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Global Infrastructure & Technologies Ltd.

BSE: 523794 Sector: Infrastructure
NSE: MANTRIHSG ISIN Code: INE943A01013
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Global Infrastructure & Technologies Ltd. (MANTRIHSG) - Auditors Report

Company auditors report

GLOBAL INFRASTRUCTURE AND TECHNOLOGIES LIMITED ANNUAL REPORT 2004-2005 AUDITORS' REPORT To, The Members of Global Infrastructure and Technologies Ltd., 1) I have audited the attached Balance Sheet of Global Infrastructure and Technologies Ltd. as at 31st March, 2005 and also the Profit and Loss Account of the Company for the period from 1st January, 2004 to 31st March, 2005 annexed thereto. These financial statements are responsibility of the Company management. My responsibility is to express an opinion on these financial statements based on my audit. 2) I have conducted the audit in accordance with auditing standards generally accepted in India. These standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes (a) Examining on a test basis, evidence to support the financial statements amounts and disclosures in the financial statements (b) assessing the accounting principles used in the preparation of financial statements (c) assessing significant estimates made by the management in the preparation of financial statements and (d) Evaluating overall financial statement presentation. l believe that my audit provides a reasonable basis for my opinion. 3) As required by the Companies (Auditors Report) order, 2003 issued by the Central Government in term of section 227 (4A) of the Companies Act, 1956 I give in the annexure a statement on the matters specified in paragraph 4 & 5 of the said order. Further to my comments in the Annexure referred to in paragraph (3) above I report that a) I have obtained all the information and explanations, which, to the best of my knowledge and belief were necessary for the purpose of my audit. b) In my opinion, proper books of account as required by law, have been kept by the Company so far as appears from examination of books of the Company (and proper returns adequate for the purpose of my audit have been received from the branches not visited by us. c) The Balance Sheet & the Profit and Loss Account referred to in this report are in agreement with the books of account of the Company. d) In my opinion, the accounts comply with the Accounting Standards referred to in section 211 (3C) of the Companies Act, 1956, except (i) and (ii) below: Accounting Standard 1 on 'Disclosure of Accounting Policies' with regard to non provision of interest on accrual. The Company has not provided for interest on loan amounting to Rs. 1,99,81,650/- for the current year and Rs. 11,01,30,316/- for the previous years. This is contrary to the fundamental accounting assumption of Accrual as prescribed in Accounting Standard 1 on 'Disclosure of Accounting Policies. As a result, the finance cost for the year by Rs. 49,97,410/-, Cost of Sales for the year by Rs. 1,11,21,787/-, i.e. the total profit for the year by Rs. 1,61,19,197/- has been overstated. Inventories have been understated by Rs. 38,62,453/-. The Company has also not provided for Penal Interest on loans. The amount of penal interest required in this behalf could not be ascertained. e) On the basis of written representation received from the directors and taken on record by the Board of Directors, in my opinion none of the Directors is disqualified from being appointed as director u/s 274 (1) (g) of the Companies Act, 1956. f) As the Company is declared Sick with BIFR, the Company is not in a position to pay the Cess as required u/s 441A of the Companies Act, 1956. 4) In my opinion and to the best of my information and according to the explanations given to me the said Balance Sheet and the Profit & Loss Account together with other notes thereto give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view on conformity with the accounting principles generally accepted in India:- a) In case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2005. b) In case of the Profit & Loss Account, of the profit of the Company for the year period on that date. For Kalyankumar & Company Chartered Accountants Proprietor Kalyankumar Place : Pune Date : 28.06.2005 ANNEXURE TO THE AUDITORS' REPORT (This is the annexure referred in my report of even date) In terms of the information and explanations given to me and the books and records examined by me in the normal course of audit and to the best of my knowledge and belief, I state as under: i) The Company has maintained the proper records showing full particulars including quantitative details and situation of fixed assets. These fixed assets were physically verified by the management during the year. I have been informed that no material discrepancies were noticed on such verification. Substantial part of fixed assets has not been disposed of during the year, which will affect its status as going concern. ii) The stock of inventory has been physically verified during the year by the management at reasonable intervals. In my opinion, the procedure of the physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business. The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of stocks as compared to books record were not material, however, the same has been properly dealt with the books of accounts. iii) The Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms and other parties covered in the register maintained under Section 301 of the Companies Act, 1956. iv) In my opinion there are adequate internal control procedures commensurate with the size of the Company and the nature of business for purchase of inventory fixed assets and for the sale of goods. In my opinion there is no continuing failure to correct major weakness in internal control. v) There are no transaction exceeding the value of Rupees five lacs in the financial year in respect of any party, the transactions that need to be entered into register in pursuance of section 301 of the Companies Act, 1956 have been so entered. vi) In my opinion and according to information and explanations given to me, the Company has not complied with the provisions of section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the pubic. There were defaults in respect of repayments of deposits and interest thereon upon maturity. However, the Company has submitted the reschedulement scheme to Honorable Company Law Board and the Company has received the order from Honorable Company Law Board accepting the reschedulement scheme. vii) In my opinion, the Company has an internal audit system commensurate with the size and the nature of its business. viii) The Central Government has not prescribed the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956. ix) (a) The Company is regular in depositing undisputed statutory dues including provident fund. The Company has not deposited Sales Tax of Rs. 32,92,508/- with Sales Tax Department. (b) The Company has not deposited the Demand of Income Tax disputed by the Company and the forum where the dispute is pending are as under:- Nature Period Forum Disputed of Dues where Amount dispute (Rs. in is pending Lacs) Income Tax A.Y. 1995-96 I.T.A.T 132.15 Income Tax A.Y. 1997-98 I.T A.T 238.78 x) The Company has accumulated losses amounting to Rs. 25,30,31,793/-. The Company has not incurred cash losses in the financial year under report and the financial year immediately preceding such financial year. xi) Based on our audit procedures and on the information and explanations given by the management, the Company has defaulted in repayment of dues to the financial institutions or banks or debenture holders as detailed below: Sr. Name Amount Default No. (Rs. in Lacs) Since 1. Vikas Sah. Bank Ltd. 53.04 2002 2. Osmanabad Janata Sah. Bank Ltd. 402.79 2002 3. SBI Home Finance Ltd. 1286.73 1999 4. Debenture Holders 16.73 1999 The Directors are negotiating with the banks/institutions the ways and means for repaying the loans. xii) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii) The Company is not chit fund Company, Nidhi or mutual benefit fund / society. xiv) The Company is not dealing or trading in shares, securities, debentures and other investments xv) The Company has not given guarantee for loans taken by others from bank or financial institutions. xvi) In my opinion the Company has not applied for the term loan during the year. xvii) In my opinion the Company has not taken short term loan during the year. xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained u/s 301 of the Act. xix) Securities have been created in respect of debentures issued by the Company. xx) The Company has not raised any money by Public Issue. For Kalyankumar & Company Chartered Accountants Proprietor Kalyankumar Place : Pune Date : 28.06.2005