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Siti Networks Ltd.

BSE: 532795 Sector: Media
NSE: SITINET ISIN Code: INE965H01011
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VOLUME 1628467
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OPEN 1.11
CLOSE 1.08
VOLUME 1628467
52-Week high 4.17
52-Week low 0.92
P/E
Mkt Cap.(Rs cr) 99
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Siti Networks Ltd. (SITINET) - Auditors Report

Company auditors report

To the Members of SITI Networks Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

1. We have audited the accompanying standalone financial statements of SITI NetworkLimited (Rsthe CompanyRs) which comprise the Balance Sheet as at March 31 2022 theStatement 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.

2. In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion section of our report the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (RsActRs) in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India including Indian Accounting Standards (RsInd ASRs) specified under section 133 ofthe Act of the state of affairs of the Company as at March 31 2022 and its loss(including other comprehensive income) its cash flows and the changes in equity for theyear ended on that date.

Basis for Qualified Opinion

3. As described in note 46 to the accompanying standalone financial statements theCompany's Revenue from operations includes broadcastersRs share in subscription incomefrom pay channels which has correspondingly been presented as an expense which is not inaccordance with the requirements of Ind AS-115 Revenue from Contracts with Customers. Hadthe management disclosed the same on net basis the Revenue from operations and the RsPaychannel costsRs each would have been lower by Rs 3369.65 million for the year ended March31 2022 while there would have been no impact on the net loss for the year ended March31 2022.

4. We conducted our audit in accordance with the Standards on Auditing specified undersection 143 (10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (RsICAIRs) together withthe ethical requirements that are relevant to our audit of the financial statements underthe provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.

Material Uncertainty Related to Going Concern

5. We draw attention to note 47 to the accompanying standalone financial statementswhich indicates that the Company has incurred a net loss (including other comprehensiveincome) of Rs 2552.25 million during the year ended March 31 2022 and as of that datethe Company's accumulated losses amount to Rs 23436.14 million resulting in a negativenet worth of Rs 6500.84 million and its current liabilities exceeded its current assetsby Rs 13586.33 million resulting in negative working capital. As at March 31 2022 thereare delays/ defaults in repayment of obligations and borrowings. The above factors alongwith other matters as set forth in note 47 indicate a material uncertainty which maycast significant doubt about the Company's ability to continue as a going concern.However basis the impact of Tariff Order 2017 ongoing discussion with the lenders of theCompany and other factors mentioned in aforesaid note to the accompanying standalonefinancial statements the management is of the view that going concern basis of accountingis appropriate for preparation of these financial statements.

The above assessment of the Company's ability to continue as going concern is by itsnature considered as key audit matter in accordance with SA 701. In relation to the abovekey audit matter our audit work included but was not limited to the followingprocedures:

• We obtained an understanding of the managements process for identification ofevents or conditions that may cast significant doubt over the Company's ability tocontinue as a going concern and the process to assess the corresponding mitigating factorsexisting against each such event or condition.

• Evaluated the design and tested the operating effectiveness of key controlsaround aforesaid identification of events or conditions and mitigating factors andcontrols around cash flow projections prepared by the management.

• We obtained the projected cash flows from the management for the next twelvemonths from the balance sheet date basis their future business plans and considering theimpact of Tariff Order 2017.

• We held discussions with the management personnel to understand the assumptionsused and estimates made by them for determining the future cash flow projections.

• The key assumptions such as revenue growth rate changes in direct andadministrative expenses and capital expenditure outflows were assessed forreasonableness by reference to historical data future market trends existing marketconditions business plans and our understanding of the business and the industry in whichthe Company operates.

• We tested mathematical accuracy of the projections and applied independentsensitivity analysis to the key assumptions mentioned above to determine inputs leading tohigh estimation uncertainty of the cash flow projections

• We read the relevant correspondences with the lending banks.

• We assessed the appropriateness and adequacy of disclosures made by the Companywith respect to the aforesaid events and conditions in accordance with the provisionsrequirements of Ind AS 1 Presentation of Financial Statements.

