Auditor Report of Southern Gas Ltd.

Mar 31, 2024

matters described below to be key audit matters to
be communicated in our report.

We have audited the accompanying standalone
Ind AS financial statements of The Southern Gas
Limited (“the Company”), which comprise the
balance sheet as 31^st March 2024, and the
statement of Profit and Loss, statement of
changes in equity and statement of cash flows for
the year then ended, and notes to the financial
statements, including a summary of significant
accounting policies and other explanatory
information.

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 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 Companies
(Indian Accounting Standards) Rules, 2015, as
amended, and other accounting principles
generally accepted in India, of the state of affairs
of the Company as at March 31, 2024, and 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 in accordance with the
Standards on Auditing (SAs) specified under
section 143(10) of the Companies Act, 2013. Our
responsibilities under those Standards are further
described in the Auditor’s Responsibilities for the
Audit of the 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
together with the ethical requirements that are
relevant to our audit of the financial statements
under the provisions of the Companies Act, 2013
and the Rules thereunder, and we have fulfilled
our other ethical responsibilities in accordancewith
these requirements and the Code of Ethics. We
believe that the audit evidence we have obtained
is sufficient and appropriate to provide abasis for
our opinion.

Key Audit Matters

Key audit matters are those matters that, in our
professional judgment, were of most significance
in our audit of standalone financial statements of
the current period. These matters were addressed
in the context of our audit of the standalone
financial statements as a whole, and in forming our
opinion thereon, we do not provide a separate
opinion on these matters. We have determined the

Key Audit Matter

How the matter was addressed in our Audit

Revenue Recognition The Company’s revenue is mainly derived from the sale of liquid gases stored in Cylinders, Cylinder Maintenance, and a minor amount from Penalty/ Demurrage for delayed return of cylinders. The Company recognizes revenue upon full execution of the terms of sale, which normally coincides with delivery. The terms set out in the Company’s sales contracts relating to goods acceptance by customers are varied. Accordingly, the terms and conditions of sales contracts may affect the timing of recognition of sales to customers as each sales contract could have different terms relating to customer acceptance of the goods sold, and time frame for return of cylinders. We identified the recognition of revenue as a key audit matter because revenue is one of the key performance indicators of the Company and is, therefore, subject to an inherent risk of misstatement.

Our audit approach was a combination of test of internal controls and substantive procedures including: • Assessing the appropriateness of the Company’s revenue recognition accounting policies in line with Ind AS 115 (“Revenue from Contracts with Customers”) and testing thereof. • Evaluating the integrity of the general information and technology control environment and testing the operating effectiveness of key IT application controls. • Evaluating the design and implementation of Company’s controls in respect of revenue recognition. • Testing the effectiveness of such controls over revenue cut off at year-end. • Testing the supporting documentation for sales transactions recorded during the period closer to the year end and subsequent to the year end, including examination of credit notes issued after the year end to determine whether revenue was recognised in the correct period. • Performing analytical procedures on current year revenue based on monthly trends and where appropriate, conducting further enquiries and testing.

Information other than the Standalone
Financial Statements and Auditor’s Report
Thereon

The Company’s Board of Directors is responsible
for the preparation of the other information. The
other information comprises the information
included in the Management Discussion and
Analysis, Board’s report, Business Responsibility
Report, Corporate Governance and shareholder’s
information, but does not include the standalone
financial statements and our auditor’s 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 material misstatement of this
other information, we are required to report thefact.
We have nothing to report in this regard.

Responsibilities of Management and Those
Charged with Governance for the financial
statements

The Company’s Board of Directors is responsible
for the matters stated in section 134(5) of the
Companies Act, 2013 (“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
accounting principles generally accepted in India,
including the accounting Standards specified
under section 133 of 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 implementation and
maintenance of 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 financial statement that
give a true and fair view and are free from material
misstatement, whether due to fraud or error.

In preparing the financial statements,
management is responsible for assessing the
Company’s 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 to cease operations, or
has no realistic alternative but to do so. Those
Board of Directors are also responsible for
overseeing the Company’s financial reporting
process.

Auditor’s Responsibilities for the Audit of the
Standalone Financial Statements

Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due

to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance
is a high level of assurance, but 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 are considered material if, individually or in the
aggregate, they could reasonably be expected to
influence the economic decisions of users taken
on the basis of these financial 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 control
relevant to the audit in order to design audit
procedures that are appropriate in the
circumstances. Under section 143(3)(i) of the
Companies Act, 2013, 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
management’s 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
significant doubt on the Company’s ability to
continue as a going concern. If we conclude
that a material uncertainty exists, we are
required to draw attention in our auditor’s report
to the related disclosures in the 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 auditor’s report.
However, future events or conditions may
cause the Company to cease to continue as a
going concern.

