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GAIL (India) Ltd.

BSE: 532155 Sector: Others
NSE: GAIL ISIN Code: INE129A01019
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VOLUME 240311
52-Week high 115.63
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P/E 6.29
Mkt Cap.(Rs cr) 65,521
Buy Price 99.65
Buy Qty 2475.00
Sell Price 99.75
Sell Qty 1900.00
OPEN 101.25
CLOSE 101.00
VOLUME 240311
52-Week high 115.63
52-Week low 83.00
P/E 6.29
Mkt Cap.(Rs cr) 65,521
Buy Price 99.65
Buy Qty 2475.00
Sell Price 99.75
Sell Qty 1900.00

GAIL (India) Ltd. (GAIL) - Auditors Report

Company auditors report

To the Members of GAIL (India) Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of GAIL (India)Limited (hereinafter referred to as "the Company") which comprise of theStandalone Balance Sheet as at 31st March 2022 the Standalone Statement ofProfit and Loss (including Other Comprehensive Income) the Standalone Statement ofChanges in Equity and the Standalone Statement of Cash Flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as "the standalonefinancial statements"). In our opinion and to the best of our information andaccording to the explanations given to us the aforesaid standalone financial statementsgive the information required by the Companies Act 2013 ("the Act") in themanner so required and give a true and fair view in conformity with the Indian AccountingStandards ("Ind AS") prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended and accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31stMarch 2022 its profit including other comprehensive income changes in equity and itscash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditors’Responsibilities 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 theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Emphasis of Matter

1. We draw attention to Note No. 33 (c) to the standalone financial statementsregarding various final transportation tariff orders issued by Petroleum and Natural GasRegulatory Board (PNGRB) which have been contested by the Company at Appellate Tribunalfor Electricity (APTEL) and also certain customers have challenged these orders of PNGRBin Court of Law. Adjustment if any will be recognized as and when matter is finallydecided.