Our opinion is not modified in respect of this matter.

Key Audit Matters

6. Key audit matters are those matters that in our professional judgment 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 financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

7. In addition to the matters described in the Basis for Qualified Opinion and MaterialUncertainty Related to Going Concern sections we have determined the matters describedbelow to be the key audit matters to be communicated in our report.

Key audit matter How our audit addressed the key audit matter
Impairment assessment of non-current investments Our audit procedures included but were not limited to the following:
As described in Note 6 to the standalone financial statements the Company has investments of Rs 3502.79 million in its subsidiaries associates and joint venture entities as at March 31 2022 (hereinafter together referred to as RsComponent entitiesRs). • We obtained understanding of the management process for identification of possible impairment indicators and process performed by the management for impairment testing.
Certain Component entities have been incurring losses in the current year and previous year and have negative cash flows from operations during the current as well as previous years thus resulting in possible impairment indicators. • We have performed detailed discussions with the management throughout the year to understand the impairment assessment process assumptions used and estimates made by management to assess the reasonableness of the recoverable amount and tested the operating effectiveness of controls implemented by management.
In view of the above management during the year ended March 31 2022 has carried out impairment test for such investments whereby the carrying amount of the investments • We obtained from the management of the Company the approved future business plans of the subsidiary companies and held detailed discussions with the management to understand the assumptions used and estimates made by them for determining the cash flow projections.
was compared with the fair value of the business of respective component entity. To determine the fair value management of the Company has prepared detailed cash flow projections based on business plans of the respective component entity expected growth rates of the business and other market related factors including the discount rates etc. • We referred to the economic conditions prevalent in the jurisdiction in which the subsidiary company operates and understood from the management about the future business plans.
Based on the result of the aforesaid impairment tests no impairment has been noted. • We assessed the reasonableness of the assumptions used and appropriateness of the valuation methodology applied.
Considering the materiality of the amount involved and significant degree of judgement and subjectivity involved in the estimates and key assumptions used in determining the cash flows used in the impairment evaluation we have determined impairment of such investments as a key audit matter. • Working with our valuation specialists we have assessed the reasonableness of assumptions around discount rate beta etc. used and valuation methodology applied for valuation of certain investment in optionally convertible debentures of the Component entities.
• Evaluated the appropriateness and adequacy of the related disclosures made in the standalone financial statements in accordance with the applicable accounting standards.
Key audit matter How our audit addressed the key audit matter
Provision for expected credit losses (ECL) Our audit procedures included but were not limited to the following:
Refer note 3(k) for significant accounting policy and note 35 for credit risk disclosures. • We obtained an understanding of the management process for segregating receivables into appropriate groups computation of average historical loss rate by age- band and adjustments made to historical loss rates (if any).
As described in note 10 trade receivables comprise a significant portion of the current financial assets of the Company. As at March 31 2022 trade receivables aggregate to Rs 2022.12 million (net of allowance for expected credit losses of Rs 4286.52 million). • We assessed and tested the design and operating effectiveness of controls around managements assessment of the recoverability of trade receivables and corresponding provisioning for ECL. Also evaluated the controls over the modelling process validation of data and related approvals.
In accordance with Ind AS 109 the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss for financial assets. The Company has analysed the trend of trade receivables under different ageing bracket for last three years and calculated credit loss rate basis such ageing. The complexity in calculation of ECL is mainly related to calculations performed for different type of revenue streams in which the Company operates and the different recovery period for different categories of customers. Additional provision is recognised for the receivables which are specifically identified as doubtful or non-recoverable. • We obtained from the management of the Company detailed assessment including computation of the ECL.
Further the management regularly assess each class of trade receivables for recoverability. Provision for ECL is adjusted considering the recovery trends noted for the respective class adjusted for forward looking estimates. • We audited the underlying data and assessed reasonableness of the assumptions used for each age- band of trade receivables.
Estimation of provisions and assessment of recoverability of amounts involves significant degree of judgement and evaluation basis the ongoing communications with the respective parties and is therefore considered as a key audit matter. • We analysed the methodology used by the management and considered the credit and payment history of specific parties to determine the trend used for arriving at the expected credit loss provision.
• We obtained the details of receivables specifically identified by the management for provisioning over and above the ECL and corroborated them from the ageing schedule and held discussions with management on their recoverability.
• We assessed the appropriateness of disclosures made by the management for the ECL recognized in accordance with applicable accounting standards.

