Mar 31, 2018
Report on the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of GTL LIMITED (âthe Companyâ), which comprise the Balance sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âStandalone Financial Statementsâ), in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Companyâs branch at Nepal.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (hereinafter referred to as âthe Actâ) with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the state of affairs, financial performance, cash flows and statement of changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015.
This responsibility also includes the 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 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 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 issued by Institute of Chartered Accountants of India, as 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 Financial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Standalone Financial Statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Companyâs preparation of the Standalone 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 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.
Basis for Qualified Opinion
As mentioned in Note No.31.1 to the Statement, the Company has neither paid nor provided interest on its borrowings during the financial year based on the âin principleâ approval given by the lenders in respect of the negotiated settlement proposal. Had such interest been recognised, the finance cost and interest liability for the year ended March, 31, 2018 would have been more by Rs.641.56 Crore.
Consequently the reported Loss after Other Comprehensive Income by the Company for the year ended March 31, 2018 would have been Rs.3,268.85 Crore. The Earnings per Share (EPS) would have been Negative Rs.207.84.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matters described in the basis for qualified opinion paragraph above, 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 including Ind AS, of the state of affairs (financial position) of the Company as at March 31, 2018, and its loss (financial performance including total comprehensive income), its cash flows and the statement of changes in equity for the year ended on that date.
Emphasis of Matters
We draw your attention to the:
Note No. 45 which inter-alia states that the Company has incurred cash losses, its Net worth has been fully eroded and the Companyâs current liabilities have exceeded its current assets as at March 31, 2018. The above conditions indicate the existence of the material uncertainty that cast significant doubt about the Companyâs ability to continue as a going concern. However, the financial statements of the Company have been prepared on going concern basis for the reasons stated in the said note.
Our opinion is not modified in respect of these matters
Other Matters
a) The comparative financial information of the Company for the year ended on March 31, 2017 are based on previously issued Standalone IND AS Financial Statements prepared in accordance with Companies (Indian Accounting Standards) Rules, 2015, audited by predecessor auditor for the year ended on March 31, 2017, dated April 27, 2017, expressed an Unmodified opinion on those Standalone Ind AS Financial Statements.
b) As at March 31, 2018, the balance confirmation, in respect of the outstanding Term Loan and Cash Credit balances (including Interest accrued) aggregating Rs.248.48 Crore due to SCB Bank, Union Bank of India have not been received.
Also, the balance confirmation relating to External Commercial Borrowings amounting to Rs.886.17 Crore (including interest accrued) and Non-Convertible Debentures amounting to Rs.1,683.09 Crore (including interest accrued) have not been received, as the matter is / was sub-judice.
c) We did not audit the financial statements/information of Nepal branch included in the Standalone Ind AS Financial Statements of the Company whose financial statements / financial information reflect total assets of Rs.0.70 crore as at March 31, 2018 and total revenues of Rs. Nil for the year ended on that date. The financial statements/information of this branch have been audited by the branch auditors whose report has been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of this branch, is based solely on the report of such branch auditor.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
I. As required by the Companies (Auditorâs Report) Order, 2016 (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 Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
II. 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 reports on the accounts of the branch office of the Company audited under section 143(8) of the Act, by branch auditor has been provided to us and has been properly dealt with by us in preparing this report.
d) 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.
e) I n our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015.
f) On the basis of the written representations received from the directors, and taken on record by the Board of Directors, none of the directors is disqualified as on 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 Bâ to this report.
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 30.03.2017, 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 Financial Statements - Refer Note No. 38 C to the Standalone Financial Statements.
ii. The Company does not have any long-term contracts including derivative contracts for which there are 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. However, unpaid dividend of Rs.0.20 Crore pertaining to the years 2000-01, 2001-02 and 2003-04 to 2008-09, 2009-10 has not been transferred to the Investor Education and Protection Fund, but is held in abeyance on account of pending legal cases.
ANNEXURE âAâ
TO THE INDEPENDENT AUDITORSâ REPORT ON STANDALONE IND AS FINANCIAL STATEMENTS OF GTL LIMITED
(Referred to in paragraph I under the heading âReport on Other Legal and Regulatory Requirementsâ of our report of even date to the members of GTL Limited on the Standalone Financial Statements for the year ended March 31, 2018)
i. a) The Company has maintained proper records showing full particulars including quantitative details and situation of property, plant and equipment.
b) As explained to us, the Company has a phased program of physical verification of the property, plant and equipment, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets.
During the year the Company, in accordance with the said program, has physically verified certain property, plant and equipment. No material discrepancies were noticed on such physical verification.
c) According to the information and explanations given to us and based on the records produced, the title deeds of the immovable properties held by the Company are in the name of the Company. The title deeds of the immovable properties held by the Company are verified from the photo copies of such title deeds as the originals thereof have been deposited with the lenders for securing the borrowings of the Company and confirmation for the same has been obtained from IDBI Trusteeship Services Limited.
ii. The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. The discrepancies noticed on verification between the physical stocks and the 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. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of sub clauses (a), (b), (c) of clause (iii) of the order are 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 investments made, and guarantees and securities given. According to the information and explanations given to us, the Company has neither provided any security nor given any loans.
v. In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Companies Act, 2013, and the rules framed there under, are not applicable and hence not commented upon.
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 clause (vi) of the Order are not applicable to the Company.
vii. a) According to records of the Company verified by us, we report that the Company is generally regular in payment of 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 other statutory dues with the appropriate authorities.
On the basis of examination of the relevant records and according to the information and explanations given to us, except for Sales Tax dues of Rs.5.68 Crore, no undisputed amounts payable in respect of Provident Fund, Employeesâ State insurance, Income-tax, Value Added Tax, Goods and Service Tax, Duty of Customs, Duty of Excise and Cess were outstanding, as at March 31 2018 for a period of more than six months from the date they became payable.
b) On the basis of the books of accounts and records of the Company as produced and examined by us, except for disputed Sales tax and Value Added Tax dues as detailed below, there are no dues of Income Tax, Service Tax, Duty of customs and Duty of excise which have not been deposited on account of any dispute.
(Rs. in Crore)
Name of Statute |
Nature of Dues |
Forum where Dispute is pending |
Period to which amount relates (Financial Year) |
Gross amount involved |
Amount paid under protest |
Amount Unpaid |
Central Sales |
Sales Tax, |
Commissioner (Appeals), |
1992-93, 1995-96, |
103.72 |
3.37 |
100.35 |
Tax Act, |
Entry Tax, |
Joint Commissioner, |
1996-97, 2005-06, |
|||
1956, and |
Trade Tax |
Additional Commissioner, |
2006-07, 2007-08, |
|||
respective |
Penalty, |
Deputy Commissioner |
2008-09, 2009-10, |
|||
states Sales |
Interest |
2010-11, 2011-12, |
||||
Tax |
2013-14, 2014-15 |
|||||
Appellate Tribunal, |
1995-96, 2002-03, |
5.64 |
1.25 |
4.39 |
||
Commercial Tax Tribunal, |
2005-06, 2006-07, |
|||||
Revision Board |
2007-08, 2009-10, |
|||||
2010-11 |
||||||
Total(A) |
109.36 |
4.62 |
104.74 |
|||
Finance Act, |
Service Tax, |
Commissioner (Appeals) |
2013-14, 2015-16, |
18.35 |
0.97 |
17.38 |
1994 (Service |
Interest, |
2016-17 |
||||
Tax) |
Penalty |
|||||
Total(B) |
18.35 |
0.97 |
17.38 |
|||
Grand Total (A B) |
127.71 |
5.59 |
122.12 |
viii. On the basis of, our examination of the records of the Company, the terms of Corporate Debt Restructuring scheme as applicable and according to the information and explanations given to us, the Company has defaulted in repayment of borrowings to financial institutions and banks. The lender wise details of the amount of default and the period of default are as under.
