1. We have audited the attached Balance Sheet of GTL INFRASTRUCTURE
LIMITED, as at March 31, 2012 and also the Statement of Profit and Loss
and Cash Flow Statement of the Company for the year ended on that date
annexed thereto. These financial statements are the responsibility of
the Company''s management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with Auditing Standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor''s Report) Order, 2003 issued
by the Central Government of India in terms of Sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure, a
statement on the matters specified in paragraphs 4 and 5 of the said
4. Without qualifying our opinion we draw your attention to the
i. Note No. 27 regarding Scheme of Arrangement under Section 391 to 394
of the Companies Act, 1956 pending for the necessary approvals and
preparation of accounts without giving any effects of this scheme and
to give the effects as and when the scheme will be effective.
ii. Note No. 4.3 regarding the accounting treatment of redemption
premium on Foreign Currency Convertible Bonds (FCCB).
5. Further to our comments in Annexure referred to in para 3 above, we
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
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
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
d) In our opinion the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the mandatory
Accounting Standards referred to in Sub-section (3C) of Section 211 of
the Companies Act, 1956;
e) On the basis of the written representations received from the
directors as on March 31, 2012 and taken on records by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2012, from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
significant accounting policies and notes thereon, give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
(ii) in the case of Statement of Profit and Loss, of the Loss of the
Company for the year ended on that date; and (iii) in the case of Cash
Flow Statement, of the cash flows for the year ended on that date.
Annexure to the Auditors'' Report (Referred to in Paragraph 3 of our
Report of even date)
As required by the Companies (Auditor''s Report) Order, 2003 issued by
Central Government of India in terms of Section 227 (4A) of the
Companies Act 1956, and on the basis of such checks as we considered
appropriate, we further report that;-
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets on the
basis of available information.
b. As explained to us, the Company has physically verified certain
assets, in accordance with a phased program of verification, which in
our opinion is reasonable, having regard to the size of the Company.
The discrepancies noticed at the time of such verification were
properly dealt with in the books of accounts.
c. During the year, the Company has disposed off certain Fixed Assets.
However, it has no effect on the going concern status of the Company.
ii. In respect of its inventories:
a. As explained to us, inventories have been physically verified by
the management at reasonable intervals.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. According to the information and explanations given to us and on
the basis of our examination of inventory records, we are of the
opinion that the Company is maintaining proper records of inventory. As
explained to us, there were no material discrepancies noticed on
physical verification of inventories as compared to the book records.
iii. According to the information and explanations given to us, the
Company has not granted or taken any loans, secured or unsecured to or
from companies, firms or parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly, clause (iii)
of Paragraph 4 of the Companies
(Auditors'' Report) Order 2003, is not applicable to the Company. iv.
In our opinion and according to the information and explanations given
to us, there is an adequate internal control system commensurate with
the size of the Company and the nature of its business for the purchase
of inventory, fixed assets and also for the sale of services. During
the course of our audit, we have not observed any continuing failure to
correct major weaknesses in internal control system.
v. According to the information and explanations given to us, there is
no contract or arrangement referred to in section 301 of the Companies
Act, 1956 that need to be entered in the register required to be
maintained under that section.
vi. According to the information and explanations given to us, the
Company has not accepted any deposits from the public and hence
directives issued by the Reserve Bank of India and the provisions of
sections 58A and 58AA of the Companies Act, 1956 and the rules framed
there under are not applicable for the year under audit.
vii. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii. The Central Government has not prescribed maintenance of cost
records, for the year, under section 209 (1) (d) of the Companies Act,
1956 in respect of any of the services provided by the Company.
ix. According to the information and explanations given to us in
respect of statutory dues:
a. The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employees'' State Insurance,
Income tax, Sales tax, Wealth tax, Service tax, Customs Duty, Excise
Duty, Cess and any other statutory dues with the appropriate
authorities during the year.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of such statutory dues were
outstanding as at March 31, 2012 for a period of more than six months
from the date they became payable except for dues relating to Gram
panchayat tax and municipal tax aggregating to Rs. 8,477,476.
c. The disputed statutory dues aggregating to Rs. 132,061,680 that have
not been deposited on account of disputed matters pending before
appropriate authorities are as under:
which the Amount (in Rs) Forum where
Name of the
Statute Nature of
the Dues amount
relates (*) is pending
2010-11 65,964,066 Deputy
Tax Act, 1956
and Sales Tax /
Trade Tax / 2007-08 to
2009-10 7,587,993 Additional
states VAT and
Entry Tax 2008-09 42,482,942 Joint
2008-09 16,026,679 Sales Tax
(*) Net of amount deposited under protest as mentioned in Note No. 25
(v) to Financial Statements.
x. The Company has accumulated losses at the end of the financial year,
which is less than fifty percent of its net worth. The Company has
incurred cash losses during the year but had not incurred cash losses
in the immediately preceding financial year.
xi. Based on our audit procedures, information and explanations given
by the mangagement and considering the Corporate Debt Restructuring
(CDR) scheme, we are of the opinion that the company has not defaulted
in repayment of dues to financial institutions, banks or bond holders
except for Foreign Currency Term Loan of Rs. 277,890,240 in respect of
which the repayment terms have since been amended w.e.f. May 14, 2012
and after taking into consideration such revised terms, there is no
xii. In our opinion and according to the explanations given to us and
based on the information available, no loans and advances have been
granted by the Company on the basis of security by way of pledge of
shares, debentures and other securities.
xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore the provisions of clause 4 (xiii) of
the Companies (Auditor''s Report) Order, 2003 is not applicable to the
xiv. The Company has maintained proper records of transactions and
contracts in respect of shares and other securities and timely entries
have been made therein. The investments are held by the Company in its
xv. The Company has given corporate guarantees aggregating to Rs.
10,810,000,000 for loans taken by the subsidiary company from banks and
financial institutions as at 31st March, 2012. The subsidiary is in the
process of the amalgamation with the Company as mentioned in Note No.
25. The management is of the opinion that the terms and conditions are
not prejudicial to the interests of the Company- We are, however,
unable to comment on the same.
xvi. The Company has raised new term loans during the year. To the best
of our knowledge and according to the information and explanations
given to us the term loans outstanding at the beginning of the year and
those raised during the year were prima facie been used for the purpose
for which they were raised.
xvii. On the basis of review of utilization of funds, which is based on
overall examination of the Balance Sheet of the Company as at March 31,
2012, related information as made available to us and as represented to
us, by the management, we are of the opinion, that funds raised on
short term basis have not prima facie been utilized for long term
xviii. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Companies Act, 1956.
xix. During the year, the Company has not issued any debenture and
hence clause 4 (xix) of Companies (Auditor''s Report) Order, 2003 is not
applicable to the Company.
xx. During the year covered by our report the Company has not raised
any money by public issue.
xxi. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
was noticed or reported during the course of our audit.
For CHATURVEDI & SHAH For YEOLEKAR & ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Reg. No. - 101720W Firm Reg. No. - 102489W
R. KORIA S. S. YEOLEKAR
Membership No. - 35629 Membership No. - 36398
Date : May 17, 2012