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Rolta India Ltd.

BSE: 500366 Sector: IT
NSE: ROLTA ISIN Code: INE293A01013
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OPEN 4.48
PREVIOUS CLOSE 4.40
VOLUME 39804
52-Week high 10.39
52-Week low 3.65
P/E 0.47
Mkt Cap.(Rs cr) 73
Buy Price 4.38
Buy Qty 20.00
Sell Price 4.48
Sell Qty 4000.00
OPEN 4.48
CLOSE 4.40
VOLUME 39804
52-Week high 10.39
52-Week low 3.65
P/E 0.47
Mkt Cap.(Rs cr) 73
Buy Price 4.38
Buy Qty 20.00
Sell Price 4.48
Sell Qty 4000.00

Rolta India Ltd. (ROLTA) - Auditors Report

Company auditors report

To the

Members of Rolta India Limited

1. The accompanying abridged standalone financial statements which comprise theabridged Balance Sheet as at March 31 2019 the abridged Statement of Profit and Loss(including Other Comprehensive Income) the abridged Statement of Changes in Equity andthe abridged Statement of Cash Flows for the year then ended and related notes arederived from the audited standalone financial statements of Rolta India Limited ("theCompany") for the year ended March 31 2019. We had expressed a qualified auditopinion on those standalone financial statements in our report dated May 24 2019.

2. The abridged standalone financial statements do not contain all the disclosuresrequired by the accounting principles generally accepted in India including the IndianAccounting Standards specified under Section 133 of the Companies Act 2013 ("theAct") read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") applied in the preparation of the audited standalone financialstatements of the Company. Reading the abridged standalone financial statementstherefore is not a substitute for reading the audited standalone financial statements ofthe Company.

Management's Responsibility for the Abridged Standalone Financial Statements

3. The Company's Board of Directors is responsible for the preparation of a summaryof the audited standalone financial statements in accordance with section 136(1) of theAct read with rule 10 of the Companies (Accounts) Rules 2014 (as amended) and which arederived from the audited standalone financial statements for the year ended March 312019 prepared in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards specified under Section 133 of the Act readwith the Companies (Indian Accounting Standards) Rules 2015 as amended ("IndAS").

Auditor's Responsibility

4. Our responsibility is to express an opinion on the abridged standalone financialstatements based on our procedures which were conducted in accordance with Standard onAuditing (SA) 810 "Engagements to Report on Summary Financial Statements"issued by the Institute of Chartered Accountants of India.

Basis for Qualified Opinion

5. We draw your attention to the following:

During the year consequent upon default committed by the International Subsidiaries ofthe Company based in the US UK and UAE viz Rolta International Inc (RUS) Rolta UKLimited (RUK) and Rolta Middle East FZ LLC (RME) on repayment of loans given to them byForeign Banks against Standby Letters of Credit (SBLC) issued by overseas branches of theCompany's bankers and guaranteed by the Company the repayment of the loans devolved onthe Company as the Company's bankers had to honour the invocation of the guarantees by thesaid lenders. Pursuant thereto the Company recognized a liability to its bankers with acorresponding receivable from each of the subsidiaries for which interest wascross-charged upto March 31 2019. The Company also has in its books long term exportadvances received from the said international subsidiaries. The Company has during theyear made the following adjustments in its books of account under an arrangement ofassignment in respect of which the deed of assignment (refer sub point b & c) is yetto be executed without obtaining necessary permissions from the Reserve Bank of India:

a. Advance against exports received from RUS has been adjusted against amountreceivable from RUS on account of devolvement of SBLC and against short term loanreceivable from RUS; advance against exports received from RUK has been adjusted againstamount receivable from RUK on account of devolvement of SBLC; and advance against exportsreceived from RME has been adjusted against amount receivable from RME on account ofdevolvement of SBLC.

b. Advance against exports received from RME has been adjusted by transfer toadvance against exports received from RUS; advance against exports received from RUK hasbeen adjusted by transferring it to trade advance of RUS where it currently stands.

c. Advance against exports received from RUS has been adjusted against tradereceivable from Rolta Canada Limited; since reversed. The aforesaid adjustments in ouropinion are not permissible under the provisions of Foreign Exchange Management Act(FEMA) 1999 wherein Para C2 (2)(iv) of Master Directions – Export of Goods andServices as updated upto January 12 2018 stipulates that a long term export advance canbe adjusted against future exports.

