To the Members of Petronet LNG Limited
1. Report on the Consolidated Financial Statements
We have audited the accompanying consolidated Ind AS financial statements of PetronetLNG Limited ("the Parent Company") and its joint venture (collectively referredto as "the Group") comprising of the Consolidated Balance Sheet as at 31 March2017 the Consolidated statement of Profit and Loss (including Other ComprehensiveIncome) the Consolidated Cash Flow Statement and the Consolidated Statement of Change inEquity for the year then ended and a summary of the significant accounting policies andother explanatory information (hereinafter referred to as "the consolidated Ind ASfinancial statements").
2. Management's Responsibility for the Consolidated Financial Statements
The Parent Company's Board of Directors is responsible for the preparation of theconsolidated Ind AS financial statements in terms of the requirements of the CompaniesAct 2013 ("the Act") that give a true and fair view of the consolidated stateof affairs (financial position) consolidated profit or loss (financial performanceincluding other comprehensive income) consolidated cash flows and change in equity of theGroup in accordance with the accounting principles generally accepted in India includingthe Indian Accounting Standards specified under Section 133 of the Companies Act 2013(hereinafter referred to as "the Act") read with relevant rules issuedthereunder.
The respective Board of Directors of the Companies included in the group areresponsible for maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing anddetecting frauds and other irregularities; the selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; andthe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror which have been used for the purpose of preparation of the consolidated financialstatements by the Directors of the Parent Company as aforesaid.
3. Auditor's Responsibility
Our responsibility is to express an opinion on these consolidated Ind AS financialstatements based 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 consolidated Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the consolidated Ind AS financial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlrelevant to the Parent Company's preparation of the consolidated Ind AS financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bythe Parent Company's Board of Directors as well as evaluating the overall presentation ofthe consolidated Ind AS financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the consolidated Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us and based on the consideration of report of other auditor on separate Ind ASfinancial statement and on the other financial information of joint venture the aforesaidconsolidated Ind AS financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the consolidated state of affairs (financialposition) of the Group as at 31st March 2017 and their consolidated profit (financialperformance including other comprehensive income) their consolidated cash flows andchange in equity for the year ended on that date.
5. Other Matters a) The comparative financial information of the Group for the yearended 31st March 2016 and the transition date opening Balance Sheet as at 1st April 2015prepared in accordance with Ind AS included in these Consolidated Ind AS financialstatements are based on previously issued statutory financial statements prepared inaccordance with the Companies (Accounting Standard) Rules 2006 audited by us whose reportfor the year ended March 31 2016 and March 31 2015 dated 16th May 2016 and 25th April2015 respectively expressed an unmodified opinion on those standalone financialstatements as adjusted for the differences in the accounting principles adopted by theCompany on transition to Ind AS which have been audited by us.
Our opinion is not modified in respect of the above matter. b) The consolidatedfinancial statement includes the Group's share of net profit of Rs. 17.46 crores and OtherComprehensive Income of Rs. 1.71 crores for the year ended 31st March 2017 as consideredin the consolidated financial results in respect of its joint venture namely AdaniPetronet (Dahej) Port Pvt. Ltd. (APPPL) whose financial statements / financialinformation have not been audited by us. Further the Company had made an investment inthe equity of its Joint Venture namely India LNG Transport Co No (4) Pvt. Ltd (ILT4) as on13th February 2017; the financial results for which are not available for the period 13thFeb'17 31st Mar'17 and therefore the Group's share of profit for post-acquisitionperiod has not been considered in the consolidated financial statements. The financialstatements of APPPL have been audited by other auditor whose report has been furnished tous by the management and our opinion in so far as it relates to amounts and disclosuresincluded in respect of such Joint venture entity and our report in terms of sub-sections(3) and (11) of Section 143 of the Act in so far as it relates to the aforesaid jointlycontrolled entity is based solely on the report of the other auditor.
Our opinion on the consolidated Ind AS financial statements and our report on OtherLegal and Regulatory Requirements below is not modified in respect of the above matterwith respect to our reliance on the work done and the report of the other auditor and thefinancial statement / financial information certified by the management.
6. Report on Other Legal and Regulatory Requirements
As required by Section 143(3) of the Act based on our audit and on consideration ofreport of the other auditor on separate financial statement and other financialinformation of the joint venture as noted in other matter' paragraph we reportthat:
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 of the aforesaidconsolidated Ind AS financial statements;
b. In our opinion proper books of account as required by law relating to thepreparation of the consolidated financial have been kept so far as it appears from ourexamination of those books and the report of the other auditor;
c. The consolidated Balance Sheet the consolidated Statement of Profit and Loss(including Other Comprehensive Income) consolidated Cash Flow Statement and Statement ofChange in Equity dealt with by this Report are in agreement with the books of accountmaintained for the purpose of preparation of the consolidated Ind AS financial statements;
d. In our opinion the aforesaid consolidated Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with relevant Ruleissued thereunder.
e. On the basis of written representations received from the directors of the ParentCompany as on 31stMarch 2017 taken on record by the Board of Directors of the ParentCompany and the reports of the statutory auditors of its joint venture incorporated inIndia none of the directors of the Group companies disqualified as on 31stMarch2017 from being appointed as a director in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls over financialreporting of the Group and the operating effectiveness of such controls refer to ourseparate report in "Annexure A".
g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us and basedon the consideration of the report of the other auditor on separate financial statement asalso the other information of the joint venture as noted in Other Matter'paragraph:
i. The consolidated Ind AS financial statements disclose the impact of pendinglitigations on the consolidated financial position of the Group Refer Note 37B to theconsolidated financial statements;
ii. The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses - Refer Note 37A (b) to theconsolidated Ind AS financial statements;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Parent Company.
iv. The Company has provided requisite disclosures in Note no.14 in its consolidatedInd AS financial statements as to holdings as well as dealings in Specified Bank Notesduring the period from 8 November 2016 to 30 December 2016. Based on the auditprocedures and relying on the management representation we report that the disclosuresare in accordance with the books of accounts and records maintained by the Company.
T R Chadha & Co LLP Chartered Accountants
Firm Regn No. 006711N / N500028
|sd/- || |
|Neena Goel || |
|(Partner) ||Date : 9 May 2017 |
|M.N. 057986 ||Place : New Delhi |
"Annexure A"as referred to in paragraph 6(f) of our report 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")
In conjunction with our audit of the consolidated Ind AS financial statements of theCompany as of and for the year ended 31 March 2017 we have audited the internal financialcontrols over financial reporting of Petronet LNG Limited ("the Parent Company")and its joint venture entity incorporated in India as of that date.
Management's Responsibility for Internal Financial Controls
The Respective Board of Directors of the Parent Company and its joint venture entitywhich are incorporated in India are 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 safeguarding ofits 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.
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") issued by ICAI and the Standards on Auditing issued byICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness.
Our audit 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 that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
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: a. pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; b. 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 authorisations ofmanagement and directors of the company; and c. provide reasonable assurance regardingprevention or timely detection of unauthorised 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.
In our opinion the Parent Company and its joint venture entity which areincorporatedin India have in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31 March 2017 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operatingeffectiveness of the internal financial controls over financial reporting in so far as itrelates to Joint venture company which is a company incorporated in India is based onthe corresponding report of the auditor of such company incorporated in India.
T R Chadha & Co LLP Chartered Accountants
Firm Regn No. 006711N / N500028
|sd/- || |
|Neena Goel || |
|(Partner) ||Date : 9 May 2017 |
|M.N. 057986 ||Place : New Delhi |