a) Nature of Dues : Term Loan
(Grouped and disclosed under the heading âSecured: Payable to CDR lendersâ of note no. 23 âOther Financial Liabilitiesâ to the Standalone Ind AS Financial Statements)
(Rs. in Crore)
Sr. No. |
Name of the Lender |
Amount of Default |
Period Of Default |
|||
Less than 1 Year |
1 to 2 Year |
2 to 3 Years |
More than 3 years |
|||
1 |
Andhra Bank |
163.24 |
47.94 |
42.62 |
42.62 |
30.06 |
2 |
Bank of Baroda |
57.74 |
16.87 |
15.00 |
15.00 |
10.87 |
3 |
Bank of India. |
205.81 |
59.75 |
53.11 |
53.11 |
39.84 |
4 |
Canara Bank. |
113.58 |
32.98 |
29.31 |
29.31 |
21.98 |
5 |
Catholic Syrian Bank |
26.82 |
8.10 |
7.20 |
7.20 |
4.32 |
6 |
Dena Bank |
93.73 |
27.46 |
24.41 |
24.41 |
17.45 |
7 |
IDBI Bank |
73.35 |
33.22 |
29.53 |
10.60 |
- |
8 |
Indian Bank |
56.18 |
16.41 |
14.59 |
14.59 |
10.59 |
9 |
Indian Overseas Bank |
83.42 |
24.37 |
21.66 |
21.66 |
15.73 |
10 |
Punjab National Bank |
127.79 |
40.51 |
36.01 |
36.01 |
15.26 |
11 |
State Bank Of Hyderabad |
9.73 |
4.06 |
3.61 |
2.06 |
- |
12 |
Standard Chartered Bank |
12.64 |
3.25 |
2.89 |
2.89 |
3.61 |
13 |
Small Industrial Development Bank Of India |
56.58 |
16.52 |
14.69 |
14.69 |
10.68 |
14 |
UCO Bank |
63.97 |
18.57 |
16.51 |
16.51 |
12.38 |
15 |
Union Bank Of India. |
89.38 |
27.74 |
24.65 |
24.65 |
12.34 |
16 |
United Bank Of India |
39.74 |
11.61 |
10.32 |
10.32 |
7.49 |
17 |
Vijaya Bank |
91.61 |
26.59 |
23.63 |
23.63 |
17.76 |
Total |
1,365.31 |
415.95 |
369.74 |
349.26 |
230.36 |
b) Nature of Dues : Funded Interest Term Loan
(Grouped and disclosed under the heading âSecured: Payable to CDR lendersâ of note no. 23 âOther Financial Liabilitiesâ to the Standalone Ind AS Financial Statements)
(Rs. in Crore)
Sr. No. |
Name of the Lender |
Amount of Default |
Period Of Default |
|||
Less than 1 Year |
Less than 1 Year |
Less than 1 Year |
Less than 1 Year |
|||
1 |
Andhra Bank |
39.39 |
- |
12.31 |
14.77 |
12.31 |
2 |
Bank Of Baroda |
11.50 |
- |
3.47 |
4.38 |
3.65 |
3 |
Bank Of India. |
42.14 |
- |
13.17 |
15.80 |
13.17 |
4 |
Canara Bank. |
26.81 |
- |
8.38 |
10.05 |
8.38 |
5 |
Catholic Syrian Bank |
6.37 |
- |
1.60 |
2.60 |
2.17 |
6 |
Dena Bank |
21.81 |
- |
6.83 |
8.17 |
6.81 |
7 |
IDBI Bank |
20.81 |
- |
3.89 |
9.23 |
7.69 |
8 |
Indian Bank |
10.88 |
- |
3.40 |
4.08 |
3.40 |
9 |
Indian Overseas Bank |
17.66 |
- |
5.52 |
6.62 |
5.52 |
10 |
PNB Bank |
31.79 |
- |
7.92 |
13.02 |
10.85 |
11 |
SBH Bank |
2.69 |
- |
0.69 |
1.09 |
0.91 |
12 |
SCB Bank |
2.57 |
- |
1.16 |
0.77 |
0.64 |
13 |
SIDBI. |
10.21 |
- |
3.19 |
3.83 |
3.19 |
14 |
UCO Bank |
11.88 |
- |
3.71 |
4.46 |
3.71 |
15 |
Union Bank Of India. |
16.13 |
- |
2.89 |
7.22 |
6.02 |
16 |
United Bank Of India |
9.95 |
- |
3.11 |
3.73 |
3.11 |
17 |
Vijaya Bank |
21.31 |
- |
6.66 |
7.99 |
6.66 |
Total |
303.90 |
- |
87.90 |
117.81 |
98.19 |
c) Nature of Dues: Liability for Bank Guarantee Invocation
(Grouped and disclosed under the heading âSecured: Payable to CDR lendersâ of note no. 23 âOther Financial Liabilitiesâ to the Standalone Ind AS Financial Statements)
(Rs. in Crore)
Sr. No. |
Name of the Lender |
Amount of Default |
Period O |
Default |
2 to 3 Years |
More than 3 years |
|||
1 |
Andhra Bank |
7.27 |
- |
7.27 |
2 |
Dena Bank |
16.88 |
16.88 |
|
3 |
IDBI Bank |
2.65 |
2.65 |
|
4 |
Punjab National Bank |
58.04 |
0.81 |
57.23 |
5 |
UCO Bank |
6.17 |
6.17 |
|
6 |
Union Bank Of India. |
20.13 |
0.63 |
19.50 |
Total |
111.14 |
18.32 |
92.82 |
d) Nature of Dues: External Commercial Borrowings
(Disclosed under the heading âUnsecured: Payable to External Commercial Borrowings (ECB) Lendersâ of Note No. 23 âOther Financial Liabilitiesâ to the Standalone Ind AS Financial Statements)
(Rs. In Cores)
Sr. No. |
Name of the Lender |
Amount of Default |
Period of Default |
1 |
Al Salam Bank, Bahrain BSC |
32.43 |
More than 6 years |
2 |
Ami Life Insurance PCC Ltd |
64.87 |
More than 6 years |
3 |
Bank of Baroda-London |
205.40 |
More than 6 years |
4 |
Bank of India-London |
83.54 |
More than 6 years |
5 |
Pegasus CP one Ltd |
97.30 |
More than 6 years |
6 |
Indian Bank-Colombo |
32.43 |
More than 6 years |
7 |
Indian Bank-Singapore |
32.43 |
More than 6 years |
8 |
Indian Overseas Bank-HongKong |
64.87 |
More than 6 years |
9 |
Punjab National Bank-London |
43.24 |
More than 6 years |
10 |
Syndicate Bank-London |
64.87 |
More than 6 years |
721.38 |
|||
11 |
Less: Deposits / Security Margin |
(88.00) |
|
Total |
633.38 |
Following court orders got by some of the ECB lenders earlier, some of the other ECB lenders have filed recovery suit.
e) Nature of Dues : Non-Convertible Debentures
As regards dues of Rs.1,640.18 crore disclosed under âPayable to holder of Rated Redeemable Unsecured Rupee Non-Convertible Debenturesâ in Note No. 23 âOther Financial Liabilitiesâ.
The Company has arrived at a one time settlement (OTS) agreement with its NCD holders for its full and final payment of their existing dues and has accordingly filed the agreed consent terms with the Honorable High Court. Accordingly High court has set aside the winding up petition filed by the NCD holders against the company.
We further invite attention to Note No 23.3 to the Standalone Ind AS Financial Statements for the same.
ix. According to the information and explanations given to us and on the basis of examination of records, the Company has neither obtained new term loans nor raised any money by way of initial public offer or further public offer of shares and/or debt instruments during the year. Therefore, the provisions of clause (ix) of the Order 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 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 records of the Company, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company and accordingly the provisions of clause (xii) of the Order are not applicable to the Company.
xiii. According to the information and explanations given to us and based on our examination of records of the Company, the transactions entered with related parties are in compliance with provisions of section 177 and 188 of the Act, where applicable and the details of such transactions are disclosed in the Standalone 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 records of the Company, the Company during the year has not made any preferential allotment or private placement of shares or fully or partly convertible debentures. Accordingly the provisions of clause (xiv) of the Order are not applicable to the Company.
xv. In our opinion and according to the information and explanations given to us and based on our examination of records of the Company, the Company during the year has not entered into any non cash transactions with directors or persons connected with the directors and accordingly the provisions of clause (xv) of the Order are not applicable to the Company.
xvi. In our opinion and according to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act,1934.
ANNEXUREâBâ
TO THE INDEPENDENT AUDITORSâ REPORT ON STANDALONE IND AS FINANCIAL STATEMENTS OF GTL LIMITED
(Referred to in paragraph 1 (h) under âReport on Other Legal and Regulatory Requirementsâ of our report of even date to the members of GTL Limited on the Standalone 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 Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the Standalone Ind AS Financial Statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs 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 (âthe Guidance Noteâ) 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 companyâs 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.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing issued by the ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 auditorâs judgment, including the assessment of the risks of material misstatement of the Standalone 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Ind AS Financial Statements for external purposes in accordance with generally accepted accounting principles. A companyâs 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 Standalone 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 authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the Standalone 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 of 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.
For GDA & Associates
Chartered Accountants
Firm Registration Number: 135780W
CA Mayuresh V. Zele
Partner
Membership No: 150027
Place : Mumbai
Date : May 03, 2018
Mar 31, 2016
To
The Members of GTL LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of GTL LIMITED (âthe Companyâ), which comprise the Balance sheet as at 31st March, 2016, 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 Standalone 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 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 the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014,as applicable.
This responsibility also includes the 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.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. 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 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;
a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2016;
b. in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and
c. 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 following matters in the Notes to the standalone financial statements:
a) Note No. 2.8.1 to the standalone financial statements which inter-alia states \describes the uncertainty related to the outcome of the winding up petition filed against the Company by the holders of Non Convertible Debentures issued by the Company.
b) Note No. 2.40 to the standalone financial statements which states and describes that the Company has incurred cash losses, its Net worth has been fully eroded and the Company''s current liabilities have exceeded its current assets as at Balance-Sheet date.
These conditions, along with other matters set forth in the said note, indicate the existence of a material uncertainty that cast significant doubt about the Company''s ability to continue as a going concern. However, the financial statements of the Company have been prepared on going concern basis for the reasons stated in the said Note.
c) Note No.2.31.1 to the standalone financial statements regarding liability under put option exercised on the Company by the financial institution in respect of Optionally Convertible Loan (OCL) of Rs. 100 crores raised by one of its associate, which is treated as contingent liability, for the reasons stated in the said note and which further inter-alia describes uncertainty regarding the winding up proceedings initiated against the Company by the said financial institution.
d) No.2.11.3 to the standalone financial statements which inter-alia states that the book values/market values of certain long term investments held by the Company, referred to in the said note, are lower than their carrying values and non provision for diminution in value of these investments for the reasons stated therein.
e) Note No.2.24.1 to the standalone financial statements regarding managerial remuneration paid to Mr. Sunil
S. Valavalkar, Whole time director of the Company, for which the approval of the Central Government is awaited.
Our opinion is not modified in respect of these matters. Other Matter
In respect of the following outstanding Term Loan balances, interest accrued and provided thereon and Balances in Current Accounts of the Company, Bank Balance Confirmations have not been received.
(Rs. In crores)
Name of The Bank |
Balances as per Books as at 31st March, 2016 |
||
Term Loan Balance |
Interest accrued and provided on term loan balance |
Balances in Current Account |
|
Catholic Syrian Bank |
59.52 |
8.46 |
- |
Punjab National Bank |
345.60 |
52.23 |
0.70 |
State Bank of Hyderabad |
23.89 |
4.05 |
0.01 |
Standard Chartered Bank |
20.62 |
5.77 |
4.72 |
Total |
449.63 |
70.51 |
5.43 |
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 reports on the accounts of the branch office of the Company audited under section 143(8) of the Act, by branch auditor have been sent to us and have been properly dealt with by us in preparing this report.
(d) 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.
(e) 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, as applicable.
(f) In our opinion, the following matters described in sub-paragraph (a), (b) and (c) under Emphasis of matter paragraph above, may have an adverse effect on the functioning of the Company:
i) The winding up petition filed by the holders of Non Convertible Debentures issued by the Company.
ii) the going concern matter and
iii) Liability under put option exercised on the Company by the Financial Institution in respect of Optionally Convertible Loan (OCL) of Rs.100 cores raised by one of the Company''s associate, treated as contingent liability and the winding up proceedings initiated against the Company by the said financial institution.
(g) On the basis of management representation and on the basis of the legal opinion obtained by the Company, in the context of provisions of section 164(2) of the Act in relation to non-payment of dues to the holders of Non Convertible Debentures and on the basis of the written representations received from the directors as on 31st March, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
(h) 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.