• Evaluate the overall presentation, structure
and content of the financial statements,
including the disclosures, and whether the
financial 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

individually or in aggregate, makes it probable that
the economic decisions of a reasonably
knowledgeable user of the financial statements
may be influenced. 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 identified 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
significant audit findings, including any significant
deficiencies in internal control 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 significance in the audit
of the financial statements of the current period
and are therefore the key audit matters. We
describe these matters in our auditor’s 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 (Auditor’s
Report) Order, 2020 (“the Order”), issued by
the Central Government of India in terms of
sub-section (11) of section 143 of the
Companies Act, 2013, we give in “Annexure A”
statement on the matters specified 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 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, the Cash Flow Statement & the
Statement of changes in Equity dealt with by
this Report are in agreement with the books of
account.

d) In our opinion, the aforesaid financial
statements comply with the Accounting
Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014.

e) On the basis of written representations
received from the directors as on March 31,
2024, and taken on record by the Board of
Directors, none of the directors is disqualified
as on March 31, 2024, from being appointed as
a director in terms of section 164 (2) of the Act;

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” to this report

g) With respect to the other matters to be
included in the Auditor’s report in accordance
with 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 explanations given to us,
the remuneration paid by the company to its
directors during the year is in accordance with
the provisions of Section 197 of the Act.

h) With respect to the other matters to be
included in the Auditor’s 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 pending litigations which
are disclosed in the Contingent Liabilities in
Note No. 2.32 to the accounts. The impact
of the same has been disclosed.

(ii) The Company does not have long-term
contracts including derivative contracts; as
such the question of commenting on any
material foreseeable losses thereon does
not arise.

(iii) There has been no delay in transferring
amounts, which were required to be
transferred to the Investor Education and
Protection Fund by the Company during the
year.

(iv) a) The management has represented that,
to the best of its knowledge and belief, no
funds 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 entities
(“Intermediaries”) with the understanding,
whether recorded in writing or otherwise,
that the Intermediary shall, whether, directly
or indirectly lend or invest in other persons
or entities identified in any manner
whatsoever by or on behalf of the Company
(“Ultimate Beneficiaries”) or provide any
guarantee, security or the like on behalf of
the Ultimate Beneficiaries.

b) The management has represented that,
to the best of its knowledge and belief, no
funds have been received by the Company
from any person or entity, including foreign
entities (“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 identified in any
manner whatsoever by or on behalf of the
Funding Party (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures
performed 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 (a) and
(b) contain any material misstatement

(v) The dividend paid by the Company
during the year in respect of the same
declared for the previous year is in
accordance with Section 123 of the Act to
the extent it applies to payment of dividend.
No Interim dividend was declared and paid
by the Company during the year. As stated
in Statement of changes in equity to the
standalone Ind AS financial statements, the
Board of Directors of the Company have
proposed dividend for the year which is
subject to the approval of the members at
the ensuing Annual General Meeting. The
dividend declared is in accordance with
Section 123 of the Act to the extent it applies
to declaration of dividend.

(vi) Based on our examination, which
included test checks, the Company has
used accounting software’s for maintaining
its books of account for the financial year
ended March 31, 2024 which has a feature
of recording audit trail (edit log) facility and
the same has operated throughout the year
for all relevant transactions recorded in the
software’s. Further, during the course of our
audit we did not come across any instance
of the audit trail being tampered with.

For M R HEGDE & ASSOCIATES
Chartered Accountants
Firm Regn. No.: 122538W

Sd/-

(Manjunath M Hegde)

Partner

Mem. No. 138268

UDIN: 24138268BKFETG7206

Place: Margao-Goa
Date: 28^th May, 2024

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Mar 31, 2014

We have audited the accompanying financial statements of THE SOUTHERN GAS LIMITED ("the Company") which comprise the Balance Sheet as at March 31, 2014, the Profit and Loss Statement and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

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 provisions of Companies Act, 1956 ("the Act") and the Accounting Standards referred to in sub-section 3C) of section 211 of the Companies Act, 1956 read with the general circular 15/2013 dated 13.09.2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act,2013.This responsibility includes the design, implementation and maintenance of internal control 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 financial statements based on our audit. 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 misstatements.

