Mar 31, 2023
The Members of Gujarat Gas Limited
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Financial Statements of Gujarat Gas Limited ("the Companyâ), which comprise the Balance Sheet as at March 31,2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes to the Standalone Financial Statements, including a summary of the significant accounting policies and other explanatory information (herein after referred to as "the Standalone Financial Statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (hereinafter referred to as "the Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended, (hereinafter referred to as "Ind ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2023, and its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (hereinafter referred to as "SAsâ) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (hereinafter referred to as "ICAIâ) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
Sr. No. |
Key Audit Matter |
Auditor''s Response |
1 |
Revenue recognition The Company is in the business of distribution of natural gas. The Company has major types of customers such as industrial, oil marketing companies, commercial, non-commercial, domestic and CNG. Revenue from sale of natural gas is considered as key audit matter as there is a risk of accuracy of recognition and measurement of gas sales in the Standalone Financial Statements considering following aspects: - Different pricing structure for different types of customers and frequency of price change - Voluminous number of customers - Capturing Gas Consumption data in billing - Estimating unbilled revenue at the year-end - Extensive use of SAP and other IT systems for managing the billing operation |
Principal audit procedure : Our approach was a combination of test of internal controls, analytical and substantive procedures which included the following: - Evaluated the design of internal control - For evaluation of operative effectiveness of internal control: ⢠Verified samples of gas sales invoices with relevant agreements executed with the customers, accuracy of pricing, consumption quantity, tax amount of invoices of major types of customers. ⢠Visited site to understand actual operations - Performed analytical procedures to verify number of bills generated during the year for each major type of customers as per their respective billing cycle - On sample basis, verified: ⢠Up-dation of Daily Contracted Quantity of gas of Industrial customers in the billing system. ⢠Up-dation of prices of gas for all major types of customers in the billing system. ⢠Sales invoices - Verified subsequent realisation of invoices generated for the month of March 2023. - Evaluated the appropriateness of accounting policies, related disclosure made and overall presentation in the Standalone Financial Statements in terms of Ind AS 115. |
2 |
Contingent Liabilities Contingent Liabilities are for ongoing litigations and claims with various authorities and third parties. These relate to direct tax, indirect tax, claims and legal proceedings. Contingent liabilities are considered as key audit matters as the amount involved is significant and it also involves significant management judgement to determine possible outcome and future cash outflows of these disputes. |
Principal audit procedure: - Obtained details of disputed claims as on March 31,2023 from the management. - Discussed with the management about the significant judgment considered in determining possible outcome and future cash outflows of these disputes. - Verified relevant documents related to disputes. - Evaluated the appropriateness of accounting policies, related disclosure made and overall presentation in the Standalone Financial Statements in terms of Ind AS 37. |
Information Other than the Standalone Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexures to Board''s Report, Business Responsibility and Sustainability Report, Corporate Governance and Shareholder''s Information, but does not include the Standalone Financial Statements and our auditor''s report thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements, or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
When we read the Final Annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions as per applicable laws and regulations.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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 Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of standalone the financial statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit 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, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act.
e) As the company is a Government Company, in terms of notification no. G.S.R. 463(E) dated 5th June 2015, issued by the Ministry of Corporate Affairs, the sub-section (2) of section 164 of the Act is not applicable to the company.
f) With respect to the adequacy of internal financial control over financial reporting of the company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure - A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial control over financial reporting.
g) As the company is a Government Company, in terms of notification no. G.S.R. 463(E) dated 5th June 2015, issued by the Ministry of Corporate Affairs, the sub-section (16) of section 197 of the Act is not applicable to the company.
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 standalone financial statements - Refer Note 43 to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a) The management has represented that, to the best of its knowledge and belief, no funds (which are material
either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person or entity, including foreign entity ("Intermediariesâ), which the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. (a) The final dividend proposed in the previous year, declared and paid by the Company during the year is in
accordance with Section 123 of the Act, as applicable.
(b) The Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with section 123 of the Act, as applicable.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.
2. As required by the Companies (Auditor''s Report) Order, 2020 ("the Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure - B", a statement on the matters specified in the paragraph 3 and 4 of the order.
3. In terms of section 143(5) of the Act, we give our report in âAnnexure - C" by taking into consideration the information, explanations and written representations received from the management on the matters specified in the directions and sub directions issued under the aforesaid section by the Comptroller and Auditor General of India.
