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Directors Report of Gujarat Gas Ltd.

Mar 31, 2023

Your Directors have pleasure in presenting the 11^th Annual Report and the Audited Financial Statements for the Financial Year ended on 31^st March 2023.

Financial Highlights ('' in Crores)
Particulars	Standalone Financials		Consolidated Financials
Particulars	12 Months ended 31/03/2023	12 Months ended 31/03/2022	12 Months ended 31/03/2023	12 Months ended 31/03/2022
Revenue from Operations	17,306.16	16,787.35	17,306.16	16,787.35
Other income	101.27	90.74	101.33	90.87
Total income	17,407.43	16,878.09	17,407.49	16,878.22
Profit before interest, depreciation and tax	2,493.26	2,155.14	2,493.32	2,155.27
Less: Interest	40.35	56.82	40.35	56.82
Depreciation	428.26	384.91	428.26	384.91
Profit before tax	2,024.65	1,713.41	2,024.71	1,713.54
Share of Profit from equity accounted investee	-	-	2.86	1.62
Minority Interest	-	-	-	-
Profit/(Loss) Before Tax and share of profit of associate	2,024.65	1,713.41	2,027.57	1,715.16
Tax expenses	499.18	427.77	499.19	427.79
Net Profit after tax for the period	1,525.47	1,285.64	1,528.38	1,287.37
Other Comprehensive Income (after tax) (OCI)
- Equity Instruments through OCI	6.22	2.12	6.22	2.12
- Remeasurements of post-employment benefit obligation, net of tax	2.30	0.57	2.30	0.57
- Share of Other comprehensive income of equity accounted investee	-	-	(0.16)	(0.01)
Total Comprehensive Income	1,533.99	1,288.33	1,536.74	1,290.05
RETAIN EARNINGS:
Profit carried to retained earnings	1,525.47	1,285.64	1,528.38	1,287.37
Other Comprehensive Income carried to retained earnings	2.30	0.57	2.14	0.56
Add: Undistributed profit /(loss) of earlier years	4,710.91	3,562.38	4,741.55	3,591.30
Balance available for Appropriation	6,238.68	4,848.59	6,272.07	4,879.23
Less: Appropriations:
Distribution of ESOP trust fund	-	-	(1.04)	-
Equity dividend	(137.68)	(137.68)	(137.68)	(137.68)
Surplus / (Deficit) retained	6,101.00	4,710.91	6,133.35	4,741.55
Earnings per Share (Face value of Rs. 2 each) (Basic & Diluted)	22.16	18.68	22.20	18.70

PERFORMANCE HIGHLIGHTS

1. Gujarat Gas adjudged as the ''Star PSU of the Year'' at The Economic Times Energy Leadership Awards 2022.

2. GGL credit rating upgraded to AAA/Stable (highest rating level) from AA /Positive by CRISIL and India Ratings & Research.

3. Prepayment of long-term loan of '' 447 crores during FY 2023 making GGL a debt free company.

4. Highest ever Profit after Tax of '' 1,525.47 Crores (19% higher than FY ''22)

5. Highest ever CNG volumes at average 2.43 mmscmd in FY2023 on the back of growth in station infrastructure (22% higher than 1.99 mmscmd in FY 2022).

6. Highest ever 1.79 Lakh Domestic customers commissioned in FY 2023 (16% higher than 1.54 Lakh in FY 2022).

7. 102 new CNG stations in FY 2023; crossing milestone of 800 CNG stations.

8. Government of Gujarat has reduced VAT on Dom & CNG consumers to 5% from 15%, improving competitiveness vis-a-vis alternate fuel.

9. GOI has revised APM Gas pricing methodology; at 10% of the Indian Crude Basket Price subject to a floor of $4 and a ceiling of $6.5/mmbtu w.e.f. 8th April, 2023. From FY 2025-26, floor and ceiling to be increased by $0.25/mmbtu each year. Cost reduced from $8.57 to $6.50/mmbtu increasing competitiveness of Gas to alternate fuels at reduced prices.

10. Managed challenging scenario of unprecedented surge in spot prices by balancing the volumes and limiting price increases via continued engagement with customers / stakeholders.

11. Implemented India''s 1^st Pilot Project for Green Hydrogen blending with PNG Domestic supplies at NTPC Kawas Township, GGL Surat & Hazira GA have successfully completed taking in 5% blended Hydrogen in DPNG network with supply to 150 numbers of households.

12. Electrical Vehicles (EV) charging facility commissioned at company owned CNG station at Kevadia as a pilot project with Tata Power. DIVIDEND

Your Directors recommend for consideration of the shareholders at the 11^th Annual General Meeting, the Dividend of '' 6.65/- per fully paid up equity share of '' 2/- each (332.5%) on 68,83,90,125 equity shares for the Financial Year 2022-23. This is 232.5% higher than FY ''22 wherein dividend payout was '' 2 per share. During this year, Dividend Distribution Policy has been amended by the Board to include Government Guidelines as one of the factors for making dividend recommendation and the same has been considered for recommending proposed dividend for the Financial Year 2022-23. The weblink for Dividend Distribution Policy is available at https://www.guiaratgas.com/resources/downloads/dividend-distribution-policv-w-e-f-10th-mav-2023.pdf SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

Your Company does not have any subsidiary and joint venture. Guj Info Petro Limited is the Associate of your Company and the statement containing salient features of financial statements of Guj Info Petro Limited under first proviso to sub section (3) of section 129 in form AOC-1 is attached at Annexure-5.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company represents consolidation of Financial Statements of Guj Info Petro Limited (GIPL), the associate company and Gujarat Gas Limited Employees Welfare Stock Option Trust (ESOP Trust), in accordance with IND AS. The Audited Consolidated Financial Statements are provided in the Annual Report.

DEPOSITS

During the year under review, your Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of Loans, Guarantees, Securities and Investments, if any covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. A statement giving details of all Related Party Transactions is placed before the Audit Committee for approval/ ratification on a quarterly basis, as the case may be. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board is uploaded on the Company''s Website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. The particulars of contracts or arrangements with Related Parties referred to in Section 188 (1) of the Companies Act, 2013, as prescribed in Form AOC - 2 of the Companies (Accounts) Rules, 2014 is enclosed herewith as Annexure -4 to this Report.

Disclosures of transactions of the Company with person or entity belonging to the Promoter/Promoter Group which hold(s) 10% or more shareholding in the Company ('' i_n Crores)
Name of Related Party	Relationship	Nature of Transactions & Balances	For Year ended 31st March 2023	For Year ended 31st March 2022
Gujarat State Petronet Limited - GSPL	Holding Company	Gas Transmission Expense	451.68	542.13
		Purchase of Natural Gas	-	2.23
		Right of Way Expense (ROW)	0.52	0.10
		Connectivity Charges	1.69	-
		Business Transfer- CGD Business of Amritsar & Bhatinda from GSPL to GGL	-	153.86
		Reimbursement of Expenses	0.34	0.28
		Dividend Paid	74.57	74.57
		Rent Expense	2.85	2.27
		Recharge of Salary - Expense	0.04	0.04
		Compression Charges	-	2.87
		Reimbursement of Deposit Receivable from Authorities	0.28	-
		O&M Charges - Income	0.05	0.04
		Rent - Income	0.03	0.03
		Reimbursement of Expenses - Income	0.01	10.01
		Recharge of Salary - Income	1.08	1.03
		Sale of Material - Income	-	0.23
		Deposit Given - Paid / (Refund) [Other than Connectivity]	0.44	(0.02)
		Deposit Given - Paid / (Refund) [For Connectivity]	12.00	4.00
		Supervision Charges -Income	-	0.01
		Interest on Late Payment	-	0.01
		Asset Purchase	8.05	-
		Balance at the period end
		Amount Receivable/(Payable)	(23.36)	(19.36)
		Deposits Asset / (Liability) - Net [Other than Connectivity]	2.47	2.03
		Deposit (For Connectivity)	51.32	39.32
		Bank Guarantee by GGL to GSPL	52.92	52.92
		Letter of Credit by GGL to GSPL	0.10	0.10

All transactions amount disclosed above are inclusive of tax.

STATEMENT ON COMPLIANCES OF APPLICABLE SECRETARIAL STANDARDS

Your Directors hereby confirm that during the year, the Company has been compliant with the applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 and Companies (CSR Policy) Amendment Rules, 2021. Pursuant to provisions of Section 135 of the Companies Act, 2013, the Company has also formulated a Corporate Social Responsibility Policy which is available on the website of the Company at https://www.guiaratgas.com/resources/downloads/corporate-social-responsibilitv-policv-wef-1st-iune-2021.pdf. The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Companies (CSR Policy) Amendment Rules, 2021 is enclosed herewith as Annexure - 2 to this Report. Further as required by Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014, Executive Summary of Impact Assessment Report for eligible CSR Project issued by Independent Agency had been placed before the Board of Directors at its meeting held on 10th May, 2023 and is being also attached to the Annual Report at Annexure-2-A.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment and Resignation of Directors

Shri Raj Kumar, IAS had been appointed as Director with effect from 21st July, 2022 and his appointment was regularized in 10th AGM held on 29th August, 2022. Subsequently, Shri Raj Kumar, IAS, Chief Secretary, Government of Gujarat had been appointed as Chairman with effect from 21st February, 2023.

Shri Pankaj Kumar, IAS (Retd.) has ceased to be the Director and Chairman of the Company with effect from 1st February, 2023, upon superannuation. Your Directors wish to place on record, appreciation for the services rendered by him as the Chairman of the Company.

Shri Balwant Singh, IAS (Retd.) had been appointed as Independent Director and Dr. Rekha Jain had been appointed as Independent Woman Director with effect from 20th April, 2022 for the first tenure of 5 years. In the opinion of the Board, the Independent Directors fulfill the conditions specified in SEBI (LODR) 2015 and are independent of management. The Shareholders have approved appointment of Shri Balwant Singh, IAS (Retd.) as Independent Director and Dr. Rekha Jain as Independent Woman Director by postal ballot in July, 2022 (with majority of 99.9968% and 99.9973%, respectively). The Board of Directors of the Company had appointed CS Manoj Hurkat, as the Scrutinizer for conducting Postal Ballot through E-voting process.

Shri Milind Torawane, IAS ceased to be Director of the Company with effect from 30th December, 2022 on account of his transfer. Subsequently, Shri Milind Torawane, IAS has been appointed as Additional Director and Managing Director of your Company with effect from 13th April, 2023. It is proposed to appoint Shri Milind Torawane, IAS in the ensuing 11th Annual General Meeting. Shri Sanjeev Kumar, IAS has ceased to be Managing Director with effect from 1st April, 2023 on account of his transfer and appointment as Principal Secretary to Government, Forests & Environment Department, Sachivalaya, Gandhinagar. Your Directors wish to place on record, appreciation for the services rendered by him as the Managing Director of the Company.

Smt. Mamta Verma, IAS, Principal Secretary, Energy & Petrochemicals Department (EPD), Government of Gujarat had been appointed as Additional Director with effect from 1st May, 2023. It is proposed to appoint Smt. Mamta Verma, IAS at the ensuing 11th Annual General Meeting.

Shri. J.P. Gupta, IAS, Additional Chief Secretary, Finance Department (FD), Government of Gujarat, had been appointed as Additional Director with effect from 9th August, 2023. It is proposed to appoint Shri. J.P. Gupta, IAS at the ensuing 11th Annual General Meeting. Dr. Rajiv Kumar Gupta, IAS has ceased to be Director of the Company with effect from 8th June, 2022, on account of his superannuation as Additional Chief Secretary Industries & Mines Department, Government of Gujarat. Your Directors wish to place on record, appreciation for the services rendered by him as Director of the Company.

Smt. Mona Khandhar, IAS, Principal Secretary (EA) Finance Department, Government of Gujarat had been appointed as Additional Director with effect from 20th February, 2023 and subsequently has ceased to be Director of the Company with effect from 9th August, 2023, on account of her transfer to Panchayats, Rural Housing & Rural Development Department, Government of Gujarat. Your Directors wish to place on record, appreciation for the services rendered by her as Director of the Company.

Shri Raj Kumar, IAS, Chairman will retire by rotation and it is proposed to reappoint him as the Director and Chairman of the Company in the ensuing 11th Annual General Meeting.

A brief resume of the Directors to be appointed at the ensuing Annual General Meeting, nature of expertise in specific functional areas and details regarding the Companies in which the Directorship is held together with the Membership / Chairmanship of Committees of the Board along with other statutory details will be given in the Explanatory Statement forming part of the Notice of the 11th Annual General Meeting.

DIRECTORS INDEPENDENCE

Pursuant to the applicable provisions of Section 149 (6) of the Companies Act, 2013, the Independent Directors of the Company have given confirmation/declaration to the Board that they meet with the criteria of Independence and are Independent in terms of applicable provisions of Section 149 (6) of the Companies Act, 2013. Further, they have also given the confirmations on independence as per provisions of Regulation 16(1)(b) and 25 (8) of the Listing Regulations.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the performance evaluation of the Board, Committees and individual Directors for FY 2022-23 was carried out as per the terms and conditions of their appointment based on various parameters. MEETINGS OF THE BOARD OF DIRECTORS

The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business. The Board / Committee Meetings are pre-scheduled to enable the Directors to plan their schedule and to ensure meaningful participation in the Meetings. However, in case of a special and urgent business need, approval is taken by passing resolutions through circulation to the Directors, as permitted by law, which are noted in the subsequent Board/Committee Meetings.

During the period from 1st April, 2022 to 31st March, 2023, 4 (Four) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

AUDITORS

As your Company is a Government Company, the Statutory Auditors are appointed by the Comptroller & Auditor General of India (C&AG). Accordingly, the C&AG had appointed M/s. Manubhai & Shah LLP, Chartered Accountants as the Statutory Auditors of the Company for the Financial Year 2022-23. Auditors'' Report for FY 2022-23 of M/s. Manubhai & Shah LLP, Chartered Accountants are self-explanatory in nature and form part of financial statements of the Company.

C&AG has carried out supplementary audit of the Financial Statements of your Company for the Financial Year 2022-23 pursuant to provisions of Section 143 (6) (a) of the Companies Act, 2013. The C&AG has issued Nil Comment Report on Financial Statements of the Company for the FY 2022-23 which forms part of financial statements of the Company.

ANNUAL ACCOUNTS

The Audit Committee at its Meeting held on 10th May, 2023, approved the Financial Statements for the Financial Year ended on 31st March, 2023 and recommended the same for approval of the Board. The same have been subsequently approved by the Board of Directors at its meeting held on 10th May, 2023.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. Dhawal Chavda & Associates, Practicing Company Secretaries to conduct the Secretarial Audit of the Company for the Financial Year 2022-23. The Report of Secretarial Auditor on Company''s Secretarial Audit for the Financial Year 2022-23 is enclosed herewith as Annexure-3 to this Report. The Secretarial Audit Report is self explanatory in nature.

COST AUDITOR

Your Company is required to carry out Cost Audit pursuant to Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014.

Your Company had appointed M/s Ashish Bhavsar & Associates, Cost Accountants as Cost Auditors for the FY 2022-23. Accordingly, Cost Audit has been carried out for the Financial Year 2022-23. The Cost Audit Report for FY 2022-23 will be submitted to the Central Government in the prescribed format within stipulated time period.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in General Meeting for their ratification. Accordingly, resolution seeking Member''s ratification for the remuneration payable to the Cost Auditors for FY 2023-24 will be included in the Notice convening the 11th Annual General Meeting.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM Risk Management

The Company has a well-defined Risk Management Framework for reviewing the major Risks and has adopted a Business Risk Management Policy. Further, pursuant to the requirement of Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted a Risk Management Committee inter-alia to monitor the Risk Management Plan of the Company.

Internal Control System

The Company has a proper and adequate system of Internal Controls commensurate with its size of operations and nature of business. These are regularly tested and certified by Auditors. Significant audit observations of audit team and follow up actions thereon are reported to the Audit Committee. The details about the identification of elements of Risk and Internal Control Systems are provided in detail in the Management Discussion & Analysis Report forming part of this Board''s Report.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls, with reference to financial statement. The internal financial controls have been documented in the business processes. Such controls have been assessed during the year under review and were operating effectively.

VIGIL MECHANISM

The Company has established a Vigil Mechanism to report genuine concerns, details of which have been given in the Corporate Governance Report forming part of this Boards'' Report. Though there was no compliant under Vigil Mechanism, however Company has identified fraud, summary of which is captured below:

There were gas Pilferage and manipulation of metering data identified in two Industrial Units in Dadra Nagar Haveli Geographical Area (GA) in January, 2023. The cross functional team (CFT) constituted to investigate the same concluded that contract employee of Gujarat Gas Limited was involved in malpractice, in collusion with the customers, which resulted in monetary loss to Company. The CFT also recommended preventive measures for such cases which are being implemented.

HEALTH, SAFETY AND ENVIRONMENT (HSE)

Health, Safety and Environment (HSE) is a core value in GGL. GGL believes that outstanding business performance requires outstanding HSE performance. GGL aims to protect the health and safety of its employees, contractors & their staff, customers and general public in our operation area, to minimize the environmental impact associated with our business processes and to assure the integrity and safe operation of our assets.

GGL recognizes that the protection of the health and safety of all those involved in its operation and public along with protection of the environment is the prime responsibility of company and its'' management at every level.

GGL operations are driven by the goal of zero injuries and seek to encourage a culture of excellence and drive forward for continual improvement in HSE performance.

QHSE commitment & Certification

GGL ensures that all its management decisions reflect its Quality, Health, Safety & Environment (QHSE) intentions. GGL is committed that its QHSE management system complies with all applicable legal requirements including acts, regulations, standards, guidelines and code of practices for Health Safety & Environment (including directives issued by legal, statutory or regulatory bodies) and follows best industrial practices. GGL aims to continue as an industry leader in City Gas Distribution business through its QHSE performance. GGL has established its Quality, Occupational Health, Safety & Environment (QHSE) management system with reference to international standards ISO 9001:2015, ISO 14001:2015 & ISO 45001:2018 and successfully completed its recertification audit as per mentioned ISO standards. The certifications demonstrate sustenance and company''s continued commitment to quality, health, safety and environment management and customer satisfaction which is the key to sustainable business performance. GGL has 160 Standard Operating Procedures and Guidelines for seamless and safe functioning of various aspects of business. In FY 2022-23 GGL has revised around 25 of its existing SOP & Guidelines to adapt to the changing business dynamics, operational requirements with respect to implementation at site and to increase the quality, safety & operational efficiency with an aim of continual improvement of the management systems at GGL.

Projects with highest level of Safety & Risk levels at ALARP

GGL in last few years has embarked into new areas in terms of geography with inclusion of new Geographical Areas in the states of Punjab, Haryana, Madhya Pradesh & Rajasthan and into new business areas in terms of faster reaching customers in our operational areas by supplying of Natural Gas using regasification of LNG, decompression of CNG for areas where pipeline laying project may take significant time. GGL takes extra HSE precautions for all such new areas of geography and business. Risk assessment through safety engineering studies has been at the fore-front of all such projects where we conduct studies like Hazard Operability (HAZOP), Quantitative Risk assessment (QRA), Escape Muster Evacuation & Rescue Analysis (EMERA) and Hazardous Area Classification (HAC) for all types of Gas installations at the planning stage itself and compliance to recommendations of these studies so that risks can be mitigated. GGL assets have been designed, constructed, commissioned, operated and maintained, such that the risks to personnel & public / society are reduced to as low as reasonably practicable (ALARP).

GGL had in past carried out Environmental impact assessment for pipeline projects passing through environmental/ecological sensitive areas/zones in Palghar district & Thane Rural GA to determine the potential environmental, social effects of the proposed project. The results of these study along with mitigation plan were presented to authorities. GGL has received Environmental Clearance from Ministry of Environment, Forest & Climate Change for two such projects in Palghar district & Thane rural GA in FY 2022-23.

GGL this year also continued special focus on safety aspects at projects especially at new Geographical areas with implementation of HSE management system at new GA relevant to project requirement, trainings, visits & meetings by management team members focusing on safety requirements.

HSE Compliance Assurance & Audits

GGL conducts its business in a safe and responsible manner and ensures compliance with the all legal and regulatory requirements. Compliance assurance is confirmed through audits / inspections with respect to all applicable PNGRB regulations and other standards covering all geographical areas of GGL every year including this financial year.

GGL has successfully conducted compliance audits & applicable recertification audits with respect to below listed PNGRB regulations through PNGRB empaneled Third Party Inspection Agency (TPIA) for Geographical Areas.

â¢ First ERDMP Certification Audits: Successfully completed for Eight (8) new Geographical Areas - Narmada GA, Ahmedabad Rural GA, Jalore-Sirohi GA, Ujjain-Dewas-Indore GA, Jhabua-Banswara-Ratlam-Dungarpur GA, Ferozepur-Faridkot-Sri Muktsar Sahib GA, Hoshiarpur-Gurdaspur GA and Sirsa-Fatehabad-Mansa GA in line with PNGRB Codes of Practices for Emergency Response and Disaster Management Plan, Regulations in FY 2022-23.

â¢ First T4S & IMS Certification Audits: Successfully completed for Seven (7) new Geographical Areas - Narmada GA, Ahmedabad Rural GA, Jalore-Sirohi GA, Ujjain-Dewas-Indore GA, Jhabua-Banswara-Ratlam-Dungarpur GA, Ferozepur-Faridkot-Sri Muktsar Sahib GA and Hoshiarpur-Gurdaspur GA in line with PNGRB Technical Standards and Specifications including Safety Standards (T4S), regulations & PNGRB Integrity Management System (IMS), Regulations in FY 2022-23.

â¢ Periodic IMS Certification Audits: Successfully completed for Fourteen (14) Geographical Areas - Surat Ankleshwar Bharuch GA, Hazira GA, Dahej GA, Navsari GA, Valsad GA, Bhavnagar GA, Gandhinagar GA, Nadiad GA, Jamnagar GA, Rajkot (including Morbi) GA, Surendranagar GA, Kutch GA, Amreli GA, Dahod GA as per the defined periodicity of TPIA audits, in line with PNGRB Integrity Management System (IMS), Regulations in FY 2022-23.

â¢ Periodic T4S Audit: Successfully completed for Two (2) Geographical Areas - Amreli GA and Dahod GA as per the defined periodicity of TPIA audits, in line with PNGRB Technical Standards and Specifications including Safety Standards (T4S), Regulations in FY 2022-23.

No major non-compliances were observed during above mentioned audits, most of the observations arising out of these audits are being addressed on priority basis.

Key Safety Index

The safe delivery of projects and safe operations of assets is a critical success factor for the company''s business. GGL sets HSE targets and closely monitors it to achieve continual improvement in QHSE performance.

GGL recognizes that leadership commitment is fundamental for continual improvement in HSE performance. GGL management team members review HSE performance on regular basis.

GGL is committed to protect Safety, Health and Well-being of people working for the organization. Lost Time Injury Frequency (LTIF) is the industry standard key indicator which is used to measure GGL''s occupational safety performance.

â¢ GGL has achieved Lost Time Injury Frequency of 0.309 for the FY 2022-23.

â¢ Total man-hours of GGL in FY 2022-23 is 29.09 Million.

Mock-drills

In FY 2022-23, GGL carried out

â¢ Level-1 Mock-drills - 112 numbers

â¢ Level-2 Mock-drills involving local emergency services/mutual aid partners - 54 numbers

â¢ Level-3 Mock-drills including participation in the offsite mock drills organized by District authorities - 23 numbers GGL Lifesaver Rules & Compliances

GGL has well defined Lifesavers rules for work related to safety critical areas such as Safe Systems of Work, Excavation-HDD-Boring, Working at Height, Lifting, Confined Space Entry, Driving, Gas Escape Handling, Electrical, CNG Handling & LNG Handling.