(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, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements -Refer Note No. 2.31.1 to the standalone financial statements.
ii. The Company does not have any long-term 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. Unpaid dividend of Rs.0.15 Crores pertaining to the years 2000-01, 2001-02 and 2003-04 to 2006-07 which has not been transferred to the Investor Education and Protection Fund but is held in abeyance on account of pending legal cases, is not considered for reporting under this clause.
2. As required by the Companies (Auditor''s Report) Order, 2016 (âCARO 2016â), issued by the Central Government of India in terms of subsection (11) of Section 143 of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the CARO 2016, to the extent applicable.
TO THE INDEPENDENT AUDITORSâ REPORT ON STANDALONE FINANCIAL STATEMENTS OF GTL LIMITED
(Referred to in paragraph 1 (h) under âReport on Other Legal and Regulatory Requirementsâ of our report of even date to the members of GTL Limited on the standalone financial statements for the year ended 31st March, 2016)
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 Limited (âthe Companyâ) as of 31st March, 2016 in conjunction with our audit of the standalone 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 (âthe Guidance Noteâ) 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.
Auditorsâ 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 and the Standards on Auditing issued by the ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on 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 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 financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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 of 31st March, 2016, 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.
ANNEXURE-B
TO THE INDEPENDENT AUDITORSâ REPORT ON STANDALONE FINANCIAL STATEMENTS OF GTL LIMITED
(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 Limited on the standalone financial statements for the year ended 31st March, 2016)
(i) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
As explained to us, the Company has a phased program of physical verification of the fixed assets, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets.
During the year the Company, in accordance with the aid program, has physically verified certain fixed assets. No material discrepancies were noticed on such physical verification.
According to the information and explanations given to us and based on the records produced, the title deeds of the immovable properties held by the Company are in the name of the Company. The title deeds of the immovable properties held by the Company are verified from the photo copies of such title deeds as the originals thereof have been deposited with the lenders for securing the borrowings of the Company.
(ii) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. The discrepancies noticed on verification between the physical stocks and the 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) According to the information and explanations given to us, the Company has not granted loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly 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 investments made, and guarantees provided. According to the information and explanations given to us, the Company has neither provided any security nor given any loans.
Name of the Statute |
Nature of Dues |
Amount (Rupees in Crores) |
Year to which the amount relates |
Forum where dispute is pending |
Central Sales Tax Act, Sales Tax Act & VAT Acts of various States |
Sales/Vat Tax Dues |
5.89 |
1992-1993,1995-1996,2006-2007, 20082009, 2009-2010,2010-2011, 2011-2012, 2014-2015 & Feb 09 to Dec 10. |
1st Appellate Authority |
5.75 |
1995-1996,1997-1998, 2002-2003, 2004-2005,2005-2006, 2007-2008, 2008-2009, 2009-2010 & 2010-2011. |
2nd Appellate Authority |
(v) According to the information and explanations given to us, the Company has not accepted any deposits from public. Therefore, the provisions of clause (v) of Paragraph 3 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 clause (vi) of the paragraph 3 of the CARO 2016 are not applicable to the Company.
(vii) (a) On the basis of examination of the relevant
records and according to the information and explanations given to us, we are of the opinion that the Company, except for payment of Sales Tax, is generally regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Employeesâ State insurance, Income-tax, Service Tax, Value Added Tax, Duty of Customs, Duty of Excise, Cess and other applicable statutory dues.
On the basis of examination of the relevant records and according to the information and explanations given to us, except for Sales Tax dues of Rs.5.70 Crores, no undisputed amounts payable in respect of Provident Fund, Employees'' State insurance, Income-tax, Value Added Tax, Service Tax, Duty of Customs, Duty of Excise and Cess were outstanding, as at 31st March 2016 for a period of more than six months from the date they became payable.
(b) On the basis of the books of accounts and records of the Company as produced and examined by us , except for disputed Sales tax and Value Added Tax dues as detailed below, there are no dues of Income Tax, Service Tax, Duty of customs and Duty of excise which have not been deposited on account of any dispute.
Out of the above disputed sales tax / value added tax dues, an amount of Rs. 1.99 Crores has been paid by the Company under protest.
(viii) (A) On the basis of, our examination of the records of the Company, the terms of Corporate Debt Restructuring scheme as applicable and according to the information and explanations given to us, the Company has defaulted in repayment of borrowings to financial institutions and banks. The lender wise details of the amount of default and the period of default are as under.
(a) Nature of Dues : Term Loan
(Grouped and disclosed under the heading âDues payable to Banks for secured long term loanâ of note no. 2.8 to the standalone financial statements)
(Rs. In Crores)
Sr. No. |
Name of the Lender |
Amount of Default |
Period Of Default |
||
Less than 365 days |
More than 365 days but less than 730 days |
More than 730 days but less than 1065 days |
|||
1 |
Andhra Bank |
73.89 |
42.62 |
31.27 |
- |
2 |
Bank of Baroda |
26.20 |
15.00 |
11.20 |
- |
3 |
Bank of India. |
92.95 |
53.11 |
39.84 |
- |
4 |
Canara Bank. |
51.30 |
29.32 |
21.98 |
- |
5 |
Catholic Syrian Bank |
11.70 |
7.20 |
4.50 |
- |
6 |
Dena Bank |
41.86 |
24.41 |
17.45 |
- |
7 |
IDBI Bank |
26.63 |
26.63 |
- |
- |
8 |
Indian Bank |
25.53 |
14.59 |
10.94 |
- |
9 |
Indian Overseas Bank |
37.91 |
21.66 |
16.25 |
- |
10 |
Punjab National Bank |
51.27 |
36.01 |
15.26 |
- |
11 |
State Bank Of Hyderabad |
5.64 |
3.61 |
2.03 |
- |
12 |
Standard Chartered Bank |
6.50 |
2.89 |
2.17 |
1.44 |
13 |
Small Industrial Development Bank Of India |
25.70 |
14.69 |
11.01 |
- |
14 |
UCO Bank |
28.89 |
16.51 |
12.38 |
- |
15 |
Union Bank Of India. |
37.65 |
24.65 |
13.00 |
- |
16 |
United Bank Of India |
18.06 |
10.32 |
7.74 |
- |
17 |
Vijaya Bank |
41.39 |
23.63 |
17.76 |
- |
(b) Nature of Dues : Funded Interest Term Loan
(Grouped and disclosed under the heading âDues payable to Banks for secured long term loanâ of note no. 2.8 to the standalone financial statements)
(Rs. In Crores)
Sr. |
Name of the Lender |
Amount of |
Period Of Default |
||
No. |
Default |
Less than 365 days |
More than 365 days but less than 730 days |
More than 730 days but less than 1065 |
|
1 |
Andhra Bank |
24.62 |
12.31 |
12.31 |
- |
2 |
Bank of Baroda |
7.17 |
3.84 |
3.33 |
- |
3 |
Bank of India. |
26.33 |
13.17 |
13.17 |
- |
4 |
Canara Bank. |
16.76 |
8.38 |
8.38 |
- |
5 |
Catholic Syrian Bank |
3.79 |
2.17 |
1.62 |
- |
Sr. No. |
Name of the Lender |
Amount of Default |
Period Of Default |
||
Less than 365 days |
More than 365 days but less than 730 days |
More than 730 days but less than 1065 |
|||
6 |
Dena Bank |
13.64 |
7.59 |
6.05 |
- |
7 |
IDBI Bank |
11.58 |
7.69 |
3.89 |
- |
8 |
Indian Bank |
6.80 |
3.40 |
3.40 |
- |
9 |
Indian Overseas Bank |
11.04 |
5.52 |
5.52 |
- |
10 |
Punjab National Bank |
18.78 |
10.88 |
7.90 |
- |
11 |
State Bank Of Hyderabad |
1.59 |
0.91 |
0.68 |
- |
12 |
Standard Chartered Bank |
1.80 |
0.64 |
0.64 |
0.52 |
13 |
Small Industrial Development Bank Of India |
6.39 |
3.19 |
3.20 |
- |
14 |
UCO Bank |
7.43 |
3.72 |
3.71 |
- |
15 |
Union Bank Of India. |
8.91 |
6.02 |
2.89 |
- |
16 |
United Bank Of India |
6.21 |
3.11 |
3.10 |
- |
17 |
Vijaya Bank |
13.32 |
6.67 |
6.65 |
- |
(c) Nature of Dues: Liability for Bank Guarantee Invocation
(Grouped and disclosed under the heading âDues payable to Banks for secured long term loanâ of note no. 2.8 to the standalone financial statements)
(Rs. In Crores)
Sr. No. |
Name of the Lender |
Amount of Default |
Period Of Default |
1 |
Andhra Bank |
7.27 |
More than 365 days but less than 730 days |
2 |
Dena Bank |
17.59 |
More than 365 days but less than 730 days |
3 |
IDBI Bank |
2.65 |
More than 365 days but less than 730 days |
4 |
Punjab National Bank |
58.04 |
More than 365 days but less than 730 days |
5 |
UCO Bank |
6.60 |
More than 365 days but less than 730 days |
6 |
Union Bank Of India. |
20.12 |
More than 365 days but less than 730 days |
(d) Nature of Dues: External Commercial Borrowings
(Disclosed under the heading âDues payable to Lenders of External Commercial Borrowingâ of note no. 2.8 to the standalone financial statements)
(Rs. In Cores)
Sr. No. |
Name of the Lender |
Amount of Default |
Period Of Default |
1 |
Bank Muscat |
33.08 |
More than 1460 days but less than 1825 days |
2 |
Amilife Insurance PCC Ltd |
66.16 |
More than 1460 days but less than 1825 days |
3 |
Bank of Baroda-London |
209.49 |
More than 1460 days but less than 1825 days |
4 |
Bank of india-London |
85.20 |
More than 1460 days but less than 1825 days |
5 |
Pegasus CP one Ltd |
99.23 |
More than 1460 days but less than 1825 days |
6 |
Indian Bank-Colombo |
33.08 |
More than 1460 days but less than 1825 days |
7 |
Indian Bank-Singapore |
33.08 |
More than 1460 days but less than 1825 days |
8 |
Indian Overseas Bank-Hongkong |
66.16 |
More than 1460 days but less than 1825 days |
9 |
Punjab National Bank-London |
44.10 |
More than 1460 days but less than 1825 days |
10 |
Syndicate Bank-London |
66.15 |
More than 1460 days but less than 1825 days |
(B) Nature of Dues : Non Convertible Debentures
As regards dues of Rs.1649.16 crores disclosed as Dues/Payable to the holder of Non Convertible Debentures and grouped under the heading Other Current Liabilities, we invite attention to Note No 2.8.1 to the standalone financial statements which inter-alia states that âdue to certain inter-creditor issues, and pendency of consent by CDR Lenders, the restructuring of NCD as was bilaterally agreed between the Company and NCD Holders in terms of amendment to the original sanction letter, on March 22, 2014 could not be implemented within the time prescribed under definitive documentation entered into with the NCD holders. While the Company was in the process of obtaining consent of the CDR lenders on bilateral restructuring documents, the Company received a notice on October 27, 2014 from the NCD holder exercising its rights for acceleration of the entire outstanding amount and in January,
2015 the NCD holders filed winding up petition against the Company before Hon''ble High Court of Bombay seeking certain urgent / interim reliefs. The CDR and ECB lenders of the Company have also intervened in the proceedings initiated by the NCD holder. The Bombay High Court has asked CDR lenders'' position on the NCD holder''s treatment on pari-passu basis. The matter is currently sub-judice.
