Mar 31, 2023
GTL INFRASTRUCTURE LIMITED
Report on the Audit of Financial Statements
Qualified Opinion
We have audited the accompanying financial statements of GTL INFRASTRUCTURE LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss including the Other Comprehensive Income, the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as âFinancial Statementsâ).
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 âBasis for Qualified Opinion'' para below, the aforesaid financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2023, its Loss including other Comprehensive Income, its Cash Flows and the Statement of Changes in Equity for the year ended on that date.
Basis for Qualified Opinion
Attention is drawn to Note No. 40 to the financial statements which inter alia states that, the Honâble Supreme Court of India held that "Mobile Telecommunication Towerâ is a building and State can levy property tax on the same. Pending petitions of the Company before the appropriate Courts, non-receipt of demand notices for property tax in respect of majority of the Telecommunication Towers and also due to Company''s right to recover such property tax amount from certain customers, the company is unable to quantify the amount of property tax to be borne by it and accordingly the Company has not made any provision for the same. We are unable to quantify the amount of the property tax, if any, to be accounted for and its consequential effects on the financial statements.
We conducted our audit in accordance with the Standards on Auditing (âSAâ) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s 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 financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the financial statements.
Material Uncertainty Related to Going Concern
We draw attention to the Note no. 59 to the financial statements, regarding preparation of financial statements on going concern basis, notwithstanding the fact that the Company continued to incur the cash losses, net-worth has been fully eroded, defaulted in repayment of principal and interest to its lenders, certain lenders including Edelweiss Asset Reconstruction Company (EARC) have called back the loans, one of the secured lender had applied before the NCLT Mumbai Bench under Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process (CIRP), which was dismissed by NCLT vide its order dated November 18, 2022, against which the secured lender has filed an appeal before the National Company Law Appellate Tribunal, (âNCLAT''''), which is subjudice, in the meantime EARC who is the lead lender of the Company has filed its Intervention Application in abovementioned Appeal and the Company has filed its reply to the appeal as well as EARC intervention application, Aircel, an erstwhile major customer of the Company has filed Insolvency petition before NCLT and various other events resulting into substantial reduction in the tenancy, provisions for impairment for Property, Plant & Equipment (refer Note No. 3(a)(iv) to the financial statements), legal matters in relation to Property Tax and qualified opinion for the same (refer note no. 40 to the Financial Statements and above paragraph heading with âBasis for Qualified Opinionâ, respectively), dismissal of Company''s proceedings by the Hon''ble Supreme Court, dismantling of various telecom sites by disgruntled landowners / miscreants and loss of assets (refer note no. 58 to the Financial Statements); these conditions along with other matters set forth in notes to the financial statements indicate that a material uncertainty exists that may cast significant doubt on the Company''s ability to continue as a going concern. The appropriateness of the assumptions of the going concern is critically depended upon the Company''s ability to generate cash flows in future to meet its obligation.
Our opinion is not modified in respect of this matter.
Key Audit Matters (KAM)
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Financial Statements for the year ended March 31, 2023. 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.
Key Audit Matter |
How our audit addressed the key audit matter |
1) Property, Plant and Equipment (PPE): |
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Impairment Annually Management reviews whether there are any indicators of impairment of the PPE of the Company by reference to the requirements under Indian Accounting Standards (Ind AS) 36 -âImpairment of Assetsâ. Accordingly, Management has identified impairment indicators (operating losses, significant erosion of net-worth, dismantling of towers etc.) in the Company. As a result, an impairment assessment was required to be performed by the Company by comparing the carrying value of the PPE to their recoverable amount to determine whether impairment was required to be recognised. For the purpose of the above impairment testing, value in use has been determined by forecasting and discounting future cash flows. These conclusions are dependent upon significant management judgments, including in respect of: - Estimated utilization, incremental tenancy (growth rate), frequency of assets replacement expenditure to be incurred, disposal values and discount rates applied to future cash flows. During the year ended March 31, 2023 the management assessed carrying values of PPE and an impairment provision of '' 58,654 Lakhs and losses on account of dismantling of PPE of '' 34,169 Lakhs have been recognised and reduced the aggregate carrying value of PPE to '' 265,154 Lakhs, to their estimated recoverable value, which is the value in use (Refer Note no. 3(a), 35 and 58 to the Financial Statements). We considered this matter as key audit matter due to the significance of the carrying value of the assets being assessed and due to the level of management judgments required in the assumptions impacting the impairment assessment and the sensitivity of the impairment model. |
Our audit procedures included, among others: - Updating our understanding of management''s annual impairment testing process. - Assessing internal controls designed for identification of impairment indicators. - Ensuring that the methodology of the impairment exercise continues to comply with the requirements of Ind AS as adopted, including evaluating management''s assessment of indicators of impairment against indicators of impairment specified within Ind AS 36. - Assessing the assumptions around the key drivers of the cash flow forecasts including incremental tenancy growth, discount rates, estimated one time settlement with disputed operators, etc. - Discussing / evaluating potential changes in key drivers as compared to previous year / actual performance with management in order to evaluate whether the inputs and assumptions used in the cash flow forecasts were suitable. - Testing the arithmetical accuracy of the impairment model prepared by the management and obtaining the fair valuation report of value in use from an independent SEBI registered merchant banker. - Verifying the completeness of disclosure in the financial statements as per Ind AS 36. |
Key Audit Matter |
How our audit addressed the key audit matter |
2) Litigation Matters and Contingent Liabilities |
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The Company is subject to number of significant litigations. Major risks identified by the Company in that area related to Service Tax, Property Tax, Legal cases initiated by various rental site owners and by a FCCB holder, Application filed by a lender to the NCLT under IBC for the recovery of loan which was dismissed by NCLT and against which lender has filed an appeal before the National Company Law Appellate Tribunal, (âNCLATâ), which is subjudice, in the meantime EARC who is the lead lender of the Company has filed its Intervention Application in abovementioned Appeal and the Company has filed its reply to the appeal as well as EARC intervention application and now matter is posted for hearing on May 26, 2023, arbitration with the vendors / service providers, etc. The amount of litigation may be significant and estimates of the amounts of provisions or contingent liabilities are subject to significant Management judgment. (Refer Note No. 36, 38(A), 39, & 40 to the Financial Statements) Due to complexity involved in these litigation matters, management''s judgment regarding recognition and measurement of provisions for these legal proceedings is inherently uncertain and might change over time as the outcomes of the legal cases are determined. Accordingly, it has been considered as a key matter. |
Our audit procedure included, among others: - Assessing the procedures implemented by the Company to identify and gather the risks it is exposed to. - Obtaining an understanding of the risk analysis performed by the Company, with relating supporting documentation, and reading written statements from internal legal experts, where applicable. - Discussion with the management on the development in these litigations during the year ended March 31,2023. - Enquiring from the company''s legal counsel (internal) and study the responses as received from them. - Verification that the accounting and / or disclosure as the case may be in the financial statements made by the Company is in accordance with the assessment of legal counsel / management. - Obtaining representation letter from the management on the assessment of these matters as per SA 580 (revised) -Written representations. |
Information Other than the Financial Statements and Auditorâs Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the management discussion & analysis and director''s report included in the annual report but does not include the Financial Statements and our auditor''s report thereon. The above information is expected to be made available to us after the date of this auditor''s report.
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 identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the above other information, if we conclude that there is material misstatement therein, we are required to communicate the matter to those charged with governance.
Management Responsibility for the Financial Statements
The Company''s 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 including Other Comprehensive Income, Cash Flows and the Statement Of Changes in Equity 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 provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the appropriate accounting policies; making judgements 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 fair 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 Company''s 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 also responsible for overseeing the Company''s financial reporting process.
Auditorâs 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 auditor''s 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 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 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 management''s 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 Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s 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 auditor''s 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.
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.
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.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor''s 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
1. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. 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 purposes of our audit;
b) Except for the effects of matters described in the Basis for Qualified Opinion paragraph above, in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
c) The Balance Sheet, Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this report are in agreement with the books of account;
d) Except for the effects of matters described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid financial statements comply with the accounting standards specified under section 133 of the Act;
e) The matter described in the âBasis for Qualified Opinion'' paragraph above and the matter described under âMaterial Uncertainty Related to Going Concern'' paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
f) On the basis of written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2023, from being appointed as a director in terms of section 164(2) of the Act;
g) With respect to the adequacy of the internal financial controls of the Company with reference to these financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
h) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended: In our opinion and to the best of our information and according to the explanations given to us, the managerial remuneration paid/ payable by the Company to a whole time directors are subject to approval of lenders in accordance with the provisions of section 197 of the Act.
i) With respect to the other matters to be included in the Auditor''s Report in accordance with Rules 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 and as represented by the management:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements in Note No. 36, 38(A) and 39 to the Financial Statements except in respect of property tax as detailed in Note No. 40 to the financial statements where the amount is not quantifiable and which is also a matter of qualified opinion in this report;
ii. The Company has made provisions, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long term contracts including derivative contracts;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. (a) Management has represented to us that, to the best of it''s knowledge and belief, as disclosed in the notes to the financial statements, during the year no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other persons or entities, including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) Management has represented to us that, to the best of it''s knowledge and belief, as disclosed in the notes to the financial statements, during the year no funds have been received by the company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party
(âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
(c) based on our audit procedure
conducted that are considered
reasonable and appropriate in the circumstances, nothing has come to our attention that cause us to believe that the representation given by the management under paragraph (2) (i) (iv) (a) & (b) contain any material misstatement.
v. The company has not declared or paid any dividend during the year and has also not proposed dividend for the year.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1,2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.
For Pathak H.D. & Associates LLP
Chartered Accountants Firm Registration No. 107783W / W100593
Gopal Chaturvedi
Partner
Place : Mumbai Membership No. 090903
Dated : May 11,2023 UDIN No.: 23090903BGXJNA9185
Mar 31, 2021
GTL INFRASTRUCTURE LIMITEDReport on the Audit of the Financial Statements
Qualified Opinion
We have audited the accompanying Financial Statements of GTL INFRASTRUCTURE LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and Statement of Cash Flows for the year then ended and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as âthe Financial Statementsâ).
