AGC Networks Ltd Directors Report.

To the Members of AGC Networks Limited

Report on the Audit of the Standalone Financial Statements

QUALIFIED OPINION

1. We have audited the accompanying standalone financial statements of AGC Networks Limited (‘the Company), which comprise the Balance Sheet as at 31 March 2020, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (‘Act) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Indian Accounting Standards (‘Ind AS) specified under section 133 of the Act, of the state of affairs of the Company as at 31 March 2020, and its loss (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

BASIS FOR QUALIFIED OPINION

3. As stated in Note 38 to the accompanying standalone financial statements, during the previous year ended 31 March 2019, the Company had recorded only the differential amount of Rs 1.11 Crores, as profit on sale of property, plant and equipment, being the difference between the sale consideration of a certain property re-assigned to a new buyer and the outstanding receivable from an earlier sale transaction incorrectly recorded without the transfer of risks and rewards of ownership of such property in the year ended 31 March 2015.

Had the Company followed the principles of Ind AS 16, Property, Plant and Equipment, and corrected the aforementioned errors relating to incorrect recognition of sale in earlier year, of the said property, in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors, exceptional item (income), representing gain on sale of property, plant and equipment, for the year ended 31 March 2019 would have been higher by Rs 22.79 Crores, while depreciation expense for the year ended 31 March 2019 would have been higher by Rs 0.02 Crores.

Our report on the standalone financial statements for the year ended 31 March 2019 was also qualified in respect of the above matter, and accordingly, our opinion on the accompanying standalone financial statements for the year ended 31 March 2020 is also qualified with respect to the effects of this matter on the comparability of current and corresponding figures in the accompanying standalone financial statements.

4. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Emphasis of Matters – Impact of COVID 19 and compliances with laws and regulations

5. We draw attention to Note 48 to the accompanying standalone financial statements with respect to delay in repatriation of proceeds of export of goods and services and delay in remittance for import payments, aggregating to Rs 1.37 Crores and Rs 4.33 Crores, respectively as on 31 March 2020 beyond the timelines stipulated, under the Foreign Exchange Management Act, 1999 and regulations thereunder. The management of the Company is in the process of filing, and in some cases, has filed necessary applications seeking extension of time / approval for write off of foreign currency payables and condonation of delays with appropriate authorities for regularising these defaults, subsequent to 31 March 2020. Pending conclusion on these matters, management is of the view that the possible fines / penalties, which may be levied, are currently unascertainable but are not expected to be material and accordingly, the accompanying standalone financial statements do not include any consequential adjustments that may be required due to such delay / default.

6. We draw your attention to Note 49 to the accompanying standalone financial statements, which describes the impact of COVID-19 pandemic on the Companys operations. In view of the uncertainties in the economic environment due to the outbreak of COVID-19 pandemic, the impact on the operations of the Company is significantly dependent on the future developments as they evolve.

Our opinion is not modified in respect of the above matters.