2. We draw attention to Note No. 29 (I) (a) (iii) to the standalone financialstatements regarding CESTAT order confirming the demand for the differential amount by theCentral Excise Department in the matter pertaining to classification of‘Naphtha’ manufactured by the Company of Rs. 3266 crore including applicablepenalty and interest thereon. Considering the merits of the case Company has filed anappeal before the Hon’ble Supreme Court. Based on the legal opinion obtained theCompany does not foresee any probable outflow in the matter and accordingly has disclosedthe same under contingent liability. Our opinion is not modified in respect of mattersmentioned in above paragraphs.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance 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 financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr. No. Key Audit Matter How our audit addressed the Key Audit Matter
1 Recognition and measurement of revenues in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" Principal Audit Procedures
We identified above as Key Audit Matter as the application of the revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized over a period. We assessed the Company’s process to identify the impact of adoption of the revenue accounting standard and checked the appropriateness of accounting policy. Our audit approach consisted testing of design and operating effectiveness of the internal controls as follows:
Additionally revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. 1. Evaluated the design of internal controls relating to implementation of the revenue accounting standard wherever applicable.
Refer notes 21 and 40 to the standalone financial statements. 2. Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation re-performance and inspection of evidence in respect of operation of these controls.
3. Tested the relevant information technology systems’ access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the revenue accounting standard.
Selected a sample of continuing and new contracts and performed the following substantive procedures:
1. Read analyzed and identified the distinct performance obligations in these contracts.
2. Compared these performance obligations with that identified and recorded by the Company.
3. Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration.
2 Evaluation of uncertain tax positions and contingent liabilities We have applied the following audit procedures in this regard:
The Company operates in multiple jurisdictions and is subject to periodic challenges by local tax authorities and other regulatory authorities such as PNGRB on a range of matters during the normal course of business including indirect tax matters We have identified above as Key Audit Matter as these involve significant judgment to determine the possible outcome of material uncertain tax positions and contingent liabilities including matters under dispute consequently having an impact on related accounting and disclosures. 1. Obtained an understanding of key tax matters and other contingent liabilities.
Refer note 29 (I) to the standalone financial statements. 2. Read and analyzed the key correspondences external legal opinions/ consultations obtained by the Company
3. Evaluated and challenged key assumptions made by the Company in estimating the current and deferred tax balances
4. Assessed and challenged the Company’s estimate of the possible outcome of the disputed cases by considering legal precedence and other judicial rulings
5. Assessed and tested the presentation and disclosures relating to uncertain tax positions and contingent liabilities
3 Derivative transaction and accounting of hedge transactions We have applied the following audit procedures in this regard:
We have identified above as Key Audit Matter as hedge accounting has resulted into significant impact on financial statements coupled with complexity of its accounting calculations and complex/numerous assumptions taken for establishing hedge relationship. 1. Obtained an understanding of management’s controls over recording of derivative transactions and application of hedge accounting.
Mark to market gain / loss pertaining to these derivative contracts are recognized in other comprehensive income. 2. Tested the accuracy and completeness of derivative transactions.
Refer note 58 to the standalone financial statements. 3. We have relied on the valuation report evaluating the appropriateness of the valuation methodologies applied and tested on sample basis the valuation of the derivative financial instruments.
4. Validated that the derivative financial instruments qualify for hedge accounting and tested accuracy of hedge effectiveness and ineffectiveness on sample basis.
Technical parameters and voluminous transactions of Natural gas trading and transmission captured to measure Revenue and Inventory through integrated system and complexities involved therein. We have applied the following audit procedures in this regard:
We have identified above as Key Audit Matter because determination of the quantity of Natural Gas sold and in stock through gas-pipelines involves use of various technical aspects of the natural gas such as pressure temperature etc. captured from the measuring devices installed on the gas pipelines. We were informed that the methodology is standard and used industry-wide. 1. We have performed test of controls assisted by our IT specialists over the accuracy and completeness of the quantity captured via IT system through to the accounting software.
This increases the complexity of validating quantity of Natural Gas sold and stock in pipeline as at 31st March 2022. Refer notes 10 and 21 to the standalone financial statements. 2. We have obtained management representation that the IT system applies a standard methodology to capture the quantity of Natural Gas for the purpose of Revenue and inventory measurement.
3. We have verified valuation of closing Inventories by applying various aspects made available to us by the management such as conversion factors meter reading etc.
5 Evaluation of the recoverable amounts of investments in and advances to certain subsidiaries We have applied the following audit procedures in this regard:
The Company’s evaluation of the recoverable amounts of investments in and advances to certain subsidiaries involves comparison of their recoverable value and the carrying amount. Management determines the recoverable amount based on management’s estimates of future cash flows. Significant judgements are required to determine the aforesaid assumptions used in the discounted cash flow models. Due to the uncertainty of forecasting and discounting future cash flows being inherently subjective the level of management’s judgement involved and the significance of the Company’s investment as at 31 st March 2022 we have considered this as a key audit matter. 1. We have carried out assessment of forecasts of future cash flows prepared by the management evaluating the assumptions and comparing the estimates to externally available industry economic and financial data.
Refer notes 5 and 7 to the standalone financial statements. 2. Assessed the reasonableness of the key business assumptions such as revenue growth and EBITDA margins by understanding the management’s plan and performing retrospective testing.
3. We have evaluated the Company’s valuation methodology in determining the fair value of the investment. In making this assessment we also assessed the professional competence objectivity and capabilities of the valuation specialist engaged by the management.
4. Assessed the reasonableness of the key assumptions adopted in the cash flow forecasts with the assistance of our internal valuation experts.
5. We have carried out discussions with management on the performance of the Company’s investments as compared to previous year in order to evaluate whether the inputs and assumptions used in the cash flow forecasts were suitable.
6. Evaluated management’s sensitivity analysis around the key assumptions.
6 Provision for Performance Related Pay We have applied the following audit procedures in this regard:
The provision for performance related pay for financial year 2021-22 is made based on Department of Public enterprises guidelines (DPE). The rating factors are yet to be approved by Board of Directors. 1. We have reviewed the circular issued by DPE and verified the computations shared by the management for FY 2021-22 to satisfy that the methodology as prescribed in the circular have been followed and the provision made is reasonable.
2. We have verified the self-evaluation report of GAIL’s Memorandum of Understanding (MOU) for the FY 2020-21 where ratings have been approved by the Board of Directors to determine reasonability of assumptions used for FY 2021-22.
3. We have also obtained MOU ratings communicated by DPE for FY 2020-21 mentioning scores and rating of the Company.