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 âBasis for Qualified Opinion'' para below, the aforesaid Financial Statements give the information required by the Companies Act, 2013 (âthe Actâ) 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 March 31, 2021 and its loss including other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
Attention is drawn to Note No. 40 to the financial statements which inter alia states that, the Hon''bie Supreme Court of India held that âMobile Telecommunication Towerâ is a building and State can levy property tax on the same. Pending petitions of the Company before the appropriate Courts, non-receipt of demand notices for property tax in respect of majority of the Telecommunication Towers and also due to Company''s right to recover such property tax amount from certain customers, the company is unable to quantify the amount of property tax to be borne by it and accordingly the Company has not made any provision for the same. We are unable to quantify the amount of the property tax, if any, to be accounted for and its consequential effects on the financial statements.
We conducted our audit in accordance with Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s 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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the Financial Statements.
Material Uncertainty Related to Going Concern
We draw attention to the Note no. 40 & 59 to the financial statements, regarding preparation of financial statements on going concern basis, notwithstanding the fact that the Company continue to incurred the cash losses, net-worth has been fully eroded, defaulted in repayment of principal and interest to its lenders, certain lenders have called back the loans, one of the secured lenders has applied before the National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy Code, 2016, Aircel, one of the major customers of the Company has filed Insolvency petition before NCLT and various other events resulting into substantial reduction in the tenancy, provisions for impairment for Property, Plant & Equipment (refer Note No. 3(a)(vi) to the financial statements), dismantling of various telecom sites (refer Note No. 58 to the financial statements); These conditions along with other matters set forth in notes to the financial statements indicate that a material uncertainty exists that may cast significant doubt on the Company''s ability to continue as a going concern. Since 79.34% (by value) of the Company''s borrowing has been assigned by the lenders to the Edelweiss Asset Reconstruction Company Limited (EARC) and expected to have realignment of debt by the EARC in accordance with the Company''s cash flow. The appropriateness of the assumptions of the going concern is critically depended upon the Company''s ability to raise finance and generate cash flows in future to meet its obligation and to restructure its borrowing with the lenders.
Our opinion is not modified in respect of this matter.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Financial Statements for the year ended March 31,2021. 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.
Key Audit Matter |
How our audit addressed the key audit matter |
1) Impairment of Property, Plant and Equipment (PPE): |
|
Annually Management reviews whether there are any indicators of impairment of the PPE of the Company by reference to the requirements under Indian Accounting Standards (Ind AS) 36 -âImpairment of Assetsâ. Accordingly, Management has identified impairment indicators (operating losses, significant erosion of net-worth, dismantling of towers etc.) in the Company. As a result, an impairment assessment was required to be performed by the Company by comparing the carrying value of the PPE to their recoverable amount to determine whether impairment was required to be recognised. For the purpose of the above impairment testing, value in use has been determined by forecasting and discounting future cash flows. These conclusions are dependent upon significant management judgments, including in respect of: - Estimated utilization, incremental tenancy (growth rate), frequency of assets replacement expenditure to be incurred, disposal values and discount rates applied to future cash flows. During the year ended March 31, 2021 the management assessed carrying values of PPE and an impairment provision of '' 36,888 Lakhs and losses on account of dismantling of PPE of '' 16,314 Lakhs (gross) have been recognised and reduce the aggregate carrying value of PPE to '' 491,614 Lakhs, to their estimated recoverable value, which is the value in use (Refer Note no. 3(a), 36(a) and 58 to the Financial Statements). We considered this matter as key audit matter due to the significance of the carrying value of the assets being assessed and due to the level of management judgments required in the assumptions impacting the impairment assessment and the sensitivity of the impairment model. |
Our audit procedures included, among others: - Updating our understanding of management''s annual impairment testing process. - Assessing internal controls designed for identification of impairment indicators. - Ensuring that the methodology of the impairment exercise continues to comply with the requirements of Ind AS as adopted, including evaluating management''s assessment of indicators of impairment against indicators of impairment specified within Ind AS 36. - Assessing the assumptions around the key drivers of the cash flow forecasts including incremental tenancy growth, discount rates, estimated one time settlement with disputed operators, etc. - Discussing/Evaluating potential changes in key drivers as compared to previous year / actual performance with management in order to evaluate whether the inputs and assumptions used in the cash flow forecasts were suitable. - Testing the arithmetical accuracy of the impairment model prepared by the management and obtaining the fair valuation report of value in use from independent SEBI registered Merchant Banker. - Verifying the completeness of disclosure in the financial statements as per Ind AS 36. |
Key Audit Matter |
How our audit addressed the key audit matter |
2) Litigation Matters and Contingent Liabilities |
|
The Company is subject to number of significant litigations. Major risks identified by the Company in that area related to Service Tax, Property Tax, Legal cases initiated by various rental site owners and by a FCCB holder, Application filed by a lender to the NCLT under IBC for the recovery of loan, arbitration with the vendors / service providers, etc. The amount of litigation may be significant and estimates of the amounts of provisions or contingent liabilities are subject to significant Management judgment. (Refer Note No. 36(b), 38(A), 39, & 40 to the Financial Statements) Due to complexity involved in these litigation matters, management''s judgment regarding recognition and measurement of provisions for these legal proceedings is inherently uncertain and might change over time as the outcomes of the legal cases are determined. Accordingly, it has been considered as a key matter. |
Our audit procedure included, among others: - Assessing the procedures implemented by the Company to identify and gather the risks it is exposed to. - Obtaining an understanding of the risk analysis performed by the Company, with relating supporting documentation, and reading written statements from internal and external legal experts, where applicable. - Discussion with the management on the development in these litigations during the year ended March 31,2021. - Enquiring from the company''s legal counsel (internal/ external) and study the responses as received from them. - Verification that the accounting and / or disclosure as the case may be in the financial statements made by the Company is in accordance with the assessment of legal counsel / management. - Obtaining representation letter from the management on the assessment of these matters as per SA 580(revised) - Written representations. |
The Company''s Board of Directors is responsible for the other information. The other information comprises the management discussion & analysis and director''s report included in the annual report but does not include the Financial Statements and our auditor''s report thereon. The above information is expected to be made available to us after the date of this auditor''s report.
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 identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the above other information, if we conclude that there is material misstatement therein, we are required to communicate the matter to those charged with governance.
Managementâs Responsibility for the Financial Statements
The Company''s Management and Board of Directors are 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 state of affairs (financial position), loss (financial performance including other comprehensive income), cash flows and the changes in equity of the Company in accordance with the accounting principles generally accepted in India, including Ind AS prescribed under Section 133 of the Act read with relevant rules issued thereunder.
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.
In preparing the Financial Statements, the Management and Board of Directors are responsible for assessing the Company''s 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 is also responsible for overseeing the Company''s financial reporting process.
Auditorâs Responsibility 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 auditor''s 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 management''s 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 ability of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s 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 auditor''s 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.
directors is disqualified as on March 31,2021 from being appointed as a director in terms of Section 164 (2) of the Act.
g. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ.
h. With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the managerial remuneration paid/ payable by the Company to a whole time director is subject to approval of shareholders in accordance with the provisions of section 197 of the Act.
i. With respect to the other matters to be included in the Auditor''s 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 in Note No. 36(b), 38(A) and 39 to the Financial Statements except in respect of property tax as detailed in Note No. 40 to the financial statements where the amount is not quantifiable and which is also a matter of qualified opinion in this report;
ii. The Company has made provisions, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long term contracts including derivative contracts;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditor''s Report) Order, 2016 (âCARO 2016â) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of CARO 2016.
For Pathak H.D. & Associates LLP
Chartered Accountants Firm Registration No. 107783W / W100593
Gopal Chaturvedi Partner
Place: Mumbai Membership No. 090903
Dated: June 03, 2021 UDIN No.: 21090903AAAADB9297
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.
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.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Financial Statements for the year ended March 31,2021 and are therefore the key audit matters. We describe these matters in our auditor''s 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
1. 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 purposes of our audit.
b. Except for the effects of matters described in the Basis for Qualified Opinion paragraph above, 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 (Including other comprehensive income), Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account.
d. Except for the effects of matters described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid financial statements comply with the Ind AS prescribed under Section 133 of the Act.
e. The matter described in the âBasis for Qualified Opinion''paragraph above and the matter described under Material Uncertainty Related to Going Concern paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
f. On the basis of the written representations received from the directors as on March 31,2021 and taken on record by the Board of Directors, none of the
Mar 31, 2018
Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of GTL INFRASTRUCTURE LIMITED (âthe Companyâ), which comprise the Balance sheet as at March 31, 2018, 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 significant accounting policies and other explanatory information (hereinafter referred to as âthe Ind AS Financial Statementsâ).
Managementâs Responsibility for the Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies act, 2013 (âthe Actâ) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the state of affairs (financial position), losses (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the Accounting Principles Generally Accepted in India, including Indian Accounting Standards (''Ind AS'') prescribed 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 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these Ind AS 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 thereunder.
We conducted our audit of the Ind AS financial statements 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 Ind AS financial statements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements.
The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS 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 Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s directors, as well as evaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
Basis for Qualified Opinion
Attention is drawn to Note No. 42 to the Ind AS financial statements which inter alia states that, the Hon''ble Supreme Court of India held that âMobile Telecommunication Towerâ is a building and State can levy property tax on the same. The Special Leave Petition filed against the above order has been dismissed by the Hon''ble Supreme Court. The appeal filed with Bombay High Court by the Company contesting the manner, quantum, component of property tax has been dismissed. Appeal was preferred against the same to the Hon''ble Supreme Court and the Hon''ble Supreme Court has granted stay. The matter being still sub judice, non-receipt of demand notices for property tax in respect of majority of the Telecommunication Towers and also due to Company''s right to recover such property tax amount from certain customers, the Company is unable to quantify the amount of property tax to be borne by it and accordingly has not made any provision for the same. In the light of above, we are unable to quantify the amount of the property tax, if any, to be accounted for by the Company and its consequential effects on the Ind AS financial statements.
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 âBasis for Qualified Opinionâ paragraph above, the aforesaid Ind AS 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 March 31, 2018 and its loss, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matters
We draw attention to the:
a. Note no. 31.1 to the Ind AS financial statements'' regarding managerial remuneration paid to a whole time director is in excess of the limits prescribed under the Act. The Company has applied to the Central Government for necessary approval which is awaited.
b. Note nos. 3.8 and 53 to the Ind AS financial statements which inter alia state that, Aircel, one of the major customers of the Company, has filed the insolvency petition before National Company Law Tribunal (NCLT), the Company has impaired its non-current assets and the Reserve Bank of India (RBI) withdrew the Strategic Debt Restructuring (SDR) guidelines resulting into uncertainty in the Debt Resolution process. The Company, however, continues to prepare its Ind AS financial statements on going concern basis and classify its rupee term loans borrowing as per SDR terms, since the Company as stated in note no. 53, has envisaged option to right size debt either through ARC debt sale process initiated by the lenders or in accordance with revised RBI guidelines.
