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GWL Properties Ltd.

BSE: 508809 Sector: Infrastructure
NSE: N.A. ISIN Code: INE595C01025
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GWL Properties Ltd. (GWLPROPERTIES) - Auditors Report

Company auditors report

We have audited the accompanying financial statements of M/s GWL PROPERTIES LIMITED ("theCompany") which comprise the Balance Sheet as at March 31 2014 the Statement ofProfit and Loss of the Company for the year then ended and a summary of significantaccounting policies and other explanatory information.

1 Management's Responsibility for the Financial Statements

The Company's Management is responsible for the preparation of these financialstatements that give a true and fair view of the financial position financial performanceof the company in accordance with the Accounting Standards referred to in Section 211 (3C)of the Companies Act 1956 ("The Act") (which continues to be applicable inrespect of Section 133 of the Companies Act 2013 in terms of General Circular 15/2013dated 13th September 2013 of the Ministry of Corporate Affairs). This responsibilityincludes design implementation and maintenance of internal controls relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

2 Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based oh ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withthe ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal control relevant to the Company's preparation and fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances but not for the purpose of expressing an opinion on theeffectiveness of the Company's internal control. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Management as well as evaluating the overall presentation of thefinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion.

3 Basis for Qualified Opinion

The company has yet to obtain the deed of conveyance in respect of certain land shownunder the head Stock in trade (Refer Note 21). The company has received an injunctionorder restraining the company from alienating its assets and consequently preferenceshares of the company have not been redeemed even though they have fallen due. The impacton the above is not determinable at present and hence not commented upon by us.

4 Qualified Opinion

In our opinion except for the matters described in Para 3 above the financialstatements read together with significant accounting policies contingent liabilities andother notes give the information required by the Companies Act 1956 in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

(i) in the case of the Balance Sheet of the state of affairs of the Company as atMarch 312014;

(ii) In the case of Statement of Profit and Loss of the loss for the year ended onthat date.

5 Report on other Legal and Regulatory Requirements

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

5.2 In our opinion proper books of account as required by law have been kept by thecompany so far as it appears from our examination of those books.

5.3 The Balance Sheet and Statement of Profit and Loss dealt with by this report are inagreement with the books of account.

5.4 In our opinion the Balance Sheet and Statement of Profit and Loss comply with theAccounting Standards (which continues to be applicable in terms of Section 133 of theCompanies Act 2013 in terms of General Circular 15/2013 dated 13th September 2013 of theMinistry of Corporate Affairs) of the Act to the extent applicable.

5.5 On the basis of the written representations received from the Directors of thecompany as on 31.3.2014 and taken on record by the Board of Directors of the company weare of the opinion that none of the Directors of the company is disqualified from beingappointed as Director in terms of Section 274(1 )(g) of the Companies Act 1956.

6 As required by the Companies (Auditors' Report) Order 2003 and other amendments tothe order issued by the Central Government in terms of Section 227(4A) of the CompaniesAct 1956 and on the basis of such checks as we considered appropriate and information andexplanations given to us we further report that:

6.1 The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

6.2 We were informed that the physical verification of assets was carried out duringthe year and no material discrepancies between book records and physical inventory havebeen noticed on such verification and in our opinion the frequency of verification isreasonable.

6.3 During the year the Company has not disposed of any property.

6.4 As informed to us the inventories lying with the company were physically verifiedby the management at reasonable intervals.

6.5 In our opinion the procedure of physical verification of inventory followed by themanagement is reasonable and adequate in relation to the size of the company and nature ofits business.

6.6 The Company is maintaining proper records of inventory. In our opinion no materialdiscrepancies have been noticed during the verification.

6.7 The Company has not granted or taken any loans secured or unsecured to/fromcompanies firms or other parties covered in the register maintained under Section 301 ofthe Act except an interest free loan from holding company for a brief period which hassince been repaid. Accordingly paragraph 4(iii) (b) (c) (d) (e) (f) and (g) of theorder regarding the rate of interest and terms and conditions regularity of the receiptof principal and interest thereon and overdue amount are not applicable.

6.8 There are adequate internal control procedures commensurate with the size of thecompany and nature of its business with regard to purchase of inventory fixed assets andwith regard to the sale/supply of services. We have neither come across nor have we beeninformed of any major weakness in internal control procedures.