Information Other than the Standalone Financial Statements and Auditors’ ReportThereon

The Company’s Board of Directors is responsible for the preparation of otherinformation. The other information includes the Director’s Report CorporateGovernance Report Business Responsibility Report and Management Discussion and Analysisof Annual Report but does not include the Standalone Financial Statements and our reportthereon. The Director’s Report Corporate Governance Report Business ResponsibilityReport and Management Discussion and Analysis of Annual Report is expected to be madeavailable to us after the date of this auditors’ report.

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 our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available to us and indoing so consider whether the other information is materially inconsistent with theStandalone Financial Statements or our knowledge obtained during the course of our auditor otherwise appears to be materially misstated.

When we read such other information as and when made available to us and if we concludethat there is a material misstatement therein we are required to communicate the matterto those charged with governance.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

The Company’s Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements the Board of Directors is responsiblefor assessing the Company’s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company’s financialreporting process.

Auditors’ Responsibilities for the Audit of the Standalone 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 auditors’ report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone financial statements.

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

Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management and Board of Directors use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors’ report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors’ report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent 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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors’ 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.

Other Matters

1. We draw attention to the Note no. 47(B)(iii) to the standalone financial statementsregarding inclusion of proportionate share in Jointly Controlled Operations in thestandalone financial statements of the Company. The total proportionate share includesAssets of `1324.74 crore Liabilities of `107.89 crore Expenditure of `515.23 croreIncome of `834.07 crore along with the elements making up the Cash Flow Statement andrelated disclosures. The aforesaid amounts have been included based on the unauditedstatements of these entities. Management is of view that this will not have a materialimpact on the Company’s financial statements.

Our opinion is not modified in respect of above matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors’ Report) Order 2020 ("theOrder") issued by the Central Government of India in terms of Section 143(11) of theAct and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanation given to us wegive in "Annexure A" a statement on the matters specified in paragraphs3 and 4 of the said Order to the extent applicable.

2. As required by Comptroller and Auditor General of India throughdirections/sub-directions issued under Section 143(5) of the Companies Act 2013 on thebasis of written representation received from the management we give our report on thematter specified in the "Annexure–B" attached.

3. 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(including the Other Comprehensive Income) the Standalone Statement of Changes in Equityand the Standalone Statement of Cash Flows dealt with by this Report are in agreement withthe books of account;

(d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended;

(e) Pursuant to the Notification No. GSR 463(E) dated 5th June 2015 issuedby the Ministry of Corporate Affairs Government of India provisions of sub-section (2)of Section 164 of the Act are not applicable to the Company being a Government Company;

(f) We are enclosing herewith a report in "Annexure – C" for our opinionon adequacy of internal financial controls system in place in the Company and theoperating effectiveness of such controls;

(g) Pursuant to the Notification No. GSR 463(E) dated 5th June 2015 issuedby the Ministry of Corporate Affairs Government of India provisions of Section 197 ofthe Companies Act 2013 are not applicable to the Company being a Government Company;and (h) With respect to the other matters to be included in the Auditors’ 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 standalone financial statements – Refer Note 29(l)(a)to thestandalone financial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any and to the extent ascertainable onlong-term contracts including derivative contracts.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. (a) The Management has represented that to the best of its knowledge and beliefno funds have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the Company to or in any other person(s)or entity(ies) including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shalldirectly or indirectly lend or invest in other persons or entities identified in anymanner.

v. whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") orprovide 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 nofunds have been received by the Company from any person(s) or entity(ies) includingforeign entities ("Funding Parties") with the understanding whether recordedin writing or otherwise that the Company shall directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries.

(c) Based on the audit procedures performed that have been considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) of Rule 11(e) contain anymaterial misstatement. vi. (a) The Company has declared Interim dividend two times duringthe year. The same is paid by the Company in accordance with Section 123 of the Act.

(b) As stated in note 14 (ii) to the financial statements the Board of Directors ofthe Company has proposed final dividend for the year which is subject to the approval ofthe members at the ensuing Annual General Meeting. The amount of dividend proposed is inaccordance with Section 123 of the Act to the extent it applies to declaration ofdividend.

For Gandhi Minocha & Co. For A.R. & Co.
Chartered Accountants Chartered Accountants
Firm Registration No: 00458N Firm Registration No: 002744C
Sd/- Sd/-
Bhupinder Singh Pawan K Goel
Partner Partner
Membership No. 092867 Membership No. 072209
UDIN 22092867AJRZVK8364 UDIN: 22072209AJVWAB8348
Place: New Delhi
Date: 27th May 2022

ANNEXURE - A TO THE INDEPENDENT AUDITORS’ REPORT

Referred to in paragraph 1 to "Report on Other legal and regulatoryrequirements" of the Independent Auditors’ Report of even date to the members ofGAIL (INDIA) LIMITED on the Standalone Financial Statements for the year ended 31stMarch 2022.

i. a) A. The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of Property Plant and Equipment andnon-current assets held for sale.