Since all funds of the Company are subject matter of Trust and Retention Account (TRA) which is controlled by CDR lenders, the question of payment to NCD holder does not arise until and unless CDR lenders decide on the issue as directed by the Hon''ble High Court of Bombay.â
In view of the above facts and as the matter is presently sub-judice ,we are unable to offer any comment on default, if any, in payment of dues to the Holders of Non Convertible debentures issued by the Company.
(ix) According to the information and explanations given to us and on the basis of examination of records, the Company has neither obtained new term loans nor raised any money by way of initial public offer or further public offer of shares and/ or debt instruments during the year. Therefore, the provisions of clause (ix) of Paragraph 3 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 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 records of the Company, the Company is required to obtain Central Government permission in respect of managerial remuneration of Rs.0.15 crores paid to one of its whole time directors and accordingly the Company has made requisite application with Central Government. The approval from the Central Government is still awaited.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company and accordingly the provisions of clause (xii) of Paragraph 3 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 records of the Company, the transactions entered with related parties are in compliance with provisions of section 177 and 188 of the Act, where applicable and the details of such transactions are disclosed in the Standalone 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 records of the Company, the Company during the year has not made any preferential allotment or private placement of shares or fully or partly convertible debentures. Accordingly the provisions of clause (xiv) of Paragraph 3 of the CARO 2016 are not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us and based on our examination of records of the Company, the Company during the year has not entered into any non cash transactions with directors or persons connected with the directors and accordingly the provisions of clause (xv) of Paragraph 3 of the CARO 2016 are not applicable to the Company.
(xvi) In our opinion and according to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act,1934 and accordingly the provisions of clause (xvi) of Paragraph 3 of the CARO 2016 are not applicable to the Company.
For Godbole Bhave & Co. For Yeolekar & Associates
Chartered Accountants Chartered Accountants
Firm Reg. No. - 114445W Firm Reg. No. - 102489W
M. V. Bhave S. S. Yeolekar
Partner Partner
Membership No. 038812 Membership No. 036398
Place: Mumbai
Date: 28111 April, 2016
Mar 31, 2015
We have audited the accompanying standalone financial statements of GTL
Limited ("the Company"), which comprise the Balance Sheet as at 31
March 2015, the Statement of Profit and Loss, the Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management's Responsibility for the 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, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes the maintenance of adequate accounting records in
accordance with the provision of the Act for safeguarding of the assets
of the Company and for preventing and detecting the 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 control, 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.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
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 financial control relevant to the Company's
preparation of the financial statements that give 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 systems over financial reporting and 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 Company's Directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis of 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;
a. in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2015;
b. in the case of the Statement of Profit and Loss, of the loss for the
year ended on that date; and
c. 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 following matters in the Notes to the
standalone financial statements:
a. Note No. 2.8.1 to the standalone financial statements which
inter-alia describes the uncertainty related to the outcome of the
winding up petition filed against the Company by the holders of Non
Convertible Debentures issued by the Company.
b. Note No. 2.39 in the standalone financial statements which describes
that the Company has incurred cash losses, its Net worth has been
substantially eroded and the Company's current liabilities have
exceeded its current assets as at the balance sheet date.
These conditions, along with other matters set forth in the said note,
indicate the existence of a material uncertainty that cast significant
doubt about the Company's ability to continue as a going concern.
However, the financial statements of the Company have been prepared on
a going concern basis for the reasons stated in the said Note.
c. Note No. 2.11.3 in the standalone financial statements which states
that the book values/market values of certain long term investments of
the Company referred to in the said note are lower than their carrying
values and non provision for diminution in value of these investments
for the reasons stated therein.
d. Note No.2.23.1 in the standalone financial statements regarding
managerial remuneration, which is subject to the approval of the
Central Government
Our opinion is not modified in respect of these matters.
Other Matter
As at March 31,2015, the Company has a Term Loan and Funded Interest
Term Loan liability of Rs. 20.64 Crores. payable to Standard Chartered
Bank, one of the banks participating in Corporate Debt Restructuring
scheme approved by CDR Empowered Group. The Company has accounted the
above liability as per the terms of CDR scheme. However, confirmation
of the above liability has not been received.
Our opinion is not modified in respect of this matter.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order,2015, issued
by the Central Government of India in terms of sub-section (11) of
section 143 of the Companies Act, 2013, we give in the Annexure a
statement on the matters specified in the 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 accounts as required by law have been
kept by the Company so far as appears from our examination of those
books.
c. The reports on the accounts of the branch office of the Company
audited under Section 143(8) of the Act by branch auditor have been
sent to us and have been properly dealt with by us in preparing this
report.
d. The Balance Sheet, the Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
e. 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.
f. The winding up petition filed by the holders of Non Convertible
Debentures issued by the Company
as described in sub-paragraph (a) and the going concern matter
described in sub-paragraph (b) under the Emphasis of Matter paragraph
above, in our opinion, may have an adverse effect on the functioning of
the Company.
g. On the basis of management representation and on the basis of legal
opinion obtained by the Company in the context of provisions of section
164(2) of the Act in relation to non payment of dues to the holders of
Non Convertible Debentures and on the basis of written representations
received from the directors as on 31 March, 2015, and taken on record
by the Board of Directors, none of the directors is disqualified as on
31 March, 2015, from being appointed as a director in terms of Section
164(2) of the Act.
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, in our opinion and to the best of our
information and according to the explanations given to us :
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note No. 2.30 to
the standalone financial statements ;
ii. The Company does not have any long-term 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. Unpaid Dividend of Rs. 0.15 Crores pertaining to the years
2000-01 to 2001-02 and 2003-04 to 2006-07 which has not been
transferred to the Investor Education and Protection Fund but is held
in abeyance on account of pending legal cases is not considered for
reporting under this clause
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 Limited on the accounts for the year ended March
31,2015)
(i) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
As explained to us the Company has a phased program of physical
verification of the fixed assets, which in our opinion is reasonable,
having regard to the size of the Company and nature of its assets.
During the year the Company, in accordance with the said program, has
physically verified certain fixed assets. No material discrepancies
were noticed on such physical verification.
(ii) The inventories have been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
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.
According to the information and explanations given to us and on the
basis of our examination of the records of inventory, we are of the
opinion that the Company is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material, having regard to the size of
the operations of the Company.
According to the information and explanations given to us, the Company
has not granted loans, secured or unsecured, to companies, firms and
other parties covered in the register maintained under Section 189 of
the Act. Accordingly clause (iii) of Paragraph 3 of the Companies
(Auditor's Report) Order, 2015 is not applicable to the Company.
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
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 public therefore, the
provisions of clause (v) of Paragraph 3 of the Companies Auditor's
Report) Order, 2015 are not applicable to the Company.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Records & Audit) Rules, 2014
prescribed by the Central Government under section 148 (1) (d) of the
Act and are of the opinion that prima facie the prescribed cost 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.
(vii) (a)On the basis of examination of the relevant records and
according to the information and explanations given to us, we are of
the opinion that the Company, except for payment of Sales Tax, is
generally regular in depositing with the appropriate authorities
undisputed statutory dues including Provident Fund, Employees' State
insurance, Income-tax, Wealth-tax, Service Tax, Value Added Tax,Duty of
Customs, Duty of Excise, Cess and other applicable statutory dues.
On the basis of examination of the relevant records and according to
the information and explanations given to us, except for Sales Tax dues
of Rs. 5.68 Crores, no undisputed amounts payable in respect of
Provident Fund, Employees' State insurance, Income-tax, Wealth-tax,
Value added Tax, Service Tax, Duty of Customs, Duty of Excise and Cess
were outstanding, as at 31st March 2015 for a period of more than six
months from the date they became payable.
(b)On the basis of the books of accounts and records of the Company as
produced and examined by us , except for disputed Sales tax and Value
Added Tax dues as detailed below, there are no dues of Income Tax,
Wealth-tax, Service Tax, Duty of customs, Duty of excise and cess which
have not been deposited on account of any dispute.
Name of the Statute Nature of Dues Amount
(Rs. in Crores)
Central Sales Tax Act, Sales / Vat Tax Dues 6.76
Sales Tax Act & VAT Acts of
various States
4.97
0.49
Name of the Statute Year to which the amount Forum where
relate dispute is pending
Central Sales Tax Act, 1992-1993,1995-1996, 2006- 1st Appellate
Sales Tax Act & VAT 2007, 2008-2009,2009-2010, Authority
Acts of various States 2010-2011,2014-2015 & Feb
09 to Dec 10
1995-1996,1997-1998, 2004- 2nd Appellate
2005, 2005-2006,2007-2008, Authority
2008- 2009 & 2009-2010
2009- 2010 Assessing Officer
Out of the above disputed sales tax / value added tax dues, an amount
of Rs. 0.91 Crores has been paid by the Company under protest.
In our opinion and according to the information and explanations given
to us the amounts required to be transferred to Investor Education &
Protection Fund in accordance with relevant provisions of the Companies
Act ,1956 (1 of 1956) and rules made thereunder has been transferred to
such fund within time except for unpaid dividend of Rs. 0.15 Crores
pertaining to the years 2000-01 to 2001-02 and 2003-04 to 2006-07,
which is held in abeyance on account of pending legal cases.
(viii) The accumulated losses of the Company as at the end of the
financial year are in excess of 50% of it's networth. The Company has
incurred cash loss during the financial year covered by our audit and
also in the immediately preceding financial year.