Had the said adjustments not been carried out the other non-current liabilities wouldhave been higher by Rs 801.14 crores other financial assets (non-current) would have beenhigher by Rs 893.61 crores trade receivables would have been higher by Rs 35.46 croresand loss for the year due to unrealised exchange loss resulting from the above adjustmentswould have been lower by Rs 127.93 crores.

Qualified Opinion

6. In our opinion the abridged standalone financial statements derived from theaudited standalone financial statements of the Company as at and for the year ended March31 2019 except for the effects as stated in para 5 above are a fair summary of thosefinancial statements in accordance with the section 136(1) of the Act read with rule 10of the Companies (Accounts) Rules 2014 (as amended).

Material Uncertainty Related to Going Concern

7. We draw attention to Note No.18 of the Notes to the abridged standalonefinancial statements which indicates that the Company has incurred a net loss of Rs3389.48 crores during the year ended March 31 2019. Proceedings initiated by theCompany's lenders under the Insolvency and Bankruptcy Code 2016 against which theCompany has obtained a stay a severe liquidity crunch and high rate of attrition ofskilled and experienced personnel including key managerial personnel indicate thatpresently a material uncertainty exists that may cast significant doubt on the Company'sability to continue as a going concern. However in the light of the mitigating factorscited by the Management in the said note our opinion is not modified in respect of thismatter.

Emphasis of Matter

8. We draw attention to the following:

(i) The Company had upto March 31 2018 made a provision for interest of Rs 272crores on the ‘Senior Notes 2013' and ‘Senior Notes 2014' issued by its twointernational subsidiaries consequent upon the said subsidiaries committing default inpayment of interest on the aforesaid ‘Senior Notes' in respect of which the Companyis a parent guarantor. The said provision was made based on the Management's perception ofthe liability that would devolve upon it in the light of the renewed negotiations withthe Bond holders. The Company has informed that in the latest settlement offer receivedfrom the bondholders there is no provision of payment of any overdue interest on the saidbonds basis which it has written back the said provision of Rs 272 crores. (Refer NoteNo.11 of the Notes to the abridged standalone financial statements) Our opinion is notmodified in respect of the said matter.

(ii) During the year the Company has incurred a business loss of ` 3389.48 croresfor which it has recognized a Deferred Tax Asset of Rs 1150.43 crores. After setting offthe same against Deferred Tax Liability of Rs 591.86 crores as permitted under Ind AS 12– Income Taxes issued by the Institute of Chartered Accountants of India the netDeferred Tax Asset attributable to unabsorbed business loss for the year recognized bythe Company amounts to ` 558.57 crores. The Company has prepared financial projectionsbased on orders presently on hand and orders which are expected to be received over aperiod of time wherein as informed to us negotiations are in an advanced stage whichindicate that it will be able to generate taxable profits for setting off the carryforward business losses despite the financial crisis currently faced by the company andthe depleted skilled operational manpower. The Board of Directors we are informed in itsmeeting has approved the financial projections. (Refer Note No.12b of the Notes to theabridged standalone financial statements) Our opinion is not modified in respect of thesaid matter.

For N.M. Raiji & Co.
Chartered Accountants
Firm Registration No.: 108296W
Vinay D. Balse
Place: Mumbai Partner
Date: 24 May 2019 Membership No.: 39434

Independent Auditors' Report

To the

Members of Rolta India Limited

Report on the Audit of Standalone Financial Statements Qualified Opinion

We have audited the standalone financial statements of Rolta India Limited ("theCompany") which comprise the Balance Sheet as at March 31 2019 the Statement ofProfit and Loss (including Other Comprehensive Income) the Statement of Changes in Equityand the Statement of Cash Flows for the year ended on that date and notes to thestandalone financial statements including a summary of the significant accountingpolicies and other explanatory information (hereinafter referred to as "thestandalone financial statements") . In our opinion and to the best of our informationand according to the explanations given to us except for the possible effects of thematter described in the Basis for Qualified Opinion section of our report the aforesaidstandalone financial statements give the information required by the Companies Act 2013(‘the Act') in the manner so required and give a true and fair view in conformitywith the Indian Accounting Standards prescribed under Section 133 of the Act read withthe Companies (Indian Accounting Standards) Rules 2015 as amended ("Ind AS")and other accounting principles generally accepted in India of the state of affairs ofthe Company as at March 31 2019 the loss and total comprehensive income changes inequity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

