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GTL Ltd.

BSE: 500160 Sector: Telecom
NSE: GTL ISIN Code: INE043A01012
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VOLUME 9468
52-Week high 19.80
52-Week low 9.00
P/E
Mkt Cap.(Rs cr) 160
Buy Price 10.20
Buy Qty 3632.00
Sell Price 10.25
Sell Qty 50.00
OPEN 10.10
CLOSE 10.18
VOLUME 9468
52-Week high 19.80
52-Week low 9.00
P/E
Mkt Cap.(Rs cr) 160
Buy Price 10.20
Buy Qty 3632.00
Sell Price 10.25
Sell Qty 50.00

GTL Ltd. (GTL) - Auditors Report

Company auditors report

To

The Members of GTL LIMITED

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS Financial Statements of GTL LIMITED("the Company") which comprise the Balance sheet as at 31st March 2017 andthe Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information ( herein afterreferred to as "Standalone Ind AS Financial Statements") in which areincorporated the Returns for the year ended on that date audited by the branch auditors ofthe Company's branch at Nepal.

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone Ind AS Financial Statements that give a true and fair view of the stateof affairs (financial position) loss (financial performance including other comprehensiveincome) cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under Section 133 of the Act.

This responsibility also includes the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Standalone IndAS Financial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these Standalone Ind AS FinancialStatements based on our audit.

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

We conducted our audit of the Standalone Ind AS Financial Statements in accordance withthe Standards

on Auditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the Standalone Ind AS Financial Statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Standalone Ind AS Financial Statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the Standalone Ind AS Financial Statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the Standalone Ind AS Financial Statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's directors as well asevaluating the overall presentation of the Standalone Ind AS Financial Statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Ind AS Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS Financial Statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including Ind AS of the stateof affairs of the Company as at 31st March 2017 and its loss total comprehensiveincome its cash flows and the changes in equity for the year ended on that date.;

Emphasis of Matters

We draw your attention to the:

i. Note No. 48 which inter-alia describes/states that the Company has incurred cashlosses its Net worth has been fully eroded and the Company's current liabilities haveexceeded its current assets as at 31st March 2017.

Moreover as stated in Note No.24.4 the uncertainty related to the outcome of thewinding up petition filed against the Company by the holders of Non Convertible Debenturesissued by the Company and as stated in Note No.40.C.2 the winding up proceedingsinitiated against the Company by the Optionally Convertible Loan (OCL) holders of anassociate wherein the Company had given the put option still prevails.

The above conditions indicate the existence of the material uncertainty that castsignificant doubt about the Company's ability to continue as a going concern. However thefinancial statements of the Company have been prepared on going concern basis for thereasons stated in the said note.

ii. Note No.6.3 which inter-alia states that the book value of Company's long terminvestment in its associate Chennai Network Infrastructure Limited is lower than thecarrying value of the said investment. No impairment provision is considered necessary bythe management in respect of the said investment for the reasons stated in the said note.The Company has made impairment provision of Rs. 107.48 Crores in respect of itsinvestment in another associate GTL Infrastructure Limited and which in the opinion of themanagement is adequate.

Our opinion is not modified in respect of these matters

Other Matters

a) As at 31st March 2017 in respect of the outstanding Term Loan and Cash Creditbalances aggregating Rs. 174.82 Crores and interest accrued and provided thereon of Rs.53.15 Crores due to Catholic Syrian Bank SIDBI and Standard Chartered Bank the BalanceConfirmations have not been received. The Balance Confirmation in respect of currentaccount balance with Punjab National Bank of Rs.0.70 Crores has not been received. Furtherin case of current account balance with Standard Chartered Bank of Rs. 4.73 Crores thebalance is subject to reconciliation.

b) We did not audit the financial statements/information of Nepal branch included inthe Standalone Ind AS Financial Statements of the Company whose financial statements /financial information reflect total assets of Rs.2.60 crores as at 31st March 2017 andtotal revenues of Rs. Nil for the year ended on that date. The financialstatements/information of this branch have been audited by the branch auditors whosereport has been furnished to us and our opinion in so far as it relates to the amountsand disclosures included in respect of this branch is based solely on the report of suchbranch auditor.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act we report that: (a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit.