6.9 According to the information and explanations given to us the contracts orarrangements referred to in Section 301 of the Act have been entered in the registermaintained under that Section.

6.10 In our opinion and according to the information and explanations given to usthere are no transactions made in pursuance of contracts or arrangements entered into theregister maintained in pursuance of Section 301 of the Act and exceeding the value of fivelakhs in respect of any party during the year which have been made at prices which arenot reasonable having regard to the prevailing market prices at the relevant time.

6.11 In our opinion and according to the information and explanations given to us theCompany has not accepted any public deposits under the provisions of the Section 58A and58AA of the Companies Act 1956 and the Companies (Acceptance of Deposits) Rules 1975.

6.12 In our opinion the Company has an internal audit system commensurate with thesize of the Company and nature of its business.

6.13 (a) The Company is regular in depositing with the appropriate authorities theundisputed statutory dues including Provident

Fund Investor Education and Protection Fund State Insurance Income tax Sales taxWealth tax Custom Duty Excise Duty Cess and other material statutory dues applicable toit except Service tax amounting to Rs 2157680/-. Except the said amount there were noundisputed amounts payable in respect of the aforesaid statutory dues outstanding as atthe last day of the financial year for a period of more than six months from the date theybecame payable. 6.13 (b) According to the records of the Company there are no dues inrespect of Sales tax Income tax Customs duty Wealth tax Service tax Excise duty Cesswhich have not been deposited on account of any dispute except Rs34116675 as detailedbelow pending before the concerned authorities:

Name of Statute Nature of Dues Assessment Year Amount Rs Pending before
1. Income Tax Act 1961 Income tax 2003-04 3783295 CIT Chennai
2. Income Tax Act 1961 Income tax 2005-06 20277821 CIT Chennai
3. Income Tax Act 1961 Income tax 2009-10 4191610 A.O Chennai
4. Income Tax Act 1961 Income tax 1998-99 225400 ITAT Kolkata
5. Income Tax Act 1961 Income tax 2008-09 1460850 A.O Chennai
6. Income Tax Act 1961 Income tax 1999-00 3838621 CIT Kolkata
7. Income Tax Act 1961 Income tax 1997-98 339078 ITAT Kolkata

6.14 Even though the Company does not have accumulated losses at the end of the yearthe Company has incurred cash loss during the current year as well as in the immediatepreceeding year.

6.15 In our opinion and according to the information and explanations given to us theCompany has not taken any loan from banks/ financial institutions.

6.16 The Company has not granted loans and advances on the basis of security by way ofpledge of shares debentures and other securities.

6.17 In our opinion the Company is not a chit fund or a nidhi/mutual benefitfund/society. Therefore the provisions of paragraph 4(xiii) of the Companies (Auditors'Report) Order 2003 are not applicable to the Company.

6.18 In our opinion and according to the information and explanations given to us thecompany is not dealing or trading in shares securities debentures and other securitiesexcept under and through portfolio management scheme. The investments shown in theaccounts are held in the name of the company except to the extent of the exemption grantedunder Section 49 of the Act.

6.19 According to the information and explanations given to us the Company has notgiven guarantees for loans taken by others from banks or financial institutions.

6.20 According to the information and explanations given to us the Company has notavailed of any term loans from any bank or . financial institution during the year.

6.21 On the basis of the overall examination of the Balance Sheet of the Company inour opinion there are no funds raised on short term basis which have been used for longterm investments.

6.22 According to the information and explanations given to us the Company has notmade any preferential allotment of shares to parties and companies covered in the registermaintained under Section 301 of the Act.

6.23 The Central Government has not prescribed maintenance of cost records underSection 209(1 )(d) of the Act for any products of the Company.

6.24 According to the information and explanations given to us the Company has notissued any debentures and hence the question of creating any security does not arise.

6.25 According to the information and explanations given to us the Company has notraised any money through public issues.

6.26 During the course of our examination of the books and records of the Companycarried out in accordance with generally accepted auditing practices and according to theinformation and explanations given to us we have neither come across any fraud on or bythe Company nor have we been informed of any such case by the management.

Chartered Accountants
Place: Chennai Membership No. 21756
Date: 5th August 2014 Partner