SENSEX NIFTY
GAIL India | Auditor's Report > Oil Drilling And Exploration > Auditor's Report from GAIL India - BSE: 532155, NSE: GAIL
YOU ARE HERE > MONEYCONTROL > MARKETS > OIL DRILLING AND EXPLORATION > AUDITORS REPORT - GAIL India
GAIL India
BSE: 532155|NSE: GAIL|ISIN: INE129A01019|SECTOR: Oil Drilling And Exploration
SET ALERT
|
ADD TO PORTFOLIO
|
WATCHLIST
LIVE
BSE
Jul 21, 17:00
438.60
-6.7 (-1.5%)
VOLUME 49,306
LIVE
NSE
Jul 21, 17:00
437.80
-7.25 (-1.63%)
VOLUME 1,058,468
« Mar 12
Auditor's Report (GAIL India) Year End : Mar '13
Report on the Financial Statements
 
 We have audited the accompanying financial statements of GAIL(India)
 Limited, which comprise the Balance Sheet as at March 31,2013, and the
 Statement of Profit and Loss and Cash Flow Statement for the year then
 ended, and a summary of significant accounting policies and other
 explanatory information.
 
 Management''s Responsibility for the Financial Statements
 
 Management is responsible for the preparation of these financial
 statements that give a true and fair view of the financial position,
 financial performance and cash flows of the Company in accordance with
 the Accounting Standards referred to in sub-section (3C) of section 211
 of the Companies Act, 1956 (the Act). This responsibility includes
 the design, implementation and maintenance of internal control relevant
 to the preparation and presentation of the 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 financial
 statements based on our audit. We conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. Those Standards require that we comply with
 ethical requirements and plan and perform the audit to obtain
 reasonable assurance about whether the financial statements are free
 from material misstatement.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and disclosures in the financial statements. The procedures
 selected depend on the auditor''s judgment, including the assessment of
 the risks of material misstatement of the financial statements, whether
 due to fraud or error. In making those risk assessments, the auditor
 considers internal control relevant to the Company''s preparation and
 fair presentation of the financial statements in order to design audit
 procedures that are appropriate in the circumstances. An audit also
 includes evaluating the appropriateness of accounting policies used and
 the reasonableness of the accounting estimates made by management, as
 well as evaluating the overall presentation of the financial
 statements.
 
 We believe that the audit evidence we have obtained is sufficient and
 appropriate to provide a basis for our audit opinion.
 
 Opinion
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the 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:
 
 a) In the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2013
 
 b) In the case of the Statement of Profit and Loss, of the profit for
 the '' year ended on that date; and
 
 c) In the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 1. As required by the Companies (Auditor''s Report) Order, 2003 (the
 Order) issued by the Central Government of India in terms of
 sub-section (4A)of section 227 of the Act, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the Order.
 
 2.  As required by section 227(3) of the Act, we report that:
 
 a) We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 b) In our opinion proper books of account as required by law have been
 kept by the Company so far as appears from our examination of those
 books
 
 c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 account
 
 d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and
 Cash Flow Statement comply with the Accounting Standards referred to in
 subsection(3C) of section 211 of the Companies Act, 1956;
 
 e) Being a government Company, pursuant to the Notification No.  GSR
 829 (E) dated 21st October 2003 issued by Department of Company
 Affairs, provisions of clause (g) of sub-section (1) of Section 274 of
 the Companies Act, 1956, are not applicable to the company.
 
 f) Since the Central Government has not issued any notification as to
 the rate at which the cess is to be paid under section 441A of the
 Companies Act,1956 nor has it issued any Rules under the said section,
 prescribing the manner in which such cess is to be paid, no cess is due
 and payable by the Company
 
 The Annexure referred to in the auditor''s report to the shareholders of
 GAIL (India) Limited for the year ended March 31, 2013. We report that:
 
 (i) (a) The company has generally maintained proper records showing
 full particulars including quantitative details and situation of fixed
 assets.
 
 (b) According to the information and explanation given to us, there is
 a regular programme of verification of fixed assets which, in our
 opinion, is reasonable having regard to the size of the company and the
 nature of its assets. Fixed assets have been physically verified by the
 management during the year and no material discrepancies were noticed
 on such verification.
 
 In our opinion, there was no substantial disposal of fixed assets
 during the year.
 
 (ii) 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 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 vap our volume is converted to tonnage by standard
 formulae.
 
 In our opinion and according to the information and explanations given
 to us, the procedures of physical verification of inventory followed by
 the Management are reasonable and adequate in relation to the size of
 the Company and nature of its business.
 
 According to the information and explanations given to us, no material
 discrepancies have been noticed on physical verification of inventories
 as compared to the books and records.
 