Key Audit Matters

7. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

8. In addition to the matters described in the Basis for Qualified Opinion, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter How our audit addressed the key audit matter
Measurement and disclosure of tax exposures Our audit procedures included, but were not limited to the following:
Refer Note 2(C)(vii) to the standalone financial statements "Use of estimate and judgement • Obtained an understanding of the managements process for identification of tax matters initiated against the Company, updating the status of the tax assessments, and estimating provision for taxes.
Provisions", Note 2(D)(xii) to the standalone financial statements "Provisions, contingent liabilities and contingent assets" and Note 34(A) to the standalone financial statements "Contingent liabilities"
As at 31 March 2020, the Company has significant uncertain tax positions including matters under dispute with excise, service tax and custom authorities which could have a significant impact on the standalone financial statements, if the potential exposures were to materialise. • Evaluated the design and implementation and tested the operating effectiveness of the internal controls over the completeness of records and those related to interpretation of tax laws and its application in estimation of tax liabilities.
• Obtained details of open tax assessments as at 31 March 2020 including demands raised against the Company from the management.
The application of Appendix C of Ind AS 12, Income Taxes, for evaluation of uncertain tax treatment to determine the amount, if any, to be provided as a liability or disclosed as a contingent liability, is inherently subjective, and based on professional advice sought from external tax consultants. • Tested the independence, objectivity and competence of internal and external managements experts who were involved and representing these cases in various authorities.
The measurement of provisions and disclosure of contingent liabilities for the aforesaid tax exposures requires a careful evaluation of the facts and consideration of various legal aspects of the matters involved. As the outcome of such assessments is uncertain, the position taken by the management involves significant judgment and estimation and auditing management judgments on whether the tax positions are probable of being sustained in tax assessments involves a high degree of subjectivity, this matter has been considered to be a Key Audit Matter. • Involved auditors experts to evaluate the tax opinions and challenge the reasonableness of the assumptions used in estimating the tax provisions and contingent liabilities and the possible outcomes of the disputes based on knowledge and understanding of the prevalent tax laws and regulations, outcome of previous claims, legal opinion sought by the management and developments in the tax environment, etc.
• Evaluated the adequacy and appropriateness of disclosures made by the Company in the standalone financial statements.
Existence of inventories
Refer Note 2(D)(xv) and Note 10 to the standalone Our audit procedures included but were not limited to financial statements. the following:
The Company holds inventory at various offices and warehouses in India. As per the Companys inventory verification plan, management has performed physical verification of the inventory at all locations. • Obtained an understanding of the managements process for inventory count, including the changes required thereto as a result of COVID-19 related restrictions.
• Evaluated the design and implementation and tested the operating effectiveness of the relevant key controls with respect to physical verification of inventory.
Our attendance at physical verification of inventory carried out by management was impracticable due to the lockdown enforced in the country near the year-end and travel restrictions imposed by the government and state authorities. Consequently, we have performed alternate audit procedures to obtain sufficient appropriate audit evidence over existence and condition of inventory as per the guidance provided in Standard on Auditing 501 "Audit Evidence Specific Considerations for Selected Items". • Verified the instructions issued by the management to all location heads and evaluated the signed inventory observation documents received from respective locations responsible for the physical verification of inventory.
• Reviewed the managements process for ensuring that there was no movement of stock during the physical verification of inventory.
As a result of the above-mentioned complexities involved in the alternate procedures, existence of year- end inventory balance is considered as a Key Audit Matter. • Ensured that the differences noted, if any, in managements physical verification of inventory from book records were adequately adjusted in books of account.
• Agreed the details for inventory lying with the Companys offices and warehouses as at 31 March 2020 to underlying supporting documents.
• Further, for the inventories sold subsequent to year end, verified the invoices and goods outward notes. Details are cross verified with gate register over video conferencing.
• For inventory lying in the custom warehouse, we have verified the Bill of Entry filed subsequently.
• Performed cut off procedures for purchases and sales made near year end based on average delivery period.

Information other than the Financial Statements and Auditors Report thereon

9. The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report but does not include the standalone financial statements and our auditors report thereon. The Annual Report is expected to be made available to us after the date of this auditors report.

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

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

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

10. The accompanying standalone financial statements have been approved by the Companys Board of Directors. The Companys Board of Directors is responsible for the matters stated in section 134(5) of 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 including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under section 133 of the Act. 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 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.

11. In preparing the standalone financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

12. Those Board of Directors is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Financial Statements

13. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

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

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls;

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

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern; and

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

16. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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

Report on Other Legal and Regulatory Requirements

18. As required by section 197(16) of the Act, based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

19. As required by the Companies (Auditors Report) Order, 2016 (‘the Order) issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

a) we have sought and except for the matter described in the Basis for Qualified Opinion section, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the accompanying standalone financial statements;

b) except for the effects of the matter described in the Basis for Qualified Opinion section, 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 standalone financial statements dealt with by this report are in agreement with the books of account;

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

e) on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2020 from being appointed as a director in terms of section 164(2) of the Act;

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

g) we have also audited the internal financial controls with reference to financial statements of the Company as on 31 March 2020 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 30 June 2020 as per Annexure II expressed unmodified opinion; and

h) 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 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. except for the effects of the matter described in paragraph 3 of the Basis for Qualified Opinion section, the standalone financial statements disclose the impact of pending litigations on the standalone financial position of the Company as at 31 March 2020, as detailed in Note 34(A) to the standalone financial statements;

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2020;

iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2020; and

iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 November 2016 to 30 December 2016, which are not relevant to these standalone financial statements. Hence, reporting under this clause is not applicable.