During the year consequent upon default committed by the International Subsidiaries ofthe Company based in the US UK and UAE viz Rolta International Inc (RUS) Rolta UKLimited (RUK) and Rolta Middle East FZ LLC (RME) on repayment of loans given to them byForeign Banks against Standby Letters of Credit (SBLC) issued by overseas branches of theCompany's bankers and guaranteed by the Company the repayment of the loans devolved onthe Company as the Company's bankers had to honour the invocation of the guarantees by thesaid lenders. Pursuant thereto the Company recognized a liability to its bankers with acorresponding receivable from each of the subsidiaries for which interest wascross-charged upto March 31 2019. The Company also has in its books long term exportadvances received from the said international subsidiaries. The Company has during theyear made the following adjustments in its books of account under an arrangement ofassignment in respect of which the deed of assignment (refer sub point b & c) is yetto be executed without obtaining necessary permissions from the Reserve Bank of India:

a. Advance against exports received from RUS has been adjusted against amountreceivable from RUS on account of devolvement of SBLC and against short term loanreceivable from RUS; advance against exports received from RUK has been adjusted againstamount receivable from RUK on account of devolvement of SBLC; and advance against exportsreceived from RME has been adjusted against amount receivable from RME on account ofdevolvement of SBLC.

b. Advance against exports received from RME has been adjusted by transfer toadvance against exports received from RUS; advance against exports received from RUK hasbeen adjusted by transferring it to trade advance of RUS where it currently stands.

c. Advance against exports received from RUS has been adjusted against tradereceivable from Rolta Canada Limited; since reversed. The aforesaid adjustments in ouropinion are not permissible under the provisions of Foreign Exchange Management Act(FEMA) 1999 wherein Para C2 (2)(iv) of Master Directions – Export of Goods andServices as updated upto January 12 2018 stipulates that a long term export advance canbe adjusted against future exports. Had the said adjustments not been carried out theother non-current liabilities would have been higher by Rs 801.14 crores other financialassets (non-current) would have been higher by Rs 893.61 crores trade receivables wouldhave been higher by Rs 35.46 crores and loss for the year due to unrealised exchange lossresulting from the above adjustments would have been lower by Rs 127.93 crores.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013.Our responsibilities under those standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Companies Act 2013 and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our qualified opinion on the standalone financialstatements.

Material Uncertainty Related to Going Concern

We draw attention to Note No.41 of the Notes to the standalone financial statementswhich indicates that the Company has incurred a net loss of ` 3389.48 crores during theyear ended March 31 2019. Proceedings initiated by the Company's lenders under theInsolvency and Bankruptcy Code 2016 against which the Company has obtained a stay asevere liquidity crunch and high rate of attrition of skilled and experienced personnelincluding key managerial personnel indicate that presently a material uncertainty existsthat may cast significant doubt on the Company's ability to continue as a going concern.However in the light of the mitigating factors cited by the Management in the said noteour opinion is not modified in respect of this matter.

Emphasis of Matter

We draw attention to the following:

(i) The Company had upto March 31 2018 made a provision for interest of Rs 272crores on the ‘Senior Notes 2013' and ‘Senior Notes 2014' issued by its twointernational subsidiaries consequent upon the said subsidiaries committing default inpayment of interest on the aforesaid ‘Senior Notes' in respect of which the Companyis a parent guarantor. The said provision was made based on the Management's perception ofthe liability that would devolve upon it in the light of the renewed negotiations withthe Bond holders. The Company has informed that in the latest settlement offer receivedfrom the bondholders there is no provision of payment of any overdue interest on the saidbonds basis which it has written back the said provision of Rs 272 crores. (Refer noteno.29(b)of the Notes to the standalone financial statements) Our opinion is not modifiedin respect of the said matter.