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 control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by manageme¬nt, 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.

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read together with the Significant accounting policies and the notes attached thereto 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 March 31, 2014;

(b) in the case of the Profit and Loss Statement, of the Profit for the year ended on that date; and ( c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date

Report on Other Legal & 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 said Order.

2. As required by section 227 (3) of the Act, we report that:

a) We have obtained all the information and explanation which to the best of oil- 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, Profit and Loss Statement and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit and Loss Statement and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, read with the general circular 15/2013 dated 13.09.2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act,2013;

e) on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors , none of the directors are disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE REFERRED TO IN PARAGRAPH I UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR INDEPENDENT AUDIT REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF THE SOUTHERN GAS LIMITED FOR THE YEAR ENDED 3e. MARCH 2014.

1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situa¬tion of fixed assets, except for location of gas cylinders in movement.

(b) We are informed that most of the fixed assets of the company have been physically verified by the management during the year, except for gas cylinders with customers, the frequency of which, in our opinion is reasonable having regard to the size of the company and the nature of assets and that no material discrepancies have been noticed on such verification.

(c) The Company has not disposed off substantial part of fixed assets during the year.

2. (a) We are informed that the stock of finished goods, stores, spare parts and raw materials have been physically verified by the management at the year-end, the frequency of which, in our opinion is reasonable, having regard to the size of the company and the nature of its business.

(b) In our opinion and according to the explanations given to us the procedures for physical verification of inventory followed by the management are reasonable and adequate in relation to tie size of the company and the nature of its business.

(c) The Company is maintaining proper records of inventory and as informed to us, no material discrepancies have been noticed on such verification.

3. a) There are certain amounts due from due to concerns listed in the register maintained under Section 301 of the Companies Act. 1956. in the course of business. The Company has not granted any loans, secured or unsecur¬ed to companies firms or other parties covered in the register maintained under Section 301 of the Companies Act. 1956.

(b) The company has not taken any loans, secured or unsecured from companies, firms or other parties requiring to be entered in the register in tents of Section 301 of the Companies Act, 1956.

4 in our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and nature of its business for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness in the internal controls.

5. (a) According to the information and explanations given to us, the contract or arrangements that need to he enter¬ed into a register in pursuance of Section 301 of the Companies Act, 1956, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions during the year made in pursuance of contracts or arrangements with parties referred to in (a) above have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted deposits from the public and hence. the directives issued by the Reserve Bank of India and the provisions of sections SSA and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder are not applicable.

7. In our opinion the Company has an internal audit system commensurate with the sire of the company and the nature of its business

8. We have broadly renewed the cost records maintained by the Company pursuant to the Companies (Cost Accou¬nting Records) Rules. 2011 prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, ho¬wever, not made a detailed examination of the cost records with a view to determining whether they are accurate or complete.

9. (a) According to the information and explanations given to us and as per our verification of the records of the company, except for minor delays in remittance of TDS in certain Branches, the Company has been generally regular in depositing undisputed statutory dues with the appropriate authorities during the year. There are no arrears of undisputed statutory dues outstanding for a period of more than six months from the date on which they became payable.

(b) According to the information and explanations given to us and as per verification of the records of the compa¬ny, there are no dues of sales Tax / income Tax, wealth tax/ excise duty/cess which is the subject matter of any disputes.

10. The company has no accumulated losses at the end of the financial year. The company has not incurred any cash losses during the year or in the immediately preceding financial year.

11. According to the information and explanations given to us and as per our verification of the records of the Com¬pany, the company has not defaulted in repayment of dues to the banks. There are no loans from financial institutions / amounts raised by issue of debentures.

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

13. Since the Company is not a chit fund/nidhi/ mutual benefit fund / society, the relative reporting requirements are not applicable.

14. Since the company is not dealing or trading in shares, securities, debentures or other investments, the relative reporting requirements are not applicable.

15. According to the information and explanations given to us and as per our verification of the records of the company, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

17. According to the information and explanations given to us and an overall examination of the financial statements, we report that no funds raised on short-term basis have been used for long-term investment by the company.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

19. The company has not issued any debentures during the year.

20. The company has not raised any money by public issues during the year.

21. According to the information and explanations given to us and the records of the company examined by us, no fraud either on or by the company, has been noticed or reported during the year.

