gujarat state petronet ltd share price Auditors report

To,

THE MEMBERS

GUJARAT STATE PETRONET LIMITED

Report on the Audit of Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone IND AS financial statements of GUJARAT STATE PETRONET LIMITED ( The Company), which comprise the Balance Sheet as at 31 March, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and a summary of signicant accounting policies and other explanatory information (hereinafter referred to as “the standalone Ind AS financial statements”), which we have signed under reference to this report.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of a airs of the Company as at 31 March, 2023, the profit and total comprehensive income, changes in equity and its Cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specied under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fullled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Emphasis of Matter

We draw attention to Note number 31 of the standalone financial statements which describe the follo wing matter:

In a matter, pursuant to the contractual dispute under arbitration between the company and M/s Fernas Construction Company Inc. (FCCI) amounting 9,519.91 Lacs (31 March, 2022: 8,688.21 Lacs), and (b) the Company and M/s Tehran Jonoob Jai hind Consortium (TJJC) amounting 2,911.77 Lacs (Previous year 2,911.77 Lacs) in which the Arbitration Tribunal has issued award in favour of contractors.

However, the company has led the application under Section 34 of the Arbitration and Conciliation Act, 1996 against contractor before the Honble High Court of Gujarat for setting aside the Arbitral Award and in the interim seeking stay on the same, pending disposal of the matter.

The Management of the company believes that for these matters no provision is required in the books of accounts as on 31 March, 2023.

Our opinion is not modiied in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most signicance in our audit of the financial statements for the financial year ended 31 March, 2023. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to be communicated in our report:

Sr. No. Key Audit Matter	Auditors Response
1. Contingent Liabilities	Principal audit procedure:
Contingent liabilities are for ongoing litigation and claims with various authorities and third parties. These relate to direct tax, indirect tax, claims and legal proceeding by other parties.	- Obtained details of disputed claims as on 31 March, 2023 from the management.
Contingent liabilities are considered as key audit matters as the amount involved is signicant and it also involves signicant management judgment to determine possible outcome and future cash outo ws of these disputes. Refer Note no-31.	- Discussed with the management about signicant judgment considered in determining possible outcome and future cash outflows of these disputes.
	- Veried r elevant documents related to disputes.
	- Evaluated the appropriateness of accounting policies, related disclosures and overall presentation in the Standalone Financial Statements in terms of IND AS 37.

Information Other than the Standalone Financial Statements and Auditors Report ?Thereon

The Companys Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders Information, but does not include the consolidated financial statements, standalone financial statements and our auditors report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Responsibility of Management and those charged with governance for the Ind AS financial statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and Cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. -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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone Ind AS financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or tofficease operations, or has no realistic alternative but to do so.

The Board of Directors is responsible for overseeing the Companys financial r eporting process.

Auditors Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the enancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and considered material if, individually or in the aggregate, they could reasonably be expected to iniuence the economic decisions of users taken on the basis of these enancial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

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

Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signicant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company tofficease to continue as a going concern.

Evaluate the overall presentation, structure and content of the enancial statements, including the disclosures, and whether the enancial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be inuenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identied misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signicant audit ndings, including any signicant deciencies in internal contr ol that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most signicance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these audit matters in our Auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specied in the paragraph 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, based on our audit 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 Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow 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 specied under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

e) As the Company is a Government Company in terms of notiecation number: G.S.R. 463(E) dated 05 June, 2015, issued by Ministry of Corporate A airs the sub section (2) of section 164 of the Act is not applicable.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”. Our report expresses an unmodied opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial r eporting.

g) As the company is a Government Company, in terms of notication no. G.S.R. 463(E) dated 5 June 2015, issued by the Ministry of Corporate A airs, the subsection (16) of section 197 of the Act is not applicable to the company.

h) With respect to the other matters to be included in the Auditors 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 financial statements. Refer Note No. 31 to the enancial 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 Profitection Fund by the Company.

iv) (a) The management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person or entity, including foreign entity ("Intermediaries”), which the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identieed in any manner whatsoever by or on behalf of the company (“Ultimate Beneeciaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneeciaries;

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identied in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneciaries ”) or provide any guarantee, security or the like on behalf of the Ultimate Beneeciaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v) (a) The nal dividend proposed in the previous year, declared and paid by the Company during the year in accordance with Section 123 of the Act, as applicable.

(b) The Board of Directors of the Company have proposed a nal dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with Section 123 of the Act, as applicable.

Please refer to the Note No. 33 to the Standalone Financial Statements.

vi) Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of accounts using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the company w.e.f. 1 April, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended 31 March, 2023.

3. As required by section 143(5) of the Act, we give in “Annexure C”, a statement on matters specied by the Comptroller and Auditor General of India for the Company.