For, Manubhai & Shah LLP Chartered Accountants
ICAI Firm Registration No. 106041W/W100136 K. B. Solanki
Place: Gandhinagar Partner
Date: May 10, 2023 Membership No. 110299
UDIN: 23110299BGYAQI7966
Mar 31, 2022
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Financial Statements of Gujarat Gas Limited ("the Companyâ), which comprise the Balance Sheet as at March 31, 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes to the Standalone Financial Statements, including a summary of the significant accounting policies and other explanatory information (herein after referred to as "the Standalone Financial Statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (hereinafter referred to as "the Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended, (hereinafter referred to as "Ind ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2022, and its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (hereinafter referred to as "SAsâ) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (hereinafter referred to as "ICAIâ) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
Sr. No. |
Key Audit Matter |
Auditor''s Response |
1 |
Revenue recognition The Company is in the business of distribution of natural gas. The Company has major types of customers such as industrial, oil marketing companies, commercial, non-commercial, domestic and CNG. Revenue from sale of natural gas is considered as key audit matter as there is a risk of accuracy of recognition and measurement of gas sales in the Standalone Financial Statements considering following aspects: - Different pricing structure for different types of customers and frequency of price change - Voluminous number of customers - Capturing Gas Consumption data in billing - Estimating unbilled revenue at the year-end - Extensive use of SAP and other IT systems for managing the billing operation |
Principal audit procedure : Our approach was a combination of test of internal controls, analytical and substantive procedures which included the following: - Evaluated the design of internal control - For evaluation of operative effectiveness of internal control: ⢠Verified samples of gas sales invoices with relevant agreements executed with the customers, accuracy of pricing, consumption quantity, tax amount of invoices of major types of customers. ⢠Visited site to understand actual operations - Performed analytical procedures to verify number of bills generated during the year for each major type of customers as per their respective billing cycle - On sample basis, verified: ⢠Updation of Daily Contracted Quantity of gas of Industrial customers in the billing system. ⢠Updation of prices of gas for all major types of customers in the billing system. ⢠Sales invoices - Verified subsequent realisation of invoices generated for the month of March 2022. - Evaluated the appropriateness of accounting policies, related disclosure made and overall presentation in the Standalone Financial Statements in terms of Ind AS 115. |
2 |
Contingent Liabilities: Contingent Liabilities are for ongoing litigations and claims with various authorities and third parties. These relate to direct tax, indirect tax, claims and legal proceedings. Contingent liabilities are considered as key audit matters as the amount involved is significant and it also involves significant management judgement to determine possible outcome and future cash outflows of these disputes. |
Principal audit procedure: - Obtained details of disputed claims as on March 31, 2022 from the management. - Discussed with the management about the significant judgment considered in determining possible outcome and future cash outflows of these disputes. - Verified relevant documents related to disputes. - Evaluated the appropriateness of accounting policies, related disclosure made and overall presentation in the Standalone Financial Statements in terms of Ind AS 37. |
Information Other than the Standalone Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexures to Board''s Report, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not include the Standalone Financial Statements and our auditor''s report thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information consider whether the other information is materially inconsistent with the Standalone Financial Statements, or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
When we read the Final Annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions as per applicable laws and regulations.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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 Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of standalone the financial statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The Standalone Financial Statements of the Company for the year ended March 31, 2021, were audited by predecessor auditor whose report dated June 01,2021 expressed an unmodified opinion on those Standalone Financial Statements..
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure - A", a statement on the matters specified in the paragraph 3 and 4 of the order.
2. As required by Section 143(3) of the Act, based on our audit 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, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act.
e) As the company is a Government Company, in terms of notification no. G.S.R. 463(E) dated 5th June 2015, issued by the Ministry of Corporate Affairs, the sub-section (2) of section 164 of the Act is not applicable to the company.
f) With respect to the adequacy of internal financial control over financial reporting of the company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure B''. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial control over financial reporting.
g) As the company is a Government Company, in terms of notification no. G.S.R. 463(E) dated 5th June 2015, issued by the Ministry of Corporate Affairs, the sub-section (16) of section 197 of the Act is not applicable to the company.
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 Standalone Financial Statements. Refer Note 43 to the Standalone Ind AS Financial Statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a) The management has represented that, to the best of its knowledge and belief, no funds (which are material
either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person or entity, including foreign entity ("Intermediariesâ), which the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. (a) The final dividend proposed in the previous year, declared and paid by the Company during the year is in
accordance with Section 123 of the Act, as applicable.
(b) The Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with section 123 of the Act, as applicable.
3. In terms of section 143(5) of the Act, we give our report in âAnnexure - C" by taking in to consideration the information, explanations and written representations received from the management on the matters specified in the directions and sub directions issued under the aforesaid section by the Comptroller and Auditor General of India.
For, Manubhai & Shah LLP Chartered Accountants
ICAI Firm Registration No. 106041W/W100136 K. B. Solanki
Place: Gandhinagar Partner
Date : May 10, 2022 Membership No. 110299
UDIN: 22110299AISTAR4367
Mar 31, 2021
Report on the Audit of the Standalone Ind AS Financial Statements Opinion
We have audited the accompanying standalone Ind AS financial statements of Gujarat Gas Limited ("the Companyâ), which comprise the Balance Sheet as at March 31, 2021 the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes to the financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone Ind AS financial statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013 ("the Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, of the state of affairs (financial position) of the Company as at March 31, 2021 and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone Ind AS financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements of the current period. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
Sr. No. |
Key Audit Matter |
Auditor''s Response |
1 |
Evaluation of Impact of COVID-19 on the business operations/ revenues/ cash flows/ Trade Receivables / Impairment of Assets etc. The Company generates revenue from supply of Natural Gas of various kinds to customers and different jurisdictions within India which includes large numbers of Industrial and commercial Customers. Customers in different category and jurisdictions are subject to their independent business risks due to COVID-19. Management has assessed the business continuity, revenue from sale of natural gas and cash flows from operations and Company has prepared cash flow projections and believes it has sufficient liquidity based on the available liquid cash and available credit facilities the expected cash to be generated from operations to meet its financial obligations as they fall due for the following twelve months. Management has also considered the possible effects of the pandemic on the carrying amount of property, plant and equipment, investments, inventories, and other current assets. The impairment test model also includes sensitivity testing of key assumptions. Further, management has factored impact of second wave of COVID-19 on the same considering as one Cash Generating Unit (CGU). Accordingly, the above assessment factoring impact of COVID-19 on continuity of its operations and the recoverability of trade receivables post COVID-19 environment has been identified as a key audit matter because the assumptions on which the tests are based are highly judgmental and are affected by future market and economic conditions which are inherently uncertain, and because of the materiality of the balances to the standalone financial statements as a whole. Refer note no. 55 Of Standalone Financial Statement. |
