Annual Report - 2005-06 - GAIL (India)

Auditor’s Report To The Board Of Directors Of GAIL (India) Limited
On Consolidated Financial Statements Of GAIL (India) Limited, Its
Subsidiary, Joint Ventures And Associates.
We have examined the attached
Consolidated Balance Sheet of GAIL (INDIA)
LTD. (“the Company”), its subsidiary, joint
ventures and associates as at 31st March,
2006 and the Consolidated Profit and Loss
Account and the Consolidated Cash Flow
Statement for the year ended on the date
annexed thereto. These financial statements
are the responsibility of the management
of the Company. Our responsibility is to
express an opinion on these financial
statements based on our audit.
1. We conducted our audit in
accordance with generally accepted
auditing standards in India. These
Standards require that we plan
and perform the audit to obtain
reasonable assurance whether the
financial statements are prepared, in
all material respects, in accordance
with an identified financial reporting
framework and are free of material
misstatements. An audit includes,
examining on a test basis, evidence
supporting the amounts and
disclosures in the financial statements.
An audit also includes assessing
the accounting principles used and
significant estimates made by the
management, as well as evaluating
the overall financial statements. We
believe that our audit provides a
reasonable basis for our opinion.
2. We did not audit the financial
statements of subsidiary namely GAIL
Global (Singapore) Pte. Ltd., whose
financial statements reflect total
assets of Rs.92.05 Crores as at March
31, 2006 and total revenue of Rs.5.84
Crores and net cash out flows of
Rs.0.44 Crore for the year ended on
that date. Our opinion, in so far as
it relates to the amount included in
respect of the subsidiary, is based on
the unaudited Financial Statements.
3. We did not audit the financial
statements of associates namely
Fayum Gas, Shell Compressed Natural
Gas Egypt, Gujarat State Electricity Generation,
National Gas Company “NATGAS” and China
Gas Holding. These financial statements have
been audited by other auditors, except for
Gujarat State Electricity Generation and China
Gas Holding, whose financial statements are
unaudited. In the case of audited financial
statements, the reports or certificate have
been furnished to us. Our opinion, in so far as
it relates to the amount included in respect of
these associates, is based solely on the report
of the other auditors and unaudited financial
statements, as the case may be.
4. We did not audit the financial statements of
Joint Ventures, whose financial statement
reflect total assets of Rs.3726.07 Crores, total
liabilities of Rs.1634.57 Crores as at March 31,
2006 and total revenue of Rs.4861.88 Crores,
total expenditure of Rs.4202.72 Crores for
the year ended on that date. Our opinion, in
so far as it relates to the amount included in
respect of these joint ventures, is based on the
unaudited Financial Statements.
5. We report that the consolidated financial
statements have been prepared by the
Company’s management in accordance with
the requirements of Accounting Standard (AS)
21, viz, “Consolidated Financial Statements”
Accounting Standard (AS) 23, viz ”Accounting
for Investments in Associates in Consolidated
Financial Statements” and Accounting
Standard (AS) 27, viz “Financial Reporting
of Interests in Joint Ventures”, issued by The
Institute of Chartered Accountants of India.
6. We further report that subject to Note
No.15 to 21 and 26 of Notes to Accounts to
Consolidated Financial Statements of the
Company and on the basis of the information
and explanations given to us and
on the consideration of separate
audit reports on individual
audited financial statements
of the Company, its subsidiary,
joint ventures and associate
companies.
7. Attention is invited to Note No. 13
(a) of Schedule 14 of Consolidated
notes regarding change in
depreciation rate of Gas Pipeline
which reduced the depreciation
charged to Profit & Loss Account
amounting to Rs.406.49 Crores
with subsequent increase in profit
before tax.
Subject to the foregoing, we are of
opinion that the said consolidated
financial statements give a true
and fair view in conformity
with the accounting principles
generally accepted in India:
(a) in the case of the
Consolidated Balance Sheet,
of the consolidated state of
affairs of the Company as at
31st March, 2006;
(b) in the case of Consolidated
Profit and Loss Account, of
the consolidated results of
operations of the Company
for the year on that date and
(c)
in the case of Consolidated
Cash Flow Statement, of the
consolidated cash flows of
the Company for the year
ended on that date.
For S. Mann & Co.
Chartered Accountants
Subhash Mann
Place : New Delhi
(Partner)
Date : April 28, 2006 Membership No. 80500
GAIL (India) Limited – New Delhi
Consolidated Balance Sheet as at 31st March, 2006
(Rs.in Crores)
SCHEDULE AS AT AS AT
NO. 31st March, 2006 31st March, 2005
SOURCES OF FUNDS
Shareholder’s Funds
Capital 1 845.65 845.65
Reserves and Surplus 2 9,419.97 10,265.62 7,964.42 8,810.07
Loan Funds 3
Secured Loans 1,772.83 1,787.91
Unsecured Loans 323.05 2,095.88 415.89 2,203.80
Deferred Tax Liability (Net) 1,341.49 1,285.45
TOTAL 13,702.99 12,299.32
APPLICATIONS OF FUNDS
Fixed Assets 4
Gross Block 15,087.02 14,786.22
Less : Depreciation 7,040.86 6,461.83
Net Block 8,046.16 8,324.39
Capital Work in Progress 5 697.31 371.86
8,743.47 8,696.25
Investments 6 901.56 709.11
Advances for Investments (Pending Allotment) 6A 500.83 0.86
Current Assets, Loans and Advances 7
Inventories 504.10 501.50
Sundry Debtors 783.20 848.71
Cash and Bank Balances 4,539.88 3,491.28
Other Current Assets 39.73 27.03
Loans and Advances 1,501.72 1,637.47
7,368.63 6,505.99
Less : Current Liabilities and Provisions 8
Current Liabilities 3,224.86 2,797.20
Provisions 587.27 819.36
3,812.13 3,616.56
Net Current Assets 3,556.50 2,889.43
Miscellaneous Expenditure
(To the extent not written off or adjusted)
Preliminary Expenditure 0.63 3.67
TOTAL 13,702.99 12,299.32
Contingent Liabilities not provided for (Refer Schedule 14)
N.K.Nagpal R.K.Goel S. P. Rao Proshanto Banerjee For M/s S. MANN & COMPANY
Secretary Director (Finance) Director(Projects) Chairman & Managing Director Chartered Accountants
Subhash Mann
Place : New Delhi
(Partner)
Dated : April 28, 2006 Membership No. 80500
156 Winning Momentum 157