To the Members of Ortel Communications Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Ortel CommunicationsLimited ("the Company") which comprise the Balance Sheet as at March 312016 the Statement of Profit and Loss and the Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The Companys 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 financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls andensuring their operating effectiveness and the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
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 in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Companys Directors as well as evaluating theoverall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in Indiaof the state of affairs of the Company as at March31 2016 its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
(1) As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in "Annexure 1" a statement on the mattersspecified 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 bestof 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 theCompany 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 Statementdealt with by this Report are in agreement with the books of account;
d. In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;
e. On the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of Section 164 (2) of theAct;
f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls we give ourseparate Report in "Annexure 2".
g. With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financial statements Refer Notes 29 and 41 to thefinancialstatements;
(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses;
(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For Haribhakti & Co. LLP
ICAI Firm Registration No.103523W
Anand Kumar Jhunjhunwala
Membership No. 056613
ANNEXURE 1 TO THE INDEPENDENT AUDITORS REPORT
[Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements in our Independent Auditors Report of even date to the membersof Ortel Communications Limited on the financial statements for the year ended March 312016] (i) (a) The Company is maintaining proper records showing full particularsincluding quantitative details and situation of fixed assets.
(b) According to the information and explanations given to us the management of theCompany physically verifies its fixed assets annually (except a significant portion ofcables and network equipment for which as explained to us physical verification is notpracticable) which in our opinion is reasonable having regard to the size of theCompany and the nature of its fixed assets. As informed no material discrepancies werenoticed on such verification of fixed assets during the year.
(c) The title deeds of immovable properties recorded in the books of account of theCompany are held in the name of the Company.
(ii) According to the information and explanations given to us the inventory has beenphysically verified by the management during the year. In our opinion the frequency ofverification is reasonable. As explained to us there were no material discrepancies onphysical verification of inventory as compared to the book records.
(iii) According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not granted any loans secured orunsecured to companies firms Limited Liability Partnerships or other parties covered inthe register maintained under Section 189 of the Act.
(iv) According to the information and explanations given to us in respect of loansinvestments guarantees and security the Company has complied with the provisions ofSections 185 and 186 of the Act.
(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public.
(vi) The maintenance of cost records has been specified by the Central Government undersub-section (1) of Section 148 of the Act. We have broadly reviewed such records and areof the opinion that prima facie the prescribed accounts and records have been made andmaintained. We have not however made a detailed examination of the records with a viewto determine whether they are accurate or complete.
(a) According to the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employeesstate insurance income-tax sales tax service tax duty of customs duty of excisevalue added tax cess and any other material statutory dues have generally been regularlydeposited with the appropriate authorities.
According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues were in arrears as at March 31 2016 for a periodof more than six months from the date they became payable.
(b) According to the information and explanations given to us the dues as at March 312016 of income-tax sales tax service tax duty of customs duty of excise and valueadded tax which have not been deposited on account of any dispute are as follows :
* Rs.43.21 lakhs has been deposited in this regard.
(viii) Based on our audit procedures and as per the information and explanations givento us by the management we are of the opinion that during the year the Company has notdefaulted in repayment of loans or borrowings to a financial institution bank orGovernment. The Company has not issued any debentures as at the balance sheet date.
(ix) According to the information and explanations given to us moneys raised by way ofinitial public offer and term loans were prima facie applied for the purposes for whichthose were raised. The Company has not raised any money by way of further public offer(including debt instruments).
(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per the information and explanations given tous by the management we report that we have neither come across any instance of fraud bythe Company or on the Company by its officers or employees noticed or reported during theyear nor have we been informed of any such case by the management.
(xi) According to the information and explanations given to us managerial remunerationhas been paid / provided in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.
(xii) The Company is not a Nidhi Company.
(xiii) According to the information and explanations given to us all transactionsentered into by the Company with the related parties are in compliance with Sections 177and 188 of the Act where applicable and the details have been disclosed in the FinancialStatements etc. as required by the applicable accounting standards.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.
(xv) As per the information and explanations given to us the Company has not enteredinto any non-cash transactions with directors or persons connected with them.
(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.
For Haribhakti & Co. LLP
ICAI Firm Registration No. 103523W
Anand Kumar Jhunjhunwala
Membership No. 056613
April 30 2016
ANNEXURE - 2 TO THE INDEPENDENT AUDITORS REPORT
Referred to in paragraph 2 (f) under Report on Other Legal and RegulatoryRequirements in our Independent Auditors Report of even date to the membersof Ortel Communications Limited on the financial statements for the year ended March 312016]
Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 ofSection 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of OrtelCommunications Limited ("the Company") as of March 31 2016 in conjunction withour audit of the financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India ("ICAI").These responsibilities include the designimplementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to companys policies thesafeguarding 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 Act.
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing specified under section 143(10) of the Act to the extent applicable to an audit of internal financial controls bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting were established andmaintained and if such controls operated effectively in all material 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys 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 preparationof financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompanys assets that could have a material effect on the 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 controlsover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.
For Haribhakti & Co. LLP
ICAI Firm Registration No.103523W
Anand Kumar Jhunjhunwala
April 30 2016