Principal Audit Procedures As a part of our audit we have, carried out the following procedures: ⢠Obtained an understanding of the process and testing the operating effectiveness of internal controls over the impairment and preparation of the cash flow forecast based on assumptions and inputs to the model used to estimate the future cash flows. ⢠We assessed the Company''s methodology applied in determining the Cash Generating Unit (CGU), it''s key assumptions and valuation method used and the accuracy of the inputs used for the same. ⢠Compared the cash flow forecasts to recent trend of sales volume and management estimates and other relevant market and economic information, as well as testing the underlying calculations. ⢠We discussed the potential changes in key drivers as compared to previous year / actual performance with management and considering impact of COVID-19 in order to evaluate whether the inputs and assumptions used in the cash flow forecasts were suitable. ⢠We evaluated disclosures related to management assessment on impact of COVID-19 for the continuity of operations and on the annual impairment tests and as required under Indian Accounting Standard (Ind-AS) -36 Impairment of Assets. |
2 |
Accuracy of Recognition, measurement, presentation and disclosure of Ind AS 116 Leases The Ind AS 116 Leases requires a new lease accounting model, wherein lessees are required to recognize a right-to-use (ROU) asset and a lease liability arising from a lease on the balance sheet. The Company has a large number of leases with different contractual terms and it involves complexity and requires significant judgements and estimates including, determination of discounting rates and the lease term. Refer note 50 of the Standalone Ind AS Financial Statements. |
Principal Audit Procedures We evaluated the accounting policy and internal controls followed by the Company in respect of lease accounting standard (Ind AS 116). On a sample basis, we have assessed the key terms and conditions of lease contracts and verified the computation of lease liabilities. Assessed and tested the presentation and disclosures relating to Ind AS 116. |
Sr. No. |
Key Audit Matter |
Auditor''s Response |
3 |
Evaluation of material claims against the company not acknowledge as debt. There are various claims disputed by the Company including matters under dispute with one of the suppliers in respect of use of domestic allocated gas other than specified purpose which involves significant judgment to determine the possible outcome and Future Cash outflow of these disputes. Refer note 42.2 (iii) of the Standalone Ind AS Financial Statements |
Principal Audit Procedures Obtained details of all the claims disputed by the company as on 31st March 2021 from the management. We have discussed the management''s underlying assumptions in estimating that the claims are erroneous and the possible outcome of the disputes. We have also evaluated these underlying assumptions to determine the Legal Liability / Obligation of the company as defined in applicable Indian Accounting Standards (Ind AS 37) and also evaluated whether any change was required to management''s position on these uncertainties'' vis a vis past year with reference to new claims disputed by the company. |
4 |
Accuracy of Recognition, measurement, presentation and disclosure of revenues and other related balance in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" Refer note 49 of the Standalone Ind AS Financial Statements |
Principal Audit Procedures We evaluated the accounting policy and internal controls followed by the Company while accounting of connection charges from customers, which is deferred over the period when the performance obligation is satisfied, as per the Indian Accounting Standard (Ind AS) 115. Further, we test checked some of the contracts and carried out a combination of procedures involving enquiry and observation, and inspection of evidence in respect of operation of these controls. We also performed analytical procedures for reasonableness of revenues disclosed as per the new accounting standard (Ind AS 115). |
In view of the Government imposed travel restrictions, we have performed the audit from remote location, on the basis of data, scan copies of key records, documents, management approvals, estimates, assumptions and other information''s supplied electronically by the management on online platform. We were not able to participate in physical verification of inventories that was carried out by the management and also not able to perform the requisite audit procedure including inquiries, external confirmations and test of controls in respect of certain receivables, etc. as prescribed in various Standards of Auditing issued by the ICAI.
We have relied on Management Assurance of the authenticity, completeness and accuracy of these records electronically submitted to us and have performed additional audit procedures to satisfy ourselves that these records are appropriate to gain the reasonable assurance that the Statement as a whole are free from material misstatement, whether due to fraud and error, and to issue an Auditor''s Report that includes our opinion.
Our opinion is not modified in respect of this matter.
Information Other than the Standalone Ind AS Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexures to Board''s Report, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not include the standalone Ind AS financial statements and our auditor''s report thereon.
Our opinion on the standalone Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone Ind AS financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
When we read the Final Annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions as per applicable laws and regulations.
Responsibilities of Management and those charged with Governance for the Standalone Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended. 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone Ind AS financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditor''s Report) Order, 2016 ("the Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
2) 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, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) As the company is a Government Company, in terms of notification no. G.S.R. 463(E) dated 5 th June 2015, issued by the Ministry of Corporate Affairs, the sub-section (2) of section 164 of the Act is not applicable to the company.
f) 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 âAnnexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
g) As the company is a Government Company, in terms of notification no. G.S.R. 463(E) dated 5th June 2015, issued by the Ministry of Corporate Affairs, the sub-section (16) of section 197 of the Act is not applicable to the company.
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 standalone Ind AS financial statements. Refer Note 42 to the standalone Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
3) In terms of section 143(5) of the Act, we give our report in âAnnexure - C" by taking into consideration the information, explanations and written representations received from the management on the matters specified in the directions and sub directions issued under the aforesaid section by the Comptroller and Auditor General of India.
For, S. R. Goyal & Co. Chartered Accountants FRN: 001537C
Place : Jaipur (Partner)
Date : 01st June 2021 M. No.:077201
UDIN : 21077201AAAAAT6447
Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Gujarat Gas Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March 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 (herein after referred to as âStandalone Ind AS Financial Statementsâ).
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (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 the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended.
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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone 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 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 standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone 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 the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone 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 standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 including the Indian Accounting Standards (Ind AS)specified under Section 133 of the Act, of the state of affairs (financial position) of the Company as at 31st March 2018, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of section 143 (11) of the Act, we give in the âAnnexure - Aâ, a statement on the matters specified in the paragraph 3 and 4 of the order, to the extent applicable.
