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Mahanagar Telephone Nigam

BSE: 500108|NSE: MTNL|ISIN: INE153A01019|SECTOR: Telecommunications - Service
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« Mar 14
Auditor's Report (Mahanagar Telephone Nigam) Year End : Mar '15
We have audited the accompanying standalone financial statements of
 MAHANAGAR TELEPHONE NIGAM LIMITED, (the Company''), which comprise the
 Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss
 and the Cash Flow Statement 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 financial statements that give a true and
 fair view of the financial position, financial performance and cash fows
 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 are 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 there under.
 
 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 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 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 qualified audit opinion on the
 standalone financial statements.
 
 Basis for Qualified Opinion
 
 (i) The Company has certain balances receivables from and payables to
 BSNL. The net amount recoverable of Rs. 2762.24 crores is subject to
 reconciliation and confirmation. In view of non reconciliation and non
 confirmation and also in view of various pending disputes regarding
 claims and counter claims, we are not in a position to ascertain and
 comment on the correctness of the outstanding balances and resultant
 impact of the same on the financial statements of the Company. (Also
 refer point no. 15 (a) of note no.35 to the financial statements).
 
 (ii) The Company has certain balances receivables from and payables to
 Department of Telecommunication (DOT). The net amount recoverable of
 Rs.8314.32 crores is subject to reconciliation and confirmation. In view
 of non reconciliation and non confirmation, we are not in a position to
 ascertain and comment on the correctness of the outstanding balances
 and resultant impact of the same on the financial statements of the
 Company. (Also refer point no. 21 (a) of note no.35 to the financial
 statements).
 
 (iii) Up to financial year 2011-12 License Fee payable to the DOT on IUC
 charges to BSNL was worked out on accrual basis as against the terms of
 License agreements requiring deduction for expenditure from the gross
 revenue to be allowed on actual payment basis. From financial year
 2012-13, the license fee payable to the DOT has been worked out
 strictly in terms of the license agreements. The Company continues to
 reflect the difference in license fee arising from working out the same
 on accrual basis as aforesaid for the period up to financial year 2011-12
 by way of contingent liability of Rs. 140.36 crores instead of actual
 liability resulting in understatement of current liabilities and
 understatement of loss to that extent. (Also refer point no. 5 of note
 no.35 to the financial statements).
 
 (iv) The Company continues to allocate the establishment overheads
 towards capital works on estimated / adhoc basis. In view of the basis
 being not in line with the accepted accounting practices and Accounting
 Standard -10 Accounting for Fixed Assets specified under Section 133
 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014,
 the same results into overstatement of capital work in progress/ fixed
 assets and understatement of loss. The actual impact of the same on the
 financial statements for year is not ascertained and quantified. (Also
 refer note no. 25 and 28 to the financial statements).
 
 (v) Except for impairment of CDMA assets of Delhi unit due to closure
 of CDMA operations, no adjustment has been considered on account of
 impairment loss during the year, with reference to AS-28 Impairment of
 Assets specified under Section 133 of the Act, read with Rule 7 of the
 Companies (Accounts) Rules 2014. In view of uncertainty in achievement
 of future projections made by the Company, we are unable to ascertain
 and comment on the provision required in respect of impairment in
 carrying value of cash generating units and its consequent impact on
 the loss for the year, accumulated balance of reserve and surplus and
 also the carrying value of the cash generating units. (Also refer point
 no. 30 of note no.35 to the financial statements).
 
 (vi) To work out the liability towards wealth tax, vacant land and
 guest houses/inspection quarters are taken at their book values instead
 of valuation of the same as per Wealth Tax Act / Rules resulting into
 understatement of loss resulting from lower wealth tax and also
 corresponding understatements of liabilities. In the absence of
 valuation as at the year end, we are not in a position to ascertain and
 quantify the impact thereof on financial statements. (Also refer point
 no. 12 of note no.35 to the financial statements).
 
 (vii) Amount receivables from and payables to the various parties are
 subject to confirmation and reconciliation.  Pending such confirmation
 and reconciliations, the impact thereof on the financial statements is
 not ascertainable and quantifiable. (Also refer, point no. 18 of note
 no.35 to the financial statements).
 