B. The Company has generally maintained proper records showing full particulars ofIntangible assets.

b) The Company is having a regular programme of physical verification of all PropertyPlant and Equipment and non-current assets held for sale which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Nomaterial discrepancies were noticed on such verification. c) According to the informationand explanations given to us we report that the title deeds of all the immovableproperties (other than properties where the Company is the lessee and the lease agreementsare duly executed in favour of the lessee) are held in the name of the Company except asfollows:-

Description of Property Gross Carrying Value (Rs. in crore) Held in the name of Whether promoter director or their relative or employee Property held- range (Financial Year) Reason for not being held in the name of the Company
Land – Freehold 2.53 Diamond Research Mercantile City Limited No 2007-2008 Matter pending with Surat Municipal Corporation
0.06 Gram Panchayat Dapcheri 2007-2008 Matter pending at Mumbai High Court
0.003 LAO D & NH Silvassa Government Land 2009-2010 Matter pending with Revenue Authorities District Collector Palghar
1.22 Land belongs to Haryana Sehkari Vikas Parishad 2010-2011 The matter is being pursued with Haryana Vikas Pradhikaran
0.16 Shri Rohit S/o Sh Shankar Lal 2015-2016 Pending with Office of DM Raebareli
0.12 Multiple Farmer’s 2015-2016 Pending with SLAO for initiating acquisition process.
0.40 Multiple Farmer’s 2015-2016 Pending with SLAO for initiating acquisition process.
4.56 Government Land 1999-2000 Matter has been pending with Government of Gujarat
0.25 Gujrat Industrial Development Corporation (GIDC) 1991-1992 Pending with Gujarat Government
0.02 Multiple Farmer’s 2012-2013 Multiple Farmer’s Agency Hired for Take-up with Land Owner
0.03 Multiple Farmer’s 2012-2013 Multiple Farmer’s Agency Hired for Take-up with Land Owner
0.01 Multiple Farmer’s 2021-2022 Multiple Farmer’s Agency Hired for Take-up with Land Owner
0.61 Government of Goa 2011-2012 Pending with Government of Goa
0.61 Multiple Farmer’s 2012-2013 Multiple Farmer’s Agency Hired for Take-up with Land Owner
Land –Leasehold 4.59 Forest Land 2011-2012 Proposal for sub-lease of Forest land in favour of GAIL is with Government of Karnataka.
0.22 Maharashtra Industrial Development Corporation (MIDC) 2021-2022 Lease pending for execution with MIDC
4.48 Nagar Nigam Varanasi 2021-2022 The Lease Agreement at draft stage with Nagar Nigam office
0.12 Government Land 2005-2006 Lease deed pending with MPIDC
0.02 Government Land 2010-2011 Lease pending with MP Government
0.18 Karnataka Industrial Areas Development Board (KIADB) 2011-2012 Pending with Sub Registrar Belgaum
0.001 Government Land 1995-1996 Lease rent yet to be fixed meeting Honourable. Collector Guna
4.79 The Fertilisers and Chemicals Travancore Limited (FACT) 2010-2011 Matter being persuaded with FACT
1.33 Forest department 1999-2000 Matter pending with the State Government
0.61 Government Land 2011-2012 Pending with Government of Goa

d) The Company has not revalued its Property Plant and Equipment (including Right ofUse assets) and intangible assets during the year. Accordingly the provisions of clause3(i)(d) of the Order are not applicable. e) According to the information and explanationsgiven to us there are no proceedings which have been initiated or are pending against theCompany for holding benami property under the Benami Transactions (Prohibition) Act 1988(as amended in 2016) and rules made thereunder. ii. a) In our opinion the management hasconducted physical verification of inventory (excluding stores & spares and inventorylying with the third parties) at reasonable intervals during the year. We have beenexplained that the stock of gas at the end of the year has been taken with reference toreading of Turbine Flow Meter/Gas Chromatograph installed at Terminals Stock ofLPG/Pentane/SBP Solvent are determined with reference to Tank Level Gauge measurementwhich are converted into tonnage by measurement of density and applying correction factorfor temperature. LPG vapors volume is converted to tonnage by standard formulae.

