To the Members of GAIL (India) Limited
This revised Independent Auditor’s Report is being issued in supersession of our earlier
Independent Auditors’ Report dated 22nd May 2017, at the instance of Comptroller & Auditor
General (C&AG) of India. The revised report is being issued in view of certain modification in Annexure
“A” of Companies (Auditors Report) Order 2016, as pointed out by C&AG of India in our earlier
report. Further, we confirm that these changes do not affect true & fair view and our opinion as expressed
earlier and also none of the figures have undergone any change in the Standalone financial Statements of the
Company as at 31st March2017.
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS financial statements of GAIL (India) Limited
(“the Company”), which comprise the Balance Sheet as at 31st March 2017, and the
Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the
Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies
and other explanatory information.
Management’s Responsibility for the Standalone Ind AS Financial Statements The
Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies
Act, 2013 (“the Act”) with respect to the preparation of these Standalone Ind AS financial
statements that give a true and fair view of the state of affairs (financial position), profit or loss
(financial performance including other comprehensive income), cash flows and changes in equity of the Company
in accordance with the accounting principles generally accepted in India, including the Indian Accounting
Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015 as amended. This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the preparation and presentation of the
Standalone Ind AS financial statements, that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these Standalone Ind AS financial statements based on our
audit. We have taken into account the provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the provisions of the Act and the Rules
made there under. We conducted our audit of the Standalone Ind AS financial statements in accordance with the
Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the
Standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in
the Standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal financial
control relevant to the Company’s preparation of the Standalone Ind AS financial statements that give a
true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit
also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the
accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of
the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion on the Standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the
aforesaid Standalone Ind AS financial statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the accounting principles generally accepted in
India including the Ind AS, of the state of affairs (financial position) of the Company as at 31st
March, 2017, and its profit (financial performance including other comprehensive income), its cash flows and
the changes in equity for the year ended on that date.
Emphasis of Matter
We draw attention to the following matters in the Notes to the financial statements:
1. Note No: 35(c)-regarding various provisional transportation tariff orders issued by Petroleum and
Natural Gas Regulatory Board (PNGRB), these orders have been contested by the company at Appellate Tribunal
for Electricity (APTEL) and adjustment if anywill be recognized as and when matter is finally decided.
2. Note No: 39-regarding provision of impairment loss amounting to Rs.783 Crores out of
carrying value of investment of Rs.974.31 Crores in a Joint Venture Entity on the basis of impairment study
of such entity. Such case has been included in exceptional item in the statement of Profit & Loss.
3. Note No: 42-in respect of revenue recognition in previous year for ship or pay charges where the
customer has disputed the claim of the company and final outcome is still uncertain.
Our opinion is not modified in respect of above matter.
Other Matters
The comparative financial information of the Company for the year ended 31stMarch 2016 and the
transition date opening balance sheet as at 1st April 2015 included in these Standalone Ind AS
financial statements, are based on the previously issued statutory financial statements prepared in
accordance with the Companies (Accounting Standards) Rules, 2006 audited by us/the predecessor auditors,
whose audit report for the year ended 31st March 2016 & 31st March 2015 dated
25th May 2016 & 27th May 2015 respectively expressed an unmodified opinion on those
Standalone financial statements, as adjusted for the differences in the accounting principles adopted by the
Company on transition to the Ind AS, which have been audited by us.
Our opinion is not modified in respect of above matter.
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 in terms of Section 143(11) of the Act, and on the basis of such checks of the
books and records of the Company as we considered appropriate and according to the information and
explanations given to us, we give in “Annexure -A” a statement on the matters specified in
paragraphs 3 and 4 of the said Order.
2. As required by Comptroller and Auditor General of India through directions/sub directions issued
under Section 143(5) of the Companies Act 2013, on the basis of written representation received from the
management, we give our report on the matter 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 best of our
knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as
it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss (including the Other Comprehensive Income),
the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement
with the books of account.
(d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Indian
Accounting Standards prescribed under Section 133 of the Act read with the Companies(Indian Accounting
Standards) Rules, 2015 as amended.
(e) Being a Government Company pursuant to the Notification No. GSR 463(E) dated 5 June 2015 issued by
the Ministry of Corporate Affairs, Government of India, provisions of sub-section (2) of Section 164 of the
Companies Act, 2013, are not applicable to the Company.