2. 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, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act read with relevant rule issued thereunder.
e) As the company is a Government Company, in terms of notification no. G.S.R. 463(E) dated 5th June 2015, issued by the Ministry of Corporate Affairs, the sub-section (2) of section 164 is not applicable to the company.
f) 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 âAnnexure - Bâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting
g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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 standalone Ind AS financial statements. Refer Note 40 to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and
3. In terms of section 143 (5) of the Act, we give our report (refer to our separate report in âAnnexure - Câ) by taking into consideration the information, explanations and written representations received from the management on the matters specified in the directions and sub directions issued under the aforesaid section by the Comptroller and Auditor General of India.
ANNEXURE- A TO INDEPENDENT AUDITORâS REPORT
(Referred to in paragraph 1 under âReport on Other Legal and Regulatory Requirementsâ section of our Independent Auditorâs Report, of even date, to the members of Gujarat Gas Limited (Formerly known as GSPC Distribution Networks Limited) on Standalone Ind AS Financial Statements for the year ended 31st March 2018)
(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items, other than underground gas pipelines which are not physically verifiable, over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company except in respect of the following freehold land as on 31st March 2018.
Sr. No. |
Asset description |
Book value (Amount in Rs.) |
1 |
Survey No. 306-A-/1 paiki 3, Post-Hazira, Taluka Choryasi, District-Surat13,057 Sq. Mtrs |
Rs. 15.88 Crores |
2 |
Survey No. 150 Mora village District-Surat 13,557 Sq. Mtrs |
Rs. 1/- |
(ii) The inventory has been physically verified by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liabilities Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3 (iii) [(a) to (c)] of the said Order are 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, with respect to the loans and investments made.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted deposits within the meaning of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products (Natural Gas) where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, income tax, goods and services tax (GST), sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities though there has been slight delay in few cases.
According to the information and explanations given to us and the records of the Company examined by us, in our opinion, no undisputed amounts payable were in arrears as at 31st March 2018 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of provident fund, goods and services tax (GST), sales tax, wealth tax, duty of customs, value added tax, cess and other material statutory dues, as applicable which have not been deposited on account of any dispute.
The particulars of dues of service tax, duty of excise and income tax as at 31st March 2018 which have not been deposited on account of a dispute, are as follows:
Sr. No. |
Name of statute |
Nature of dues |
Amount (in Crs.) |
Period to which the amount relates |
Forum where the dispute is pending |
1 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.79 |
Assessment Year 2001-02 |
Assessing Officer |
2 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.03 |
Assessment Year 2012-13 |
Income Tax Appellate Tribunal |
3 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.002 |
Assessment Year 2012-13 |
Assessing Officer |
4 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.86 |
Assessment Year 2012-13 |
Income Tax Appellate Tribunal |
5 |
Income Tax Act,1961 Income |
Income Tax and Interest thereon |
0.15 |
Assessment Year 2013-14 |
Commissioner of Tax (Appeals) |
6 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
3.98 (after adjusting credit of tax paid & TDS) |
Financial Year 2014-15 |
Commissioner of Income Tax (Appeals) |
7 |
Central Excise Act, 1944 |
Service Tax and Duty of Excise |
11.75 |
April-2010 to March-2015 |
The Customs, Excise and Service Tax Appellate Tribunal |
8 |
Central Excise Act, 1944 |
Service Tax and Duty of Excise |
1.01 |
April-2015 to Nov-2015 |
Excise & Service Tax Commissioner |
9 |
Central Excise Act, 1944 |
Service Tax and Duty of Excise |
2.68 |
2009-10 to 2014-15 (up to Aug-2014) |
The Customs, Excise and Service Tax Appellate Tribunal |
10 |
Central Excise Act, 1944 |
Service Tax and Duty of Excise |
0.67 |
Sept-2014 to 14th May-2015 |
The Customs, Excise and Service Tax Appellate Tribunal |
11 |
Central Excise Act, 1944 |
Service Tax and Duty of Excise |
1.17 |
Mayâ10 (2010-11) to Feb-2016 (up to 02.02.2016) |
Excise & Service Tax Commissioner |
12 |
Central Excise Act, 1944 |
Service Tax and Duty of Excise |
0.18 |
2006-07 & 2007-08 |
The Customs, Excise and Service Tax Appellate Tribunal |
13 |
Finance Act, 1994 |
Service Tax and Duty of Excise |
0.10 |
2006-07 to 2009-10 |
The Customs, Excise and Service Tax Appellate Tribunal |
14 |
Finance Act, 1994 |
Service Tax and Duty of Excise |
37.66 |
2005-06 to 2012-13 |
The Customs, Excise and Service Tax Appellate Tribunal |
15 |
Finance Act, 1994 |
Service Tax and Duty of Excise |
2.24 |
2013-14 |
The Customs, Excise and Service Tax Appellate Tribunal |
16 |
Finance Act, 1994 |
Service Tax and Duty of Excise |
0.59 |
2006-07 to 2011-12 |
The Customs, Excise and Service Tax Appellate Tribunal |
(viii) The Company has not defaulted in repayment of loans or borrowing dues to financial institution or bank or dues to debenture holders.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. During the year money raised from term loans were applied for the purpose for which they were raised.
(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been, noticed or reported during the year, nor we have been informed of any such case by the Management.
(xi) The Company has not paid or provided managerial remuneration during the year. Therefore, the provisions of Clause 3 (xi) of the said Order are not applicable to the Company.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(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 Company being a government company, transactions with other government companies are exempt for the compliance of Section 188 of the Act, in terms of notification no. G.S.R 463(E) dated 5thJune 2015, issued by Ministry of Corporate Affairs. Details of such transactions have been disclosed in the financial statements as required by the applicable Indian Accounting Standards.
(xiv) According to the information and explanations give 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.
(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 them. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For, S. R. Goyal & Co.