All critical activities are covered under these defined 10 lifesaver areas which are monitored throughout the year using Lifesaver compliance / Work place inspection checklists defined based on lifesaver rules. In FY 2022-23, GGL has achieved ~ 93% compliance to lifesavers rules.

HSE Initiatives

To improve HSE performance, various HSE initiatives and programs are implemented as part of HSE improvement plan such as Safety tours by Management, awareness sessions with frontline workers and supervisors on various aspects of Safety, Utility coordination, Safety awareness workshops at local schools across operational areas, campaign activities related to lifesaver areas, Hazard hunt activities, special drives to check compliance in defined focus areas etc. In FY 2022-23, GGL has achieved more than 97% compliance to its HSE improvement plan.

GGL encourages participation and involvement of its employees and contractor staff in HSE related activities through monthly HSE committee meetings, Hazard and Near miss reporting, monthly quiz, risk assessment, work place inspections, various campaigns and celebration of HSE events and numerous safety awareness programs.

HSE Awareness & Trainings

GGL always ensures that safety training programs are conducted periodically for employees and contractor staff. GGL also organizes various safety awareness programs including awareness regarding Natural Gas related safety for its customers, general public, employees, contractors and other stakeholders such as third-party utility in FY 2022-23:

â¢ 627 numbers of Natural Gas safety awareness program have been conducted for general public, customers and other utility companies.

â¢ 1970 numbers of Safety & Technical Competency Training programs have been conducted which includes Basic Safety, Practical Fire-fighting, First Aid Treatment, Defensive Driving, Working at height and other Technical Competency trainings in various areas such as GI Plumbing, CNG filling, Welding, CGD O&M, LCNG O&M etc.

â¢ 1231 numbers of Safety Awareness Programs have been conducted for employees and contractors.

GGL also educates and influences various third-party utility companies and their contractors who undertake digging/excavation/drilling activities on or near the underground, GGL gas pipeline network. This is done to focus on the safety risks and environmental impact of the release of Natural gas which can occur as a result of damaging GGL''s natural gas pipelines while digging/excavation/drilling operations. The third parties are urged to dial in to GGL to confirm the pipeline location prior to starting any digging/excavation/drilling activities so that damage to Natural gas pipeline network can be prevented.

Celebrating HSE Events at GGL

GGL, being a prudent organization, celebrates various HSE related events like National Safety Week, Road Safety Week and World Environment Day.

GGL celebrated National Safety Week in March 2023. Focusing on this year''s theme "OUR AIM - ZERO HARMâ, below mentioned special activities were accomplished across all locations of GGL

â¢ Display of custom National Safety Week banners and Health & Safety Pledge ceremony at all offices & various sites involving employees and contractor staff

â¢ Natural Gas Safety Awareness session for School / College students

â¢ ''Essay Writing Competition'' on topics of HSE for employees

â¢ ''Story Writing Competition'' with a message on Safety for children of employees

â¢ Contractor Engagement session at Site - NSW Awareness, Safety pledge, Safety reporting, Hazard hunt etc.

â¢ Demonstration of PPEs and session on use of PPEs & its importance across all GA & corporate offices

â¢ Spot quiz on Safety with employees and contractor staff

GGL celebrated Road Safety Week in January 2023. Below mentioned activities were done across all locations of GGL

â¢ Display of custom Road Safety Week banners & Group gathering at GGL Offices & Road Safety message to employees by Management

â¢ ''Poster competition'' on Road safety for children of employees

â¢ Special drive on Vehicle inspection covering CNG MCVs and LNG Tankers

â¢ Awareness Session on Driving Safety for MCV/LNG tanker/Hired vehicle drivers

â¢ Eye check-up camp for CNG/LNG/Hired vehicle drivers

â¢ Meeting with CNG/LNG Transport Agency owners to reinforce safety culture and compliance requirements among drivers GGL in its contribution under the theme Actions@75 of the government led initiative ''Azadi Ka Amrit Mahotsav'' through various initiatives/actions along with commitments to collectively create a better tomorrow by contributing in the field of Environment Protection. GGL celebrated World Environment Day (WED) to encourage awareness and implement actions for the protection of our environment. Below mentioned activities were carried out across all locations of GGL

â¢ Display of custom Environment Day/ Week banners & Group gathering at GGL Offices

â¢ Spot quiz on environment protection for GGL employees

â¢ Sapling - Distribution & Plantation across all locations of GGL

â¢ ''Poster competition'' on ''Only one Earth'' for children of GGL employees

â¢ ''Poster competition'' on ''Azadi Ka Amrit Mahotsav'' for GGL employees focusing on GGL contribution to Environment Protection

â¢ Awareness session on Environment Social Governance system

â¢ Engagement with Contractors supervisors on Waste management (collection, handling and disposal)

All of these activities were done with an aim to involve employees, contractors, society at large and enhance their awareness regarding importance of Health Safety & Environment and related best practices.

HSE Rewards & Recognition at GGL

â¢ HSE contributor of the month among employees and contractor staff are identified on monthly basis at each geographical area and are rewarded during monthly HSE committee meeting.

â¢ Monthly Best Hazard & Best Near miss carefully selected based on quality and safety criticality and rewarded

â¢ Best HSE Performer amongst all employees in every quarter for each operations area

â¢ Best HSE Performer amongst all employees for Financial year for each operations area

GGL also conducted monthly online HSE Quiz based on HSE focus area to raise awareness amongst employees across GGL & winners of this quiz result are awarded each month.

Step up with Environmental, Social and Governance - ESG system

ESG is a system to measure the sustainability of a company or investment in three specific categories: environmental, social and governance. With intentions to grow & reduce costs in the long run and forge a sense of trust amongst consumers & stakeholders, GGL has decided to step up its HSE scorecard to align with ESG requirements. In that line, GGL Board of Directors have constituted Business Responsibility and Sustainability Report (BRSR) Committee to oversee all activities pertaining to GGL ESG-BRSR reporting. The Committee has responsibility to review & approve business policies, process, practices and adoption of other necessary matters including decision-making, risk management, target setting for material issues & opportunities relevant to the organization. GGL has identified policies related to HSE, Human Resources, Information Security, Customer & Community grievance redressal etc. which have been prepared or modified in line with ESG requirement. Also additional performance indicators have been identified to comply with ESG requirements and data has been recorded against the same. GGL has worked towards improvising systems and process with the resolve to implement all essential & identified leadership indicators relevant to GGL business & operations. GGL is publishing its BRSR report for FY 2022-23 as a part of Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS The Management Discussion & Analysis is as under:

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

Natural Gas is the cleanest and most efficient of the fossil fuels. Natural Gas is used as a feedstock in several industries like fertilizers, plastics and other commercially important organic chemicals and used as a fuel for electricity generation, heating purpose in industrial and commercial units. Natural gas is also used for cooking in domestic households and as a transportation fuel for vehicles. The global energy crisis triggered by the Russian invasion of Ukraine had put gas supply security and market stability at the center of policy interventions in 2022. During 2022 natural gas prices reached all-time high levels in Asian and European markets amid tight market conditions. Record high price levels were accompanied by excessive volatility and short term price variability.

During FY 2022-23, Natural Gas consumption has declined from 64.5 BCM (billion cubic meters) to 60.3 BCM (billion cubic meters) i.e. a decline of 6.5% as compared to previous year. Consumption of Natural Gas (NG) was driven by the fertilizer (33%) followed by CGD (20%), Power (14%) Refinery (7%), Petrochemicals (3%) and others (23%).¹

India''s natural gas consumption has declined by nearly 6.5% during the year as compared to the previous year as high prices squeezed gas demand for fertilizer (down 25% y-o-y), refining (down 50% y-o-y) and the petrochemicals sector (down 65% y-o-y) in particular. City gas demand was broadly flat with an increase of 4%, while consumption in the power segment increased steeply by 45% and other segment (which include glass, metal, ceramic and other small scale industries) also saw sharp increase of 95% during the year. India''s LNG imports dropped by approximately 16.5% while there was a 3.2% increase in domestic production.

2. OPPORTUNITIES AND THREATS

The Government is promoting the usages of clean and green fuel, i.e. Piped Natural Gas ("PNGâ) and Compressed Natural Gas ("CNGâ) by expanding the coverage of CGD network in the country. In order to promote the natural gas usage in the country, the Government has issued guidelines for making available Domestic Gas to the CGD entities for meeting the entire requirement of CNG for transport sector and PNG for Domestic. However, owing to significant increase in demand for CNG and PNG (Domestic) categories, the Domestic Gas allocated is insufficient to meet the demand. The shortfall was being filled by sourcing gas at market rates. However, the auction guidelines for Domestic Gas has been altered wherein the CGD''s can source gas from Domestic Gas field (viz. HPHT fields). While the above factors did lead to increase in prices in CNG & PNG (Domestic) categories; however the impact on demand in these categories was limited as prices of alternate fuels has also increased significantly.

Recently the Government of India has approved the Kirit Parikh Committee Report for Natural Gas Pricing Reforms based on which the Domestic Gas Pricing Guidelines, 2014 has been amended. Based on the amended guidelines, the new Domestic Natural Gas Price (APM price) shall be 10% of the Indian Crude Basket Price as defined by Petroleum Planning and Analysis Cell (PPAC) from time to time. The APM price shall be subject to a floor and a ceiling. The initial floor and ceiling prices shall be $4/MMBTU and $6.5/MMBTU respectively. The ceiling would be maintained for the next two years (FY 2023-24 and 2024-25) and then increased by $0.25/MMBTU each year. CGD companies, including your Company reciprocated by reducing CNG and PNG (Domestic) prices. This policy change shall impact CGD businesses positively by way of reduced Domestic gas purchase price leading to higher new conversions in CNG and PNG (Domestic) category.

Similar to any other business, the Company faces challenges in the form of stiff competition from other fuels due to accessibility and availability. The fuel also faces threat in the form of disparity in the tax structure compared to alternate fuels as PNG and CNG are still out of GST ambit. Notwithstanding these, your Company shall continue to focus placing environmentally clean Natural Gas to affordable markets for sustainable growth.

The Company has completed the Minimum Work Program (MWP) targets as applicable viz. PNG (Domestic) connections, Pipeline Inch- km laid, Compression Capacity and CNG Stations in the Geographical Areas of Surat-Bharuch-Ankleshwar, Valsad, UT of DNH, Dahej, Anand, Panchmahal and Amritsar GAs.

Further, the sector regulator has also notified Unified Tariff regulation for natural gas pipelines with a mission of "One Nation, One Grid and One tariffâ. This reform will specially benefit the consumers located in the far-flung areas where currently the additive tariff is applicable and facilitate development of gas markets and vision of government to increase the gas utilisation in the country.

3. SALES AND MARKET PERFORMANCE

Your Company has an expanse of around 1,75,700 square kilometres of licensed area under its umbrella and continues to hold the position among the largest CGD Company in Country. Your company supplies natural gas to more than 19.28 lakh residential consumers, over 14,390 commercial customer and has erected / commissioned 808 CNG stations for vehicular consumers and provides clean energy solutions to over 4,360 industrial units through its wide spread operations with more than 35,650 kilometres of Natural Gas pipeline network.

Your company has achieved a growth of 22% and 15% in CNG and commercial sales respectively compared to previous year. Your Company has continued its focused efforts for developing and growing PNG (Domestic) and CNG business. Your Company has connected more than 2,22,000 residential customers and commercialized more than 179000 residential customers, erected / commissioned 102 new CNG stations during the year.

4. OUTLOOK

The future outlook for natural gas in India depends on the growth in demand, the evolution of the pricing regime and the pace of gas infrastructure expansion. The demand will steadily rise with opening of the economy after the pandemic.

Your company has already adopted digitization of its critical processes and going forward also, your company shall leverage its endeavors for more digitization and aims to set benchmark in the CGD industry for complete E-Office, benefiting all the stakeholders viz. consumers, vendors, suppliers and employees.

India''s Natural Gas supply and demand outlook is changing. The Government of India (GoI) wants to make India a gas-based economy by boosting domestic production. India has set a target to raise the share of gas in its primary energy mix to 15% by 2030 from about current level of 6%. To improve the share of Natural Gas and promote a gas-based and clean fuel economy, the GoI has adopted a systematic approach to focus on all aspects of the gas sector viz upstream, midstream and downstream including CGD network development.

Your Company has been continuously growing and expanding its horizon by venturing into new geographic areas and is committed to reach every possible Natural Gas user across its licensed expanse of around 1,75,700 square kilometres through its ever growing pipeline network spread across 44 districts in six states and one UT. Your Company shall continue to focus on growing the penetration in the current operating areas by increasing the PNG connections and additional CNG stations while tapping the untapped potential by expeditious rollout of distribution network in its operating Areas. With this focused endeavour, your Company shall continue its efforts in providing clean fuel solutions across all operational area to augment an energetic top-line and bottom-line in coming years.

5. RISKS AND CONCERNS

As per EIA Short-Term Energy Outlook (STEO) April 2023 report, the Brent crude oil spot price forecast averages $85 per barrel (b) in 2023, up $2/b from last month''s forecast. The higher price forecast reflects a forecast for less global production in 2023 and a relatively unchanged outlook for global oil consumption. Despite of higher price forecast, recent issues raise the potential that economic and oil demand growth will be lower than the forecast, which has the potential to result in lower oil prices.

Based on the data represented below it can be inferred that the Brent Crude Oil Spot average price is expected to be around $85/ bbl in 2023 and is expected to further reduce to around $81/ bbl in 2024 which may result in lower purchase cost of spot volumes required for meeting the shortfall volumes by your company for serving the various customer segments.

	2022				2023				2024				Avg for the Year
	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	2022	2023	2024
Brent Spot Average (dollars per barrel)	101.17	113.84	100.53	88.44	81.04	86.00	87.00	86.00	85.00	82.00	80.00	78.00	100.94	85.01	81.21

INTERNAL CONTROL SYSTEM AND ADEQUACY

The Company has a proper and adequate system of Internal Controls commensurate with its size of operations and nature of business. The Company''s Internal Control Systems are further supplemented by extensive programs of audits, i.e. Internal Audit, Proprietary Audit by the Comptroller & Auditor General of India (C&AG) and Statutory Audit by Statutory Auditors appointed by the C&AG. The Internal Control System is designed to ensure that all financial and other records are reliable for preparing financial statements and other data and for maintaining accountability of assets and compliance with statutory requirements. The Company has mapped a number of business processes on to SAP system, thereby leading to significantly improved controls & transparency. Your Company also continues to invest in Information Technology to support various business processes and automating controls.

FINANCIAL AND OPERATIONAL PERFORMANCE

The stand-alone net profit after tax (Total comprehensive income) for the current financial year 2022-23 increased to Rs 1,533.99 Crores from Rs 1,288.33 Crores in the previous year. The Company had a healthy net cash inflows from operations of Rs. 2,377.96 Crores during the financial year 2022-23. During the year, the Company has fully prepaid outstanding long term loan from internal accruals and there is no outstanding loan as on 31st March 2023.

Investments were made in extension of pipeline network to reach new areas and in reinforcements and upgradation of existing network as required. Investments were also made to connect residential customers and augmenting the CNG infrastructure. Investments were also made to upgrade the IT infrastructure and integrate SAP to enhance reliability and enable scalability. No amount has been transferred to the General Reserve during the year.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore, including:

Particulars	FY 2022-2023	FY 2021-2022	Remarks	Reason for significant changes
Debtors Turnover	16.47	18.66	Net Credit Sales / Average Trade Receivable	NA
Inventory turnover	781.48	924.77	Cost of goods sold or sales /Average Inventory (Natural Gas)	NA
Interest Coverage Ratio		48.57	Earning for Debt Service / Interest for borrowing [Earning for Debt Service = Net Profit after taxes Non-cash expenses/adjustment Interest -Lease payments]	Interest Coverage Ratio is improved due to prepayments/ repayment of Borrowings during the year. There is no outstanding debt as on 31st March 2023.
Current Ratio	1.40	1.17	Current assets / Current liabilities net of customer deposit	NA
Debt Equity	0.00	0.09	Total Borrowing / Total Equity	Debt Equity ratio has improved due to prepayments/ repayment of Borrowings during the year and increase in total equity due to current year profits. There is no outstanding debt as on 31st March 2023.
Operating Profit Margin (%)	14.30%	12.76%	Operating income / Revenue from operations	NA
Net Profit Margin (%)	8.81%	7.66%	PAT / Revenue from operations	NA
Return on Net Worth	23.83%	25.05%	PAT / Average net worth	NA
Previous year''s ratios have been reclassified wherever necessary to confirm to the current period''s presentation.

HUMAN RELATIONS AND PARTICULARS OF EMPLOYEES

Your Company employed 1028 employees as on 31st March 2023. Your Company has a focus on building capabilities and developing competencies of its employees. The Company believes that training and development is of vital importance to create a climate where people maximize their technical skills and inner potential which can help the Company in capitalizing the emerging business opportunities through their involvement. During the year, employees were sent for various training programs and seminars to enhance their skills/knowledge. Your Company has in place an attractive policy of performance linked incentive to encourage and reward employee performance.

There was no strike or lock-out during the year under review.

CORPORATE GOVERNANCE

The Company believes that good governance can deliver continuous good business performance. The particulars on Corporate Governance as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is incorporated as a part of this Board''s Report at Annexure - 1.

ANNUAL RETURN

The Annual Return of the Company in the Form MGT - 7 is available on the website of the Company at https://www.gujaratgas.com/GGL/annual-return/

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details about conservation of energy, technology absorption, foreign exchange earnings and outgo is attached at Annexure - 6.

Foreign Exchange Earnings and Outgo-

The Company has incurred expenditure in Foreign Exchange to the extent of Rs. Nil during FY 2022-23 (Previous year FY 2021-22 Rs. 0.62 Crores) and the Foreign Exchange Earnings during FY 2022-23 were Rs. Nil (Previous year FY 2021-22 Rs. Nil).

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/Courts during the year, which would impact the going concern status of the Company.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

Gujarat Gas Limited is dedicated towards fostering an atmosphere of transparency and accountability by working in partnership and empowering our stakeholders. To protect and for the benefit of all our stakeholders, we strive to promote sustainable development. GGL considers its responsibility towards sustainable development as an opportunity to succeed by taking actions which are beneficial for society as a whole.

We applaud SEBI''s introduction of the "Business Responsibility and Sustainability Reporting" ("BRSR") reporting structure, which includes comprehensive Environmental, Social, and Governance ("ESG") disclosures.

The first edition of our Business Responsibility and Sustainability Report (BRSR) forms part of the Annual Report, in which we attempted to provide all non-financial disclosures in accordance with clause (f) of sub-regulation (2) of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The report provides all our stakeholders with a comprehensive view and insight into our Company''s contribution to the economy, the environment and society, which can be utilized to showcase GGL''s dedication towards long-term growth. In order to meet the expectations of our investors and other stakeholders, we are improving the transparency of our report, as well as our strategic approaches to create value for our stakeholders while minimizing risk in the external environment. Statement on ESG is attached at Annexure-7 of the Board''s Report.

FUND RAISING BY ISSUANCE OF DEBT SECURITIES BY LARGE ENTITIES

In view of requirements of SEBI Circular bearing No SEBI/HO/DDHS/CIR/P/2018/144 dated 26th November, 2018, disclosures made in terms of para 4.1 of the said circular forms part of Audited Annual Financial Results of the Company. No funds have been raised by your Company during FY 2022-23.

DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013:

a. that in the preparation of the annual accounts, financial statements for the year ended 31st March, 2023, the applicable accounting standards have been followed and no material departures have been made from the same;

b. that accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2023 and of the profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

ACKNOWLEDGEMENTS

The Directors place on record their deep appreciation to employees of the Company at all levels for their hard work, dedication and commitment. The Directors are extremely grateful for all the support given by the Government of Gujarat at all levels. The Directors place on record their sincere thanks to the Promoters, Shareholders, Suppliers, Lenders and Customers for their valuable support, trust and confidence reposed in the Company.

For and on behalf of the Board of Directors Date: 18^th August, 2023 Raj Kumar, IAS

Place : Gandhinagar Chairman

Mar 31, 2022

Your Directors have pleasure in presenting the 10th Annual Report and the Audited Financial Statements for the Financial Year ended on 31st March 2022.

Financial Highlights ₍? in Crores)
Particulars	Standalone Financials		Consolidated Financials
Particulars	12 Months ended 31/03/2022	12 Months ended 31/03/2021	12 Months ended 31/03/2022	12 Months ended 31/03/2021
Revenue from Operations	16,787.35	10,057.10	16,787.35	10,057.10
Other income	90.74	71.44	90.87	71.58
Total income	16,878.09	10,128.54	16,878.22	10,128.68
Profit before interest, depreciation and tax	2,155.14	2,155.63	2,155.27	2,155.77
Less: Interest	56.82	116.76	56.82	116.76
Depreciation	384.91	343.57	384.91	343.57
Profit before tax	1,713.41	1,695.30	1,713.54	1,695.44
Share of Profit from equity accounted investee	-	-	1.62	2.11
Minority Interest	-	-	-	-
Profit/(Loss) Before Tax and share of profit of associate	1,713.41	1,695.30	1,715.16	1,697.55
Tax expenses	427.77	427.15	427.79	427.18
Net Profit after tax for the period	1,285.64	1,268.15	1,287.37	1,270.37
Other Comprehensive Income ( after tax)(OCI) -Equity Instruments through OCI	2.12	1.96	2.12	1.96
- Remeasurements of post-employment benefit obligation, net of tax	0.57	0.61	0.57	0.61
Share of Other comprehensive income of equity accounted investee			(0.01)	(0.03)
Total Comprehensive Income	1,288.33	1,270.72	1,290.05	1,272.91
RETAIN EARNINGS:
Profit carried to retained earnings	1,285.64	1,268.15	1,287.37	1,270.37
Retained earning (Accumulated loss) from business combination transaction	-	(2.68)	-	(2.68)
Other Comprehensive Income carried to retained earnings	0.57	0.61	0.56	0.58
Add: Undistributed profit /(loss) of earlier years	3,562.38	2,382.35	3,591.30	2,409.08
Balance available for Appropriation	4,848.59	3,648.43	4,879.23	3,677.35
Less: Appropriations:
Equity dividend	(137.68)	(86.05)	(137.68)	(86.05)
Surplus / (Deficit) retained	4,710.91	3,562.38	4,741.55	3,591.30
Earnings per Share (Face value of Rs. 2 each) (Basic & Diluted)	18.68	18.42	18.70	18.45

PERFORMANCE HIGHLIGHTS

1. Gujarat Gas, has been honoured with BT-PwC India''s Best CEO Award in the Emerging Companies category.

2. Your Company has been ranked No.1 (Best Performer) in three different Investor Relations (IR) categories (Best ESG, Best IR Program and Best IR Professional) by Institutional Investor in the 2022 All Asia (ex-Japan) Executive Team rankings in Power (Electric, Gas, and Water) sector.

3. Highest annual turnover of Rs 16,787.35 crores, increase by 67 % compared to previous year alongwith marginal increase in PBT levels.

4. Highest ever 153 CNG stations in FY 2021-22; 2 LNG stations in Thane (150 CNG stations & 1 LNG station in Narmada in FY 2020-21).

5. More than 1.54 Lakh Domestic customers commissioned in FY22 - highest ever (50% higher than 1.02 Lakh in FY 21).

6. Managed unprecedented surge in spot prices by balancing the volumes and limiting price increases via continued engagement with customers / stakeholders.

7. GGL signed an agreement with NTPC to blend Green Hydrogen in Piped Natural Gas, to be provided at NTPC Kawas Township, first of its kind project in India.

8. Prepayment of term loans of Rs 327 crores during FY 22 through internal accruals bringing the debt levels at less than Rs 500 crores as on year end.

