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Updated:14 May, 2021, 15:59 PM IST

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Updated:14 May, 2021, 16:00 PM IST

INDEPENDENT AUDITOR'S REPORT

To,

The Members, Gujarat Gas Limited,

Report on the Financial Statements

We have audited the accompanying financial statements of Gujarat Gas Limited (formerly known as GSPC Distribution Networks Limited) ("the Company"), which comprise the Balance Sheet as at 31st March, 2014, and the Statement of Profit and Loss and the Cash Flow Statement for the Year ended as on 31st March, 2014 and a summary of significant accounting policies and other explanatory information, which have been signed under reference to this report. The financial statements for the year the ended 31st March, 2014 were audited by us and our report dated 20th May, 2014 expressed an unqualified opinion on those financial statements. Consequent to the below mentioned facts, the audited financial statements for the year ended 31st March, 2014 were revised by the Company to give effect to the said amalgamation and arrangement, effective from 1 st April, 2013. 1. The Honourable High Court of Gujarat at Ahmedabad vide its oral order dated 30th March 2015 and certified order dated 18th April, 2015 sanctioned the Scheme of amalgamation and arrangement between the following mentioned companies w.e.f. 14th May, 2015 having the appointed date of 1 st April, 2013.

(i) GSPC Gas Company Limited (GSPC Gas),

(ii) Gujarat Gas Company Limited (GGCL),

(iii) Gujarat Gas Financial Services Limited (GFSL)

(iv) Gujaratgas Trading Company Limited (GTCL)

with the Company and the certified copy of the order of the High Court was filed with the Registrar of Companies (ROC), Gujarat on 14th May, 2015 from which date the Scheme of Amalgamation and arrangement has become effective, with the appointed date of 1st April, 2013.

Subsequently, the Company's name has been changed from GSPC Distribution Networks Limited (GDNL) to Gujarat Gas Limited (GGL) with effect from 15th May 2015.

2. The Honourable High Court of Gujarat at Ahmedabad vide its order dated 6th July, 2015 permitted to reopen and revise accounts of the company in the financial year 2013–14 to reflect the correct financial position and comply with the conditions of sanctioned scheme of amalgamation and arrangement.

Accordingly, we have carried out audit procedures and amended the date of our audit report in respect of this subsequent event (Refer Note No. 48 to the financial statements).

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 also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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 standalone 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 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 financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the effectiveness of such controls. An audit also includes evaluating the appropriateness of 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 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 financial statements.

Other Matter

We did not audit total assets as at March 31, 2014, total revenues of and net cash outflows of the transferor companies for the year ended on March 31, 2014, included in the accompanying financial statements in respect of erstwhile –

(i) GSPC Gas Company Limited (GSPC Gas),

(ii) Gujarat Gas Company Limited (GGCL),

(iii) Gujarat Gas Financial Services Limited (GFSL)

(iv) Gujaratgas Trading Company Limited (GTCL) (collectively referred to as "Transferor Companies") which got amalgamated with the Company pursuant to the order of Honourable High Court of Gujarat at Ahmedabad its oral order dated 30th March 2015 and certified order dated 18th April, 2015. The financial statements and other financial information for the financial year 2013 –14 of erstwhile above mentioned transferor companies have been audited by their respective statutory auditors and office of the C&AG and has been approved by their respective Board and shareholders of the transferor companies and whose report has been furnished to us. Our opinion, in so far as it relates to the affairs of erstwhile above mentioned transferor companies is based solely on the report of other auditors. Our opinion is not qualified in respect of this matter.

Opinion

Based on our audit and matter of emphasis, we report that,

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 31 st March, 2014;

b) in the case of the Statement of Profit and Loss, of the "Profit" for the Year ended 31 st March, 2014; and

c) In the case of the Cash Flow Statement, of the cash flows for the Year ended 31 st March, 2014.

Report on Other Legal and Regulatory Requirements

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) As the Company is a Government Company, in terms of notification no. G.S.R. 829(E) dated 21st October, 2003, issued by Department of Company Affairs, Ministry of Finance, the clause (g) of subsection(1) of section 274 of the Companies Act, 1956 is not applicable.

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. Thus, it would not be possible for us to comment on the regularity or otherwise about the cess till the time relevant rules or regulations are issued. However, till the time such Rules are prescribed, we need not make any comment in respect of the Cess under section 441A of the Companies Act, 1956 in report under paragraph 4(ix)(a) of CARO 2003.

ANNEXURE TO AUDITOR'S REPORT

Referred to in Paragraph 1 under report on 'other legal and regulatory requirements' of our report of even date of the members of Gujarat Gas Limited (GGL) (erstwhile known as GSPC Distribution Networks Limited) on the financial statements for the year ended on 31 st March, 2014.

1. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) We have been provided letters specifying that all major fixed assets other than underground gas pipeline networks which are not physically verifiable, have been verified by the management during the year and no material discrepancies were noticed on the said verification.

c) According to the information and explanation given to us the company has not disposed off any substantial part of its fixed assets so as to affect its going concern status.

2. In respect of its inventories:

a) As explained to us, inventories (except stock with third parties) have been physically verified by the management during the year at reasonable interval. In respect of inventories lying with third parties, these have substantially been confirmed by them.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory. On physical verification of such inventory by management no any material discrepancies were noticed as compared to book records.

3. In respect of loans granted and taken to / from parties covered in the register maintained u/s 301 of the Companies Act, 1956:

The Company has neither granted nor taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. Accordingly, the provisions of clause (iii) (a) to (iii) (g) of the said Order, 2003 are not applicable to the Company.

4. In respect of internal control:

In our opinion and according to the information and explanations given to us, there is an adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and for 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 not come across any continuing failure to correct major weaknesses in internal control system.

5. In respect of contracts or arrangements need to be entered into a register maintained u/s 301 of the Companies Act, 1956:

a) According to the information, explanations and representations given to us, we are of the opinion that the company has entered all the transaction, if any required to be entered into the registered maintained under section 301 of the Companies Act, 1956.

b) According to the information, explanations and representations given to us, the transactions made, if any in pursuance of such contracts or arrangements that exceed the value of Rs. five lacs in respect of any party during the period have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. In respect of Deposit from Public:

In our opinion and according to the information, explanations and representations given to us, the Company has not accepted any deposits from the public pursuant to sections 58A, 58AA or any other relevant provisions of the Companies Act 1956 and rules framed thereunder. Therefore, the provisions of clause (vi) of the Order are not applicable to the Company.

7. In respect of Internal Audit System :

The Company has an internal audit system commensurate with its size of the company and nature of its business. The internal audit during the period under review was carried out by the firm of Chartered Accountants. In our opinion the internal audit system is adequate commensurate with the size of the company and nature of its business.

8. In respect of maintenance of cost records:

We have broadly reviewed the books of accounts maintained by the company pursuant to the order made by the Central Government of India for the maintenance of cost records under clause (d) of sub–section (1) of section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been maintained and cost audit report have been produced before us. We have not, however, carried out a detailed examination of the records to ascertain whether they are accurate or complete.

9. In respect of statutory dues:

a) According to the information and explanations given to us and record of the company has been examined by us, In our opinion, the company is generally regular in depositing undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year, except that the service tax on commitment charges were not deposited within the prescribed time limit by erstwhile Gujarat Gas Company Limited. The amount of service tax outstanding for a period exceeding 6 months from the date they become payable was Rs. 1.38 crores and the same has been paid on 05.05.2014.

10. In respect of accumulated losses and cash losses:

Since the company has been incorporated on 21/02/2012 and not more than five year has been elapsed at the end of the current financial year, hence this clause of the said order is not applicable.

11. In respect of dues to financial institution / banks / debenture:

According to the information and explanations given to us and based on the documents and records produced to us, the company has not defaulted in repayment of dues to the Financial Institution or Bank or debenture holders.

12. In respect of loans and advances granted on the basis of security:

The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In respect of provisions applicable to Chit fund:

The company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

14. In respect of dealing or trading in shares, securities, debentures and other investment:

In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments as such provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

15. In respect of guarantee given for loans taken by others:

According to the information and explanations given to us and the representations made by the management, the company has not given any guarantee for loans taken by others from any bank or financial institution.

16. In respect of application of term loans:

In our opinion, and according to the information and explanations given to us, term loans have been applied for the purpose for which they were raised.

17. In respect of funds used:

According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that funds raised on short term basis have, prima facie, not been used for long–term investments and vice–versa.

18. In respect of preferential allotment of shares:

During the period under review, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clause 4(xviii) of the Companies (Auditor's Report) Order, 2003 is not applicable.

19. In respect of securities created for debentures:

On the basis of the records and documents examined by us, and according to the information and explanation given to us, the Company has issued 10.30% redeemable, unlisted, non–convertible debentures of Rs 500 crores. However, such debentures have been secured by jointly and severally corporate guarantee of erstwhile GSPC GAS and GSPL of Rs. 500 crores.

20. In respect of end use of money raised by public issues:

The Company has not raised any money by way of public issue during the period under review and therefore clause 4(xx) of the Companies (Auditor's Report) Order, 2003 is not applicable.

21. In respect of fraud:

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 material fraud on or by the Company, noticed or reported during the period under review /audit.

For, J. S. Maheshwari & Co.

Chartered Accountants

Firm Regn. No.: 001318C

(Ashish Maheshwari)

Partner

M. No. 412441

Place : Gandhinagar

Date : 17/08/2015

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