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Adani Total Gas Ltd.

BSE: 542066 Sector: Others
NSE: ATGL ISIN Code: INE399L01023
BSE 09:09 | 17 May 2431.90 47.40
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NSE 00:00 | 16 May 2388.55
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OPEN 2431.90
PREVIOUS CLOSE 2384.50
VOLUME 13
52-Week high 2739.95
52-Week low 772.95
P/E 529.83
Mkt Cap.(Rs cr) 267,460
Buy Price 2400.00
Buy Qty 2.00
Sell Price 2431.90
Sell Qty 81.00
OPEN 2431.90
CLOSE 2384.50
VOLUME 13
52-Week high 2739.95
52-Week low 772.95
P/E 529.83
Mkt Cap.(Rs cr) 267,460
Buy Price 2400.00
Buy Qty 2.00
Sell Price 2431.90
Sell Qty 81.00

Adani Total Gas Ltd. (ATGL) - Auditors Report

Company auditors report

To the Members of Adani Total Gas Limited (formerly known as Adani Gas Limited)

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Adani Total GasLimited (formerly known as Adani Gas Limited) ("the Company") which comprisethe balance sheet as at 31st March 2021 the statement of Profit and Loss(including othercomprehensive income) the statement of changes in equity and the statement of cash flowsfor the year then ended anda summary of significant accounting policies and otherexplanatory information (herein after referred to as "Standalone FinancialStatements"). In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31st March2021 the profit and total comprehensive income changes in equity and its cash flows forthe year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current year. Thesematterswere addressed in the context of our audit of the financialstatements as a wholeand in forming our opinion thereonand we do not provide a separate opinion on thesematters. We have determined the matters described below to be the key audit matters to becommunicated in our report.

Sr. No. Key Audit Matter Auditor's Response
1. Non-responses of external confirmations request perpetrated pursuant to SA 505 Principal Audit Procedures
COVID-19 has impacted the procedure of external confirmation request. Postal methods have been scrapped in this day and age. We had sent positive external confirmation requests through electronic modes.
However due to suspension of business activities of many confirming parties and non- availability of their responsive staff there are fewer confirmations received than anticipated. In such events in accordance with SA auditors have to revise the assessed risk of material misstatement at the assertion level and modify the planned audit procedures. SA also directs the auditors to perform alternative audit procedures. We revised our assessed risk and have modified our audit procedures to mitigate these risks. We have obtained a reliable assurance pertaining to transactions with confirming parties in the sense for accurate and complete processing of routine and significant classes of transactions such as revenue purchases and cash receipts or cash purchases. We selected samples and tested the effectiveness of controls relating to accuracy and completeness of transactions in totality considering the frequency and regularity of transactions.
We performed alternative audit procedures like follow-up confirmation requests verification of subsequent payments and receipts to verify part of the balances appearing in the original confirmation requests.
2 Appropriateness of Classification under Contingent Liability Principal Audit Procedures
The company has material uncertain legal positions in relation to property tax matters which involve significant judgment to determine the possible outcome of the litigation and the nature of its classification.
During the year the company has made reversal of erstwhile provided amount and has reclassified this amount of demand of property tax as contingent liability. We have obtained complete details of property tax demands andlitigations pending as on 31st March 2021 from management. Ad-interim relief order obtained by the company from High Court has enabled the company to reclassify its erstwhile provided amount to contingent liability (not provided for).
We have assessed the position of previous litigations filed by the company in similar matters for previous years.
There is significant judgment and complexity involved in ascertaining the possible outcome of the legal position. Therefore we have identifiedreclassification of demand of property tax to contingent liability as a key audit matter. We assessed company's conclusions through discussions held with their in-house legal counsel and understanding precedents in similar cases. We communicated with the company's legal counsel on the relevant litigation to establish the likelihood of outflow of economic resources being probable possible or remote in respect of the litigations.
We also assessed and validated the adequacy and appropriateness of the disclosures made by the management in the financial statements.

Information other than the Financial Statements and Auditor's Report thereon

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditors' report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon. In connection with ouraudit of the standalone financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information; weare required to report that fact. We have nothing to report in this regard.