 (viii) Dues from the operators are not taken into account for making
 provision for doubtful debts. Also no provision for doubtful debts is
 made for disputed cases outstanding for less than one year in Basic and
 for less than 180 days in GSM/CDMA. In the absence of any working, the
 impact thereof on the financial statements cannot be ascertained and
 quantified. (Also refer point no. 3(b) of note no.1 to the financial
 statements).
 
 (ix) (a) In Delhi Unit, reconciliation of balances of subscriber''s
 deposits as per subsidiary records with financial books (WFMS) is still
 in progress and the impact, if any, of the differences arising out of
 such reconciliation on financial statements cannot be ascertained and
 quantified at present. (Also refer point no. 17(a) of note no.35 to the
 financial statements).
 
 (b) Unlinked credit of Rs. 10.43 crores on account of receipts from
 subscribers against billing by the Company which could not be matched
 with corresponding receivables are appearing as liabilities in the
 balance sheet.  To that extent, trade receivables and other current
 liabilities are overstated. (Also refer point no. 17(d) of note no.35
 to the financial statements).
 
 (x) In the absence of detailed information i.e. break up of amount
 received with relation to the individual invoices raised through MACH,
 invoice wise reconciliation of the roaming debtors is pending. Pending
 such reconciliation, the impact of the same on the financial statements
 cannot be ascertained and quantified.  (Also refer point no19 of note
 no.35 to the financial statements).
 
 (xi) Fixed assets are generally capitalised on the basis of completion
 certificates issued by the engineering department. Due to delays in
 issuance of the completion certificates, there are cases where
 capitalization of the fixed assets gets deferred to next year. The
 resultant impact of the same on the statement of profit and loss by way
 of depreciation and amount of fixed assets capitalized in the balance
 sheet cannot be ascertained.
 
 (xii) Pending reconciliation of income from recharge coupons/ITC
 cards/prepaid calling cards and stock of such coupons/cards, the impact
 thereof on the financial statements cannot be ascertained and quantified.
 
 (xiii) In respect of sundry creditors, in Mobile Services, Mumbai,
 liability towards one of the vendors of Rs. 106.73 crores is appearing in
 the financial books as against the liability of Rs. 42.01 crores to be
 retained as per the other available records. Pending reconciliation and
 review of records spread over the years from 2006-07 to 2012-13, no
 corrective entries have been passed in the financial books during the
 year. Impact of the same on the financial statements of the Company
 cannot be ascertained pending the said reconciliation and review.
 (Refer point no 6 of Note no. 35 to the financial statements).
 
 (xiv) The Company had invested Rs.100 crores in 8.75% Cumulative
 Preference Shares of M/S. ITI Limited during the year 2001-02. As per
 the terms of allotment, the said preference shares were to be redeemed
 in five equal installments. As per letter no. U-59011-10/2002-FAC dated
 31.07.2009 issued by DOT, the repayment schedule of the said preference
 shares was deferred to 2012-13 onwards in five equal installments. M/s.
 ITI Ltd. has failed to meet its rescheduled obligation in respect of
 first three installments of Rs. 20 crores each payable in 2012-13, 2013-14
 & 2014-15. Since M/s. ITI Ltd. has not complied with even rescheduled
 commitments, the Company has made a provision for the first three
 installment of Rs. 60 crores only instead of providing for full investment
 of Rs. 100 crores. This has resulted into understatement of loss by Rs. 40
 crores and overstatement of noncurrent investments by Rs. 20 crores and
 also overstatement of current investments by Rs. 20 crores. (Also refer
 point no. 7 of note no.35 to the financial statements).
 
 (xv) Certain Land and Buildings transferred to MTNL from DOT in earlier
 years have been reflected as leasehold.  In the absence of relevant
 records, we are not in a position to comment on the classification of
 the same as leasehold and also the consequential impacts, if any, of
 such classification not backed by relevant records.  In the absence of
 relevant records, impact of such classification on the financial
 statements cannot be ascertained and quantified.
 
 (xvi) Department of Telecommunication (DOT) had raised a demand of Rs.
 3313.15 crores in 2012-13 on account of one time charges for 2G
 spectrum held by the Company for GSM and CDMA for the period of license
 already elapsed and also for the remaining valid period of license
 including spectrum given on trial basis.
 
 As explained the demand for spectrum usage for CDMA has been revised by
 Rs. 107.44 crores on account of rectification of actual usage.
 