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

(c) The reports on the accounts of the branch office of the Company audited undersection 143(8) of the Act by branch auditor has been sent to us and has been properlydealt with by us in preparing this report.

(d) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

(e) In our opinion the aforesaid Standalone Ind AS Financial Statements comply withthe IND AS specified under Section 133 of the Act.

(f) I n our opinion the going concern matter and outcome of winding up petition filedagainst the Company by the Holders of Non Convertible Debentures issued by the Company andthe winding up proceedings initiated against the Company by the Optionally ConvertibleLoan (OCL) holders of an associate wherein the Company had given the put option asdescribed in sub-paragraph (i) under Emphasis of matters paragraph above may have anadverse effect on the functioning of the Company.

(g) On the basis of management representation and on the basis of the legal opinionobtained by the Company in the context of provisions of section 164(2) of the Act inrelation to non-payment of dues to the holders of Non Convertible Debentures and on thebasis of the written representations received from the directors as on 31st March 2017and taken on record by the Board of Directors none of the directors is disqualified as on31st March 2017 from being appointed as a director in terms of Section 164 (2) of theAct.

(h) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A".

(i) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 read withNotification No G.S.R 307(E) dated 30.03.2017 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 financialposition in its Standalone Ind AS Financial Statements - Refer Note No. 40.C.1 and 40.C.2to the Standalone Ind AS Financial Statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company. Unpaid dividend of Rs.0.19Crores pertaining to the years 2000-01 2001-02 and 2003-04 to 2008-09 which has not beentransferred to the Investor Education and Protection Fund but is held in abeyance onaccount of pending legal cases is not considered for reporting under this clause.

iv. The Company has provided the requisite disclosures in the Standalone Ind ASFinancial Statements as regards to its holdings and dealings in Specified Bank Notes asdefined in the Notification S.O 3407(E) dated November 08 2016 of the Ministry ofFinance during the period from November 08 2016 to December 30 2016 and based on auditprocedure performed and the representation provided by the Management we report that thedisclosures are in accordance with the books of account maintained by the Company and asproduced to us by the management (refer to Note No 13.1 of Standalone Ind AS FinancialStatements).

2. As required by the Companies (Auditor's Report) Order 2016 ("CARO 2016")issued by the Central Government of India in terms of subsection (11) of Section 143 ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the CARO 2016 to the extent applicable.

For Godbole Bhave & Co.

Chartered Accountants Firm Reg. No. - 114445W

For Yeolekar & Associates

Chartered Accountants Firm Reg. No. - 102489W

M. V. Bhave

Partner

Membership No. 038812

S. S. Yeolekar

Partner

Membership No. 036398

Place: Mumbai Date: 27th April 2017

ANNEXURE "A"

TO THE INDEPENDENT AUDITORS' REPORT ON STANDALONE iND AS FiNANCiAL STATEMENTS OF GTLLiMiTED

(Referred to in paragraph 1 (h) under ‘Report on Other Legal and RegulatoryRequirements' of our report of even date to the members of GTL Limited on the Standaloneind AS Financial Statements for the year ended 31st March 2017)

Report on the internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of GTL Limited("the Company") as of 31st March 2017 in conjunction with our audit of theStandalone Ind AS Financial Statements of the Company for the year ended on that date.

Management's Responsibility for internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting("the Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing issued by the ICAI and deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Standalone Ind AS Financial Statements whether due to fraudor error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Standalone Ind AS Financial Statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneInd AS Financial Statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the StandaloneInd AS Financial Statements.

inherent Limitations of internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial

controls over financial reporting were operating effectively as of 31st March 2017based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Noteissued by the ICAI.

For Godbole Bhave & Co.

Chartered Accountants Firm Reg. No. - 114445W

For Yeolekar & Associates

Chartered Accountants Firm Reg. No. - 102489W

M. V. Bhave

Partner

Membership No. 038812

S. S. Yeolekar

Partner

Membership No. 036398

Place: Mumbai Date: 27th April 2017

ANNEXURE-B

TO THE INDEPENDENT AUDITORS' REPORT ON STANDALONE iND AS FiNANCiAL STATEMENTS OF GTLLIMITED

(Referred to in paragraph 2 under the heading "Report on Other legal andRegulatory Requirements" of our report of even date to the members of GTL limited onthe Standalone ind AS Financial Statements for the year ended 31st march 2017)

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

As explained to us the Company has a phased program of physical verification of theproperty plant and equipment which in our opinion is reasonable having regard to thesize of the Company and nature of its assets.