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 Act with respect to the preparation and presentation of these StandaloneFinancial Statements that give a true and performance fairviewof the financial positionfinancial including other comprehensive income cash flows and changes in equity of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the applicable Indian Accounting Standards (Ind AS) prescribed under Section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the StandaloneFinancial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financialstatements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financialstatements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial including the disclosures and whether the standalone financialstatementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with astatement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial controls overstatements of the current year and are therefore the key audit matters. We describe thesematters in our auditor's report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably 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 Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 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 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 Standalone Balance Sheet the Standalone Statement of Profit and Loss includingOther Comprehensive Income the Standalone Statement of Cash Flows and the StandaloneStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account. statements

d) in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended.

e) on the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of Section164 (2) of the Act.

f) with respect to the adequacy of the internal financial controls over financial theCompany and the operating effectiveness of such controls refer to our separate Report in"Annexure B".Our report expresses an unmodifiedopinion on the adequacy andoperating effectiveness of the Company's internal financial reporting

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:

i. the Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note 38 to the financial statements;

ii. the company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; iii. there were no amounts which wererequired to be transferred to the Investor Education and Protection Fund by the company.

3. With respect to the matters to be included in the Auditor's Report in accordancewith the requirements of section 197(16) of the Act as amended: In our opinion and to thebest of our information and according to the explanations given to us the remunerationpaid by the Company to its directors during the current year is in accordance with theprovisions of section 197 of the Act. The remuneration paid to any director is not inexcess of limit laid down under section 197 of the Act. The Ministry of Corporate Affairshas not prescribed other details under section 197 (16) which are required to be commentedupon by us.

For SHAH DHANDHARIA & CO LLP
Chartered Accountants
Firm's Registration No. 118707W/W100724
Shubham Rohatgi
Partner
Place: Ahmedabad Membership No. 183083
Date :4th May 2021 UDIN: 21183083AAAACF9436

Annexure A to the Independent Auditor's Report

RE: Adani Total Gas Limited (formerly known as Adani Gas Limited)

(Referred to in Paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our Report of even date)

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

(b) As explained to us fixed assets according to the practice of the Company arephysically verified by the management at reasonable intervals in a phased verificationprogramme which in our opinion is reasonable looking to the size of the Company andthe nature of its business. According to the information and explanations given to us nomaterial discrepancies were noticed on such verification

(c) The title deeds of immovable properties as disclosed in Note 3 on Property Plantand Equipment to the financial statements are held in the name of the company exceptfor leasehold lands and construction thereon.

(ii) The inventory other than stocks lying with third parties has been physicallyverified by the management during the year. In our opinion the frequency of verificationis reasonable. The discrepancies noticed on verification between the physical stocks andthe book records were not material and have been properly dealt with in the books ofaccount.

(iii) According to the information and explanations given to us the Company hasgranted loans unsecured to parties covered in the register maintained under section 189of the Companies Act 2013 in respect of which:

(a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company's interest.

(b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.

(c) There is no overdue amount remaining outstanding as at the year-end (iv) In ouropinion and according to information and explanations given to us the Company hascomplied with provisions of Section 185 and 186 of the Act in respect of grant of loansmaking investments and providing guarantees and securities as applicable.

(v) According to information and explanations given to us the Company has not acceptedany deposits from the public within the meaning of the directives issued by the ReserveBank of India provisions of section 73 to 76 of the Act any other relevant provisions ofthe Act and the relevant rules framed thereunder. Accordingly the provisions of Clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant tothe Companies (Cost Records and Audit) Rules 2014 prescribed by the Central Governmentunder section 148(1) of the Companies Act 2013 in respect of the company's products/services to which the said rules are made applicable and are of the opinion that primafacie the prescribed cost records have been made and maintained. However we have not madea detailed examination of the cost records with a view to determine whether they areaccurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees StateInsurance income tax sales tax / value added tax goods and services tax excise dutyduty of customs entry tax cess and other material statutory dues have generally beendeposited regularly during the year by the Company with the appropriate authorities.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of applicable statutory dues as referred to above were in arrears as at31st March 2021 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us there are no materialdues of provident fund employees' state insurance and wealth tax which have not beendeposited with the appropriate authorities on account of any dispute. However accordingto information and explanations given to us the following dues of service tax incometax excise duty sales tax / value added tax and Municipal Corporation Tax have not beendeposited by the Company on account of disputes.

