Auditor Report of IL&FS Transportation Networks Ltd.

Mar 31, 2018

Report on the Standalone Ind AS financial Statements

We have audited the accompanying standalone Ind AS financial statements of IL&FS Transportation Networks Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Ind AS financial statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

In respect of the matter explained in Note 4 (footnote (j)) of the standalone Ind AS financial statements, in respect of suspension of toll collection of an associate company pursuant to the order of Hon’ble High Court of Allahabad and the matter is pending with Hon’ble Supreme Court of India.

Our opinion is not modified in respect of this matter.

Other Matter

The comparative financial information of the Company for the year ended March 31, 2017, included in these standalone Ind AS financial statements, have been jointly audited by us along with predecessor auditor. We and joint auditor expressed an unmodified opinion on those financial statements on May 29, 2017.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1” a statement on the matters specified in paragraphs 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 the best of our knowledge and belief were necessary for the purpose of our audit;

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

(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 35 to the standalone Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts -Refer Note 16 and 32.6.2 to the standalone Ind AS financial statements;

iii. There has been no delay in transferring amounts; required to be transferred, to the Investor Education and Protection Fund by the Company.

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

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets.

No material discrepancies were noticed on such verification.

(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company.

(ii) The management has conducted physical verification of inventory at the year-end and no material discrepancies were noticed on such physical verification.

(iii) (a) The Company has granted loans to five companies covered in the register maintained under section 189 of the Companies Act, 2013. In our opinion and according to the information and explanation given to us, the terms and conditions of the loans are not prejudicial to the interest of the company.

(b) The Company has granted loans to companies covered in the register maintained under section 189 of the Companies Act, 2013. The payment of principle and payment of interest has been stipulated, wherever applicable, and the repayments or receipts of principle amounts and contractual interest have been generally regular as per stipulations.

(c) There are no amounts of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 which are overdue for more than ninety days.

(iv) The Company has not granted any loans covered under Section 185 of the Companies Act, 2013. Further based on the information and explanation give to us, the Company is in the business of providing infrastructural facilities and hence provisions of section 186 of the Companies Act, 2013 do not apply to the Company, however, the Company is in compliance of section 186 (1).

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). 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 pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities though there have been delays in a few cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues which were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, service tax, duty of custom, duty of excise, value added tax and cess on account of any dispute, are as follows:

Name of Statute	Nature of dues	Forum where dispute	Period to which	Amount	Unpaid Amount (Rs. in crore)
		is pending	the amount relates	Involved (Rs. in crore)
Income Tax Act, 1961	Income Tax	Income Tax Appellate Tribunal- Mumbai	2008-09	4.39	-
Income Tax Act, 1961	Income Tax	Income Tax Appellate Tribunal- Mumbai	2009-10	4.95	-
Income Tax Act, 1961	Income Tax	Income Tax Appellate Tribunal- Mumbai	2010-11	12.56	-
		Commissioner of
Income Tax Act, 1961	Income Tax	Income Tax (Appeals)-Mumbai	2011-12	4.19	-
		Commissioner of
Income Tax Act, 1961	Income Tax	Income Tax (Appeals)-Mumbai	2012-13	12.10	-
		Commissioner of
Income Tax Act, 1961	Income Tax	Income Tax (Appeals)-Mumbai	2013-14	26.73	-
Finance Act	Service Tax	CESTAT	2012-13	1.20	0.60
Madhya Pradesh VAT Act	Value Added Tax	MP Commercial Tax Appellate Board	2012-13	0.68	0.09
Madhya Pradesh VAT Act	Value Added Tax and Entry Tax	MP Commercial Tax Appellate Board / 1st Appellate Authority	2013-14	1.43	0.08
Madhya Pradesh VAT Act	Value Added Tax, Entry Tax and CST	Additional Commissioner	2014-15	0.09	0.07
Madhya Pradesh VAT Act	Value Added Tax and Entry Tax	Deputy Commissioner of Commercial Tax	2015-16	0.37	0.03
Punjab VAT Act	Value Added Tax	Deputy Commissioner Appeal	2013-14	0.37	0.05
Punjab VAT Act	Value Added Tax	Deputy Commissioner Appeal	2014-15	0.34	-

(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank or government or dues to debenture holders.