According to the information and explanations given to us and based on the auditprocedures performed by us we are of the opinion that the coverage and procedure of suchverification by the management is appropriate.

According to the information and explanations given to us no material discrepancies of10% or more in the aggregate for each class of inventory between physical inventory andbook records were noticed on physical verification.

b) In our opinion and according to the information and explanations given to us duringthe year the Company has not been sanctioned working capital limits in excess of `5crore in aggregate from a bank or financial institutions on the basis of security ofcurrent assets. However the Company has been sanctioned unsecured working capital limitsin excess of `5 crore in aggregate from a bank as such filings of quarterly returns orstatements by the Company with the bank is not applicable

iii. The Company has provided investments in provided guarantee and given unsecuredloan to subsidiaries Joint Venture companies during the year in respect of which. a) A Asper information and explanation given to us the Company has stood guarantee tosubsidiaries during the year and has given loan to subsidiary as per following details:

Sr. No. Name of the Company During the year Amount (Rs. in crore) As at 31st March 2022 Amount
(Rs. in crore)
1. GAIL Gas Limited - 5951.99
2. HDFC LOAN (GAIL Gas Limited) 1500 1500
3. Brahmaputra Cracker and Polymer Ltd. - 652.34
4. GAIL Global Singapore Pte Ltd. - 1713.83
5. GAIL Global (USA) Inc. - 533.19
6. GAIL Global (USA) LNG LLC - 7503.22

The details of loans given to subsidiary is as follows:

During the year As at
Particulars Amount 31st March 2022
(Rs. in crore) Amount (Rs. in crore)
Konkan LNG Limited - 2861.72

B) Since the Company has not provided any loans or provided advances in the nature ofloans or stood guarantee or provided security to parties other than subsidiaries jointventures and associates and hence the relevant clause is not applicable.

b) According to the information and explanations given to us and based on the auditprocedures performed by us we are of the opinion that the investments made guaranteesprovided and the terms and conditions of loans and guarantees provided by the Company areprima facie not prejudicial to the Company’s interest.

c) According to the information and explanations given to us and based on the auditprocedures performed by us we are of the opinion that in respect of loans the scheduleof repayment of principal and payment of interest has been stipulated and the receipts ofinterest is regular where it is due. For repayment of principal moratorium has beengiven and no repayment is due during the year.

d) According to the information and explanations given to us and based on the auditprocedures performed by us no amount of loan is overdue for a period of more than 90days.

e) According to the information and explanations given to us and based on the auditprocedures performed by us we are of the opinion that no loan or advance in the nature ofloan granted which has fallen due during the year has been renewed or extended or freshloans granted to settle the overdue of existing loans given to the same parties.

f) According to the information and explanations given to us and based on the auditprocedures performed by us we are of the opinion that the Company has not granted anyloans or advances in the nature of loans either repayable on demand or without specifyingany terms or period of repayment.

iv. According to the information and explanations given to us the Company has compliedwith the provisions of Section 185 and 186 of Companies Act 2013 in respect of loansinvestment guarantee and security granted during the year. v. In our opinion andaccording to the information and explanations given to us the Company has not accepteddeposits or amount which deemed to be deposits. As such the directives issued by theReserve Bank of India the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the rules framed thereunder are not applicable to the Company.No order has been passed with respect to Section 73 to 76 by the Company Law Board orNational Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vi. We have broadly reviewed the accounts and records maintained by the Companypursuant to the Rules made by the Central Government for the maintenance of cost recordsunder sub-section (1) of Section 148 of the Act read with Companies (Cost Records &Audit) Rules 2014 as amended and we are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have not however madedetailed examination of the records with a view to determine whether they are accurate andcomplete.

vii. a) According to records of the Company and information and explanation given to usthe Company has generally been regular in depositing undisputed statutory dues includingGoods and Services Tax provident fund employees' state insurance income-tax sales-taxservice tax duty of customs duty of excise value added tax cess and any otherstatutory dues to the appropriate authorities. According to information and explanationgiven to us there are no outstanding statutory dues as referred above as at the last dayof the financial year under audit for a period of more than six months from the date theybecame payable.

