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GTL Infrastructure Ltd.

BSE: 532775 | NSE: GTLINFRA |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE221H01019 | SECTOR: Telecommunications - Equipment

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Dec 08, 11:23
1.64 0.01 (0.61%)
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16,923,882
10-Day
27,270,729
30-Day
16,724,900
21,844,363
  • Prev. Close

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  • Open Price

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  • Bid Price (Qty.)

    1.64 (28397)

  • Offer Price (Qty.)

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NSE Live

Dec 08, 11:23
1.65 0.05 (3.13%)
Volume
AVERAGE VOLUME
5-Day
20,277,267
10-Day
44,945,961
30-Day
26,583,411
24,541,073
  • Prev. Close

    1.60

  • Open Price

    1.65

  • Bid Price (Qty.)

    1.60 (11177868)

  • Offer Price (Qty.)

    1.65 (6186314)

Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2012 2011 2010

Auditor's Report

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of GTL INFRASTRUCTURE LIMITED (“the Company”), which comprise the Balance sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the Ind AS Financial Statements”).

Management’s Responsibility for the Ind AS Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies act, 2013 (“the Act”) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the state of affairs (financial position), losses (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the Accounting Principles Generally Accepted in India, including Indian Accounting Standards (''Ind AS'') prescribed under Section 133 of the Act.

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

Auditors’ Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements.

The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s directors, as well as evaluating the overall presentation of the Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.

Basis for Qualified Opinion

Attention is drawn to Note No. 42 to the Ind AS financial statements which inter alia states that, the Hon''ble Supreme Court of India held that “Mobile Telecommunication Tower” is a building and State can levy property tax on the same. The Special Leave Petition filed against the above order has been dismissed by the Hon''ble Supreme Court. The appeal filed with Bombay High Court by the Company contesting the manner, quantum, component of property tax has been dismissed. Appeal was preferred against the same to the Hon''ble Supreme Court and the Hon''ble Supreme Court has granted stay. The matter being still sub judice, non-receipt of demand notices for property tax in respect of majority of the Telecommunication Towers and also due to Company''s right to recover such property tax amount from certain customers, the Company is unable to quantify the amount of property tax to be borne by it and accordingly has not made any provision for the same. In the light of above, we are unable to quantify the amount of the property tax, if any, to be accounted for by the Company and its consequential effects on the Ind AS financial statements.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the “Basis for Qualified Opinion” paragraph above, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018 and its loss, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matters

We draw attention to the:

a. Note no. 31.1 to the Ind AS financial statements'' regarding managerial remuneration paid to a whole time director is in excess of the limits prescribed under the Act. The Company has applied to the Central Government for necessary approval which is awaited.

b. Note nos. 3.8 and 53 to the Ind AS financial statements which inter alia state that, Aircel, one of the major customers of the Company, has filed the insolvency petition before National Company Law Tribunal (NCLT), the Company has impaired its non-current assets and the Reserve Bank of India (RBI) withdrew the Strategic Debt Restructuring (SDR) guidelines resulting into uncertainty in the Debt Resolution process. The Company, however, continues to prepare its Ind AS financial statements on going concern basis and classify its rupee term loans borrowing as per SDR terms, since the Company as stated in note no. 53, has envisaged option to right size debt either through ARC debt sale process initiated by the lenders or in accordance with revised RBI guidelines.

Our opinion is not modified in respect of these matters. Other Matter

As mentioned in Note no. 43 to the Ind AS financial statements, during the year the scheme of Arrangement for the merger of Chennai Network Infrastructure Limited (CNIL) with the Company has been approved by the National Company Law Tribunal, at Mumbai and Chennai and the scheme became effective from December 22, 2017 having the appointed date April 1, 2016. The comparatives for the previous years have been restated by the Management of the Company to give the effect of the said scheme by including the financial statements of CNIL which are audited by other auditor, M/s Arvind Mahajan & Associates, Chartered Accountants, Mumbai for the year ended March 31, 2017 and March 31, 2016 and by giving such adjustments and effects as are required by the scheme of Arrangement. Our Audit has been restricted for the year ended on March 31, 2018. We have traced the comparative figures as at March 31st 2017 and 1st April 2016, from the information as certified and provided by the Management of the Company.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