Our opinion is not modified in respect of these matters. Other Matter
As mentioned in Note no. 43 to the Ind AS financial statements, during the year the scheme of Arrangement for the merger of Chennai Network Infrastructure Limited (CNIL) with the Company has been approved by the National Company Law Tribunal, at Mumbai and Chennai and the scheme became effective from December 22, 2017 having the appointed date April 1, 2016. The comparatives for the previous years have been restated by the Management of the Company to give the effect of the said scheme by including the financial statements of CNIL which are audited by other auditor, M/s Arvind Mahajan & Associates, Chartered Accountants, Mumbai for the year ended March 31, 2017 and March 31, 2016 and by giving such adjustments and effects as are required by the scheme of Arrangement. Our Audit has been restricted for the year ended on March 31, 2018. We have traced the comparative figures as at March 31st 2017 and 1st April 2016, from the information as certified and provided by the Management of the Company.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. 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 purposes of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. The Balance Sheet, the Statement of Profit and Loss (Including other comprehensive income), the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid Ind AS financial statements comply with the Ind AS prescribed under Section 133 of the Act.
e. The matter described in the ''Basis for Qualified Opinion'' paragraph above and the going concern matter described in subparagraph (b) under the âEmphasis of Mattersâ paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
f. On the basis of the written representations received from the directors as on March 31, 2018 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
g. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ.
h. With respect to the other matters to be included in the Auditor''s 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 Ind AS financial statements in Note No. 38, 40 and 41 to the Ind AS financial statements except in respect of property tax as detailed in note no 42 to the Ind AS financial statements where the amount is not quantifiable and which is also a matter of qualified opinion in this report;
ii. The Company has made provisions, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long term contracts including derivative contracts;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditor''s Report) Order, 2016 (âCARO 2016â) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of CARO 2016.
(Referred to in paragraph 1 (g) under âReport on Other Legal and Regulatory Requirementsâ of our report of even date to the members of GTL Infrastructure Limited on the Ind AS financial statements for the year ended March 31, 2018)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of GTL INFRASTRUCTURE LIMITED (''the Company'') as of March 31, 2018 in conjunction with our audit of the Ind As financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Company''s 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 (''the Guidance Note'') issued by the Institute of Chartered Accountants of India (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 its business, including adherence to company''s 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note issued by the ICAI and the Standards of Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 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 and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the Ind AS 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 the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A company''s 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 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 Ind AS 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 company''s assets that could have a material effect on the Ind AS 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.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, 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 issued by the ICAI.
(Referred to in paragraph 2 under the heading âReport on Other Legal and Regulatory Requirementsâ of our report of even date to the members of GTL INFRASTRUCTURE LIMITED on the Ind AS financial statements for the year ended March 31, 2018)
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment on the basis of available information.
b. As explained to us, the Company has physically verified certain assets, in accordance with a phased program of verification, which in our opinion is reasonable, having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification as compared with the available records.
c. According to the information and explanations given to us, the title deeds of immovable properties are held in the name of the Company except in respect of following immovable properties as detailed below:
(Rs. in Lakhs)
Sr. No. |
Particulars of the Building |
Leasehold/ Freehold |
Net Book Value |
Remarks |
1 |
Land at Sudhagad, Raigad (Pledged with the Bank) |
Freehold |
38 |
The title deed is in the name of Chennai Network Infrastructure Limited (CNIL) which got merged with the Company pursuant to the scheme of arrangement (Refer Note no. 43 to the Ind AS Financial Statements) |
2 |
Building at Wanawadi, Pune (Pledged with the Bank) |
Freehold |
563 |
The title deed is in the name of Global Electronic Commerce services Limited, which was merged with GTL Limited (the seller) |
Further, as informed to us, in respect of 8 immovable properties having the Net Book Value of Rs. 3,457 Lakhs (Including 7 immovable properties having Net Book Value of Rs.3,456 Lakhs in respect of which the original title deeds have been deposited with the lenders as security) have been verified based on the photocopies of the documents for those immovable properties and based on such documents, the title deeds are held in the name of the company.
ii. As explained to us, inventories have been physically verified during the year by the management and in our opinion the frequency of verification is reasonable. Discrepancies noticed on physical verification of the inventories between the physical inventories and book records were not material, having regard to the size of the operations of the Company and the same have been properly dealt with.
iii. The Company has not granted any loan, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. Therefore, clause (iii) of paragraph 3 of the CARO 2016 is not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, in respect of grant of loans, making investments and providing guarantees and securities.
v. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of section 73 to 76 of the Act and the Rule framed there-under. Therefore, clause (v) of paragraph 3 of the CARO 2016 is not applicable to the Company.
vi. According to the information and explanations given to us, the Central Government has not prescribed the cost records to be maintained under sub-Section (1) of Section 148 of the Act in respect of business activities carried on by the Company. Therefore, clause (vi) of paragraph 3 of the CARO 2016 is not applicable to the Company.
vii. According to the information and explanations given to us, in respect of statutory dues:
a. The Company has been generally regular in depositing undisputed statutory dues, including provident fund, employees'' state insurance, income tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues as applicable, with the appropriate authorities during the year. According to information and explanation given to us, no undisputed amounts payable in respect of such statutory dues were outstanding as at 31st March, 2018 for a period of more than six months from the date they become payable.
b. The disputed statutory dues of income tax, sales tax, entry tax, value added tax and service tax aggregating to Rs.17,078 Lakhs that have not been deposited on account of disputed matters pending before appropriate authorities are as under:
Name of the Statutes |
Nature of the Dues |
Period to which it relates |
Rs. in Lakhs (*) |
Forum where the dispute is pending |
The Central Sales Tax Act, |
Sales Tax / VAT / |
2008-09,2010-11to 2016-17 |
12,665 |
High Court |
1956 and Sales Tax Acts of various States |
Entry Tax |
2009-10 & 2010-11 |
7 |
Appellate Tribunal |
2009-10 |
1 |
Additional Commissioner (Appeal) |
||
2008-09 to 2014-15 |
38 |
Joint Commissioner (Appeal ) |
||
2010-11 |
43 |
Sr. Joint Commissioner (Appeal ) |
||
2011-12 & 2012-13 |
7 |
Sr. Joint Commissioner |
||
2007-08to 2010-11,2013-14 |
191 |
Deputy Commissioner (Appeal) |
||
2007-08 |
2 |
Deputy Commissioner |
||
2013-14 |
41 |
Assistant Commissioner (Appeals) |
||
2008-09 to 2017-18 |
336 |
Assessing Authority |
||
2006-07 |
3 |
Appellate Board |
||
The Finance Act, 1994 |
Service Tax |
2012-13 to 2016-17 |
3,374 |
Commissioner (Appeal) |
The Income Tax Act, 1961 |
Income Tax |
2011-12 |
370 |
Deputy Commissioner |
Total |
17,078 |
(*) Net of amount deposited under protest
Property Tax:
As detailed in Note No. 42 to the Ind AS Financial Statements, the Company has disputed various matters related to Property tax payable on its telecommunication towers in respect of which it is not possible to quantify the amount in dispute.
viii. As mentioned in Note no. 53 to the Ind AS Financial Statements, the rupee term loan lenders of the Company had invoked the Strategic Debt Restructuring (SDR) in accordance with the Reserve Bank of India (RBI) guidelines on September 20, 2016. In accordance with the terms of SDR, there were no financial defaults by the Company to its rupee term loan lenders as on March 31, 2018. Pursuant to RBI Circular dated February 12, 2018 SDR guidelines have been withdrawn and hence on technical ground some of the lenders have classified the Company''s rupee term loan borrowings as Non Performing Assets (NPA) as on March 31, 2018. Further, the âSeries Bâ FCCB Bonds also got exchanged with new Series of FCCBs and hence the Company did not default in respect of FCCBs as on March 31, 2018. In respect of foreign currency term loan from Deutsche Investitions-undEntwicklungsgesellschaft mbH (DEG), the Company has defaulted for Rs.2,668 lakhs (having Rs.378 lakhs for a period of less than 100 days and Rs.2,290 lakhs for a period more than 100 days) as on March 31, 2018.
ix. According to the information and explanations given to us, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, clause (ix) of paragraph 3 of the CARO 2016 is not applicable to the Company.
x. Based on our audit procedures performed for the purpose of reporting the true and fair view of the Ind AS financial statements and on the basis of information and explanations given by the management, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
xi. According to the information and explanations given to us and based on our examination of the records, the Company, in respect of remuneration of Rs.50 Lakhs paid to Whole Time Director which is in excess of the limit prescribed in the schedule V to the Act, the requisite approval sought by the Company from the Central Government as mandated by the provisions of section 197 read with schedule V of the Act, is awaited.
xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Therefore, clause (xii) of paragraph 3 of the CARO 2016 is not applicable to the 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 Ind AS financial statements as required by the applicable accounting standards.
xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. The Company has allotted equity shares to the rupee term loan lenders pursuant to the SDR, scheme of arrangement for the merger of CNIL with the Company and on conversion of FCCBs. Further new series of FCCBs have been issued to the existing FCCB holders in exchange of old FCCBs. Therefore, clause (xiv) of paragraph 3 of the CARO 2016 is not applicable to the Company.
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. Therefore, clause (xv) of paragraph 3 of the CARO 2016 is not applicable to the Company.
xvi. In our opinion and according to the information and explanations provided to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
For Chaturvedi & Shah For Yeolekar & Associates
Chartered Accountants Chartered Accountants
Firm Reg. No. 101720W Firm Reg. No. 102489W
R. Koria CA S. S. Yeolekar
Partner Partner
Membership No. 35629 Membership No. 036398
Place : Mumbai
Dated : May 08, 2018
Mar 31, 2017
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of GTL INFRASTRUCTURE LIMITED (âthe Companyâ), which comprise the Balance sheet as at March 31, 2017, 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 significant accounting policies and other explanatory information (hereinafter referred to as âthe Standalone Ind AS Financial Statementsâ).
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the Accounting Principles Generally Accepted in India, including Indian Accounting Standards (âInd ASâ) prescribed 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 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these standalone Ind AS 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 thereunder.