(ix) In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of term loans for the purposes for which they were raised, other than temporary deployment pending application of proceeds. According to the information and explanations given by the management, the Company has not raised any money by way of initial public offer / further public offer (including debt instruments).

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and section 188 of Act, where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Act.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of IL&FS Transportation Networks Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the 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 internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting with reference to these standalone financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls over financial reporting with reference to these standalone financial statements.

Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Financial Statements

A company’s internal financial control over financial reporting with reference to these standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting with reference to these standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting With Reference to these Standalone Financial Statements

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

Opinion

In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting with reference to these standalone financial statements were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For S R B C & CO LLP

Chartered Accoutants

(Firm’s Registration No. 324982E/E300003)

per Ravi Bansal

Partner

Membership No. 49365

Place of Signature: Mumbai

Date: May 29, 2018

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Mar 31, 2017

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of IL&FS Transportation Networks Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, its profit including other comprehensive loss, its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

In respect of the matter explained in Note 4(ii)(f) of the Standalone IndAS Financial Statements, in respect of suspension of toll collection of an associate company pursuant to the order of Hon''ble High Court of Allahabad and the matter is pending with Hon''ble Supreme Court of India.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1" a Statement on the matters specified in paragraphs 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 the best of our knowledge and belief were necessary for the purpose of our audit;

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

(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of Section 164(2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 33 to the standalone Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts -Refer Note 15 and 30.6.2 to the standalone Ind AS financial statements;

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

iv. The Company has provided requisite disclosures in Note 12(d) to these standalone Ind AS financial statements as to the holding of Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the Management.

Other Matter

The comparative financial information of the Company for the year ended March 31, 2016 and the transition date opening balance sheet as at April 01, 2015 included in

these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by one of us whose report for the year ended March 31, 2016 and March 31, 2015 dated May 13, 2016 and May 15, 2015 respectively expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been jointly audited by us.

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

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

(b) All fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered Conveyance deed provided to us, we report that the title deed of immovable property of building is freehold and is held in the name of the Company as at the balance sheet date. The Company does not have immovable properties of leasehold land and buildings and disclosed as fixed assets in the financial statements.

(ii) As explained to us, the inventories were physically verified by the management at reasonable intervals and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us, the Company has granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013, in respect of which : (a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company''s interest. (b) The Schedule of repayment of principal and payment of interest has been stipulated, wherever applicable, and the repayments or receipts of principal amounts and contractual interest have been generally regular as per stipulations (c) There is no amount overdue for more than 90 days as at March 31, 2017

(iv) The Company has not granted any loans covered under Section 185 of the Companies Act, 2013. The Company is in the business of providing infrastructural facilities and hence provisions of Section 186 of the Companies Act, 2013 do not apply to the Company, however, the Company is in compliance of Section 186(1).

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable. There are no unclaimed deposits with the Company any time during the year.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Companies Act, 2013, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) Undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities though there has been a delays in a few cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income-tax, service tax, sales-tax, value added tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, service tax, value added tax, entry tax, CST on account of any dispute, are as follows:

Name of Statue	Nature of dues	Forum where dispute	Period to which	Amount	Unpaid Amount (Rs. in crore)
		is pending	the amount relates	Involved (Rs. in crore)
Finance Act, 1994	Service Tax	CESTAT	2012-13	1.20	0.60
Madhya Pradesh VAT Act	Value Added Tax	MP Commercial Tax Appellate Board	2012-13	0.68	0.09
Madhya Pradesh VAT Act	Value Added Tax	MP Commercial Tax Appellate Board	2013-14	1.43	0.03
Madhya Pradesh VAT Act	Value Added Tax, Entry Tax and CST	Dy. Commissioner of Commercial Tax	2014-15	0.09	0.07
Punjab VAT Act	Value Added Tax	Deputy Commissioner Appeal	2013-14	0.37	0.18
Punjab VAT Act	Value Added Tax	Deputy Commissioner Appeal	2014-15	0.43	-
		Deputy Commissioner
Rajasthan VAT Act	Value Added Tax	Appeals, Commercial Tax Department, Jaipur	2011-12	0.08	0.08
		Additional
Uttar Pradesh VAT Act	Value Added Tax	Commissioner (Appeal), Commercial Tax	2012-13	7.37	3.69
Uttar Pradesh VAT Act	Value Added Tax, CST & Entry Tax	Additional Commissioner (Appeal), Commercial Tax	2013-14	38.76	38.76
		Senior Joint
West Bengal VAT Act	Value Added Tax	Commissioner of Sales Tax Appeal	2013-14	0.59	-
Income Tax Act, 1961	Income Tax	Income Tax Appellate Tribunal- Mumbai	2008-2009	4.39	-
		Commissioner of
Income Tax Act, 1961	Income Tax	Income Tax (Appeals)-Mumbai	2009-2010	6.97	-
		Commissioner of
Income Tax Act, 1961	Income Tax	Income Tax (Appeals)-Mumbai	2010-2011	12.56	-
		Commissioner of
Income Tax Act, 1961	Income Tax	Income Tax (Appeals)-Mumbai	2011-2012	3.70	-
		Commissioner of
Income Tax Act, 1961	Income Tax	Income Tax (Appeals)-Mumbai	2012-2013	12.10	-

(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank or government or dues to debenture holders.

(ix) In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by term loans for the purposes for which they were raised, other than temporary deployment pending application of proceeds. The Company has not raised any money by way of initial public offer/further public offer (including debt instruments) during the year.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the company material fraud on the company by the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, etc. as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon.

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in Section 192 of Companies Act, 2013.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

For DELOITTE HASKINS & SELLS LLP For S R B C & CO LLP

Chartered Accountants Chartered Accountants

ICAI Firm Registration Number: 117366W/W100018 ICAI Firm Registration Number:

324982E/E300003

per Shrenik Baid per Ravi Bansal

Partner Partner

Membership Number: 103884 Membership Number: 49365

Place of Signature: Mumbai Place of Signature: Mumbai

Date: May 29, 2017 Date: May 29, 2017

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Mar 31, 2016

We have audited the accompanying standalone financial statements of IL&FS TRANSPORTATION NETWORKS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

II. Management''s Responsibility for the Standalone Financial Statements

1) The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, as applicable.

2) This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

III. Auditor''s Responsibility

1) Our responsibility is to express an opinion on these standalone financial statements based on our audit.

2) We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order under section 143(11) of the Act.

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

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

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

IV. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.

V. Report on Other Legal and Regulatory Requirements

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

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

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

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

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under section 133 of the Act, as applicable.

e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements.

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

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

2) As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order. Annexure "B" to the Independent Auditor''s Report

(Re: IL&FS TRANSPORTATION NETWORKS LIMITED)

(Referred to in paragraph (2) under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

(i) In respect of Fixed Assets:

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

(b) All fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered Conveyance deed provided to us, we report that, the title deed of one immovable property of building is freehold and is held in the name of the Company as at the balance sheet date. The Company does not have immovable properties of leasehold land and buildings and disclosed as fixed assets in the financial statements.

(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013, in respect of which:

(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company''s interest.

(b) The schedule of repayment of principal and payment of interest has been stipulated and the repayments or receipts of principal amounts and interest have been generally regular as per stipulations.

(c) There is no amount overdue for more than 90 days as at March 31, 2016.

(iv) The Company has not granted any loans covered under section 185 of the Companies Act, 2013. The Company is in the business of providing Infrastructural facilities and hence provisions of section 186 of the Companies Act, 2013 do not apply to the Company, however, the company is in compliance of section 186(1).