9. Successful in ensuring uninterrupted gas supplies to its customers during Covid 19 pandemic and ensuing lockdown.

10. Integrated QHSE Management System of the Company has been assessed and certified as complying with the requirements of International Standards for Quality Management System - ISO 9001:2015, Environment Management System - ISO 14001:2015 and Occupational Health & Safety Management System - ISO 45001:2018

DIVIDEND

Your Directors recommend for consideration of the shareholders at the 10th Annual General Meeting, the Dividend of Rs. 2/- per fully paid up equity share of Rs. 2/- each (100%) on 68,83,90,125 equity shares for the Financial Year 2021-22 . The weblink for Dividend Distribution Policy is available at https://www.gujaratgas.com/resources/downloads/policy-on-dividend-distribution.pdf SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

CONSOLIDATED FINANCIAL STATEMENTS

DEPOSITS

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of Loans, Guarantees, Securities and Investments, if any covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Disclosures of transactions of the Company with person or entity belonging to the Promoter/Promoter Group which hold(s) 10% or more shareholding in the Company i_n Crores)
Name of Related Party	Relationship	Nature of Transactions & Balances	For Year ended 31st March 2022	For Year ended 31st March 2021
Gujarat State Petronet Limited - GSPL	Holding Company	Gas Transmission Expense	542.13	459.86
		Purchase of Natural Gas	2.23	0.31
		Right of Way Expense (ROW)	0.10	0.21
		Business Transfer- CGD Business of Amritsar & Bhatinda from GSPL to GGL (Refer footnote no.2)	153.86
		Reimbursement of Expenses	0.28	0.10
		Dividend Paid	74.57	46.61
		Rent Expense	2.27	1.92
		Recharge of Salary - Expense	0.04	0.31
		Compression Charges	2.87	1.29
		Purchase of Material	-	0.17
		O&M Charges - Income	0.04	0.05
		Rent - Income	0.03	0.03
		Reimbursement of Expenses - Income	10.01	4.60
		Recharge of Salary - Income	1.03	0.69
		Sale of Material - Income	0.23	-
		Deposit Given - Paid / (Refund)	3.99	15.94
		Supervision Charges -Income	0.01	0.01
		Interest On Late Payment	0.01	-
		Balance at the period end Amount Receivable/(Payable)	(19.36)	(5.03)
		Deposits Asset / (Liability) - Net	41.35	37.36
		Bank Guarantee by GGL to GSPL	52.92	52.92
		Letter of Credit by GGL to GSPL	0.10	0.10

1. All transactions amount disclosed above are inclusive of tax.

2. Pursuant to the approval by the Board of Directors on 1st June 2021, the Company had executed Business Transfer Agreement (BTA) on 26th October 2021 to transfer / purchase of City Gas Distribution (CGD) Business of Amritsar and Bhatinda Geographical Areas from Gujarat State Petronet Limited (GSPL, holding company) to Gujarat Gas Limited (GGL, the Company) by way of slump sale and the Company has completed the above transfer of business as per BTA.

STATEMENT ON COMPLIANCES OF APPLICABLE SECRETARIAL STANDARDS

Your Directors hereby confirm that during the year, the Company has been compliant with the applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

CORPORATE SOCIAL RESPONSIBILITY

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment and Resignation of Directors

Shri Pankaj Kumar, IAS, Chief Secretary, Government of Gujarat had been appointed as Additional Director and Chairman with effect from 8th September, 2021. His appointment had been regularized by the shareholders in the 9th AGM held on 28th September, 2021. Shri Anil Mukim, IAS (Retd.) has ceased to be the Director and Chairman of the Company with effect from 3rd September, 2021, upon superannuation. Your Directors wish to place on record, appreciation for the services rendered by him as the Chairman of the Company.

Prof. Yogesh Singh and Shri Bhadresh Mehta had been appointed as Independent Directors with effect from 15 th August, 2021 for a first tenure of 5 years, their appointment had been approved by the shareholders in the 9th AGM held on 28th September, 2021. Shri Balwant Singh, IAS (Retd.) had been appointed as Independent Director and Dr. Rekha Jain had been appointed as Independent Woman Director with effect from 20th April, 2022 for the first tenure of 5 years. In the opinion of the Board, the Independent Directors fulfill the conditions specified in SEBI (LODR) 2015 and are Independent of the Management. The Shareholders vide special resolution approved appointment of Shri Balwant Singh, IAS (Retd.) as Independent Director and Dr. Rekha Jain as Independent Woman Director by postal ballot effective from 15th July, 2022 (with majority of 99.9968% and 99.9973% respectively). The Board of Directors of the Company had appointed C S Manoj Hurkat as the Scrutinizer for conducting Postal Ballot through E-voting process.

Smt. Sunaina Tomar, IAS has ceased to be the Director of the Company with effect from 5th July, 2021, on account of her transfer from Energy and Petrochemicals Department, Government of Gujarat. Your Directors wish to place on record, appreciation for the services rendered by her as the Director of the Company.

Prof. P.K. Sinha and Prof. Vishal Gupta have ceased to be Independent Directors of the Company with effect from 15th August, 2021, on account of expiry of their second tenure as Independent Directors of the Company. Your Directors wish to place on record, appreciation for the services rendered by them as Independent Directors of the Company.

Dr. Manjula Subramaniam, IAS (Retd.) resigned as Independent Woman Director with effect from 28th January, 2022 on account of her preoccupation. Your Directors wish to place on record, appreciation for the services rendered by her as the Independent Woman Director of the Company.

Shri Jal Patel and Shri KD. Chatterjee ceased to be Independent Directors of the Company with effect from 20th April, 2022 on account of expiry of their second tenure. Your Directors wish to place on record, appreciation for the services rendered by them as Independent Directors of the Company.

Dr. Rajiv Kumar Gupta, IAS has ceased to be Director of the Company with effect from 8th June, 2022, on account of his superannuation as Additional Chief Secretary Industries & Mines Department, Government of Gujarat. Your Directors wish to place on record, appreciation for the services rendered by him as Director of the Company.

Shri Raj Kumar, IAS, Additional Chief Secretary, Home Department, Government of Gujarat had been appointed as Additional Director with effect from 21st July, 2022 in place of Dr. Rajiv Kumar Gupta, IAS. It is proposed to appoint Shri Raj Kumar, IAS at the ensuing Annual General Meeting.

Shri Milind Torawane, IAS, will retire by rotation and it is proposed to reappoint him as the Director of the Company in the ensuing 10th Annual General Meeting.

A brief resume of the Directors to be appointed at the ensuing Annual General Meeting, nature of expertise in specific functional areas and details regarding the Companies in which the Directorship is held together with the Membership / Chairmanship of Committees of the Board is given in the Explanatory Statement forming part of the Notice of the 10th Annual General Meeting.

DIRECTORS INDEPENDENCE

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the performance evaluation of the Board, Committees and individual Directors for FY 2021-22 was carried out as per the terms and conditions of their appointment based on the various parameters. MEETINGS OF THE BOARD OF DIRECTORS

During the period beginning from 1st April, 2021 to 31st March, 2022, 4 (Four) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

AUDITORS

As your Company is a Government Company, the Statutory Auditors are appointed by the Comptroller & Auditor General of India (C&AG). Accordingly, the C&AG had appointed M/s. Manubhai & Shah LLP, Chartered Accountants as the Statutory Auditors of the Company for the Financial Year 2021-22. Auditors'' Report for FY 2021-22 of M/s. Manubhai & Shah LLP, Chartered Accountants are self-explanatory in nature and form part of financial statements of the Company.

C&AG has carried out supplementary audit of the Financial Statements of your Company for the Financial Year 2021-22 pursuant to provisions of Section 143 (6) (a) of the Companies Act, 2013. The C&AG has issued the Nil Comment Report on the Financial Statements of the Company for the FY 2021-22 and form part of financial statements of the Company.

ANNUAL ACCOUNTS

The Audit Committee at its Meeting held on 10th May, 2022, approved the Financial Statements for the Financial Year ended on 31st March, 2022 and recommended the same for approval of the Board which had been subsequently approved by the Board of Directors at its meeting held on 10th May, 2022.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s Manoj Hurkat and Associates, Practicing Company Secretaries to conduct the Secretarial Audit of the Company for the Financial Year 2021-22. The Report of Secretarial Auditor on Company''s Secretarial Audit for the Financial Year 2021-22 is enclosed herewith as Annexure-3 to this Report. The Secretarial Audit Report is self explanatory in nature.

COST AUDITOR

Your Company is required to carry out Cost Audit pursuant to Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014.

Your Company had appointed M/s Ashish Bhavsar & Associates, Cost Accountants as Cost Auditors for the FY 2021-22. Accordingly, your Company has got the Cost Audit carried out for the Financial Year 2021-22. The Cost Audit Report for FY 2021-22 will be submitted to the Central Government in the prescribed format within stipulated time period.

The Board of Directors has, on the recommendation of the Audit Committee, appointed M/s Ashish Bhavsar & Associates, Cost Accountants, as the Cost Auditor to audit the Cost Accounts of the Company for financial year 2022-23 for remuneration of Rs. 1,30,000/- (Rupees One Lac Thirty Thousands only) GST and out of pocket expenses.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in General Meeting for their ratification. Accordingly, necessary resolution seeking Member''s ratification for the remuneration payable to the Cost Auditors for FY 2022-23 is included in the Notice convening the 10th Annual General Meeting. RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM Risk Management

Internal Control System

INTERNAL FINANCIAL CONTROLS

VIGIL MECHANISM

The Company has established a Vigil Mechanism to report genuine concerns, details of which have been given in the Corporate Governance Report forming part of this Boards'' Report.

HEALTH, SAFETY AND ENVIRONMENT (HSE)

Health, Safety and Environment (HSE) is a core value in GGL. GGL believes that outstanding business performance requires outstanding HSE performance. GGL recognizes that HSE is everyone''s responsibility and every individual has a duty to intervene and prevent unsafe actions and to reinforce safe behaviors.

GGL recognizes that the protection of the health and safety of all those involved in its operation and public at large and protection of the environment is the prime responsibility of company and its'' management at every level.

GGL operations are driven by the goal of zero injuries, with the aim to ensure that every individual working for and on behalf of the company returns home safely at the end of each working day.

QHSE commitment & Certification

GGL ensures that all its management decisions reflect its Quality, Health, Safety & Environment (QHSE) intentions and QHSE management systems reflect best industry practices and are properly resourced. GGL is India''s largest City Gas Distribution (CGD) Company in terms of sales volume and aims to continue as an industry leader in City Gas Distribution business through its QHSE performance. GGL has established its Quality, Occupational Health, Safety & Environment (QHSE) management system with reference to international standards ISO 9001:2015, ISO 14001:2015 & ISO 45001:2018 and successfully completed its recertification audit as per mentioned ISO standards. The certifications demonstrate sustenance and company''s continued commitment to quality, health, safety and environment management and customer satisfaction which is the key to sustainable business performance.

Projects with highest level of Safety & Risk levels at ALARP

GGL has embarked into new areas in terms of geography with inclusion of new Geographical Areas in the states of Punjab, Haryana, Madhya Pradesh & Rajasthan and into new business areas in terms of faster reaching customers in our operational areas by supplying of Natural Gas using regasification of LNG, decompression of CNG for areas where pipeline laying project may take significant time. GGL takes extra HSE precautions for all such new areas of geography and business. Risk assessment through safety engineering studies has been at the fore-front of all such projects where we conduct studies like Hazard Operability (HAZOP), Hazard Identification (HAZID), Quantitative Risk assessment (QRA), Escape Muster Evacuation & Rescue Analysis (EMERA) and Hazardous Area Classification (HAC) for all types of Gas installations at the planning stage itself and compliance to recommendations of these studies so that risks can be mitigated. GGL assets have been designed, constructed, commissioned, operated and maintained, such that the risks to personnel & public / society are reduced to as low as reasonably practicable (ALARP).

After successfully establishing Gujarat''s first LCNG station at Narmada district last FY, this year (FY 2021 -22), Gujarat Gas Limited (GGL) has commissioned two new LCNG stations at Thane GA in the state of Maharashtra. One of them is located in Vasai-Virar area having CNG Mother Facility to cater surrounding CNG Daughter/ Daughter Booster Stations and also provision to cater PNG domestic customers. Another LCNG Station has been setup in Padgha location of Thane GA having highest compression capacity amongst GGL CNG Stations. All 3 LCNG stations have now been remotely connected to GGL Master control room. Liquefied Natural Gas (LNG) is natural gas, predominantly methane (CH4) that have been liquefied for ease of storage and transportation. Liquefied Natural Gas (LNG) is being transported through Cryogenic Road Tankers from source LNG Terminal to GGL LNG /LCNG Stations. This LNG is pressurized & regasified through ambient vaporizers for dispensing to customer vehicles as an automotive fuel and Piped natural gas to domestic, commercial & industrial customers on priority in areas far away from gas supply point of transportation pipeline. GGL has taken utmost precaution in establishment of these LCNG station, in terms of quality, safety & environmental compliance.

GGL carries out Environmental impact assessment for pipeline projects passing through environmental/ecological sensitive areas/zones to determine the potential environmental, social effects of the proposed project. The results of these study indicate no negative significant impact on environment and the same has been presented to authorities for obtaining permission for such projects.

GGL this year made special focus on safety aspects at projects especially at new Geographical areas with implementation of HSE management system at new GAs relevant to project requirement, trainings, visits & meetings by management team members focusing on safety requirements. GGL delivered pipe laying projects and CNG projects safely at new GA of MP & Rajasthan with zero recordable injury cases.

HSE Compliance Assurance & Audits

GGL conducts its business in a safe and responsible manner and ensures compliance with the all legal and regulatory requirements. Compliance assurance of the same is confirmed through audits / inspections with respect to all applicable Petroleum and Natural Gas Regulatory Board (PNGRB) regulations and other standards covering all geographical areas of GGL every year including this financial year.

GGL has successfully conducted periodic compliance audits & applicable recertification audits with respect to below listed PNGRB regulations through PNGRB approved Third Party Inspection Agency (TPIA) for Geographical Areas as per PNGRB defined periodicity of TPIA audits against each regulations;

â¢ 13 GA (Geographical Areas) have successfully completed & their ERDMP document has been re-certified in line with PNGRB Codes of Practices for Emergency Response and Disaster Management Plan, regulations in FY 2021-22.

â¢ 16 GA (Geographical Areas) have completed their periodic audit in line with PNGRB Technical Standards and Specifications including Safety Standards (T4S), regulations in FY 2021-22.

â¢ 4 GA (Geographical Areas) have completed their periodic audit in line with PNGRB Integrity Management System (IMS), regulations in FY 2021-22.

â¢ GGL''s Transmission pipeline (Hazira Ankleshwar Pipeline) was successfully audited in line with

o PNGRB Technical Standards and Specifications including Safety Standards (T4S) regulations o PNGRB Integrity management System (IMS) regulations

o PNGRB Codes of Practices for Emergency Response and Disaster Management Plan, regulations along with recertification of its ERDMP document

No major non-compliances were observed during above mentioned audits, most of the observations arising out of these audits have been addressed on priority basis to attend to the gaps & implement recommendations, few balance actions are being taken up in time bound manner.

Key Safety Index

The safe delivery of projects and safe operations of assets is a critical success factor for the company''s business. GGL sets HSE argets and closely monitors it to achieve continual improvement in QHSE performance.

GGL recognizes that leadership commitment is fundamental for continual improvement in HSE performance. GGL management team members review HSE performance on regular basis.

â¢ GGL has achieved Lost Time Injury Frequency of 0.155 for the FY 2021-22.

â¢ Total man-hours of GGL in FY 2021-22 is 25.75 Million.

Mock-drills

In FY 2021-22, GGL carried out

â¢ Level-1 Mock-drills - 91 numbers

â¢ Level-2 Mock-drills involving local emergency services/mutual aid partners - 43 numbers

â¢ Level-3 Mock-drills including participation in the offsite mock drills organized by District authorities - 27 numbers GGL Lifesaver Rules & Compliances

GGL has well defined Lifesavers rules for work related to safety critical areas such as Excavation, Working at Height, Lifting, Confined Space Entry, Driving, Gas Escape Handling etc. In FY 2021-22, GGL has introduced new Lifesaver areas

â¢ "LNG Handlingâ to focus on risks mitigation and compliance in this new business area

â¢ "CNG Handlingâ with rules based on years of learnings from incidents, near-miss and best industrial practices.

All critical activities are covered under these defined 10 lifesaver areas which are monitored throughout the year using Lifesaver compliance / Work place inspection checklists defined based on lifesaver rules. In FY 2021-22, GGL has achieved close to 93% compliance to lifesavers rules.

HSE Initiatives

To improve HSE performance, various HSE initiatives and programs are implemented as part of HSE improvement plan such as Safety tours by Management, awareness sessions with frontline workers, and supervisors on various aspects of Safety, Utility coordination, Safety awareness workshops at local schools across operational areas, campaign activities related to lifesaver areas etc. In FY 202122, GGL has achieved more than 96% compliance to its HSE improvement plan.

HSE Awareness & Trainings

â¢ 1295 numbers of Safety & Technical Competency Training programs have been conducted which includes Basic Safety, Practical Fire-fighting, First Aid Treatment, Defensive Driving, Working at height, and other Technical Competency trainings in various areas such as GI Plumbing, CNG filling, Welding, CGD O&M, LCNG O&M etc.

â¢ 1211 numbers of Safety Awareness Programs have been conducted for employees and contractors

â¢ 388 numbers of Natural Gas safety awareness program have also been conducted for general public, customers and other utility companies.

GGL also educates and influences various third-party utility companies and their contractors who undertake digging/excavation/drilling activities on or near the underground GGL gas pipeline network. This is done to focus on the safety risks and environmental impact of the release of Natural gas which can occur as a result of damaging GGL''s natural gas pipelines while digging/excavation/drilling operations. The third parties are urged to dial in to GGL to confirm the location prior to starting any digging/excavation/drilling activities so that damage to Natural gas pipeline network can be prevented.

Celebrating HSE Events at GGL

GGL, being a prudent organization, celebrates various HSE related events like National Safety Week and World Environment Day.

GGL celebrated National Safety Week in March 2022 organizing various initiatives such as display of custom banners, Health & Safety Pledge ceremony at all offices, Spot quiz with awards for winner across all locations & offices, Hazard Hunt activity in teams at Projects sites & Gas Installation facilities.

Focusing on this year''s theme "Nurture Young Minds Develop Safety Cultureâ, three special activities were planned

â¢ Safety Awareness session for School/College students or Children at Societies

â¢ Safety poster competition for "Children of GGL employee"

â¢ Safety Talk by GGL management with young employees of the organization.

GGL celebrated World Environment Day by organizing various initiatives such as display of custom banners, sapling distribution & plantation by GGL employees across all locations of GGL, Online quiz on Environment related aspects, poster competition for employees and their family members on "Ecosystem Restoration / Environment Conservationâ and Engagement (online sessions) with frontline supervisors on appropriate methodology for waste collection, handling and disposal.

All of these activities were done with an aim to involve employees, contractors, society at large and enhance their awareness regarding importance of HSE and related best practices HSE Rewards & Recognition at GGL

â¢ HSE contributor of the month among employees and contractor staff have been identified on monthly basis at each geographical area and are rewarded by GA management during monthly HSE committee meeting.

â¢ Monthly Best Hazard & Best Near miss carefully selected based on quality and safety criticality and rewarded

â¢ Best HSE Performer amongst all employees in every quarter for each operations area

â¢ Best HSE Performer amongst all employees for Financial year for each operations area

GGL also conducts monthly online HSE Quiz based on HSE focus area to raise awareness amongst employees across GGL & winners of this quiz result are awarded each month.

To safeguard the life of its employee, contractor staff, customers and other stakeholders against COVID-19, GGL has developed and implemented various guidelines for precautions to be taken against COVID-19, while continuing emergency and customer services operations. GGL supported its employees with alternate on-off working days during the COVID crisis and with providing leaves related to COVID sickness of self and/or any family members. GGL also supported its employees with medical support including related to hospital admissions during the worst COVID crisis last year. GGL has been compliant with the COVID guidelines at offices and operation & project sites including travel throughout the Financial Year.

Step up with Environmental, Social and Governance - ESG system

ESG is a system for how to measure the sustainability of a company or investment in three specific categories: environmental, social and governance. With intentions to grow & reduce costs in the long run and instill a sense of trust amongst consumers & stakeholders, GGL has decided to step up its HSE scorecard to align with ESG requirements. In that line, GGL has identified additional performance indicators and initiated data recording for ESG baseline assessment. GGL is working towards improvising systems and process with the resolve to implement all essential & identified leadership indicators relevant to GGL business & operations in financial year 202223 and thereafter.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion & Analysis is as under:

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

Natural Gas is the cleanest and most efficient of the fossil fuels. It is the only fossil fuel whose share of the primary energy mix is expected to grow, as it has the potential to play an important role in the world''s transition to a cleaner, more affordable and secure energy future due to its high energy content, which results in lower emissions of carbon and volatile organic compounds (VOCs) at combustion, relative to coal and oil. These characteristics of gas provide substantial environmental benefits such as improved air quality and reduced CO2 emissions.

World energy demand rebounded sharply during FY 2021-22. The strong demand growth was driven by the economic recovery that followed the previous year''s lockdowns. The combination of demand growth and lower-than-expected natural gas supply led to the extremely tight gas market situation that prevailed during most part of the year. The year ended with all-time high natural gas prices in the main importing markets in Europe and in Asia.

Crude Oil prices have always been at the forefront for all energy prices including Natural Gas. The crude oil prices increased drastically during the 2nd half of FY 2021-22. The Crude Oil prices crossed $100/bbl in the last quarter of the Financial Year.

India''s natural gas consumption has increased by nearly 7% in FY 2021-22 as compared to the previous year. This was led by the city gas segment (~ 24% of total natural gas consumption), where a strong recovery from previous year''s lockdowns and the continuing rollout of new distribution networks boosted demand. In 2022 the demand growth is expected to accelerate by nearly 8% on the back of strong GDP growth, expanding infrastructure and a supportive policy environment. However, high LNG prices could present continuing headwinds to India''s gas demand recovery in 2022.

2. OPPORTUNITIES AND THREATS

The Government is promoting the usages of clean and green fuel, i.e. Piped Natural Gas ("PNGâ) and Compressed Natural Gas ("CNGâ) by expanding the coverage of CGD network in the country. In order to promote the natural gas usage in the country, the Government has issued guidelines for making available Domestic Gas to the CGD entities for meeting the entire requirement of CNG for transport sector and PNG for Domestic. However, owing to significant increase in demand for CNG and PNG (Domestic) categories, the Domestic Gas allocated is insufficient to meet the demand. The shortfall is being filled by sourcing RLNG at market rates. The above factors has led to significant increase in prices in CNG & PNG (Domestic) categories; however the impact on demand in these categories may be limited as prices of alternate fuels has also increased significantly.

During the year, PNGRB announced the 11th and 11A CGD Bidding Round comprising of 71 Geographical Areas covering 235 districts spread over 19 States and 2 Union Territory (UT). With completion of this CGD bidding round 96% of India''s population and 86% of India''s area spread over 600 districts in 28 States/ UTs would have access to CGD networks.

The Honourable Supreme Court vide its order dated September 28, 2021 in the matter of Adani Gas Limited (AGL) v. UOI & Ors (SLP(c) 28192-93 of 2018) had upheld the authorization awarded to your Company for the Geographical Area of Ahmedabad District (Excluding Areas Already Authorized).

Similar to any other business, the Company faces challenges in the form of stiff competition from other conventional fossil fuels due to accessibility and availability. The fuel also faces threat in the form of disparity in the tax structure compared to alternate fuels as PNG and CNG are still out of GST ambit. Notwithstanding these, your Company shall continue to focus placing environmentally clean Natural Gas to affordable markets for sustainable growth.

