1.  We have audited the attached Balance Sheet of GTL INFRASTRUCTURE
 LIMITED, as at March 31, 2012 and also the Statement of Profit and Loss
 and Cash Flow Statement of the Company for the year ended on that date
 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 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 disclosures in financial statements. An audit also includes
 assessing the accounting principles used and 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 issued
 by the Central Government of India in terms of Sub-section (4A) of
 Section 227 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.  Without qualifying our opinion we draw your attention to the
 
 i. Note No. 27 regarding Scheme of Arrangement under Section 391 to 394
 of the Companies Act, 1956 pending for the necessary approvals and
 preparation of accounts without giving any effects of this scheme and
 to give the effects as and when the scheme will be effective.
 
 ii.  Note No. 4.3 regarding the accounting treatment of redemption
 premium on Foreign Currency Convertible Bonds (FCCB).
 
 5.  Further to our comments in Annexure referred to in para 3 above, 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 appears from our examination of
 such books;
 
 c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 d) In our opinion the Balance Sheet, Statement of Profit and Loss and
 Cash Flow Statement dealt with by this report comply with the mandatory
 Accounting Standards referred to in Sub-section (3C) of Section 211 of
 the Companies Act, 1956;
 
 e) On the basis of the written representations received from the
 directors as on March 31, 2012 and taken on records 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 clause
 (g) of sub-section (1) of Section 274 of the Companies Act 1956.
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read together with the
 significant accounting policies and notes thereon, 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:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2012;
 
 (ii) in the case of Statement of Profit and Loss, of the Loss of the
 Company for the year ended on that date; and (iii) in the case of Cash
 Flow Statement, of the cash flows for the year ended on that date.
 
 Annexure to the Auditors'' Report (Referred to in Paragraph 3 of our
 Report of even date)
 
 As required by the Companies (Auditor''s Report) Order, 2003 issued by
 Central Government of India in terms of Section 227 (4A) of the
 Companies Act 1956, and on the basis of such checks as we considered
 appropriate, we further report that;-
 
 i.  In respect of its fixed assets:
 
 a.  The Company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets on the
 basis of available information.
 
 b.  As explained to us, the Company has physically verified certain
 assets, in accordance with a phased program of verification, which in
 our opinion is reasonable, having regard to the size of the Company.
 The discrepancies noticed at the time of such verification were
 properly dealt with in the books of accounts.
 
 c.  During the year, the Company has disposed off certain Fixed Assets.
 However, it has no effect on the going concern status of the Company.
 
 ii.  In respect of its inventories:
 
 a.  As explained to us, inventories have been physically verified by
 the management at reasonable intervals.
 
 b.  In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 c.  According to the information and explanations given to us and on
 the basis of our examination of inventory records, we are of the
 opinion that the Company is maintaining proper records of inventory. As
 explained to us, there were no material discrepancies noticed on
 physical verification of inventories as compared to the book records.
 
 iii.  According to the information and explanations given to us, the
 Company has not granted or taken any loans, secured or unsecured to or
 from companies, firms or parties covered in the register maintained
 under Section 301 of the Companies Act, 1956. Accordingly, clause (iii)
 of Paragraph 4 of the Companies
 
 (Auditors'' Report) Order 2003, is not applicable to the Company.  iv.
 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 inventory, fixed assets and also for the sale of services. During
 the course of our audit, we have not observed any continuing failure to
 correct major weaknesses in internal control system.
 
 v.  According to the information and explanations given to us, there is
 no contract or arrangement referred to in section 301 of the Companies
 Act, 1956 that need to be entered in the register required to be
 maintained under that section.
 
 vi.  According to the information and explanations given to us, the
 Company has not accepted any deposits from the public and hence
 directives issued by the Reserve Bank of India and the provisions of
 sections 58A and 58AA of the Companies Act, 1956 and the rules framed
 there under are not applicable for the year under audit.
 
 vii.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 viii.  The Central Government has not prescribed maintenance of cost
 records, for the year, under section 209 (1) (d) of the Companies Act,
 1956 in respect of any of the services provided by the Company.
 