Chartered Accountants
FRN No. 001537C
A.K. Atolia
Place: Gandhinagar (Partner)
Date: 11th May, 2018 M. No. - 077201
Mar 31, 2017
INDEPENDENT AUDITOR''S REPORT
To
The Members of Gujarat Gas Limited
(Formerly Known as GSPC Distribution Networks Limited)
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Gujarat Gas Limited (''the Company''), which comprise the Balance Sheet as at 31st March 2017, 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 (herein after referred to as ''Standalone Ind AS Financial Statements'').
Management''s Responsibility for the Standalone 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 Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, 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 the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act read with relevant rules issued there under.
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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone 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 there under.
We conducted our audit 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 standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone 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 the 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 standalone 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 standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 including Ind AS, of the financial position of the Company as at 31st March 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Other matter
The Comparative financial information of the Company for the year ended 31st March 2016 and the transition date opening balance sheet as at 1st April 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by us for the year ended 31st March 2016 vide report dated 17th May 2016 and for the year ended 31st March 2015 vide our report dated 13 th August 2015 expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
Our Opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Orderâ) issued by the Central Government of India in terms of section 143 (11) of the Act, we give in the âAnnexure - A", a statement on the matters specified in the paragraph 3 and 4 of the order, to the extent applicable.
2. 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, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act read with relevant rule issued there under.
e) As the company is a Government Company, in terms of notification no. G.S.R. 463(E) dated 5th June 2015, issued by the Ministry of Corporate Affairs, the sub-section (2) of section 164 is not applicable to the company.
f) 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 âAnnexure - B".
g) 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, 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 standalone Ind AS financial statements. Refer Note 43 to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and
iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November 2016 to 30th December 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the Management. Refer Note 52 to the standalone Ind AS financial statements.
3. In terms of section 143 (5) of the Act, we give in âAnnexure - C" a statement on the directions and sub directions issued under the aforesaid section by the Comptroller and Auditor General of India.
(Referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirementsâ section of our Independent Auditor''s Report, of even date, to the members of Gujarat Gas Limited (Formerly known as GSPC Distribution Networks Limited) on Standalone Ind AS Financial Statements for the year ended 31st March 2017)
(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items, other than underground gas pipelines which are not physically verifiable, over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company except in respect of one freehold land situated at Survey No. 306-A-/1 paiki 3, Post-Hazira, Taluka Choryasi, District-Surat admeasuring 13,057 Sq. Mtrs., having book value of '' 15.88 Crores as at 31st March 2017.
(ii) The inventory, has been physically verified by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liabilities Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3 (iii) [(a) to (c)] of the said Order are 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, with respect to the loans and investments made.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted deposits within the meaning of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products (Natural Gas) where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion,
the Company is regular in depositing the undisputed statutory dues, including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities though there has been slight delay in few cases.
According to the information and explanations given to us and the records of the Company examined by us, in our opinion, no undisputed amounts payable were in arrears as at 31st March 2017 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of sales tax and customs duty which have not been deposited on account of any dispute.
The particulars of dues of service tax, duty of excise and income tax as at 31st March 2017 which have not been deposited on account of a dispute, are as follows:
Name of statute |
Nature of dues |
Amount (in Crs.) |
Period to which the amount relates |
Forum where the dispute is pending |
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.79 |
Assessment Year 2001-02 |
Income Tax Appellate Tribunal |
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.31 |
Assessment Year 2002-03 |
Commissioner of Income Tax (Appeals) |
Income Tax Act,1961 |
Income Tax and Interest thereon |
4.33 |
Assessment Year 2008-09 |
Commissioner of Income Tax (Appeals) |
Income Tax Act,1961 |
Income Tax and Interest thereon |
2.96 |
Assessment Year 2009-10 |
Commissioner of Income Tax (Appeals) |
Income Tax Act,1961 |
Income Tax and Interest thereon |
20.40 |
Assessment Year 2011-12 |
Commissioner of Income Tax (Appeals) |
Income Tax Act,1961 |
Income Tax and Interest thereon |
34.95 |
Assessing Officer |
|
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.02 |
Assessment Year 2012-13 |
Income Tax Appellate Tribunal |
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.92 |
Assessment Year 2012-13 |
Commissioner of Income Tax (Appeals) |
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.002 |
Assessment Year 2012-13 |
Assessing Officer |
Income Tax Act,1961 |
Income Tax and Interest thereon |
5.79 |
Assessment Year 2013-14 |
Commissioner of Income Tax (Appeals) |
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.15 |
Assessment Year 2013-14 |
Commissioner of Income Tax (Appeals) |
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.02 |
Assessment Year 2014-15 |
Assessing Officer |
Central Excise Act, 1944 |
Service Tax and Duty of Excise |
11.13 |
April-2010 to March-2015 |
The Customs, Excise and Service Tax Appellate Tribunal |
Central Excise Act, 1944 |
Service Tax and Duty of Excise |
0.84 |
April-2015 to Nov-2015 |
Excise & Service Tax Commissioner |
Central Excise Act, 1944 |
Service Tax and Duty of Excise |
2.52 |
2009-10 to 2014-15 (up to Aug-2014) |
The Customs, Excise and Service Tax Appellate Tribunal |
Central Excise Act, 1944 |
Service Tax and Duty of Excise |
0.63 |
Sept-2014 to 14th May-2015 |
The Customs, Excise and Service Tax Appellate Tribunal |
Central Excise Act, 1944 |
Service Tax and Duty of Excise |
1.06 |
May''10 (2010-11) to Feb-2016Service (up to 02.02.2016) |
Excise & Tax Commissioner |
Central Excise Act, 1944 |
Service Tax and Duty of Excise |
0.18 |
2006-07 & 2007-08 |
The Customs, Excise and Service Tax Appellate Tribunal |
Finance Act, 1994 |
Service Tax and Duty of Excise |
0.10 |
2006-07 to 2009-10 |
The Customs, Excise and Service Tax Appellate Tribunal |
Finance Act, 1994 |
Service Tax and Duty of Excise |
37.66 |
2005-06 to 2012-13 |
The Customs, Excise and Service Tax Appellate Tribunal |
Finance Act, 1994 |
Service Tax and Duty of Excise |
2.11 |
2013-14 |
The Customs, Excise and Service Tax Appellate Tribunal |
Finance Act, 1994 |
Service Tax and Duty of Excise |
0.59 |
2006-07 to 2011-12 |
The Customs, Excise and Service Tax Appellate Tribunal |
(viii) The Company has not defaulted in repayment of loans or borrowing dues to financial institution or bank or dues to debenture holders.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. During the year money raised from term loans were applied for the purpose for which they were raised.