(f) We are enclosing herewith a report in “Annexure - C” for our opinion on adequacy of
internal financial controls system in place in the company and the operating effectiveness of such
controls;
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with
Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information
and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its
Standalone Ind AS financial statements. Refer Note 29 (I)(a)to the financial statements.
ii. The Company has made provision, as required under the applicable law or Indian accounting
standards, for material foreseeable losses, if any, on long-term contracts including derivative
contracts;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in Note no9A of its financial statements as to
holdings as well as dealings in Specified Bank Notes (SBN) during the period from 8th November
2016 to 30th December 2016. Based on the audit procedures and relying on the management
representation, we report that the disclosures are in accordance with the books of accounts and records
maintained by the Company.
ANNEXURE - A TO THE INDEPENDENT AUDITORS’ REPORT
Referred to in paragraph 1 to “Report on Other legal and regulatory requirements” of the
Independent Auditors’ Report of even date to the members of GAIL (INDIA) LIMITED on the Standalone Ind
AS Financial Statements for the year ended March 31, 2017.
(i) (a) As informed to us the company has generally maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) According to information and explanation given to us there is a regular programme of physical
verification of these fixed assets by the management which in our opinion is reasonable having regard to the
size of the company and nature of its assets. As informed to us no material discrepancies were noticed on
such verification.
(c) As informed to us and as verified by us during the course of our audit the title deeds of
immovable properties are held in name of the company except for the cases as follows.
|
Description of Asset
|
No. of cases
|
Area in Hectares
|
Gross block as on 31.03.2017 (Rs. in Cr.)
|
Net block as on 31.03.2017 (Rs. in Cr.)
|
|
Land
|
|
|
|
|
|
- Freehold
|
10
|
4.81
|
19.43
|
19.43
|
|
- Leasehold
|
6
|
175.31
|
27.36
|
26.48
|
|
- Leasehold- stated at carrying value (classified as prepayment under non-financial assets)
|
2
|
22.01
|
9.39
|
9.39
|
|
Building & Structures
|
10
|
-
|
1.67
|
1.00
|
(ii) As informed to us physical verification of inventory has been conducted at reasonable intervals
by the management except the store and spares lying with Engineers India Limited and other contractors. We
have been explained that the stock of gas at the end of the year has been taken with reference to reading of
Turbine Flow Meter/Gas Chromatograph installed at Terminals, Stock of LPG/Pentane/SBP Solvent are determined
with reference to Tank Level Gauge measurement which are converted into tonnage by measurement of density and
applying correction factor for temperature. LPG vapors volume is converted to tonnage by standard formulae. As
informed to us no material discrepancies were noticed on physical verification of inventory.
(iii) As informed to us the company has granted unsecured loans to companies covered in the register
maintained under section 189 of the Companies Act 2013. In respect of such loans:
a) As informed to us and as verified by us the terms and conditions of grant of such loans are not
prejudicial to the interest of the company.
b) Repayment of the principal amount and payment of interest on such loans have been stipulated and
the parties are making payments as per stipulation.
c) As informed to us, no amount of loan is overdue as at end of the year for a period more than ninety
days.
(iv) According to the information and explanations given to us, the company has complied with the
provisions of Section 185 and 186 of Companies Act 2013 in respect of loans/investment/guarantee/security
granted during the year.
(v) The company has not accepted any deposits, in terms of the directives issued by the Reserve Bank
of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and
the rules framed there under.
(vi) We have broadly reviewed the accounts and records maintained by the Company pursuant to the Rules
made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the
Companies Act, 2013 read with Companies (Cost Records & Audit) Rules, 2014 and we are of the opinion that
prima facie the prescribed accounts and records have been made and maintained. We have not, however, made
detailed examination of the records with a view to determine whether they are accurate and complete.
(vii) (a) According to records of the company and information and explanation given to us the company
has generally been regular in depositing undisputed statutory dues including provident fund, employees’
state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess
and any other statutory dues with the appropriate authorities. According to information and explanation given
to us there are no outstanding statutory dues as referred above as at the last day of the financial year under
audit for a period of more than six months from the date they became payable.