(ix) On the basis of our examination of the records of the Company and
according to the information and explanations given to us, the Company
has defaulted in repayment of External Commercial Borrowings of Rs.
694.86 Crores which were due for payment in September,2011 and interest
of Rs. 93.75 Crores due thereon which relates to the period from
December,2011 to March,2015.
The Company has defaulted in repayment of Secured term loan of Rs.
419.55 Crores to the banks which relates to the period from June 2014
to March 2015.
The Company has defaulted in payment of Interest of Rs. 196.54 Crores
on Secured Term Loan from banks which relates to the period from June
2014 to March 2015, Interest of Rs. 5.87 Crores on Secured Funded
Interest Term loan from the banks which relates to the period from June
2014 to March 2015 and Interest of Rs. 2.48 Crores on Cash Credit
facility from the banks which relates to the period from September 2014
to March 2015.
As regards dues payable by the Company to the holders of Rated
Redeemable Unsecured Rupee Non-convertible Debentures we invite
attention to Note No 2.8.1 to the financial statement which inter-alia
states that
"due to certain inter-creditor issues, and pendency of consent by CDR
Lenders, the restructuring of NCD as was bilaterally agreed between the
Company and
NCD Holders in terms of amendment to the original sanction letter, on
March 22, 2014 could not be implemented within the time prescribed
under definitive documentation entered into with the NCD holders. While
the Company was in the process of obtaining consent of the CDR lenders
on bilateral restructuring documents, the Company received a notice on
October 27, 2014 from the NCD holder exercising its rights for
acceleration of the entire outstanding amount and in January 2015 the
NCD holders filed winding up petition against the Company before
Hon'ble High Court of Bombay seeking certain urgent / interim reliefs.
The CDR and ECB lenders of the Company have also intervened in the
proceedings initiated by the NCD holder. The Bombay High Court has
asked CDR lenders' position on the NCD holder's treatment on pari-passu
basis. The matter is currently sub-judice.
Since all funds of the Company are subject matter of Trust and
Retention Account (TRA) which is controlled by CDR lenders, the
question of payment to NCD holder does not arise until and unless CDR
lenders decide on the issue as directed by the Hon'ble High Court of
Bombay ".
In view of the above facts and as the matter is presently subjudice, we
are unable to offer any comment on default, if any, in payment of dues
to the Holders of Non Convertible debentures issued by the Company.
(x) The Company has given corporate guarantees aggregating to Rs.
581.20 Crores for loans taken by Subsidiary Companies, an associate
Company and affiliate Company from banks and financial institutions.
It has been explained to us that these guarantees are given in the
course of and for furtherance of business interest of the Company and
accordingly the terms and conditions of these guarantees are not
prejudicial to the interest of the Company. We are, however, unable to
comment on the same.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not raised new term loan during the year.
Therefore, the provisions of clause (xi) of Paragraph 3 of the
Companies (Auditor's Report) Order, 2015 are not applicable to the
Company.
(xii) To the best of our knowledge and belief and on the basis of our
examination of the records of the Company, no material fraud on or by
the Company has been noticed or reported during the year, nor we have
been informed of any such case by management.
For Godbole Bhave & Co. For Yeolekar & Associates
Chartered Accountants Chartered Accountants
Firm Reg. No. - 114445W Firm Reg. No. - 102489W
M.V. Bhave S. S. Yeolekar
Partner Partner
Membership No. - 038812 Membership No. -036398
Place: Mumbai
Date: 5th May 2015
Mar 31, 2014
We have audited the accompanying financial statements of GTL LIMITED
("the Company"), which comprise the Balance Sheet as at March 31, 2014,
and 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 Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act") read with the General Circular
15/2013 dt.13.09.2013 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.2.37 regarding preparation of financial statements of the
Company on going concern basis notwithstanding the fact that the
Company has been incurring cash losses and it''s networth 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 dependent upon the company''s ability to raise requisite
funds /generate adequate cash flows in future to meet it''s obligations
b. Note No 2.11.5 regarding the book value of non current investments
being lower than there carrying value and non provision for diminution
in value of these investments for the reasons mentioned therein.
Our opinion is not qualified in respect of these matters.
other Matter
As at March 31,2014, the Company has a Term Loan and Funded Interest
Term Loan Liability of Rs. 20.64 Crores payable to Standard Chartered
Bank, one of the banks participating in Corporate Debt Restructuring
Scheme approved by CDR Empowered Group. The Company has accounted the
above liability as per the terms of CDR Scheme. However confirmation of
the above liability has not been received.
Our opinion is not qualified in respect of this matter. 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 the 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 subsection (3C) of section 211 of the Act read with the General
Circular 15/2013 dt.13.09.2013 of the Ministry of Corporate Affairs in
respect of Section 133 of the Companies Act, 2013, and
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 Independent AudItors'' report (referred to in paragraph 1
under the heading of "report on other Legal and regulatory
requirements" of our report of even date to the members of GtL Limited
on the accounts for the year ended March 31,2014)
(i) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
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.
In our opinion, during the year, the Company has not disposed off
substantial part of its fixed assets.
(ii) As explained to us, the inventories have been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable.
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.
According to the information and explanations given to us and on the
basis of our examination of the records of inventory, we are of the
opinion that the Company is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material, having regard to the size of
the operations of the Company.
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 and other parties covered in the register maintained
under Section 301 of the Act. Accordingly clause (iii) of Paragraph 4
of the Companies (Auditor''s Report) Order, 2003 is not applicable to
the Company.
In our opinion and according to the information and explanations given
to us, there is an adequate internal control procedures commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for 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
procedures.
(v) Based on the information and explanation provided to us, during the
year the Company has not entered into any contracts or arrangements,
which were required to be entered in the register maintained u/s 301 of
the Companies Act, 1956 and accordingly the provisions of clause 4(v)
of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the Company.
(vi) According to the information and explanations given to us, during
the year, the Company has not accepted any deposits from public within
the meaning of provisions of Sections 58A, 58AA or any other relevant
provisions of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975. Therefore, the provisions of clause 4 (vi) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company.
(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 cost 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) On the basis of examination of the relevant records and according
to the information and explanations given to us, we are of the opinion
that the Company, except for payment of Service Tax, General Sales Tax,
Value Added Tax and dues of labour welfare fund, is generally regular
in depositing with appropriate authorities undisputed statutory dues
including Provident Fund, Investor Education and Protection fund,
Employees'' State insurance, Income-tax, Wealth-tax, Income Tax deducted
at source, Custom duty, Excise-duty, Cess and other applicable
statutory dues.
On the basis of examination of the relevant records and according to
the information and explanations given to us, except for General Sales
Tax of Rs. 4.18 Crores, no undisputed amounts payable in respect of
Provident Fund, Investor Education and Protection fund, Employees''
State insurance, Income-tax, Wealth-tax, Value added Tax, Service Tax,
Custom duty, Excise-duty and Cess were outstanding, as at 31st March
2014 for a period of more than six months from the date they became
payable. Amounts due and outstanding for a period exceeding six months
as at the year end to be credited to Investor Education and Protection
fund of Rs. 0.14 Crores, which are held in abeyance on account of pending
legal cases, have not been considered.
On the basis of the books of accounts and records of the Company as
produced and examined by us , except for disputed Sales tax as detailed
below, there are no dues of Income Tax, customs duty, wealth-tax,
service tax, excise duty and cess which have not been deposited on
account of any dispute.
Amount
Name of the
Statute Nature of dues Year to which the amount
relates
(Rs.in
Crores)
Central Sales
Tax Act, Sales/Vat Tax 5.39 1992-1993, 1995 1996, 2008-
2009, 2009-2010,
Sales Tax Act
& VAT of Dues 2010-2011 & Feb 09 to Dec 10
various States
1.51 1995-1996, 1997-1998, 2004-
2005, 2008-2009 & 2009-2010
0.48 2009-2010
2.90 2002-2003, 2005-2006, 2006-
2007 & 2008-2009
Name of the Statue Forum where dispute is
pending
Central Sales
Tax Act, Sales
Tax Act & VAT of
various States 1st Appellate Authority
2nd Appellate Authority
Assessing Officer
Tribunal
Out of the above disputed sales tax dues, an amount of Rs. 0.57 Crores
has been paid by the Company under protest.
(x) The accumulated losses of the Company as at the end of the
financial year are in excess of 50% of it''s networth. The Company has
incurred cash loss during the financial year covered by our audit and
also in the immediately preceding financial year.
(xi) On the basis of our examination of the records of the Company and
according to the information and explanations given to us, the Company
has defaulted in repayment of External Commercial Borrowings of Rs.
899.25 Crore due for payment in August, 2011 and interest of Rs. 86.67
Crore due thereon for the period 12th December, 2011 to 31st March,
2014.
The Company has also defaulted in redemption of Rated Redeemable
Unsecured Rupee Non-convertible Debentures of Rs. 940 Crores comprising
of amount of Rs. 470 Crores due for redemption in February, 2013 and of Rs.
470 Crores due for redemption in February, 2014 and Interest of Rs.
415.50 Crores due to holders of Rated Redeemable Unsecured Rupee Non-
convertible Debentures for the period 2nd May, 2011 to 31st March,
2014.
Further the Company has defaulted in repayment of Secured term loan of
Rs. 65.72 Crores to the banks relating to the period January 2014 to
March 2014, which was due for payment on March 31, 2014.
Interest of Rs. 23.00 Crores on Term Loan and of Rs. 0.81 Crores on Funded
Interest Term Loan was due for payment on 31st March ,2014. Out of the
above, interest of Rs. 3.13 Crores in respect of Term Loan and of Rs. 0.08
Crores in respect of Funded Interest Term Loan has been paid by the
Company subsequent to balance sheet date.
Details of defaults furnished above do not include the cases where the
funds are made available by the Company for payments but not
appropriated by the banks against the liabilities.
Except for above, there are no defaults in payment of dues to banks
considering that the debts of the Company have been restructured under
Corporate Debt Restructuring (CDR) scheme.
(xii) In our opinion and according to the explanations given to us and
based on the information available, the Company has not granted any
loans or advances on the basis of security by way of pledge of shares,
debentures or other securities. Therefore, the provisions of clause 4
(xii) of the Companies (Auditor''s Report) Order, 2003 are not
applicable to the Company.