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

d. In our opinion, the aforesaid Ind AS financial statements comply with the Ind AS prescribed under Section 133 of the Act.

e. The matter described in the ''Basis for Qualified Opinion'' paragraph above and the going concern matter described in subparagraph (b) under the “Emphasis of Matters” paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f. On the basis of the written representations received from the directors as on March 31, 2018 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.

g. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”.

h. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements in Note No. 38, 40 and 41 to the Ind AS financial statements except in respect of property tax as detailed in note no 42 to the Ind AS financial statements where the amount is not quantifiable and which is also a matter of qualified opinion in this report;

ii. The Company has made provisions, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long term contracts including derivative contracts;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor''s Report) Order, 2016 (“CARO 2016”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of CARO 2016.

(Referred to in paragraph 1 (g) under ‘Report on Other Legal and Regulatory Requirements’ of our report of even date to the members of GTL Infrastructure Limited on the Ind AS financial statements for the year ended March 31, 2018)

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

We have audited the internal financial controls over financial reporting of GTL INFRASTRUCTURE LIMITED (''the Company'') as of March 31, 2018 in conjunction with our audit of the Ind As financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (''the Guidance Note'') issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note issued by the ICAI and the Standards of Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the Ind AS financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

(Referred to in paragraph 2 under the heading “Report on Other Legal and Regulatory Requirements” of our report of even date to the members of GTL INFRASTRUCTURE LIMITED on the Ind AS financial statements for the year ended March 31, 2018)

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment on the basis of available information.

b. As explained to us, the Company has physically verified certain assets, in accordance with a phased program of verification, which in our opinion is reasonable, having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification as compared with the available records.

c. According to the information and explanations given to us, the title deeds of immovable properties are held in the name of the Company except in respect of following immovable properties as detailed below:

(Rs. in Lakhs)

Sr.

No.

Particulars of the Building

Leasehold/

Freehold

Net Book Value

Remarks

1

Land at Sudhagad, Raigad (Pledged with the Bank)

Freehold

38

The title deed is in the name of Chennai Network Infrastructure Limited (CNIL) which got merged with the Company pursuant to the scheme of arrangement (Refer Note no. 43 to the Ind AS Financial Statements)

2

Building at Wanawadi, Pune (Pledged with the Bank)

Freehold

563

The title deed is in the name of Global Electronic Commerce services Limited, which was merged with GTL Limited (the seller)

Further, as informed to us, in respect of 8 immovable properties having the Net Book Value of Rs. 3,457 Lakhs (Including 7 immovable properties having Net Book Value of Rs.3,456 Lakhs in respect of which the original title deeds have been deposited with the lenders as security) have been verified based on the photocopies of the documents for those immovable properties and based on such documents, the title deeds are held in the name of the company.

ii. As explained to us, inventories have been physically verified during the year by the management and in our opinion the frequency of verification is reasonable. Discrepancies noticed on physical verification of the inventories between the physical inventories and book records were not material, having regard to the size of the operations of the Company and the same have been properly dealt with.

iii. The Company has not granted any loan, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. Therefore, clause (iii) of paragraph 3 of the CARO 2016 is not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, in respect of grant of loans, making investments and providing guarantees and securities.

v. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of section 73 to 76 of the Act and the Rule framed there-under. Therefore, clause (v) of paragraph 3 of the CARO 2016 is not applicable to the Company.

vi. According to the information and explanations given to us, the Central Government has not prescribed the cost records to be maintained under sub-Section (1) of Section 148 of the Act in respect of business activities carried on by the Company. Therefore, clause (vi) of paragraph 3 of the CARO 2016 is not applicable to the Company.

vii. According to the information and explanations given to us, in respect of statutory dues:

a. The Company has been generally regular in depositing undisputed statutory dues, including provident fund, employees'' state insurance, income tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues as applicable, with the appropriate authorities during the year. According to information and explanation given to us, no undisputed amounts payable in respect of such statutory dues were outstanding as at 31st March, 2018 for a period of more than six months from the date they become payable.

