1.  We have audited the attached Balance Sheet of GTL INFRASTRUCTURE
 LIMITED, as at March 31,2011 and also the Profit and Loss Account 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 Note
 no 8 of Schedule P regarding Scheme of Arrangement under lection 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.
 
 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, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 d) In our opinion the Balance Sheet, Profit and Loss Account 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 31,2011 and taken on records by the Board of
 Directors, we report that none of the directors is disqualified as on
 March 31,2011, 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, in particular Note
 No. 9 of Schedule P regarding the accounting treatment of redemption
 premium on Foreign Currency Convertible Bonds (FCCB), 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 31,2011;
 
 ii) in the case of Profit and Loss Account, 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.
 
 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. No
 material discrepancies were noticed on such physical verification.
 
 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 was no material discrepancies noticed on
 physical verification of inventories as compared to the book records.
 
 iii. In respect of loans, secured or unsecured, granted or taken by the
 company to / from companies, firms or other parties covered in the
 register maintained under section 301 of the companies Act 1956:
 
 a.  The Company has not granted any loan to such parties. Consequently
 the provisions of clauses (iii) (b), (iii) (c) and (iii) (d) of
 paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not
 applicable.
 
 b.  During the year the Company has not taken any Loan from parties
 covered in the register maintained under Section 301 of the Companies
 Act, 1956 however the loan taken in the Financial Year 2009-10 was
 repaid during the year. The maximum amount involved in this respect was
 Rs. 2,800,000,000.
 
 c.  In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions of the
 loan taken are not prima facie prejudicial to the interest of the
 Company.
 
 d.  As there was no amount outstanding as on March 31,2011 the question
 of overdue amount does not arise.
 
 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 are
 no contracts or arrangements 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 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 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.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable under section 441A of the Companies Act, 1956,
 we are not in a position to comment upon the regularity or otherwise of
 the Company in depositing the same.
 
 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 31,2011 for a period of more than six months
 from the date they became payable.
 
 c.  The disputed statutory dues aggregating to Rs. 80,625,978 that have
 not been deposited on account of disputed matters pending before
 appropriate authorities are as under:
 
                                Period to 
                                which the    Amount 
                                              (in Rs.)   Forumiwhere
                                                           dispute
 Name of 
 the Statute         Nature of 
                     the Dues   amount 
                                relates                 is pending
 
                                2007-08 to 
                                2010-11    53,862,230   Deputy Commiss
                                                        -ioner (Appeal)
 
 Central Sales Tax 
 Act, 1956 and      Sales Tax / 
                    Trade Tax / 2009-10     4,947,434   Additional 
                                                       Commissioner
                                                       (Appeals)
 Sales Tax Acts of 
 various states     VAT and 
                    Entry Tax   2007-08     3,654,110   Joint Commiss
                                                        -ioner (Appeal)
 
                                2006-07 to 
                                2008-09    18,162,204   Sales Tax 
                                                        Tribunal
 
 Total                                     80,625,978
 
 (*) Net of amount deposited under protest as mentioned in note 1 of
 Schedule P to accounts.
 
 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 not
 incurred cash losses during the financial year covered by the audit and
 in the immediately preceding financial year.
 
 xi. Based on our audit procedures and information and explanations
 given by the management, we are of the opinion that the company has not
 defaulted in repayment of dues to financial institutions, banks or bond
 holders except for interest accrued and due of Rs. 379,056,867, which has
 paid in the subsequent month.
 
 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 Company.
 
 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.
 10,560,000,000 for loans taken by the subsidiary company from banks and
 financial institutions as at March 31,2011. The subsidiary is in the
 process of the amalgamation with the Company as mentioned in Note no. 8
 of Schedule P. 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 unutilized term loans outstanding at the beginning of
 the year and those raised during the year were prima facie been either
 used for the purpose for which they were raised or pending utilisation
 been temporarily kept with banks.
 
 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,
 2011, 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 aggregating to Rs. 12,601,935,290 have been utilized for
 purchase of Fixed Assets and long term investments.
 
 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.  We have verified the end-use of money raised by issue of Foreign
 Currency Convertible Bonds and the same is disclosed by the management
 in Note no 9 of Schedule P to accounts.
 
 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.-10248W
 
 
 R- Koria                             S.S.Yeolekar
 
 Partner                              Partner
 
 Membership No. - 35629               Membership No. - 36398 
 
 Mumbai
 
 Date: November 23,2011