b) According to records of the Company and information and explanation given to us theCompany the gross statutory dues of income tax or sale tax or service tax or duty ofcustom or duty of excise or value added tax or cess or Goods and Service Tax and any otherstatutory dues which have not been deposited on account of dispute or deposited underprotest and the forum where the dispute is pending are given below:

Sl. No. Name of Statute Nature of the Dues Period to which the amount relates Forum where the dispute is pending Gross disputed amount (Rs. in crore) Amount deposited under protest/ appeal (Rs. in crore) Amount not deposited (Rs. in crore)
1 Entry Tax Act of respective Entry Tax / Penalty / Interest 1999-00 to 2009-10 Commercial Tax Tribunal UP 254.36 6.41 247.95
States 2008-09 Additional Commissioner (Appeal) Noida 0.63 - 0.63
2015-16 to 2016-17 Joint Commissioner of State Tax (Appeal) Central Division Patna 0.13 - 0.13
SUB-TOTAL 255.12 6.41 248.71
2 Central Sales CST / Sales Tax 2003-2004 Hon. High Court Mumbai 0.63 0.03 0.60
Tax Act 1956 and respective State Sales Tax / VAT Act / VAT/ Penalty / Interest 2003-2004 Hon. High Court Guwahati 0.29 0.14 0.15
2007-2008 Sales Tax Tribunal Mumbai 26.71 3.80 22.91
2013-14 Joint Commissioner Thanjavur 0.10 0.01 0.09
October 2011 to December 2011 Joint Commissioner of Commercial Taxes Trichy 0.99 - 0.99
2011-12 & 2012 to 2015 Joint Commissioner (Appeals) Sales Tax Mumbai 89.13 2.32 86.81
2003-04 Joint Commissioner (Appeals) Commercial Tax Vadodara 4.96 1.19 3.77
2014-15 Joint Commissioner (Appeals) Sonepat 6.38 - 6.38
2011-13 Dy. Commissioner (Appeals) Gwalior 2.78 1.06 1.72
2018-19 Appellate Deputy Commissioner(CT) Thanjavur 3.13 - 3.13
SUB-TOTAL 135.10 8.55 126.55
3 Central Excise Act 1944 Central Excise Duty / Interest / January 2008 to March 2012 Hon. Supreme Court 3265.52 20.00 3245.52
Penalty May 2007 to May 2009 Customs Excise and Service Tax Appellate Tribunal Kolkata 35.94 0.66 35.28
October 2001 to August 2004 Customs Excise and Service Tax Appellate Tribunal Mumbai 233.45 - 233.45
November 2010 to March 2011 Customs Excise and Service Tax Appellate Tribunal Ahmedabad 1.73 - 1.73
SUB-TOTAL 3536.64 20.66 3515.98
4. Customs Act 1962 Customs Duty/ Interest / Penalty May 2015 to December 2018 & September 2019 to August 20 Hon. High Court of Gujarat 595.68 - 595.68
March 2006 January 2019 to August 2019 Customs Excise and Service Tax Appellate Tribunal Delhi Commissioner (Appeals) Ahmedabad 0.53 0.36 0.46 - 0.07 0.36
SUB-TOTAL 596.57 0.46 596.11
5 Goods & Service Tax 2017 GST / Interest / Penalty January19 Hon. High Court Allahabad 0.85 0.85 -
6 Finance Act 1994 (Service Tax) Service Tax / Interest / Penalty April2009 to March 2014 Customs Excise and Service Tax Appellate Tribunal Delhi 7.08 0.42 6.66
7 Income Tax Act 1961 Income Tax / Interest / Penalty AY 2008-09 to AY 2018-19 Jurisdictional Assessing Officer (TDS) 0.41 - 0.41
8 Gujarat Municipalities Act 1963 Notified Area Tax / GIDC Tax / Interest 1998-99 to 2005- 06 & 1985-86 to 2009-10 Hon. High Court Ahmedabad 5.68 - 5.68
TOTAL 4537.45 37.35 4500.10

viii. In our opinion and according to the information and explanations given to us theCompany has not surrendered or disclosed as income any transaction not recorded in thebooks of account during the year in the tax assessments under the Income Tax Act 1961(43 of 1961). Accordingly the provisions of clause 3(viii) of the Order are notapplicable.

ix. a) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or other borrowings or in the paymentof interest thereon to any lender.

b) According to the information and explanations given to us and on the basis of ouraudit procedures we report that the Company has not been declared willful defaulter byany bank or financial institution or other lender.