In addition, during the FY 2020-21, the sector regulator Petroleum and Natural Gas Regulatory Board (PNGRB) notified regulations enabling open access to CGD business in India. In January 2021 your company had challenged the said regulation and other related regulations at Honourable High Court of Delhi. Your company was able to obtain favourable interim order stating that the PNGRB shall not take any coercive actions against Your Company. The matter is presently sub-judiced. While this may have some impact on GGL''s business; it shall also allow GGL to access other CGD markets too. Hence the net impact on account of the open access regulations may be minimal in the foreseeable future.

Further, due to the Covid-19 worldwide pandemic outbreak, your company has faced various challenges in executing its CGD development activity across different geographies due to which there was delay in achieving the Minimum Work Program (MWP) awarded by the PNGRB. In this regards, your company has filed Review petitions with the PNGRB seeking extension of exclusivity period and shifting of year wise MWP targets by the PNGRB on account of Force Majeure event i.e. Covid-19 pandemic.

3. SALES AND MARKET PERFORMANCE

Your Company as on date has total 27 CGD licenses and operates in 44 districts across six states and one Union territory which accounts to c. 9% of total CGD licenses and c. 6% of total areas authorised by PNGRB in India and one transportation pipeline license. Your Company has an expanse of around 1,75,700 square kilometres of licensed area under its umbrella and continues to hold the leadership position of being the largest CGD Company in terms of sales volume. Your company supplies natural gas to more than 17 lakh residential consumers, over 13,400 commercial customer and has erected / commissioned 711 CNG stations for vehicular consumers and provides clean energy solutions to over 4,300 industrial units through its wide spread operations with more than 32,800 kilometres of Natural Gas pipeline network.

Your company has achieved a moderate growth of 7% in industrial sales compared to previous year. The CNG & Commercial category volumes have increased by 52% each. The CNG and commercial category volumes have recovered during the second half of FY 2021-22. Your Company has continued its focused efforts for developing and growing PNG (Domestic) and CNG business. Your Company added more than 1,54,000 residential customers and erected / commissioned 153 new CNG stations and 2 new LNG Station during the year.

4. OUTLOOK

The future outlook for natural gas in India depends on the growth in demand, the evolution of the pricing regime, and the pace of gas infrastructure expansion. The demand will steadily rise with opening of the economy after the pandemic.

India''s Natural Gas supply and demand outlook is changing. The Government of India (GoI) wants to make India a gas-based economy by boosting domestic production. India has set a target to raise the share of gas in its primary energy mix to 15% by 2030. To improve the share of Natural Gas and promote a gas-based and clean fuel economy, the GoI has adopted a systematic approach to focus on all aspects of the gas sector viz upstream, midstream and downstream including CGD network development.

Your Company has been continuously growing and expanding its horizon by venturing into new geographic areas and is committed to reach every possible Natural Gas user across its licensed expanse of around 1,75,700 square kilometres through its ever growing pipeline network spread across 44 districts in six states and one UT. Your Company shall continue to focus on growing the penetration in the current operating areas by increasing the PNG connections and additional CNG stations while tapping the untapped potential by expeditious rollout of distribution network in its operating Areas. With this focused endeavour Your Company shall continue its efforts in providing clean fuel solutions across all operational area to augment an energetic top-line and bottom-line in coming years.

5. RISKS AND CONCERNS

The Brent crude oil spot price averaged $115 per barrel in March 2022, an increase of 100% as compared to April 2021. The war between Ukraine and Russia has been a key contributor in increase of Crude Oil prices during the latter part of the Financial Year.

The crude oil prices are expected to be over $100 per barrel for most part of FY 2022-23. However, this price forecast is highly uncertain and will depend on various factors including how long the war between Ukraine and Russia lasts.

INTERNAL CONTROL SYSTEM AND ADEQUACY

The stand-alone net profit after tax (Total comprehensive income) for the current financial year 2021-22 increased to Rs 1288.33 Crores from Rs 1270.72 Crores in the previous year. The Company had a healthy net cash inflows from operations of Rs. 1661.76Crores during the financial year 2021-22. During the year, the Company also prepaid loans amounting to Rs 327 Crores from internal accruals bringing down the total debt level to Rs 478 Crores at the end of financial year.

Investments were made in extension of pipeline network to reach new areas and in reinforcements and upgradation of existing network as required. Investments were also made to connect residential customers and augmenting the CNG infrastructure. Investments were also made to upgrade the IT infrastructure and integrate SAP to enhance reliability and enable scalability. Appropriate provisions have been made in the accounts wherever necessary for contingencies, bad debts and diminution in value of investments. No amount has been transferred to the General Reserve during the year.

In view of the pandemic relating to Coronavirus (COVID-19), the Company has considered the impact of COVID19 as evident so far in the above financial results. The Company will continue to monitor any material changes to future economic conditions which necessitate any further modifications.

HUMAN RELATIONS AND PARTICULARS OF EMPLOYEES

Your Company employed 1034 employees as on 31st March 2022. Your Company has a focus on building capabilities and developing competencies of its employees. The Company believes that training and development is of vital importance to create a climate where people maximize their technical skills and inner potential which can help the Company in capitalizing the emerging business opportunities through their involvement. Considering the pandemic situation, during the year, employees were facilitated for various training programs and seminars (including virtual mode) to enhance their skills/knowledge. Your Company has in place an attractive policy of performance linked incentive to encourage and reward employee performance.

There was no strike or lock-out during the year under review.

CORPORATE GOVERNANCE

ANNUAL RETURN

The Annual Return of the Company in the Form MGT - 7 is available on the website of the Company at https://www.gujaratgas.com/GGL/annual-return/

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details about conservation of energy, technology absorption, foreign exchange earnings and outgo is attached at Annexure - 6. Foreign Exchange Earnings and Outgo-

The Company has incurred expenditure in Foreign Exchange to the extent of Rs. 0.62 Crores during FY 2021-22 (Previous year FY 2020-21 Rs. 0.49 Crores) and the Foreign Exchange Earnings during FY 2021-22 were Rs. NIL (Previous year FY 2020-21 Rs. NIL). SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/Courts during the year, which would impact the going concern status of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

a. that in the preparation of the annual accounts, financial statements for the year ended 31st March, 2022, the applicable accounting standards have been followed and no material departures have been made from the same;

b. that accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2022 and of the profit of the Company for the year ended on that date;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

ACKNOWLEDGEMENTS

For and on behalf of the Board of Directors Date: 3rd August, 2022 Pankaj Kumar, IAS

Place : Gandhinagar Chairman

Mar 31, 2021

Your Directors have pleasure in presenting the 9^th Annual Report and the Audited Financial Statements for the Financial Year ended on 31^st March 2021.

('' i_n C_r0res)
	Standalone Financials		Consolidated Financials
	12 Months	12 Months	12 Months	12 Months
Particulars	ended	ended	ended	ended
	31/03/2021	31/03/2020	31/03/2021	31/03/2020
Revenue from Operations	10,042.28	10,526.49	10,042.28	10,526.49
Other income	74.03	83.66	74.16	83.89
Total income	10,116.31	10,610.15	10,116.44	10,610.38
Profit before interest, depreciation and tax	2,161.85	1,717.93	2,161.98	1,718.16
Less: Interest	116.31	192.17	116.31	192.17
Depreciation	340.84	317.98	340.84	317.98
Profit before tax	1,704.70	1,207.78	1,704.83	1,208.01
Share of Profit from equity accounted investee	_-	_-	2.11	(0.03)
Minority Interest	_-	_-	_-	_-
Profit/(Loss) Before Tax and share of profit of associate	1,704.70	1,207.78	1,706.94	1,207.98
Tax expenses	429.20	14.46	429.22	9.16
Net Profit after tax for the period	1,275.50	1,193.32	1,277.72	1,198.82
Other Comprehensive Income ( after tax)(OCI)
-Equity Instruments through OCI	1.96	0.95	1.96	0.95
-Remeasurements of post-employment benefit obligation, net of tax	0.61	(4.65)	0.61	(4.65)
Share of Other comprehensive income of equity accounted investee	-	-	(0.03)	(0.05)
Total Comprehensive Income	1,278.07	1,189.62	1,280.26	1,195.07
RETAIN EARNINGS:
Profit carried to retained earnings	1,275.50	1,193.32	1,277.72	1,198.82
Impact of Changes in accounting policy	-	-	-	-
Impact of Changes in accounting policy- share of equity accounted investee	-	-	-	0.01
Other Comprehensive Income carried to retained earnings	0.61	(4.65)	0.58	(4.70)
Refund of earlier year''s Dividend distribution tax	-	-	-	-
Add: Undistributed profit /(loss) of earlier years	2,382.34	1,276.66	2,409.08	1,297.94
Balance available for Appropriation	3,658.45	2,465.33	3,687.38	2,492.07
Less: Appropriations:
Transfer to general reserve	-	-		-
Preference dividend	-	-		-
Equity dividend	(86.05)	(68.84)	(86.05)	(68.84)
Corporate dividend tax on Equity dividend	-	(14.15)	-	(14.15)
Surplus / (Deficit) retained	3,572.40	2,382.34	3,601.33	2,409.08
Earnings per Share (Face value of Rs. 2 each) (Basic & Diluted)	18.53	17.33	18.56	17.41

PERFORMANCE HIGHLIGHTS

â¢ Gujarat Gas won the Business Today BEST CEO AWARD 2020 in the Oil & Gas sector and ranked overall second across all sectors.

â¢ Gujarat Gas won the Business Standard STAR PSU AWARD 2020

â¢ Total volumes at -same level of previous year despite Covid-19 impact in FY 21 (FY-21 9.39 mmscmd vs FY-20 9.44 mmscmd). Highest gas sales, crossed 12 mmscmd in Q4 FY 21; 22% volume growth in Q4 FY 21 as compared to Q4 FY 20

â¢ Highest annual profit before tax of Rs 1,705 crores, increase by 41% compared to previous year

â¢ Prepayment of term loans of Rs 988 crores during FY 21 through internal accruals bringing the debt levels at less than Rs 900 crores as on year end

â¢ 150 new CNG Stations erected / commissioned in FY 2021; highest in the history of GGL

â¢ New Domestic Connections of more than 1 Lakh in FY 2021

â¢ Successful in ensuring uninterrupted gas supplies to its customers during Covid 19 pandemic and ensuing lockdown

â¢ Currently supplying gas in all the Geographical Areas recently won in PNGRB''s Bidding Round 9 and 10.

â¢ First LNG/LCNG station in Gujarat - commissioned at Rajpipla in record six months'' time

â¢ Pipeline projects Outside Gujarat Geographical Areas ; Jalore - Sirohi - Pindwara Steel pipeline - 54 km laid, Madhya Pradesh -EPC contract - Steel pipeline - 33 km laid, Thane GA - Vasai/Virar & Dahanu - Virtual Pipeline and Domestic connections commissioned

â¢ Integrated QHSE Management System of the Company has been assessed and certified as complying with the requirements of International Standards for Quality Management System - ISO 9001:2015, Environment Management System - ISO 14001:2015 and Occupational Health & Safety Management System - ISO 45001:2018

DIVIDEND

Your Directors recommend for consideration of the shareholders at the 9th Annual General Meeting, the Dividend of Rs. 2/- per fully paid up equity share of Rs. 2/- each (100%) on 68,83,90,125 equity shares for the Financial Year 2020-21. The weblink for Dividend Distribution Policy is available at https://www.guiaratgas.com/resources/downloads/policv-on-dividend-distribution.pdf

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

CONSOLIDATED FINANCIAL STATEMENTS

DEPOSITS

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of Loans, Guarantees, Securities and Investments, if any covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Section 188 (1) of the Companies Act, 2013, as prescribed in Form AOC - 2 of the Companies (Accounts) Rules, 2014 is enclosed herewith as Annexure -4 to this Report.

Disclosures of transactions of the Company with person or entity belonging to the Promoter/Promoter Group which hold(s) 10% or more shareholding in the Company ('' i_n C_rores)

Name of Related Party	Relationship	Nature of Transactions & Balances	For Year ended 31st March 2021	For Year ended 31st March 2020
Gujarat State Petronet Limited - GSPL	Holding Company	Gas Transmission Expense	459.86	476.50
		Purchase of Natural Gas	0.31	-
		Right of Way Expense (ROW)	0.21	0.21
		Reimbursement of Expenses	0.10	0.003
		Dividend Paid	46.61	37.29
		Rent Expense	1.92	1.41
		Recharge of Salary - Expense	0.31	0.09
		Compression Charges	1.29	-
		Purchase of Material	0.17	-
		PNG Sales - Income	0.02	0.02
		O&M Charges Recovered - Income	0.05	0.04
		Rent - Income	0.03	0.03
		Reimbursement of Expenses - Income	4.60	3.02
		Recharge of Salary - Income	0.69	0.07
		Recharge of Capex (by GGL to GSPL)	-	1.73
		Recharge of Material - Income	-	0.68
		Facilitation Charges - Income	2.22	0.25
		Deposit Given - Paid / (Refund)	15.94	16.94
		Supervision Charges -Income	0.01	-
		Balance at the period end
		Amount Receivable/(Payable)	(18.17)	(10.50)
		Deposits Asset / (Liability) - Net	37.35	21.39
		Bank Guarantee by GGL to GSPL	52.92	48.31
		Letter of Credit by GGL to GSPL	0.10	0.05

All transactions amount disclosed above are inclusive of tax.

Transfer of City Gas Distribution (CGD) Business of Amritsar and Bhatinda Geographical Areas (Gas)

Petroleum and Natural Gas Regulatory Board ("PNGRBâ) granted authorization in favour of Gujarat State Petronet Limited ("GSPLâ, parent company of Gujarat Gas Limited) for laying, building, operating or expanding City Gas Distribution network in GAs of Amritsar (May 2015) and Bhatinda (May 2016) District in the State of Punjab. In furtherance of overall strategic business objective and synergies, GSPL and Gujarat Gas Limited ("GGLâ or "the Companyâ) requested PNGRB for transfer of these GAs authorizations to GGL in line with applicable PNGRB Regulations. After due examination, PNGRB provided approval dated 29 June 2020 for transfer of these authorization for Amritsar and Bhatinda GAs from GSPL to GGL subject to fulfilment of below three conditions:

1) Revised Performance Bank Guarantee (PBG)

2) Revised Gas Sale Agreement in name of GGL

3) Financial Closure

During the year, the Company fulfilled the above conditions and same has been duly acknowledged and accepted by PNGRB.

The Board of the Company has approved the valuation and transfer / purchase of CGD Business of Amritsar and Bhatinda GAs from GSPL to the Company for cash consideration of INR 163.31 Crores (subject to various transaction adjustments) by slump sale through business transfer agreement at its meeting held on 1st June 2021.

As on 31st March 2021, the Company has incurred total capital expenditure INR 197.46 Crores (previous year INR 122.19 Crores) with respect to these projects in GAs of Amritsar and Bhatinda and accounted the same as under in books of GGL for the year ended on 31.03.2021:

- Property, Plant and Equipment and intangible assets - INR 119.53 Crores (previous year INR 58.62 Crores)

- Capital Work in Progress (including capital inventory) - INR 77.93 Crores (previous year INR 63.57 Crores)

Until the transfer / purchase of CGD Business from GSPL to GGL, GSPL had contracted with GGL to use assets owned by GGL for limited period of time in exchange of facility service charges (equal to depreciation and all operating expenses) being paid by GSPL. Accordingly, GGL has recovered the operating expenditure amounting Rs. 5.79 Crores (Previous year Rs. 2.56 Crores) and facilitation fees income of Rs. 2.73 Crores (Previous year Rs. 0.21 Crores) from GSPL during the year for use of these assets.

STATEMENT ON COMPLIANCES OF APPLICABLE SECRETARIAL STANDARDS

Your Directors hereby confirm that during the year, the Company has been compliant with the applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. Pursuant to provisions of Section 135 of the Companies Act, 2013, the Company has also formulated a Corporate Social Responsibility Policy which is available on the website of the Company at http://www.gujaratgas.com/corporate-governance/policies/. The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed herewith as Annexure - 2 to this Report.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment and Resignation of Directors

Shri Anil Mukim, IAS, Chief Secretary, Government of Gujarat had been appointed as Additional Director and Chairman with effect from 1st April, 2020. His appointment had been regularized by the shareholders in the 8th AGM held on 24th September, 2020. Dr. J.N. Singh, IAS (Retd.) has ceased to be the Director and Chairman of the Company with effect from 1st April, 2020, as per Resolution of Energy & Petrochemicals Department, Government of Gujarat. Your Directors wish to place on record, appreciation for the services rendered by him as the Director and Chairman of the Company.

Dr. Manjula Subramaniam, IAS (Retd.) had been appointed as Independent Woman Director by the Board of Directors w.e.f. 28/08/2020 to hold office for the period of 5 years effective from 28/08/2020. Her appointment was subsequently approved by the Shareholders in the 8^th Annual General Meeting held on 24^th September, 2020.

Shri Milind Torawane, IAS, will retire by rotation and it is proposed to reappoint him as the Director of the Company in the ensuing 9th Annual General Meeting.

Dr. Rajiv Kumar Gupta, IAS, Additional Chief Secretary, Industries and Mines Department, Government of Gujarat had been appointed as Additional Director with effect from 5^th July, 2021 in place of Smt Sunaina Tomar, IAS. It is proposed to appoint Dr. Rajiv Kumar Gupta, IAS at the ensuing 9^th Annual General Meeting.

Prof. Yogesh Singh and Shri Bhadresh Mehta being qualified and eligible for appointment as Independent Directors in the Company in accordance with provisions of Section 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014, were appointed by the Board of Directors for first tenure of 5 years with effect from 15^th August, 2021, subject to approval of shareholders at 9^th Annual General Meeting. It is proposed to appoint Prof. Yogesh Singh and Shri Bhadresh Mehta as Independent Directors in the ensuing 9^th Annual General Meeting.

Smt. Sunaina Tomar, IAS has ceased to be the Director of the Company with effect from 5^th July, 2021, on account of her transfer from Energy and Petrochemicals Department, Government of Gujarat. Your Directors wish to place on record, appreciation for the services rendered by her as the Director of the Company.

Prof. P.K. Sinha and Prof. Vishal Gupta have ceased to be Independent Directors of the Company with effect from 15^th August, 2021, on account of expiry of their second tenure as Independent Directors of the Company. Your Directors wish to place on record, appreciation for the services rendered by them as Independent Directors of the Company.

A brief resume of the Directors to be appointed at the ensuing Annual General Meeting, nature of expertise in specific functional areas and details regarding the Companies in which the Directorship is held together with the Membership / Chairmanship of Committees of the Board is given in the Explanatory Statement forming part of the Notice of the 9th Annual General Meeting.

DIRECTORS INDEPENDENCE

Pursuant to the provisions of Section 149 (6) of the Companies Act, 2013, the Independent Directors of the Company have given confirmation/declaration to the Board that they meet with the criteria of Independence and are Independent in terms of Section 149 (6) of the Companies Act, 2013. Further, they have also given the confirmations on independence as per provisions of Regulation 16(1)(b) and 25 (8) of the Listing Regulations.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the performance evaluation of the Board, Committees and individual Directors for FY 2020-21 was carried out as per the terms and conditions of their appointment based on the various parameters. MEETINGS OF THE BOARD OF DIRECTORS

The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business. The Board / Committee Meetings are pre-scheduled to enable the Directors to plan their schedule and to ensure meaningful participation in the Meetings. However, in case of a special and urgent business need, the approval is taken by passing resolutions through circulation to the Directors, as permitted by law, which are noted in the subsequent Board/Committee Meetings.

During the period beginning from 1st April, 2020 up to 31st March, 2021,4 (four) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

AUDITORS

As your Company is a Government Company, the Statutory Auditors are appointed by the Comptroller & Auditor General of India (C&AG). Accordingly, the C&AG had appointed M/s. S. R. Goyal & Co., Chartered Accountants as the Statutory Auditors of the Company for the Financial Year 2020-21.

C&AG has carried out supplementary audit of the Financial Statements of your Commpany pursuant to provisions of Section 143 (6) (a) of the Companies Act, 2013. The C&AG has issued the Nil Comment Report on the Financial Statements of the Commpany for the FY 2020-21.

ANNUAL ACCOUNTS

The Audit Committee at its Meeting held on 1st June, 2021, approved the Financial Statements for the Financial Year ended on 31st March, 2021 and recommended the same for approval of the Board which had been subsequently approved by the Board of Directors at its meeting held on 1st June, 2021.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s Manoj Hurkat and Associates, Practising Company Secretaries to conduct the Secretarial Audit of the Company for the Financial Year 2020-21. The Report of Secretarial Auditor on Company''s Secretarial Audit for the Financial Year 2020-21 is enclosed herewith as Annexure-3 to this Report. The Secretarial Audit Report is self explanatory in nature.

COST AUDITOR

Your Company is required to carry out Cost Audit pursuant to Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014.

The Board of Directors has on the recommendation of the Audit Committee appointed M/s Ashish Bhavsar & Associates, Cost Accountants, as the Cost Auditor to audit the Cost Accounts of the Company for financial year 2021-22 on remuneration of Rs. 1,30,000/- (Rupees One Lac Thirty Thousands only) GST and out of pocket expenses.

The Cost Audit Report for FY 2020-21 will be submitted to the Central Government in the prescribed format within stipulated time period.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in General Meeting for their ratification. Accordingly, the necessary resolution seeking Member''s ratification for the remuneration payable to the Cost Auditors for FY 2021-22 is included in the Notice convening the 9th Annual General Meeting.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM Risk Management

Internal Control System

INTERNAL FINANCIAL CONTROLS

VIGIL MECHANISM

The Company has established a Vigil Mechanism for Directors, Employees to report their genuine concerns, details of which have been given in the Corporate Governance Report forming part of this Boards'' Report.

HEALTH, SAFETY AND ENVIRONMENT (HSE)

GGL has established its Quality, Occupational Health, Safety & Environment (QHSE) management system with reference to international standards ISO 9001:2015, ISO 14001:2015 & OHSAS 18001:2007 and was certified by a third party certification body after rigorous certification audit in 2018 along with periodic audits in successive years 2019 & 2020. Recently GGL has made the transition of its Occupational Health & Safety (OH&S) management system from OHSAS 18001 to new ISO standard 45001:2018 and successfully completed its recertification audit as per ISO 9001:2015, ISO 14001:2015 & ISO 45001:2018. The certifications demonstrate sustenance and company''s continued commitment to quality, health, safety and environment management and customer satisfaction which is the key to sustainable business performance. GGL ensures that all management decisions reflect its Quality, Health, Safety & Environment (QHSE) intentions and QHSE management systems reflect best industry practices and are properly resourced. GGL aims to be an industry leader in City Gas Distribution business through its QHSE performance.

GGL has embarked into new areas in terms of geography with inclusion of new Geographical Areas in the states of Punjab, Haryana, Madhya Pradesh & Rajasthan and into new business areas in terms of faster reaching customers in our operational areas by supplying of Natural Gas using regasification of LNG, decompression of CNG for areas where pipeline laying project may take significant time. GGL takes extra HSE precautions for all such new areas of geography and business. Risk assessment through safety engineering studies has been at the fore-front of all such projects where we conduct studies like Hazard Operability (HAZOP), Hazard Identification (HAZID), Hazardous Area Classification (HAC) and Quantitative Risk assessment (QRA), Escape Muster Evacuation & Rescue Analysis (EMERA) for all types of Gas installations at the planning stage itself and compliance to recommendations of these studies so that risks can be mitigated. GGL assets have been designed, constructed, commissioned, operated and maintained, such that the risks to personnel are reduced to as low as reasonably practicable (ALARP).