Emphasis of Matter

8. We draw attention to note 56 which indicates HDFC Limited (lender) has filed anapplication against the Company under section 7 of the Insolvency and Bankruptcy Code2016 before National Company Law Tribunal (RsNCLTRs) Mumbai for initiation of CorporateInsolvency Resolution Process on the ground that the Company has defaulted in makingrepayment of borrowings taken from lender amounting to Rs 2960.60 million (includingprincipal interest and additional interest) as on January 31 2022. NCLT in its hearingon March 30 2022 has fixed next hearing on July 22 2022. The Company is in discussionwith the lenders for restructuring of its debt and has no negative assessment of Company'sability to continue as a going concern. Our opinion is not modified in respect of thismatter.

Information other than the Financial Statements and Auditor's Report thereon

9. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe standalone financial statements and our Auditor's report thereon. The Annual Report isexpected to be made available to us after the date of this Auditor's report.

Our opinion on the standalone financial statements does not cover the other informationand we will 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 identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

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

10. The accompanying standalone financial statements have been approved by theCompany's Board of Directors. The Company's Board of Directors is responsible for thematters stated in section 134(5) of the Act with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Ind AS specified under section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

11. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

12. Those charged with governance is also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

13. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an Auditor's report that includes our opinion.

Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with Standards on Auditing will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if individually or in the aggregate they could reasonably beexpected to influence the economic decisions of users taken on the basis of thesefinancial statements.

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

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control;

• 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 Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls;

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

• Conclude on the appropriateness of managements use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our Auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our Auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern;

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation;

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

16. 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.

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

Report on Other Legal and Regulatory Requirements

18. Based on our audit we report that the Company has not paid or provided for anymanagerial remuneration during the year. Accordingly reporting under section 197(16) ofthe Act is not applicable.

19. As required by the Companies (Auditor's Report) Order 2020 (Rsthe OrderRs) issuedby the Central Government of India in terms of section 143(11) of the Act we give in theAnnexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.

20. Further to our comments in Annexure I as required by section 143(3) of the Actbased on our audit we report to the extent applicable that:

a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit of theaccompanying standalone financial statements;

b) except for the effects of the matter(s) described in the Basis for Qualified Opinionsection 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 standalone financial statements dealt with by this report are in agreement withthe books of account;

d) except for the effects of the matter described in the Basis for Qualified Opinionsection in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under section 133 of the Act;

e) the going concern matter described in Material Uncertainty Related to Going Concernsection in our opinion may have an adverse effect on the functioning of the Company;

f) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on March 312022 from being appointed as a director in terms of section 164(2) of the Act;

g) the qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion section;

h) we have also audited the internal financial controls with reference to financialstatements of the Company as on March 31 2022 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated May 28 2022 as per Annexure II expressed modified opinion; and

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 (as amended) inour opinion and to the best of our information and according to the explanations given tous:

i. the Company as detailed in note 38 to the standalone financial statements hasdisclosed the impact of pending litigations on its financial position as at March 312022;

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at March 31 2022;

iii. there were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended March 31 2022;

iv. (a) The management has represented that to the best of its knowledge and belief asdisclosed in note 54(a) to the financial statements no funds have been advanced or loanedor invested (either from borrowed funds or securities premium or any other sources or kindof funds) by the Company to or in any persons or entities including foreign entities(Rsthe intermediariesRs) with the understanding whether recorded in writing orotherwise that the intermediary shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of

the Company (Rsthe Ultimate BeneficiariesRs) or provide any guarantee security or thelike on behalf the Ultimate Beneficiaries;