For Walker Chandiok & Co LLP

Chartered Accountants

Firms Registration No.: 001076N / N500013

Bharat Shetty

Partner

Membership No.: 106815

UDIN: 20106815AAAABT9588

Place : Mumbai

Date : 30 June 2020

ANNEXUREI TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATETO THE MEMBERS OF AGC NETWORKS LIMITED, ON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020

Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

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

(b) The property, plant and equipment have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the property, plant and equipment is reasonable having regard to the size of the Company and the nature of its assets.

(c) The title deeds of all the immovable properties (which are included under the head ‘Property, plant and equipment) are held in the name of the Company.

(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies between physical inventory and book records were noticed on physical verification.

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

(iv) In our opinion, the Company has complied with the provisions of Section 186 in respect of loans, investments and guarantee. Further, in our opinion, the Company has not entered into any transaction covered under Section 185 and Section 186 of the Act in respect of security.

(v) In our opinion, 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) The Central Government has not specified maintenance of cost records under sub-section (1) of section 148 of the Act, in respect of Companys products and services. Accordingly, the provisions of clause 3(vi) of the Order are not applicable.

(vii) (a) Undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, goods and service tax, cess and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(b) There are no dues in respect of duty of excise and goods and service tax that have not been deposited with the appropriate authorities on account of any dispute. The dues outstanding in respect of income-tax, sales-tax, service-tax, duty of customs and value added tax on account of any dispute, are as follows:

ANNEXUREI TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATETO THE MEMBERS OF AGC NETWORKS LIMITED, ON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020 (CONTD) Statement of disputed dues

Name of the statute Nature of dues Amount Amount paid under protest Period to which the amount relates Forum where dispute is pending
(Rs In Crores) (Rs In Crores)
Income-tax Act, 1961 Income tax 13.01 13.01 Assessment year 2005-06 Deputy Commissioner of Income Tax
Income-tax Act, 1961 Income tax 2.13 2.13 Assessment year 2006-07 Deputy Commissioner of Income Tax
Income-tax Act, 1961 Income tax 5.12 5.12 Assessment year 2007-08 Deputy Commissioner of Income Tax
Income-tax Act, 1961 Income tax 0.28 0.28 Assessment year 2008-09 Commissioner of Income Tax (Appeal)
Income-tax Act, 1961 Income tax 0.55 0.55 Assessment year 2009-10 Commissioner of Income Tax (Appeal)
Income-tax Act, 1961 Income tax 5.53 5.53 Assessment year 2010-11 Commissioner of Income Tax (Appeal)
Income-tax Act, 1961 Income tax 2.22 0.44 Assessment year 2011-12 Commissioner of Income Tax (Appeal)
Income-tax Act, 1961 Income tax 4.73 4.73 Assessment year 2012-13 Income Tax Appellant Tribunal
Income-tax Act, 1961 Income tax 4.43 - Assessment year 2013-14 Income Tax Appellant Tribunal
Income-tax Act, 1961 Income tax 11.94 - Assessment year 2014-15 Income Tax Appellant Tribunal
Income-tax Act, 1961 Income tax 0.55 0.54 Assessment year 2015-16 Commissioner of Income Tax (Appeal)
Income-tax Act, 1961 Income tax 0.04 - Assessment year 2016-17 Commissioner of Income Tax (Appeal)
West Bengal Sales Tax, 1994 Sales tax 0.03 - 2003-04, 2005-06 and 2006-07 Sr. Joint Commissioner of Commercial Tax, West Bengal
The Kerala Value Added Tax Act, 2003 Value added tax 0.08 - 2008-09 Kerala VAT Tribunal
The Uttar Pradesh Value Added Tax Act, 2008 Value added tax 0.28 0.08 2008-09 Additional Commissioner (Appeal) of Commercial Tax, Lucknow
The Kerala Value Added Tax Act, 2003 Value added tax 0.05 0.02 2011-12 Assistant Commissioner Appeals
The Kerala Value Added Tax Act, 2003 Value added tax 0.03 0.01 2009-10 Assistant Commissioner Appeals
The Gujarat Value added Tax Act, 2003 Value added tax 0.74 0.26 2011-12 Gujarat VAT Tribunal
The Gujarat Value added Tax Act, 2003 Value added tax 1.58 0.44 2012-13 Gujarat VAT Tribunal
The Gujarat Value added Tax Act, 2003 Value added tax 0.20 0.06 2013-14 Gujarat VAT Tribunal
The Maharashtra Value Added Tax Act, 2002 Value added tax 0.47 0.03 2013-14 Joint Commissioner of Appeals
The Gujarat Value added Tax Act, 2003 Value added tax 0.54 0.07 2015-16 Joint Commissioner Appeal, Ahmedabad
Tamil Nadu Value Added Tax Act, 2006 Value added tax 0.10 - 2015-16 Deputy Commissioner Appeal, Chennai
The Kerala Value Added Tax Act, 2003 Value added tax 1.15 - 2013-14, 2014-15, 2015-16 and 2016-17 State Tax Officer
The Haryana Value Added Tax Act, 2003 Value added tax 1.90 - 2015-16 Joint Excise & Tax Commissioner (Appeals), Haryana
The Maharashtra Value Added Tax Act, 2002 Value added tax 0.51 - 2015-16 Deputy Commissioner of State Tax
The Gujarat Value added Tax Act, 2003 Value added tax 2.50 - 2016-17 Commissioner of State Tax, Ahmedabad
Finance Act,1994 Service tax 0.50 0.05 2006-07, 2007-08 and 2011-12 Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad
Finance Act,1994 Service tax 4.17 0.35 2003-04 to 2006-07 Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad
Finance Act,1994 Service tax 0.74 0.04 2004-05 to 2006-07 Customs, Excise and Service Tax Appellate Tribunal, Mumbai
Finance Act,1994 Service tax 4.73 0.05 2003-04 to 2007-08 Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad
Finance Act,1994 Service tax 5.40 0.50 2004-05 to 2007-08 Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad
The Customs Act,1962 Custom duty 6.60 - Various financial years Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad (Order also passed by Supreme Court)
Finance Act,1994 Service tax 0.06 0.03 2005-06 Commissioner of Central Excise and Service Tax - Appeals