 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
 statutory dues, including Provident Fund, Employees'' State Insurance,
 Income tax, Sales tax, Wealth tax, Service tax, Customs Duty, Excise
 Duty, Cess and any other statutory dues with the appropriate
 authorities during the year.
 
 b.  According to the information and explanations given to us, no
 undisputed amounts payable in respect of such statutory dues were
 outstanding as at March 31, 2012 for a period of more than six months
 from the date they became payable except for dues relating to Gram
 panchayat tax and municipal tax aggregating to Rs. 8,477,476.
 
 c.  The disputed statutory dues aggregating to Rs. 132,061,680 that have
 not been deposited on account of disputed matters pending before
 appropriate authorities are as under:
 
                              Period to 
                              which the    Amount (in Rs)   Forum where
                                                            dispute
 Name of the 
 Statute         Nature of 
                 the Dues     amount 
                              relates          (*)          is pending
 
                              2006-07 to 
                              2010-11       65,964,066      Deputy 
                                                            Commissioner
                                                           (Appeals)
 
 Central sales 
 Tax Act, 1956 
 and            Sales Tax / 
                Trade Tax /  2007-08 to 
                             2009-10         7,587,993      Additional
                                                            Commissioner
                                                           (Appeals)
 
 Sales Tax 
 Acts of 
 various 
 states         VAT and 
                Entry Tax   2008-09         42,482,942      Joint 
                                                            Commissioner
                                                           (Appeal)
 
                            2006-07 and 
                            2008-09         16,026,679      Sales Tax 
                                                            Tribunal
 Total                                     132,061,680
 
 (*) Net of amount deposited under protest as mentioned in Note No. 25
 (v) to Financial Statements.
 
 x. The Company has accumulated losses at the end of the financial year,
 which is less than fifty percent of its net worth. The Company has
 incurred cash losses during the year but had not incurred cash losses
 in the immediately preceding financial year.
 
 xi. Based on our audit procedures, information and explanations given
 by the mangagement and considering the Corporate Debt Restructuring
 (CDR) scheme, we are of the opinion that the company has not defaulted
 in repayment of dues to financial institutions, banks or bond holders
 except for Foreign Currency Term Loan of Rs. 277,890,240 in respect of
 which the repayment terms have since been amended w.e.f. May 14, 2012
 and after taking into consideration such revised terms, there is no
 overdue amount.
 
 xii. In our opinion and according to the explanations given to us and
 based on the information available, no loans and advances have been
 granted by the Company on the basis of security by way of pledge of
 shares, debentures and other securities.
 
 xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual
 benefit fund/society. Therefore the provisions of clause 4 (xiii) of
 the Companies (Auditor''s Report) Order, 2003 is not applicable to the
 Comapny.
 
 xiv. The Company has maintained proper records of transactions and
 contracts in respect of shares and other securities and timely entries
 have been made therein. The investments are held by the Company in its
 own name.
 
 xv. The Company has given corporate guarantees aggregating to Rs.
 10,810,000,000 for loans taken by the subsidiary company from banks and
 financial institutions as at 31st March, 2012. The subsidiary is in the
 process of the amalgamation with the Company as mentioned in Note No.
 25. The management is of the opinion that the terms and conditions are
 not prejudicial to the interests of the Company- We are, however,
 unable to comment on the same.
 
 xvi. The Company has raised new term loans during the year. To the best
 of our knowledge and according to the information and explanations
 given to us the term loans outstanding at the beginning of the year and
 those raised during the year were prima facie been used for the purpose
 for which they were raised.
 
 xvii. On the basis of review of utilization of funds, which is based on
 overall examination of the Balance Sheet of the Company as at March 31,
 2012, related information as made available to us and as represented to
 us, by the management, we are of the opinion, that funds raised on
 short term basis have not prima facie been utilized for long term
 purposes.
 
 xviii. 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.
 
 xix. During the year, the Company has not issued any debenture and
 hence clause 4 (xix) of Companies (Auditor''s Report) Order, 2003 is not
 applicable to the Company.
 
 xx.  During the year covered by our report the Company has not raised
 any money by public issue.
 
 xxi. To the best of our knowledge and belief and according to the
 information and explanations given to us, no fraud on or by the company
 was noticed or reported during the course of our audit.
 
 For CHATURVEDI & SHAH                        For YEOLEKAR & ASSOCIATES
 
 Chartered Accountants                        Chartered Accountants
 
 Firm Reg. No. - 101720W                      Firm Reg. No. - 102489W
 
 R. KORIA                                     S. S. YEOLEKAR
 
 Partner                                      Partner
 
 Membership No. - 35629                       Membership No. - 36398
 
 Mumbai
 
 Date : May 17, 2012