1. We have audited the attached Balance Sheet of GWL PROPERTIES
LIMITED as at 31st March, 2010 and the Profit and Loss Account 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 have 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. Attention is invited to note number B (ii) of Notes on Accounts
regarding non-obtaining of the deed of conveyance in respect of land
included under stock in trade and note number B(iv) of Notes on
Accounts on injunction order regarding restraining the Company from
alienating its assets and consequently non redemption of certain
preference shares which have fallen due during the year.
4. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
5. 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
6. In our opinion, the Balance Sheet, Profit and Loss Account dealt
with by this report comply with the accounting standards issued by the
Institute of Chartered Accountants of India referred to in sub section
(3C) of Section 211 of the Act, to the extent applicable.
7. On the basis of written representations received from directors as
on March 31, 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 of the Company in terms of
clause (g) of sub-section (1) of Section 274 of the Act.
8. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with
Significant Accounting Policies contingent liabilities and Notes to
Accounts appearing in Schedule 12 and subject to Para 3 mentioned
above, 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 31st March, 2010 and;
ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date.
9. As required by the Companies [Auditors Report] Order 2003 and
other amendments to the order, issued by the Central Government in
terms of Section 227(4A) of the Companies Act, 1956 and on the basis of
such checks as we considered appropriate and information and
explanations given to us, we further report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
(b) We were informed that the physical verification of assets was
carried out during the year, and no material discrepancies between book
records and physical inventory have been noticed on such verification
and in our opinion the frequency of verification is reasonable.
(c) During the year the Company has not disposed of any property.
(ii) As informed to us, the inventories lying with the company were
physically verified by the management at reasonable intervals.
(iii) In our opinion, the procedure of physical verification of
inventory followed by the management is reasonable and adequate in
relation to the size of the company and nature of its business.
(iv) The company is maintaining proper records of inventory. In our
opinion, no material discrepancies have been noticed during the
(v) The Company has not granted or taken, any loans, secured or
unsecured to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Act. Accordingly,
paragraph 4(iii) (b), (c), (d), (e), (f) and (g) of the order,
regarding the rate of interest and terms and conditions, regularity of
the receipt of principal and interest thereon and over due amount are
(vi) There are adequate internal control procedures commensurate with
the size of the company and nature of its business with regard to
purchase of inventory, fixed assets and with regard to the sale /
supply of services. We have neither come across nor have we been
informed of any major weakness in internal control procedures.
(vii) According to the information and explanations given to us, the
contracts or arrangements referred to in Section 301 of the Act, have
been entered in the register maintained under that Section.
(viii) In our opinion and according to the information and explanations
given to us, there are no transactions made in pursuance of contracts
or arrangements entered into the register maintained in pursuance of
Section 301 of the Act and exceeding the value of Rupees five lakhs in
respect of any party during the year, which have been made at prices
which are not reasonable having regard to the prevailing market prices
at the relevant time. (ix) In our opinion and according to the
information and explanations given to us, the Company has not accepted
any public deposits under the provisions of the Sections 58A and 58AA
of the Companies Act, 1956 and the Companies (Acceptance of Deposits)
(x) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.
(xi) (a) The Company is regular in depositing with the appropriate
authorities the undisputed statutory dues including Provident Fund,
Investor Education and Protection Fund, State Insurance, Income Tax,
Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and
other material statutory dues applicable to it. There were no
undisputed amounts payable in respect of the aforesaid statutory dues
outstanding as at the last day of the financial year for a period of
more than six months from the date they became payable. (b) According
to the records of the Company, there are no dues in respect of Sales
Tax, Income Tax, Customs duty, Wealth Tax, Service Tax, Excise duty,
Cess which have not been deposited on account of any dispute except Rs.
723.53 lakhs as detailed below pending before the concerned
No.Name of Statute Nature of Dues Amount
(Rs.inlacs) Pending before
1. Wealth Tax Act,1957 Wealth tax 28.23 ITAT, Chennai
2. Income Tax Act,1961 Income tax 2.25 ITAT, Kolkata
3. Income Tax Act,1961 Income tax 83.59 ITAT Kolkata
4. Income Tax Act,1961 Income tax 609.46 CIT, Chennai
(xii) The Company has no accumulated losses as at 31-03-2010 and has
not incurred cash losses both in the current financial year as well as
in the immediately preceding financial year.
(xiii) In our opinion and according to the information and explanations
given to us, the Company has not taken any loan from banks/ financial
(xiv) The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
(xv) In our opinion, the Company is not a chit fund or a nidhi/ mutual
benefit fund/ society. Therefore, the provisions of paragraph 4 (xiii)
of the Companies (Auditors Report) Order, 2003 are not applicable to
(xvi) In our opinion and according to the information and explanations
given to us, the company is not dealing or trading in shares,
securities, debentures and other securities. The investments shown in
the accounts are held in the name of the company except to the extent
of the exemption granted under Section 49 of the Act.
(xvii) According to the information and explanations given to us, the
Company has not given guarantees for loans taken by others from banks
or financial institutions. (xviii) According to the information and
explanations given to us, the company has not availed of any term loans
from any bank or financial institution during the year.
(xix) On the basis of the overall examination of the Balance Sheet of
the Company, in our opinion, there are no funds raised on short term
basis which have been used for long term investments.
(xx) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under Section 301 of
(xxi) The Central Government has not prescribed maintenance of cost
records under Section 209(1 )(d) of the Act for the company
(xxii) According to the information and explanations given to us, the
Company has not issued any debentures and hence the question of
creating any security does not arise.
(xxiii) According to the information and explanations given to us, the
Company has not raised any money through public issues.
(xxiv) During the course of our examination of the books and records of
the Company, carried out in accordance with generally accepted auditing
practices and according to the information and explanations given to
us, we have neither come across any fraud on or by the Company nor have
we been informed of any such case by the management.
For LODHA & COMPANY
FirmRegn. No. 301051E
G. SUBRAMANIA SARMA
[M. No 21756]
Chennai, 9th August, 2010