(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been, noticed or reported during the year, nor we have been informed of any such case by the Management.
(xi) The Company has not paid or provided managerial remuneration during the year. Therefore, the provisions of Clause 3 (xi) of the said Order are not applicable to the Company.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(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 Company being a government company, transactions with other government companies are exempt for the compliance of Section 188 of the Act, in terms of notification no. G.S.R 463(E) dated 5th June 2015, issued by Ministry of Corporate Affairs. Details of such transactions have been disclosed in the financial statements as required by the applicable Indian Accounting Standards.
(xiv) According to the information and explanations give 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.
(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 them. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
(Referred to in paragraph 2 (f) under "Report on Other Legal and Regulatory Requirementsâ section of our Independent Auditor''s Report, of even date, to the members of Gujarat Gas Limited (Formerly known as GSPC Distribution Networks Limited) on Standalone Ind AS Financial Statements for the year ended 31st March 2017)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Act")
We have audited the internal financial controls over financial reporting of GUJARAT GAS LIMITED (Formerly known as GSPC Distribution Networks Limited) ("the Companyâ), as of 31st March 2017 in conjunction with our audit of the standalone 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 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 on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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 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 judgment, including the assessment of the risks of material misstatement of the 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 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 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 financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the 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, 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 31st March 2017, 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 issued by the Institute of Chartered Accountants of India.
For, Manubhai & Shah LLP
Chartered Accountants
ICAI Firm Regn. No. 106041W/W100136
(G. R. Parmar)
Partner
Membership No. 121462
Place: Ahmedabad
Date: 24 May 2017
Mar 31, 2016
TO
THE MEMBERS OF GUJARAT GAS LIMITED
(Formerly known as GSPC Distribution Networks Limited)
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of GUJARAT GAS LIMITED (Formerly known as GSPC Distribution Networks Limited) ("the Companyâ), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year ended on that date and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,
2014. 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone 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 there under.
We conducted our audit 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 financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the 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 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 the 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 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 standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 31st March, 2016, and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. 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, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) As the Company is a Government Company, in terms of notification no. G.S.R 463(E) dated 5th June 2015, issued by Ministry of Corporate Affairs, the sub-section (2) of section 164 of the Act is not applicable.
(f) 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 âAnnexure B"; and
(g) 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, 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 financial statements -Refer Note 34 to the financial statements;
(ii) The Company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts;
(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
3. As required by section 143 (5) of the Act, we give in âAnnexure C" a report on the directions and sub directions issued by Comptroller and Auditor General of India.
(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixedassets.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items, other than underground gas pipelines which are not physically verifiable, over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company except in respect of one land situated at Hazira location having book value of '' 15.88 crore as at 31st March 2016.
(ii) The inventory, has been physically verified by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liabilities Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3 (iii) [(a) to (c)] of the said Order are 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, with respect to the loans and investments made.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted deposits within the meaning of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products (Natural Gas) where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities though there has been slight delay in few cases.
According to the information and explanations given to us and the records of the Company examined by us, in our opinion, no undisputed amounts payable were in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of sales tax, wealth tax and customs duty which have not been deposited on account of any dispute.
The particulars of dues of service tax, excise and income tax as at March 31, 2016 which have not been deposited on account of a dispute, are as follows:
Sr. No. |
Name of statute |
Nature of dues |
Amount (in Crs.) |
Period to which the amount relates |
Forum where the dispute is pending |
1 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.34 |
Assessment Year 1996-97 |
Commissioner of Income Tax (Appeal) |
2 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.79 |
Assessment Year 2001-02 |
Commissioner of Income Tax (Appeal) |
3 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.31 |
Assessment Year 2002-03 |
Commissioner of Income Tax (Appeal) |
4 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.02 |
Assessment Year 2006-07 |
Commissioner of Income Tax (Appeal) |
5 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
4.33 |
Assessment Year 2008-09 |
Commissioner of Income Tax (Appeal) |
6 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
2.96 |
Assessment Year 2009-10 |
Commissioner of Income Tax (Appeal) |
7 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
1.55 |
Assessment Year 2010-11 |
Income Tax Appellate Tribunal |
8 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
0.31 |
Assessment Year 2010-11 |
Commissioner of Income Tax (Appeal) |
9 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
60.87 |
Assessment Year 2011-12 |
Commissioner of Income Tax (Appeal) |
10 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
5.69 |
Assessment Year 2012-13 |
Commissioner of Income Tax (Appeal) |
11 |
Income Tax Act,1961 |
Income Tax and Interest thereon |
5.79 |
Assessment Year 2013-14 |
Commissioner of Income Tax (Appeal) |
12 |
Central Excise Act, 1944 |
Excise Exemption related to SSI Unit |
0.43 |
Financial Year 2003-04 |
Customs, Excise & Service Tax Appellate Tribunal, Ahmadabad |
13 |
Central Excise Act, 1944 |
Cenvat Credit of Input Service Tax paid on Outward Freight transportation disallowed. |
10.2 |
Financial Year 2010-11 to 2014-2015 |
Customs, Excise & Service Tax Appellate Tribunal, Ahmadabad |
14 |
Central Excise Act, 1944 |
Cenvat Credit of Input Service Tax paid on Franchisee Commission disallowed |
2.28 |
Financial Year 2009-10 to 2014-15 (up to August 2014) |
Customs, Excise & Service Tax Appellate Tribunal, Ahmadabad |