(b) The management has represented that to the best of its knowledge and belief asdisclosed in note 54(b) to the financial statements no funds have been received by theCompany from any persons or entities including foreign entities (Rsthe FundingPartiesRs) with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons or entitiesidentified in any manner whatsoever by or on behalf of the Funding Party (RsUltimateBeneficiariesRs) or provide any guarantee security or the like on behalf of the UltimateBeneficiaries; and

(c) Based on such audit procedures performed as considered reasonable and appropriatein the circumstances nothing has come to our notice that has caused us to believe thatthe management representations under sub-clauses (a) and (b) above contain any materialmisstatement.

v. The Company has not declared or paid any dividend during the year ended March 312022.

For DNS & Associates
Chartered Accountants
FirmRss Registration No.: 006956C
Ankit Marwaha
Partner
Place: Noida Membership No.: 518749
Date: May 28 2022 UDIN: 22518749AKQPFZ6358

Annexure I

to the Independent Auditor's Report of even date to the members of Siti NetworksLimited on the standalone financial statements for the year ended March 31 2022

In terms of the information and explanations sought by us and given by the Company andthe books of account and records examined by us in the normal course of audit and to thebest of our knowledge and belief we report that:

(i) (a) (A) The Company has maintained proper records showing full particularsincluding quantitative details and situation of property plant and equipment (RsPPERs)except for some of the network equipment acquired in a scheme of arrangement in an earlieryear where the records are maintained for a group of similar assets and not for eachindividual asset. However the written down value of these assets is nil.

(B) The Company has maintained proper records showing full particulars of intangibleassets.

(b) The company has a regular program of physical verification of its PPE and right ofuse assets that are verified in a phase manner over a period of three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets other than Rsset top boxesRs and Rsbroadband consumer premises equipment (CPE)Rswhich are installed either at customer premises or lying with the distributors/cableoperators and Rsdistribution equipment comprising overhead and underground cablesRssince the physical verification of such items of PPE is not feasible owing to the natureand location of these assets. Further the Company has not been able to reconcile thephysical verification of certain Rsnetwork equipmentRs acquired in a scheme of arrangementin an earlier year to the books of account due to lack of records thereof as mentioned inparagraph (a) above. According to the information and explanations given to us theexistence of Rsset top boxesRs and CPE installed at customer premises is verified on thebasis of the Rsactive userRs status of the customers. No material discrepancies werenoticed on the physical verification of the PPE of the Company. However Rsset top boxesRsand CPE lying with the distributors/cable operators Rsdistribution equipment comprisingoverhead and underground cablesRs and Rsnetwork equipmentRs acquired in a scheme ofarrangement as aforementioned have not been physically verified by the management duringthe year as explained above and we are therefore unable to comment on the discrepanciesif any which could have arisen on verification thereof.

(c) The title deeds of all the immovable properties (including investment properties)held by the Company (other than properties where the Company is the lessee and the leaseagreements are duly executed in favour of the lessee) disclosed in the financialstatements are held in the name of the Company except for the following properties {forwhich the Company's management is in the process of getting the registration in the nameof the Company:

Description of property Gross carrying value Held in name of Whether promoter director or their relative or employee Period held Reason for not being held in name of company
Building 93.88 Information TV Private Limited No Less than 360 days Legal procedures of transfer of the property are in progress. Post completion of such processes property will be registered in the name of Company.

(d) The Company has not revalued its Property Plant and Equipment and Right of Useassets or intangible assets during the year.

(e) No proceedings have been initiated or are pending against the Company for holdingany benami property under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) andrules made thereunder.

Accordingly reporting under clause 3(i)(e) of the Order is not applicable to theCompany.

(ii) (a) The management has conducted physical verification of inventory at reasonableintervals during the year. In our opinion the coverage and procedure of such verificationby the management is appropriate and no discrepancies of 10% or more in the aggregate foreach class of inventory were noticed.