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year as provided under section 73 to 76 or any other relevant provisions of the Companies Act, 2013. There are no unclaimed deposits with the Company any time during the year.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues of Income-tax and Service Tax. The Company has been regular in depositing Provident Fund, Sales Tax, Value Added Tax, Cess and other material statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Income-tax, Sales Tax, Value Added Tax, Service Tax, Cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Service Tax, Value Added Tax and Cess which have not been deposited as on March 31, 2016 on account of disputes are given below:

Rs. in crore

Name of the Statute Nature of Dues Forum where dispute is pending

Income Tax Act, 1961 Income Tax Income Tax Appellate Tribunal - Mumbai

Income Tax Act, 1961 Income Tax Commissioner of Income Tax (Appeals) - Mumbai

Finance Act, 1994 Service Tax Commissioner of Service Tax

Madhya Pradesh Vat Act Value Added Tax Commercial Tax Appellate Board, MP

Madhya Pradesh Vat Act Value Added Tax Additional Commissioner of Commercial Tax, MP

Rajasthan Vat Act Value Added Tax Appellate Authority, Rajasthan

Name of the Statute Period to which the Amount Amount amount relates involved Unpaid

Income Tax Act, 1961 FY 2007-2008 1.26 -

Income Tax Act, 1961 FY 2008-09, 10-11 8.89 - and 11-12

Finance Act, 1994 FY 2011-2012 1.20 1.20

Madhya Pradesh Vat Act FY 2012-2013 0.68 0.16

Madhya Pradesh Vat Act FY 2013-2014 2.09 -

Rajasthan Vat Act FY 2011-2012 0.08 0.08

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks, government and dues to debenture holders.

(ix) In our opinion and according to the information and explanations given to us, money raised by way of further public offer and the term loans have been applied by the Company during the year for the purposes for which they were raised, other than temporary deployment pending application of proceeds.

(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-1 of the Reserve Bank of India Act, 1934.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm''s Registration No. 117366W/W-100018)

Kalpesh J. Mehta

Mumbai, May 13, 2016 Partner

Membership No. 48791

---

Mar 31, 2015

We have audited the accompanying standalone financial statements of IL&FS TRANSPORTATION NETWORKS LIMITED ('the Company'), which comprise the Balance Sheet as at March 31,2015,the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors and Management is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, and its profit and its cash flows for the year ended on that date

Emphasis of Matter

Attention is invited to Note 40 of the Standalone financial statements, regarding an amount of Rs. 2,352.70 Million included in the Revenue from Operations for the year ended March 31,2015 on account of aggregate compensation claimed by the Company from two Special Purpose Vehicles ("SPVs") and by the two SPV's on the Concession Granting Authorities ("CGA"), for the incremental work and related claims arising from delays due to handing over of the land for project execution. The compensation is based on the provisions in the Service Concession Agreements and is supported by the Extension of Time granted by the Independent Engineers. The SPVs have been legally advised that they are contractually entitled to such claims under the Service Concession Agreements

Our opinion is not modified in this regard

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 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 the best of our knowledge and belief were necessary for the purposes of our audit

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

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

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

(e) On the basis of the written representations received from the directors as on March 31,2015, taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2015 from being appointed as a director in terms of Section 164 (2) of the Act

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

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 21 to the standalone financial statements;

ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 4 to the standalone financial statements;

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

Annexure to the Independent Auditor's Report

1. Having regard to the nature of the Company's business / activities / results during the year, clause (ii) of paragraph 3 of the Order is not applicable to the Company

2. In respect of its fixed assets:

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification

3. According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013 In respect of such loans:

(a) The receipts of principal amounts and interest (where contractually receivable) have been regular as per stipulations during the year except in the case of loans given by the Company to its six subsidiary companies, two jointly controlled companies and two associate companies incorporated in India where there were delays in receipt of interest

(b) In respect of overdue amounts of over Rs. 1 lakh remaining outstanding as at year end, as explained to us, the Management has taken reasonable steps for recovery of the interest

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and for the sale of services and during the course of our audit we have not observed any major weakness in such internal control system

5. According to the information and explanations given to us, the Company has not accepted any deposit during the year as provided under Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013. There were no unclaimed deposits with the Company any time during the year

6. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete

7. According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has been regular in depositing undisputed statutory dues, including provident fund, income tax, value added tax, cess and other material statutory dues applicable to it with the appropriate authorities

The Company has been generally regular in depositing service tax with the appropriate authorities

(b) There were no undisputed amounts payable in respect of provident fund, income tax, service tax, value added tax, cess and other material statutory dues in arrears as at March 31, 2015 for a period of more than six months from the date they became payable