Name of Statute Nature of the dues Forum where dispute is pending Amount (*) (Rs. in Crores) Amount paid under protest (Rs. in Crores) Period to which the amount relates
Central Excise Act Excise Duty Assessing Authority 13.47 0.22 2006-07 to2015-16
1944 High Court 6.32 3.16 2006-07 &2007-08
Finance Act 1994 Service Tax Assessing Authority 1.21 Nil 2008-09 to2013-14
Appellate Tribunal 1.47 0.47 2005-06
Appellate Authority up to Commissioner's Level 0.10 0.00# 2008-09 to 2012- 13
Sales Tax Act Sales Tax / VAT Appellate Tribunal 6.75 Nil 2009-10
Municipal Property Tax Supreme Court 36.27 36.27 2010-11 to 2020-21
Corporation High Court 11.69 Nil 2012-13 to 2020-21
Income Tax Act Income Tax Assessing Authority 0.30 0.25 2008-09 & 2012-13
1961 Appellate Authority up to Commissioner's Level 1.36 Nil 2016-17 to 2018-19
Appellate Tribunal 1.02 0.10 2014-15 & 2015-16

(*) Excluding Interest and Penalty where the notice does not specifies the same.

(#) Figures below H50000

(viii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company it has not defaulted in repayment of loansor borrowings from Banks and Financial Institutions. The Company has not taken any loanfrom government and has not issued any debentures.

(ix) Based upon the audit procedures performed the company has not raised moneys byway of initial public offer or further public offer (including debt instruments). In ouropinion and as per the information and explanations given by the management the Fundsraised through term loans have been applied for the purpose they were raised.

(x) During the course of our examination of the books and records of the companycarried out in accordance with the generally accepted auditing practice in India andaccording to the information and explanation given to us we have neither come across anyinstance of material fraud by the company or on the company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement.

(xi) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of Section197 read with Schedule V of the Act.

(xii) In our opinion the Company is not a nidhi Company. Accordingly the provisions ofClause 3 (xii) of the Order are not applicable.

(xiii) As per information and explanation given to us and on the basis of ourexamination of the records of the Company all the transaction with related parties are incompliance with section 177 and 188 of Companies Act 2013 and all the details of suchrelated party transactions have been disclosed in Standalone Financial Statements asrequired by the applicable Indian Accounting Standards.

(xiv) According to the information and explanations given to us and on the basis of ourexamination of the records the Company has not made any preferential allotment or privateplacement or not issued any fully or partly convertible debenture during the year underreview. Accordingly the provisions of Clause 3(xiv) of the Order are not applicable.

(xv) According to the information and explanations given to us and on the basis of ourexamination of the records Company has not entered into any non-cash transactions withany director or any person connected with him. Accordingly the provisions of Clause 3(xv)of the Order are not applicable.

(xvi) In our opinion the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of Clause 3(xvi) ofthe Order are not applicable.

For SHAH DHANDHARIA & CO LLP
Chartered Accountants
Firm's Registration No. 118707W/W100724
Shubham Rohatgi
Partner
Place: Ahmedabad Membership No. 183083
Date :4th May 2021 UDIN: 21183083AAAACF9436

Annexure B to the Independent Auditor's Report

RE: Adani Total Gas Limited (formerly known as Adani Gas Limited)

(Referred to in paragraph 2 (f) under ‘Report on Other Legal and RegulatoryRequirements' section 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").

Opinion

We have audited the internal financial controls over financial reporting of Adani TotalGas Limited (formerly known as Adani Gas Limited) ("the Company") as of 31stMarch 2021 in conjunction with our audit of the Financial Statements of the company forthe year ended on that date. reporting In our opinion the Company has in all materialrespects an adequate internal financial controls reportingsystem included over financialreporting and such internal financialcontrols over financial reporting were operatingeffectively as at 31st March 2021 based on the internal control over financialconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

Management's Responsibilities 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 Institutecontrol of Chartered Accountants of India. These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention control over financialreporting includes and detection of frauds and errorsthe accuracy and completeness of the accounting records and the timely preparation ofreliable financialinformation as required under the Companies Act 2013.

Auditors' 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 audit involves performing procedures to obtain audit evidence financial about theadequacy of the internal andcontrols their system over financial operating effectiveness.Our audit of internal financial obtaining controls over financial an understanding ofinternal financial financial reporting weakness exists and testing and evaluating thedesign and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks 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 toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting with reference to standalone financial statements.

Meaning of Internal Financial Controls over Financial Reporting

A financial company's internal financial reporting is a process designed to providereasonable assurance regarding the reliability of financial statements reporting and thepreparation of financial for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial policies and procedures that:

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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 financialcontrolover financialreporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

For SHAH DHANDHARIA & CO LLP
Chartered Accountants
Firm's Registration No. 118707W/W100724
Shubham Rohatgi
Partner
Place: Ahmedabad Membership No. 183083
Date :4th May 2021 UDIN: 21183083AAAACF9436

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