ANNEXURE ‘A TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements section of our report of GUJARAT STATE PETRONET LIMITED of even date)

To the best of our information and according to the explanations provided to us by the company and the books of account and records examined by us in the normal course of audit, we state that: I. In respect of the Companys Property, Plant and Equipment and Intangible Assets: (a) (i) The company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant & Equipment.

(ii) The Company has maintained proper records showing full particulars of intangible assets. (b) The Company has a program of physical verication of Property, Plant and Equipment so to cover all the assets once every three years which, in our opinion, is reasonable having regard to the size of the company and nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verication.

(c) Based on our examination of the property tax receipts and lease agreement for land, registered sale deed/ transfer deed/ conveyance deed provided to us, we report that, the title in respect of self constructed buildings and title deeds of all other immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee), disclosed in the financial statements under Property, Plant & Equipment are held in the name of the Company as at the Balance Sheet date.

(d) The Company has not revalued any of its Property, Plant & Equipments (including right-of-use assets) and intangible assets during the year.

(e) No proceedings have been initiated during the year or are pending against the Company as at 31 March, 2023 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made there under as per information provided to us.

II. (a) As informed to us physical verication of inventory has been conducted at reasonable intervals by the management. We have been explained that the stock of Gas at the end of the year has been taken with reference to reading of Turbine o w meter/ Gas Chromatograph / Gas measurement system installed at Terminals. As explained to us, no material discrepancies were noticed on physical verication of inventories as compared to the book records.

(b) The Company has not been sanctioned working capital limits in excess of 5 crore, in aggregate, at any points of time during the year, from the banks or financial institutions on the basis of security of current assets and hence reporting under clause 3(ii) (b) of the order is not applicable.

III. The Company has made investments in, companies, rms, Limited Liability Partnerships and granted unsecured loans to other parties, during the year, in respect of which:

(a) During the Year, the company has provided loans to other parties in respect of which:

(i) Aggregate amount of loan provided to subsidiary, associate and joint venture is NIL and balance outstanding at balance sheet date is NIL.

(ii) During the year, the company has provided loan to other Parties (Employees) is 93.97 Lacs and balance outstanding at Balance Sheet date is 830.18 Lacs.

(b) According to information and explanation given to us & in our opinion, the investments made and terms and conditions of the grant of loans, during the year are, prima facie, not prejudicial to the Companys interest.

(c) In respect of loans granted by the Company, the schedule of repayment of principal and payment of interest has been stipulated and the repayments of principal amounts receipts of interest are generally been regular as per stipulation.

(d) In respect of loans granted by the company, there is no overdue amount remaining outstanding as at Balance Sheet date.

(e) No loan granted by the Company which has fallen due during the year, has been renewed or extended or fresh loans granted to settle the overdues of existing loans given to the same parties.

(f) The Company has not granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment during the year. Hence, reporting under clause 3(iii) (f) is not applicable.

The Company has not provided any guarantee or security or granted any advances in the nature of loans, secured or unsecured, to companies, rms, Limited Liability Partnerships or any other parties.

IV. The Company has granted Corporate Guarantee of

2,500.00 Lacs in respect of its jointly controlled company namely GSPL India Transco Limited. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans, investment, guarantees and security.

V. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the Public during the year. Therefore, the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

VI. As per information & explanation given by the management, maintenance of cost records has been prescribed by the Central Government under sub-section (1) of section 148 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however made a detailed examination of the records with a view to determine whether they are accurate and complete.

VII. a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, GST, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess, GST and other material statutory dues were in arrears as at 31 March, 2023 for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us, the following dues of Income Tax, Duties of Excise and service tax as at 31 March 2023 have not been deposited by the Company on account of disputes given below:

Nature of Statue	Nature of Dues	Amount ( In Lacs)	Period to which the amount relates	Forum where the dispute is pending
The Income Tax Act, 1961	Reduction of MAT Credit	141.23	2012-13	CIT (Appeals)
	Denial of Cenvat Credit	735.04	2005-08, 2008-09 2010-11	Supreme Court
	Denial of Cenvat Credit	14,414.99	2005-08, 2008-09 2010-11	Gujarat High Court
The Finance Act, 1994	Denial of Cenvat Credit	9,468.15	2009-10 2010-11 2011-12 2012-13	CESTAT
	Denial of Cenvat Credit	3,920.03	2010-11 2012-13 2014-15 2015-16 2016-17	Commissioner/ Asst. Commissioner
	Service tax on Liquidated Damages	444.61	2012-17	CESTAT

VIII.According to the information and explanations given to us, there were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).

IX. (a) Based on our audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowing to financial institution, bank, Government or dues to debenture holders. There were no debenture holders at any time during the year.