(c) There are no dues of provident fund, Income-tax, service tax, value added tax and Cess which have not been deposited as on March 31,2015 on account of disputes

(d) There are no amounts that are due to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made thereunder

8. The Company does not have accumulated losses at the end of the financial year and the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year

9. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders

10. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company

11. In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained

12. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018)

Kalpesh J. Mehta Mumbai, Partner May 15, 2015 (Membership No. 48791)

---

Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

1 We have audited the accompanying financial statements of IL&FS TRANSPORTATION NETWORKS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 ("the Act") and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error

AUDITORS'' RESPONSIBILITY

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

4. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion

OPINION

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

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

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

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

REPORT ON OTHER LEGAL AND REGuLATORY REQUIREMENTS

6. Further to our comments above, we report as follows:

A. As required by the Companies (Auditor''s Report) Order, 2003("CARO") issued by the Central Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of CARO

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

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

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

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

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act; and

(e) On the basis of the written representations received from the Directors as on March 31, 2013 taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2013 from being appointed as a Director in terms of Section 274(1)(g) of the Act

(i) Having regard to the nature of the Company''s business/activities/ results during the year, clauses (ii), (x), (xii), (xiii), (xiv) and (xx) of CARO are not applicable to the Company

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company

(iii) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has granted unsecured loans aggregating Rs. 10,689.71 million to eight parties during the year. At the year-end, the outstanding balances of such loans aggregated Rs. 6,300.62 million to seven parties and the maximum amount involved during the year was Rs. 14,430.16 million to eleven parties

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interests of the Company

(c) The receipts of principal amounts and interest have been generally regular during the year

(d) According to the information and explanation given to us, in respect of outstanding overdue interest as at the March 31, 2013 aggregated Rs. 175.14 million pertaining to two parties, Management has taken reasonable steps for recovery of the interest amounts

In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has taken unsecured loans aggregating Rs. 6,390.00 million from four parties during the year. At the year-end, the outstanding balances of such loans aggregated Rs. 700.00 million from one party and the maximum amount involved during the year was Rs. 6,950.00 million from five parties

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interests of the Company

(c) The payments of principal amounts and interest in respect of such loans have been regular / as per stipulations during the year

(iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of fixed assets and the sale of services. During the course of our audit, we have not observed any major weakness in such internal control system

(v) To the best of our knowledge and belief and according to the information and explanations given to us, there were no contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that needed to be entered in the register maintained under the said Section (other than loans reported under paragraph (iii) above). Accordingly, sub-clause (b) of clause (v) of paragraph 4 of CARO is not applicable to the Company

(vi) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year

(vii) In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business

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

(ix) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has been generally regular in depositing undisputed dues relating to Service Tax and has been regular in depositing undisputed dues relating to Provident Fund, Income- tax, Wealth Tax, Sales Tax, Cess and other material statutory dues applicable to it with the appropriate authorities during the year

(b) There were no undisputed amounts payable on account of the above dues in arrears as at March 31, 2013 for a period of more than six months from the date they became payable

(c) There were no disputed dues as regards Income-tax, Wealth Tax, Sales Tax and Service Tax that have not been deposited as at the year end

(x) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks, financial institutions and debenture holders

(xi) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company

(xii) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained

(xiii) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have, prima facie, not been used during the year for long-term investment

(xiv) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956

(xv) According to the information and explanations given to us, during the current year, the Company has issued 10,000 unsecured non-convertible debentures of Rs. 1.00 million each

(xvi) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm Registration No. 117366W)

Mr. Kalpesh J. Mehta

Partner

(Membership No. 48791)

Bengaluru, May 7, 2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of IL&FS TRANSPORTATION NETWORKS LIMITED ("the Company") as at March 31, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit

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

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

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

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

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

(iv) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(v) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

(b) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date and

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

5. On the basis of the written representations received from the Directors as on March 31, 2012 taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2012 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Company's business/activities/results, clauses (ii), (x), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of CARO are not applicable to the company

(ii) in respect of its fixed assets:

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification

(c) The fixed assets disposed during the year, in our opinion, do not constitute a substantial part of the fixed assets of the company and such disposal has, in our opinion, not affected the going concern status of the company