Liquefied Natural Gas (LNG) is natural gas, predominantly methane (CH4) that have been liquefied for ease of storage or transportation. In absence of natural gas source/tap-off point in proximity of the remote areas, GGL has commissioned Gujarat''s first LNG/LCNG hub at Rajpipla, Narmada located 20 KM from Statue of Unity (SoU). Liquefied Natural Gas (LNG) is being transported through Cryogenic Road Tanker from source LNG Terminal to GGL LNG /LCNG Stations. This LNG is pressurized & re-gasified through ambient vaporizers for dispensing to customer vehicles as automobile fuel and Piped natural gas to domestic commercial & industrial customers on priority. GGL has taken utmost precaution in establishment of this LCNG station, in terms of quality, safety & environmental compliance. GGL has carried out safety engineering studies such as HAZOP, QRA, EMERA & HAC at planning stage along with implementation of their recommendation to reduce and control the risks.

GGL conducts its business in a safe and responsible manner and ensures compliance with the all legal and regulatory requirements. Compliance assurance of the same is confirmed through internal audits / inspections with respect to all applicable PNGRB regulations and ISO standards covering all geographical areas of GGL every year including this financial year. GGL also conducts periodic compliance audits through PNGRB approved third party inspection agency. The safe delivery of projects and safe operations of assets is a critical success factor for the company''s business. GGL sets HSE targets and closely monitors it to achieve continual improvement in QHSE performance.

GGL recognizes that leadership commitment is fundamental for continual improvement in HSE performance. GGL management team members review HSE performance on regular basis.

GGL is committed to protect safety, health and well-being of people working for the organization. Lost Time Injury Frequency (LTIF) is the industry standard key indicator which is used to measure GGL''s occupational safety performance. GGL has achieved Lost Time Injury Frequency of 0.321 for the FY 2020-21. Total man-hours of GGL in FY 2020-21 is 21.823 Million. GGL, as a responsible organization, recognizes and understands the various global challenges with respect to environmental degradation and climate change. Building awareness among the employees and community about these challenges is an effective way of addressing these challenges. GGL raises the awareness through various activities like knowledge sharing programs, quiz, various other competitions, etc. throughout the entire organization as well as sapling plantation drives. GGL also educates and influences various third-party utility companies, authorities and their contractors who undertake digging activities on or near the underground GGL gas pipeline network. This is done to focus on the safety risks and environmental impact of the release of Natural gas which can occur as a result of damaging GGL''s natural gas pipelines while digging/excavation operations. The third parties are urged to dial in to GGL to confirm the location prior to starting any digging/excavation activities so that damage to Natural gas pipeline network can be prevented.

GGL has a well-developed and certified Emergency Response and Disaster Management Plan through PNGRB approved Third Party Inspection agency (TPIA) for each of its operational Geographical Areas. GGL conducts mock-drills at defined intervals to check adequacy of preparedness against various anticipated emergency scenarios across all locations. In FY 2020-21, GGL carried out 102 Level-1 Mock-drills, 23 Level-2 Mock-drills & 11 Level-3 Mock-drills including participation in the offsite mock drills organized by District authorities.

GGL has well defined Lifesavers rules for all the critical activities and monitors lifesaver compliance. In FY 2020-21, GGL has achieved close to 94% compliance to lifesavers rules.

To improve HSE performance, various HSE initiatives and programs are implemented as part of HSE improvement plan. In FY 202021, GGL has achieved more than 94% compliance to its HSE improvement plan.

GGL always ensures that safety training programs are conducted periodically for employees and contractor staff which includes basic safety, practical fire-fighting, first aid, defensive driving and other technical competency trainings in various areas such as plumbing, CNG filling, Welding, Working at height etc. More than 628 Safety & Technical competency training programs have been conducted during FY 2020-21.

GGL organizes various safety awareness programs including awareness regarding Natural Gas related safety for its customers, general public, employees, contractors and other stakeholders such as third-party utility. Around 1058 safety awareness programs have been conducted for employees and contractors during FY 2020-21. Around 305 Natural Gas safety awareness program have also been conducted for general public, customers and other utility companies.

GGL has also established a system for evaluating contractor performance on monthly basis. Quality & HSE performance has been made an essential part of this performance evaluation with pre-defined key indicators. GGL conducts monthly online HSE Quiz based on monthly HSE focus area to raise awareness amongst employees across GGL.

In the last quarter of this financial year, GGL decided to focus on few key areas identified based on incident areas and major activities undergoing:

Jan 2021: Driving Safety including CNG Transportation Feb 2021: Excavation Safety Mar 2021: Lifting Safety

Various initiatives including display of posters focusing on safe practices, awareness sessions with employees, online quiz, onsite briefing sessions and spot quiz for contractors'' staff.

With an intention to motivate and foster a positive HSE culture and step-up HSE-AI compliance and performance, GGL has put in place HSE reward and recognition scheme to acknowledge significant HSE contribution of employees and contractor staff and to boost their confidence. Under this scheme Best HSE contributors among employees and contractor staff are identified on monthly basis at each geographical area and are rewarded by GA management during monthly HSE committee meeting. Along with that every month GGL recognizes and rewards persons reporting Best Hazard & Best Near miss carefully selected based on quality and safety criticality and also identifies Best HSE contributor amongst all employees in every quarter and entire financial year for each operations area/corporate office.

GGL, being a prudent organization, celebrates various HSE related events like National Safety Week, Road Safety Week and World Environment Day. Under these umbrella, GGL organizes various initiatives such as display of custom banners, pledge ceremony, quiz and number of awareness sessions etc. with an aim to involve employees and contractors and enhance their awareness regarding importance of HSE and related best practices.

GGL operations are driven by the goal of zero injuries, with the aim to ensure that every individual working for and on behalf of the company returns home safely at the end of each working day.

On the onset of Corona virus pandemic and hard time of lockdown across country, GGL being a responsible company and as an essential service has continued its operations with reduced staff at field & offices and rest working from home with support of information technology to ensure uninterrupted supply of Piped Natural Gas (PNG) to its residential, commercial and Industrial customers and to ensure continuity of its CNG operation.

To safeguard the life of its employee, contractor staff, customers and other stakeholders against COVID-19, GGL has developed and implemented various guidelines for precautions to be taken against COVID-19, while continuing emergency and customer services operations, in line with various orders & advisories released by Ministry of Health & Family Welfare and Ministry of Home affairs. During these times to raise the awareness about precautions against COVID-19, GGL has developed & displayed various posters and conducted awareness sessions. GGL is ensuring compliance with the guidelines at offices and operation & project sites including travel.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion & Analysis is as under:

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

World energy demand has been increasing steadily with Natural Gas accounting nearly half of increased consumption. Gas demand growth was especially strong in China and the United States, where cheap gas continues to replace coal for electricity generation. As

per the International Energy Agency, India along with China is highly dependent on natural gas imports as domestic production exceeds consumption.

Crude Oil prices have always been at the forefront for all energy prices including Natural Gas. The crude oil prices had softened drastically in the initial part of FY 2020-21 on account of the Pandemic COVID 19.

The oil prices in FY 2020-21 has seen major volatility with the lowest being at 19.90 $/bbl in Apr 2020 and the highest being 64.73 in Mar 2021. However the average crude oil price has been much lower for the FY 2020-21 than FY 2019-20

The oil prices peaked in the last quarter of FY 2020-21 mainly on account of increased economic activity post the slowdown of CoVID-19 outbreak coupled with

announcement by Saudi Arabia to reduce oil production over and above the levels agreed by OPEC .

Growth of India''s share in the global energy market is expected to increase in the coming years. India has been mainly dependent on high polluting fuels viz. coal, Furnace Oil to meet its ever growing energy needs. Government of India; realizing the importance of protecting the environment has announced; one of its important initiatives for a more sustainable future; an aggressive target to increase the share of Natural Gas in the overall energy consumption mix to 15 percent from the current levels of 6 percent by 2030. Historically the Natural Gas usage in India has seen a slowdown with power sector shifting back to coal from Natural Gas due to lower availability of cheap domestic gas and increased dependency on costly R-LNG

2. OPPORTUNITIES AND THREATS

In the coming Financial Year it is also expected that the PNGRB shall be announcing the 11th CGD Bidding Round wherein it is likely that many new GAs which are contiguous to your company''s existing CGD operations shall also be included. This shall give your company another opportunity to expand its foot prints.

In addition, during the FY 2020-21, the sector regulator Petroleum and Natural Gas Regulatory Board notified regulations enabling open access to CGD business in India. While this may have some impact on GGL''s business; it shall also allow GGL to access other CGD markets too. Hence the net impact on account of the open access regulations may be minimal in the foreseeable future.

3. SALES AND MARKET PERFORMANCE

The sector regulator approved the transfer of license from GSPL to GGL for the GA of Amritsar District and Bhatinda Distrcit. Your Company now has total 27 CGD licenses and operates in 43 districts and six states and one Union territory which accounts to c. 12% of total CGD licenses and c. 10% total Authorized areas issued by PNGRB in India and one transportation pipeline license.

Your Company has an expanse of around 1,75,600 square kilometres of licensed area under its umbrella and continues to hold the leadership position of being the largest CGD Company in terms of market share with catering to more than 15.46 lakh residential consumers, over 12,900 commercial customer, has erected / commissioned 539 CNG stations for vehicular consumers and provides clean energy solutions to over 4,000 industrial units through its wide spread operations with more than 30,000 kilometres of Natural Gas pipeline network. In the GA of Amritsar and Bhatinda, natural gas is supplied to over 4,450 residential customers, 36 commercial customers and 3 industrial

customers. In addition, 20 CNG stations are erected / commissioned in these GA''s.

Despite the dynamic business environment and intensely competitive energy market; Your Company has been resilient to connect around 347 new industrial units during the year. In addition, 3 new industrial units have been added in Amritsar and Bhatinda.

Despite the CoVID-19 pandemic, your company has witnessed a moderate growth of 1% in industrial sales compared to previous year. The average CNG volume decreased by 12% and commercial segment volume decreased by 31% mainly on account of the CoVID-19 pandemic. The CNG volumes and commercial segment volumes have recovered during the last quarter of FY 2020-21. Your Company has continued its focused efforts for developing and growing PNG (Domestic) and CNG business. Your Company added more than 1,02,000 residential customers and erected / commissioned 150 new CNG stations during the year (including the GAs of Amritsar and Bhatinda). Your company is aggressively planning for penetration in PNG (domestic), PNG (commercial) and CNG (transport) sector which is comparatively less volatile.

4. OUTLOOK

The future outlook for natural gas in India depends on the growth in demand, the evolution of the pricing regime, and the pace of gas infrastructure expansion. With outbreak of pandemic COVID-19, the demand for oil & gas is likely to remain stable. The demand will steadily rise with opening of the economy after the pandemic.

Your company has already adopted digitization of its critical processes and due to that these processes were least impacted during the Covid-19 lockdown period. Going forward also, your company shall leverage its endeavors for more digitization and aims to set benchmark in the CGD industry for complete E-Office, benefiting all the stakeholders viz. consumers, vendors, suppliers and employees. India''s Natural Gas supply and demand outlook is changing. The Government of India (GoI) wants to make India a gas-based economy by boosting domestic production and buying cheap LNG. India has set a target to raise the share of gas in its primary energy mix to 15% by 2030. To improve the share of Natural Gas and promote a gas-based and clean fuel economy, the Gol has adopted a systematic approach to focus on all aspects of the gas sector viz upstream, midstream and downstream including CGD network development.

Your Company has been continuously growing and expanding its horizon by venturing into new geographic areas and is committed to reach every possible Natural Gas user across its licensed expanse of around 1,75,600 square kilometres through its ever growing pipeline network spread across 43 districts and six states and one UT. Your Company shall continue to focus on growing the penetration in the current operating areas by increasing the PNG connections and additional CNG stations while tapping the untapped potential by expeditious rollout of distribution network in the newly acquired geographic areas as well. With this focused endeavour GGL shall continue its efforts in providing clean fuel solutions across all operational area to augment an energetic top-line and bottom-line in coming years.

5. RISKS AND CONCERNS

The world runs on energy. Conventional fuels such as petrol and diesel have been in use for transportation for decades. But the current demand-supply gap in energy, depletion of oil-based fuels and environmental constraints have created a necessity for alternate energy resources which are cleaner and environment friendly. Natural gas is being considered as the fuel for today and is being looked as transportation as well as a domestic fuel. CGD is a growing business sector and it aims to provide uninterrupted supply of gas to domestic, commercial and industrial customers in the form of PNG and CNG. Natural Gas Distribution or CGD system is a pipeline system for transport of gas and their distribution among consumers. The distribution system includes gas distribution mains and service lines. The pressure is regulated in the system and is usually designed as closed ring or loop systems, in order to ensure uninterrupted gas supply. The sector has attracted many engineers, managers, and practitioners. The CGD sector has seen a tremendous growth over the past few decades but as the sector is still in the development stage, especially in India, many challenges are being faced by all the stakeholders of the CGD sector. Challenges and issues are now discussed in many forums and corrective actions are being taken. In CGD sector most of the issues are complex and the mechanism for combating the same are jointly worked out by the government and CGD entities. CGD business like any other business is also exposed to inherent business risks due to internal and/ or external factors. To name a few, the risks could vary from continuous availability of economic gas supplies, pipeline connectivity for expansion in unconnected areas, abundant availability of economical alternate fuels, global economic downturn, crude market volatility, delay in permissions from various statutory bodies for laying the infrastructure etc. While some of these risks may be beyond the mitigation capability of any company or industry, as a prudent and responsible Company all possible measures are being taken to safe guard the interest of the Company from being impacted due to the above listed risks and concerns. Your Company has adequate internal control procedure for assessing various business risks, which, the Company is likely to face in near to mid-term future and also prepares mitigation measures.

INTERNAL CONTROL SYSTEM AND ADEQUACY

FINANCIAL AND OPERATIONAL PERFORMANCE

The stand-alone net profit after tax (Total comprehensive income) for the current financial year 2020-21 increased to Rs. 1278.07 Crores from Rs. 1189.62 Crores in the previous year. The Company had a healthy net cash inflows from operations of Rs. 1655.18 Crores during the financial year 2020-21. During the year, the Company also prepaid loans amounting to Rs 988 crores from internal accruals bringing down the total debt level to Rs. 897 crores at the end of financial year.

Investments were made in extension of pipeline network to reach new areas and in reinforcements and upgradation of existing network as required. Investments were also made to connect residential customers and augmenting the CNG infrastructure. Investments were also made to upgrade the IT infrastructure and integrate SAP to enhance reliability and enable scalability. Appropriate provisions have been made in the accounts wherever necessary for contingencies, bad debts and diminution in value of investments. No amount has been transferred to the General Reserve during the year.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore, including:
Particulars	FY 2020-2021	FY 2019-2020	Remarks	Reason for changes
Debtors Turnover	15.53	20.63	Reven ue From Operation / Average Trade Receivable	Ratio for FY 2019-20 was Higher due to reduction of sales and hence receivables in last billing cycle of March 2020 on account of lockdown due to COVID 19.
Inventory turnover	-	-	Not relevant from company perspective	NA
Interest Coverage Ratio	14.58	7.11	(EBITDA-current tax)/ Interest Cost	Interest Coverage Ratio is improved due to - increase in profitability and - reduction in borrowings cost on account of prepayments of loans during FY 2020-21 and - reduction in interest rates
Current Ratio	1.21	1.58	Current assets / Current liabilities net of customer deposit	NA
Debt Equity	0.20	0.61	Total Borrowing / Total Equity	Debt Equity ratio has improved due to prepayments of Borrowings during FY 2020-21 and increase in Total equity due to profits earned in FY 2020-21.
Operating Profit Margin (%)	20.79%	15.53%	Operating income / Revenue from operations	Operating Profit Margin(%) is improved mainly on account of increase in margins.
Net Profit Margin (%)	12.70%	11.34%	PAT / Revenue from operations	NA
Return on Net Worth	32%	42%	PAT / Average net worth	NA

â¢ Previous year''s ratios have been reclassified wherever necessary to confirm to the current period''s presentation.

IMPACT OF COVID-19

In view of the pandemic relating to Coronavirus (COVID-19), the Company has considered the possible effects including but not limited to assessment of going concern assumptions, the carrying amount of current assets and assessed the carrying amounts of property, plant and equipment, investments, inventories, receivables and other current assets as evident so far in the preparation of these financial results. The Company currently has a comfortable liquidity position and continues to service its debt obligations.

The impact of the COVID-19 pandemic, if any, may be different from that estimated as at the date of approval of these financial statements. Considering the second wave of COVID 19 across the country a definitive assessment of the impact, at this stage, is not possible in view of the highly uncertain economic environment. The Company is continuously monitoring material changes in such information and economic forecasts.

Due to the COVID-19 impact, primarily in the first quarter, the results of the company for year ended on 31st March, 2021 are not comparable with corresponding period of FY 2019-20 to that extent.

HUMAN RELATIONS AND PARTICULARS OF EMPLOYEES

Your Company employed 1050 employees as on 31st March 2021. Your Company has a focus on building capabilities and developing competencies of its employees. The Company believes that training and development is of vital importance to create a climate where people maximize their technical skills and inner potential which can help the Company in capitalizing the emerging business opportunities through their involvement. Considering the pandemic situation, during the year, employees were facilitated for various virtual training programs and seminars to enhance their skills/knowledge. Your Company has in place an attractive policy of performance linked incentive to encourage and reward employee performance.

There was no strike or lock-out during the year under review.

CORPORATE GOVERNANCE

ANNUAL RETURN

The Annual Return of the Company in the Form MGT -7 is available on the website of the Company at https://www.gujaratgas.com/resources/downloads/draft-annual-return-2020-21-03092021.pdf

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details about conservation of energy, technology absorption, foreign exchange earnings and outgo is attached at Annexure - 6. Foreign Exchange Earnings and Outgo-

The Company has incurred expenditure in Foreign Exchange to the extent of Rs. 0.49 Crores during FY 2020-21 (Previous year FY 2019-20 Rs. 1.50 Crores) and the Foreign Exchange Earnings during FY 2020-21 were Rs. NIL (Previous year FY 2019-20 Rs. NIL).

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/Courts during the year, which would impact the going concern status of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

a. that in the preparation of the annual accounts, financial statements for the year ended 31st March, 2021, the applicable accounting standards have been followed and no material departures have been made from the same;

b. that accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2021 and of the profit of the Company for the year ended on that date;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

ACKNOWLEDGEMENTS

For and on behalf of the Board of Directors Date : 25^th August, 2021 Anil Mukim, IAS

Place : Gandhinagar Chairman

Mar 31, 2018

Dear Members,

Gujarat Gas Limited

The Directors have pleasure in presenting the 6th Annual Report and the Audited Financial Statements for the Financial Year ended on 31st March 2018.

Financial Highlights (Rs. in Crores)

Particulars	Standalone Financials		Consolidated Financials
Particulars	12 Months ended 31/03/2018	12 Months ended 31/03/2017	12 Months ended 31/03/2018	12 Months ended 31/03/2017
Total income	6,375.03	5,264.19	6,375.21	5,264.21
Gross profit before interest, depreciation and tax	930.74	769.62	930.92	769.63
Less: Interest	196.08	208.96	196.08	208.96
Depreciation	271.82	257.33	271.82	257.33
Profit before tax	462.84	303.33	463.02	303.34
Share of Profit from Associates	-	-	1.25	1.35
Minority Interest	-	-	-	-
Profit/(Loss) Before Tax and share of profit of associate	462.84	303.33	464.27	304.69
Tax expenses	171.48	83.83	171.83	84.10
Net Profit after tax for the period	291.36	219.50	292.44	220.59
Other Comprehensive Income (after tax)(OCI)
- Equity Instruments through OCI	(40.55)	(40.11)	(40.55)	(40.11)
- Remeasurements of post-employment benefit obligation, net of tax	0.43	(2.56)	0.43	(2.56)
Share of Other comprehensive income of associate			0.04	(0.02)
Total Comprehensive Income	251.24	176.83	252.36	177.90
RETAIN EARNINGS:
Profit carried to retained earnings	291.36	219.50	292.44	220.59
Other Comprehensive Income carried to retained earnings	0.43	(2.56)	0.47	(2.58)
Add: Undistributed profit /(loss) of earlier years	696.97	396.46	715.81	414.23
Balance available for Appropriation	988.76	613.40	1,008.72	632.24
Less: Appropriations:
Transfer to general reserve	_-	_-	_-	_-
Preference dividend	_-	_-	_-	_-
Equity dividend	(41.30)	(34.42)	(41.30)	(34.42)
Corporate dividend tax on Equity dividend	(8.41)	(7.01)	(8.41)	(7.01)
Interim Dividend	-	-	-	-
Corporate dividend tax on interim dividend	-	-	-	-
Depreciation Adjustment	-	-	-	-
Transfer to Stock Options Outstanding Account	-	-	-	-
Transfer from Debenture Redemption Reserve	-	125.00	-	125.00
Surplus / (Deficit) retained	939.05	696.97	959.02	715.81
Earnings per Share (Face value of Rs. 10 each)
(Basic & Diluted)	21.16	15.94	21.24	16.02

PERFORMANCE HIGHLIGHTS

Your Company continues to hold the leadership position as the largest CGD Company in the country catering to more than 12.5 lakh residential customers, over 13,440 commercial customers, dispensing CNG from 291 CNG stations for automotive sector and providing clean energy solutions to around 3,300 industrial units across its operational area with a spread of around 21,640 kilometers of pipeline network.

While Gujarat Gas Limited (GGL) has been resilient in sustaining the industrial volumes successfully in the ever dynamic oil & gas industry, it has continued to focus its efforts for developing and growing PNG (Domestic) and CNG business. GGL connected around 90,200 household customers and added 46 new CNG stations during year. Sales volume has grown by 7% in the residential segment and 10% in transport (CNG) segment.

The stand-alone net profit after tax (Total comprehensive income) for the current year 2017-18 increased to Rs 251.24 Crores from Rs. 176.83 Crores in the previous year. The Company had healthy net cash flows from operations of Rs. 782.92 crores during the year 2017-18.

DIVIDEND

Your Directors recommend for consideration of the shareholders at the 6th Annual General Meeting, the Dividend of Rs. 4.00 per fully paid up equity share of Rs. 10/- each on 13,76,78,025 equity shares for the Financial Year 2017-18.

CHANGE IN SHAREHOLDING OF PROMOTERS

During the year under review, the following event/action has taken place, which has major bearing on the affairs of the Company:

Gujarat State Petronet Ltd (GSPL) has acquired/purchased 3,91,06,328 Equity Shares (i.e., 28.41% of the fully Paid-Up Equity Share Capital of Gujarat Gas Limited (GGL) from Gujarat State Petroleum Corporation Limited (GSPC), by way of an inter-se promoter transfer in accordance with Regulation 10(1)(a)(iii) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Subsequent to the same, GSPL now holds 54.17% of the fully paid-up Equity Share Capital of GGL and accordingly in terms of the provisions of Section 2(46) of the Companies Act, 2013, GSPL has become the holding Company of GGL.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

Your Company does not have any subsidiary and joint venture. Guj Info Petro Limited is the Associate of your Company, a statement containing salient features of financial statements of Guj Info Petro Limited under first proviso to sub section (3) of section 129 in form AOC-1 is attached at Annexure-7.

CHANGE IN THE REGISTERED OFFICE OF THE COMPANY

The Registered Office of your Company has been changed with effect from 15th May, 2018 at the new address at âGujarat Gas CNG Station, Sector-5/C, Gandhinagar-382006, Gujaratâ.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company represents consolidation of Financial Statements of Guj Info Petro Limited (GIPL), an associate company and Gujarat Gas Limited Employees Welfare Stock Option Trust (ESOP Trust), in accordance with IND AS. The Audited Consolidated Financial Statements are provided in the Annual Report.