(ii) During the year the Company incurred a business loss of Rs 3389.48crores for which it has recognized a Deferred Tax Asset of Rs 1150.43 crores. Aftersetting off the same against Deferred Tax Liability of ` 591.86 crores as permitted underInd AS 12 – Income Taxes issued by the Institute of Chartered Accountants of Indiathe net Deferred Tax Asset attributable to unabsorbed business loss for the yearrecognized by the Company amounts to Rs 558.57 crores. The Company has prepared financialprojections based on orders presently on hand and orders which are expected to be receivedover a period of time wherein as informed to us negotiations are in an advanced stagewhich indicate that it will be able to generate taxable profits for setting off the carryforward business losses despite the financial crisis currently faced by the company andthe depleted skilled operational manpower. The Board of Directors we are informed in itsmeeting has approved the financial projections. (Refer note no.30(c)of the Notes to thestandalone financial statements) Our opinion is not modified in respect of the saidmatter.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. In addition to the matter described in the Basis forQualified Opinion section we have determined the matters described below to be the keyaudit matters to be communicated in our report.

Key Audit Matter Auditor's Response
1 Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard) Principal Audit Procedures
We assessed the Company's process / basis of
- Identification of Contract with the
Customer
- Identification of performance obligation
The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognised over a period. Additionally new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. Refer Note 2(b) to the standalone financial statements - Determination of transaction price
- Allocation of transaction price
- Satisfaction of performance obligation
Selected a sample of contracts and performed the following procedures:
• read analysed and identified the distinct performance obligations in these contracts;
• compared these performance obligations with that identified and recorded by the Company;
• considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration;
• verified performance obligation that gets satisfied at a point in time upon physical delivery of goods to customer with delivery proofs;
• verified performance obligation that gets satisfied over a period of time upon passage of time with actual passage of time;
• tested sample of revenues disaggregated by type with the performance obligations specified in the underlying contracts; and
• performed analytical procedures for reasonableness of revenues disclosed by type.
2 Accuracy of booking of revenues in respect of fixed price ongoing con- tracts involving critical estimates Principal Audit Procedures
Estimated effort is a critical estimate to determine revenues in case of ongoing contracts. This estimate has a high inherent uncertainty as it requires consideration of progress of the contract efforts incurred till date and efforts required to complete the remaining contract performance obligations. Our audit approach was a combination of test of internal controls and substantive procedures which included the following:
• Evaluating the design of internal controls relating to recording of efforts incurred and estimation of efforts required to complete the performance obligations;
Refer Note 2(b) to the standalone financial statements • Testing the access and application controls pertaining to time recording allocation and budgeting systems which prevents unauthorised changes to recording of efforts incurred;
• Selecting a sample of contracts and through inspection of evidence of performance of these controls testing the operating effectiveness of the internal controls relating to efforts incurred and estimated;
• Selecting a sample of contracts and performing a retrospective review of efforts incurred with estimated efforts so as to identify significant variations and verify whether those variations have been considered in estimating the remaining efforts to complete the contract;
• Reviewing a sample of contracts with unbilled revenues to identify possible delays in achieving milestones which require change in estimated efforts to complete the remaining performance obligations; and
• Performing analytical procedures and testing details for reasonableness of incurred and estimated efforts.
3 Non repayment of principal and interest due thereon in respect of borrowings Principal Audit Procedures
Non repayment of borrowings is one of the event/ condition that may cast significant doubt on a Company's abil- ity to continue as a going concern. We obtained details of principal and interest due thereon to various banks as at March 31 2019 from the Management and confirmed the accuracy of the amounts out- standing/ payable to various banks against each of the facilities with reference to the balance confirmation certificates procured from the respective banks.
The Company has defaulted in repayment of principal and interest due thereon aggregating ` 2164.90 crores in respect of Secured Borrow- ings and Working Capital Term Loans taken from various banks.
Further the Company also owes ` 1529.68 crores to various banks on account of devolvement of Letter of Credit and invocation of Stand By Letter's of Credit and Bank Guarantees.
Refer Note 18 to the standalone financial statements
4 Non payment of statutory dues Principal Audit Procedures
During the year the Company has defaulted in depositing statutory dues with various authorities. As at March 31 2019 the Company has not deposited the following statutory dues with the respective authorities: Obtained details including ageing of various statutory dues payable by the Company to various authorities as at March 31 2019 from the Management.