(iii) in respect of loans, secured or unsecured, granted by the company to companies, firms or other parties covered in the Register maintained under Section 301 of the companies Act, 1956, according to the information and explanations given to us:

(a) The company has granted unsecured loans aggregating Rs 12,564.48 million to thirteen parties during the year. At the year-end, the outstanding balances of such loans aggregated Rs 8,893.34 million to fourteen parties and the maximum amount involved during the year was Rs 11,842.58 million to fourteen parties

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interests of the Company

(c) The receipts of principal amounts and interest have been regular during the year

(d) There are no overdue amounts over Rs 0.10 million remaining outstanding as at March 31, 2012 in respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The company has taken unsecured loans aggregating Rs 800 million from one party during the year. At the year-end, the outstanding balances of such loans aggregated Rs 700 million from one party and the maximum amount involved during the year was Rs 2,450 million from three parties

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interests of the Company

(c) The payments of principal amounts and interest in respect of such loans have been regular / as per stipulations during the year

(iv) in our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of fixed assets and the sale of services. During the course of our audit, we have not observed any major weakness in such internal control system

(v) To the best of our knowledge and belief and according to the information and explanations given to us, there were no contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that needed to be entered in the register maintained under the said Section. Accordingly, sub-clause (b) of clause (v) of paragraph 4 of CARO is not applicable to the Company

(vi) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year within the meaning of Sections 58A & 58AA or any other relevant provisions of the Companies Act, 1956

(vii) in our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business

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

(ix) According to the information and explanations given to us in respect of statutory dues:

(a) The company has generally been regular in depositing undisputed dues relating to provident Fund, income-tax, wealth tax, Sales tax, Service Tax and other material statutory dues applicable to it with the appropriate authorities during the year

(b) there were no undisputed amounts payable in respect of income-tax, wealth tax and other material statutory dues in arrears as at March 31, 2012 for a period of more than six months from the date they became payable

(c) there were no disputed dues as regards income- tax, wealth tax, Sales tax and Service tax that have not been deposited as at the year end

(x) in our opinion and according to the information and explanations given to us, the company has not defaulted in the repayment of dues to banks and financial institutions

(xi) in our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the company

(xii) in our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained

(xiii) in our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet, we report that Rs 5,239 million raised on short-term basis have been used during the year for long- term investment

(xiv) to the best of our knowledge and according to the information and explanations given to us, no fraud by the company and no fraud on the company has been noticed or reported during the year

For DELOITTE HASKINS & SELLS

chartered Accountants

(Firm registration No. 117366w)

Kalpesh J. Mehta

partner

Bengaluru, May 4, 2012 (Membership No. 48791)

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of IL&FS TRANSPORTATION NETWORKS LIMITED (the "Company”) as at March 31, 2011, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit

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

3. As required by the Companies (Auditors Report) Order, 2003 ("CARO” / the "Order”) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

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

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

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

d. in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

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

i. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

ii. in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

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

5. On the basis of the written representations received from the Directors as on March 31, 2011 taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2011 from being appointed as a director in terms of Section 274(1) (g) of the Companies Act, 1956

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph (3) of our report of even date i. Having regard to the nature of the Companys business / activities / result, clause (xiii) of paragraph 4 of CARO is not applicable to the Company

ii. In respect of its fixed assets:

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

b. The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification

c. The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company

iii. According to the information and explanation given to us, the nature of the activities of the Company did not require it to hold inventories during the year. Accordingly, the provisions of paragraph 4(ii) of CARO are not applicable to the Company

iv. The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly, provisions of paragraphs 4(iii) (a) to (g) of CARO are not applicable to the Company

v. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of special nature and suitable alternative sources do not exists for obtaining comparable quotations, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and for sale of services. The nature of the Companys business is such that, it does not involve purchase or sale of goods. During the course of our audit, we have not observed any major weaknesses in such internal control system

vi. In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

a. The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered

b. Where each of such transaction is in excess of Rs. 0.5 Million in respect of any party, the transactions have been made at prices which are, prima facie, reasonable having regard to the prevailing market prices at the relevant time

vii. According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year and no order has been passed in this respect by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal

viii. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business

ix. According to the information and explanation given to us, the Central Government has not prescribed the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, for the nature of services rendered by the Company. Accordingly, the provisions of paragraph 4(viii) of CARO are not applicable to the Company

x. According to the information and explanation given to us in respect of statutory dues:

a. The Company has generally been regular in depositing undisputed dues, including Provident Fund, Service Tax, Custom Duty, Income Tax, Wealth Tax and other material statutory dues applicable to it with the appropriate authorities during the year. According to the information and explanation given to us, there were no dues payable on account of Investor Education and Protection Fund, Employees State Insurance, Sales Tax, Excise Duty and Cess during the year

b. There were no undisputed amounts payable in respect of Sales Tax, Service Tax, Custom Duty, Income Tax, Wealth Tax, Excise Duty, Cess and other material statutory dues in arrears as at March 31, 2011 for a period of more than six months from the date they became payable

c. There were no disputed dues as regards Sales Tax, Service Tax, Custom Duty, Income Tax, Wealth Tax, Excise Duty and Cess that have not been deposited as at the year end

xi. The Company does not have any accumulated losses as at the year end. The Company has not incurred cash losses during the financial year covered by our audit and in immediately preceding financial year

xii. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company has not borrowed any sum from financial institutions nor raised any sum by issue of debentures

xiii. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions of paragraph 4(xii) of CARO are not applicable to the Company

xiv. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures or other investments. Accordingly, the provisions of paragraph 4(xiv) of CARO are not applicable to the Company

xv. According to the information and explanations given to us, the Company has given guarantees for Rs. 4,075.69 Million to the lenders of one of the Companys subsidiary. In our opinion, having regard to the relationship with the subsidiary in respect of whose loans the guarantees have been furnished and exposure of the Company in the subsidiary, the terms and conditions of the guarantees are not, prima facie, prejudicial to the interest of the Company

xvi. In our opinion and according to the information and explanations given to us, term loans availed by the Company were, prima facie, applied for the purpose for which they were obtained, other than temporary deployment pending application

xvii. In our opinion and according to the information and explanations given to us, and on overall examination of the balance sheet of the Company, funds raised on short term basis have, prima facie, not been used during the year for long term investments

xviii. According to the information and explanation given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of paragraph 4(xviii) of CARO are not applicable to the Company

xix. According to the information and explanations given to us, the Company has not issued any debentures during the year. Therefore, the provisions of paragraph 4(xix) of CARO are not applicable to the Company

xx. The Management has disclosed (in note no. 1 of the Schedule O to the financial statements) the end use of money raised by public issue and we have verified the same

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No. 117366W)

Sanjiv V. Pilgaonkar

Partner

(Membership No. 39826)

Mumbai, April 29, 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of IL&FS TRANSPORTATION NETWORKS LIMITED (the “Company”) as at March 31, 2010, the Proft and Loss Account and the Cash Flow Statement of the Company for year ended on that date, both annexed thereto. These fnancial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these fnancial statements based on our audit

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

3. As required by the Companies (Auditor’s Report) Order, 2003 (“CARO”) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specifed in Paragraphs 4 and 5 of CARO

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

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

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

c) the Balance Sheet, the Proft and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, the Proft and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956; and

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

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

ii) in the case of the Proft and Loss Account, of the proft of the Company for year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash fows of the Company for year ended on that date

5. On the basis of the written representations from the Directors as on March 31, 2010 taken on record by the Board of Directors, none of the Directors is disqualifed as on March 31, 2010 from being appointed as a Director in terms of Section 274(1)(g) of the Companies Act, 1956.