We conducted our audit of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companyâs directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Basis for Qualified Opinion
Attention is drawn to Note No. 40 to the Standalone Ind AS Financial Statements, the Honâble Supreme Court of India held that âMobile Telecommunication Towerâ is a building and State can levy property tax on the same. Pending Special Leave Petition before the Honâble Supreme Court in this regard, other petitions of the Company before other appropriate Courts, non-receipt of demand notices for property tax in respect of majority of the Telecommunication Towers and also due to companyâs right to recover such property tax amount from certain customers, the company is unable to quantify the amount of property tax to be borne by it and accordingly has not made any provision for the same.
We are unable to quantify the amount of the property tax, if any, to be accounted for and its consequential effects on the Standalone Ind AS Financial statements.
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 âBasis for Qualified Opinionâ paragraph above, the aforesaid standalone Ind AS 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 March 31, 2017, and its loss, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
We draw attention to the:
a. Note no. 4.1 regarding Companyâs Investment through Tower Trust in its associate company Chennai Network Infrastructure Limited (CNIL) amounting to Rs.181,572 Lakhs as at March 31, 2017. The associate has incurred cash losses and whose net worth has been eroded substantially. However, no provision for diminution in the value of investment has been considered necessary by the management for the reasons stated therein.
b. Note no. 29.1 regarding managerial remuneration paid to a whole time director which is in excess of the limits prescribed under the Act. The Company has applied to the Central Government for necessary approval which is awaited.
c. Note no. 41 regarding Scheme of Amalgamation (the scheme) between CNIL and the Company pending for the necessary modifications and approvals and preparation of standalone Ind AS financial statements without giving effect of this scheme and to give the effect as and when the scheme becomes effective.
d. Note no. 44 regarding preparation of the Standalone Ind AS Financial Statements of the Company on a going concern basis notwithstanding the fact that the Company has been incurring cash losses and its net worth has been fully eroded as on March 31, 2017. Standalone Ind AS Financial Statements have been prepared on going concern basis for the reasons stated in the said note. The appropriateness of assumption of going concern is critically dependent upon the Companyâs ability to raise requisite finance / generate cash flows in future to meet its obligations.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. 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 purposes of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone Ind AS financial statements comply with the Ind AS prescribed under Section 133 of the Act.
e. The going concern matter described in subparagraph (d) under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
f. On the basis of the written representations received from the directors as on March 31, 2017 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.
g. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ.
h. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 read with Notification no. G.S.R. 307 (E) dated 30th March 2017, 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 standalone Ind AS financial statements in Note Nos. 36, 38 and 39 to the standalone Ind AS financial statements except in respect of property tax as detailed in Note No. 40 to the standalone Ind AS financial statements where the amount is not quantifiable and which is also a matter of qualified opinion in this report;
ii. The Company has made provisions, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long term contracts including derivative contracts;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. The Company has provided the requisite disclosures in the standalone Ind AS financial statements as regards to its holdings and dealings in Specified Bank Notes as defined in the Notification S.O 3407(E) dated November 08, 2016 of the Ministry of Finance, during the period from November 08, 2016 to December 30, 2016 and based on audit procedure performed and the representation provided by the Management we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the management (refer to Note No 10.1 of Standalone Ind AS Financial Statements).
2. As required by the Companies (Auditorâs Report) Order, 2016 (âCARO 2016â) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of CARO 2016.
ANNEXURE - B TO INDEPENDENT AUDITORSâ REPORT
(Referred to in paragraph 2 under the heading âReport on Other Legal and Regulatory Requirementsâ of our report of even date to the members of GTL INFRASTRUCTURE LIMITED on the standalone Ind AS financial statements for the year ended March 31, 2017)
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipments on the basis of available information.
b. As explained to us, the Company has physically verified certain assets, in accordance with a phased program of verification, which in our opinion is reasonable, having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification as compared with the available records.
c. According to the information and explanations given to us, the title deeds of immovable properties are held in the name of the Company except in respect of one of the immovable properties as detailed below:
(Rs. in Lakhs)
Sr. No. |
Particulars of the Building
|
Leasehold/ Freehold |
Net Book Value |
Remarks |
Building at Wanawadi, Pune (Pledged with the Bank) |
Freehold |
572 |
The title deed is in the name of Global Electronic Commerce services Limited, which was merged with GTL Limited (the seller) |
|
1 |
||||
|
|
|
Further, as informed to us, in respect of 8 immovable properties having the Net Book Value of Rs.3,584 Lakhs (Including 7 immovable properties having Net Book Value of Rs.3,582 Lakhs in respect of which the original title deeds have been deposited with the lenders as security) have been verified based on the photocopies of the documents for those immovable properties and based on such documents, the title deeds are held in the name of the Company.
ii. As explained to us, inventories have been physically verified during the year by the management and in our opinion the frequency of verification is reasonable. Discrepancies noticed on physical verification of the inventories between the physical inventories and book records were not material, having regard to the size of the operations of the Company and the same have been properly dealt with.
iii. In respect of loans, secured or unsecured, granted by the Company to companies, firms, Limited liability partnerships or other parties covered in the register maintained under section 189 of the Act:
a. The Company has given advances in the nature of loan to one such party, and in our opinion and according to the information given to us, the rate of interest and other terms and conditions on which the loan has been granted to the body corporate listed in the register maintained under section 189 of the Act were not, prima facie, prejudicial to the interest of the Company.
b. The schedule of repayment of principal and payment of interest has been stipulated and repayments of principal amounts and /or receipts of interest have been regular as per the stipulations.
c. There are no overdue amounts as at the year-end in respect of both principal and interest.
iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, in respect of grant of loans, making investments and providing guarantees and securities.
v. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the provision of sections 73 to 76 of the Act and the Rules framed thereunder. Therefore, the provisions of paragraph 3 (v) of the CARO 2016 are not applicable to the Company.
vi. According to the information and explanations given to us, the Central Government has not prescribed the cost records to be maintained under sub-Section (1) of Section 148 of the Act in respect of business activities carried on by the Company. Therefore the provisions of paragraph 3(vi) of the CARO 2016 are not applicable to the Company.
vii. According to the information and explanations given to us in respect of statutory dues:
a. The Company has been generally regular in depositing undisputed statutory dues, including provident fund, employeesâ state insurance, income tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues as applicable, with the appropriate authorities during the year. According to information and explanation given to us, no undisputed amounts payable in respect of such statutory dues were outstanding as at March 31, 2017 for a period of more than six months from the date they become payable.
b. The disputed statutory dues of sales tax, Entry Tax and Value Added Tax aggregating to Rs.1,159 Lakhs that have not been deposited on account of disputed matters pending before appropriate authorities are as under:
Name of the Statutes |
Nature of the Dues |
Period to which it relates |
Rs. in Lakhs(*) |
Forum where the dispute is pending |
Central Sales Tax Act, 1956 and Sales Tax Acts of various States |
Sales Tax / VAT / Entry Tax |
2008-09 |
91 |
High Court |
2009-10 and 2010-11 |
7 |
Appellate Tribunal |
||
2008-09 and 2009-10 |
188 |
Commissioner (Appeal) |
||
2007-08, 2008-09, and 2009-10 |
139 |
Additional Commissioner (Appeal ) |
||
2008-09, 2009-10, 201011, 2013-14 and 2014-15 |
9 |
Joint Commissioner (Appeal ) |
||
2010-11 to 2011-12 |
46 |
Sr. Joint Commissioner (Appeal ) |
||
2007-08 to 2010-11 |
676 |
Deputy Commissioner (Appeal) |
||
2006-07 |
3 |
Assistant Commissioner |
||
Total |
1,159 |
(*) Net of amount deposited under protest
viii. Based on our audit procedures and information and explanations given by the management, and considering the Corporate Debt Restructuring (CDR) scheme and other restructuring schemes with foreign lender and FCCB holders, we are of the opinion that as on March 31, 2017 the Company has defaulted in repayment of loans to banks and financial institutions aggregating to Rs.33,156 Lakhs. Lender wise details of such default are as under:
(Rs. in Lakhs)
Sr. No. |
Bank / Financial Institution |
Amount of default as at the balance sheet date |
|
Below 100 days |
Above 100 days |
||
1 |
Indian Overseas Bank |
3,613 |
2,674 |
2 |
Punjab National Bank |
933 |
485 |
3 |
Corporation Bank |
456 |
315 |
4 |
Union Bank of India |
2,704 |
1,842 |
5 |
Bank of Baroda |
2,002 |
1,168 |
6 |
Oriental Bank of Commerce |
389 |
258 |
7 |
Andhra Bank |
1,273 |
726 |
8 |
Bank of India |
1,755 |
950 |
9 |
Central Bank of India |
1,370 |
831 |
10 |
Canara Bank |
447 |
330 |
11 |
IDBI Bank |
194 |
140 |
12 |
Vijaya Bank |
196 |
139 |
13 |
LIC of India |
491 |
292 |
14 |
State Bank of Bikaner and Jaipur |
98 |
65 |
15 |
Indian Bank |
663 |
355 |
16 |
State Bank of India |
1,242 |
693 |
17 |
State Bank of Patiala |
196 |
114 |
18 |
State Bank of Travancore |
196 |
109 |
19 |
United Bank of India |
900 |
535 |
20 |
Dena Bank |
321 |
160 |
21 |
Axis Bank |
263 |
120 |
22 |
Deutsche Investitions-undEntwicklunasaesellschaft mbH (DEG) |
261 |
892 |
Total |
19,963 |
13,193 |
ix. According to the information and explanations given to us, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, provisions of paragraph 3 (ix) of the CARO 2016 are not applicable to the Company.
x. Based on our audit procedures performed for the purpose of reporting the true and fair view of the standalone Ind AS financial statements and on the basis of information and explanations given by the management, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
xi. According to the information and explanations given to us and based on our examination of the records the Company, in respect of remuneration of Rs.50 Lakhs paid to a Whole Time Director, the requisite approval sought by the Company from the Central Government as mandated by the provisions of section 197 read with Schedule V of the Act, is awaited.
xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Therefore, the provisions of paragraph 3 (xii) of the CARO 2016 are not applicable to the 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 standalone Ind AS financial statements etc. as required by the applicable accounting standards.
xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Therefore, the provisions of paragraph 3 (xiv) of the CARO 2016 are not applicable to the Company.
