1. We have audited the attached Balance Sheet of GTL INFRASTRUCTURE
LIMITED, as at March 31,2009 and also the Profit and Loss Account and
Cash Flow Statement of the Company for the year ended on that date
annexed thereto. These financial statements are the responsibility of
the Companys management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with Auditing Standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of Sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure, a
statement on the matters specified in paragraphs 4 and 5 of the said
4. 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, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d) In our opinion the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the mandatory
Accounting Standards referred to in Sub-section (3C) of Section 211 of
the Companies Act, 1956;
e) On the basis of the written representations received from the
directors as on March 31,2009 and taken on records by the Board of
Directors, we report that none of the directors is disqualified as on
March 31,2009, from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
significant accounting policies and notes thereon, in particular Note
No. 5 of Schedule Q regarding the accounting treatment of redemption
premium on Foreign Currency Convertible Bonds (FCCB), give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2009;
(ii) in the case of Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
(iii) in the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to the Auditors Report (Referred to in Paragraph 3 of our
Report of even date)
As required by the Companies (Auditors Report) Order, 2003 issued by
Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, and on the basis of such checks as we considered
appropriate, we further report that:-
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets on the
basis of available information.
b. As explained to us, the Company has physically verified certain
assets, in accordance with a phased program of verification, which in
our opinion is reasonable, having regard to the size of the Company. No
material discrepancies were noticed on such physical verification.
c. During the year, the Company has disposed of 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 other parties covered in the register
maintained under Section 301 of the Companies Act, 1956 and accordingly
the clause 4(iii) 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 are
no contracts or arrangements referred to in section 301 of the
Companies Act, 1956 that need to be entered in the register required to
be maintained under that section.
vi. According to information and explanations given to us, the Company
has not accepted any deposits from the public and hence directives
issued by the Reserve Bank of India 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 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 31,2009 for a period of more than six months
from the date they became payable.
c. The disputed statutory dues aggregating to Rs. 2,29,19,695, that
have not been deposited on account of disputed matters pending before
appropriate authorities are as under:
Name of the Statute Nature of the Dues Period to which Amount (in Rs.)
The Punjab VAT
Act, 2005 Sales Tax 2007-08 1,65,683
The Central Sales
Tax Act, 1956 Sales Tax 2008-09 1,81,28,394
The Assam Entry
Tax Act, 2008 Entry Tax 2008-09 46,25,618
Forum where dispute
Deputy Excise & Taxation Commissioner (Appeal)
Deputy Commissioner of Taxes (Appeal)
Deputy Commissioner of Taxes (Appeal)
x. The Company has accumulated losses at the end of the financial year,
which is less than fifty percent of its net worth. The Company has not
incurred cash losses during the financial year covered by the audit and
in the immediately preceding financial year.
xi. Based on our audit procedures and information and explanations
given by the management, we are of the opinion that the Company has not
defaulted in repayment of dues to financial institutions, banks or bond
xii. In our opinion and according to the explanations given to us and
based on the information available, no loans and advances have been
granted by the Company on the basis of security by way of pledge of
shares, debentures and other securities.
xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore the provisions of clause 4 (xiii) of
the Companies (Auditors Report) Order, 2003 is not applicable to the
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 by way of pledging its
fixed deposits with banks for loans taken by others from their bank. On
the basis of representation and explanations provided to us, we are of
the opinion that the terms and conditions there of are not prima facie
prejudicial to the interest of the Company.
xvi. The Company has raised new term loans during the year. To the best
of our knowledge and according to the information and explanations
given to us the term loans outstanding at the beginning of the year and
those raised during the year were prima facie been either used for the
purpose for which they were raised or pending utilisation been
temporarily placed as fixed deposits with banks.
xvii. On the basis of review of utilization of funds, which is based on
overall examination of the Balance Sheet of the Company as at March 31,
2009, related informations as made available to us and as represented
to us, by the management, we are of the opinion, that funds raised on
short term basis have not prima facie been utilized for long term
xviii. During the year the Company has made preferential allotments of
2,60,00,000 equity shares of Rs. 10 each, against the conversion of
preferential convertible warrants, at a price of Rs. 40 per share to a
Company covered under register maintained under Section 301 of the
Companies Act, 1956. According to the information & explanation given
to us these shares are issued in terms of Securities And Exchange Board
Of India (Disclosure And Investor Protection) Guidelines, 2000 and
accordingly, the prices at which these shares are issued are not prima
facie prejudicial to the interest of the Company.
xix. During the year, the company has not issued any debenture and
hence clause 4 (xix) of Companies (Auditors Report) Order, 2003 is not
applicable to the Company.
xx. We have verified the end-use of money raised by issue of Foreign
Currency Convertible Bonds and the same is disclosed by the management
in Note no. 5 of Schedule Q to accounts.
xxi. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the course of our audit.
For Chaturvedi & Shah For Yeolekar & Associates
Chartered Accountants Chartered Accountants
R. Koria S. S. Yeolekar
Membership No. - 35629 Membership No. - 36398
Date: April 29,2009