ANNEXURE TO THE AUDITOR’S REPORT (Referred to in paragraph (3) of our report of even date)

i) Having regard to the nature of the Company’s business / activities / result, clause (xiii) of paragraph 4 of CARO is not applicable

ii) In respect of its fxed assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fxed assets

b) The fxed assets were physically verifed during the year by the Management in accordance with a regular programme of verifcation which, in our opinion, provides for physical verifcation of all the fxed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verifcation

c) The fxed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fxed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company

iii) According to the information and explanation given to us, the nature of the activities of the Company did not require it to hold inventories during the year. Accordingly, the provisions of paragraph 4(ii) of CARO are not applicable to the Company

iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, frms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly, provisions of paragraphs 4 (iii) (a) to (g) of CARO are not applicable to the Company

v) In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of special nature and suitable alternative sources do not exists for obtaining comparable quotations, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of fxed assets and for sale of services. The nature of the Company’s business is such that, it does not involve purchase or sale of goods. During the course of our audit, we have not observed any major weaknesses in such internal control system

vi) According to the information and explanations given to us, there were no contracts or arrangements that were required to be entered in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of paragraph 4(v) (a) and (b) of CARO are not applicable to the Company

vii) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year and no order in this respect in the case of the Company has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal

viii) In our opinion, the internal audit functions carried out during the year by a frm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business

ix) According to the information and explanation given to us, the Central Government has not prescribed the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, for the nature of services rendered by the Company. Accordingly, the provisions of paragraph 4(viii) of CARO are not applicable to the Company

x) According to the information and explanation given to us in respect of statutory dues:

a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Service Tax, Custom Duty, Income Tax, Wealth Tax and other material statutory dues applicable to it with the appropriate authorities during the year. According to the information and explanation given to us, there were no dues payable on account of Investor Education and Protection Fund, Employee’s State Insurance, Sales Tax, Excise Duty, and Cess during the year

b) There were no undisputed amounts payable in respect of Service Tax, Custom Duty, Income Tax, Wealth Tax, Excise Duty, Cess and other material statutory dues in arrears as at March 31, 2010 for a period of more than six months from the date they became payable

c) There were no amounts relating to Sales Tax, Wealth Tax, Customs Duty, Service Tax, Excise Duty and Cess that have not been deposited as on March 31, 2010 on account of dispute. The details of dues in relation to Income Tax which have not been deposited as on March 31, 2010 on account of disputes are given below:

Statute Nature of dues Forum where the Period to which dispute is pending the amount relates

Income Tax Act, Income Tax Commissioner of Assessment Year 1961 (including interest) Income Tax (Appeals) 2007- 08

Fringe Beneft Tax Commissioner of Assessment Year (including interest) Income Tax (Appeals) 2008- 09

Statue Amount involved (Rs. In Million)

Income Tax Act,1961 22.61

0.24

xi) The Company does not have any accumulated losses as at the year end. The Company has not incurred cash losses during the fnancial year covered by our audit and in immediately preceding fnancial year

xii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company has not borrowed any sum from fnancial institutions or raised any sum by issue of debentures

xiii) According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions of paragraph 4(xii) of CARO are not applicable to the Company

xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures or other investments. Accordingly, the provisions of paragraph 4(xiv) of CARO are not applicable to the Company

xv) According to the information and explanations given to us, the Company has given counter guarantees amounting to Rs. 1,457.08 Million to its holding company of guarantees given by it to the lenders of the Company’s subsidiaries and guarantees for Rs. 4,113.61 Million to the lenders of one of the Company’s subsidiary. In our opinion, having regard to the relationship with the subsidiaries in respect of whose loans the guarantees have been furnished and exposure of the Company in the subsidiaries, the terms and conditions of the counter guarantees and guarantees are not, prima facie, prejudicial to the interest of the Company

xvi) In our opinion and according to the information and explanations given to us, term loans availed by the Company were, prima facie, applied for the purpose for which they were obtained, other than temporary deployment pending application.

xvii) In our opinion and according to the information and explanations given to us, and on overall examination of the balance sheet of the Company, funds raised on short term basis have, prima facie, not been used during the year for long term investments

xviii) According to the information and explanation given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of paragraph 4(xviii) of CARO are not applicable to the Company

xix) According to the information and explanations given to us, the Company has not issued any debentures during the year. Therefore, the provisions of paragraph 4(xix) of CARO are not applicable to the Company

xx) The Management has disclosed (in note no. 1 of the Schedule M to the fnancial statements) the end use of money raised by public issue and we have verifed the same

xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No. 117366W)

Sanjiv V. Pilgaonkar Partner (Membership No. 39826) Mumbai May 25, 2010