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. Therefore, the provisions of paragraph 3 (xv) of the CARO 2016 are not applicable to the Company.
xvi. In our opinion and according to information and explanations provided to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
For Chaturvedi & Shah For Yeolekar & Associates
Chartered Accountants Chartered Accountants
Firm Reg. No. 101720W Firm Reg. No. 102489W
R. Koria CA S. S. Yeolekar
Partner Partner
Membership No. 35629 Membership No. 036398
Place: Mumbai
Dated: April 27, 2017
Mar 31, 2015
We have audited the accompanying standalone financial statements of GTL
INFRASTRUCTURE LIMITED ("the Company"), which comprise the Balance
sheet as at 31st March, 2015, the Statement of Profit and Loss and Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the Standalone 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 standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the Accounting Principles
Generally Accepted in India (Indian GAAPs), including 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 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.
Auditors' 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
thereunder.
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 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 control system over financial
reporting and the operating effectiveness of such controls. An audit
also includes evaluating the appropriateness of accounting policies
used and the reasonableness of the accounting estimates made by the
management, 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 audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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 loss and its cash flows for the year ended
on that date.
Emphasis of Matter
We draw attention to the:
a. Note no. 29 regarding outstanding trade receivables and other
current assets, which are subject to confirmation but considered good
for the reasons mentioned therein.
b. Note no. 30 regarding Scheme of Arrangement under section 391 to
394 of the Companies Act, 1956 pending for the necessary modifications
and approvals and preparation of financial statements without giving
any effect of this scheme and to give the effect as and when the scheme
becomes effective.
c. Note no. 31 regarding preparation of the financial statements of the
Company on a going concern basis notwithstanding the fact that the
Company has been incurring cash losses and its net worth has been
substantially eroded as on the Balance Sheet date. These financial
statements have been prepared on a going concern basis for the reasons
stated in the said note. The appropriateness of assumption of going
concern is critically dependent upon the Company's ability to raise
requisite finance/generate cash flows in future to meet its obligations.
d. Note no. 22.1 regarding Managerial Remuneration, which is subject
to the approval of Central Government.
Our opinion is not modified in respect of these matters.
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
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2. 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
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, 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.
(e) The going concern matter described in subparagraph (c) under the
Emphasis of Matter paragraph above, in our opinion, may have an adverse
effect on the functioning of the Company.
(f) On the basis of the 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 March 31,2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(g) With respect to the other matters to be included in the Auditor's
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 on its
financial position in its financial statements as referred to in Note
No. 26 and 27 to the standalone financial statements.
ii. The Company does not have any longterm contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
ANNEXURE TO INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under the heading "Report on Other Legal
and Regulatory Requirements" of our report of even date to the members
of GTL Infrastructure Limited on the accounts for the year ended 31st
March, 2015)
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b. As explained to us, the Company has physically verified certain
assets, in accordance with a phased program of verification, which in
our opinion is reasonable, having regard to the size of the Company and
the nature of its business. No material discrepancies were noticed on
such physical verification as compared with the available records.
ii. In respect of its inventories:
a. As explained to us, inventories have been physically verified
during the year by the management. In our opinion the frequency of
verification is reasonable.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. According to the information and explanations given to us and on
the basis of our examination of inventory records, we are of the
opinion that the Company is maintaining proper records of inventory.
Discrepancies noticed on physical verification of the inventories
between the physical inventories and book records were not material,
having regard to the size of the operations of the Company, and the
same have been properly dealt with.
iii. In respect of loans, secured or unsecured, granted by the Company
to companies, firms or other parties covered in the register maintained
under section 189 of the Act:
a. The Company has given advances in the nature of loan to one such
party, and as per the information and explanations given to us, the
above advances along with the interest are not due for repayment.
b. As the loan is repayable on demand, the question of overdue amount
does not arise.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
v. According to the information and explanations given to us, the
Company has not accepted any deposits from the public. Therefore, the
provisions of Clause (v) of paragraph 3 of the Order are not applicable
to the Company.
vi. According to the information and explanations given to us, the
Central Government has not prescribed the cost records to be maintained
under sub-Section (1) of Section 148 of the Act in respect of
activities carried on by the Company. Therefore the provisions of
Clause (vi) of paragraph 3 of the Order are not applicable to the
Company.
vii. According to the information and explanations given to us in
respect of statutory dues:
a. The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employees' State Insurance,
Income tax, Sales tax, Wealth tax, Service tax, Duty of Customs, Duty
of Excise, Value Added Tax, Cess and any other statutory dues with the
appropriate authorities during the year. According to the information
and explanations given to us, no undisputed amounts payable in respect
of such statutory dues were outstanding as at 31st March, 2015 for a
period of more than six months from the date they became payable except
in case of Gram Panchayat and Municipal Corporation dues of Rs.
30,607,185 and Rs. 2,734,926 respectively.
b. The disputed statutory dues of Income tax, Sales tax, Wealth tax,
Service tax, Duty of Customs, Duty of Excise, Value added tax and Cess
aggregating to Rs. 101,399,353 that have not been deposited on account
of Disputed matters pending before appropriate authorities are as under:
Name of the Nature of the Period to which the Amount
Statute Dues amount relates (in Rs.)
Central Sales Sales Tax/ 2008-09 9,128,394
Tax Act, 1956 Trade Tax/VAT 2006-07, 2009-10 981,928
and Sales Tax and Entry Tax & 2010-11
Acts of various 2009-10 77,979
states
2007-08 to 2011-12 81,505,729
2007- 08 & 2009-10 2,733,283
2008- 09 to 2010-11 2,366,759
and 2013-14 &
2014-15
2010-11 to 2010-11 4,605,281
Total 101,399,353
Name of the Forum where dispute is pending
Statute
Central Sales High Court
Tax Act, 1956 Sales Tax Tribunal
and Sales Tax
Acts of various Commissioner (Appeals)
states
Deputy Commissioner (Appeals)
Additional Commissioner (Appeals)
Joint Commissioner (Appeal)
Sr. Joint Commissioner Sales Tax
(*) Net of amount deposited under protest
c. There is no delay in transferring amounts, required to be
transferred, to Investor Education and protection fund in accordance
with the relevant provision of the Companies Act, 1956 and rule made
there-under.
viii. The Company has accumulated losses at the end of the financial
year which are more than fifty percent of its net worth. The Company
has incurred cash losses during the financial year covered by the audit
and in the immediately preceding financial year.
ix. Based on our audit procedures and information and explanations
given by the management, and considering the Corporate Debt
Restructuring (CDR) scheme and other restructuring schemes with foreign
lender and FCCB holders, we are of the opinion that as on 31st March,
2015 the Company has not defaulted in repayment of dues to financial
institutions and banks, except in the repayment of the principal amount
of secured rupee term loan of Rs. 146,649,026 where the period of
default was less than 30 days and interest thereon of Rs. 31,807,844
where the period of default was more than 60 days .
x. The Company has given corporate guarantees aggregating to Rs.
8,310,000,000 for loan taken by Chennai Network Infrastructure Limited
(CNIL), an Associate / erstwhile subsidiary of the Company, from banks
and financial institutions as at 31st March, 2015. CNIL is in the
process of the amalgamation with the Company as mentioned in Note No.
30 to the standalone financial statements. The management is of the
opinion that since these guarantees were given when CNIL was the
subsidiary of the Company and CNIL is getting merged with the Company,
the terms and conditions of the Corporate Guarantee are not prejudicial
to the interest of the Company. We are, however, unable to comment on
the same.
xi. The Company has not raised any new term loans during the year
under audit. To the best of our knowledge and according to the
information and explanations given to us the term loans outstanding at
the beginning of the year have been applied for the purposes for which
they were raised.
xii. In our opinion and according to the information and explanations
given to us, no fraud by the Company and no material fraud on the
Company has been noticed or reported during the year.
For Chaturvedi & Shah For Yeolekar & Associates
Chartered Accountants Chartered Accountants
Firm Reg. No. - 101720W Firm Reg. No. - 102489W
R. Koria S. S. Yeolekar
Partner Partner
Membership No. - 35629 Membership No. - 36398
Place: Mumbai
Date: 6th May, 2015
Mar 31, 2014
We have audited the accompanying financial statements of GTL
INFRASTRUCTURE LIMITED ("the Company"), which comprises Balance
sheet as at March 31, 2014, the Statement of Profit and Loss and 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
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Principles Generally Accepted in India (Indian GAAPs),
including Accounting Standards referred to in sub-section (3C) of
section 211 of the Companies Act, 1956 ("the Act") read with the
General Circular 15/2013 dated 13th September 2013 of the Ministry of
corporate affairs in respect of section 133 of the Companies Act, 2013.
This responsibility includes the design, implementation and maintenance
of internal control 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.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. 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 control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by management, 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 audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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: -
i. in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2014;
ii. in the case of the Statement of Profit and Loss, of the loss of the
Company for the year ended on that date; and
iii. in the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date.
Emphasis of Matter We draw attention to the:
a. Note No. 34 regarding Scheme of Arrangement under section 391 to 394
of the Act pending for the necessary modifications and approvals and
preparation of financial statements without giving any effect of this
scheme and to give the effect as and when the scheme becomes effective.
b. Note No. 35 regarding preparation of the financial statements of the
Company on a going concern basis notwithstanding the fact that the
Company has been incurring cash losses and its net worth has been
substantially eroded as on the Balance Sheet date. These financial
statements have been prepared on a going concern basis for the reasons
stated in the said note. The appropriateness of assumption of going
concern is critically dependent upon the Company''s ability to raise
requisite finance/generate cash flows in future to meet its
obligations.
c. Note No. 12.1 regarding capital advance given to certain vendors, in
respect of which the Company is negotiating with them for the recovery
of these advances. The management is confident of recovering
substantial amount out of these advances and the provision for doubtful
advances aggregating to Rs.600,000,000 against same has been considered
sufficient by them.
d. Note No. 11.3 regarding the book value of non-current investments
being lower than their carrying value and non provision for diminution
in value of these investments for the reasons mentioned therein.
e. Note No. 33 regarding outstanding trade receivables and other
current assets, which are subject to confirmation but considered good
for the reasons mentioned therein.
Our opinion is not qualified in respect of these matters
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required under provisions of section 227(3) of the Act, we report
that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account
d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Act read with the General Circular 15/2013 dated 13th September
2013 of the Ministry of corporate affairs in respect of section 133 of
the Companies Act, 2013.
e. On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub- section (1) of
section 274 of the Act.