(b) The Company has a working capital limit in excess of Rs 5 crore sanctioned bybanks and/or financial institutions on the basis of security of current assets. Howeversuch borrowings are declared as nonperforming assets (NPAs) by the respective banks andfinancial institutions (FIs). Company is under discussion with the banks forre-structuring of such loans. As a result Company has not been filing any quarterlyreturns or statements of current assets with the banks or FIs.

(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships (LLPs) or other parties covered in the register maintainedunder Section 189 of the Act. Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b)and 3(iii)(c) of the Order are not applicable.

(iv) In our opinion the Company has complied with the provisions of Section 186 inrespect of investments. Further in our opinion the Company has not entered into anytransaction covered under Section 185 and Section 186 of the Act in respect of loansguarantees and security.

(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of the Company's services and are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

(vii) (a) In our opinion and according to the information and explanations given tous undisputed statutory dues including goods and services tax provident fundemployees's state insurance income-tax sales-tax service tax duty of customs duty ofexcise value added tax cess and other material statutory dues as applicable havegenerally been regularly deposited with the appropriate authorities by the Company thoughthere have been slight delays in a few cases. Further no undisputed amounts payable inrespect thereof were outstanding at the year-end for a period of more than six months fromthe date they became payable.

(b) According to the information and explanations given to us there are no statutorydues referred in subclause (a) which have not been deposited with the appropriateauthorities on account of any dispute except for the following:

Statement of disputed dues

Name of the statute Nature of dues Amount (Rs in million) Amount paid under protest ( Rs in million) Period to which the amount relates Forum where dispute is pending
Finance Act 1994 Service tax 80.90 1.67 July 2003 to June 2008 Financial year 2005-06 to 2008-09 and Financial Year 2011-2012 The Customs Excise and Service Tax Appellate Tribunal
Karnataka Value Added Tax Act 2003 Value added tax 8.61 - Financial year 2010-11 High Court of Karnataka
Kerala Value Added Tax Act 2003 Value added tax 4.49 - Financial year 2015-16 State Tax Officer
Andhra Pradesh Value Added Tax Act 2005 Value added tax 16.80 8.40 Financial year 2016-17 High Court of Andhra Pradesh
Andhra Pradesh Value Added Tax Act 2005 Value added tax 3.11 1.66 Financial year 2010-11 to 2016-17 Telangana Value Added Tax Appellate Tribunal
Delhi Value Added Tax Act 2004 Value added tax 0.71 - Financial year 2013-14 Additional Commissioner (Appeals)
Delhi Value Added Tax Act 2004 Value added tax 2.24 5.30 Financial year 2014-15 Additional Commissioner (Appeals)
The Uttar Pradesh Value Added Tax Act 2008 Value added tax 8.19 8.19 Financial year 2015-16 to 2017-18 Appellate Deputy Commissioner Commercial Taxes (Appeals)
The Haryana Value Added Tax Act 2003 Value added tax 33.87 12.13 Financial year 2014-15 to 2017-18 The Joint Excise and Taxation Commissioner (Appeals)
Custom Act 1962 Custom Duty 1011.22 20.00 Financial Year 2014-15 till 2018-19 Additional Director General (Adjudication) Directorate of Revenue Intelligence Delhi
Uttar Pradesh Entertainment and Betting Tax Act Entertainment tax 10.00* 10.00 Financial year 2016-17 to 2017-18 Q1 Supreme Court

* To the extent determined

(viii) According to the information and explanations given to us no transactions weresurrendered or disclosed as income during the year in the tax assessments under the IncomeTax Act 1961 (43 of 1961) which have not been recorded in the books of accounts.

