Jain Studios Ltd Directors Report.

To

THE MEMBERS OF JAIN STUDIOS LIMITED

Report on the Audit of the Financial Statements Qualified

Opinion

We have audited the accompanying financial statements of Jain Studios Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2019, the Statement of Profit and Loss, the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the financial statements").

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(s) described in the Basis for Qualified Opinion section of our report, the aforesaid financial statements give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2019, the profit, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

i. We refer to refer note no. 2.3 of the financial statements in respect of custom duty saved Rs. 351.48 Lakhs during earlier years as per EPCG Scheme, against which the companys funds amount Rs 274.21 Lakhs are laying deposited with the custom department which has been shown as Deposits with custom department.

Attention is invited that no provision has been made for the custom duty saved and interest thereon and the penal consequences which may arise out of this (impact unascertained). The Management has considered and disclosed the liability of Rs. 351.48 Lakhs as not acknowledged as debts under "Contingent Liabilities" (refer note no. 2.24 of the financial statements).

ii. We refer to refer note no. 2.3 of the financial statements in respect of part payment of Rs. 105.00 Lakhs made under protest towards Monthly use and occupation charges claimed by Scindia Potteries and Services Ltd, against the decretal amount of Rs. 1213.94 Lakhs (up to 31.03.2019) as directed by the High Court Delhi High Court vide its order dated 01.08.2018.

Attention is invited that no provision has been made in respect of liability of the remaining decretal amount of Rs. 1108.94 Lakhs. The Management has considered and disclosed the liability of Rs. 1108.94 Lakhs as not acknowledged as debts under "Contingent Liabilities" (refer note no. 2.24 of the financial statements). Keeping in view the pendency of the matter before the court, we express our inability to comment on the matter and quantify the liability including penal consequences (liability unascertained)which may arise due to not depositing the decretal amount as directed by the Delhi High Court vide its order dated 01.08.2018.

iii. We refer to note no. 2.4 of the financial statements in respect of MAT credit entitlement amounting to Rs 26.45 Lakhs recognized and carried over based on management perception in respect of availability of sufficient taxable income in coming years against which such credit can be set off and our inability to comment thereon.

iv. We refer to note no. 2.8 of the financial statements in respect of recognition and carryover of deferred tax assets (net) amounting to Rs. 965.46 Lakhs, based on management perception in respect of availability of sufficient taxable income in coming years against which such assets can be realized and our inability to comment thereon.

v. We refer note no. 2.12 in respect of one time settlement (OTS) arrived at with SASF, which SASF vide its letter dated 12th February 2015 and 5th March 2015 respectively revoked the OTS including reversal of waiver of dues and restoration of the original liability as per the terms of loan agreement and adjustment of payment received by SASF from the company towards the dues. The Company had received a show cause notice dated 09.12.2016 from Debt Recovery Tribunal (DRT-1, Delhi) for the application filed by SASF u/s 19 of the Recovery of the Debts due to Banks and Financial institutions Act, 1993, for recovery of its debt of Rs. 308.22 crores. Besides, SASF has also moved an application u/s 7 of I & B Code 2016 on 03.01.2019 for recovery of Rs. 445.39 crore claim. In the interim, the company has further sent a letter dated 30.01.2019 to SASF wherein the company has asked SASF to come for discussion for settlement of dues. SASF, vide its letter (LOA) dated 02.03.2019 has agreed for fresh One Time Settlement (OTS) of dues, subject to certain terms and conditions and upon payment of Rs. 750.00 Lakhs (as per Appendix) within 240 days from the date of acceptance of OTS. However, the company has yet not made the first tranche payment of Rs. 50.00 Lakhs, as per payment schedule, due for payment on or before 02.04.2019.

Attention is invited that necessary accounting entries in respect of provision of fresh OTS of Rs 750.00 Lakhs has not been made in the books of accounts of the company. Further, the Management has considered and disclosed the liability of Rs. 308.22 crores, raised by SASF in respect of previous OTS revoked, as not acknowledged as debts under "Contingent Liabilities" (refer note no. 2.24 of the financial statements). We express our inability to comment on the matter and quantify the liability in view of non fulfillment of payment commitment by the company as agreed with SASF and pendency of the matter.

vi. We refer to note no. 2.13 of the financial statements in respect of dues to micro enterprises and small enterprises. In absence of records, confirmation and documentation we report that the company has not identified its MSME creditors and their respective outstanding dues and has not disclosed the outstanding dues to MSME creditors as required to be disclosed in terms of Section 22 of Micro, Small and Medium Enterprises Development Act, 2006 read with notification dated 02nd November 2018 and has not provided for the penal interest (amount unascertained) on delayed payments to MSME creditors.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion section we have determined the matters described below to be the key audit matters to be communicated in our report.

