We have audited the accompanying standalone financial statements of
Cairn India Limited ("the Company"), which comprise the Balance Sheet
as at March 31, 2016, the Statement of Profit and Loss and 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
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 and
cash fows of the Company in accordance with accounting principles
generally accepted in India, including the Accounting Standards
specified under section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014 and Companies (Accounting Standards)
Amendment Rules, 2016. This responsibility also includes maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding of the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and
application of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and the design,
implementation and maintenance of adequate internal financial control
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under. We conducted our
audit in accordance with the Standards on Auditing, issued by the
Institute of Chartered Accountants of India, as specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company's
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the Company's Directors, as well as evaluating the
overall presentation of the financial statements. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the standalone financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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 accounting principles
generally accepted in India of the state of affairs of the Company as
at March 31, 2016, its profit, and its cash fows for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's report) Order, 2016 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure 1 a
statement on the matters specified in paragraphs 3 and 4 of the Order.
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
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 it appears from our examination of those
books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the aforesaid standalone 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, 2016, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2016, 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 2" to this
report;
(g) 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 disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 32 to the
financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There were no amounts which were required to be transferred to
the Investor Education and Protection Fund by the Company.
Annexure 1 referred to in paragraph 1 under the heading "Report on
other legal and regulatory requirements" of our report of even date Re:
Cairn India Limited (the Company)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
(c) According to information and explanations given by the management,
the title deeds of immovable properties, included under fixed assets,
are held in the name of the Company except for title deeds of immovable
properties in oil and gas blocks, jointly owned with other joint
venture partners, which are held in the name of the licensee off the
block. The written down value of such immovable properties in the
accompanying financial statements aggregates to Rs, 267.39 crore.
(ii) The management has conducted physical verification of inventory at
reasonable intervals during the year and no material discrepancies were
noticed on physical verification.
(iii) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to companies,
firms, Limited Liability Partnerships or other parties covered in the
register maintained under section 189 of the Companies Act, 2013.
Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the
Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations
given to us, provisions of section 186 of the Companies Act 2013 in
respect of investments made have been complied with by the Company. In
our opinion and according to the information and explanations given to
us, there are no loans, guarantees and securities granted in respect of
which provisions of section 185 and 186 of the Companies Act 2013 are
applicable and hence not commented upon.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 148(1) of the Companies Act,
2013, related to the extraction of crude oil and natural gas, and are
of the opinion that prima facie, the specified accounts and records
have been made and maintained. We have not, however, made a detailed
examination of the same.
(vii) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
income-tax, sales-tax, service tax, duty of customs, duty of excise,
value added tax, cess and other material statutory dues applicable to
it. The provisions relating to employees' state insurance are not
applicable to the Company.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, income-tax,
service tax, sales-tax, duty of customs, duty of excise, value added
tax, cess and other material statutory dues were outstanding, at the
year end, for a period of more than six months from the date they
became payable. The provisions relating to employees' state insurance
are not applicable to the Company.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, duty of customs, duty
of excise, value added tax and cess on account of any dispute, are as
follows:
Name of the statute Nature of dues Amount (in Rs, crore)
Income Tax Act,1961 Additional Income Tax 85.57
demand 2010-11
Income Tax Act,1961 Additional Income Tax 28.73
demand
Income Tax Act,1961 Additional Income Tax 570.212
demand & penalty
Income Tax Act,1961 Withholding Tax demand 20,494.73
Central Excise
Act, 1944 Oil Cess and NCCD demand 0.21
Central Excise
Act, 1944 Excise Duty demand 0.06
Finance Act, 1994 Service Tax demand 23.57
Customs Act,1962 Custom Duty demand 0.16
Andhra Pradesh
VAT Act, Value Added Tax demand 0.01
2015
Name OF THE STATUTE Financial year to whaich Forum where dispute
it relates is pending
Income Tax Act,1961 1999-00, 2008-09,2009-10, Not applicable as
application filed
2010-11 for rectification
Income Tax Act,1961 2008-09, 2009-10 Commissioner of
Income Tax (Appeals)
Income Tax Act,1961 2002-03, 2004-05,
2005-06, Income Tax Appellate
Tribunal
2006-07, 2007-08, 2008-09
Income Tax Act,1961 2006-07 Commissioner of Income
Tax (Appeals)
Central Excise
Act, 1944 2002-03 to 2006-07 Central Excise and
Service Tax
Appellate Tribunal
Central Excise
Act, 1944 June 13 to October 14 Commissioner Appeals
Finance Act, 1994 2002-03 to 2013-14 Central Excise and
Service Tax
Appellate Tribunal
Customs Act,1962 2007-08 Commissioner Appeals
Andhra Pradesh
VAT Act, 2011-12 Deputy Commissioner
1 Represents the Company's share in gross liability after adjusting
amounts paid under protest.
2 Includes Rs, 274.45 crore for which the revenue department has gone
in for an appeal.
(viii) According to the information and explanations given by the
management, the Company did not have any outstanding dues in respect of
a bank, financial institution, government or debenture holders during
the year.
(ix) According to the information and explanations given by the
management, the Company has neither raised any monies by way of initial
public offer or further public offer (including debt instruments) and
term loans during the year nor did it have any such unutilized monies
outstanding at the start of the year. Hence, reporting under clause
(ix) is not applicable to the Company and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud by the Company or material fraud on the Company by its
officers or employees has been noticed or reported during the year.
(xi) According to the information and explanations given by the
management, we report that the managerial remuneration has been paid /
provided in accordance with the requisite approvals mandated by the
provisions of section 197 read with Schedule V to the Companies Act,
2013.
(xii) In our opinion, the Company is not a nidhi company. Therefore,
the provisions of clause 3(xii) of the Order are not applicable to the
Company and hence not commented upon.
(xiii) According to the information and explanations given by the
management, transactions with the related parties are in compliance
with section 177 and 188 of Companies Act, 2013 where applicable and
the details have been disclosed in the notes to the financial
statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on
an overall examination of the balance sheet, the Company has not made
any preferential allotment or private placement of shares or fully or
partly convertible debentures during the year under review and hence,
reporting requirements under clause 3(xiv) are not applicable to the
Company and, not commented upon. .
(xv) According to the information and explanations given by the
management, the Company has not entered into any non-cash transactions
with directors or persons connected with him as referred to in section
192 of the Companies Act 2013.
(xvi) According to the information and explanations given to us, the
provisions of section 45-IA of the Reserve Bank of India Act, 1934 are
not applicable to the Company.
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E
per Naman Agarwal
Partner
Membership Number: 502405
Place of Signature: Gurgaon
Date: 22 April 2016
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