(ix) (a) According to the information and explanations given to us the Company has notdefaulted in repayment of loans or other borrowings to any lender or in the payment ofinterest thereon except for the below:- which were paid on or before the Balance Sheetdate:

Name of the bank Amount of default during the year ended March 31 2022 ( Rs in million) Period of default (maximum days)
Principal Interest Principal Interest
Axis Bank 26.60 - 676 -
Indus Ind Bank - 56.83 - 91
Kotak Mahindra Bank - - - -
IDBI Bank 2.45 - 608 -
HDFC Limited - 26.60 - 610
RBL Bank Limited 14.00 3.86 613 670
Aditya Birla Finance Limited - 21.56 - 94
Standard Chartered Bank 9.32 - 564 -

- which were unpaid as at March 31 2022:

Name of the bank Amount of default as on March 31 2022 ( Rs in million) Period of default upto the date of balance sheet (maximum days)
Principal Interest Principal Interest
Terms loans
Axis Bank 1728.67 640.54 975 1006
Indus Ind Bank 866.03 86.00 460 336
IDBI Bank 149.55 274.41 914 914
HDFC Limited 1985.00 628.26 975 822
RBL Bank Limited 478.50 147.48 944 914
Standard Chartered Bank 677.79 236.05 910 853
Aditya Birla Finance Limited 363.54 151.55 365 365
Loans repayable on demand from banks
Axis Bank 248.73 72.20 - More than one year
IDBI Bank 1000 219.55 - More than one year
RBL Bank Limited 0.71 11.00 - More than one year

(b) According to the information and explanations given to us including confirmationsreceived from banks/ financial institution and/or other lenders and representationreceived from the management of the Company and on the basis of our audit procedures wereport that the Company has not been declared a willful defaulter by any bank or financialinstitution or other lender.

(c) In our opinion and according to the information and explanations given to us moneyraised by way of term loans were applied for the purposes for which these were obtained

(d) In our opinion and according to the information and explanations given to us andon an overall examination of the financial statements of the Company no funds were raisedby the Company on short term basis.

(e) According to the information and explanations given to us and on an overallexamination of the financial statements of the Company the Company has not taken anyfunds from any entity or person on account of or to meet the obligations of itssubsidiaries associates or joint ventures.

(f) According to the information and explanations given to us the Company has notraised any loans during the year on the pledge of securities held in its subsidiariesjoint ventures or associate companies.

(x) (a) The Company did not raise moneys by way

of initial public offer or further public offer (including debt instruments).Accordingly reporting under clause 3(x)(a) of the Order is not applicable to the Company.

(b) According to the information and explanations given to us the Company has not madeany preferential allotment or private placement of shares or (fully partially oroptionally) convertible debentures during the year. Accordingly reporting under clause3(x)(b) of the Order is not applicable to the Company.

(xi) (a) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or on the Company has been noticed or reported duringthe period covered by our audit.

(b) No report under section 143(12) of the Act has been filed with the CentralGovernment for the period covered by our audit.

(c) According to the information and explanations given to us including therepresentation made to us by the management of the Company there are no whistle-blowercomplaints received by the Company during the year.

(xii) The Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it. Accordingly reporting under clause 3(xii) of the Order is not applicable to theCompany.

(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS.

(xiv) (a) In our opinion and according to the information and explanations given to usthe Company has an internal audit system as required under section 138 of the Act which iscommensurate with the size and nature of its business.

(b) We have considered the reports issued by the Internal Auditors of the Company tilldate for the period under audit.

(xv) According to the information and explanation given to us the Company has notentered into any non-cash transactions with its directors or persons connected with themand accordingly provisions of section 192 of the Act are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly reporting under clause 3(xvi) of the Order is notapplicable to the Company.

(xvii) The Company does not incurred cash losses in the current and immediatelypreceding financial year.

(xviii) There has been no resignation of the statutory auditors during the year.Accordingly reporting under clause 3(xviii) of the Order is not applicable to theCompany.