Annexure to Auditors'' Report
(Referred to in paragraph 1 under the heading "Report on Other Legal
and Regulatory Requirements" of our report of even date to the
members of GTL Infrastructure Limited on the accounts for the year
ended 31st March, 2014)
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets on the
basis of available information.
b. As explained to us, the Company has physically verified certain
assets, in accordance with a phased program of verification, which in
our opinion is reasonable, having regard to the size of the Company. No
material discrepancies were noticed on such physical verification.
c. In our opinion, the Company has not disposed off substantial part of
fixed assets during the year which has an impact on the going concern
status of the Company.
ii. In respect of its inventories:
a. As explained to us, inventories have been physically verified by the
management at reasonable intervals.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. According to the information and explanations given to us and on the
basis of our examination of inventory records, we are of the opinion
that the Company is maintaining proper records of inventory. As
explained to us, discrepancies noticed on physical verification of the
inventories between the physical inventories and book records were not
material, having regard to the size of the operations of the Company,
and the same have been properly dealt with.
iii. In respect of loans, secured or unsecured, granted or taken by the
Company to/from companies, firms or other parties covered in the
register maintained under section 301 of the Act:
a. The Company has given advances in the nature of loan to a party in
respect of which maximum amount involved during the year was Rs.
3,391,395,602 and the year-end balance was Rs. 2,265,493,079.
b. In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions are
not prima facie prejudicial to the interest of the Company.
c. As per the information and explanations given to us, the above
advances are repayable on demand.
d. As the loans are repayable on demand, the question of overdue
amounts does not arise.
e. The Company has not taken loans from any such parties hence
provisions of sub clause (e) to (g) are not applicable to the Company
for the year under audit.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and also for the sale of services.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control system.
v. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
a. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements, that need to be entered in the register maintained under
section 301 of the Companies Act, 1956 have been so entered.
b. Based on information and explanation given to us, in our opinion,
the transactions made in pursuance of the contracts or arrangements,
entered in the register maintained under section 301 of the Companies
Act, 1956, and aggregating during the year to Rs. 5 lacs or more in
respect of each party, have been made at prices, which are reasonable.
The Company has not entered into transactions of similar nature with
any other party.
vi. According to the information and explanations given to us, the
Company has not accepted any deposits from the public and hence
directives issued by the Reserve Bank of India and the provisions of
sections 58A and 58AA of the Act and the rules framed there under are
not applicable for the year under audit.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii. We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Government of India under section 209(1) (d) of the
Act and are of the opinion that prima facie the prescribed records have
been maintained. We have, however, not made a detailed examination of
the cost records with a view to determine whether they are accurate or
complete.
ix. According to the information and explanations given to us in
respect of statutory dues:
a. The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employees'' State Insurance,
Income tax, Sales tax, Wealth tax, Service tax, Customs Duty, Excise
Duty, Cess and any other statutory dues with the appropriate
authorities during the year. According to the information and
explanations given to us, no undisputed amounts payable in respect of
such statutory dues were outstanding as at March 31,2014 for a period
of more than six months from the date they became payable except for
Gram Panchayat and Municipal Taxes aggregating to Rs. 35,025,705.
b. The disputed statutory dues aggregating to Rs. 1,455,004,166 that have
not been deposited on account of disputed matters pending before
appropriate authorities are as under:
Name of the Nature of the Period to which the amount
Amount
Statute Dues relates (in Rs.)
(*)
Central Sales
Tax Sales Tax/Trade 2008-09 9,128,394
Act, 1956 and Tax/VAT and Entry
Sales Tax Acts
of Tax 2006-07, 2009-10 & 2010-11 981,928
various states
2009-10 12,229,970
2007-08 to 2010-11 11,284,961
2007- 08 & 2009-10 2,733,283
2008- 09 to 2010-11 2,170,358
2009- 10 to 2010-11 14,355,055
Central Excise Service Tax 2006-07 to 2011-12 1,402,120,217
Act,1944
Total 1,455,004,166
Name of the
Statute Forum where dispute is
pending
Central Sales Tax
Act, 1956 and
Sales Tax Acts of
various states High Court
Sales Tax Tribunal
Appellate Commissioner,
Sales Tax (Appeal )
Deputy Commissioner
(Appeals)
Additional Commissioner
(Appeals)
Joint Commissioner (Appeal)
Sr. Joint Commissioner Sales
Tax
Central Excise
Act,1944 Commissioner (Appeals)
Service Tax
Total
(*) Net of amount deposited under protest as mentioned in Note No. 30
to the financial statements.
x. The Company has accumulated losses at the end of the financial year,
which is more than fifty percent of its net worth. The Company has
incurred cash losses during the year covered by the audit and in the
immediately preceding financial year.
xi. Based on our audit procedures, information and explanations given
by the management, and considering the Corporate Debt Restructuring
(CDR) scheme and other restructuring schemes with foreign lender and
FCCB holders, we are of the opinion that the Company has not defaulted
in repayment of dues to financial institutions, banks or bond holders
except for overdue amount of interest aggregating to Rs. 653,625,908 due
to banks and financial institutions.
xii. In our opinion and according to the explanations given to us and
based on the information available, no loans and advances have been
granted by the Company on the basis of security by way of pledge of
shares, debentures and other securities.
xiii. In our opinion, the Company is not a chit fund or a nidhi/ mutual
benefit fund/society. Therefore the provisions of clause 4 (xiii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company.
xiv. In our opinion and according to the information and explanations
given to us, the Company is not a dealer or trader in shares,
securities, debentures & other investments. The Company has maintained
proper records of transactions and contracts in respect of investments
in shares and Mutual funds and timely entries have been made therein.
All the investments in shares and mutual funds have been held by the
Company in its own name.
xv. The Company has given corporate guarantee aggregating to Rs.
8,310,000,000 for loans taken by Chennai Network Infrastructure Limited
(CNIL), an Associate/erstwhile subsidiary of the Company, from banks
and financial institutions as at 31st March, 2014. CNIL is in the
process of the amalgamation with the Company as mentioned in Note No.
34 to the financial statements. The management is of the opinion that
since these guarantees were given when CNIL was the subsidiary of the
Company and CNIL is getting merged with the Company, the terms and
conditions of the Corporate Guarantee are not prejudicial to the
interest of the Company. We are, however, unable to comment on the
same.
xvi. The Company has not raised any new term loans during the year
under audit. To the best of our knowledge and according to the
information and explanations given to us the term loans outstanding at
the beginning of the year have been applied for the purposes for which
they were raised.
xvii. On the basis of review of utilization of funds, which is based on
overall examination of the Balance Sheet of the Company as at March
31,2014, related information as made available to us and as represented
to us, by the management, we are of the opinion, that funds raised on
short term basis have not prima facie been utilized for long term
purposes.
xviii. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Companies Act, 1956.
xix. During the year, the Company has not issued any debenture and
hence clause 4 (xix) of the Companies (Auditor''s Report) Order, 2003 is
not applicable to the Company.
xx. During the year covered by our report the Company has not raised
any money by public issue.
xxi. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the course of our audit.
For Chaturvedi & Shah For Yeolekar & Associates
Chartered Accountants Chartered Accountants
Firm Reg. No. - 101720W Firm Reg. No. - 102489W
R. KORIA S. S. YEOLEKAR
Partner Partner
Membership No. - 35629 Membership No. - 36398
Place: Mumbai
Date : May 21,2014
Mar 31, 2013
Report on the Financial statement
We have audited the accompanying financial statements of GTL
INFRASTRUCTURE LIMITED ("the CompanyÂ)'' which comprises Balance Sheet
as at March 31'' 2013'' the Statement of Profit and Loss and Cash Flow
Statement for the year then ended'' and a summary of significant
accounting policies and other explanatory information.
ManagementÂs Responsibility for the Financial statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position''
financial performance and cash flows of the Company in accordance with
the Accounting Principles Generally Accepted in India (Indian GAAPs)''
including Accounting Standards referred to in sub-section (3C) of
section 211 of the Companies Act'' 1956 ("the ActÂ). This responsibility
includes the design'' implementation and maintenance of internal control
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.
Auditors Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on
Auditing issued by the Institute of Chartered Accountants of India.
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 auditorÂs 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 control relevant to the CompanyÂs preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management'' 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 audit opinion. opinion
In our opinion and to the best of our information and according to the
explanations given to us'' the 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: -
i. in the case of the Balance Sheet'' of the state of affairs of the
Company as at March 31'' 2013;
ii. in the case of the Statement of Profit and Loss'' of the loss of
the Company for the year ended on that date; and
iii. in the case of the Cash Flow Statement'' of the Cash Flows for the
year ended on that date.
emphasis of Matter
We draw attention to Note No.30 regarding Scheme of Arrangement under
section 391 to 394 of the Act pending for the necessary modifications
and approvals and preparation of account without giving any effect of
this scheme and to give the effect as and when the scheme becomes
effective. Our opinion is not qualified in respect of this matter.
Report on other legal and Regulatory Requirements
1. As required by the Companies (AuditorÂs Report) Order'' 2003 ("the
OrderÂ) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act'' we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required under provisions of section 227(3) of the Act'' we
report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. the Balance Sheet'' Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account
d. in our opinion'' the Balance Sheet'' Statement of Profit and Loss''
and Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of section 211 of the Act.
e. On the basis of written representations received from the directors
as on March 31'' 2013'' and taken on record by the Board of Directors''
none of the directors is disqualified as on March 31'' 2013'' from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
Annexure to Auditors Report
(Referred to in paragraph 1 under the heading "Report on Other Legal
and Regulatory Requirements of our report of even date)
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars''
including quantitative details and situation of fixed assets on the
basis of available information.
b. As explained to us'' the Company has physically verified certain
assets'' in accordance with a phased program of verification'' which in
our opinion is reasonable'' having regard to the size of the Company. No
material discrepancies were noticed on such physical verification.
c. In our opinion'' the Company has not disposed off substantial part
of fixed assets during the year and the going concern status of the
Company is not affected.
ii. In respect of its inventories:
a. As explained to us'' inventories have been physically verified by
the management at reasonable intervals.
b. In our opinion and according to the information and explanations
given to us'' the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. According to the information and explanations given to us and on
the basis of our examination of inventory records'' we are of the
opinion that the Company is maintaining proper records of inventory. As
explained to us'' there were no material discrepancies noticed on
physical verification of inventories as compared to the book records.
iii. According to the information and explanations given to us'' the
Company has not granted or taken loans'' secured or unsecured'' to or
from companies'' firms or other parties covered in the register
maintained under section 301 of the Act. Accordingly'' clause (iii) of
Paragraph 4 of the Companies (Auditors Report) Order 2003 is not
applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us'' there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory'' fixed assets and also for the sale of services.
