals.

5. 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.

6. On the basis of our examination of the records of inventory, we are of the opinion that the ompany is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book record were not material and have been properly dealt with in the books of account.

7. In our opinion and according to the information and explanations given to us, there is adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no majorweakness has been noticed in the internal controls.

8. According to the information and explanations provided by the management, the Company has taken a secured loan from one of the companies listed in the register maintained under section 301 of the Companies Act, 1956. This is as per the Sanctioned Scheme issued by BIFR. The maximum amount due during the year and the amount due as at 31st March 2011 was Rs.1165.73 Lakhs. There are no over dues in this account.

9. In our opinion the rate of interest and other terms and conditions on which the Loans have been taken from the company listed in the register maintained under section 301 of the Companies Act, are not, prima facie, pre-judicial to the interest of company. The interest due amount as at 31st March 2011 is Rs.0.42 Lakhs.

10. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under Section 301 and exceeding the value of five lakhs rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

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

12. We were informed that the Central Government has not prescribed maintenance of cost records for the company under section 209(1) (d) of the Companies Act, 1956 and hence, we are not commenting on the Cost Records maintained by the Company.

13. According to the records of the Company, the Company irregular in depositing with appropriating authorities undisputed statutory dues including Provident Fund, Investor education protection fund, Employees State Insurance, Income-Tax, Sales-Tax, Wealth-Tax, Service Tax, Custom Duty, Excise Duty, profession tax, Cess applicable to it However TDS of Rs. 6.07 lakhs has not been deducted during this year

14. Based on our audit procedures and on the information and explanations given by the management, we furnish below the details of dues of sales tax / income tax / customs duty/ wealth Tax / service Tax / excise Duty / cess which have not been deposited on account of disputes.

SI. Name of Nature of Amount Forum where No. statute the dues in Rs. dispute is pending

1. CST Additional 1.86,08.794/- High Court of Sales 2000-01 & Chennai 2001-02

2. Customs Difference in 31,55,226/- Commissioner Act Classification 2006-07 of Customs. of Telecommuni Chennai cation Grade Optical Fibre Cables

- Rs.75, 00.000/- had been deposited against the demand

15. In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, short term funds have not been used to finance long term investments. However, during the year bridge loan of Rs. 1165.73 lakhs raised and utilised as per the Sanctioned Scheme of BIFR

16. The Company has issued shares under preferential allotment to a Company covered in the Register maintained under section 301 of the Companies Act, 1956 at face value as per the Sanctioned Scheme of BIFR, and the same is not prejudicial to the interest of the Company.

17. The accumulated losses of the company at the end of the financial year are not more than its net worth after restructuring as per the Sanctioned Scheme of BIFR. The company has incurred Cash losses during the year.

18. During the course of our examination of the books of account and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have not come across any instance of fraud on or by the company, noticed or reported during the year, nor have been informed of such case by the management.

For N.SANKARAN& CO. CHARTERED ACCOUNTANTS

(R.SUNDARARAJAN.FCA) Place: New Delhi Partner Date : 28.05.2011 Membership No: 25762 FIRM REGN NO.03590S

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Tamilnadu Telecommunications Limited, as at 31st March 2010, and also the Profit and Loss account and the Cash Flow Statement for the year ended on the date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

4. The Company has Prepared the Financial Statements on “Going concern basis” despite substantial losses which exceeds net worth of Company as referred in Note No.3.

5. The Impact on the accounts could not be ascertained due to adjustments if any required on account of non confirmation of balances of Debtors, Creditors and Loans and Advances as referred in Note No.4.

6. No provision is made for an amount of Rs. 352 lakhs (Previous year Rs.352 lakhs) in the financial statements for certain long outstanding debtors for which the recoverability is dependent on judgement of Court of Law as referred to in Note No.5.

7. The Company has not accounted the interest on secured loans obtained from the banks and financial institutions amounting to Rs. 297 lakhs (Previous year Rs. 346 lakhs) for the period April 09 to March 10 and cumulative interest not accounted amounting to Rs. 660 lakhs upto 31.03.2009 as referred in Note 9(i) . Out of earlier years interest dues, the company have recognised Rs.46.72 lakhs of interest set off by banks out of cash credit and margin money accounts as dues receivable from banks under loans and advances as referred to in Note 9(ii).

The loss for the year would have been higher by the amounts in Note 6 & 7 above and consequential impact in accumulated losses in profit and loss account, reserves and surplus:

8. Subject to the above and Further to our comments in the Annexure referred , we report that:

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

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

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

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

(v) As informed to us and based on the verification of records , we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

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

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010;

(b) in the case of the Profit and Loss Account, of the 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.

