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Gujarat Gas Ltd.

BSE: 539336 Sector: Others
NSE: GUJGASLTD ISIN Code: INE844O01022
BSE LIVE 19:42 | 19 Oct 921.70 2.30
(0.25%)
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917.00

HIGH

928.90

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915.05

NSE 19:31 | 19 Oct 917.65 0.65
(0.07%)
OPEN

924.90

HIGH

925.00

LOW

915.05

OPEN 917.00
PREVIOUS CLOSE 919.40
VOLUME 2113
52-Week high 945.00
52-Week low 487.10
P/E 50.48
Mkt Cap.(Rs cr) 12,690
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 917.00
CLOSE 919.40
VOLUME 2113
52-Week high 945.00
52-Week low 487.10
P/E 50.48
Mkt Cap.(Rs cr) 12,690
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Gujarat Gas Ltd. (GUJGASLTD) - Auditors Report

Company auditors report

TO

THE MEMBERS OF GUJARAT GAS LIMITED

(Formerly known as GSPC Distribution Networks Limited) Report on the StandaloneFinancial Statements

We have audited the accompanying standalone financial statements of GUJARAT GASLIMITED (Formerly known as GSPC Distribution Networks Limited) (“theCompany”) which comprise the Balance Sheet as at 31st March 2016 the Statement ofProfit and Loss the Cash Flow Statement for the year ended on that date and a summary ofthe 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 Section134(5) of the Companies Act 2013 (“the Act”) with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

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

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas 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 (“theOrder”) issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the “Annexure A” a statement on thematters 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 bestof 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 theCompany so far as it appears from our examination of those books; (c) The Balance Sheetthe Statement of Profit and Loss and the Cash Flow Statement dealt with by this Reportare in agreement with the books of account; (d) In our opinion the aforesaid standalonefinancial statements comply with the Accounting Standards specified under Section 133 ofthe 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) ofsection 164 of the Act is not applicable.

(f) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in “Annexure B”; and (g) With respect to the othermatters to be included in the Auditor’s Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us: (i) The Company has disclosedthe impact of pending litigations on its financial position in its financial statementsRefer Note 34 to the financial statements; (ii) The Company has made provisions asrequired under the applicable law or accounting standards for material foreseeablelosses if any on long term contracts including derivative contracts; (iii) There hasbeen no delay in transferring amounts required to be transferred to the InvestorEducation and Protection Fund by the Company.

3. As required by section 143 (5) of the Act we give in “Annexure C”a report on the directions and sub directions issued by Comptroller and Auditor General ofIndia.

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

TO INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements” section of our report on Standalone Financial Statements of Gujarat GasLimited (Formerly known as GSPC Distribution Networks Limited) of even date)

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items other than underground gas pipelines which arenot physically verifiable over a period of 3 years which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. Pursuant to theprogramme a portion of the fixed assets has been physically verified by the Managementduring 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 ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except in respect of one land situated at Hazira locationhaving book value of ` 15.88 crore as at 31st March 2016. (ii) The inventory has beenphysically verified by the Management during the year. The discrepancies noticed onphysical verification of inventory as compared to book records were not material.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liabilities Partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provisions of Clause 3 (iii) [(a) to (c)] of thesaid Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made. (v) In our opinion and according to the information andexplanations given to us the Company has not accepted deposits within the meaning ofSections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder. According to the information and explanations given to us no order has been passedby the Company Law Board or the National Company Law Tribunal or the Reserve Bank of Indiaor any Court or any other Tribunal.

(vi) We have broadly reviewed the books of account maintained by the Company in respectof products (Natural Gas) where pursuant to the rules made by the Central Government ofIndia the maintenance of cost records has been prescribed under sub-section (1) ofSection 148 of the Act and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. We have not however made a detailedexamination 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 ofthe Company examined by us in our opinion the Company is regular in depositing theundisputed statutory dues including provident fund income tax sales tax wealth taxservice tax duty of customs duty of excise value added tax cess and other materialstatutory dues as applicable have generally been regularly deposited with theappropriate authorities though there has been slight delay in few cases. According to theinformation and explanations given to us and the records of the Company examined by us inour opinion no undisputed amounts payable were in arrears as at March 31 2016 for aperiod of more than six months from the date they became payable. (b) According to theinformation and explanations given to us and the records of the Company examined by usthere are no dues of sales tax wealth tax and customs duty which have not been depositedon account of any dispute.