(xix) According to the information and explanations given to us and on the basis of thefinancial ratios ageing and expected dates of realisation of financial assets and paymentof financial liabilities other information accompanying the standalone financialstatements our knowledge of the plans of the Board of Directors and management we are ofthe opinion that material uncertainty exists as on the date of the audit report thatCompany is capable of meeting its liabilities existing at the date of balance sheet as andwhen they fall due within a period of one year from the balance sheet date. However basisthe impact of Tariff Order 2017 ongoing discussion with the lenders of the Company andother factors mentioned in aforesaid note to the accompanying standalone financialstatements the management is of the view that going concern basis of accounting isappropriate for preparation of these financial statements.

(xx) According to the information and explanations given to us The Company does notfulfil the criteria as specified under section 135(1) of the Act read with the Companies(Corporate Social Responsibility Policy) Rules 2014 and according reporting under clause

(xx) of the Order is not applicable to the Company.

(xxi) The reporting under clause

(xxi) is not applicable in respect of audit of standalone financial statements of theCompany. Accordingly no comment has been included in respect of said clause under thisreport.

For DNS & Associates
Chartered Accountants
FirmRss Registration No.: 006956C
Ankit Marwaha
Partner
Place: Noida Membership No.: 518749
Date: May 28 2022 UDIN: 22518749AKQPFZ6358

Annexure II

Independent Auditor's Report on the internal financial controls with reference to thefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 (Rsthe Act)

1. In conjunction with our audit of the standalone financial statements of Siti NetworkLimited (the Company) as at and for the year ended March 31 2022 we have audited theinternal financial controls with reference to financial statements of the Company as atthat date.

Responsibilities of Management and those charged with governance for Internal FinancialControls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal financial controls with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting (Rsthe Guidance ReportRs) issued by the Institute ofChartered Accountants of India (RsICAIRs). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of the Company's businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditor's Responsibility for the Audit of the Internal Financial Controls withReference to Financial Statements

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Standards on Auditing issued by the Institute of CharteredAccountants of India (ICAI) prescribed under Section 143(10) of the Act to the extentapplicable to an audit of internal financial controls with reference to financialstatements and the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the Guidance Note) issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements includes obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the Auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the Company's internal financialcontrols with reference to financial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

6. A Company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts 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 financialstatements.

Inherent Limitations of Internal Financial Controls with Reference to FinancialStatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Qualified Opinion

8. According to the information and explanations given to us and based on our auditthe following material weakness has been identified in the operating effectiveness of theCompany's internal financial controls with reference to financial statements as at March31 2022.

The Company's internal financial controls over preparation of financial statements withrespect to presentation and disclosure of Revenue from operations in accordance with therequirement of Ind AS 115 Revenue from contracts with customers were not operatingeffectively which has resulted in a material misstatement in the amounts recognised asRevenue from operations and Rspay channel costs including the relevant disclosures in thestandalone financial statements while there is no impact on the net loss for the yearended March 31 2022.

9. A Rsmaterial weakness is a deficiency or a combination of deficiencies in internalfinancial controls with reference to financial statements such that there is a reasonablepossibility that a material misstatement of the Company's annual or interim financialstatements will not be prevented or detected on a timely basis.

10. In our opinion the Company has in all material respects adequate internalfinancial controls with reference to financial statements as at March 31 2022 based onthe internal financial controls with reference to financial statements criteriaestablished by the company considering the essential components of internal control statedin the Guidance Note issued by the ICAI and except for the effects of the materialweakness described in paragraph 8 above on the achievement of the objectives of thecontrol criteria the Company's internal financial controls with reference to financialstatements were operating effectively as at March 31 2022.

11. We have considered the material weakness identified and reported above indetermining the nature timing and extent of audit tests applied in our audit of thestandalone financial statements of the Company as at and for the year ended March 312022 and the material weakness has affected our opinion on the standalone financialstatements of the Company and we have issued a qualified opinion on the standalonefinancial statements.

For DNS & Associates
Chartered Accountants
FirmRss Registration No.: 006956C
Ankit Marwaha
Partner
Place: Noida Membership No.: 518749
Date: May 28 2022 UDIN: 22518749AKQPFZ6358

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