DEPOSITS

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of Loans, Guarantees, Securities and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions that were entered into during the financial year were on an armâs length basis and were in the ordinary course of business. A statement giving details of all Related Party Transactions is placed before the Audit Committee for approval/ ratification on a quarterly basis, as the case may be. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board is uploaded on the Companyâs Website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. The particulars of contracts or arrangements with Related Parties referred to in Section 188 (1) of the Companies Act, 2013, as prescribed in Form AOC - 2 of the Companies (Accounts) Rules, 2014 is enclosed herewith as Annexure -4 to this Report.

STATEMENT ON COMPLIANCES OF APPLICABLE SECRETARIAL STANDARDS

Your Directors hereby confirm that during the year, the Company has been compliant with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. Pursuant to provisions of Section 135 of the Companies Act, 2013, the Company has also formulated a Corporate Social Responsibility Policy which is available on the website of the Company at http://www.gujaratgas.com/corporate-governance/policies/ The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed herewith as Annexure - 2 to this Report.

BOARD OF DIRECTORS

APPOINTMENT AND RESIGNATION OF DIRECTORS

The Shareholders of the Company in its 3rd Annual General Meeting held on 28th December, 2015 had appointed Prof. Pradip Khandwalla and Shri Ajit Kapadia as the Independent Directors of the Company for the period of two years effective from 21st April, 2015.On account of expiry of their tenure as the Independent Directors of the Company, they ceased to be the Independent Directors of the Company w.e.f. 21st April, 2017. Shri Sanjeev Kumar, IAS, whose appointment had been regularized by the Shareholders in the 4th Annual General Meeting held on 29th September, 2016, ceased to be the Director of the Company w.e.f. 27th June, 2017. Shri Sujit Gulati, IAS, Additional Chief Secretary, Energy & Petrochemicals Department whose appointment had been regularized by the Shareholders in the 4th Annual General Meeting held on 29th September, 2016, ceased to be the Director of the Company w.e.f. 17th July, 2018. Your Directors wish to place on record, their appreciation for the services rendered by them as the Directors of the Company.

Shri Milind Torawane, IAS, had been appointed as the Additional Director by the Board of Directors in its Meeting held on 10th August, 2017, the appointment had been further regularized by the shareholders in its 5th Annual General Meeting held on 29th September, 2017. He will retire by rotation and it is proposed to reappoint him as the Director of the Company in the ensuing 6th Annual General Meeting.

Prof Piyush Kumar Sinha and Prof Vishal Gupta had been appointed as the Independent Directors of the Company for the tenure of 2 years by the Board of Directors vide Circular Resolution with effect from 16th August, 2017. Their appointment was subsequently approved by the Shareholders in its 5th Annual General Meeting held on 29th September, 2017.

It is also informed to the Shareholders that Shri Raj Gopal, IAS had been appointed as the Additional Director by the Board of Directors vide Circular Resolution effective from 16th August, 2018 and it is proposed to regularize his appointment in the ensuing 6th Annual General Meeting.

A brief resume of the Director to be appointed at the ensuing Annual General Meeting, nature of expertise in specific functional areas and details regarding the Companies in which the Directorships are held together with the Membership / Chairmanship of Committees of the Board is given in the Explanatory Statement forming part of the Notice of the 6th Annual General Meeting.

DIRECTORS INDEPENDENCE

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the performance evaluation of individual Directors for FY 2017-18 was carried out as per the terms and conditions of their appointment based on the various parameters.

MEETINGS OF THE BOARD OF DIRECTORS

The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business. The Board / Committee Meetings are pre-scheduled to enable the Directors to plan their schedule and to ensure meaningful participation in the Meetings. However, in case of a special and urgent business need, the approval is taken by passing resolutions through circulation to the Directors, as permitted by law, which are noted in the subsequent Board/Committee Meetings.

During the period beginning from 1st April, 2017 up to 20th August, 2018, Eight (8) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

AUDITORS (STATUTORY & CAG AUDIT)

As your Company is a Government Company, the Statutory Auditors are appointed by the Comptroller & Auditor General of India (CAG). Accordingly, the CAG had appointed M/s. S R Goyal & Co., Chartered Accountants as the Statutory Auditors of the Company for the Financial Year 2017-18. The CAG has carried out supplementary audit of your Company pursuant to provisions of Section 143 (6) of the Companies Act, 2013. The CAG has issued the Nil Comments Certificate on the Financial Statements of the Company for FY 2017-18.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s Manoj Hurkat & Associates, Practising Company Secretaries to conduct the Secretarial Audit of the Company for the Financial Year 2017-18. The Report of Secretarial Auditor on Companyâs Secretarial Audit for the Financial Year 2017-18 is enclosed herewith as Annexure - 3 to this Report. The Secretarial Audit Report is self explanatory in nature.

COST AUDITOR

Your Company is required to carry out Cost Audit pursuant to Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014. Accordingly, the Cost Auditor M/s Kailash Sankhlecha & Associates, Cost Accountants, has carried out the Cost Audit for the Financial Year 2017-18. The Cost Audit Report for FY 2017-18 has been submitted to the Central Government in the prescribed format within stipulated time period.

Further, the Board of Directors has on the recommendation of the Audit Committee, appointed M/s Kailash Sankhlecha & Associates, Cost Accountants, as the cost auditor to audit the Cost Accounts of the Company for financial year 2018-19 on remuneration of Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand Only) plus GST and out of pocket expenses.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in General Meeting for their ratification. Accordingly, the necessary resolution seeking Memberâs ratification for the remuneration payable to the Cost Auditors for FY 2018-19 is included in the Notice convening the 6th Annual General Meeting.

ANNUALACCOUNTS

The Audit Committee at its Meeting held on 11th May, 2018, approved the Financial Statements for the Financial Year ended on 31st March, 2018 and recommended the same for approval of the Board which had been subsequently approved by the Board of Directors at its meeting held on 11th May, 2018.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

Risk Management

The Company has a well-defined Risk Management Framework for reviewing the major Risks and has adopted a Business Risk Management Policy. Further, pursuant to the requirement of Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has voluntarily constituted a Risk Management Committee inter-alia to monitor the Risk Management Plan of the Company.

Internal Control System

The Company has a proper and adequate system of Internal Controls commensurate with its size of operations and nature of business. These are routinely tested and certified by Auditors. Significant audit observations of audit team and follow up actions thereon are reported to the Audit Committee. The details about the identification of elements of Risk and Internal Control Systems are provided in detail in the Management Discussion & Analysis Report forming part of this Boardâs Report.

Internal Financial Controls

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company has established a Whistle Blower Policy/Vigil Mechanism for Directors, Stakeholders and Employees to report their genuine concerns, details of which have been given in the Corporate Governance Report forming part of this Boardsâ Report.

HEALTH, SAFETY AND ENVIRONMENT (HSE)

Health, Safety and Environment (HSE) is a core value in Gujarat Gas Limited (GGL), a GSPC Group Company. GGL believes that all injuries are preventable. We recognize that HSE is everyoneâs responsibility and each of us has a duty to intervene and prevent unsafe actions and to reinforce safe behaviours.

GGL recognizes that the protection of the health and safety of all those involved in its operation and public at large and protection of the environment is an integral part of the companyâs business performance and the prime responsibility of management at every level. GGL assets have been designed, constructed, commissioned and are operated and maintained, such that the risks to personnel are reduced to as low as reasonably practicable (ALARP). GGL operations are driven by the goal of zero injuries, with the aim to ensure that every employee working for and on behalf of the company returns home safely at the end of each working day.

We conduct our business in a safe and responsible manner and ensure compliance with the legal and regulatory requirements. We check the compliance by conducting various internal and external audits. The safe delivery of our projects and safe operations of our assets is a critical success factor for our business. We set HSE targets and closely monitor it to achieve continual improvement in our performance.

We recognize that leadership commitment is fundamental for continual improvement in HSE performance. GGL management team members review HSE performance on regular basis in monthly/quarterly review meetings. The team regularly carries out HSE tour at different worksites to engage and involve site staff in HSE processes, to reinforce best HSE practices and to understand their HSE related concerns. In FY 2017-18, compliance to âHSE tour planâ was more than 90%.

GGL is committed to protect safety, health and well-being of people working for the organisation. Lost Time Injury Frequency (LTIF) is the industry standard key indicator which is used to measure GGLâs occupational safety performance. For the FY 2017-18, GGL has achieved Lost Time Injury Free Man-hours - 20.93 Million Man-hours against Total of 21.75 Million Man-hours. Lost Time Injury Frequency is 0.0459 for the FY 2017-18.

GGL is committed for protection of the Environment. One of our focus area is to reduce Natural Gas (NG) emission. GGL has achieved the target of more than 3 percent reduction in NG emission for FY 2017-18 as compared to FY 2016-17.

GGL has a well-developed and certified Emergency Response and Disaster Management Plan for each Geographical Areas. GGL conducts mock-drills at defined intervals to check adequacy of emergency preparedness across all locations. In FY 2017-18, GGL carried out 70 Onsite mock-drills and 04 Off-site mock drills.

GGL has defined Lifesavers rules for all the critical activities and monitor lifesaver compliance. In FY 2017-18, GGL has achieved 90.5% compliance to GGL lifesavers.

To improve HSE performance, various HSE initiatives and programs are implemented as part of HSE improvement plan. In FY 2017-18, GGL has achieved 91% compliance to HSE improvement plan.

GGL always ensures that safety training programs are conducted regularly for employees and contractor staff which includes basic safety, practical fire fighting, first aid, defensive driving and other technical competency trainings.

GGL encourages participation and involvement of its employees and contractor staff in HSE related activities through HSE committee meetings, Hazard Near miss reporting, online monthly quiz, risk assessment and numerous safety awareness programs. GGL organises various Natural Gas safety awareness programs for its customers and general public at large to make them aware for safe use of PNG and CNG.

GGL cares about the health of all its employees and its family members. GGL has completed annual medical check-up for all of its employees in FY 2017-18.

GGL, being a prudent organization, is actively participating in various events & celebrations like National Safety Week, Road Safety Week and World Environment Day to make the society a cleaner, greener and safer place.

HUMAN RELATIONS AND PARTICULARS OF EMPLOYEES

Your Company employed 1096 employees as on 31st March 2018. Your Company has a focus on building capabilities and developing competencies of its employees. The Company believes that training and development is of vital importance to create a climate where people maximize their technical skills and inner potential which can help the Company in capitalizing the emerging business opportunities through their involvement. During the year, employees were sent for various training programs and seminars to enhance their skills/knowledge. Your Company has in place an attractive policy of performance linked incentive to encourage and reward employee performance.

There was no strike or lock-out during the year under review.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has always believed that appropriate standard of conduct should be maintained by the employees in their conduct and that there should be a safe, non-discriminatory and harassment-free (including free of sexual harassment) work environment for every individual working in the Company. The Company has in place, the Policy on Prevention of Sexual Harassment at workplace, as a part of its Human Resource Policy. It aims at prevention of harassment of employees and lays down the guidelines for reporting and prevention of sexual harassment. During the year ended 31st March, 2018, no complaint has been received pertaining to sexual harassment.

COMPLIANCES OF APPLICABLE SECRETARIAL STANDARDS

The Company has complied with applicable Secretarial Standards during the year under review.

DIVIDEND DISTRIBUTION POLICY

The dividend payout is in accordance with the Companyâs Dividend Distribution Policy.

CORPORATE GOVERNANCE

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT - 9 is enclosed herewith as Annexure - 5.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details about conservation of energy, technology absorption, foreign exchange earnings and outgo is attached at Annexure - 6.

The Company has incurred expenditure in Foreign Exchange to the extent of Rs.0.60 Crores during FY 2017-18 (Previous year FY 2016-17 was Rs.0.07 Crores) and the Foreign Exchange Earnings during FY 2017-18 was â NIL (Previous year FY 2016-17 was â Nil).

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts during the year, which would impact the going concern status of the Company.

DIRECTORSâ RESPONSIBILITY STATEMENT

a. that in the preparation of the annual accounts, financial statements for the year ended 31st March 2018, the applicable accounting standards have been followed and no material departures have been made from the same;

b. that accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2018 and of the profit of the Company for the year ended on that date;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

ACKNOWLEDGEMENTS

For and on behalf of the Board of Directors

Dr. J. N. Singh, IAS

Chairman

Date: 20th August, 2018

Place: Gandhinagar

Mar 31, 2017

Dear Members,

Gujarat Gas Limited

The Directors have pleasure in presenting the 5th Annual Report and the Audited Financial Statements for the Financial Year ended on 31st March 2017.

Financial Highlights

	Standalone Financials		Consolidated Financials
Particulars	12 Months ended 31/03/2017	12 Months ended 31/03/2016	12 Months ended 31/03/2017	12 Months ended 31/03/2016
	Rs. in Cr.	Rs. in Cr.	Rs. in Cr.	Rs. in Cr.
Total income	5,264.19	6,289.98	5,264.21	6,289.99
Gross profit before interest, depreciation and tax	769.62	746.57	769.63	746.58
Less: Interest	208.96	247.44	208.96	247.44
Depreciation	257.33	245.42	257.33	245.42
Profit before tax and share of profit of associate	303.33	253.71	303.34	253.72
Share of Profit from Associates	-	-	1.35	2.14
Minority Interest	-	-	-	-
Profit/(Loss) Before Tax	303.33	253.71	304.69	255.86
Tax expenses	83.83	65.38	84.10	65.82
Net Profit after tax for the period	219.50	188.33	220.59	190.04
Other Comprehensive Income ( after tax)(OCI)
-Equity Instruments through OCI	(40.11)	(31.97)	(40.11)	(31.97)
- Re-measurements of post-employment benefit obligation, net of tax	(2.56)	(1.98)	(2.56)	(1.98)
Share of Other comprehensive income of associate	-	-	(0.02)	0.01
Total Comprehensive Income	176.83	154.38	177.90	156.10
RETAIN EARNINGS:
Net Profit after tax for the period carried to retained earnings	219.50	188.33	220.59	190.04
Add : Other Comprehensive Income carried to retained earnings	(2.56)	(1.98)	(2.58)	(1.97)
Add: Undistributed profit /(loss) of earlier years	396.46	292.96	414.23	309.01
Balance available for Appropriation	613.40	479.31	632.24	497.08
Less: Appropriations:
Transfer to general reserve	-	-	-	-
Preference dividend	-	-	-	-
Equity dividend paid	(34.42)	(68.84)	(34.42)	(68.84)
Corporate dividend tax on Equity dividend	(7.01)	(14.01)	(7.01)	(14.01)
Interim Dividend	-	-	-	-
Corporate dividend tax on interim dividend	-	-	-	-
Add; Transfer from Debenture Redemption Reserve	125.00	-	125.00	-
Surplus / (Deficit) retained	696.97	396.46	715.81	414.23
Earnings per Share (Face value of Rs. 10 each)
(Basic & Diluted)	15.94	13.68	16.02	13.80

PERFORMANCE HIGHLIGHTS

Your Company continues to hold the leadership position as the largest CGD Company in the country catering to 11,64,461 residential customers, 12,341 commercial customers, dispensing CNG from 252 operational CNG stations for automotive sector and providing clean energy solutions to 3,067 industrial units across its operational area with a spread of around 19,974 kilometers of pipeline network.

While Gujarat Gas Limited (GGL) has been resilient in sustaining the industrial volumes successfully in the ever dynamic oil & gas industry, it has continued to focus its efforts for developing and growing PNG (Domestic) and CNG business. GGL connected around 85,441 household customers and commissioned 22 CNG stations during year. Sales volume has grown by 4% in the residential segment and 8% in transport (CNG) segment.

The stand-alone net profit after tax (Total comprehensive income) for the current year 2016-17 increased to Rs. 176.83 Crores from Rs. 154.38 Crores in the previous year. The Company had healthy net cash flows from operations of Rs. 701.61 crores during the year 2016-17.

DIVIDEND

Your Directors recommend for consideration of the shareholders at the 5 th Annual General Meeting, the Dividend of Rs. 3.00 per fully paid up equity share of Rs. 10/- each on 13,76,78,025 equity shares for the Financial Year 2016-17.

LISTING OF SHARES

Your Company''s equity shares have been listed and trading on BSE Limited (BSE), National Stock Exchange of India Limited (NSE), Ahmadabad Stock Exchange Limited (ASE) and Vadodara Stock Exchange (VSE) with effect from 15th September, 2015. The ISIN of Equity Shares is INE844O01022. Further it is brought to the notice of Shareholders that SEBI vide its Order No. WTM/RKA /MRD/144/2015, dated 9th November, 2015 had provided the exit to Vadodara Stock Exchange Limited and in view thereof, the Company is no longer listed on VSE. It is also brought to the notice of the Shareholders that the Company has received a letter dated 11/01/2017 from Ahmadabad Stock Exchange Limited wherein it has been informed that Ahmadabad Stock Exchange Limited (ASEL) is undergoing its exit policy and because of that all the Companies listed with ASEL are shifted to NSE, BSE, or dissemination Board NSE. So the Company is requested to do all the Compliance with relevant exchanges where the Company is further listed or with Dissemination Board NSE and not with ASEL. As your Company is already listed with NSE and BSE, no additional compliance is required.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

Your Company does not have any subsidiary and joint venture and Guj Info Petro Limited is the Associate of your Company, a statement containing salient features of financial statements of Guj Info Petro Limited under first proviso to sub section (3) of section 129 in form AOC-1 is attached at Annexure-7.

CONSOLIDATED FINANCIAL STATEMENTS

1. Investment in associate has been accounted for using Equity Method in accordance with IND AS 28 - Investments in Associates and Joint Ventures.

2. Consolidation of Employees Welfare Stock Option Trust (ESOP Trust) resulting into adjustment of underlying treasury shares and disclosed in the statement of other Equity in financial statement in accordance with IND AS.

The Audited Consolidated Financial Statements are provided in the Annual Report.

FINANCIAL STATEMENT IN COMPLIANCE WITH IND AS

The financial statements have been prepared in accordance and compliance of all material aspects of Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

FIRST TIME ADOPTION OF IND-AS

The Group has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101 - First time adoption of Indian Accounting Standards including relevant clarifications issued by Ind AS Transition Facility Group (ITFG) on various issues. The transition was carried out as the Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was the previous GAAP.

DEPOSITS

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of Loans, Guarantees, Securities and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. A statement giving details of all Related Party Transactions is placed before the Audit Committee for approval/ ratification on a quarterly basis, as the case may be. The Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions as approved by the Board is uploaded on the Company''s Website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. The particulars of contracts or arrangements with Related Parties referred to in Section 188 (1) of the Companies Act, 2013, as prescribed in Form AOC - 2 of the Companies (Accounts) Rules, 2014 is enclosed herewith as Annexure -4 to this Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. Pursuant to provisions of Section 135 of the Companies Act, 2013, the Company has also formulated a Corporate Social Responsibility Policy which is uploaded on the website of the Company at http://www.gujaratgas.com/corporate-governance/policies/ The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed herewith as Annexure - 2 to this Report.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTMENT AND RESIGNATION OF DIRECTORS

Shri G.R. Aloria, IAS ceased to be the Director of the Company w.e.f. 30th July, 2016, Shri Atanu Chakraborty, IAS ceased to be the Director of the Company w.e.f. 11th April, 2016, Shri L Chuaungo, IAS ceased to be the Director of the Company w.e.f. 27th June, 2016 and Shri Mukesh Kumar, IAS ceased to be the Director of the Company w.e.f. 8th August, 2016.

The Shareholders of the Company in its 3rd Annual General Meeting held on 28th December, 2015 had appointed Prof Pradip Khandwalla and Shri Ajit Kapadia as the Independent Directors of the Company for the period of two years effective from 21st April, 2015.On account of expiry of their tenure as the Independent Directors of the Company they ceased to be the Independent Directors of the Company w.e.f. 21st April, 2017. Shri Sanjeev Kumar, IAS whose appointment had been regularized by the Shareholders in the 4th Annual General Meeting held on 29th September, 2016, ceased to be the Director of the Company w.e.f. 27th June, 2017. Your Directors wish to place on record, their appreciation for the services rendered by them as the Directors of the Company.

Dr. J. N. Singh IAS had been appointed as the Additional Director with effect from 25/04/2016. Upon his appointment as the Chief Secretary, Government of Gujarat, he was appointed w.e.f. 11th August, 2016, as the Chairman on the Board of Directors in place of Shri G. R. Aloria, IAS, who retired from the office of Chief Secretary to Government of Gujarat w.e.f. 31st July, 2016. The appointment of Dr. J. N. Singh IAS was regularized in the 4th Annual General Meeting of the Company held on 29th September, 2016. Shri Sujit Gulati, IAS, Additional Chief Secretary, Energy & Petrochemicals Department had been appointed as Additional Director with effect from 11th August, 2016. His appointment was regularized by the Shareholders in the 4th Annual General Meeting held on 29th September, 2016. The appointment of Dr. T. Natarajan, IAS, Jt. Managing Director, GSPC was regularized in the 4th Annual General Meeting of the Company held on 29th September, 2016. He will retire by rotation and it is proposed to reappoint him as the Director of the Company in the ensuing 5th Annual General Meeting.

Shri Milind Torawane, IAS had been appointed as the Additional Director by the Board of Directors in its Meeting held on 10th August, 2017, it is proposed to regularize his appointment in the ensuing 5 th AGM.

Shri Jal Patel, Smt. Manjula Shroff and Shri K.D. Chatterjee had been appointed as the Independent Directors of the Company for the period of two years effective from 21st April, 2015 by the Shareholders of the Company in its 3rd Annual General Meeting held on 28th December, 2015. On account of expiry of their tenure and they being qualified and eligible for re-appointment as the Independent Directors of the Company in accordance with provisions of Section 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors Rules), 2014, they had been re-appointed by the Board of Directors vide Circular Resolution dated 21/04/2017 for second term of 5 years effective from 21/04/2017, subject to approval of shareholders at Annual General Meeting vide special resolution. Their re-appointment is being placed for approval of the Shareholders in its ensuing 5 th Annual General Meeting.

A brief resume of the Directors to be appointed at the ensuing Annual General Meeting, nature of their expertise in specific functional areas and details regarding the Companies in which they hold Directorship, Membership / Chairmanship of committees of the Board are given in the Explanatory Statement forming part of the Notice of the 5 th Annual General Meeting.

APPOINTMENT AND RESIGNATION OF KEY MANAGERIAL PERSONNEL

Mr. Nitin Patil was appointed as the In-charge CEO of your Company with effect from 2nd March, 2016. Further he was redesignated as the CEO of your Company w.e.f. 11th August, 2016.

DIRECTORS INDEPENDENCE

(6) of the Companies Act, 2013.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the performance evaluation of individual Directors for FY 2016-17 was carried out as per the terms and conditions of their appointment based on the various parameters.

MEETINGS OF THE BOARD OF DIRECTORS

The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business. The Board / Committee Meetings are pre-scheduled to enable the Directors to plan their schedule and to ensure meaningful participation in the Meetings. However, in case of a special and urgent business need, the approval is taken by passing resolutions through circulation to the Directors, as permitted by law, which are noted in the subsequent Board/Committee Meetings.

During the period beginning from 1st April, 2016 up to 10th August, 2017, Eight (8) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

AUDITORS (STATUTORY & CAG AUDIT)

As your Company is a Government Company, the Statutory Auditors are appointed by the Comptroller & Auditor General of India (CAG). Accordingly, the CAG had appointed M/s. Manubhai & Shah LLP, Chartered Accountants as the Statutory Auditors of the Company for the Financial Year 2016-17. The CAG has carried out supplementary audit of your Company pursuant to Provisions of Section 143 (6) of the Companies Act, 2013. The CAG has issued the NIL comment report on the Financial Statements of the Company for FY 2016-17.