(viii) There are no loans or borrowings payable to financial institutions or government and no dues payable to debenture-holders. The Company has defaulted in repayment of loans to the following bank:

Name of the bank Amount of default Period of default Remarks
(Rs in Crores)
Yes Bank 2.55 May 2019 The repayment has subsequently been made in July 2019

(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments) and did not have any term loans outstanding during the year. Accordingly, the provisions of clause 3(ix) of the Order are not applicable.

(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.

(xi) Managerial remuneration has been paid and provided by the Company in accordance with the requisite approvals mandated by the provisions of section 197 of the Act read with Schedule V to the Act.

(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.

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

(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.

(xv) In our opinion, the Company has not entered into any non-cash transactions with the directors or persons connected with them covered under section 192 of the Act.

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

For Walker Chandiok & Co LLP

Chartered Accountants

Firms Registration No.: 001076N / N500013

Bharat Shetty

Partner

Membership No.: 106815

UDIN: 20106815AAAABT9588

Place : Mumbai

Date : 30 June 2020

ANNEXURE II TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE TO THE MEMBERS OF AGC NETWORKS LIMITED, ON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020

Independent Auditors Report on the internal financial controls with reference to financial statements under Clause (i) of Sub-section 3 of Section 143 of the Act

1. In conjunction with our audit of the standalone financial statements of AGC Networks Limited (‘the Company) as at and for the year ended 31 March 2020, we have audited the internal financial controls with reference to financial statements of the Company as at that date.

Responsibilities of Management and Those Charged with Governance for Internal Financial Controls

2. The Companys Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements 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 (‘the Guidance Note) issued by the ICAI. 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 the Companys business, including adherence to the Companys 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 Act.

Auditors Responsibility for the Audit of the Internal Financial Controls with Reference to Financial Statements

3. Our responsibility is to express an opinion on the Companys internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the ICAI prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements, and the Guidance Note issued by the ICAI. 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 with reference to financial statements were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements includes obtaining an understanding of such internal financial controls, 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 auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls with Reference to Financial Statements

6. A companys internal financial controls with reference to 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 companys internal financial controls with reference to financial statements include 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 companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with Reference to Financial Statements

7. Because of the inherent limitations of internal financial controls with reference to 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 with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such controls were operating effectively as at 31 March 2020, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For Walker Chandiok & Co LLP

Chartered Accountants

Firms Registration No.: 001076N / N500013

Bharat Shetty

Partner

Membership No.: 106815

UDIN: 20106815AAAABT9588

Place : Mumbai

Date : 30 June 2020