During the year the Company in accordance with the said program has physicallyverified certain property plant and equipment. No material discrepancies were noticed onsuch physical verification.

According to the information and explanations given to us and based on the recordsproduced the title deeds of the immovable properties held by the Company are in the nameof the Company. The title deeds of the immovable properties held by the Company areverified from the photo copies of such title deeds as the originals thereof have beendeposited with the lenders for securing the borrowings of the Company and confirmation forthe same has been obtained from IDBI Trusteeship Services Limited.

(ii) The inventories have been physically verified during the year by the management.In our opinion the frequency of verification is reasonable. The discrepancies noticed onverification between the physical stocks and the book records were not material havingregard to the size of the operations of the Company and the same have been properly dealtwith.

(iii) According to the information and explanations given to us the Company has notgranted loans secured or unsecured to companies firms limited liability partnershipsor other parties covered in the register maintained under Section 189 of the Act.Accordingly clause (iii) of Paragraph 3 of the CARO 2016 is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act in respect ofinvestments made and guarantees provided. According to the information and explanationsgiven to us the Company has neither provided any security nor given any loans.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from public within the provisions of section 73 to 76 of the Act andthe rules framed thereunder. Therefore the provisions of clause (v) of Paragraph 3 of theCARO 2016 are not applicable to the Company.

(vi) According to the information and explanations given to us the Central Governmenthas not prescribed the cost records to be maintained under sub-Section (1) of Section 148of the Act in respect of business activities carried on by the Company. Therefore theprovisions of clause (vi) of the paragraph 3 of the CARO 2016 are not applicable to theCompany.

(vii) (a) On the basis of examination of the relevant

records and according to the information and explanations given to us we are of theopinion that the Company except for payment of Sales Tax is generally regular indepositing with the appropriate authorities undisputed statutory dues including ProvidentFund Employees' State insurance Income-tax Service Tax Value Added Tax Duty ofCustoms Duty of Excise Cess and other applicable statutory dues.

On the basis of examination of the relevant records and according to the informationand explanations given to us except for Sales Tax dues of Rs. 5.68 Crores no undisputedamounts payable in respect of Provident Fund Employees' State insurance Income-taxValue Added Tax Duty of Customs Duty of Excise and Cess were outstanding as at 31stMarch 2017 for a period of more than six months from the date they became payable.

(b) On the basis of the books of accounts and records of the Company as produced andexamined by us except for disputed Sales tax and Value Added Tax dues as detailed belowthere are no dues of Income Tax Service Tax Duty of customs and Duty of excise whichhave not been deposited on account of any dispute.

Name of the Statute Nature of Dues Amount (Rupees in Crores) Year to which the amount relates Forum where dispute is pending
Central Sales Tax Act Sales Tax Act & VAT Acts of various States Sales/Vat Tax Dues 54.96 1992-19931995-19962005-2006 20062007 2008-2009 2009-20102010-2011 2011-2012 2013-2014 & 2014-15. 1st Appellate Authority
6.12 1995-1996 1996-1997 2002-2003 20052006 2006-2007 2007-2008 2008-2009 2009-2010 & 2010-2011. 2nd Appellate Authority
Central Excise Custom & Service Tax Act Service Tax Dues 17.35 2010-112011-12 2012-13 2013-14 2014-15. 1st Appellate Authority

Out of the above disputed sales tax / value added tax dues an amount of Rs. 2.91Crores has been paid by the Company under protest.

(viii) (A) On the basis of our examination of the records of the Company the terms ofCorporate Debt Restructuring scheme as applicable and according to the information andexplanations given to us the Company has defaulted in repayment of borrowings tofinancial

institutions and banks. The lender wise details of the amount of default and the periodof default are as under.