 (iii) (a) The Company has granted loans to its one subsidiary company
 (None of the Directors individually or collectively hold more than two
 per cent of the paid-up share capital). The Company has maintained the
 register under section 301 of the Companies Act, 1956, inter-alia, in
 which the name of said one subsidiary is also entered. The maximum
 amount involved during the year for Rs. 57.32crores and year-end
 balance of loan was Rs.55.60crores.
 
 (b) In our opinion, the rate of interest and other terms and conditions
 of such loans are not, prima facie, prejudicial to the interest of the
 company.
 
 (c) The party has repaid the principal amounts as stipulated and has
 also been regular in the payment of interest to the company.
 
 (d) There is no overdue amount in excess of Rs. 1 lakh in respect of
 loans granted to companies, firms or other parties listed in the
 register maintained under section 301 of the Companies Act, 1956.
 
 (e) The company had not taken loan from companies covered in the
 register maintained under section 301 of the Companies Act, 1956.
 
 (iv) In our opinion, and according to information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the company and the nature of its
 business for the purchase of inventory, fixed assets and for the sale
 of goods and services.
 
 (v) On the basis of our examination of books of accounts, and as per
 information and explanation given to us, the company has not made any
 transactions in respect of any party during the financial year that
 needs to be entered in the register pursuant to the section 301 of the
 Companies Act, 1956.
 
 (vi) The company has not accepted any deposits from the public during
 the year covered under section 58A and 58AA or any other relevant
 provision of the Companies Act, 1956.
 
 (vii) In our opinion, the company''s internal audit system is
 commensurate with its size and nature of its activities.
 
 (viii) We have broadly reviewed the books of Accounts maintained by the
 Company pursuant to the order made by the Central Government for the
 maintenance of Cost records under Section 209(1)(d) of the Companies
 Act, 1956 and we are of the opinion that prima facie the prescribed
 accounts and records have been maintained.
 
 (ix) (a) According to the records of the company, the company is
 generally regular in depositing undisputed statutory dues including
 Provident fund, Investor Education and Protection Fund, Employees''
 State Insurance, Sales tax, Wealth tax, Service Tax, Custom duty,
 Excise duty, cess and any other statutory dues with the appropriate
 authorities. According to the information and explanation given to us,
 no undisputed amounts payable in respect of Sales tax, Service Tax,
 Custom duty, Excise duty and other statutory dues were outstanding at
 the year-end for a period of more than six months from the date they
 become payable.
 
 (b) As certified by the Management on which we have relied upon, the
 dues of Excise Duty, Custom Duty, Entry Tax, Sales Tax and other Taxes
 which have not been deposited on account of disputes and the forum
 where the dispute is pending, are given below:
 
 List of Cases of Unpaid Disputed Demand under various Statutes as on
 31.03.2013
 
                                                      (Rs. In Crores)
 
 SI.  Statute          Subject Matter of Dispute              Amount
 No.                                                         (2012-13)
 
 1    Entry Tax   (a)  Demand of Entry Tax on 
                       Natural Gas in U.P.                     159.17
 
                  (b)  Demand of Entry Tax on Natural Gas        0.82 
                       in Rajasthan
 
                  (c)  Demand of Entry Tax on Natural Gas in    26.00 
                       Madhya Pradesh
 
 2    Sales Tax   (a)  Non-acceptance of declaration form for    0.61
                       concessional sales tax
 
                  (b)  Sales Tax demand as per assessment order  3.66
                       of 2005-06 and 2006-07
 
                  (c)  CST demand on Transmission charges        0.70
 
                  (d)  Demand of GVAT & CST on account of       81.18 
                       disallowance of LPG subsidy discount 
                       and treating LPG as non-domestic
 
                  (e)  Interest for delay for sales  
                       tax assessment                            0.51
 
                  (f)  Demand of VAT on account of rate change   0.29
  
                  (g)  Demand of MP VAT & CST Disallowance of
                       credit note for LPG subsidy discount    207.97
 
                  (h)  Demand for treating CST sale as
                       local sale                                0.15
 
                  (i)  Sales Tax demand                          0.20
 
                  (j)  Revised Sales Tax demand as per 
                       assessment order of 2003-04               1.05
 
 3    Excise &    (a)  LPG valuation Dispute                    16.88 
      Service
      Tax
 
                  (b)  Dispute on Pentane Classification        99.63
 
                  (c)  Dispute on MFO Classification            66.45
 
                  (d)  Demand of duty under Rule 6(3) of CCR,   11.97
                       2004 for credit taken on input services
  
                  (e)  Demand of differential service 
                       tax based on                              0.19 
                       returns for the period from Oct 06
                       to Mar 07
 
                  (f)  Demand raised denying refund claim        0.47 
                       allowed to GAIL for service tax on
                       compression charges
 
                  (g)  Demand raised by denying Cenvat &        10.29
                       service tax credit taken at Hazira
 
                  (h)  Demand raised by denying Cenvat credit    0.22
                       taken on input services
 