 Also as explained, pending finality of the issue by the Company
 regarding surrender of a part of the spectrum, crystallization of issue
 by the DOT in view of the claim being contested by the Company and
 because of the matter being sub-judice in the Apex Court on account of
 dispute by other private operators on the similar demands, the amount
 payable, if any, is indeterminate. Accordingly, no liability has been
 created for the demand made by DOT on this account and Rs. 3205.71 crores
 has been disclosed as contingent liability.
 
 In view of the above we are not in a position to comment on the
 correctness of the stand taken by the Company and the ultimate
 implications of the same on the financial statements of the Company.
 (Also refer point no.4 of note no.35 to the financial statements).
 
 (xvii) Other current assets include claim of Income tax refund for F.Y.
 1999-2000 of Rs. 101.54 crores arising from pending appeal effect /
 rectification under Section 154 of Income Tax Act, 1961 by income tax
 department.  This includes tax amount of Rs. 60.30 crores and interest
 accrued thereon amounting to Rs. 41.24 crores. In the absence of complete
 records, we are not in a position to comment on the correctness and
 recoverability of the same and consequential impact on the financial
 statements of the Company.
 
 (xviii) The balances appearing in the advance tax/income tax receivable
 / tax deducted at source / interest on income tax and provisions for
 taxes are subject to reconciliation with the tax records. Pending
 reconciliations we are not in a position to comment on the correctness
 of the same and consequential impact of the same on the financial
 statements of the Company.
 
 (xix) In Mumbai unit, on reconciliation of balance outstanding under
 refund due to subscribers account with actual amount due for refund, Rs.
 37.13 crores was identified as excess liability appearing in the
 financial books. Pending decision on the final treatment of this excess
 amount, the same has been retained as liability in the financial books
 resulting into overstatement of loss and overstatement of current
 liabilities.  (Refer point no. 17(c) of note no.35 to the financial
 statements).
 
 In the absence of information, the effect of which cannot be
 quantified, we are unable to comment on the possible impact of the items
 stated in the point nos.(i), (ii), (iv), (v), (vi), (vii), (viii),
 (ix)(a), (x), (xi), (xii),(xiii), (xv), (xvi), (xvii) and (xviii) on
 the standalone financial statements of the Company for the year ended on
 31st March 2015.
 
 We further state that without considering the impact of items stated in
 preceding para, the effect of which could not be determined, had the
 observations made by us in point nos (iii),(ix)(b), (xiv) and(xix) )
 been considered in the standalone financial statements, loss for the
 year would have been Rs. 3036.62 crores as against the reported figure of
 Rs. 2893.39 crores in the Statement of Profit and Loss and Trade
 receivables under the head Current Assets would have been Rs.284.09
 crores as against the reported figure of Rs. 294.52 crores, Non Current
 Investments and Current Investments would have been Rs. 141.98 crores and
 Rs. NIL as against the reported figures of Rs. 161.98 crores and Rs. 20 crores
 respectively, Other Current Liabilities would have been Rs. 3163.28
 crores as against the reported figure of Rs. 3070.48 crores in the Balance
 Sheet.
 
 Qualified Opinion
 
 In our opinion and to the best of our information and according to the
 explanations given to us, except for the possible effects of the
 matters described in the Basis for Qualified Opinion paragraph, the
 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 31st March, 2015 and its
 losses and its cash fowls for the year ended on that date.
 
 Emphasis of Matters
 
 We draw attention to the following notes on the standalone financial
 statements being matters pertaining to Mahanagar Telephone Nigam
 Limited requiring emphasis by us. Our opinion is not qualified in
 respect of these matters:
 
 (i) Point no. 27 of note no.35 to the financial statements regarding non
 provision of diminution in the value of investments in joint
 ventures/subsidiary as these diminutions are considered temporary in
 nature.
 
 (ii) Point no. 9(a) of note no.35 to the financial statements regarding
 the adequacy or otherwise of the provision and / or contingency reserve
 held by the Company with reference to pending dispute with the Income
 Tax Department before the Hon''ble Courts regarding deduction claimed by
 the Company u/s 80 IA of the Income Tax Act,1961.
 
 (iii) Point no.14(a) of note no.35 to the financial statements regarding
 accounting of claims and counter claims of MTNL with M/S M&N
 Publications Ltd., in a dispute over printing, publishing and supply of
 telephone directories for MTNL, in the year when the ultimate
 collection / payment of the same becomes reasonably certain.
 