The Shareholders are further informed that CAG has appointed M/s. S R Goyal & Co, Chartered Accountants, as the Statutory Auditors of the Company for Financial Year 2017-18.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s Manoj Hurkat & Associates, Practicing Company Secretaries to conduct the Secretarial Audit of the Company for the Financial Year 2016-17. The Report of Secretarial Auditor on Company''s Secretarial Audit for the Financial Year 2016-17 is enclosed herewith as Annexure - 3 to this Report. The Secretarial Audit Report is self explanatory in nature.

COST AUDITOR

Your Company is required to carry out Cost Audit pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014. Accordingly, the Cost Auditor M/s Dalwadi & Associates, Cost Accountants, have carried out the Cost Audit for the Financial Year 2016-17. The Cost Audit Report for FY 2016-17 has been submitted to the Central Government in the prescribed format within stipulated time period.

Further the Board of Directors has, on the recommendation of the Audit Committee appointed M/s. Kailash Sankhlecha & Associates, Cost Accountants, as the cost auditor to audit the Cost Accounts of the Company for financial year 2017-18 on remuneration of Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand only) plus GST and out of pocket expenses.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in General Meeting for their ratification. Accordingly, the necessary resolution seeking Member''s ratification for the remuneration payable to the Cost Auditors for FY 2017-18 is included in the Notice convening the 5 th Annual General Meeting.

ANNUAL ACCOUNTS

The Audit Committee at its Meeting held on 23rd May, 2017 approved the Financial Statements for the Financial Year ended on 31st March, 2017 and recommended the same for approval of the Board which had been subsequently approved by the Board of Directors at its meeting held on 24th May, 2017.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM RISK MANAGEMENT:

The Company has a well-defined Risk Management Framework for reviewing the major Risks and has adopted a Business Risk Management Policy. Further, pursuant to the requirement of Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has voluntarily constituted a Risk Management Committee inter-alia to monitor the Risk Management Plan of the Company.

INTERNAL CONTROL SYSTEM:

INTERNAL FINANCIAL CONTROLS

WHISTLE BLOWER POLICY/VIGIL MECHANISM

GUJARAT GAS LIMITED EMPLOYEE STOCK OPTION PLAN 2016 ("THE ESOP 2016")

GRANT, VESTING AND EXERCISE OF OPTIONS - I

1. The Eligible Employees were entitled to Revised Grants (with effect from the Revised Grant Date) of equivalent number of Options - I under the ESOP 2016, against the equivalent number of Options Granted and Vested in them pursuant to the ESOP 2008, which had not been Exercised by them on the Effective Date under the Scheme of Amalgamation.

2. The Eligible Employee had been issued Revised Grant of 13,000 number of Options - I under the ESOP 2016, against the equivalent number of Options Granted and Vested pursuant to the ESOP 2008.

3. The above Revised Grants of Options - I were on the basis of the Share Exchange Ratio of 1 (one) equity share of Rs.10/- each

of GGL, for every 1 (one) equity share of Rs.2/- each of erst while GGCL, pursuant to the Scheme of Amalgamation.

4. These Options - I continued to bear the Exercise Price as per the ESOP 2008. The Exercise Price payable for Options - I under ESOP 2016 was based on the Exercise Price payable under the ESOP 2008 that has been adjusted after taking into account the effect of the Share Exchange Ratio of 1:1.

5. Upon the Revised Grant of Options - I, the Options Granted under the ESOP 2008 stood cancelled and the Eligible Employees were not entitled to any further eligibility criteria under the ESOP 2016 neither any further Grants were made under the ESOP 2016.

6. The Eligible Employees continued to be bound by all the terms and conditions of the ESOP 2008 in addition to the ESOP 2016.

The Gujarat Gas Limited Employee Welfare Stock Option Trust Deed ("ESOP 2016 Trust Deedâ) that is supplementary to the Deed of Gujarat Gas Company Limited Employee Welfare Stock Option Trust together with the Variation Deeds thereto ("the ESOP 2008 Trust Deedâ) was formed to hold the shares under ESOP 2016 Trust Deed, to meet obligation in respect of the ESOPs granted to the Eligible Employees. The ESOP 2016 Trust shall be an irrevocable Trust. 13000 Options-I were granted to four eligible employees of the Company in terms of ESOP 2016 and those 13000 options had been exercised by them. . It is confirmed that the ESOP 2016 was in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014. The applicable disclosures as stipulated under Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014, with regard to Employees Stock Option Plan of the Company are available on the website of the Company at www.gujaratgas.com and weblink for the same is http://www.gujaratgas.com/investors/ investors-information.

The Nomination & Remuneration Committee in its meeting held on 6th February, 2017 approved the winding up of the Gujarat Gas Limited Employee Stock Option Plan 2016 ("ESOP 2016â) together with the Addendum thereto as it had ceased to be in force on account of all the outstanding Options there under having been exercised. It further approved the sale in the secondary market of 92000 equity shares of GGL held by the Gujarat Gas Limited Employee Welfare Stock Option Trust (ESOP Trust) on account of the winding up of the ESOP 2016 and recommended the proposal for the approval of the Board of Directors which had subsequently been approved by the Board in its Meeting held on 6th February, 2017. On account of aforesaid approval the ESOP Trust sold surplus 92000 equity shares of the Company held by it in the secondary market on 6th March, 2017 and an amount of Rs. 2.58 crores had been paid by way of repayment of loans advanced by GGL (erstwhile GGCL) to the ESOP Trust for acquisition of shares.

HEALTH, SAFETY AND ENVIRONMENT (HSE)

Health, Safety and Environment (HSE) is a core value in Gujarat Gas Limited, a GSPC Group Company. The Company believes that all injuries are preventable. We recognize that HSE is everyone''s responsibility and we each of us have a duty to intervene to prevent unsafe actions and to reinforce safe behaviors. We conduct our business in a safe and responsible manner and ensure compliance with the legal and regulatory requirements. The Company practices high level of HSE standards with an aim to protect health and safety of people, to minimize the environmental impact of our business activities and to assure the integrity and safe operation of our assets. We set HSE targets and closely monitor to achieve continual improvement in our performance.

We are committed to ensure that the assets are safe and fit for purpose throughout their life cycle. The safe delivery of our projects and safe operations of our assets is a critical success factor for our business. The Company has completed certification of its Emergency Response & Disaster Management Plan (ERDMP) as well Integrity Management System (IMS) from PNGRB approved Third Party Inspection Agency in line with the requirements of the PNGRB regulations.

Gujarat Gas Limited, being a prudent organization, has joined hands in initiative like Swachh Bharat Abhiyaan and is actively participating in various events & celebrations like National Safety Week, Road Safety Week and World Environment Day to make the society a cleaner, greener and safer place.

The Company was awarded the ''Golden Peacock Occupational Health and Safety Award 2016'' for its exemplary performance and excellence in maintaining high standards of safety in Gas Sector. The prestigious award was received by the Company from the hands of Piyush Goyal, Hon''ble Union Minister of State (I/C) for Power, Coal & Renewable Energy, Govt. of India, at the Golden Peacock Awards function held at New Delhi on the 10th of July, 2016.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion & Analysis is as under:

1. INDUSTRY, STRUCTURE AND DEVELOPMENTS

Natural gas plays a significant role in the global energy arena with its presence and usage across all activities in the economy and India is no exception to this rule. Globally, natural gas accounts for around 24% of primary energy consumption, while India currently accounts for around 6.5% which demonstrates the immense potential for growth of this fuel in the overall energy mix of India. Natural gas has grown at a consistent pace of around 4% in the last decade buoyed by import of natural gas at a CAGR of around 9.3%¹ . It is worth mentioning that the share of natural gas in Gujarat''s energy basket is 25%, which is higher than the global average² . The use of Natural Gas has been predominantly in fertilizers industry 34%; followed by power generation 23%; City or Local Natural Gas Distribution 11%; Refinery 11%; Petrochemicals 8% and others 13%. Industry wise offtake of natural gas shows that natural gas has been used both for Energy (55.76%) and Non-energy (44.24%) purposes¹. This has been complemented by continuous improvement and advancement in techno-economic dynamics evolving the sector from the primitive mode of tapping the fuel from land, shore, off-shore, coal seam, etc. to the recent commercialization of natural gas found in shale and channelized to markets in liquid or gaseous state through viable modes of infrastructure including cargos, pipelines, cryogenic containers, etc.

Energy has profound implications on mankind and their socio-economic-political spheres integrated across the globe. The global energy basket is led by oil, closely contested by coal and then followed by natural gas and other fuels in respective order of their share in global consumption pattern. Among the leading nations of energy consumption, India has had a tremendous growth trajectory of around 5% over the last one and half decade to consistently position itself at the third¹ place only next to China and United States respectively for nearly a decade. India has been highly dependent on imports of oil and gas with a CAGR of around 8% since the last decade. The Government of India has urged all stakeholders to increase the domestic production of Oil and Gas to reduce import dependence from 77% to 67% by the year 2022² . India has been rated the fastest growing G20 economy registering an economic growth of around 7.1%³ in the fiscal concluded on March 31, 2017 even after recording a sluggish index of industrial production⁴ . This is further complemented by the fact that the energy intensity of GDP of India is lower than the world average including that of United States, BRICS, among others. The world economy is expected to almost double over the next 20 years with India and China accounting for around half of the expected increase³.

Globalisation is an economic phenomenon, but impacts all fields of human life making it a boon and a bane. The consolidation brings in efficiency and equitable access to resources across the globe but also makes it vulnerable to the changes happening in the global arena like Britain''s exit from the European Union (Brexit), Paris Agreement (on Climate Change), the refugee crisis, conflict in the Middle East, few nation''s electoral mandate, China''s economic sluggishness, OPEC and Non-OPEC Nation''s decision for oil production cut, to name a few. While these may not have a direct impact on the Indian economy per se, however they do create volatility in the global trade. The same is reflected in one of the globally traded commodities, crude, which settled at levels below US$ 60/ bbl after an inconsistent trajectory in the recent past.

The disruption in the global oil and gas market impacted the prices starting FY 2014-15, after having a stable run for more than half a decade, attributed to the increased supplies and dwindling global demand which piled up inventories. The stability was reinstated to the levels of around US$ 50-55/ bbl through the production cut agreed by OPEC and Non-OPEC countries. This phase left the stakeholders globally guessing about the prices and the consequential impact on the economic activities all across.

In addition to the above, the Indian economy evidenced some major policy changes in the fiscal concluded on March 31, 2017 including the passing of the Goods and Services Tax ("GSTâ) bill in both the houses of Parliament which received the assent of the Honourable President of India on September 08, 2016, demonetization of the legal tender of all currency having denomination of Rs. 500/- and Rs. 1,000/- with an intention to curb - corruption, counterfeiting, antisocial activities; changing from cash economy to digital payments, etc. complementing the initiatives like Start-up India, Digital India, Make in India, Smart Cities, etc. The demonetization along with the implementation of the GST is likely to have a positive impact over the medium term including widening of the tax net and improved tax compliance. Further the currency so channelized into the banking system would reduce the lending rates and augment the growth of Indian economy. The fiscal and monetary policy reforms were supported by sectoral initiatives which included introduction of Hydrocarbon Exploration and Licensing Policy, LPG Give it up Campaign, Pradhan Mantri Ujjwala Yojana (PMUY), marketing and pricing freedom for new gas production, Diesel Price Deregulation, Discovered small field policy, etc⁴.

Notwithstanding the aforementioned factors and ever dynamic business environment, the Indian economy and the oil and gas industry (including City Gas Distribution (CGD)) could sustain and maintain the growth momentum. While the geo-political events, policy changes and other chaos posed globally and within the country could be meted out gallantly during the bygone fiscal reflected in sustenance of demand, but nevertheless failed to leave its mark denting the CGD growth. The CGD business is a sun-rise business drawing focus of policy makers and associated stakeholders towards tapping the immense growth potential and though may be subjected to challenges due to the ever dynamic business environment would not deter from the growth path in the long run. In addition the global consensus exhibited during the Paris agreement on climate change makes it evident the clean and green fuels would continue to enjoy priority and support from policy makers and key stakeholder alike.

2. OPPORTUNITIES AND THREATS

At the twenty-first session of the "Conference of the Partiesâ (COP), held in Paris, France, the parties adopted the Paris Climate Change Agreement under the United Nations Framework Convention on Climate Change. The Agreement was opened for signature on April 22, 2016 at a high-level signature ceremony convened by the Secretary General in New York. India also deposited its instrument of ratification of the Paris Agreement with the United Nations in October 2016. The agreement further translated into action based policies by the Ministry of Petroleum and Natural Gas, Ministry of Road Transport and Highways, Ministry of Environment and Forests, etc. Among other initiatives that marked the focus on natural gas usage includes introduction of Hydrocarbon Exploration and Licensing Policy, marketing and pricing freedom for new gas production, discovered small field policy, Gas4India campaign, smart cities, etc. The Government of India''s commitment for a gas-based economy is patent in its efforts to increase the share of natural gas in the country''s energy basket from 6.5%⁷ towards achieving global benchmark.

To increase the share of natural gas in India''s energy mix, harness domestic sources, expand existing and erect new terminals for LNG imports, floating storage facilities, gas transportation, etc. for catering the growing needs of existing and new demand centres, the efforts have assertively been augmented⁷ under the vision of the Government of India. Complementing these efforts public and private sector companies including City Gas Distribution (CGD) companies, Natural Gas Pipeline companies, LNG Terminal companies, and other industry stakeholders have joined hands to promote the natural gas sector with zeal. Gas4India an unified cross-country, multimedia, multi-event campaign aims to communicate the national, social, economic and ecological benefits of using natural gas as the fuel of choice to every citizen who uses, or will use in the near future, gas in any way - to cook, travel, light their homes, and power their businesses. Harmonising these initiatives the sectoral regulator, the Petroleum and Natural Gas Regulatory Board (PNGRB), which governs and regulates the downstream gas industry, has been proactive and aggressive in authorizing about 75 City Gas Distribution Networks and 53 Natural Gas Pipeline projects to integrate and roll out infrastructure development on pan India basis.

Your Company has been optimally making the best utilization of these opportunities by participating actively in the CGD bidding process tendered by PNGRB in the CGD Bid Round - VI. Your Company is proud to claim that it was victorious in 6 Geographical Areas (GA''s) contiguous to the existing areas of operation in State of Gujarat which includes the Dahej-Vagra Taluka (District Bharuch), Panchmahal District, Ahmadabad District (excluding areas already authorized), Anand District (excluding areas already authorized), Dahod District and Amreli District. These contiguous areas and the potential demand loads would enhance the customer base across all business area propelling growth in volume and synergise the Company''s overall business. Your Company would continue to evaluate new opportunities to diversify its existing business into new markets organically and inorganically.

In addition to the aforesaid opportunities the industry is glaring at yet another avenue of growth and abundance in the form of commercially introducing CNG in two wheeler business. Two wheelers comprise around 25% of the total vehicles on road at national level . Further there are other initiatives in the pipeline such as CNG stations for CNG run train, LNG by trucks, Green Corridor, among other in-house research initiatives being carried out relentlessly.

Similar to any other business, the Company faces challenges in the form of competition, from other conventional fossil fuels due to the abundance, accessibility and availability at much cheaper rates, notwithstanding the other subsidized/ nonsubsidized renewable fuels as well. The fuel also faces threat in the form of disparity in the tax structure compared to alternate fuels. The impetus on growth of natural gas sector as mentioned in the above sections has attracted a lot of new players in CGD business. Notwithstanding these your Company shall continue to focus placing environmentally clean natural gas to affordable markets for sustainable growth.

3. SALES AND MARKET PERFORMANCE

Your Company which has an expanse of around 96,000 square kilometres of licensed area under its umbrella and continues to hold the leadership position of being the largest City Gas Distribution Company in the country catering to more than 11.6 lakh residential consumers, over 12,750 commercial customers, dispensing CNG from 252 operational CNG stations for vehicular consumers and providing clean energy solutions to over 3,050 industrial units through its wide spread operations with around 20,000 kilometres of natural gas pipeline network.

After growing by 8.2% in FY2015, the industry decelerated to 5.8% in FY2016. Manufacturing value added grew by a healthy 7.7%, though down from the 10.6% recorded a year earlier. Growth reflected robust performance by large private manufacturers, which benefited from lower input costs. However, healthy growth in manufacturing value added is at odds with the volume-based index of industrial production, which registered hardly any growth. Construction was muted, growing by 3.1% as the cash crunch possibly hit real estate activity in the second half of the fiscal year. The growth slowdown in FY2016 was primarily the result of sluggish investment and of consumption slowing in the second half because of the cash crunch⁶.

4. Ministry of Petroleum and Natural Gas

7. http://pib.nic.in

The services and manufacturing indexes improved significantly from April to October 2016 before slipping in November and December as demonetization hit demand. However, they have recovered since January to signal a return to expansion with recovery in domestic and export orders.

Despite the dynamic business environment and intensely competitive energy market; Your Company has been resilient to connect 202 new industrial units and 943 new commercial establishments during the year. The volume loss in industrial sector is broadly attributable to the global demand slump and also due to abundance of cheaper alternate polluting fuels. Your Company has continued its focused efforts for developing and growing PNG (Domestic) and CNG business. GGL added more than 84,000 residential customers and commissioned 22 new CNG stations during the year. Your Company has been able to sustain the volumes with growth of around 7.4% in the residential sector and around 7.7% in CNG (transport) sector. Your company is aggressively planning for penetration in PNG (domestic), PNG (commercial) and CNG (transport) sector which is comparatively less volatile.

Your Company, through competitive bidding, as already stated above has won 6 new geographical areas in State of Gujarat and has aggressively rolled out the expansion plans to develop networks to tap the unexplored CGD potential in new geographies. GGL has, now, total 18 CGD licenses spread across 22 districts which accounts to almost 24% of total CGD licenses issued by PNGRB in India and 1 pipeline license.

4. OUTLOOK

The consumption dampened and deferred in the second half of FY2016 due to the cash crunch, will resurface in FY2017 and lift consumption growth in the country. The increase in central government capital expenditure targeted in the FY2017 budget augurs well for public investment. The union budget continues to prioritize infrastructure and rural development with higher outlay on roads and highways, electric power, affordable housing, among others. The growth is projected to pick up to 7.4% -7.6% in FY2017-2018, owing to improved consumption, public and private investment which is expected bears fruits. The implementation of a new goods and services tax beginning in July 2017 should lower prices for capital goods, providing impetus to investment. This coupled with various initiatives in the natural gas sector as mentioned in earlier sections is expected to propel growth for the business going forward.

While India stands at the third position as the world''s largest energy consumers, however it has immense potential to grow its base from about one-third of the global average in the per capita consumption. The economy which is evenly poised for growth at over and above 7% in the coming fiscals would also correspondingly increase the energy demand thereto. Government of India is aggressive in pushing the usage of clean and green natural gas across sectors with special focus to the growth of PNG in the household and CNG for vehicles. This shall lead to impending development of robust downstream gas distribution infrastructure in the country.

Your Company has been continuously growing and expanding its horizon by venturing into new geographic areas and is committed to reach every possible natural gas users across its licensed expanse of around 96,000 square kilometres through its ever growing pipeline network spread across 22 districts. Your Company shall continue to focus on growing the penetration in the current operating areas by increasing the PNG connections and additional CNG stations while tapping the untapped potential by expeditious rollout of distribution network in the newly acquired geographic areas as well. With this focused endeavour GGL shall continue its efforts in providing clean fuel solutions across all operational area to augment an energetic top-line and bottom-line in coming years.

5. RISKS AND CONCERNS

The business environment due to its inherent dynamics is placed alike with opportunities and risks. The opportunity and risk could arise ranging from but not limited to growth for expansion (organic & inorganic), turmoil in sector, change in political scenario, economy consolidation within the country and globally, tax reforms, techno-commercial disruptions, governmental policy, etc.

CGD business like any other business is also exposed to risks influencing the sustenance and growth of an organization either due to internal and/ or external factors. To name a few, the risks could vary from continuous availability of economic gas supplies, pipeline connectivity for expansion in unconnected areas, abundant availability of economical alternate fuels, global economic downturn, crude market volatility, delay in permissions from various statutory bodies for laying the infrastructure, etc.

While some of these risks may be beyond the mitigation capability of any Company; industry and even the policy makers, however as a prudent and responsible Company all possible measures are being taken to safe guard the interest of the Company from being impacted due the above listed risks and concerns. Your Company has adequate internal control procedure for assessing various business risks, which the Company is likely to face in near to mid-term future and also prepares mitigation measures.

INTERNAL CONTROL SYSTEM AND ADEQUACY

The Company has a proper and adequate system of Internal Controls commensurate with its size of operations and nature of business. The Company''s Internal Control Systems are further supplemented by extensive programs of audits, i.e. Internal Audit, Proprietary Audit by the Comptroller & Auditor General of India (CAG) and Statutory Audit by Statutory Auditors appointed by the CAG. The Internal Control System is designed to ensure that all financial and other records are reliable for preparing financial statements and other data and for maintaining accountability of assets and compliance with statutory requirements. The Company has mapped a number of business processes on to SAP system, thereby leading to significantly improved controls & transparency. Your Company also continues to invest in Information Technology to support various business processes.

FINANCIAL AND OPERATIONAL PERFORMANCE

The Company through its aggressive expansion plans is committed to reach out to every possible natural gas user in its expanded geographical area, which now comprises of close to 22 districts.

The stand-alone net profit after tax (Total Comprehensive Income) for the current year 2016-17 increased to Rs 176.83 Crores from Rs. 154.38 Crores in the previous year. The Company had healthy net cash flows from operations of Rs 701.61 crores during the year 2016-17. Investments were made in extension of pipeline network to reach new areas and in reinforcements and upgradation of existing network as required. Investments were also made to connect residential customers and augmenting the CNG infrastructure. Investments were also made to upgrade the IT infrastructure and integrate SAP to enhance reliability and enable scalability. Appropriate provisions have been made in the accounts wherever necessary for contingencies, bad debts and diminution in value of investments. No amount has been transferred to the General Reserve during the year.

HUMAN RELATIONS AND PARTICULARS OF EMPLOYEES

Your Company employed 1113 employees as on 31st March 2017. Your Company has a focus on building capabilities and developing competencies of its employees. The Company believes that training and development is of vital importance to create a climate where people maximize their technical skills and inner potential which can help the Company in capitalizing the emerging business opportunities through their involvement. During the year, employees were sent for various training programs and seminars to enhance their skills/knowledge. Your Company has in place an attractive policy of performance linked incentive to encourage and reward employee performance.

There was no strike or lock-out during the year under review.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has always believed that appropriate standard of conduct should be maintained by the employees in their conduct and that there should be a safe, in discriminatory and harassment-free (including free of sexual harassment) work environment for every individual working in the Company. The Company has in place a Policy on Prevention of Sexual Harassment at workplace as a part of its Human Resource Policy. It aims at prevention of harassment of employees and lays down the guidelines for reporting and prevention of sexual harassment. During the year ended 31st March, 2017, no complaint has been received pertaining to sexual harassment.

CORPORATE GOVERNANCE

The Company believes that good governance can deliver continuous good business performance. The particulars on Corporate Governance as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is incorporated as a part of this Board''s Report at Annexure - 1.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT - 9 is enclosed herewith as Annexure - 5.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details about conservation of energy, technology absorption, foreign exchange earnings and outgo is attached at Annexure - 6

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts during the year, which would impact the going concern status of your Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

a. that in the preparation of the annual accounts, financial statements for the year ended 31st March, 2017, the applicable accounting standards have been followed and no material departures have been made from the same;

b. that accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2017 and of the profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

ACKNOWLEDGEMENTS

The Directors place on record their deep appreciation to employees of the Company at all levels for their hard work, dedication and commitment. The Directors are extremely grateful for all the support given by the Government of Gujarat at all levels. The Directors place on record their sincere thanks to the Promoters, Shareholders and Lenders and Customers for their valuable support, trust and confidence reposed in the Company.