(a) Nature of Dues : Term Loan

(Grouped and disclosed under the heading "Secured: Payable to CDR lenders" ofnote no. 24 "Other Financial Liabilities" to the Standalone Ind AS FinancialStatements)

Sr. name of the lender No.

amount of Default

period of default

less than 365 days More than 365 days but less than 730 days More than 730 days but less than 1065 days More than 1065 days but less than 1460 days
1 Andhra Bank 116.51 42.62 42.62 31.27 -
2 Bank of Baroda 41.20 15.00 15.00 11.20 -
3 Bank of India. 146.06 53.11 53.11 39.84 -
4 Canara Bank. 80.61 29.31 29.32 21.98 -
5 Catholic Syrian Bank 18.90 7.20 7.20 4.50 -
6 Dena Bank 66.26 24.40 24.41 17.45 -
7 IDBI Bank 40.13 29.53 10.60 - -
8 Indian Bank 40.12 14.59 14.59 10.94 -
9 Indian Overseas Bank 59.57 21.66 21.66 16.25 -
10 Punjab National Bank 87.28 36.01 36.01 15.26 -
11 State Bank Of Hyderabad 9.25 3.61 3.61 2.03 -
12 Standard Chartered Bank 9.39 2.89 2.89 2.17 1.44
13 Small Industrial Development Bank Of India 40.39 14.69 14.69 11.01 -
14 UCO Bank 45.40 16.51 16.51 12.38 -
15 Union Bank Of India. 62.31 24.66 24.65 13.00 -
16 United Bank Of India 28.38 10.32 10.32 7.74 -
17 Vijaya Bank 65.03 23.64 23.63 17.76 -

(b) Nature of Dues : Funded interest Term Loan

(Grouped and disclosed under the heading "Secured: Payable to CDR lenders" ofnote no. 24 "Other Financial Liabilities" to the Standalone Ind AS FinancialStatements)

Sr. name of the lender No.

Amount of default

period of default

less than 365 days More than 365 days but less than 730 days More than 730 days but less than 1065 days More than 1065 days but less than 1460 days
1 Andhra Bank 39.39 14.77 12.31 12.31 -
2 Bank of Baroda 11.55 4.38 3.84 3.33 -
3 Bank of India. 42.13 15.79 13.17 13.17 -
4 Canara Bank. 26.81 10.05 8.38 8.38 -
5 Catholic Syrian Bank 6.40 2.61 2.17 1.62 -
6 Dena Bank 21.81 8.17 7.59 6.05 -
7 IDBI Bank 20.81 9.23 7.69 3.89 -
8 Indian Bank 10.88 4.08 3.40 3.40 -
9 Indian Overseas Bank 17.66 6.62 5.52 5.52 -
10 Punjab National Bank 31.80 13.02 10.88 7.90 -
11 State Bank Of Hyderabad 2.68 1.09 0.91 0.68 -
12 Standard Chartered Bank 2.57 0.77 0.64 0.64 0.52
13 Small Industrial Development Bank Of India 10.22 3.83 3.19 3.20 -
14 UCO Bank 11.88 4.45 3.72 3.71 -
15 Union Bank Of India. 16.13 7.22 6.02 2.89 -
16 United Bank Of India 9.94 3.73 3.11 3.10 -
17 Vijaya Bank 21.31 7.99 6.67 6.65 -

(c) Nature of Dues: Liability for Bank Guarantee invocation

(Grouped and disclosed under the heading "Secured: Payable to CDR lenders" ofnote no. 24 "Other Financial Liabilities" to the Standalone Ind AS FinancialStatements)

(' In Crores)

Sr. name of the lender amount of default period of default
No.
1 Andhra Bank 7.27 More than 730 days but less than 1065 days
2 Dena Bank 17.59 More than 730 days but less than 1065 days
3 IDBI Bank 2.65 More than 730 days but less than 1065 days
4 Punjab National Bank 58.04 More than 730 days but less than 1065 days
5 UCO Bank 6.60 More than 730 days but less than 1065 days
6 Union Bank Of India. 20.12 More than 730 days but less than 1065 days

(d) Nature of Dues: External Commercial Borrowings

(Disclosed under the heading "Unsecured: Payable to External CommercialBorrowings(ECB) Lenders" of Note No. 24 "Other Financial Liabilities" tothe Standalone Ind AS Financial Statements)

(' In Cores)