S.No. Key Audit Matters Auditors Response
1 Assessment of litigations and related disclosure of contingent liabilities. Refer to Note 2.24 to the Financial Statements- Contingent liabilities not provided for. Our audit procedures included the following - We understood, assessed and tested the design and operating effectiveness of key controls surrounding assessment of litigations relating to the relevant laws and regulations;
As at March 31, 2019, the Company has exposures towards litigations relating to various matters as set out in the aforesaid Notes. - We discussed with management the recent developments and the status of the material litigations which were reviewed by the audit committee;
Significant management judgement is required to assess such matters to determine the probability of occurrence of material outflow of economic resources and whether a provision should be recognised, or a disclosure should be made. - We performed our assessment on a test basis on the underlying calculations supporting the contingent liabilities / other significant litigations made in the Financial Statements
The management judgement is also supported with legal advice in certain cases as considered appropriate. As the ultimate outcome of the matters are uncertain and the positions taken by the management are based on the application of their best judgement, related legal advice including those relating to interpretation of laws/regulations, it is considered to be a Key Audit Matter. - We evaluated managements assessments by understanding precedents set in similar cases and assessed the reliability of the managements past estimates / judgements;
- We evaluated managements assessment around those matters that are not disclosed or not considered as contingent liability, as the probability of material outflow is considered to be remote by the management; and
- We assessed the adequacy of the Companys disclosures. Based on the above work performed, managements assessment in respect of litigations and related disclosures relating to contingent nancial Statements are considered to be reasonable.
Our audit procedures included the following
2 Assessment for provision for impairment in value of investment in Company in Corporate Insolvency Resolution Process (CIRP). Refer to Note 2.2 to the Financial Statements - Investments in Equity Instruments (unquoted- fully paid up) of Noida Software Technology Park Limited. - We discussed with management the recent developments and the status of the insolvency proceedings which were reviewed by the audit committee;
As at March 31, 2019, the Company has shown investment in Equity shares of company admitted into CIRP. - We evaluated managements assessments by understanding precedents set in similar cases and assessed the reliability of the managements estimates / judgements; and
Significant management judgement is required to assess such matters to determine the probable impact of the insolvency proceedings and outcome to assess the requirement and quantum of provision for impairment in the value of investment in Company in CIRP. - We assessed the adequacy of the Companys disclosures. Based on the above work performed, managements assessment in respect of non provision for impairment in the value of investment due to pendency of the insolvency proceedings and subject to the approval of NCLT, the related disclosures in the Financial Statements are considered to be reasonable.
The extent of impairment may or may not have been ascertained depending upon the stage of the resolution process. As the insolvency proceedings are in process and the ultimate outcome is uncertain and the positions taken by the management are based on the application of their best judgement, related legal advice including those relating to interpretation of laws/regulations, it is considered to be a Key Audit Matter.

Information Other than the Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the preparation of the other information along with the financial statements. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders Information, but does not include our auditors report on the financial statements.

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

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Managements Responsibility for the Financial Statements

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

In preparing the 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.

The Board of Directors are responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 SAs 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 financial statements.

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

-Identify and assess the risks of material misstatement of the 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 financial controls 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 system 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.

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

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

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.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of subsection (11) of section 143 of the Companies Act, 2013, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

As required by Section 143(3) of the Act, based on our audit we report that:

a) We have sought and except for the mattere described under Basis for Qualified Opinion paragraph, 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) Except for the effects of matters described under Basis for Qualified Opinion paragraph, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

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

d) In our opinion, except for the effects of matters described under Basis for Qualified Opinion paragraph, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act.

f) The qualification relating to the maintenance of account and other matters connected there with are as stated in the Basis for Qualified Opinion paragraph.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the oper ating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses a modified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting.

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. The Company has disclosed the impact of pending litigations on its financial position in its financial statements (refer Note 2.24).

ii. Except for the effects of mattere described under Basis for Qualified Opinion paragraph, the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on longterm contracts including derivative contracts.

iii. There has been no delay in transferring amount required to be transferred, to the Investor Education and protection Fund by the Company during the year.

iv. With respect to the matter to be included in the Auditors report under Section 197, in our opinion and according to the information and explanation given to us, the remuneration paid during the current year by the Company is in accordance with the provisions of Schedule V of the Act.

For VIKAS DAHIYA & CO.
Chartered Accountants .
FRN : 026025N
Date: CA Vikas Dahiya
Place: New Delhi M.No. 516598

ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 2 under Report on Other Legal and Regulatory Requirements section of our report to the Members of JAIN STUDIOS LIMITED of even date).

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

(b) The fixed assets have not been physically verified during the year by the management.