(b) As certified by the management on which we have relied upon the dues of income tax or sale tax or
service tax or duty of custom or duty of excise or value added tax or cess which have not been deposited on
account of dispute or deposited under protest and the forum where the dispute is pending are given below:
|
S. 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 Crores)
|
Amount deposited under protest/ appeal (Rs. In Crores)
|
Amount not deposited (Rs. In Crores)
|
| |
|
|
2002-03 to 2004-05
|
Hon. High Court, Allahabad
|
18.83
|
-
|
18.83
|
| |
|
|
1999-00 to 2009-10
|
Commercial Tax Tribunal, UP
|
205.34
|
6.41
|
198.93
|
|
1
|
Entry Tax Act of respective State
|
Entry Tax / Penalty / Interest
|
2008-09
|
Additional Commissioner (Appeals), Commercial Taxes
|
0.47
|
-
|
0.47
|
| |
|
|
2002-03 to 2005-06
|
Dy. Commissioner (Appeals), Commercial Tax, Ajmer
|
6.19
|
-
|
6.19
|
| |
|
|
2011-12 & 2012-13
|
MP Commercial Tax Appellate Board, Bhopal
|
4.76
|
1.77
|
2.99
|
| |
|
SUB-TOTAL
|
|
|
235.59
|
8.18
|
227.41
|
| |
|
|
2011-12 & 2012-13
|
MP Commercial Tax Appellate Board, Bhopal
|
12.26
|
4.01
|
8.25
|
| |
|
|
2005-06 to 2011-12
|
Joint Commissioner (Appeals), Sales Tax, Mumbai
|
313.30
|
24.03
|
289.27
|
| |
|
|
2003-2004
|
Hon. High Court, Mumbai
|
0.63
|
0.03
|
0.60
|
| |
Central Sales
|
CST / Sales Tax / VAT/ Penalty /
|
Oct 2011 to Dec 2011
|
Joint Commissioner of Commercial Taxes, Trichy
|
0.59
|
-
|
0.59
|
|
2
|
Tax Act, 1956 and respective State Sales Tax / VAT Act
|
2003-2004
|
Hon. High Court, Guwahati
|
0.29
|
0.14
|
0.15
|
| |
Interest
|
2014-15
|
Dy.Commissioner (Appeals), Commercial Taxes, Ernakulam
|
2.85
|
0.07
|
2.78
|
| |
|
|
2003-04
2008-09
2009-10
2012-13
|
Joint Commissioner (Appeals), Commercial Tax, Vadodara
|
93.44
|
82.98
|
10.46
|
| |
|
|
1995-96 to 1996-97
|
Dy Commissioner, Commercial Tax, Gwalior
|
0.16
|
0.16
|
-
|
| |
|
SUB-TOTAL
|
|
|
423.52
|
111.42
|
312.10
|
| |
|
|
Mar 2000 to Feb 2002, April 2002 to March 2003 & Nov 2004to Feb2005
|
Supreme Court
|
54.24
|
-
|
54.24
|
| |
|
Central Excise Duty / Interest / Penalty
|
Sept 2006 to Feb 2014
|
Customs, Excise and Service Tax Appellate Tribunal, Delhi
|
2646.90
|
-
|
2646.90
|
|
3
|
Central Excise Act 1944
|
Jan 2001 to Feb 2005
|
Customs, Excise and Service Tax Appellate Tribunal, Mumbai
|
196.09
|
-
|
196.09
|
| |
|
|
July 2004 to March 2011
|
Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad
|
188.44
|
-
|
188.44
|
| |
|
|
April 2008 to March 2010 & July 2010 to Nov 2010
|
Customs, Excise and Service Tax Appellate Tribunal, Kolkata
|
77.72
|
-
|
77.72
|
| |
|
SUB-TOTAL
|
|
|
3163.39
|
0.00
|
3163.39
|
| |
|
|
Oct. 2006 to Mar 2015
|
Customs, Excise and Service Tax Appellate Tribunal, Delhi
|
1216.80
|
23.61
|
1193.19
|
|
4
|
Finance Act 1994 (Service Tax)
|
Service Tax / Interest/ Penalty
|
Aug. 2005 to Sept 2009
|
Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad
|
9.88
|
-
|
9.88
|
| |
|
July 2010 to Nov 2010
|
Customs, Excise and Service Tax Appellate Tribunal, Delhi
|
0.37
|
-
|
0.37
|
| |
|
|
2008-09
|
Customs, Excise and Service Tax Appellate Tribunal, Allahabad
|
0.03
|
-
|
0.03
|
| |
|
|
Apr 2007 to Mar 2009 & Oct 2009 to Mar 2015
|
Commissioner (Appeals), Customs, Excise and Service Tax, Delhi
|
1.18
|
-
|
1.18
|
| |
|
SUB-TOTAL
|
|
|
1228.26
|
23.61
|
1204.65
|
| |
|
|
March 2006
|
Customs, Excise and Service Tax Appellate Tribunal, Delhi
|
0.53
|
0.46
|
0.07
|
|
5
|
Customs Act, 1962
|
Customs Duty/ Interest / Penalty
|
Oct 2015 to Mar 2016
|
Commissioner of Customs, Excise and Service Tax, (Appeals), Pune
|
0.77
|
0.65
|
0.12
|
| |
|
|
March 2013 to July 2014
|
Commissioner of Customs, Excise and Service Tax, (Appeals), Ahmedabad
|
7.78
|
7.78
|
-
|
| |
|
SUB-TOTAL
|
|
|
9.08
|
8.89
|
0.19
|
| |
|
|
2008-09 to 2017-18
|
Jurisdictional Assessing Officer (TDS)
|
4.94
|
-
|
4.94
|
| |
Income Tax Act, 1961
|
Income Tax /
|
1999-00, 2013-14 & 2014-15
|
Commissioner Income Tax (Appeals) - 22, New Delhi
|
152.20
|
152.20
|
-
|
|
6
|
Interest/ Penalty
|
1996-97 to 199899 & 2000-01 to 2012-13
|
Income Tax Appellate Tribunal, Delhi