c) In our opinion and according to the information and explanations given to us theterm loans were applied for the purposes for which the loans were obtained.

d) According to the information and explanations given to us and the proceduresperformed by us and on an overall examination of the financial statements of the Companywe report that no funds raised on short-term basis have been used for long-term purposesby the Company.

e) According to the information and explanations given to us and on an overallexamination of the financial statements of the Company we report that the Company has nottaken any funds from any entity or person on account of or to meet the obligations of itssubsidiaries and joint ventures. f) According to the information and explanations given tous and procedures performed by us we report that the Company has not raised loans duringthe year on the pledge of securities held in its subsidiaries and joint ventures.

x. a) In our opinion and according to the information and explanations given to us theCompany did not raise monies by way of initial public offer or further public offer(including debt instruments) during the year. Accordingly provisions of clause 3(x)(a) ofthe order are not applicable.

b) During the year the Company has not made any preferential allotment or privateplacement of shares or convertible debentures (fully partially or optionally).Accordingly provisions of clause 3(x) (b) of the order are not applicable.

xi. a) According to the information and explanations given to us by the Managementthere has been a CBI enquiry against then Director Marketing on charges of criminalconspiracy demand and obtaining undue advantage by public servant taking undue advantageto influence public servant bribing public servant etc.. The enquiry proceedings areunder progress. As per explanations given by the management at this stage no estimatedfinancial impact or estimated amount can be ascertained b) We have not submitted anyreport under subsection (12) of section 143 of the Companies Act 2013 in Form ADT-4 asprescribed under Rule 13 of Companies (Audit and Auditors) Rules 2014 with the CentralGovernment during the year and up to the date of this audit report.

c) As represented to us by the management there are no whistle blower complaintsreceived by the Company during the year accordingly provisions of clause 3(xi)(c) of theorder are not applicable. xii. The Company is not a Nidhi Company. Accordingly provisionsof clause 3(xii) of the Order are not applicable.

xiii. In our opinion the Company has complied with provisions of sections 177 and 188of Companies Act 2013 in respect of transactions with the related parties and the detailshave been disclosed in the Standalone Financial Statements as required by the applicableaccounting standards.

xiv. a) In our opinion and based on our examination the Company has an internal auditsystem commensurate with the size and nature of its business.

b) We have considered the Internal Auditors reports of the Company issued till date forthe period under audit. However annual internal audit plan needs review in order to makecoverage for the respective financial year.

xv. In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions with the directors or personsconnected with them covered under Section 192 of the Act. Accordingly provisions ofclause 3(xv) of the Order are not applicable.

xvi. a) In our opinion and according to the information and explanations given to usthe Company is not required to be registered under Section 45-IA of the Reserve Bank ofIndia Act 1934.Accordingly provisions of clause (xvi)(a) of the Order are not applicableto the Company.

b) According to the information and explanations provided to us the Company has notconducted any Non-Banking Financial or Housing Finance activities therefore the Company isnot required to be registered under Section 45-IA of the Reserve Bank of India Act1934.Accordingly provisions of clause 3(xvi)(b) of the Order are not applicable.

c) The Company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve Bank of India. Accordingly provisions of clause 3(xvi)(c) of theOrder are not applicable.

d) According to the audit reports shared by the management of entities forming part ofthe group and as per information and explanations given to us by the Management in ouropinion there is no core investment Company within the Group (as defined in the CoreInvestment Companies (Reserve Bank) Directions 2016). Accordingly provisions of clause3(xvi)(d) of the Order are not applicable.

xvii. Based on our examination of the books and records of the Company the Company hasnot incurred cash losses in the financial year and in the immediately preceding financialyear. Accordingly provisions of clause 3(xvii) of the order are not applicable.

xviii. There has been no resignation of the statutory auditors during the year.Accordingly provisions of clause 3 (xviii) of the order are not applicable.

xix According to the information and explanations given to us and on the basis of thefinancial ratios ageing and expected dates of realization of financial assets and paymentof financial liabilities other information accompanying the financial statements ourknowledge of the Board of Directors and management plans and based on our examination ofthe evidence supporting the assumptions nothing has come to our attention which causesus to believe that any material uncertainty exists as on the date of the audit report andthat Company is not capable of meeting its liabilities existing at the date of balancesheet as and when they fall due within a period of one year from the balance sheet date.We however state that this is not an assurance as to the future viability of theCompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Company as and when they fall due.

xx. a) In our opinion and according to the information and explanations given to usthe Company has incurred expenditure under Corporate Social Responsibility as required bythe provisions of Section 135 of the Act and there are no unspent amounts which are to betransferred pursuant to section 135(5) and 135(6) of the Act. b) Since there are nounspent amounts which are to be transferred pursuant to section 135(5) and 135(6) of theAct hence provisions of clause 3(xx) (b) of the order are not applicable.