 (iv) Point no. 15(d)of note no.35 to the financial statements regarding
 non deduction of tax at source for IUC services rendered by BSNL based
 on the expert opinion taken by the Company.
 
 (v) Classification of trade receivables as unsecured without considering
 the security deposit which the Company has received from the subscribeRs.
 (Also refer note no.19 to the financial statements).
 
 (vi) Amount receivable from BSNL has been reflected as loans and
 advances instead of bifurcating the same into trade receivables and
 other receivables. (Also refer note no. 19 to the financial statements).
 
 (vii) Disclosure of consumption of imported and indigenous stores and
 spares and percentage to the total consumption as required by Schedule
 III of the Companies Act, 2013 has not been made by the Company in the
 financial statements.
 
 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 of India in terms of
 sub-section (11) of section 143 of the Act, we give in the Annexure -
 ''A'' a statement on the matters specified in paragraphs 3 and 4 of Order,
 to the extent applicable.
 
 2.  As required by Section 143(5) of the Act, we give in Annexure B, a
 statement on the matters specified by the Comptroller and
 Auditor-General of India for the Company.
 
 3.  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 except for the matters described in point nos.
 (i), (ii), (iv), (v), (vi), (vii), (viii), (ix)(a), (x), (xi), (xii),
 (xiii), (xv), (xvi), (xvii) and (xviii)of the paragraph on Basis of
 Qualified Opinion given above ;
 
 (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 except for our comments under the head ''Basis for Qualified
 Opinion'' stated above;
 
 (c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
 Flow Statement dealt with by this Report are in agreement the books of
 account;
 
 (d) In our opinion and based on our comments in point nos. (iii), (iv),
 (v), (xi), (xii), (xiv), (xv) and (xvi) of the paragraph on Basis for
 Qualified Opinion given above, 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
 except for AS-2 regarding Valuation of Inventories, AS-6 regarding
 Depreciation Accounting, AS-9 regarding Revenue recognition, AS-10
 regarding Accounting of Fixed Assets, AS-13 regarding Accounting of
 Investments, AS-28 regarding Impairment of Assets and AS 29 on
 Provisions, Contingent Liabilities and Contingent Assets.
 
 (e) On the basis of written representations received from the directors
 as on 31st March, 2015 and taken on record by the Board of Directors,
 none of the directors is disqualified as on 31st March, 2015 from being
 appointed as a director in terms of Section 164 (2) of the Act; and
 
 (f) The qualification relating to the maintenance of accounts and other
 matters connected therewith are as stated in the Basis for Qualified
 Opinion paragraph above.
 
 (g) With respect to the other matters to be included in the Auditors
 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,
 wherever quantifiable, on its financial position in its financial
 statements. Refer point no. 1 and 14 of Note no. 35 to the financial
 statements.
 
 ii. the Company is not required to make any provision for any material
 foreseeable losses under any law or accounting standards on long terms
 contracts. Also the Company is not dealing into derivatives contracts.
 Refer point no. 37 of Note no. 35 to the financial statements.
 
 iii. There has been no delay in transferring any amount to the Investor
 Education and protection Fund during the year. Refer point no 36 of Note
 No. 35 to the financial statements.
 
 ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
 
 REFERRED TO IN OUR INDEPENDENT AUDITORS'' REPORT OF EVEN DATE TO THE
 MEMBERS OF MAHANAGAR TELEPHONE NIGAM LIMITED ON THE STANDALONE
 FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2015.
 
 (i) (a) Delhi unit has maintained records of fixed assets. However in MS
 unit-Delhi, identification number are not mentioned. It has been noticed
 that records of the Estates Department in respect of land and building
 do not match with the records as per financial books. In case of Mumbai
 unit (both basic and WS), fixed assets registers have been maintained
 w.e.f. 01.04.2002. However, the fixed assets records maintained by the
 Mumbai unit are not updated and reconciled with the financial
 records. Also identification numbers are not mentioned in respect of most
 of the items. the corporate office has maintained fixed assets records
 showing full particulars including quantitative details and situation
 of fixed assets.
 
 (b) As per the accounting policy of the company, fixed assets are
 required to be physically verified by the management on rotation basis,
 once in three years, which in our opinion is reasonable and adequate in
 relation to the size of the Company and the nature of its business. As
 certified by the management, the office machinery and equipments, leased
 premises and cables were physically verified in accordance with
 programme of verification by the management during the year and no
 material discrepancies were noticed on such verification. However no
 documentary evidence in respect of physical verification of cables was
 made available to us for our verification. Therefore, we are unable to
 comment on material discrepancies, if any, noticed on such verification.
 