a) Tax Deducted at Source – Confirmed the accuracy of the statutory dues payable as at March 31 2019 to various authorities from the relevant documents challans and ledger accounts maintained by the Company for each of the said dues.
` 13.75 crores.
b) Provident Fund (including Pension) – Rs 2.04 crores
c) Profession Tax – Rs 0.12 crores
d) ESIC – Rs 0.04 crores
5 Write off of receivables Principal Audit Procedures
The Company has during the year ended March 31 2019 written off an amount of Rs 2988.44 crores being receivable on account of certain un- billed receivables pertaining to work done on various projects. Further the Company has also written off an amount of Rs 847.93 crores being receivables from sundry debtors. Obtained details including ageing of unbilled receivables which the Company has written off to test the recoverability of these receivables. These unbilled amounts are on account of work done and delivered to the respective customers but for which acceptance/ clearance has not been provided by the customers and hence have been considered as bad and therefore written off. Further the said amount of ` 2988.44 crores includes an amount of ` 2737.74 crores which has been written off on account of cancellation of a large project by the customer under the terms of which no compensation is receivable. We have verified the copy of the intimation received from the customer cancelling the contract as also letter received from the lead consortium partner confirming the cancellation.
The aggregate amount of Rs 3836.37 crores has been disclosed as a part of the ‘Exceptional Item' in the stand- alone financial statements.
Refer Note 29 to the standalone financial statements.
With regard to the other receivables (sundry debtors) considering the ageing of the respective balances and verifications carried out by us we have relied on the management's judgment that the said amounts are not receivable.
6 Inter company balance adjustments which in our opinion are not permissible under the provisions of Foreign Exchange Management Act (FEMA) 1999. Refer to the comments in the "Basis for Quali- fied Opinion" section of the report.
7 Material uncertainty related to going concern Refer to the comments in the "Material Uncertainty Related to Going Concern" section of the report.
8 Reversal of provision for interest on Senior Notes (Bonds) issued by the international subsidiaries Principal Audit Procedures
The Company had upto March 31 2018 made a provision for interest of Rs 272 crores on the ‘Senior Notes (Bonds) issued by its two international subsidiaries consequent upon the said subsidiaries committing default in payment of interest on the aforesaid ‘Senior Notes' in respect of which the Company is a parent guarantor. The said provision was made based on the Management's perception of the liabil- ity that would devolve upon it in the light of the renewed negotiations with the Bond holders. The Company has during the year reversed the provision so made on the premise that as per the latest settlement offer received from the bondholders there is no provision of payment of any overdue interest on the said bonds. Our audit procedures performed by us comprised of the following:
studied and analysed the bond inden- ture to understand and verify the terms agreed upon between the Company and the bond holders as regards the payment of interest in case of any default by the subsidiaries;
examined the latest settlement offer with regard to the demand of the bond holders as regards payment of interest;
discussed with appropriate senior management and evaluated manage- ment's perception with regard to not carrying forward the said provision in the books.
Assessed management's estimate of the possible outcome of the renewed negotiations with the bond holders.
This has been disclosed separately as an Emphasis of Matter in the report Refer note no.29(b)of the Notes to the standalone financial statements
9 Creation of Deferred Tax Asset Principal Audit Procedures
Though the Company has during the year incurred a business loss of ` 3389.48 crores it has recognized a Deferred Tax Asset of Rs 1150.43 crores. As permitted under Ind AS 12- Income Taxes issued by the ICAI after setting off the Deferred Tax Asset against the Deferred Tax Liability of ` 591.86 crores the net Deferred Tax Asset attributable to unabsorbed business loss for the year recognized by the Company amounts to Rs 558.57 crores. Since the Company has recognized Deferred Tax Asset based on financial projections our audit procedures comprised of the following:
verifying the financial projections prepared by the management which have also been approved by the Board of Directors vis-a-vis the revenue expected to be generated from orders presently on hand and orders which the management has represented are expected to be received and wherein negotiations are at an advanced stage;
Refer note no.30(c)of the Notes to the standalone financial statements analyzing the cost estimate made by the management to generate the aforesaid revenue; and
analyzing the profit the company will be able to generate basis the revenue projections and cost estimates men- tioned above for setting off the carry forward business losses.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the DirectorsReport Corporate Governance Shareholder's Information etc but does not include thestandalone financial statements and our auditor's report thereon.

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

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the stand-alone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.