For Gandhi Minocha & Co. For A.R. & Co.
Chartered Accountants Chartered Accountants
Firm Registration No: 00458N Firm Registration No: 002744C
Sd/- Sd/-
Bhupinder Singh Pawan K Goel
Partner Partner
Membership No. 092867 Membership No. 072209
UDIN 22092867AJRZVK8364 UDIN: 22072209AJVWAB8348
Place: New Delhi
Date: 27th May 2022

ANNEXURE - B TO THE INDEPENDENT AUDITORS’ REPORT

Referred to in paragraph 2 to "Report on Other legal and regulatoryrequirements" of the Independent Auditors’ Report of even date to the members ofGAIL (INDIA) LIMITED on the standalone financial statements for the year ended 31stMarch 2022.

Sl. No. Directions / Sub Directions Action taken Impact on standalone financial statement
1 Whether the Company has system in place to process all the accounting transitions through IT system? If yes the implications of processing of accounting transaction outside IT system on the integrity of the accounts along with the financial implications if any may be stated? The Company maintains its books of account on IT system SAP which is an ERP system. All accounting transactions are processed in accounts maintained on SAP. Nil
Based on the audit procedures carried out and as per the information and explanations given to us no accounting transactions have been processed or carried outside the IT system of the Company. Accordingly in our opinion there are no implications on the integrity of the accounts.
2 Whether there is any restructuring of an existing loan or cases of waiver/write off of debts/loans/interest made by a lender due to Company inability to repay the loan? If yes the financial impact may be stated? In accordance with the audit procedures carried out and as per the information and explanations given to us by the Company there was no restructuring of existing loans or cases of waiver/write off of debts/ loans/interest made by a lender to the Company due to the Company’s inability to repay the loan. Nil
3 Whether funds received/ receivable for specific schemes from central state agencies were properly accounted for/ utilized as per its terms and conditions? List the cases of deviation. Refer to Note 55 of the standalone financial statements regarding the grant received by the Company for the project Jagdishpur Haldia Bokaro Dhamra Pipeline Project (JHBDPL). According to the information and explanations given to us and as represented by the Management and based on our examination of the books and records of the Company these have been utilized as per its terms and conditions. We did not encounter any deviation. Nil
For Gandhi Minocha & Co. For A.R. & Co.
Chartered Accountants Chartered Accountants
Firm Registration No: 00458N Firm Registration No: 002744C
Sd/- Sd/-
Bhupinder Singh Pawan K Goel
Partner Partner
Membership No. 092867 Membership No. 072209
UDIN 22092867AJRZVK8364 UDIN: 22072209AJVWAB8348
Place: New Delhi
Date: 27th May 2022

ANNEXURE - C TO THE INDEPENDENT AUDITORS’ REPORT

Referred to in paragraph 3(f) to "Report on Other legal and regulatoryrequirements" of the Independent Auditors’ Report of even date to the members ofGAIL (INDIA) LIMITED on the standalone financial statements for the year ended 31stMarch 2022.

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 GAIL(INDIA) LIMITED ("the Company") as of 31st March 2022 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company’s policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness.

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 auditors’ 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 except timely closure of contractssuch internal financial controls over financial reporting were operating effectively as at31st March 2022 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.

We have considered the areas of improvement identified which needs furtherstrengthening as reported above in determining the nature timing and extent of audittests applied in our audit of the 31st March 2022 Standalone (Ind AS)Financial Statements of the Company. However these areas of improvement do not affect ouropinion on the standalone Ind AS financial statements of the Company.

For Gandhi Minocha & Co. For A.R. & Co.
Chartered Accountants Chartered Accountants
Firm Registration No: 00458N Firm Registration No: 002744C
Sd/- Sd/-
Bhupinder Singh Pawan K Goel
Partner Partner
Membership No. 092867 Membership No. 072209
UDIN 22092867AJRZVK8364 UDIN: 22072209AJVWAB8348
Place: New Delhi
Date: 27th May 2022

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