(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 or 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 guarantees aggregating to Rs. 594.79
Crores for loans taken by Subsidiary Companies, an associate Company
and affiliate Company from banks and financial institutions. It has
been explained to us that these guarantees are given in the course of
and for furtherance of business interest of the Company and accordingly
the terms and conditions of these guarantees are not prejudicial to the
interest of the Company. We are, however, unable to comment on the
same.
(xvi) In our opinion and according to the information and explanations
given to us, the Company has not raised new term loan during the year.
Therefore, the provisions of clause 4 (xvi) of the Companies (Auditor''s
Report) Order, 2003 are not applicable to the Company.
(xvii) On an overall examination of the Balance sheet of the Company as
at 31st March, 2014 and related information made available and
representations by the management more specifically regarding
restructuring under process relating to External Commercial Borrowings
and Rated Redeemable Unsecured Rupee Non-convertible Debentures , we
are of the opinion that short term funds of Rs. 306.88 have been used for
long term purposes.
(xviii) The Company has not made any preferential allotment of shares
to parties covered in the Register maintained under Section 301 of the
Companies Act, 1956.
(xix) The Company had created security in respect of 92978 Compulsorily
Convertible Debentures (CCDs) aggregating to Rs. 0.93 Crores issued to
the lender during the year. These CCDs got converted in to Equity
Shares of the Company and no CCDs are outstanding as on March 31,2014.
The ''Rated Redeemable Unsecured Rupee Non Convertible Debentures''
issued by the Company in the earlier years on private placement basis
are unsecured and therefore, no security is created in respect of these
debentures.
(xx) The Company has not raised any money through public issue during
the year and therefore, the provisions of clause 4(xx) of the Companies
(Auditors Report) Order, 2003 are not applicable to the Company.
(xxi) To the best of our knowledge and belief and on the basis of our
examination of the records of the Company, no material fraud on or by
the Company has been noticed or reported during the year, nor we have
been informed of any such case by management.
For Godbole Bhave & Co. For Yeolekar & Associates
Chartered Accountants Chartered Accountants
Firm Reg. No. - 114445W Firm Reg. No. - 102489W
M. V. Bhave s. s. Yeolekar
Partner Partner
Membership No. Â 038812 Membership No. Â036398
Place: Mumbai
Date : 20th May, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of GTL LIMITED
("the CompanyÂ), which comprise the Balance Sheet as at March 31, 2013,
and 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.
Other Matter
The Company has a Term Loan and Funded Interest Term Loan Liability of
Rs. 20.64 Cr. towards Standard Chartered Bank, one of the bank
participating in Corporate Debt Restructuring Scheme approved by CDR
Empowered Group. The Company has accounted above liability as per the
terms of CDR Scheme. However confirmation of above liability has not
been received. 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 Companies Act, 1956;
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.
(Referred to in paragraph 1 under the heading of "Report on Other Legal
and Regulatory Requirements of our report of even date)
(i) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
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.
In our opinion, during the year, the Company has not disposed off
substantial part of its fixed assets.
(ii) As explained to us, the inventories have been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable.
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.
According to the information and explanations given to us and on the
basis of our examination of the records of inventory, we are of the
opinion that the Company is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material.
(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 procedure
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for 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 procedures.
(v) Based on the information and explanation provided to us, during the
year the Company has not entered into any contracts or arrangements,
which were required to be entered in the register maintained u/s 301 of
the Companies Act, 1956 and accordingly the provisions of clause 4(v)
of the Companies (Auditors Report) Order, 2003 are not applicable to
the Company.
(vi) According to the information and explanations given to us, during
the year, the Company has not accepted any deposits from public within
the meaning of provisions of Sections 58A, 58AA or any other relevant
provisions of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975.Therefore, the provisions of clause 4 (vi) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
(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) On the basis of examination of the relevant records and according
to the information and explanations given to us, we are of the opinion
that the Company, except for payment of Service Tax, General Sales Tax,
Value added Tax and dues of labour welfare fund, is generally regular
in depositing with appropriate authorities undisputed statutory dues
including Provident Fund, Investor Education and Protection fund,
Employees State insurance, Income-tax, Wealth-tax, Custom duty,
Excise-duty, Cess and other applicable statutory dues.
On the basis of examination of the relevant records and according to
the information and explanation given to us, except for Service Tax of
Rs. 1.21 Cr. and General Sales Tax of Rs. 2.20 Cr., no undisputed amounts
payable in respect of Provident Fund, Investor Education and Protection
Fund, Employees State Insurance, Income Tax, Wealth Tax, Value Added
Tax, Custom duty, Excise-duty and Cess were outstanding, as at 31st
March 2013 for a period of more than six months from the date they
became payable. Amounts due and outstanding for a period exceeding six
months as at period end to be credited to Investor Education and
Protection fund of Rs. 0.03 Cr., which are held in abeyance of pending
legal cases, have not been considered.
On the basis of books of accounts and records of the Company as
produced and examined by us, except for disputed Sales tax and Income
tax dues as detailed below, there are no dues of custom duty,
wealthÂtax, service tax, excise duty and cess which have not been
deposited on account of any dispute.
Name of the
Statute Nature of Dues Amount Year to which
the amount relates
(Rs. in Crores)
Central
Sales Tax
Act, Sales Sales/Vat
Tax Dues 6.50 1992-1993, 1995-1996, 2002-2003,
Tax Act &
VAT of
various 2005-2006, 2006-2007, 2007-2008,
States 2009-2010 & 2010-2011
2.09 1995-1996, 1997-1998, 2004-2005,
2005-2006, 2007-2008, 2009-2010 &
2010-2011
0.50 2009-2010
Income
Tax Act,
1961 Income Tax 0.77 2004-2005
NAME Forum where dispute is pending
Central
Sales Tax
Act, Sales 1st Appellate Authority
2nd Appellate Authority
Central
Sales Tax
Act, Sales Assessing Officer CIT Appeals
Out of the above disputed sales tax and Income tax dues, amount of Rs.
2.06 Cr. and Rs. 0.40 Cr. respectively has been paid by the Company under
protest.
(x) The accumulated losses of the Company as at the end of the
financial year are not in excess of 50% of itÂs net worth. The Company
has incurred cash loss during the financial year covered by our audit
and also in the immediately preceding financial year.
(xi) On the basis of our examination of the records of the Company and
according to the information and explanations given to us, the Company
has defaulted in repayment of External Commercial Borrowings of Rs.
815.70 Crore due for payment on August, 2011 and interest of Rs. 44.67
Crore due thereon for the period 12th December, 2011 to 19th March,
2013.
Further the Company has also defaulted in redemption of Rated
Redeemable Unsecured Rupee Non-convertible Debentures of Rs. 470 Cr. due
for redemption in February, 2013 and Interest of Rs. 250.90 Cr. due to
holders of Rated Redeemable Unsecured Rupee Non-convertible Debentures
for the period 2nd May, 2011 to 3rd February, 2013.
Interest of Rs. 0.25 Crore on Funded Interest Term Loan and of Rs. 0.08
Crore on Cash credit facility was due for payment on 31st March,
2013.Out of the above, interest of Rs. 0.15 Cr. in respect of Funded
Interest Term Loan and entire interest in respect of Cash Credit
facility has been paid by the Company subsequent to balance sheet date.
Except for above defaults, there are no defaults in payment of dues to
banks as debts of the Company have been restructured under Corporate
Debt Restructuring (CDR) scheme.
(xii) In our opinion and according to the explanations given to us and
based on the information available, the Company has not granted any
loans or advances on the basis of security by way of pledge of shares,
debentures or other securities. Therefore, the provisions of clause 4
(xii) of the Companies (Auditors Report) Order, 2003 are not applicable
to the Company.
(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 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 guarantees aggregating to Rs. 580.77
Cr. for loans taken by Subsidiary Companies, an associate Company and
an affiliate Company from banks and financial institutions. It has been
explained to us that these guarantees are given in the course of and
for furtherance of business interest of the Company and accordingly the
terms and conditions of these guarantees are not prejudicial to the
interest of the Company. We are, however, unable to comment on the
same.
(xvi) In our opinion and according to the information and explanations
given to us, the Company has not raised new term loan during the year.
Therefore, the provisions of clause 4 (xvi) of the Companies (Auditors
Report) Order, 2003 are not applicable to the Company.
(xvii) On an overall examination of the Balance sheet of the Company as
at 31st March, 2013 and 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 been used for long term
purposes.
(xviii) The Company, during the year, has made a preferential allotment
of 18,360,835 Equity shares of Rs. 10 each fully paid up aggregating to Rs.
18.36 Cr. on conversion of 0% Compulsorily Convertible Debentures
(CCDs) to a party covered in the 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 Corporate Debt
Restructuring Scheme and in accordance with the 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 18,784,046, 1%
Compulsorily Convertible Debentures (CCDs) of Rs. 100 each aggregating
to Rs. 187.84 Cr. issued to the lenders during the year. These CCDs got
converted in to Equity Shares of the Company and no CCDs are
outstanding as on March 31, 2013.
The ''Rated Redeemable Unsecured Rupee Non Convertible DebenturesÂ
issued by the Company in the earlier years on private placement basis
are unsecured and therefore, no security is created in respect of these
debentures.
(xx) The Company has not raised any money through public issue during
the year and therefore, the provisions of clause 4(xx) of the Companies
(Auditors Report) Order, 2003 are not applicable to the Company.
(xxi) To the best of our knowledge and belief and on the basis of our
examination of the records of the Company, no material fraud on or by
the Company has been noticed or reported during the year, nor we have
been informed of any such case by management.
For Godbole Bhave & Co. For Yeolekar & Associates
Chartered Accountants Chartered Accountants
A.S. MAHAJAN S.S. YEOLEKAR
Partner Partner
Membership Number 100483 Membership Number 36398
FRN NO. 114445W FRN NO. 102489W
Place: Mumbai Date: 8th May, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of GTL Limited, as at
31st March 2012, Statement of Profit And Loss and also the Cash Flow
Statement for the period 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 the 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 misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by 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 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 the Annexure referred above, we report
that:
(i) 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;
(ii) 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;
(iii) 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;
(iv) In our opinion, the Balance Sheet, Statement of Profit And Loss
and Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
(v) On the basis of written representations received from the directors
as on 31st March 2012 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31st March 2012
from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
(vi) The balances of Funded interest Term Loan from banks aggregating
to Rs. 77,41,64,733/- are not confirmed and are subject to
reconciliation.