During the course of our audit'' we have not observed any continuing
failure to correct major weaknesses in internal control system.
v. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act'' 1956:
a. In our opinion and according to the information and explanations
given to us'' the transactions made in pursuance of contracts or
arrangements'' that need to be entered in the register maintained under
section 301 of the Companies Act'' 1956 have been so entered.
b. Based on information and explanation given to us'' in our opinion''
the transactions made in pursuance of the contracts or arrangements''
entered in the register maintained under section 301 of the Companies
Act'' 1956'' and aggregating during the year to Rs. 5 lacs or more in
respect of each party'' have been made at prices'' which are reasonable.
The Company has not entered into transactions of similar nature with
any other party.
vi. According to the information and explanations given to us'' the
Company has not accepted any deposits from the public and hence
directives issued by the Reserve Bank of India and the provisions of
sections 58A and 58AA of the Act and the rules framed there under are
not applicable for the year under audit.
vii. In our opinion'' the Company has an internal audit system
commensurate with the size and nature of its business.
viii. We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules'' 2011
prescribed by the Government of India under section 209 (1) (d) of the
Act and are of the opinion that prima facie the prescribed records have
been maintained. We have'' however'' not made a detailed examination of
the cost records with a view to determine whether they are accurate or
complete.
ix. According to the information and explanations given to us in
respect of statutory dues:
a. The Company has generally been regular in depositing undisputed
statutory dues'' including Provident Fund'' Employees State Insurance''
Income tax'' Sales tax'' Wealth tax'' Service tax'' Customs Duty'' Excise
Duty'' Cess and any other statutory dues with the appropriate
authorities during the year. According to the information and
explanations given to us'' no undisputed amounts payable in respect of
such statutory dues were outstanding as at March 31'' 2013 for a period
of more than six months from the date they became payable except for
Gram Panchayat and Municipal Taxes aggregating to Rs. 22''963''394.
b. The disputed statutory dues aggregating to Rs. 59''417''478 that have
not been deposited on account of disputed matters pending before
appropriate authorities are as under:
Name of the
statute Nature of the
Dues period to
which the Amount Forum where dispute
is pending
amount
relates (in Rs.)
(*)
Central Sales
Tax Act'' 1956
and Sales Tax/
Trade Tax/ 2007-08
to
2010-11 50''759''937 Deputy
Commissioner
(Appeals)
Sales Tax
Acts of
various
states VAT and
Entry Tax 2007-08 &
2009-10 2''733''283 Additional
Commissioner
(Appeals)
2008-09
to
2010-11 4''942''330 Joint
Commissioner
(Appeal)
2006-07 ''
2009-10 & 981''928 Sales Tax
Tribunal
2010-11
total 59''417''478
(*) Net of amount deposited under protest as mentioned in Note No. 25
to the financial statements.
x. The Company has accumulated losses at the end of the financial year''
which is less than fifty percent of its net worth. The Company has
incurred cash losses during the year covered by the audit and in the
immediately preceding financial year.
xi. Based on our audit procedures'' information and explanations given
by the management'' and considering the Corporate Debt Restructuring
(CDR) scheme and other restructuring schemes with foreign lender and
FCCB holders'' we are of the opinion that the Company has not defaulted
in repayment of dues to financial institutions'' banks or bond holders.
xii. In our opinion and according to the explanations given to us and
based on the information available'' no loans and advances have been
granted by the Company on the basis of security by way of pledge of
shares'' debentures and other securities.
xiii. In our opinion'' the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore the provisions of clause 4 (xiii) of
the Companies (AuditorÂs Report) Order'' 2003 are not applicable to the
Company.
xiv. In our opinion and according to the information and explanations
given to us'' the Company is not a dealer or trader in shares''
securities'' debentures & other investments. The Company has maintained
proper records of transactions and contracts in respect of investments
in shares and Mutual funds and timely entries have been made therein.
All the investment in shares and mutual funds have been held by the
Company in its own name.
xv. The Company has given corporate guarantee aggregating to Rs.
10''810''000''000 for loans taken by Chennai Network Infrastructure
Limited (CNIL)'' the erstwhile subsidiary of the Company'' from banks and
financial institutions as at 31st March'' 2013. CNIL is in the process
of the amalgamation with the Company as mentioned in Note no.30 to the
financial statements. The management is of the opinion that since these
guarantees were given when CNIL was the subsidiary of the Company and
CNIL is getting merged with the Company'' the terms and conditions of
the Corporate Guarantee are not prejudicial to the interest of the
Company. We are'' however'' unable to comment on the same.
xvi. To the best of our knowledge and according to the information and
explanations given to us the term loans outstanding at the beginning of
the year and those raised during the year have been applied for the
purposes for which they were raised.
xvii. On the basis of review of utilization of funds'' which is based on
overall examination of the Balance Sheet of the Company as at March 31''
2013'' related information as made available to us and as represented to
us'' by the management'' we are of the opinion'' that funds raised on
short term basis have not prima facie been utilized for long term
purposes.
xviii. During the year'' the Company has made preferential allotment of
71''329''113 equity shares of Rs. 10/- each on conversion of 9''016''000
Compulsorily Convertible Debentures (CCDs) to a Company covered in the
Register maintained under Section 301 of the Act. According to the
information & explanation given to us these shares are issued in terms
of Corporate Debt Restructuring Scheme and in accordance with
Securities and Exchange Board of India (Issue Of Capital and Disclosure
Requirements) Regulations'' 2009 and accordingly'' the prices at which
these shares are issued are not prima facie prejudicial to the interest
of the Company.
xix. The Company had created security in respect of 110''162''087
Compulsorily Convertible Debentures (CCDs) issued during the year.
Subsequently these CCDs got converted in to Equity Shares of the
Company and as on March 31'' 2013 no CCDs were outstanding.
xx. During the year covered by our report the Company has not raised
any money by public issue.
xxi. To the best of our knowledge and belief and according to the
information and explanations given to us'' no fraud on or by the Company
was noticed or reported during the course of our audit.
For chaturvedi & shah For yeolekar & Associates
Chartered Accountants Chartered Accountants
Firm Reg. No. - 101720W Firm Reg. No. - 102489W
R. Koria s. s. yeolekar
Partner Partner
Membership No. Â 35629 Membership No. Â 36398
Mumbai Date: 9th May 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of GTL INFRASTRUCTURE
LIMITED, as at March 31, 2012 and also the Statement of Profit and Loss
and Cash Flow Statement of the Company for the year ended on that date
annexed thereto. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with Auditing Standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of Sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure, a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Without qualifying our opinion we draw your attention to the
i. Note No. 27 regarding Scheme of Arrangement under Section 391 to 394
of the Companies Act, 1956 pending for the necessary approvals and
preparation of accounts without giving any effects of this scheme and
to give the effects as and when the scheme will be effective.
ii. Note No. 4.3 regarding the accounting treatment of redemption
premium on Foreign Currency Convertible Bonds (FCCB).
5. Further to our comments in Annexure referred to in para 3 above, we
report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b) In our opinion, proper books of account, as required by law, have
been kept by the Company, so far as appears from our examination of
such books;
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) In our opinion the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the mandatory
Accounting Standards referred to in Sub-section (3C) of Section 211 of
the Companies Act, 1956;
e) On the basis of the written representations received from the
directors as on March 31, 2012 and taken on records by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2012, from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
significant accounting policies and notes thereon, give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
(ii) in the case of Statement of Profit and Loss, of the Loss of the
Company for the year ended on that date; and (iii) in the case of Cash
Flow Statement, of the cash flows for the year ended on that date.
Annexure to the Auditors' Report (Referred to in Paragraph 3 of our
Report of even date)
As required by the Companies (Auditor's Report) Order, 2003 issued by
Central Government of India in terms of Section 227 (4A) of the
Companies Act 1956, and on the basis of such checks as we considered
appropriate, we further report that;-
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets on the
basis of available information.
b. As explained to us, the Company has physically verified certain
assets, in accordance with a phased program of verification, which in
our opinion is reasonable, having regard to the size of the Company.
The discrepancies noticed at the time of such verification were
properly dealt with in the books of accounts.
c. During the year, the Company has disposed off certain Fixed Assets.
However, it has no effect on the going concern status of the Company.
ii. In respect of its inventories:
a. As explained to us, inventories have been physically verified by
the management at reasonable intervals.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. According to the information and explanations given to us and on
the basis of our examination of inventory records, we are of the
opinion that the Company is maintaining proper records of inventory. As
explained to us, there were no material discrepancies noticed on
physical verification of inventories as compared to the book records.
iii. According to the information and explanations given to us, the
Company has not granted or taken any loans, secured or unsecured to or
from companies, firms or parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly, clause (iii)
of Paragraph 4 of the Companies
(Auditors' Report) Order 2003, is not applicable to the Company. iv.
In our opinion and according to the information and explanations given
to us, there is an adequate internal control system commensurate with
the size of the Company and the nature of its business for the purchase
of inventory, fixed assets and also for the sale of services. During
the course of our audit, we have not observed any continuing failure to
correct major weaknesses in internal control system.
v. According to the information and explanations given to us, there is
no contract or arrangement referred to in section 301 of the Companies
Act, 1956 that need to be entered in the register required to be
maintained under that section.
vi. According to the information and explanations given to us, the
Company has not accepted any deposits from the public and hence
directives issued by the Reserve Bank of India and the provisions of
sections 58A and 58AA of the Companies Act, 1956 and the rules framed
there under are not applicable for the year under audit.
vii. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii. The Central Government has not prescribed maintenance of cost
records, for the year, under section 209 (1) (d) of the Companies Act,
1956 in respect of any of the services provided by the Company.
ix. According to the information and explanations given to us in
respect of statutory dues:
a. The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employees' State Insurance,
Income tax, Sales tax, Wealth tax, Service tax, Customs Duty, Excise
Duty, Cess and any other statutory dues with the appropriate
authorities during the year.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of such statutory dues were
outstanding as at March 31, 2012 for a period of more than six months
from the date they became payable except for dues relating to Gram
panchayat tax and municipal tax aggregating to Rs. 8,477,476.
c. The disputed statutory dues aggregating to Rs. 132,061,680 that have
not been deposited on account of disputed matters pending before
appropriate authorities are as under:
Period to
which the Amount (in Rs) Forum where
dispute
Name of the
Statute Nature of
the Dues amount
relates (*) is pending
2006-07 to
2010-11 65,964,066 Deputy
Commissioner
(Appeals)
Central sales
Tax Act, 1956
and Sales Tax /
Trade Tax / 2007-08 to
2009-10 7,587,993 Additional
Commissioner
(Appeals)
Sales Tax
Acts of
various
states VAT and
Entry Tax 2008-09 42,482,942 Joint
Commissioner
(Appeal)
2006-07 and
2008-09 16,026,679 Sales Tax
Tribunal
Total 132,061,680
(*) Net of amount deposited under protest as mentioned in Note No. 25
(v) to Financial Statements.
x. The Company has accumulated losses at the end of the financial year,
which is less than fifty percent of its net worth. The Company has
incurred cash losses during the year but had not incurred cash losses
in the immediately preceding financial year.
xi. Based on our audit procedures, information and explanations given
by the mangagement and considering the Corporate Debt Restructuring
(CDR) scheme, we are of the opinion that the company has not defaulted
in repayment of dues to financial institutions, banks or bond holders
except for Foreign Currency Term Loan of Rs. 277,890,240 in respect of
which the repayment terms have since been amended w.e.f. May 14, 2012
and after taking into consideration such revised terms, there is no
overdue amount.
xii. In our opinion and according to the explanations given to us and
based on the information available, no loans and advances have been
granted by the Company on the basis of security by way of pledge of
shares, debentures and other securities.
xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore the provisions of clause 4 (xiii) of
the Companies (Auditor's Report) Order, 2003 is not applicable to the
Comapny.
xiv. The Company has maintained proper records of transactions and
contracts in respect of shares and other securities and timely entries
have been made therein. The investments are held by the Company in its
own name.
xv. The Company has given corporate guarantees aggregating to Rs.
