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Adani Gas Ltd.

BSE: 542066 Sector: Others
NSE: ADANIGAS ISIN Code: INE399L01023
BSE 00:00 | 24 Apr 2020 Adani Gas Ltd
NSE 05:30 | 01 Jan 1970 Adani Gas Ltd

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OPEN 98.95
PREVIOUS CLOSE 99.15
VOLUME 89952
52-Week high 194.55
52-Week low 76.70
P/E 27.25
Mkt Cap.(Rs cr) 10,701
Buy Price 97.00
Buy Qty 2791.00
Sell Price 97.30
Sell Qty 980.00
OPEN 98.95
CLOSE 99.15
VOLUME 89952
52-Week high 194.55
52-Week low 76.70
P/E 27.25
Mkt Cap.(Rs cr) 10,701
Buy Price 97.00
Buy Qty 2791.00
Sell Price 97.30
Sell Qty 980.00

Adani Gas Ltd. (ADANIGAS) - Auditors Report


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Company auditors report

To The Members of Adani Gas Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Adani Gas Limited("the Company") which comprise the balance sheet as at 31st March2019 the statement of Profit and Loss (including other comprehensive income) thestatement of changes in equity and the statement of cash flows for the year then endedand a summary of significant accounting policies and other explanatory information (hereinafter referred to as "Standalone Financial Statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under Section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31st March 2019 the profit andtotal comprehensive income changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities 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 the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current year. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Sr. No. Key Audit Matters Procedures performed and Auditor's Response
1 Accuracy for measurement of expected credit losses for receivables - domestic consumers of Piped Natural Gas The Company follows 'simplified approach' for recognition of impairment for 'recoverable' from the domestic consumers of Piped Natural Gas (PNG). Under the simplified approach the Company recognises impairment allowance based on lifetime expected credit loss.
The objective of the impairment is to recognise lifetime expected credit losses for the recoverable for which there have been significant increases in credit risk since initial recognition whether assessed on an individual or collective basis considering all reasonable and supportable information.
A recoverable is checked for impairment at each reporting period. There are various assessment parameters designed and adopted by the Company on which recoveries from a move-in consumer is considered for impairment which includes but does not limit to identification of customers to initiate litigations for recovery and for temporary disconnection.
We have reviewed the amounts recoverable from the domestic consumers of PNG and their likelihood of recovery. The Company has provided in full for the balances recoverable outstanding from move-in domestic consumers of PNG for more than a year for recoveries with ongoing or proposed legal matters and customers identified for temporary disconnection. We have tested the appropriateness of controls established by recovery department of the Company.
2 Appropriateness of Classification under Contingent Liability The Company has material uncertain tax positions in relation to tax matters which involves significant judgment to determine the possible outcome of the litigation.
We have obtained complete details of tax assessments and demands pending as on 31st March 2019 from management. There are certain grounds of appeals yet to be decided by courts which are already decided in favour of the Company for subsequent years by lower appellate authorities.
As the revenue has not escalated to courts for the same matter in subsequent years as on the date of financial statements therefore it can be said that there is no dispute alive with respect to the same. We have considered favourable legal precedence and rulings in Company's own cases against lower appellate authorities and have taken a view that there is no contingent liability outstanding with regards to the same.

Information other than the Financial Statements and Auditor's Report thereon

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the standalone financial statements and our auditors'report thereon.

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 and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation; we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these Standalone Financial Statements that give a true and fair viewof the financial position financial performance including other comprehensive incomecash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the applicable Indian AccountingStandards (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 inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the StandaloneFinancial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the 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 auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

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

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent 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 also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships 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 financial statements of thecurrent year and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

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 of India in terms of sub-section (11) of Section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

2. 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 Balance Sheet the Statement of Profit and Loss the Cash Flow Statement and theStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account.

d) in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended.

e) on the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act.

f) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

g) with respect to the other matters to be included in the Auditor's 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 financial statements - Refer Note 37 to the financial statements;

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. there were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

3. With respect to the matters to be included in the Auditor's Report in accordancewith the requirements of Section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the current yearis in accordance with the provisions of Section 197 of the Act. The remuneration paid toany director is not in excess of limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.

For SHAH DHANDHARIA & CO.
Chartered Accountants
(Firm's Registration No. 118707W)
SHUBHAM ROHATGI
Place : Ahmedabad Partner
Date : 27th May 2019 (Membership No.183083)

ANNEXURE - A TO THE

INDEPENDENT AUDITOR'S REPORT RE: Adam Gas Limited

(Referred to in Paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our Report of even date)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) As explained to us fixed assets according to the practice of the Company arephysically verified by the management at reasonable intervals in a phased verificationprogramme which in our opinion is reasonable looking to the size of the Company andthe nature of its business.

(c) The title deeds of immovable properties as disclosed in Note 3 on Property Plantand Equipment to the financial statements are held in the name of the Company exceptfor leasehold land.

(ii) The inventory other than stocks lying with third parties has been physicallyverified by the management during the year. In our opinion the frequency of verificationis reasonable. The discrepancies noticed on verification between the physical stocks andthe book records were not material and have been properly dealt with in the books ofaccount.

(iii) According to the information and explanations given to us the Company hasgranted loans unsecured to one party covered in the register maintained under section189 of the Companies Act 2013 in respect of which:

(a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company's interest

(b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.

(c) There is no overdue amount remaining outstanding as at the year-end.

