1. We have audited the attached Balance Sheet of Gujarat Gas Company
Limited (the Company) as at December 31, 2011, and the related Profit
and Loss Account and Cash Flow Statement for the year ended on that
date annexed thereto, which we have signed under reference to this
report. These financial statements are the responsibility of the
Company''s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
3. As required by the Companies (Auditor''s Report) Order, 2003, as
amended by the Companies (Auditor''s Report) (Amendment) Order, 2004
(together the Order), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of ''The Companies Act, 1956''
of India (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 the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, 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 purposes of
(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
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from the
directors, as on December 31, 2011 and taken on record by the Board of
Directors, none of the directors is disqualified as on December 31,
2011 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, in the prescribed
manner, the information required by the Act, and give a true and fair
view in conformity with the accounting principles generally accepted in
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at December 31, 2011;
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(ii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to Auditors'' Report
[Referred to in paragraph 3 of the Auditors'' Report of even date to the
members of Gujarat Gas Company Limited on the financial statements for
the year ended December 31, 2011]
i) a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
b) The fixed assets (excluding assets given on leases) are physically
verified by the Management according to a phased programme designed to
cover all the items over a period of 3 years which, in our opinion, is
reasonable having regard to the size of the Company and the nature of
its assets. Pursuant to the programme, a portion of the fixed assets
has been physically verified by the Management during the year and no
material discrepancies between the book records and the physical
inventory have been noticed.
c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
ii) a) The inventory (excluding stocks with third parties) has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
b) In our opinion, the procedures of physical verification of inventory
followed by the Management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
iii) a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
b) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system 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. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
v) According to the information and explanations given to us, there
have been no contracts or arrangements referred to in Section 301 of
the Act during the year to be entered in the register required to be
maintained under that Section. Accordingly, the question of commenting
on transactions made in pursuance of such contracts or arrangements
does not arise.
vi) The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii) The Central Government of India, under clause (d) of sub-section
(1) of Section 209 of the Act, has prescribed the maintenance of cost
records. The company is in the process of preparing the cost records
and accounts for the year.
ix) a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is regular in depositing the undisputed statutory dues including
provident fund, investor education and protection fund, employees''
state insurance, income-tax, sales-tax, wealth tax, service tax,
customs duty, excise duty, cess and other material statutory dues as
applicable with the appropriate authorities.
b) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of taxes
as at December 31, 2011 which have not been deposited on account of a
dispute, are as follows:
Name of the Nature of
Dues Amount Period to
which the Forum where the
statute (Rs. in
relates dispute is pending
Tax Act, Income
Tax and 3.96 Assessment
Year CIT (Appeals)
Finance Act, Service
Tax 6.80 2005-2009 CESTAT
Excise Act, Excise
Duty 0.63 October
There are no dues of sales tax, wealth tax, customs duty and value
added tax which have not been deposited on account of dispute.
x) The Company has no accumulated losses as at December 31, 2011 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
xi) According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the balance sheet date.
xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
xiii) The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund/ societies are not applicable to the
xiv) In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
xv) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
xvi) The Company has not obtained any term loans.
xvii) On the basis of an overall examination of the balance sheet of
the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-term
basis which have been used for long-term investment.
xviii) The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
xix) The Company has not issued any debentures during the year and
there are no debentures outstanding as at year end.
xx) The Company has not raised any money by public issues during the
xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management.
For Price Waterhouse
Firm Registration No-301112E
Place : Gurgaon V.Nijhawan
Date : February 23,2012 Partner
Membership Number : F87228