(b) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(c) Based on our audit procedures and according to the information and explanations given to us, the Company has applied the term loans for the purpose for which loans were obtained.

(d) On an overall examination of the financial statements of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long-term purposes by the Company.

(e) On an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, joint ventures or associate companies.

(f) On an overall examination of the financial statements of the Company, the company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies.

X. (a) In our opinion and according to the information and explanations given to us, the Company has not raised moneys by way of Initial Public offer or further public offer (including debts instruments) during the year.

(b) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence reporting under clause 3(x) (b) of the order is not applicable.

XI. (a) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company and no material fraud on the company has been noticed or reported during the year.

(b) According to the information and explanations given to us, No report under sub-section (12) of section 143 of the Companies Act has been led in Form-ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and up to date of this report.

(c) We have taken into consideration the whistle blower complaints received by the Company during the year (and upto the date of this report), while determining the nature, timing and extent of our audit procedures.

XII. The Company is not a Nidhi company. Therefore the provisions of clause 3 (xii) of the Companies (Auditors Report) Order, 2020, are not applicable to the Company.

XIII.According to the information and explanations given to us & in our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details of such transactions have been disclosed in the notes to the financial statements as required by Indian Accounting Standard (AS) 24, Related Party Disclosures.

XIV. (a) In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of its business.

(b) We have considered, the internal audit reports for the year under audit, issued to the Company during the year and till date, in determining the nature, timing and extent of our audit procedures.

XV. In our opinion and according to the information and explanations given to us, the company has not entered in to any non-cash transactions with its directors or persons connected with them. Hence, provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

XVI. The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and hence, reporting under clause 3 (xvi) (a) (b) (c) and (d) of the Order are not applicable to the Company.

XVII. The company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial y ear.

XVIII. There has been no resignation of the statutory auditors of the Company during the year.

XIX. On the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that the Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

XX. (a) According to the information and explanations given to us, there are no unspent amounts towards Corporate Social Responsibility (CSR) on other than ongoing projects requiring a transfer to a Fund specied in Schedule VII to the Companies Act in compliance with second proviso to sub-section (5) of Section 135 of the said Act. Accordingly, reporting under clause 3(xx) (a) of the order is not applicable for the year.

(b) In respect of ongoing projects, the Company has transferred unspent Corporate Social Responsibility (CSR) amount as at the end of the previous enancial year, to a Special account within a period of 30 days from the end of the said enancial year in compliance with the provision of section 135 (6) of the Act.

ANNEXURE ‘B TO THE INDEPENDENT AUDITORS REPORT

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act)

We have audited the internal financial controls over financial reporting of GUJARAT STATE PETRONET LIMITED (“the Company”) as of 31 March, 2023 in conjunction with our audit of the standalone IND AS financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with 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 be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. -Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or err or.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that : (1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reect the transactions and dispositions of the assets of the Company; (2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Management and directors of the Company; and (3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial r eporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2023, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

ANNEXURE ‘C TO THE INDEPENDENT AUDITORS REPORT

REPORT ON DIRECTIONS ISSUED BY COMPTROLLER & AUDITOR GENERAL OF INDIA UNDER SECTION 143(5) OF COMPANIES ACT 2013 APPLICABLE FOR THE FINANCIAL YEAR 2022-23

Based on the audit procedures performed and taking into consideration the information, explanations and written representations given to us by the management in the normal course of audit, we to the best of our knowledge and belief that:

General Directions
Directions issued by Comptroller and Auditor General of India	Response
1. Whether the company has system in place to process all the accounting transactions through IT system? If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications, if any , may be stated.	The Company maintains its books of accounts in SAP (an ERP System). All accounting transactions are processed in SAP.
2. Whether there is any restructuring of an existing loan or cases of waiver/write o of debts /loans/interest etc. made by a lender to the company due to the companys inability to repay the loan? If yes, the nancial impact may be stated. Whether such cases are properly accounted for? (In case, lender is a Government company, then this direction is also applicable for statutory auditor of lender company).	On the basis of our audit and as per information and explanations given to us, there are no cases of restructuring of any existing loan or any waiver/write o of debts /loans/interest during the year.
3. Whether funds (grants/subsidy etc.) received/receivable for specic schemes from Central/State Government or its agencies were properly accounted for/utilized as per its term and conditions? List the cases of deviation.	It is conveyed to us that no funds have been received or receivable from Central/State Government or its agencies hence, this clause is not applicable.