(vii) We invite your attention to note no.2.3, wherein Company's
liability of Rs. 1,400 Crore towards debenture holders has been
classified as noncurrent liability. As per the maturity profile of the
debenture liability furnished in note no.2.3.5 an amount of Rs. 470
Crores is due for repayment within Twelve months of the balance sheet
date i.e 31st March, 2012 and accordingly should have been classified
as current maturities of long term debts under the heading current
liabilities as required by Schedule VI of the Companies Act, 1956. In
view of the above the company's noncurrent liabilities have been shown
higher by Rs. 470 Crores and correspondingly the current liabilities have
been shown lower to that extent.
We further invite attention to note no 2.25 wherein the net exchange
gain of Rs. 6.08 Crore has been classified as other expenses. The same
should have been classified as other income as required by Schedule VI
of the Companies Act,1956. ln view of the above the company's other
expenses have been shown lower by Rs. 6.08 Crore and correspondingly the
other income has been shown lower to that extent. This however does not
have any impact on loss for the period.
(viii) In our opinion and to the best of our information and according
to the explanations given to us, they said accounts read together with
the Significant Accounting Policies and notes thereon subject to our
comment in paragraph (vl) and (vii) above 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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2012.
(b) in the case of Statement of Profit And Loss, of the loss for the
period ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
period ended on that date Referred to in paragraph 3 of our report of
even date on the accounts of GTL Limited for the period ended 31st
March 2012 On the basis of such checks as considered appropriate and in
terms of the information and explanations given to us, we report as
under:
(i) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
The physical verification of fixed assets was not carried out during
the period and accordingly we are unable to comment on discrepancies if
any as compared to book records.
In our opinion, during the period, the Company has not disposed off
substantial part of its fixed assets.
(ii) The inventory has been physically verified during the period by
the management. In our opinion, the frequency of verification is
reasonable.
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.
On the basis of our examination of the records of inventory, we are of
the opinion that the Company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
(iii) The Company has neither taken for granted any loans, secured or
unsecured, from/to companies, firms and other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Therefore, the provisions of clause 4 (iii) of the Companies (Auditors
Report) Order, 2003 are not applicable to the Company.
(iv) In our opinion, there is an adequate internal control procedures
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for 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 procedures.
(v) Based on the information and explanation provided to us, during the
period the Company has not entered into any contracts or arrangements,
which were required to be entered in the register maintained u/s 301 of
the Companies Act, 1956 and accordingly the provisions of clause 4(v)
of the Companies (Auditors Report) Order, 2003 are not applicable to
the Company.
(vi) During the period, the Company has not accepted any deposits from
public within the meaning of provisions of Sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975. Therefore, the provisions of
clause 4 (vi) of the Companies (Auditors Report) Order, 2003 are not
applicable to the Company.
(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 Central Government under section 209(1)(d) of the
Companies Act,1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. The contents of these
records have not been examined by us.
(ix) On the basis of our examination of the records of the Company, we
are of the opinion that the Company is generally regular in depositing
with appropriate authorities undisputed statutory dues including
Provident Fund, Investor Education and Protection fund, Employees'
State Insurance, Income-tax, Wealth-tax, Custom duty, Excise-duty, Cess
and other applicable statutory dues. The delays have been observed in
payment of Service Tax , Value added Tax, Income Tax deducted at source
and dues of labour welfare fund.
On the basis of our examination of the records of the Company, except
for Value added Tax dues of Rs. 1,00,06,064/-, no undisputed amounts
payable in respect of Provident Fund, Investor Education and Protection
fund, Employees' State insurance, Income-tax, Wealth-tax, Service Tax,
Custom duty, Excise-duty and Cess were outstanding, as at 31st March
2012 for a period of more than six months from the date they became
payable. Amounts due and outstanding for a period exceeding six months
as at the period end to be credited to Investor Education and
Protection fund of Rs. 3,01,310/-, which are held in abeyance on account
of pending legal cases, have not been considered.
On the basis of the books of accounts and records of the Company as
produced and examined by us , except for disputed Sales tax dues as
detailed below, there are no dues of customs duty, wealth-tax, income
Tax, service tax, excise duty and cess which have not been deposited on
account of any dispute.
Year to which Forum where
Name of the Nature of Amount
the lamount dispute is
Statute Dues (Rs. in lakhs)
relates pending
Central Sales Sales/Vat 10,724.31 1992-1993, 1st Appellate
Authority
Tax Act,Sales Tax Dues 1995-1996,
Tax Act &
VAT of 2002-2003,
various States 2005-2006,
2006-2007,
2008-2009,
2009-2010 &
2010-2011,
208.64 1995-1996, 2nd Appellate
Authority
1997-1998,
2004-2005,
2005-2206,
2007-2008,
2009-2010 &
2010-2011
Out of the above disputed sales tax dues, an amount of Rs. 2.25 Crores has
been paid by the Company under protest.
(x) The accumulated losses of the Company as at the end of the
financial period are not in excess of 50% of its net worth. The Company
has incurred cash loss during the financial period covered by our
audit. The cash loss was not incurred in the immediately preceding
financial year.
(xi) On the basis of our examination of the records of the Company, the
Company has defaulted in repayment of External Commercial Borrowings of
Rs. 763.35 Crore due for payment on August, 2011 and interest of Rs. 11.48
Crore thereon for the period 12th December, 2011 to 19th March, 2012.
Interest of Rs. 105.33 Crore to holders of 8% Rated Redeemable Unsecured
Rupee Non-convertible Debentures for the period 2nd May, 2011 to 3rd
February, 2012 was overdue for payment as at 31st March, 2012.
Interest of Rs. 0.23 Crore on Funded interest Term Loan and of Rs. 2.01
Crore on Cash credit facility was due for payment on 31st March, 2012.
Out of which an amount of Rs. 2.21 Crores has been paid by the Company
subsequent to balance sheet date.
Except for above defaults there, are no defaults in payment of dues to
banks as the debts of the Company has been restructure under Corporate
Debt Restructuring (CDR) scheme.
(xii) The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures or other securities.
Therefore, the provisions of clause 4 (xii) of the Companies (Auditors
Report) Order, 2003 are not applicable to the Company.
(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 are not applicable to the
Company.
(xiv) In our opinion, the Company's business activities do not comprise
of dealing in shares, securities, debentures or other investments.
Therefore, the provisions of clause 4(xiv) of the Companies (Auditors
Report) Order, 2003 are not applicable to the Company.
(xv) The Company has not issued any new guarantees during the period
under audit. In our opinion and as explained to us, the terms and
conditions of continuing guarantees given by the Company for loans
taken by others from banks or financial institutions, are prima facie
not prejudicial to the interest of the Company.
(xvi) The Company has not raised new term loan during the period.
Therefore, the provisions of clause 4(xvi) of the Companies (Auditors
Report) Order, 2003 are not applicable to the Company.
(xvii) On an overall examination of the Balance Sheet of the Company as
at 31st March, 2012 and 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 been used for long term
purposes.
(xviii) The company has not made preferential allotment of shares to
parties and/or to the companies covered in the register maintained
under section 301 of the Companies Act 1956. Therefore, the provisions
of clause 4(xviii) of the Companies (Auditors Report) Order, 2003 are
not applicable to the Company.
(xix) The debentures issued on private placement basis by the Company
are unsecured and therefore, the provisions of clause 4(xix) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
(xx) The Company has not raised any money through public issue during
the period and therefore, the provisions of clause 4(xx) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
(xxi) To the best of our knowledge and belief and on the basis of our
examination of the records of the Company, no material fraud on or by
the Company has been noticed or reported during the period, nor we have
been informed of any such case by management.
For Godbole Bhave & Co. For Yeolekar & Associates
Chartered Accountants Chartered Accountants
A.S. Mahajan S.S. Yeolekar
Partner Partner
Membership Number 100483 Membership Number 36398
FRN No. 114445W FRN No. 102489W
Mumbai
May 22, 2012
Jun 30, 2011
1. We have audited the attached balance sheet of GTL Limited, as at
30th June 2011, the profit and loss account and also the cash flow
statement for the period 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 the 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 misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by 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 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 the Annexure referred to above, we
report that:
(i) 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;
(ii) 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;
(iii) The balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the balance sheet, profit and loss account and
cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
(v) On the basis of written representations received from the
directors, as on 31st March, 2011 and taken on record by the Board of
Directors, we report that none of the directors were disqualified as on
31st March, 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956;
(vi) Unsecured loan payable to ICICI Bank is subject to confirmation;
(vii) In our opinion and to the best of our information and according
to the explanations given to us, the said accounts subject to our
comment in paragraph (vi) above 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:
(a) in the case of the balance sheet, of the state of affairs of the
Company as at 30th June, 2011.
(b) in the case of the profit and loss account, of the profit for the
period ended on that date; and
(c) in the case of the cash flow statement, of the cash flows for the
period ended on that date.
Referred to in paragraph 3 of our report of even date on the accounts
of GTL Limited for the period ended 30th June, 2011
On the basis of such checks as considered appropriate and in terms of
the information and explanations given to us, we report as under:
(i) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
All the fixed assets have not been physically verified by the
management during the year but there is a regular programme 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 verification.
In our opinion, during the year, the Company has not disposed off
substantial part of the Fixed Assets.
(ii) The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
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.
On the basis of our examination of the records of inventory, we are of
the opinion that the Company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
(iii) The Company has neither taken nor granted any loans, secured or
unsecured, from/to companies, firms and other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Therefore, the provisions of clause 4 (iii) of the Companies (Auditors
Report) Order, 2003 are not applicable to the Company.
(iv) In our opinion, there is an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for 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 procedure.
(v) Based on the audit procedures applied by us, we are of the opinion
that the transactions made in pursuance of contracts or arrangements,
which were required to be entered in the register maintained u/s 301 of
the Companies Act, 1956, have been so entered.
In our opinion, the transactions made, during the year, aggregating in
value of Rupees Five Lakhs or more per party, in pursuance of contracts
or arrangements entered into register maintained under section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time
except that in case of transaction of provisioning and availment of
services, no comparable price instances were available in view of the
uniqueness of these transactions.
(vi) During the period, the Company has not accepted any deposits from
public within the meaning of provisions of Sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975.Therefore, the provisions of
clause 4 (vi) of the Companies (Auditors Report) Order, 2003 are not
applicable to the Company.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) As explained to us, the Central Government has not prescribed
the maintenance of Cost records under clause (d) of sub section (i) of
Section 209 Companies Act, 1956, in respect of the business activities
of the Company.