|
1808.28
|
1180.19
|
628.09
|
| |
|
|
1997-98 & 1998-99
|
Hon. Supreme Court
|
0.26
|
0.26
|
-
|
| |
|
SUB-TOTAL
|
|
|
1965.68
|
1332.65
|
633.03
|
|
7
|
Gujarat Municipalities Act, 1963
|
Notified Area Tax / GIDC Tax / Interest
|
1998-99 to 200506 & 1985-86 to 2009-10
|
Hon. High Court, Ahmedabad
|
4.33
|
-
|
4.33
|
| |
|
TOTAL
|
|
|
7029.85
|
1484.75
|
5545.10
|
(viii) Based on our audit procedures and in accordance with the information and explanations given to
us by the management the company has not defaulted in repayment of dues to a bank or government or bonds
holders.
(ix) The Company has not raised any money by way of initial public offer or further public offer or
further public offer (including debt instrument). Term Loans obtained during the year were applied for the
purpose for which those were obtained by the company.
(x) 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 and in accordance with generally accepted
auditing practices in India, no case of frauds by the Company or any fraud on the Company by its officers or
employees has been noticed or reported during the year.
(xi) As per notification no. GSR 463(E) dated 5 June 2015 issued by the Ministry of Corporate Affairs,
Government of India, Section 197 is not applicable to the Government Companies. Accordingly, provisions of
clause 3 (xi) of the Order are not applicable to the Company.
(xii) The company is not a nidhi company and therefore clause 3(xii) of the Order related to such
companies is not applicable to the Company.
(xiii) The company has complied with in respect of all transactions with the related parties are in
compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been
disclosed in the Financial Statements as required by the applicable accounting standards.
(xiv) The Company has not made any preferential allotment or private placement of shares or fully or
partly convertible debentures during the year under review.
(xv) As informed to us, during the year the company has not entered into any noncash transactions with
any of its directors or persons connected with the Directors.
(xvi) The company is not required to get registered under section 45-IA of Reserve Bank of India
ActRs.1934.
ANNEXURE - B TO THE INDEPENDENT AUDITORS’ REPORT
Referred to in paragraph 2 to “Report on Other legal and regulatory requirements” of the
Independent Auditors’ Report of even date to the members of GAIL (INDIA) LIMITED on the financial
statements for the year ended March 31, 2017.
|
S. No.
|
Directions / Sub Directions
|
Action taken
|
Impact on financial statement
|
|
1
|
Whether the company has clear title/lease deed for freehold and leasehold respectively? If not please
state the area of freehold and leasehold land for which title/lease deed are not available?
|
As informed to us and as verified by us during the course of our audit the title deeds of immovable
properties are held in name of the company except for the cases as disclosed in Note no. 37(b) & (c)along
with area of these lands.
|
Nil
|
|
2
|
Whether there are any cases of waiver/ write off of debts/loans/interest etc., if any, the reason there
for and amount involved.
|
We have been informed that there has been no case of waiver, write off of debt/interest/loans etc.
|
Nil
|
|
3
|
Whether proper records are maintained for inventories laying with third parties & assets received as gift
from Govt. or other authorities.
|
The company has maintained proper records of inventories including inventory lying with the third
parties. The inventories have been physically verified at reasonable intervals by the Management, except the
stores & spares lying with Engineers India Ltd. and other contractors. We have been informed that no asset
has been received as gift from government or other authorities.
|
Nil
|
For O. P. Bagla & Co. For G. S. Mathur &
Co.
Chartered Accountants Chartered Accountants
Firm No.: 000018N Firm No.: 08744N
(Rakesh Kumar) (Rajiv Kumar
Wadhawan)
(Partner) (Partner)
Membership No.: 087537 Membership No.: 091007
Place : New Delhi
Dated : 20th July, 2017 |
-5.3 (-1.58%)