For VARMA & VARMA Chartered Accountants FRN 004532S

P.G. SUSIL KUMAR Partner M No. 22579

Place: Margao

Date: 29th May, 2014

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Mar 31, 2012

1. We have audited the attached Balance Sheet of THE SOUTHERN GAS LIMITED, as at 31st March 2012, Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with Auditing Standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors'' Report) Order, 2003 issued by the Central Government of India, in terms of Section 227 (4A) of the Companies Act, 1956, we give in the Annexure, a statement on the matters specified in Paragraphs 4 and 5 of the said Order;

4. Further to our comments in the Annexure referred to above, we report that:

(i) 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;

(ii) 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 and proper returns adequate for the purposes of our audit have been received from the branches;

(iii) 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;

(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from directors, as on 3 Is''March 2012, and taken on record by the Board of Directors, we report that none of the directors of the company is disqualified as on 31st March 2012, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant accounting policies and other notes attached thereto, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the Accounting Principles generally accepted in India:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

ii. in the case of the Statement of Profit and Loss, of the Profit for the year ended on that date and

iii. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR AUDIT

1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets, except for location of gas cylinders in movement.

(b) We are informed that most of the fixed assets of the company have been physically verified by the management during the year, except for gas cylinders with customers, the frequency of which, in our opinion is reasonable having regard to the size of the company and the nature of assets and that no material discrepancies have been noticed on such verification.

(c) The Company has not disposed off substantial part of fixed assets during the year.

2. (a) We are informed that the stock of finished goods, stores, spare parts and raw materials have been physically verified by the management at the year-end, the frequency of which, in our opinion is reasonable, having regard to the size of the company and the nature of its business.

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

(c) The Company is maintaining proper records of inventory and as informed to us, no material discrepancies have been noticed on such verification.

3. (a) There are certain amounts due from concerns listed in the register maintained under Section 301 of the Companies Act, 1956, in the course of business. The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) The company has not taken any loans, secured or unsecured from companies, firms or other parties requiring to be entered in the register in terms of Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and nature of its business for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness in the internal controls.

5. (a) According to the information and explanations given to us, the contract or arrangements that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions during the year made in pursuance of contracts or arrangements with parties referred to in (a) above have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted deposits from the public and hence, the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder are not applicable.

7. In our opinion, the Company has an internal audit system commensurate with the size of the Company and the nature of its business.

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records ) Rules, 2011, prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determining whethere they are accurate or complete.

9. (a) According to the information and explanations given to us and as per our verification of the records of the company, except for minor delays in remittance of Service tax, VAT and TDS in certain Branches, the Company has been generally regular in depositing undisputed statutory dues with the appropriate authorities during the year. There are no arrears of undisputed statutory dues outstanding for a period of more than six months from the date on which they became payable.

(b) According to the information and explanations given to us and as per verification of the records of the company, disputed amounts of taxes have not been deposited with the authorities as at 31st March 2012 as per details given below:

Name of the Statute Nature of Dues Amount (Rs.) Forum where Period to dispute is which pending amount relates

Income Tax Act Income Tax 9,40,660 Commissioner Assessment Year dues (Appeals) 2007-08

10.The company has no accumulated losses at the end of the financial year. The company has not incurred any cash losses during the year or in the immediately preceding financial year.

11. According to the information and explanations given to us and as per our verification of the records of the Company, the company has not defaulted in repayment of dues to the banks. There are no loans from financial institutions / amounts raised by issue of debentures.

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

13. Since the Company is not a chit fund / nidhi/mutual benefit fund/society, the relative reporting requirements are not applicable.

14. Since the company is not dealing or trading in shares, securities, debentures or other investments, the relative reporting requirements are not applicable.

15. According to the information and explanations given to us and as per our verification of the records of the company, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

17. According to the information and explanations given to us and an overall examination of the financial statements, we report that no funds raised on short-term basis have been used for long-term investment by the company.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

19. The company has not issued any debentures during the year.

20. The company has not raised any money by public issues during the year.

21 .According to the information and explanations given to us and the records of the company examined by us, no fraud either on or by the company, has been noticed or reported during the year.

For and on behalf of the

Board of Directors

Margao, Madhav G.Poy Raiturcar

29th May, 2012 Chairman & Managing Director

---

Mar 31, 2010

1 We have audited the attached Balance Sheet of THE SOUTHERN GAS LIMITED, as at 31st March 2010, the annexed Profit and Loss Account for the year ended on that date and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2 We conducted our audit in accordance with Auditing Standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3 As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India, in terms of Section 227 (4A) of the Companies Act, 1956, we give in the Annexure, a statement on the matters specified in Paragraphs 4 and 5 of the said Order;

4. Further to our comments in the Annexure referred to above, we report that:

(i) 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;

(ii) 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.