Sr. Name of the Lender No. Amount of default period of default
1 Bank Muscat 32.37 More than 1825 days but less than 2190 days
2 Amilife Insurance PCC Ltd 64.75 More than 1825 days but less than 2190 days
3 Bank of Baroda-London 205.05 More than 1825 days but less than 2190 days
4 Bank of India-London 83.40 More than 1825 days but less than 2190 days
5 Pegasus CP one Ltd 97.13 More than 1825 days but less than 2190 days
6 Indian Bank-Colombo 32.38 More than 1825 days but less than 2190 days
7 Indian Bank-Singapore 32.38 More than 1825 days but less than 2190 days
8 Indian Overseas Bank-HongKong 64.75 More than 1825 days but less than 2190 days
9 Punjab National Bank-London 43.17 More than 1825 days but less than 2190 days
10 Syndicate Bank-London 64.75 More than 1825 days but less than 2190 days

(B) Nature of Dues: Non Convertible Debentures As regards dues of Rs.1649.16 croresdisclosed under "Payable to holder of Rated Redeemable Unsecured Rupee NonConvertible Debentures" in Note No. 24 "Other Financial Liabilities" weinvite attention to Note No 24.4 to the Standalone Ind AS Financial Statements whichstates that

"The holder of Rated Redeemable Unsecured Rupee Non -Convertible Debentures hadgiven their consent to be part of the Corporate Debt Restructuring Scheme. Accordinglythe Company and the holder of Rated Redeemable Unsecured Rupee Non -Convertible Debenturesentered into amendment to the original sanction letter to restructure NCD debt.

While the Company was in the process of obtaining consent of the CDR lenders onbilateral restructuring document the Company received a notice from the NCD holderexercising its rights for acceleration of the entire outstanding amount and filed windingup petition against the Company before Hon'ble High Court of Bombay. The matter iscurrently sub-judice.

Since all funds of the Company are subject matter of Trust and Retention Account (TRA)which is controlled by CDR lenders the question of payment to NCD holder does not ariseuntil and unless CDR lenders decide on

the issue as directed by the Hon'ble High Court of Bombay.

The above circumstances have resulted in nonpayment of dues to the NCD holder which isbeyond the control of the management and thus not in the nature of default.

Further NCD holder along with other lenders have agreed in-principle for the One TimeSettlement (OTS) proposal made by the Company."

In view of the above facts and as the matter is presently sub-judice we are unable tooffer any comment on default if any in payment of dues to the Holder of Non Convertibledebentures issued by the Company.

(ix) According to the information and explanations given to us and on the basis ofexamination of records the Company has neither obtained new term loans nor raised anymoney by way of initial public offer or further public offer of shares and/or debtinstruments during the year. Therefore the provisions of clause (ix) of Paragraph 3 ofthe CARO 2016 are not applicable to the Company.

(x) Based on our audit procedures performed for the purpose of reporting the true andfair view of the Standalone Ind AS Financial Statements and on the basis of informationand explanations given by the management no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.

(xi) According to the information and explanations given to us and based on ourexamination of records of the Company the managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company and accordingly the provisions of clause (xii) of Paragraph3 of the CARO 2016 are not applicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of records of the Company the transactions entered with related parties arein compliance with provisions of section 177 and 188 of the Act where applicable and thedetails of such transactions are disclosed in the Standalone Ind AS Financial Statementsas required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of records of the Company the Company during the year has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures. Accordingly the provisions of clause (xiv) of Paragraph 3 of the CARO 2016 arenot applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us andbased on our examination of records of the Company the Company during the year has notentered into any non cash transactions with directors or persons connected with thedirectors and accordingly the provisions of clause (xv) of Paragraph 3 of the CARO 2016are not applicable to the Company.

(xvi) I n our opinion and according to the information and explanations given to usthe Company is not required to be registered under section 45-IA of the Reserve Bank ofIndia Act1934.

For Godbole Bhave & Co.

Chartered Accountants Firm Reg. No. - 114445W

For Yeolekar & Associates

Chartered Accountants Firm Reg. No. - 102489W

M. V. Bhave

Partner

Membership No. 038812

S. S. Yeolekar

Partner

Membership No. 036398

Place: Mumbai Date: 27th April 2017