                       SUB-TOTAL                               688.41
 
 4    Income           Unpaid demands including interest        68.58
      Tax
 
 5    Other            Notified Area tax & GIDC tax on revised   3.63
      taxes            value (incl. interest)
 
                       TOTAL                                   760.62
  
 Statute         Period of Dispute    Status - Forum
 
 Entry Tax       1999-00 to 2009-10   Allahabad High Court, Trade tax 
                                      Tribunal & Additional / Joint 
                                      Commissioner (Appeals)
 
                 2005-06              Dy. Commissioner (Appeals), Ajmer
 
                 2008-09,             High Court, Gwalior & Tribunal, 
                 2009-10 & 2010-11    Bhopal
 
 Sales Tax       1995-96 & 1996-97    Additional Commissioner (Appeals),
                                      Commerical Tax, Gwalior
 
                 2005-06 & 2006-07    Additional Commissioner (Appeals)
                                      Noida
 
                 2005-06 to 2009-10   AP High Court
 
                 2006-2007            Joint Commissioner (Appeals)
 
                 2003-2004            Dy. Commissioner, Sales Tax, Mumbai
 
                 Oct 2011 to Dec 2011 Joint Commissioner, Trichy
 
                 2008-09 to 2010-11   High Court, Gwalior 
 
                 2003-2004            High Court, Guwahati
 
                 1998-1999            Mumbai Tribunal
 
                 2003-04              Joint Commissioner (Appeals),
                                      Baroda
 
 Excise & 
 Service Tax     Jan 2001 to
                 Feb 2005             CESTAT Mumbai
 
                 Mar. 2000 to         CESTAT New Delhi & CESTAT
                 Feb 2002 & Aug.2005  Ahmedabad 
                 to Jul 2009
 
                 July 2004 to 
                 March 2011           CESTAT Ahmedabad
 
                 2008-2009 &          CESTAT Kolkata
                 2009-2010
 
                 Oct.2006 to 
                 March 2007           CESTAT Ahmedabad
 
                 Sep.2007             CESTAT Ahmedabad
 
                 May 2005 to 
                 March 2011           CESTAT Ahmedabad
 
                 Jan. 2006 to 
                 Oct. 2009 &          Commissioner (Appeals), 
                                      Guwahati &
                 Dec. 2010 to 
                 March 2011           CESTAT Delhi
 
 Income Tax      AY-2003-04, 2004-05, CIT (Appeals)
                 2006-07, 2007-08
                 & 2010-11
 
 Other taxes     1985-86 to 2008-09   Ahmedabad High Court
 
 (x) The company has no accumulated losses at the end of the financial
 year and it has not incurred any cash losses in the current and
 immediately preceding financial year.
 
 (xi) Based on our audit procedure and on the information and
 explanations given by the management, we are of the opinion that the
 company has not defaulted in repayment of dues to a financial
 institution, bank and debenture holders.
 
 (xii) In our opinion, the company has granted loans and advances on the
 basis of security by way of pledge of shares, debentures and other
 securities. In our opinion, the company has maintained adequate
 documents and records in respect of such loans.
 
 (xiii) The company is not a chit fund, nidhi, mutual benefit fund or a
 society.  Accordingly, clause 4(xiii) of the order not applicable.
 
 (xiv) According to the information and explanation given to us, the
 company is not dealing or trading in shares, securities, debentures and
 other investments. Accordingly, clause 4 (xiv) of the order is not
 applicable.
 
 (xv) The company has given guarantees for loans taken by its
 subsidiaries from bank and financial institutions. The terms and other
 conditions, in our opinion, are not prima facie prejudicial to the
 interest of the company.
 
 (xvi) On the basis of review of utilization of funds pertaining to term
 loans on overall basis and related information as made to us, the term
 loans taken by the company have been utilized for the purposes for
 which they are obtained.
 
 (xvii) According to the information and explanation given to us,
 company has not utilized short-term loan for long-term investment
 during the year.
 
 (xviii)The company has not made any preferential allotment of shares to
 parties or companies covered in the register maintained under section
 301 of the Companies Act, 1956.
 
 (xix) The Company has not issued any debentures during the year.
 
 (xx) During the year no money has been raised by public issues.
 
 (xxi) According to the information and explanations given to us, no
 fraud on or by the company has been noticed or reported during the
 year.
 
 For M.L.Puri& Co.                   For Rasool Singhal & Co.
 
 Chartered Accountants               Chartered Accountants
 
 Firm No.: 002312N                   Firm No.: 500015N
 
 (Navin Bansal)                     (Sandeep Gupta)
 
 (Partner)                          (Partner)
 
 Membership No.:91922                Membership No.:413890
 
 Place : New Delhi
 
 Dated : May 28, 2013
Source : Dion Global Solutions Limited
Quick Links for gailindia
Explore Moneycontrol
Stocks     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | Others
Mutual Funds     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.