Sector Specic S ub-directions

Infrastructure Sector General
Sub-directions issued by Comptroller and Auditor General of India	Response
1. Whether the Company has taken adequate measures to prevent encroachment of idle land owned by it. Whether any land of the Company is encroached, under litigation not put to use or declared surplus? Details may be provided.	As per information and explanation given to us, the Company has taken adequate measures to prevent encroachment of idle land and there is no such land under litigation.
2. Whether the system in vogue for identication of projects to be taken up under Public Private Partnership is in line with the guidelines/ policies of the Government? Comment on deviation if any.	In our opinion and according to the information and explanations given to us, the Company does not have any project to be taken up under Public Private Partnership.
3. Whether system for monitoring the execution of works vis-a-vis the milestones stipulated in the agreement is in existence and the impact of cost escalation, if any, revenues/ losses from contracts, etc., have been properly accounted for in the books.	Based on our audit procedures and according to the information and explanations given to us, system for monitoring the execution of works vis-a-vis the milestones stipulated in the agreement is in existence and the impact of cost escalation, if any, revenue/ losses from contracts, etc., have been properly accounted for in the books of accounts.
4. Whether funds received/ receivable for specic schemes from central/ state agencies were properly accounted for/ utilized? List the cases of deviations.	According to the information and explanations given to us, no funds have been received or receivable from central/ state agencies hence, it is not applicable.
5. Whether the Bank guarantees have been revalidated in time?	According to the information and explanations given to us, the Bank guarantees have been revalidated in a timely manner.
6. Comment on the conrmation of balances of trade receivables, trade payables, term deposits, bank accounts and cash obtained.	Yes, Balance conrmation has been r eceived in respect of term deposits, bank accounts & cash. A separate disclosure has been given for trade receivables & trade payables.
	Please refer to Note no. 36 to notes to account.
7. The cost incurred on abandoned projects may be quantied and the amount actually written-o shall be mentioned.	According to the information and explanations given to us, during the year the company has not incurred any cost on abandoned projects.

Service Sector- General

Sub-directions issued by Comptroller and Auditor General of India	Response
1. Whether the Companys pricing policy absorbs all fixed and variable cost of production and the overheads allocated at the time of xation of price?	According to the information and explanations given to us, the Companys pricing is determined based on tari approved by Petroleum and Natural Gas Regulatory Board.
2. Whether the Company recovers Commission for work executed on behalf of Government/ other organizations that is properly recorded in the books of accounts? Whether the Company has an efficient system for billing and collection of revenue?	The Company has not undertaken any work or project executed on behalf of Government / other organizations hence there is no recovery of commission for the same.
	The Company has SAP system in place for billing and accounting for collection of revenue. The company has a policy and procedures in place for effective monitoring of credit exposure and recovery of dues from its customers in respect of its activities.
3. Whether the Company regularly monitors timely receipt of subsidy from Government and it is properly recording them in its books?	According to the information and explanations given to us, there is no receipt of subsidy from Government.
4. Whether interest earned on parking of funds received for specic projects from Government was properly accounted for?	According to the information and explanations given to us, there are no cases of receipt of fund for any projects from Government.
5. Whether the Company has entered into Memorandum of understanding with its Administrative Ministry, if so, whether the impact thereof has been properly dealt with in the financial statements.	According to the information and explanations given to us, the company has not entered into any MOU with its Administrative Ministry during the financial year under r eview.

Service Sector- Trading

Sub-directions issued by Comptroller and Auditor General of India	Response
1. Whether the company has an effective system for recovery of dues in respect of its sales activities and the dues outstanding and recoveries there against have been properly recorded in the books of accounts?	As per the information and explanations given to us and based on the examination of the policies in respect of recovery of dues from customers, the Company has a policy and procedure for e ective monitoring of credit exposure and recovery of dues from its customers in respect of its activities. Also, the recoveries against the dues have been properly recorded in the books of accounts.
2. Whether the company has effective system for physical verication, valuation of stock, treatment of non-moving items and accounting the e ect of shortage/ excess noticed during physical verication.	In our opinion and according to the information and explanations given to us, the procedures and systems, in relation to physical verication of inventories, valuation of stock, treatment of non-moving items and accounting the effect of shortage / excess noticed during physical verication, are reasonable and adequate in relation to the size of the Company and the nature of its business.
3. The effectiveness of the system followed in recovery of dues in respect of sale activities may be examined and reported.	In our opinion and according to the information and explanations given to us, the Company has a policy and procedure for e ective monitoring of credit exposure and recovery of dues from its customers in respect of its sales activities. There are no signicant instances of its failure observed for the year under audit.

For B P BANG & CO.

Place: Ahmedabad
Date: 11 May, 2023	Chartered Accountants
	(Firm Registration No. 010621C)
	(ANURAG BANG)
	Partner
	Membership No. 434060
	UDIN: 23434060BGUHEV5770