(iv) In our opinion and according to information and explanations given to us theCompany has complied with provisions of Section 185 and 186 of the Act in respect of grantof loans making investments and providing guarantees and securities as applicable.

(v) According to information and explanations given to us the Company has not acceptedany deposits from the public within the meaning of the directives issued by the ReserveBank of India provisions of section 73 to 76 of the Act any other relevant provisions ofthe Act and the relevant rules framed thereunder. Accordingly the provisions of Clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant tothe Companies (Cost Records and Audit) Rules 2014 prescribed by the Central Governmentunder section 148(1) of the Companies Act 2013 in respect of the Company's products/services to which the said rules are made applicable and are of the opinion that primafacie the prescribed cost records have been made and maintained. However we have not madea detailed examination of the cost records with a view to determine whether they areaccurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees StateInsurance income tax sales tax / value added tax goods and services tax excise dutyduty of customs entry tax cess and other material statutory dues have generally beendeposited regularly during the year by the Company with the appropriate authorities.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of applicable statutory dues as referred to above were in arrears as at31st March 2019 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us there are no materialdues of provident fund employees' state insurance wealth tax value added tax cesswhich have not been deposited with the appropriate authorities on account of any dispute.However according to information and explanations given to us the following dues ofservice tax income tax excise duty sales tax/ value added tax and Municipal CorporationTax have not been deposited by the Company on account of disputes.

Name of Statute Nature of the dues Forum where dispute is pending Amount (*) (Rs in Crores) Amount paid under protest (Rs in Crores) Period to which the amount relates
Central Excise Act 1994

Excise Duty

Assessing Authority 15.40 0.22 2006-07 to2015-16
Appellate Tribunal 5.65 0.21 2008-09 to 2013-14
High Court 6.32 3.16 2006-07 & 2007-08
Finance Act 1994

Service Tax

Assessing Authority 1.32 Nil 2008-09 to 2016-17
Appellate Authority upto Commissioner's Level 0.05 0.00# 2008-09 to 2012-13
Appellate Tribunal 24.24 3.01 2005-06 2008-09 to 2011-12
Income Tax Act

Income Tax

Assessing Authority 0.30 0.25 2008-09 & 2012-13
Appellate Authority upto Commissioner's Level 0.37 0.07 2015-16
Appellate Tribunal 0.65 0.03 2014-15
High Court 0.88 0.88 2007-08
Sales Tax Act

Sales Tax

Appellate Authority upto Commissioner's Level 0.08 Nil 2012-13
Appellate Tribunal 6.75 Nil 2009-10
Municipal Corporation Property Tax Supreme Court 29.16 29.16 2010-11 to 2018-19

(*) Excluding Interest and Penalty where the notice does not specifies the same. (#)Figures below '50000

(viii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company it has not defaulted in repayment of loansor borrowings from Banks and Financial Institutions. The Company has not taken any loanfrom government and has not issued any debentures.

(ix) Based upon the audit procedures performed the Company has not raised moneys byway of initial public offer or further public offer. In our opinion and as per theinformation and explanations given by the management the Funds raised through debtinstruments and term loans have been applied for the purpose they were raised.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practice in India andaccording to the information and explanation given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year.

(xi) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of Section197 read with Schedule V of the Act.

(xii) In our opinion the Company is not a Nidhi Company. Accordingly the provisions ofClause 3 (xii) of the Order are not applicable.

(xiii) As per information and explanation given to us and on the basis of ourexamination of the records of the Company all the transaction with related parties are incompliance with Section 177 and 188 of Companies Act 2013 and all the details have beendisclosed in Standalone Financial Statements as required by the applicable IndianAccounting Standards.

(xiv) According to the information and explanations given to us and on the basis of ourexamination of the records the Company has not made any preferential allotment or privateplacement or not issued any fully or partly convertible debenture during the year underreview. Accordingly the provisions of Clause 3(xiv) of the Order are not applicable.

(xv) According to the information and explanations given to us and on the basis of ourexamination of the records Company has not entered into any noncash transactions with anydirector or any person connected with him. Accordingly the provisions of Clause 3(xv) ofthe Order are not applicable.

(xvi) In our opinion the Company is not required to be registered under Section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of Clause 3(xvi) ofthe Order are not applicable.

For SHAH DHANDHARIA & CO.
Chartered Accountants
(Firm's Registration No. 118707W)
SHUBHAM ROHATGI
Place : Ahmedabad Partner
Date : 27th May 2019 (Membership No.183083)

ANNEXURE - B TO THE INDEPENDENT AUDITOR'S REPORT

RE: Adam Gas Limited

(Referred to in paragraph 2(f) under 'Report on Other Legal and RegulatoryRequirements' section of our Report of even date)

Report on the Internal Financial Controls under Clause i of sub-section 3 of Section143 of the Companies Act 2013 (the Act).

Opinion

We have audited the internal financial controls over financial reporting of the Companyas of 31st March 2019 in conjunction with our audit of the Financial Statements of theCompany for the year ended on that date. In our opinion the Company has in all materialrespects an adequate internal financial controls system over financial reporting and suchinternal financial controls over financial reporting were operating effectively as at 31stMarch 2019 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.

Management's Responsibilities 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 the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Financial Statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorizations of management and directors of the Company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could have amaterial 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.

For SHAH DHANDHARIA & CO.
Chartered Accountants
(Firm's Registration No. 118707W)
SHUBHAM ROHATGI
Place : Ahmedabad Partner
Date : 27th May 2019 (Membership No.183083)


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