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from directors, as on 31st March 2010. and taken on record by the Board of Directors, we report that none of the directors of the company is disqualified as on 31st March 2010, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) In our opinion, and to the best of our information and according to the explanations given to us. the said accounts, subject to note 9 of Schedule 14 regarding non compliance of certain requirements of the listing agreement with the Stock exchange as referred to therein and read together with the Significant accounting policies and other notes attached thereto, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the Accounting Principles generally accepted in India;

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March. 2010;

i in the case of the Profit and Loss Account, of the Profit for the year ended on that date and

iii. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR AUDIT REPORT OF EVEN DATE

1. (a) The Company is maaintaining proper records showing full particulars, including quantitative details and situation of fixed assets, except tor location of gas cylinders in movement.

(b) We are informed that most of the fixed assets of the company have been physically verified by the management during the year, except for gas cylinders with customers, the frequency of which, in our opinion is reasonable having regard to the size of the company and the nature of assets and that no material discrepancies have been noticed on such verification.

(c) The Company has not disposed off substantial part of fixed assets during the year.

2. (a) We are informed that the stock of finished goods, stores, spare parts and raw materials have been physically verified by the management at the year-end, the frequency of which, in our opinion is reasonable, having regard to the size of the company and the nature of its business.

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

(c) The Company is maintaining proper records of inventory and as informed to us, no material discrepancies have been noticed on such verification.

3. (a) There are certain amounts due from concerns listed in the register maintained under Section 301 of the Companies Act, 1956, in the course of business. The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) The company has not taken any loans, secured or unsecured from companies, firms or other parties requiring to be entered in the register in terms of Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and nature of its business for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness in the internal controls.

5. (a) According to the information and explanations given to us, the contract or arrangements that need to be entered into a register in pursuance of Section 301 of the Companies Act. 1956, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions during the year made in pursuance of contracts or arrangements with parties referred to in (a) above have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted deposits from the public and hence, the directives issued by the Reserve Bank of India and the provisions of sections 58 A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder are not applicable.

7. In our opinion, the Company has an internal audit system commensurate with the size of the company and the nature of its business.

8. According to the information and explanations given to us, we are of the opinion that, prima facie, the company has made and maintained Cost records pursuant to the Order issued by the Central Government under Section 209(1)(d) of the Companies Act, 1956, in respect of the products manufactured by the Company. We have, however, not made a detailed examination of these records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and as per our verification of the records of the company, except for minor delays in remittance of Service tax in certain Branches, the Company has been generally regular in depositing undisputed statutory dues with the appropriate authorities during the year. There are no arrears of undisputed statutory dues outstanding for a period of more than six months from the date on which they became payable.

(b) According to the information and explanations given to us and as per verification of the records of the company, disputed amounts of taxes have not been deposited with the authorities as at 31st March 2010 as per details given below:

Name of the Nature of dues Amount(Rs.) Forum where Period to statute dispute is which amount pending relates

Income Tax Act Income Tax dues 9,40,660 Commissioner Assessment (Appeals) Year 2007-08

10. The company has no accumulated losses at the end of the financial year. The company has not incurred any cash losses during the year or in the immediately preceding financial year.

11. According to the information and explanations given to us and as per our verification of the records of the Company, the company has not defaulted in repayment of dues to the banks. There are no loans from financial institutions/ amounts raised by issue of debentures.

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

13. Since the Company is not a chit fund/nidhi/mutual benefit fund/society, the relative reporting requirements are not applicable.

14. Since the company is not dealing or trading in shares, securities, debentures or other investments, the relative reporting requirements are not applicable.

15. According to the information and explanations given to us and as per our verification of the records of the company, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

17. According to the information and explanations given to us and an overall examination of the financial statements, we report that no funds raised on short-term basis have been used for long-term investment by the company.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

19. The company has not issued any debentures during the year.

20. The company has not raised any money by public issues during the year.

21. According to the information and explanations given to us and the records of the company examined by us, no fraud either on or by the company, has been noticed or reported during the year.

For VARMA & VARMA Chartered Accountants

V. SATHYANARAYANAN PARTNER

Place; Kochi 16 Date: 31.05.2010