(ix) On the basis of our examination of the records of the Company, we
are of the opinion that the Company is generally regular in depositing
with appropriate authorities undisputed statutory dues including
Provident Fund, Investor Education and Protection fund, Employees'
State insurance, Income-tax, Sales-tax, Wealth-tax, Custom duty,
Excise- duty, Cess and other applicable statutory dues.The company has
not paid service tax dues of Rs. 2,821.32 lacs for the month April, May &
June,11.
On the basis of our examination of the records of the Company, no
undisputed amounts payable in respect of Provident Fund, Investor
Education and Protection fund, Employees' State insurance, Income- tax,
Sales-tax, Wealth-tax, Service Tax, Custom duty, Excise-duty and Cess
were outstanding, as at 30th June, 2011 for a period of more than six
months from the date they became payable.
On the basis of the books of accounts and records of the Company as
produced and examined by us , except for disputed Sales tax dues and
Income Tax dues as detailed below, there are no dues of customs duty,
wealth-tax, service tax, excise duty and cess which have not been
deposited on account of any dispute.
Name of the Nature of Amount Year to which Forum where
Statute Dues (Rs. in lakhs) the amount dispute is
relates pending
Income Tax Income Tax 195.72 2003-2004 CIT (Appeal)
Act, 1961 Dues
Central Sales Sales Tax 11,313.00 1995-1996, 1st Appellate
Tax Act & Dues Authority
2005-2006,
Sales Tax Act
of various 2006-2007,
States 2007-2008,
2008-2009,
2009-2010 &
2010-2011
205.49 1997-1998, 2nd Appellate
Authority
2004-2005 &
2010-2011
(x) The Company does not have accumulated losses as at the end of the
financial year and has not incurred cash losses during the financial
year covered by our audit and in the immediately preceding financial
year.
(xi) On the basis of our examination of the records of the Company, we
are of the opinion that the Company has not defaulted in repayment of
dues to financial institutions, banks or debenture holders except for
amount of Rs. 7,325.21 lacs due in respect of overdue bills of exchange.
(xii) The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures or other securities.
Therefore, the provisions of clause 4 (xii) of the Companies (Auditors
Report) Order, 2003 are not applicable to the Company.
(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 are not
applicable to the Company.
(xiv) In our opinion, the Company's business activities do not comprise
of dealing in shares, securities, debentures or other investments.
Therefore, the provisions of clause 4(xiv) of the Companies (Auditors
Report) Order, 2003 are not applicable to the Company.
(xv) In our opinion, the terms and conditions of guarantees given by
the Company for loans taken by others from banks or financial
institutions, are prima facie not prejudicial to the interest of the
Company.
(xvi) In our opinion the term loans have been applied for the purposes
for which they were raised. Pending utilizations have been temporarily
placed as fixed deposit with banks.
(xvii) On an overall examination of the Balance sheet of the Company as
at 30th June,2011 and 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 been used for long term
purposes.
(xviii) The company has not made preferential allotment of shares to
parties and/or to the companies covered in the register maintained
under section 301 of the Companies Act 1956.Therefore, the provisions
of clause 4(xviii) of the Companies (Auditors Report) Order, 2003 are
not applicable to the Company.
(xix) The debentures issued on private placement basis by the Company
are unsecured and therefore, the provisions of clause 4(xix) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
(xx) The Company has not raised any money through public issue during
the year and therefore, the provisions of clause 4(xx) of the Companies
(Auditors Report) Order, 2003 are not applicable to the Company.
(xxi) To the best of our knowledge and belief and on the basis of our
examination of the records of the Company, no material fraud on or by
the Company has been noticed or reported during the course of our
audit.
For Godbole Bhave & Co. For Yeolekar & Associates
Chartered Accountants Chartered Accountants
A.S. Mahajan S.S. Yeolekar
Partner Partner
Membership Number 100483 Membership Number 36398
FRN No. 114445W FRN No. 102489W
Mumbai
August 18, 2011
Mar 31, 2010
1. We have audited the attached balance sheet of GTL Limited, as at
31st March 2010, the profit and loss account and also the cash flow
statement 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 the 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 misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by 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 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 the Annexure referred to above, we
report that:
(i) 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;
(ii) 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;
(iii) The balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the balance sheet, profit and loss account and
cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
(v) On the basis of written representations received from the
directors, as on 31st March 2010 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts 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:
(a) in the case of the balance sheet, of the state of affairs of the
Company as at 31st March, 2010.
(b) in the case of the profit and loss account, of the profit for the
year ended on that date; and
(c) in the case of the cash flow statement, of the cash flows for the
year ended on that date
Annexure to Auditors Report
Referred to in paragraph 3 of our report of even date on the accounts
of GTL Limited for the year ended 31st March, 2010
On the basis of such checks as considered appropriate and in terms of
the information and explanations given to us, we report as under:
(i) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
All the fixed assets have not been physically verified by the
management during the year but there is a regular programme 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 verification.
In our opinion, during the year, the Company has not disposed off
substantial part of the Fixed Assets.
(ii) The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
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.
On the basis of our examination of the records of inventory, we are of
the opinion that the Company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
(iii) The Company has neither taken nor granted any loans, secured or
unsecured, from/to companies, firms and other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Therefore, the provisions of clause 4 (iii) of the Companies (Auditors
Report) Order, 2003 are not applicable to the Company.
(iv) In our opinion, there is an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for 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 procedure.
(v) Based on the audit procedures applied by us, we are of the opinion
that the transactions made in pursuance of contracts or arrangements,
which were required to be entered in the register maintained u/s 301 of
the Companies Act, 1956, have been so entered.
In our opinion, the transactions made, during the year, aggregating in
value of Rupees Five Lakhs or more per party, in pursuance of contracts
or arrangements entered into register maintained under section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time
except that in case of transaction of provisioning and availment of
services, no comparable price instances were available in view of the
uniqueness of these transactions.
(vi) During the year, the Company has not accepted any deposits from
public within the meaning of provisions of Sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975.Therefore, the provisions of
clause 4 (vi) of the Companies (Auditors Report) Order, 2003 are not
applicable to the Company.
(vii) In our opinion, the Company hasan internal auditsystem
commensurate with the size and nature of its business.
(viii) As explained to us, the Central Government has not prescribed
the maintenance of Cost records under clause (d) of sub section (i) of
Section 209 Companies Act, 1956, in respect of the business activities
of the Company.
(ix) On the basis of our examination of the records of the Company, we
are of the opinion that the Company is regular in depositing with
appropriate authorities undisputed statutory dues including Provident
Fund, Investor Education and Protection fund, Employees State
insurance, Income-tax, Sales-tax, Wealth-tax, Service Tax, Custom duty,
Excise-duty, Cess and other applicable statutory dues.
On the basis of our examination of the records of the Company, no
undisputed amounts payable in respect of Provident Fund, Investor
Education and Protection fund, Employees State insurance, Income- tax,
Sales-tax, Wealth-tax, Service Tax, Custom duty, Excise-duty and Cess
were outstanding, as at 31st March, 2010 for a period of more than six
months from the date they became payable.
On the basis of the books of accounts and records of the Company as
produced and examined by us , except for disputed Sales tax dues and
Income Tax dues as detailed below, there are no dues of customs duty,
wealth-tax, service tax, excise duty and cess which have not been
deposited on account of any dispute.
Name of the Nature of Amount (Rs. Year to Forum where
Statute Dues in lakhs) which the dispute is
amount pending
relates
Income Tax Income Tax 14.47 2002-2003 CIT (Appeal)
Act, 1961 Dues
80.58 2005-2006 CIT (Appeal)
20.40 2006-2007 CIT (Appeal)
Central
Sales Sales Tax 9,489.96, 1995-1996, IstAppellate
Tax Act& Dues 2002-2003, Authority
SfaleS.Tax Act 2004-2005,
of various
States 2005-2006,
2006-2007,
2007-2008 &
2009-2010
8.27 1995-1996 2nd Appellate
1997-1998 Authority
(x) The Company does not have accumulated losses as at the end of the
financial year and has not incurred cash losses during the financial
year covered by our audit and in the immediately preceding financial
year.
(xi) On the basis of our examination of the records of the Company, we
are of the opinion that the Company has not defaulted in repayment of
dues to financial institutions, banks or debenture holders.
(xii) The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures or other securities.
Therefore, the provisions of clause 4 (xii) of the Companies (Auditors
Report) Order, 2003 are not applicable to the Company.
(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 are not
applicable to the Company.
(xiv) In our opinion, the Companys business activities do not comprise
of dealing in shares, securities, debentures or other investments.
Therefore, the provisions of clause 4(xiv) of the Companies (Auditors
Report) Order, 2003 are not applicable to the Company.
(xv) In our opinion, the terms and conditions of guarantees given by
the Company for loans taken by others from banks or financial
institutions, are prima facie not prejudicial to the interest of the
Company.
(xvi) In our opinion the term loans have been applied for the purposes
for which they were raised or pending utilization have been temporarily
placed as fixed deposit with banks.
(xvii) On an overall examination of the Balance sheet of the Company as
at 31st March,2010 and 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 been used for long term
purposes.
(xviii) The company has not made preferential allotment of shares to
parties and/or to the companies covered in the register maintained
under section 301 of the Companies Act 1956.Therefore, the provisions
of clause 4(xviii) of the Companies (Auditors Report) Order, 2003 are
not applicable to the Company.
(xix) During the year company has issued unsecured debentures on
private placement basis and therefore, the provisions of clause 4(xix)
of the Companies (Auditors Report) Order, 2003 are not applicable to
the Company.
(xx) The Company has not raised any money through public issue during
the year and therefore, the provisions of clause 4(xx) of the Companies
(Auditors Report) Order, 2003 are not applicable to the Company.
(xxi) To the best of our knowledge and belief and on the basis of our
examination of the records of the Company, no material fraud on or by
the Company has been noticed or reported during the course of our
audit.
For Godbole Bhave & Co. For Yeolekar & Associates
Chartered Accountants Chartered Accountants
A.S. Mahajan S.S. Yeolekar
Partner Partner
Membership Number 100483 Membership Number 36398
FRN No. 114445W FRN No. 102489W
Mumbai
April 20, 2010