15 |
Central Excise Act, 1944 |
Cenvat Credit of Input Service Tax paid on Franchisee Commission disallowed |
0.59 |
September 2014 to May 2015 |
Excise & Service Tax Commissioner ate |
16 |
Central Excise Act, 1944 |
Cenvat Credit of Capital Goods disallowed |
0.12 |
Financial Year 2006-07 & 2007-08 |
Customs, Excise & Service Tax Appellate Tribunal, Ahmadabad |
17 |
Finance Act, 1994 |
Service Tax on the overseas remittance |
0.08 |
Financial Year 2006-07 to 2009-10 |
Customs, Excise & Service Tax Appellate Tribunal, Ahmadabad |
18 |
Finance Act, 1994 |
Cenvat Credit of Input Service Tax paid on Gas Transportation charges disallowed |
24.65 |
Financial Years 2005-06 to 2012-13 |
Customs, Excise & Service Tax Appellate Tribunal, Ahmadabad |
19 |
Finance Act, 1994 |
Service Tax on lease of Equipment |
0.38 |
Financial Year 2006-07 to 2011-12 |
Customs, Excise & Service Tax Appellate Tribunal, Ahmadabad |
20 |
Finance Act, 1994 |
Cenvat Credit of Input Service Tax paid on Gas Transportation charges disallowed |
1.09 |
Financial Year 2013-14 |
Excise & Service Tax Commissioner ate |
(viii) The Company has not defaulted in repayment of loans or borrowing dues to financial institution or bank or dues to debenture holders.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. During the year money raised from term loans have been applied for the purpose for which they were raised.
(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been, noticed or reported during the year, nor we have been informed of any such case by the Management.
(xi) The Company has not paid or provided managerial remuneration during the year. Therefore, the provisions of Clause 3 (xi) of the said Order are not applicable to the Company.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(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 Company being a government company, transactions with other government companies are exempt for the compliance of Section 188 of the Act, in terms of notification no. G.S.R 463(E) dated 5th June 2015, issued by Ministry of Corporate Affairs. Details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations give 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.
(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 them. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Act")
We have audited the internal financial controls over financial reporting of GUJARAT GAS LIMITED (Formerly known as GSPC Distribution Networks Limited) (âthe Company"), as of 31 March 2016 in conjunction with our audit of the standalone 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 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 on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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 judgment, including the assessment of the risks of material misstatement of the 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 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 financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the 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, 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 31 March 2016, 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 issued by the Institute of Chartered Accountants of India.
For Manubhai & Shah LLP
Chartered Accountants
ICAI Firm Regn. No. 106041W/W100136
(G. R. Parmar)
Partner
Membership No.121462
Place: Ahmedabad
Date: 17 May 2016
Mar 31, 2015
We have audited the accompanying standalone financial statements of
GUJARAT GAS LIMITED (Formerly known as GSPC Distribution Networks
Limited) ("the Company"), which comprise the Balance Sheet as at 31 st
March, 2015, the Statement of Profit and Loss, the Cash Flow Statement
for the year then ended on that date and a summary of the significant
accounting policies and other explanatory information, in which are
incorporated the returns of four branches [erstwhile GSPC Gas Company
Limited, Gujarat Gas Financial Services Limited, Gujarat gas Trading
Company Limited and GSPC Distribution Networks Limited (without
considering any impact of Scheme of Amalgamation and Arrangement
effected from dated April 01, 2013)] audited by branch auditors of the
Company's branches and the return of one branch (erstwhile Gujarat Gas
Company Limited) audited by us, for the year ended on that date.
Management's Responsibility for the Standalone 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 standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. 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 financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
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
there under.
We conducted our audit 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 financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the 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 financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the 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 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 standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone 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 31 st March, 2015, and its profit and its cash flows for the year
ended on that date.
Other Matters
We did not audit the financial statements of four branches included in
the standalone financial statements of the Company whose financial
statements reflect total assets of Rs. 5,931.03 Crores as at 31st
March, 2015 and total revenues of Rs. 6,553.09 Crore for the year ended
on that date, as considered in the standalone financial statements. The
financial statements of these branches have been audited by the branch
auditors whose reports have been furnished to us, and our opinion in so
far as it relates to the amounts and disclosures included in respect of
these branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure - I
a statement on the matters specified in paragraphs 3 and 4 of the
Order, in which the comments in the branch auditors' reports are also
incorporated.
2. 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 and proper returns adequate for the purpose of our audit
have been received from the branches not audited by us.
(c) The reports on the accounts of the branch offices of the Company
audited under section 143 (8) of the Act by branch auditors have been
sent to us and have been properly dealt with by us in preparing this
report.
(d) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account and with the returns received from branches not
visited by us.
(e) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 13 3 of
the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(f) As the Company is a Government Company, in terms of notification
no. G.S.R 463(E) dated 5th June 2015, issued by Ministry of Corporate
Affairs, the sub-section (2) of section 164 of the Act is not
applicable.
(g) 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, 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 financial statements - Refer Notes 35 and 48
to the financial statements;
(ii) The Company has made provisions, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long term contracts including derivative contracts;
(iii) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
3. As required by section 143 (5) of the Act, we give in Annexure - II
a report on the directions and sub directions issued by the Comptroller
and Auditor General of India, in which the comments in the branch
auditors' reports are also incorporated.
ANNEXURE - I TO INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 under "Report on Other Legal and Regulatory
Requirements" section of our report on Standalone Financial Statements
of Gujarat Gas Limited (Formerly known as GSPC Distribution Networks
Limited) of even date)
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items, other
than underground gas pipelines which are not physically verifiable,
over a period of 3 years which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies have been noticed on such verification.