(c) According to information and explanation given to us, the title deeds of the immovable property have been mortgaged with the banks/ Financial Institutions etc., for securing the borrowings and loan raised by the Company.

ii. The Company is a service company, primarily rendering news media services. Accordingly, it does not hold any physical inventories. Thus, paragraph 3(ii) of the Order is not applicable to the Company.

iii. According to explanation and information given to us and on examination of records, during the year, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the companies Act. Thus, paragraph 3(iii) of the Order is not applicable to the Company.

iv. In our opinion and according to information and explanation given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees, and security provided by the company.

v. In our opinion, and on the basis of audit procedures and according to information and explanation given to us, the company has not accepted any deposits from public, however, the company has not filed Form DPT-3 with the ROC, New Delhi.

vi. In our opinion, maintenance of cost records under section 148(1) is not applicable to the company.

vii. (a) According to our information and explanation given to us and from examination of records of the company, the company is not regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, duty of customs, service tax, value added tax, cess and any other statutory dues with the appropriate authorities and there are undisputed statutory dues which remain in arrear for a period of more than six month as on 31st March 2019.

NATURE OF DUES AMOUNT OF DUES (Rs. in Lakhs)
Central sales tax (UP) 11.73
TDS 27.20
Bonus Payable 14.84
Service Tax 89.75
EPF 15.30
ESI 0.24

(b) According to the information and explanations given to us, there are no material dues of duty of customs which have not been deposited with the appropriate authorities on account of any dispute except as reported at serial no. i. "Basis of qualified opinion". However, according to information and explanations given to us, the following dues of income tax, sales tax, duty of excise, service tax and value added tax have not been deposited by the Company on account of disputes.

Name of the Statue Nature of Dues Amount Involved (Rs.) Forum where dispute is pending
The Income Tax Act, 1961 Matter in Appeal for A.Y. 2012-13. (u/s 271(1)(c) of the Act) 21,57,124/- Income Tax Commissioner (Appeals)-5, (Delhi)
The Income Tax Act, 1961 Matter in Appeal for A.Y. 2013-14. (u/s 271(1)(c) of the Act) 6,30,311/- Income Tax Commissioner (Appeals)-5, (Delhi)

viii. The Company does not have any loans or borrowings from any financial institution, banks, government or debenture holders during the year except Debts not acknowledged as debts against the company amounting to Rs. 308.22 crores considered as Contingent Liabilities (refer note 2.24 of the financial statements).

ix. According to our information and explanation given to us and from examination of records, the company has not raised any moneys by way of Initial Public Offer (IPO) or further public offer (including debt instruments).

x. According to information and explanation given to us, no material fraud on or by the company has been noticed or reported during the year.

xi. During the year, the Company has paid / provided for managerial remuneration amounting to Rs. 23.60 Lakhs to its Managing Director as per the provisions of section 197 read with Schedule V to the Act.

xii. The company is not a Nidhi Company.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting.

xiv. According to information and explanation given to us, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi. In our opinion, and on the basis of our audit procedures and according to information and explanation given to us, the company do not require registration under section 45-IA of the Reserve Bank of India Act, 1934.

For VIKAS DAHIYA & CO.
Chartered Accountants
FRN : 026025N
Date: CA Vikas Dahiya
Place: New Delhi M.No. 516598

ANNEXURE ‘B TO THE INDEPENDENT AUDITORS REPORT

(Referred to in Independent Auditors Report of even date to the members of JAIN STUDIOS LIMITED ("the Company") on the financial statements for the year ended March 31, 2019)

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

We have audited the internal financial controls over financial reporting of JAIN STUDIOS LIMITED ("the Company") as of March 31,2019 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adquate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to 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 Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Fni ancial Reporting (the "Guidance Note") and the Standards on Auditing issued, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India and applicable to an audit of internal financial controls. TTiose Standards and the Guidance Note require that we comply with ethical requirements andperform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on he Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and 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 Over Financial Reporting

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

Basis of qualified opinion

The Company did not have appropriate internal financial controlsin respect of control over process of compliance of Ind As-12"Income Tax" and atutory returns under income tax, GST and company laws. The inadequate internal controls over financial reporting in respect of aforesaid matters have effect on the reported profit for the year.

Qualified opinion

In our opinion and according to the information and explanations given to us, except for the effects of matters described in "Basis of qualified opinion" paragraph above, the Company has, in all material respects, an adeq^te internal financial rontrols system over finanaal reporting and such internal financial controls over financial reporting were operating effectively as at March 31,2019, based on the internal control over financial reporting criteria established by the Company considering the essential conponents of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

We have considered matters reported in "Basis of qualified opinion" paragraph in determining the nature, timing and extent of audit tests applied in our audit of the Standalone financial statements of the Company for the March 31, 2019.

For VIKAS DAHIYA & CO.
Chartered Accountants
FRN: 026025N
Date: 10th August, 2019 CA Vikas Dahiya
Place: New Delhi M.No. 516598