b. The disputed statutory dues of income tax, sales tax, entry tax, value added tax and service tax aggregating to Rs.17,078 Lakhs that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Name of the Statutes

Nature of the Dues

Period to which it relates

Rs. in Lakhs (*)

Forum where the dispute is pending

The Central Sales Tax Act,

Sales Tax / VAT /

2008-09,2010-11to 2016-17

12,665

High Court

1956 and Sales Tax Acts of various States

Entry Tax

2009-10 & 2010-11

7

Appellate Tribunal

2009-10

1

Additional Commissioner (Appeal)

2008-09 to 2014-15

38

Joint Commissioner (Appeal )

2010-11

43

Sr. Joint Commissioner (Appeal )

2011-12 & 2012-13

7

Sr. Joint Commissioner

2007-08to 2010-11,2013-14

191

Deputy Commissioner (Appeal)

2007-08

2

Deputy Commissioner

2013-14

41

Assistant Commissioner (Appeals)

2008-09 to 2017-18

336

Assessing Authority

2006-07

3

Appellate Board

The Finance Act, 1994

Service Tax

2012-13 to 2016-17

3,374

Commissioner (Appeal)

The Income Tax Act, 1961

Income Tax

2011-12

370

Deputy Commissioner

Total

17,078

(*) Net of amount deposited under protest

Property Tax:

As detailed in Note No. 42 to the Ind AS Financial Statements, the Company has disputed various matters related to Property tax payable on its telecommunication towers in respect of which it is not possible to quantify the amount in dispute.

viii. As mentioned in Note no. 53 to the Ind AS Financial Statements, the rupee term loan lenders of the Company had invoked the Strategic Debt Restructuring (SDR) in accordance with the Reserve Bank of India (RBI) guidelines on September 20, 2016. In accordance with the terms of SDR, there were no financial defaults by the Company to its rupee term loan lenders as on March 31, 2018. Pursuant to RBI Circular dated February 12, 2018 SDR guidelines have been withdrawn and hence on technical ground some of the lenders have classified the Company''s rupee term loan borrowings as Non Performing Assets (NPA) as on March 31, 2018. Further, the “Series B” FCCB Bonds also got exchanged with new Series of FCCBs and hence the Company did not default in respect of FCCBs as on March 31, 2018. In respect of foreign currency term loan from Deutsche Investitions-undEntwicklungsgesellschaft mbH (DEG), the Company has defaulted for Rs.2,668 lakhs (having Rs.378 lakhs for a period of less than 100 days and Rs.2,290 lakhs for a period more than 100 days) as on March 31, 2018.

ix. According to the information and explanations given to us, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, clause (ix) of paragraph 3 of the CARO 2016 is not applicable to the Company.

x. Based on our audit procedures performed for the purpose of reporting the true and fair view of the Ind AS financial statements and on the basis of information and explanations given by the management, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

xi. According to the information and explanations given to us and based on our examination of the records, the Company, in respect of remuneration of Rs.50 Lakhs paid to Whole Time Director which is in excess of the limit prescribed in the schedule V to the Act, the requisite approval sought by the Company from the Central Government as mandated by the provisions of section 197 read with schedule V of the Act, is awaited.

xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Therefore, clause (xii) of paragraph 3 of the CARO 2016 is not applicable to the Company.

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

xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. The Company has allotted equity shares to the rupee term loan lenders pursuant to the SDR, scheme of arrangement for the merger of CNIL with the Company and on conversion of FCCBs. Further new series of FCCBs have been issued to the existing FCCB holders in exchange of old FCCBs. Therefore, clause (xiv) of paragraph 3 of the CARO 2016 is not applicable to the Company.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Therefore, clause (xv) of paragraph 3 of the CARO 2016 is not applicable to the Company.

xvi. In our opinion and according to the information and explanations provided to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For Chaturvedi & Shah For Yeolekar & Associates

Chartered Accountants Chartered Accountants

Firm Reg. No. 101720W Firm Reg. No. 102489W

R. Koria CA S. S. Yeolekar

Partner Partner

Membership No. 35629 Membership No. 036398

Place : Mumbai

Dated : May 08, 2018