(ii) (a) The inventory, excluding stocks with third parties, has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 189 of the Act. Therefore, the provisions of Clause 3
(iii) [(a) and (b)] of the said Order are 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 and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company and according to the information and
explanations given to us, we have neither come across, nor have been
informed of, any continuing failure to correct major weaknesses in the
aforesaid internal control system.
However as reported by Branch Auditor of erstwhile GSPC Gas Company
Limited, internal control as regards inventory with contractors and
physical verification of fixed assets needs to be strengthened in order
to avoid encroachments by third parties in ROU / ROW.
(v) The Company has not accepted deposits within the meaning of
Sections 73 to 76 or any other relevant provisions of the Act and the
rules framed there under. According to the information and explanations
given to us, no order has been passed by the Company Law Board or the
National Company Law Tribunal or the Reserve Bank of India or any Court
or any other Tribunal.
(vi) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under sub-section (1) of Section 148 of the Act, and are of
the opinion that, prima facie, the prescribed accounts and records have
been made and maintained. We have not, however, made a detailed
examination of the records with a view to determine whether they are
accurate or complete.
(vii) (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is regular in depositing the undisputed statutory dues, including
provident fund, income tax, sales tax, wealth tax, service tax, duty of
customs, duty of excise, value added tax, cess and other material
statutory dues, as applicable, with appropriate authorities.
According to the information and explanations given to us and the
records of the Company examined by us, in our opinion, no undisputed
amounts payable were in arrears as at March 31, 2015 for a period of
more than six months from the date they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of sales tax,
wealth tax and customs duty which have not been deposited on account of
any dispute.
The particulars of dues of service tax, excise and income tax as at
March 31, 2015 which have not been deposited on account of a dispute,
are as follows:
Name of Nature of dues Amount
the Statute (Rs. in Crores)
Finance Act, 1994 Service Tax 24.30
(including interest
and penalty)
Central Excise Act, Excise Exemption 0.24
1944 related to SSI Unit
Central Excise Act , Excise Duty
(including 0.12
1944 interest and penalty)
Central Excise Act, CENVAT Credit of 1.07
1944 service tax paid on
Franchisee Commission
Central Excise Act, CENVAT Credit of 3.53
1944 service tax paid on
outward freight transfer
Income Tax Act,1961 Income Tax and 0.19
Interest thereon.
Income Tax Act,1961 Income Tax and 0.35
Interest thereon
Income Tax Act,1961 Income Tax 12.22
Assessment order
u/s 143(3) of the
Income Tax Act,1961
Income Tax Act,1961 Income Tax and 0.31
Interest thereon.
Income Tax Act,1961 Income Tax and 2.19
Interest thereon
Income Tax Act,1961 Income Tax 60.80
Assessment order
u/s 143(3) of the
Income Tax Act,1961
Income Tax Act,1961 Income Tax and 0.06
Interest thereon.
Income Tax Act,1961 Income Tax and 4.77
Interest thereon.
Name of the Statute Period to which Forum where the
the amount relates dispute is pending
Finance Act,1994 Financial Years Customs, Excise &
Service Tax
2005-06 to 2012-13 Appellate Tribunal,
Ahmedabad
Central Excise Financial Year Customs, Excise &
Act,1944 Service Tax
2003-04 Appellate Tribunal,
Ahmedabad
Central Excise
Act,1944 October 2006 Customs, Excise &
Service Tax
Appellate Tribunal,
Ahmedabad
Central Excise
Act,1944 April 2009 to Commissioner of
August 2014 Central Excise
Department
Central Excise April 2010 to Commissioner of
Act,1944 Central
August 2014 Excise Department
Income Tax Act,1961 Assessment Year Assessing Officer
1996-97
Income Tax Act,1961 Assessment Year Commissioner of
Income Tax
1996-97 (Appeals), Ahmadabad
Income Tax Act,1961 Assessment Year Commissioner of
Income Tax
2010-11 (Appeals), Gandhinagar
Income Tax Act,1961 Assessment Year Commissioner of
Income Tax
2010-11 (Appeals) ruled
in favour of
Gujarat Gas Financial
Services Limited.
Appeal Effect awaited.
Income Tax Act,1961 Assessment Year Commissioner of
Income Tax
2011-12 (Appeals), Ahmadabad
Income Tax Act,1961 Assessment Year Income Tax Assessment
order u/s
2011-12 143(3) of the Income
Tax Act, 1961
Income Tax Act,1961 Assessment Year Commissioner of
Income Tax
2011-12 (Appeals) ruled in
favour of
Gujarat Gas
Financial Services
Limited. Appeal
Effect awaited.
Income Tax Act,1961 Assessment Year Commissioner of
Income Tax
2012-13 (Appeals), Ahmadabad
(c) According to the information and explanations given to us and on
the basis of our examination of the records of the Company, Company has
transferred the amount required to be transferred to Investor Education
and Protection Fund within the time in accordance with the provisions
of the Companies Act, 1956 and rules made there under.
(viii) Since the company has been incorporated on February 21, 2012 and
not more than five years has been elapsed at the end of the current
financial year, the provisions of Clause 3 (VIII) of the Order are not
applicable to the Company.
(ix) The Company has not defaulted in repayment of dues to financial
institution or bank or debenture holders.
(x) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions during the year. Therefore, the
provisions of Clause 3 (X) of the Order are not applicable to the
Company.
(xi) In our opinion, and according to the information and explanations
given to us, terms loans have been applied for the purpose for which
they were raised.
(xii) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of any such case by the Management.
For, Manubhai & Shah
Chartered Accountants
Firm Regn. No.: 106041W
(G. R. Parmar)
Place: Ahmedabad Partner
Date:13/08/2015 Membership No. 121462