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

1. The provisions of the following clauses of Companies (Auditors Report) Order, 2003 as amended are not applicable to the company for the year.

a) Clause 4(iii) with regard to loans granted to parties covered in the register maintained under section 301 of the Companies Act, 1956 as there were no such transactions.

b) Clause 4(vi) with regard to acceptance of deposits from the public since the company has not accepted any deposits.

c) Clause 4(xii) with regard to loans granted against pledge of securities since no loans have been granted by the company.

d) Clause 4(xiii) with regard to special statutes applicable to chit funds and nidhis since the company has not carried on such business.

e) Clause 4(xiv) with regard to trading in securities since the company did not carry on such activities.

f) Clause 4(xv) with regard to guarantee given for loans taken by others from bank or financial institutions as the company had not given any guarantees.

g) Clause 4(xvii) with regard to funds obtained on short term basis used for long-term investment and vice-versa since the company has not raised such funds during the year.

h) Clause 4(xviii) with regard to preferential allotment of shares to specified parties since no allotment of shares was made during the year. i) Clause 4(xix) with regard to securities to be created in respect of debentures since no debentures was issued during the year. And j) Clause 4(xx) with regard to money raised by public issue since no money was raised by public issue during the year.

2. The Company has maintained adequate records for fixed assets to show full particulars including quantitative details and the situation of fixed assets. The assets were physically verified by the management during the year and no material discrepancies were noticed on such verification.

3. The Company has not during the year disposed off any substantial part of fixed assets, which would give rise to the question of impairment of status of the company as a going concern.

4. The management has conducted physical verification of inventory at reasonable intervals.

5. 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.

6. On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

7. In our opinion and according to the information and explanations given to us, there is adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

8. According to the information and explanations provided by the management, the Company has taken a secured loan from one of the companies listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount due during the year and the amount due as at 31st March 2010 was Rs.765.04 Lakhs.

9. In our opinion the rate of interest and other terms and conditions on which the Loans have been taken from the company listed in the register maintained under section 301 of the Companies Act, are not, prima facie, pre-judicial to the interest of company. The interest over due amount as at 31st March 2010 is Rs.431.79 Lakhs.

10. The company has defaulted in payment of principal to the company listed in the register maintained under section 301 of the Companies Act 1956. The principal overdue amount as at 31st March 2010 is Rs.765.04 Lakhs.

11. According to the information and explanations given to us, the debt portfolio of the company was restructured through corporate debt restructuring scheme. As per the scheme, the company has defaulted the repayment of the dues to the financial institutions and banks. The principal overdue amount as at 31st March 2010 is Rs.1194.53 Lakhs and the interest over due amount as at 31st March 2010 is Rs.15.01 Lakhs.

12. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under Section 301 and exceeding the value of five lakhs rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

13. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. However, the Internal Audit System has scope to strengthen further by prescribing suitable audit programme on record as to coverage and observations in the report.

14. We were informed that the Central Government has not prescribed maintenance of cost records for the company under section 209(1) (d) of the Companies Act, 1956 and hence, we are not commenting on the Cost Records maintained by the Company.

15. According to the records of the Company, the Company is regular in depositing with appropriating authorities undisputed statutory dues including Provident Fund, Investor education protection fund, Employees State Insurance , Income-Tax, Sales-Tax, Wealth-Tax, Service Tax, Custom Duty, Excise -Duty, profession tax, Cess applicable to it. However, in respect of Provident Fund, Employees State Insurance, Tax Deducted at Source and Sales Tax there have been delays during the year. The company has not deducted the Tax deducted at source amount to Rs.37.13 lakhs (Previous year Rs.32.05 lakhs) cumulative for the year Rs.107.07 lakhs (Previous Year Rs. 69.94 lakhs).

16. Based on our audit procedures and on the information and explanations given by the management, we furnish below the details of dues of sales tax / income tax / customs duty/ wealth Ta x / service Tax / sales Tax / customs duty / excise Duty / cess which have not been deposited on account of disputes.

Sl. No. Name of Nature of Amount Forum

the dues in Rs. where

statute dispute is

pending

1. CST Additional 1,86,08,794/-* High Court

Sales 2000-01 & of Chennai

2001-02

2. Customs Difference in 31,55,226/- Commissioner

Act Classification

2006-07 of Customs,

of Telecomm- Chennai

unication Grade

Optical Fibre

Cables

* Rs.75, 00,000/- had been deposited against the demand.

17. The accumulated losses of the company at the end of the financial of year are more than 100% of its net worth. The company has not incurred Cash losses during the year. However, the company has incurred Cash losses in the year immediately preceding the year covered by this report.

18. During the course of our examination of the books of account and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have not come across any instance of fraud on or by the company, noticed or reported during the year, nor have been informed of such case by the management.

For N.SANKARAN& CO.

CHARTERED ACCOUNTANTS

(R.SUNDARARAJAN FCA)

Place: Chennai Partner

Date : 28.05.2010 Membership No: 25762

FIRM REGN NO.03590S