10,810,000,000 for loans taken by the subsidiary company from banks and
financial institutions as at 31st March, 2012. The subsidiary is in the
process of the amalgamation with the Company as mentioned in Note No.
25. The management is of the opinion that the terms and conditions are
not prejudicial to the interests of the Company- We are, however,
unable to comment on the same.
xvi. The Company has raised new term loans during the year. To the best
of our knowledge and according to the information and explanations
given to us the term loans outstanding at the beginning of the year and
those raised during the year were prima facie been used for the purpose
for which they were raised.
xvii. On the basis of review of utilization of funds, which is based on
overall examination of the Balance Sheet of the Company as at March 31,
2012, related information as made available to us and as represented to
us, by the management, we are of the opinion, that funds raised on
short term basis have not prima facie been utilized for long term
purposes.
xviii. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Companies Act, 1956.
xix. During the year, the Company has not issued any debenture and
hence clause 4 (xix) of Companies (Auditor's Report) Order, 2003 is not
applicable to the Company.
xx. During the year covered by our report the Company has not raised
any money by public issue.
xxi. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
was noticed or reported during the course of our audit.
For CHATURVEDI & SHAH For YEOLEKAR & ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Reg. No. - 101720W Firm Reg. No. - 102489W
R. KORIA S. S. YEOLEKAR
Partner Partner
Membership No. - 35629 Membership No. - 36398
Mumbai
Date : May 17, 2012
Mar 31, 2010
1. We have audited the attached Balance Sheet of GTL INFRASTRUCTURE
LIMITED, as at March 31,2010 and also the Profit and Loss Account and
Cash Flow Statement of the Company for the year ended on that date
annexed thereto. These financial statements are the responsibility of
the Companys management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with Auditing Standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditors Report) Order. 2003 issued
by the Central Government of India in terms of Sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure, a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in Annexure referred to in para 3 above, we
report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b) In our opinion, proper books of account, as required by law, have
been kept by the Company, so far as appears from our examination of
such books;
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d) In our opinion the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the mandatory
Accounting Standards referred to in Sub-section (3C) of Section 211 of
the Companies Act, 1956;
e) On the basis of the written representations received from the
directors as on March 31, 2010 and taken on records by the Board of
Directors, we report that none of the directors is disqualified as on
March 31,2010, from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
significant accounting policies and notes thereon, in particular Note
No. 9 of Schedule P regarding the accounting treatment of redemption
premium on Foreign Currency Convertible Bonds (FCCB), give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2010;
ii) in the case of Profit and Loss Account, of the loss of the Company
for the year ended on that date; and
iii) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
Annexure tO the Auditors Report (Referred to in Paragraph 3 of our
Report of even date)
As required by the Companies (Auditors Report) Order, 2003 issued by
Central Government of India in terms of Section 227 (4A) of the
Companies Act 1956, and on the basis of such checks as we considered
appropriate, we further report that:-
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets on the
basis of available information.
b. As explained to us, the Company has physically verified certain
assets, in accordance with a phased program of verification, which in
our opinion is reasonable, having regard to the size of the Company. No
material discrepancies were noticed on such physical verification.
c. During the year, the Company has disposed off certain Fixed Assets.
However it has no effect on the going concern status of the company.
ii. In respect of its inventories:
a. As explained to us, inventories have been physically verified by
the management at reasonable intervals.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. According to the information and explanations given to us and on
the basis of our examination of inventory records, we are of the
opinion that the Company is maintaining proper records of inventory. As
explained to us, there were no material discrepancies noticed on
physical verification of inventories as compared to the book records.
iii. In respect of loans, secured or unsecured, granted or taken by the
company to/from companies, firms or other parties covered in the
register maintained under section 301 of the companies Act 1956:
a. The Company has not granted any loan to such parties. Consequently
the provisions of clauses (iii) (b), (iii) (c) and (iii) (d) of
paragraph 4 of the Companies (Auditors Report) Order, 2003 are not
applicable.
b. The Company has taken loan from a party covered in the register
maintained under section 301 of the Companies Act, 1956 in respect of
which maximum amount involved during the year and year end balance was
Rs. 2,800,000,000.
c. In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
loan taken are not prima facie prejudicial to the interest of the
Company.
d. The principal amount of loan taken and interest thereon were not
due for payment as on 31st March, 2010 and hence question of overdue
amount does not arise.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and also for the sale of services.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control system.
v. According to the information and explanations given to us, there are
no contracts or arrangements referred to in section 301 of the
Companies Act, 1956 that need to be entered in the register required to
be maintained under that section.
vi. According to information and explanations given to us, the Company
has not accepted any deposits from the public and hence directives
issued by the Reserve Bank of India andthe provisions of sections 58A
and 58AA of the Companies Act, 1956 and the rules framed there under
are not applicable for the year under audit.
vii. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii. The Central Government has not prescribed maintenance of cost
records under section 209 (1) (d) of the Companies Act, 1956 in respect
of any of the services provided by the Company. Therefore the
provisions of Clause (viii) of paragraph 4 of the Companies (Auditors)
Report Order, 2003 are not applicable.
ix. According to the information and explanations given to us in
respect of statutory dues:
a. The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employees State Insurance,
Income tax, Sales tax, Wealth tax, Service tax, Customs Duty, Excise
Duty, Cess and any other statutory dues with the appropriate
authorities during the year.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of such statutory dues were
outstanding as at March 31,2010 for a period of more than six months
from the date they became payable.
c. The disputed statutory dues aggregating to Rs. 42,887,287 that have
not been deposited on account of disputed matters pending before
appropriate authorities are as under:
Name of the Statute Nature of
the Dues Period to
which Amount
(in Rs.)
Forum where dispute
the
amount
relates (*) is pending
The Punjab VAT
Act, 2005 Sales Tax 2007-08 165,683 Deputy Excise &
Taxation
Commissione
(Appeal)
The Andhra Pradesh
VAT Act, 2005 Sales Tax 2008-09 18,128,394 Deputy
Commissioner
of Taxes
(Appeal)
The Uttar Pradesh
VAT Act, 2008 Sales Tax 2008-09 23,554,908
Joint
Commissioner of
Taxes (Appeal)
The Madhya Pradesh
VAT Act, 2002 Entry Tax 2006-07 1,038,302 Deputy
Commissioner of
Taxes (Appeal)
Total 42,887,287
l Net nf amnnnt riennsiteri nnrler nrntest as mentioned innote
1 nf schedule P tr Amounts
x. The Company has accumulated losses at the end of the financial year,
which is less than fifty percent of its net worth. The Company has not
incurred cash losses during the financial year covered by the audit and
in the immediately preceding financial year.
xi. Based on our audit procedures and information and explanations
given by the management, we are of the opinion that the Company has not
defaulted in repayment of dues to financial institutions, banks or bond
holders.
xii. In our opinion and according to the explanations given to us and
based on the information available, no loans and advances have been
granted by the Company on the basis of security by way of pledge of
shares, debentures and other securities.
xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore the provisions of clause 4 (xiii) of
the Companies (Auditors Report) Order, 2003 is not applicable to the
Company.
xiv. The Company has maintained proper records of transactions and
contracts in respect of shares and other securities and timely entries
have been made therein. The investments are held by the Company in its
own name.
xv. According to the information and explanations given to us, as on
31st March, 2010 the Company has not given any guarantee for loans
taken by others from banks or financial institutions.
xvi. The Company has raised new term loans during the year. To the best
of our knowledge and according to the information and explanations
given to us the term loans outstanding at the beginning of the year and
those raised during the year were prima facie been either used for the
purpose for which they were raised or pending utilisation been
temporarily kept with banks.
xvii. On the basis of review of utilization of funds, which is based on
overall examination of the Balance Sheet of the Company as at March 31,
2010, related informations as made available to us and as represented
to us, by the management, we are of the opinion, that funds raised on
short term basis have not prima facie been utilized for long term
purposes.
xviii. During the year the company has made preferential allotments of
106,058,940 equity shares of Rs. 10 each, against the conversion of
preferential convertible warrants, at a price of Rs. 40 per share to a
Company covered under register maintained under section 301 of the
Companies Act, 1956. According to the information & explanation given
to us these shares are issued in terms of Securities And Exchange Board
Of India (Disclosure And Investor Protection) Guidelines, 2000 and
accordingly, the prices at which these shares are issued are not prima
facie prejudicial to the interest of the company.
xix. During the year, the Company has not issued any debenture and
hence clause 4 (xix) of Companies (Auditors Report) Order, 2003 is not
applicable to the Company.
xx. We have verified the end-use of money raised by issue of Foreign
Currency Convertible Bonds and the same is disclosed by the management
in Note no. 9 of Schedule P to accounts.
xxi. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
was noticed or reported during the course of our audit.
For Chaturvedi & Shah For Yeolekar & Associates
Chartered Accountants Chartered Accountants
R. Koria S. S. Yeolekar
Partner Partner
Membership No. - 35629 Membership No. - 36398
Firm Reg. No. - 101720W Firm Reg. No. - 102489W
Mumbai
Date: April 29,2010