The particulars of dues of service tax excise and income tax as at March 31 2016which have not been deposited on account of a dispute are as follows:

Sr. Name of No. statute Nature of dues Amount (in Crs.) Period to which the amount relates Forum where the dispute is pending
1 Income Tax Act1961 Income Tax and Interest thereon 0.34 Assessment Year 1996-97 Commissioner of Income Tax (Appeal)
2 Income Tax Act1961 Income Tax and Interest thereon 0.79 Assessment Year 2001-02 Commissioner of Income Tax (Appeal)
3 Income Tax Act1961 Income Tax and Interest thereon 0.31 Assessment Year 2002-03 Commissioner of Income Tax (Appeal)
4 Income Tax Act1961 Income Tax and Interest thereon 0.02 Assessment Year 2006-07 Commissioner of Income Tax (Appeal)
5 Income Tax Act1961 Income Tax and Interest thereon 4.33 Assessment Year 2008-09 Commissioner of Income Tax (Appeal)
6 Income Tax Act1961 Income Tax and Interest thereon 2.96 Assessment Year 2009-10 Commissioner of Income Tax (Appeal)
7 Income Tax Act1961 Income Tax and Interest thereon 1.55 Assessment Year 2010-11 Income Tax Appellate Tribunal
8 Income Tax Act1961 Income Tax and Interest thereon 0.31 Assessment Year 2010-11 Commissioner of Income Tax (Appeal)
9 Income Tax Act1961 Income Tax and Interest thereon 60.87 Assessment Year 2011-12 Commissioner of Income Tax (Appeal)
10 Income Tax Act1961 Income Tax and Interest thereon 5.69 Assessment Year 2012-13 Commissioner of Income Tax (Appeal)
11 Income Tax Act1961 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 Ahmedabad
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 Ahmedabad
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 Ahmedabad
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 Commissionerate
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 Ahmedabad
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 Ahmedabad
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 Ahmedabad
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 Ahmedabad
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 Commissionerate

(viii) The Company has not defaulted in repayment of loans or borrowing dues tofinancial institution or bank or dues to debenture holders.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. During the year money raisedfrom term loans have been applied for the purpose for which they were raised. (x) Duringthe course of our examination of the books and records of the Company carried out inaccordance with the generally accepted auditing practices in India and according to theinformation and explanations given to us no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year nor we have beeninformed 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 theCompany.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and Company being a government company transactions withother government companies are exempt for the compliance of Section 188 of the Act interms of notification no. G.S.R 463(E) dated 5th June 2015 issued by Ministry ofCorporate Affairs. Details of such transactions have been disclosed in the financialstatements as required by the applicable accounting standards.

(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. (xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable. (xvi) According to the information and explanations givento us and based on our examination of the records of the Company the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

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

ANNEXURE - B

TO INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 (f) under "Report on Other Legal and RegulatoryRequirements” section of our report on Standalone Financial Statements of Gujarat GasLimited (Formerly known as GSPC Distribution Networks Limited) of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of GUJARATGAS LIMITED (Formerly known as GSPC Distribution Networks Limited) (“theCompany”) as of 31 March 2016 in conjunction with our audit of the standalonefinancial 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 internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI’). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the “Guidance Note”) and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor’s judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company’s internal financial controls system over financialreporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany'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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants 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

ANNEXURE C

TO INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 3 under "Report on Other Legal and RegulatoryRequirements” section of our report on Standalone Financial Statements of Gujarat GasLimited (Formerly known as GSPC Distribution Networks Limited) of even date)

Sr. Directions / Sub-Directions Issued by Response
No. Comptroller and Auditor General of India
1 Whether the Company has clear title / lease deeds for freehold and leasehold respectively? If not please state the area of freehold or leasehold land for which title / lease deeds are not available? 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. 185 Plot No. 364 Post-Hazira Taluka Choryasi District-Surat admeasuring 13057 Sq. Mtrs. having book value of ` 15.88 crore as at 31st March 2016.
2 Whether there are any cases of waiver / write offs of debts/loans/interest etc. if yes the reasons therefore and the amount involved. As per information and explanations given to us and based on examination of the records of the Company there are no cases of any waiver of loan / debt / interest during the year.
3 Whether proper records are maintained for inventories lying with third parties & assets received as gift from Govt. or other authorities? As per information and explanations given to us and based on the examination of the records provided to us we report that proper records are maintained for material lying with third parties and reconciliation of the inventory issued to third party is done on yearly basis. During the year company has not received any assets as gifts from Government or other authorities.
4 Whether the company has an effective system for recovery of dues in respect of its sales activities and the dues outstanding and recoveries there against have been properly recorded in the books of accounts? As per the information and explanations given to us and based on the examination of the policies in respect of recovery of dues from customers the Company has a policy and procedure for effective monitoring of credit exposure and recovery of dues from its customers in respect of its sales activities. In our opinion and according to the information and explanation given to us the recoveries against the dues have been properly recorded in the books of accounts.
5 Whether the company has an effective system for physical verification valuation of stock treatment of non-moving items and accounting the effect of shortage / excess noticed during physical verification. In our opinion and according to the information and explanations given to us the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.
6 The effectiveness of the system followed in recovery of dues in respect of sale activities may be examined and reported. In our opinion and according to the information and explanations given to us the Company has a policy and procedure for effective monitoring of credit exposure and recovery of dues from its customers in respect of its sales activities. There are no significant instances of its failure observed for the year under audit.

 

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