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

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 with respect to the preparation of these financialstatements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theaccounting standards specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements the management is responsible forassessing the ability of the Company to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The management is also responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

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

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

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign 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 whetherthe Company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting in preparation of standalone financial statements and based on the auditevidence obtained whether a material uncertainty exists related to events or conditionsthat may cast significant doubt on the ability of the Company to continue as a goingconcern. If we conclude that a material uncertainty exists we are required to drawattention in our auditor's report to the related disclosures in the standalone financialstatements or if such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor's report. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation. We communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards. From the matters communicatedwith those charged with governance we determine those matters that were of mostsignificance in the audit of the standalone financial statements of the current period andare therefore the key audit matters. We describe these matters in our auditors' reportunless law or regulation precludes public disclosure about the matters or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interests benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of section 143(11) of theAct we give in the Annexure "A" a statement on the matters specified in theparagraph 3 and 4 of the order.

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 thebest of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion except for the matter stated in the Basis for Qualified Opinionsection proper books of account as required by law have been kept by the Company so faras it appears from our examination of those books.

(c) The Balance sheet the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowsdealt with by this Report are in agreement with the books of account.

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

(e) On the basis of the written representations received from the directors as onMarch 31 2019 taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2019 from being appointed as a director in terms of Section164 (2) of the Act.

(f) 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 "B".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act in our opinion and to thebest of our information and according to the explanations given to us the remunerationpaid by the Company to its directors during the year is in accordance with the provisionsof section 197 of the Act ; and

(h) 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 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact if any of pending litigations as at March31 2019 on its financial position in its standalone financial statements – Refernote 36 to the standalone financial statements. ii. The Company did not have anylong term contracts including derivative contracts for which there were any materialforseeable losses. iii. There has been no delay in transferring amounts requiredto be transferred to the Investor Education and Protection Fund by the Company.

For N.M. Raiji & Co.
Chartered Accountants
Firm Registration No.: 108296W
Vinay D. Balse
Place: Mumbai Partner
Date: 24 May 2019 Membership No.: 39434

ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THEFINANCIAL STATEMENTS OF ROLTA INDIA LIMITED

(Referred to in Paragraph 1 under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even date)

We report that:

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

(b) As explained to us according to the practice of the Company fixed assets arephysically verified by the management at reasonable intervals which in our opinion isreasonable considering the size of the company and nature of its business.

(c) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

ii. The Company is a service company primarily rendering software services.Accordingly it does not hold any physical inventories. Thus paragraph 3(ii) of the Orderis not applicable to the Company.

iii. The Company has granted interest free unsecured loans to its three whollyowned subsidiary companies covered in the register maintained under section 189 of theCompanies Act 2013 (‘the Act').

(a) In our opinion the terms and conditions on which the loans have been grantedto the Subsidiaries listed in the register maintained under Section 189 of the Act arenot prima facie prejudicial to the interest of the Company.

(b) In the case of the loans granted to the bodies corporate listed in the registermaintained under section 189 of the Act the borrowers have not been regular in thepayment of the principal as stipulated.

(c) There are no overdue amounts in respect of the loan granted to a body corporatelisted in the register maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanations given to usthe Company has complied with the provisions of section 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

v. The Company has not accepted any deposits from the public.

vi. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company. Accordinglythe provisions of clause 3(vi) of the Order are not applicable to the Company.

vii. (a). According to the information and explanations given to us and on thebasis of our examination of the records of the Company amounts deducted/accrued in thebooks of account in respect of undisputed statutory dues including provident fundincome-tax sales tax value added tax duty of customs service tax goods and servicetax cess and other material statutory dues have not been regularly deposited during theyear by the Company with the appropriate authorities and there have been significantdelays in a large number of cases.

The details of undisputed amounts payable in respect of the statutory dues mentionedabove and the interest thereon which were outstanding at the year-end for a period of morethan six months from the date they become payable is as tabulated below:

Particulars Amount Period of Default
(Rs in crores)
Profession Tax 0.04 9 Months
Provident & Pension Fund 0.41 7 Months
ESIC & Labour Welfare 0.01 9 Months
Fund
TDS 6.61 12 Months
Interest on Statutory Dues 5.77 Between 7 to 12 months
(b) The dues in respect of income-tax service tax sales tax and VAT which have not been deposited on account of any dispute with the appropriate authorities is as tabulated below:
Name of statute Amount Period for which the amount relates Forum where dispute is pending
( Rs in crores)
Service Tax 00.15 FY 2013-14 Commissioner of Service Tax (Appeals) II
00.37 FY 2014-15
00.35 FY 2015-16
Central Sales Tax 0.14 FY 2008-09 Deputy Commissioner of
0.25 FY 2014-15 Sales Tax
Deputy
Commissioner of
Sales Tax
MVAT 0.48 FY 2008-09 Deputy
Commissioner of
0.27 FY 2014-15 Sales Tax
Deputy
Commissioner of Sales Tax

viii. There are no loans or borrowings payable to financial institutions orgovernment and no dues payable to debenture-holders. The Company has defaulted inrepayment of loans/borrowings to the following banks:

Name of the bank Nature of loan/ borrowing Amount of default as on March 31 2019 Period of default Remarks
(In Rs' Crores)
Union Bank of India External Commercial 400.34 March 26 2018 – till date Continuing Default
Bank of Baroda Bank of India (Consortium Balance) Borrowing*
Bank of Baroda External Commercial Borrowing* 53.30 January 26 2018– till date Continuing Default
Bank of Baroda Working 127.57 September 29 2018 Continuing
Central Bank of India Capital Term 122.73 Default
Loan – I
Union Bank of India 297.00 December 28 2018
Bank of India 196.92 December 28 2018
December 31 2018
(All the above loans are outstanding till date)
Bank of Baroda Working 137.77 December 31 Continuing
Union Bank of India Capital Term 228.19 2017 – till date Default
Loan – II
Bank of India 151.25
Bank of Baroda Overdraft 83.63 December 2017 Continuing Default
Central Bank of India 34.97 – till date
January 2018 –
Union Bank of India 173.93 till date
Bank of India 157.28 February 2018
– till date
November
2017 – till date
Central Bank of India LC devolvement 83.74 Between March Continuing Default
07 2018 to July
29 2018 – till
date
Union Bank of India 43.32
Between April 18 2018 to July 17 2018 – till date
Syndicate Bank SBLC's invoked 1397.92 Between Continuing Default
Central Bank of India November 01
2018 to January
Union Bank of 23 2019 – till date
India and
Bank of India

*External Commercial Borrowings taken by subsidiaries have now devolved on the ParentCompany and are payable in Indian Rupees

ix. The Company has not raised during the year moneys by way of initial publicoffer or further public offer (including debt instruments) and term loans. Hencereporting under this clause is not applicable to the Company.

x. In our opinion no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the period covered by our audit.

xi. Managerial remuneration has been paid and provided by the Company in accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to usthe Company is not a Nidhi Company. Accordingly clause (xii) of paragraph 3 of the Orderis not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to usall transactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 and corresponding details have been disclosed in the financialstatements as required by the applicable accounting standards.

xiv. In our opinion and according to the information and explanations given to usthe Company has not made any preferential allotment or private placement of shares orfully or partly convertible debentures during the year. Accordingly reporting requirementunder clause (xiv) of paragraph 3 of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to usthe Company has not entered into non-cash transactions with its directors or personsconnected with him; as such provisions of section 192 of the Act are not applicable.Accordingly requirement under clause (xv) of paragraph 3 of the Order is not applicableto the Company.

xvi. To the best of our knowledge and belief the Company is not required to beregistered under section 45-IA of the Reserve Bank of India Act 1934.

For N.M. Raiji & Co.
Chartered Accountants
Firm Registration No.: 108296W
Vinay D. Balse
Place: Mumbai Partner
Date: 24 May 2019 Membership No.: 39434

Annexure - B to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Rolta IndiaLimited ("the Company") as at March 31 2019 in conjunction with our audit ofthe standalone 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 Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation 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 judgement including the assessment of the risks ofmaterial misstatement 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 opinion on the Company's internal financial controls system overfinancial 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 financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that:

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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 controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Based on the audit carried out by us and according to the information and explanationsgiven to us we have observed high levels of attrition particularly in the Accounts andFinance department in the last quarter of the financial year which has resulted in theresidual personnel having had to carry out multiple tasks which would not be desirablefrom the internal control mechanism perspective. However the said risk has beensubstantially mitigated due to the fact that the size of operations of the Company havealso reduced significantly during the year as compared to the previous year/s.

Opinion

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 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For N.M. Raiji & Co.
Chartered Accountants
Firm Registration No.: 108296W
Vinay D. Balse
Place: Mumbai Partner
Date: 24 May 2019 Membership No.: 39434