 (ii) (a) In our opinion, physical verification of inventory has been
 conducted by the management at reasonable intervals during the year.
 
 (b) In our opinion, the procedures of physical verification of inventory
 followed by the management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) On the basis of our examination of the records of inventory, we are
 of the opinion that the Company is maintaining proper records of
 inventory. Discrepancies noticed on physical verification of inventory
 as compared to book records were not material and have been properly
 dealt with in the books of accounts.
 
 (iii) The Company has not granted any secured or unsecured loans to
 companies, forms or other parties covered in the register maintained
 under section 189 of the Companies Act, 2013 (''the Act''). Thus ,
 paragraph 3(iii) of the Order is not applicable
 
 (iv) In our opinion and according to the information and explanations
 given to us, internal control system is reasonably adequate and broadly
 commensurate with the size of the Company and the nature of its
 business with regard to purchase of inventory and fixed assets and for
 the sale of goods and services.  The same needs to be strengthened
 further. We have not observed any continuing failure to correct major
 weakness in the internal control system during the course of the audit.
 
 (v) The Company has not accepted any deposits from the public within
 the meaning of Section 73 to Section 76 or any other relevant
 provisions of the Companies Act, 2013 or rules framed there under.
 
 (vi) As per information and explanation given to us, Company is
 required to maintain the cost records under Section 148(1) of the
 Companies Act 2013. As explained the Company has not yet maintained the
 required cost records for 2014-15.
 
 (vii) (a) According to the information and explanations given to us and
 on the basis of our examination of the records of the Company, amounts
 deducted/ accrued in the books of account in respect of undisputed
 statutory dues including provident fund, employee''s state insurance,
 income tax, sales tax, wealth tax, service tax, duty of customs, duty
 of excise, value added tax, cess and other material statutory dues,
 wherever applicable, have been regularly deposited during the year by
 the Company with the appropriate authorities.
 
 According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, employee''s
 state insurance, income tax, sales tax, wealth tax, service tax duty of
 customs, duty of excise, value added tax, cess or other material
 statutory dues were in arrears as at 31 March 2015.
 
 (b) According to the information and explanations given to us, there
 are no dues of Income tax, Sale tax, service tax, wealth tax, duty of
 customs, duty of excises, value added tax and cess which have not been
 deposited with the appropriate authorities on account of any dispute
 except for the following dues:
 
 Delhi Unit
 
 i.  Sales Tax 
 Name of        Amount         
  Period     Authority where Forum where 
 the Statute   (Rs,in Crores)              the dispute is pending
                L.S.T (Net)
 
 Delhi Sales 
 Tax Act         12.21          2007-08    Addl. Comm. Sales Tax
 
 Delhi Sales 
 Tax Act         62.60         2009-10 
                             & 2010-11     Addl. Comm. Sales Tax
                              (CWG 2010)
 
 Delhi Sales 
 Tax Act          0.04         2012-13     Addl. Comm. Sales Tax
 
 TOTAL           74.85
 
 
 ii.  Service Tax
 
 Name of the 
 Statute       Amount (Rs,in   Period     Forum where the dispute is
 pending       Crores) (Net)
 
 Service tax       7.96        2005-06    Addl. Comm. Service Tax
  
 Service tax      22.03        2007-08    Addl. Comm. Service Tax
 
 TOTAL            29.99
 
 
 iii.  Labour Cess
 
 Name of the 
 Statute        Amount (Rs,in  Period    Forum where the dispute is
                Crores) (Net)            pending
 
 Building 
 and other           2.68      1996 to 
                               2001      Deputy Labor Commissioner
 Construction 
 Workers
 Welfare Cess 
 Act, 1996.
 
 
 Building 
 and other           5.93      2002 to 
                               2005      Deputy Labor Commissioner
 Construction 
 Workers
 Welfare Cess 
 Act, 1996.
 
 
 Building and 
 other              1.48       2005 to  
                               31.03.
                               2015     Deputy Labor Commissioner
 Construction 
 Workers
 
 Welfare Cess 
 Act, 1996.
 
 TOTAL             10.09
 
 
 Mumbai Basic Unit Sales Tax:
 
 Name of the     Nature of Dues    Amount under     Year to which 
 Statute                           dispute(Rs,in    amount relates 
                                   Crores) (Net)
 
 BST ACT         Assessed Amount        0.36           1993-94
  
 
 BST ACT         Assessed Amount        5.32           1996-97 
 
 
 BST ACT         Assessed Amount        1.91           1998-99 
 
 BST ACT         Assessed Amount        3.52          1999-200
 
 BST ACT         Assessed Amount        5.48           2000-01 
 
 BST ACT         Assessed Amount       10.16           2001-02 
 
 BST ACT         Assessed Amount      216.11           2003-04
 
 BST ACT         Assessed Amount      101.57           2004-05 
 
 Total                                344.43
 
 
 Name of the Statute           Forum where the dispute is pending
 
 BST ACT                       mAHARASHTRA SALES tAX
                               Tribunal, Mumbai
 
 BST ACT                       Maharashtra Sales Tax
                               Tribunal Mumbai
 
 BST ACT                       Jt. Commissioner of sales
                               Tax (Appeal) II Mumbai
 
 BST ACT                       Jt. Commissioner of Sales
                               Tax (Appeal) II Mumbai
 
 Bst ACT                       Maharashtra sales tax
                               Tribunal Mumbai         
 
 Bst ACT                       Maharashtra sales tax
                               Tribunal Mumbai         
 
 Bst ACT                       Maharashtra sales tax
                               Tribunal Mumbai         
 
 Bst ACT                       Maharashtra sales tax
                               Tribunal Mumbai         
 
 
 Mumbai MS Unit Central Excise:
 
 Name of the 
 Statute           Nature of dues     Amount Under    Year to Which 
                                      dispute not     Amount 
                                      deposited 
                                     (Rs,in           Relates
                                      Crores)
 
 Central 
 Excise Act        Installation of
                   BTS Site           0.29            2004-05
 
 Central 
 Excise Act        Installation of 
                   BTS Site           0.26            2005-06 
 
 Central 
 Excise Act        Installation of
                   BTS Site           0.32            2006-07 
 
 Total                                0.87
 
 
 
 Name of the Statute            Form where the dispute is pending
 
 Central Excise Act                  CESTAT  
 
 Central Excise Act                  CESTAT 
 
 Central Excise Act                  CESTAT 
 
        
 
 (c) According to the information and explanations given to us the
 amounts required 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 there under have been
 transferred to such fund within time .
 
 (viii) The company does not have accumulated losses as at 31st March
 2015. The Company has incurred cash losses during the current financial
 year. However, the Company did not have cash losses in the preceding
 financial year.
 
 (ix) The Company has not defaulted in the repayment of dues to banks or
 debenture holders. The Company has not taken any loan from any financial
 institution.
 
 (x) In our opinion and according to the information and the
 explanations given to us, the Company has not given any guarantee for
 loans taken by others from banks or financial institutions.
 
 (xi) The Company has not taken any term loan during the year.
 
 (xii) Based on audit procedures applied and according to the
 information and explanations given to us, we report that no fraud on or
 by the Company has been noticed or reported during the course of our
 audit for the year ended on 31st March 2015 except for the following
 three cases:
 
 Nature of Fraud                  Amount        Remarks
                                (Rs,in Crores)
 
 Major Discrepancy found in 
 reconciliation of                  0.02         Investigation in
                                                 Progress
 E-recharge through Demo 
 Sim. Short remittances of
 E-recharge.
 
 Improper record keeping of 
 recharge coupons, non              0.11         Investigation in
                                                 Progress
 
 reconciliation of stock 
 time to time and probable 
 siphoning of amount
 collected.
 
 Theft of blank cheques and 
 enacted by forged                  0.05         Amount has been
 credited to
                                                 signature.  MTNL
                                                 Account by Bank.
 
 TOTAL                              0.18
 
 
 For V. K. DHINGRA & CO.               For ARUN K. AGARWAL & ASSOCIATES
 
 CHARTERED ACCOUNTANTS                     CHARTERED ACCOUNTANTS
 
 Firm Regn. No. 000250N                    Firm Regn. No. 003917N
 
 
 
 
 (SANJAY JINDAL)                           (SANJAY GUPTA)
   
 PARTNER                                       PARTNER
  
 M. NO. 087085                             M. NO. 095506
 
 PLACE : NEW DELHI DATED : MAY 30, 2015
Source : Dion Global Solutions Limited
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