For and on behalf of the Board of Directors

Dr. J. N. Singh, IAS

Chairman

Date: 10th August, 2017

Place: Gandhinagar

Mar 31, 2015

Dear Members,

Gujarat Gas Limited (Formerly known as GSPC Distribution Networks Limited) Your Directors have pleasure in presenting the 3rd Annual Report and the Audited Accounts for the Financial Year ended on 31st March 2015.

The name of your Company was changed from GSPC Distribution Networks Limited (GDNL) to Gujarat Gas Limited (GGL) vide the fresh certificate of incorporation granted by Registrar of Companies, Ahmedabad dated 15th May, 2015.

FINANCIAL RESULTS

Rs. in Crore

Stand-alone Financials

12 Months ended 12 Months ended 31-03-2015 31-03-2014

Total income 9,113.40 7,907.50

Gross profit before interest, depreciation and tax 1,212.30 675.14

Less: Interest 333.18 300.30

Depreciation 237.68 282.64

Profit before tax 641.44 92.20

Tax expenses 197.86 63.77

Net Profit 443.58 28.43

Minority Interest 0.00 0.00

Profit attributable to Group 443.58 28.43

Add: Undistributed profit /(loss) of earlier years (26.06) (3.87)

Balance available for Appropriation 417.52 24.56

Less: Appropriations:

Transfer to general reserve 0.00 0.00

Preference dividend 0.00 0.00

Proposed Equity dividend 68.84 0.00

Corporate dividend tax on proposed dividend 14.01 19.55

Interim Dividend 0.00 29.94

Corporate dividend tax on interim dividend 0.00 0.07

Depreciation Adjustment 529 0.00

Transfer to Stock Options Outstanding Account 0.00 1.05

Transfer to Debenture Redemption Reserve 125.00 0.00

Surplus / (Deficit) retained 204.33 (26.06)

Earnings per Share (Rs.) 10 each 32.22 2.07

PERFORMANCE HIGHLIGHTS

The Company is serving over 10 lakh residential customers, dispensing CNG through a network of 234 CNG stations and providing clean energy solutions to over 2750 industrial units in Gujarat with a pipeline network of over 15,000 kilometres. The Company through its aggressive expansion plans is committed to reach out to every possible natural gas user in its expanded geographical area, which now comprises of close to 19 districts. Recently, your Company has won the bids for developing gas distribution network in Thane GA and Dadara and Nagar Haveli and also commissioned Jamnagar and Bhavnagar GA

The net profit after tax for the year increased to Rs. 443.58 crores from Rs. 28.43 crores in the previous year. The Company had healthy net cashflows from operations of Rs. 1179.81 crores during the year. Investments were made in extension of pipeline network to reach new areas and in reinforcements and up gradation of existing network as required. Investments were also made to connect residential customers and augmenting the CNG infrastructure. Investments were also made to upgrade the IT infrastructure of your Company to enhance reliability and enable scalability. Appropriate provisions have been made in the accounts wherever necessary for contingencies, bad debts and diminution in value of investments. No amount has been transferred to the General Reserve during the year.

As on 31st March 2015, the Company had long term borrowings of Rs. 1490.78 crores and current maturities of long term debt were Rs. 1734.94 crores..

DIVIDEND

Based on the assessment of the fund requirements of the Company for the smooth sustenance of its operations and for its future capital expenditure programme, your Directors recommend for consideration of the shareholders at the 3rd Annual General Meeting, the payment of Dividend of Rs. 5.00 per fully paid up equity share of Rs. 10/- each on 137678025 equity shares for the Financial Year 2014-15.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

The material changes and commitments, affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of this Report pertain to the Scheme of Amalgamation as follow:

- COMPOSITE SCHEME OF AMALAGAMATION

The Board of Directors at its meeting dated 24th February 2014, granted its "in-principle" approval to the consolidation by way of amalgamation to Gujarat Gas Limited ["the Company" (Formerly known as GSPC Distribtion Networks Limited)] of erstwhile GSPC Gas Company Limited ("GSPC Gas"), erstwhile Gujarat Gas Company Limited ("GGCL"), erstwhile Gujarat Gas Financial Services Limited ("GFSL") and erstwhile Gujarat Gas Trading Company Limited ("GTCL") through a High Court approved Composite Scheme of Amalgamation and Arrangement (Scheme). The Board at its meeting held on 21 st April 2014 approved the Scheme of Amalgamation and Arrangement. In consideration of the amalgamation, the Company has issued and alloted the shares, as per the following swap ratio:

a. 1 (one) equity share of Rs. 10/- each, credited as fully-paid up of GGL, for every 1 (one) equity share of Rs. 2/- each held by equity shareholders of the GGCL;

b. 1 (one) equity share of Rs.10/- each, credited as fully-paid up of GGL, for every 1 (one) equity share of Rs. 10/- each held by equity shareholders of GFSL;

c. 81 (eighty one) equity shares of Rs.10/- each, credited as fully-paid up of GGL, for every 76 (seventy six) equity shares of Rs.10/- each held by equity shareholders of GSPC Gas;

Your Company had initiated the process of Amalgamation as per the relevant provisions of Companies Act 19 56/ or Companies Act 2013, the SEBI requirements including the provisions under the listing agreements with the stock exchanges.

As mentioned above, the Honorable High Court of Gujarat at Ahmedabad had sanctioned the Scheme vide common oral order dated 30th March 2015 (certified copy received by the Company on 18th April 2015). A copy of the authenticated/certified Order had been filed with the office of the Registrar of Companies Ahmedabad on 14th May 2015. Accordingly, the Effective Date for the Scheme is 14th May 2015 with an appointed date of 1st April, 2013. Subsequently, the company's name has been changed from GSPC Distribution Networks Limited to Gujarat Gas Limited (GGL) with effect from 15th May 2015. As per the Scheme, the CGD Business of erstwhile GSPC Gas, erstwhile GGCL, erstwhile GFSL and erstwhile GTCL was transferred and vested in Gujarat Gas Limited.

The erstwhile GGCL was listed on BSE, NSE, ASE and VSE and hence as per the requirement of SEBI Circular No. CIR/CFD/DIL/ 5/2013 dated 4th February 2013, GGCL obtained the Observation from the NSE, BSE, ASE and VSE vide their letters dated 5 November 2014, 7 November 2014, 10 November 2014 and 11 November 2014, respectively. Further, the Scheme was approved by an overwhelming majority of its Shareholders and Creditors at their meetings held on 5th January 2015 & 6th January, 2015 respectively As per the Scheme, all assets, debts, liabilities, duties and obligations of every kind pertaining to CGD of the Transferor Companies have vested in Gujarat Gas Limited, being the Transferee Company with an appointed date of 1st April, 2013. The following have been effected as per the Scheme:

1. ALTERATION TO MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION

A Transfer of the Consolidated Authorized Share Capital of Transferor Companies

As per the Scheme of Amalgamation and Arrangement, the authorized share capital of the Transferor Companies aggregating to 235,100,000 shares of Rs 10 each stood transferred to and combined with the authorized share capital of the Company and was re-classified without any further act or deed. Hence, Clause V of the Memorandum of Association of the Company and clause 4 of Article of Association of the Company relating to authorized share capital of the Company stands replaced with the following clause:

i. Clause V of Memorandum of Association

The Authorized Share capital of the company is Rs. 17,571,000,000/- (Rupees seventeen thousand five hundred and seventy one million only) divided into 1,735,100,000 (Seventeen hundred thirty five million and one lac only) Equity shares of Rs. 10/- each, 17,000,000 (Seventeen million only) 7.5% Redeemable Preference shares of Rs. 10/- each and 5,000,000 (Five million only) Preference shares of Rs. 10/- each.

ii. Clause 4 of Articles of Association

The Authorized Share capital of the company is Rs. 17,571,000,000/- (Rupees seventeen thousand five hundred and seventy one million only) divided into 1,735,100,000 (Seventeen hundred thirty five million and one lac only) Equity shares of Rs. 10/- each, 17,000,000 (Seventeen million only) 7.5% Redeemable Preference shares of Rs. 10/- each and 5,000,000 (Five million only) Preference shares of Rs. 10/- each.

B. Amendment to Object Clause of the Company

Upon the Scheme becoming effective, the following clauses stand inserted in the Main Objects clause after clause 5 of the Memorandum of Association:

6. To carry on business of dealing with all aspects of negotiations, procurement, imports, storage, handling processing, distribution and transportation of Natural Gas, Liquefied Natural Gas ("LNG"), Coal Bed Methane ("CBM"), Naphtha, Fuel Oils, Crude Oil & other Petroleum Products, coal and any other fuels and utilization thereof.

7. To administer fuel supply and purchase contracts on behalf of State Government and promoter Companies.

8. To develop expertise, provide consultation and render advisory services for various technical, legal and commercial aspects of Fuel Supply Management business and facilitating implementation of Natural Gas, LNG, CBM, Naphtha, Fuel Oils, Crude Oil & Petroleum Products, Coal and any other fuel projects.

9. To act as an advisory body to the Government / any other agency appointed by State Government for all aspects related to Policy and regulation of Natural Gas, LNG, CBM, Naphtha, Fuel Oils, Crude Oil & Petroleum Products, Coal and any other fuels import / utilization.

10.To promote and make strategic investment in infrastructure projects and facilities meant for augmenting fuel supply.

C Alteration to the Name Clause

Upon the Scheme becoming effective, the name of GSPC Distribution Networks Limited was changed to Gujarat Gas Limited vide the fresh certificate of incorporation dated 15th May 2015 granted by Registrar of Companies, Ahmadabad to the Company, pursuant to change of name as per the Scheme of Amalgamation and Arrangement.

2. ISSUE OF EQUITY SHARES AND REORGANIZATION OF SHARE CAPITAL

As per the Scheme, with effect from 14th May 2015 (the Effective Date), the Company has reduced its Equity Share Capital from Rs. 9,000,500,000 to Rs. 131,578,950 after cancellation of investment of Rs 4,000,500,000 divided into 400,050,000 shares of Rs. 10 each held by erstwhile GSPC Gas Company Limited (one of the transferor company) and has reduced its remaining fully paid up equity share capital from Rs. 5,000,000,000 divided into 500,000,000 shares of Rs. 10 each to Rs. 131,578,950 divided into 13,157,895 shares of Rs. 10 each.

Further, the Committee of the Board of Directors at its meeting held on 2nd June 2015 allotted 124,520,130 fully paid up Equity Shares of Rs. 10/- each aggregating to Rs. 1,245,201,300, to shareholders holding shares of erstwhile Transferor Companies as on Record Date being 28 May 2015, pursuant to the said Scheme. Equity shares of Rs. 10 each allotted on 2nd June, 2015, were credited by the Depositories into the shareholders account on 25th June, 2015 and the physical share certificates were dispatched on 26th June, 2015 by Karvy Computershare Pvt. Ltd., the Registrar and Transfer (RTA) Agent of the Company.

3. ACCOUNTING TREATMENT

Upon the Scheme becoming effective, the Company has accounted for the Amalgamation in its books of accounts with effect from the Appointed Date as per the "Purchase Method" as described in Accounting Standard - 14 "Accounting for Amalgamations" issued by the Institute of Chartered Accountants of India, such that:

A. The assets liabilities and debts of the Transferor Companies are transferred to and vested in the Company, pursuant to the Scheme and recorded at their respective fair values, as determined by the Board, as on the Appointed Date.

B. With effect from the Appointed Date and upon the Scheme becoming effective, the investment of erstwhile GSPC Gas in the Company, the investment of the Company in erstwhile GGCL and the investment of erstwhile GGCL into erstwhile GFSL and erstwhile GTCL stands cancelled.

C Inter-company transactions and balances including loans, advances, amount receivable or payable inter-se between the Transferor Companies and the Company as appearing in their books of accounts, if any, stand cancelled.

D. The Company has credited to the Share Capital Account in its books of account, the aggregate face value of equity shares issued to the shareholders of Transferor Companies pursuant to the Scheme of Amalgamation.

E. The difference in the value of net assets of Transferor Companies vested in the Company and issue of shares as above, after adjustment of the cancellation of investment of erstwhile GSPC Gas into the Company, investment of the Company into erstwhile GGCL and investment of erstwhile GGCL into erstwhile GFSL and erstwhile GTCL, reduction of share capital of the Company and adjustment of differential amount arising, has been credited by the Company to "Reserves" or debited to "Goodwill Account", as the case may be.

F. In case of any difference in accounting policy between the Transferee Company and the Transferor Companies or between Transferor Companies, the impact of the same till the Appointed Date would be adjusted in accordance with Accounting Standard - 5 "Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies" to ensure that the financial statements of the Transferee Company reflect the financial position on the basis of consistent accounting policy.

Consequent to order dated 6th July 2015 of the Honourable High Court of Gujarat sanctioning permission of re-opening and revision of books of accounts for the year 2013-14, the audited financial statements of transferee company i.e. Gujarat Gas Limited (formerly known as GSPC Distribution Networks Limited-GDNL) for year 2013-14 has been re- opened and revised by the Company to give effect of the said amalgamation and arrangement in books of accounts for the year 2013-14. The business of the transferor companies have been transferred to the Company on a going concern basis. As per the Scheme, the appointed date, for the transfer of assets and liabilities at their respective fair value as determined by the Board is 1 st April 2013. Accordingly, operations of all the Transferors Companies from 1 st April 2013, have been accounted for in the financial statements for financial year 2013-14.

4. DISSOLUTION OF THE TRANSFEROR COMPANIES

As per the Scheme of Amalgamation, with effect from 14th May 2015, the Transferor Companies, i.e. erstwhile GSPC Gas Company Limited ("GSPC Gas"), erstwhile Gujarat Gas Company Limited ("GGCL"), erstwhile Gujarat Gas Financial Services Limited ("GFSL") and erstwhile Gujarat Gas Trading Company Limited ("GTCL") stand dissolved without winding up pursuant to the provisions of Section 394 of the Act.

LISTING OF SHARES

Your Company's equity shares have been listed and traded on BSE Limited (BSE), National Stock Exchange of India Limited (NSE), Ahmedabad Stock Exchange Limited (ASE) and Vadodara Stock Exchange (VSE) with effect from 15th September, 2015. The ISIN of Equity Shares is INE844O01022.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

Pursuant to the Scheme, your Company does not have any subsidiary and joint venture and Guj Info Petro Limited is the Associate of your Company, However there was no requirement to prepare the consolidated financial statements for the year 2014-2015 for companies having only Associates.

DEPOSITS

During the year under review, your Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of Loans, Guarantees, Securities and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188 (1) OF THE COMPANIES ACT, 2013

All Related Party Transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. A statement giving details of all Related Party Transactions is placed before the Audit Committee for approval/ ratification on a quarterly basis, as the case may be.The Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions as approved by the Board is uploaded on the Company's Website. None of the Directors has any pecuniary relationships or transactions vis-Ã -vis the Company. The particulars of contracts or arrangements with Related Parties referred to in Section 188 (1) of the Companies Act, 2013, as prescribed in Form AOC - 2 of the Companies (Accounts) Rules, 2014 is enclosed herewith as Annexure -5 to this Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. Pursuant to provisions of Section 135 of the Companies Act, 2013, the Company has also formulated a Corporate Social Responsibility Policy which is available on the website of the Company at http://www.gujaratgas.com/resources/downloads/csr-policy.pdf The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed herewith as Annexure - 2 to this Report.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointment and Resignation of Directors

Shri Tapan Ray, IAS ceased to be Director with effect from 30/09/2014. Shri Manish Verma ceased to be Director with effect from 18/03/2015. Shri Ravindra Agrawal, Shri PPG Sarma and Shri N Bose Babu ceased to be Director with effect from 21/04/2015. Shri DJ. Pandian, IAS, Chief Secretary Government of Gujarat was appointed as Additional Director and Chairman on the Board of the Company with effect from 21/04/2015. Shri DJ. Pandian, IAS upon his superannuation ceased to be Director of the Company with effect from 30/05/2015. Shri M.K. Das, IAS Joint Managing Director, Gujarat State Petroleum Corporation Limited was appointed as Additional Director on the Board of Company with effect from 21 /04/2015. He ceased to be the Director of the Company with effect from 27/04/2015. Your Directors wish to place on record, their appreciation for the services rendered by them as the Directors of the Company.

Shri G.R. Aloria, IAS, Chief Secretary, Government of Gujarat has been appointed as an Additional Director and Chairman on the Board of Directors of the Company with effect from 13/08/2015. Further in terms of Section 152 (6) of the Companies Act, 2013 and provisions of the Articles of Association of the Company he is not liable to retire by rotation. The appointment of Shri G. R. Aloria, IAS, was on account of resignation tendered by Shri DJ. Pandian, IAS, as the Director and Chairman, upon his superannuation as the Chief Secretary to Government of Gujarat. It is proposed to regularise the appointment of Shri G.R. Aloria, IAS, in the 3rd Annual General Meeting.

Shri Atanu Chakraborty, IAS has been appointed as Additional Director of the Company on 16/04/2015 and in terms of Section 152 (6) of the Companies Act, 2013 and provisions of the Articles of Association of the Company he is not liable to retire by rotation. Shri L Chuaungo, IAS, Shri Sanjeev Kumar, IAS, Shri Mukesh Kumar, IAS, have been appointed as Additional Directors with effect from 21 /04/2015 to hold office till the ensuing Annual General Meeting. It is proposed to regularise their appointments in the 3rd Annual General Meeting.

Shri Jal Patel, Prof Pradip Khandwalla, Shri Ajit Kapadia, Smt. Manjula Shroff and Shri K.D. Chatterjee being qualified and eligible for appointment as Independent Directors in the Company in accordance with provisions of Section 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors Rules), 2014, were appointed by the Board of Directors with effect from 21st April 2015 and their appointments are proposed for approval of shareholders at the 3rd Annual General Meeting as Independent Directors for a term of 2 consecutive years w.e.f. 21st April 2015.

A brief resume of the Directors to be appointed at the ensuing Annual General Meeting, nature of their expertise in specific functional areas and details regarding the companies in which they hold directorship, membership/chairmanship of committees of the Board are given in the Explanatory Statement forming part of Notice of the 3rd Annual General Meeting.

Appointment and Resignation of Key Managerial Personnel

Shri Rohan Sampat who was appointed as Company Secretary of the Company with effect from 2nd December, 2013, ceased to be the Company Secretary with effect from 25th May, 2015. Smt Rajeshwari Sharma was appointed as Company Secretary with effect from 25th May, 2015. Shri Rahul Devi, who was appointed as Chief Financial Officer with effect from 25th May, 2015, ceased to be the CFO with effect from 10th September, 2015. Shri Nitesh Bhandari was appointed as Chief Financial Officer with effect from 14th September, 2015.

Directors Independence

Pursuant to the provisions of Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Independent Directors of the Company have given confirmation/declaration to the Board that they meet with the criteria of Independence and are Independent in terms of Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013, the performance evaluation of individual Directors for FY 2014-15 was carried out as per the terms and conditions of their appointment based on the various parameters.

Nomination and Remuneration Policy

The Company's Nomination and Remuneration Policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under the relevant provisions of the Companies Act, 2013 and Listing Agreement is enclosed herewith as Annexure - 3 to this Report.

Meetings of the Board of Directors

The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business. The Board / Committee Meetings are pre-scheduled to enable the Directors to plan their schedule and to ensure meaningful participation in the Meetings. However, in case of a special and urgent business need, the approval is taken by passing resolutions through circulation to the Directors, as permitted by law, which are confirmed in the subsequent Board/Committee Meetings.

During the year, four (4) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

AUDITORS

Statutory & C&AG Audit

As your Company is a Government Company, the Statutory Auditors are appointed by the Comptroller & Auditor General of India (C&AG). Accordingly, the C&AG has appointed Manu bhai & Shah, Chartered Accountants as Statutory Auditors of the Company for the Financial Year 2014 - 15. The C&AG has issued NIL comment report on accounts of the Company for the Financial Year 2014 - 15.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed Dhawal Chavda & Associates, Practicing Company Secretaries to conduct the Secretarial Audit of the Company for the Financial Year 2014 - 2015. The Report of Secretarial Auditor on Company's Secretarial Audit for the Financial Year 2014 - 15 is enclosed herewith as Annexure - 4 to this Report. The Secretarial Audit Report is self explanatory in nature.

Cost Auditor:

Your Company is required to carry out Cost Audit pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014.

Accordingly, the Cost Auditor N. D. Birla & Co, Cost Accountants, Ahmadabad have carried out Cost Audit for the Financial Year 2014-15. The Cost Audit Report 2014 - 2015 will be submitted to the Central Government in the prescribed format within stipulated time period.

Further, the Board of Directors has, on the recommendation of the Audit Committee, appointed Dalwadi & Associates, Cost Accountants, as Cost Auditor to audit the cost accounts of the Company for the Financial Year 2015-2016 on a remuneration of 2 lacs plus service taxe plus out of pocket expenses, if any, incurred by them during the course of Audit.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in General Meeting for their ratification. Accordingly, the necessary resolutions seeking Member's ratification for the remuneration payable to the Cost Auditors for FY 2014-15 and FY 2015 - 2016 is included in the Notice convening the 3rd Annual General Meeting.

AUDIT COMMITTEE

Audit Committee of Directors of the Company at its Meeting held on 13th August, 2015 approved the revised Annual Accounts for the Financial Year ended on 31st March, 2014 and the Annual Accounts for the Financial Year ended on 31st March, 2015 and recommended the same for approval of the Board.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

Risk Management:

The Company has a well-defined Risk Management Framework for reviewing the major Risks and has adopted a Business Risk Management Policy. Further, pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee inter-alia to monitor the Risk Management Plan of the Company.

Internal Control System:

The Company has a proper and adequate system of Internal Controls commensurate with its size of operations and nature of business. These are routinely tested and certified by Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The details about the identification of elements of Risk and Internal Control Systems are provided in detail in the Management Discussion & Analysis Report forming part of this Directors 'Report.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company has established a Whistle Blower Policy/Vigil Mechanism for Directors and Employees to report their genuine concerns, details of which have been given in the Corporate Governance Report forming part of this Directors' Report.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company for FY 2014-15 will be provided upon request. In terms of Section 136 of the Companies Act, 2013, this Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company in this regard.

ERSTWHILE GUJARAT GAS COMPANY LIMITED EMPLOYEE STOCK OPTION PLAN 2008 ("THE ESOP 2008")

The erstwhile Gujarat Gas Company Limited had implemented the Employee Stock Option Plan 2008 ("the ESOP"). It had formed the Gujarat Gas Company Limited Employee Welfare Stock Option Trust ("the Trust") in November 2008, for the administration of the ESOP. IDBI Trusteeship Services Limited (ITSL), having its registered office at Asian building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai was appointed as an External Trustee of the Trust w.e.f. 28 April 2011, for providing the trusteeship services to the Trust for an agreed remuneration.

Pursuant to the Amalgamation, the carry forward of the ESOP will be effected. Manubhai & Shah, Chartered Accountants, the auditors of erstwhile Gujarat Gas Company Limited, Manubhai & Shah, Chartered Accountants, have certified to the effect that the ESOP has been implemented in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the resolutions passed by the members in this regard.

HEALTH, SAFETY, SECURITY AND ENVIRONMENT (HSSE)

Duty of care for Health, Safety, Security and the Environment (HSSE) is a core value of the Company. The management of the Company aims to protect the health, safety and security of its people, to minimize the environmental impact associated with its business and to assure the integrity and safe operation of its assets.

The Company believes that outstanding business performance requires outstanding HSSE performance. The safe delivery of projects and operation of its facilities is a critical success factor for the Company's business. Our HSSE goal is to deliver the company business with zero injuries to our people and to minimize the environmental impact of our activities. We seek to continuously improve our HSSE performance.

The Company believes that every individual has a duty to both themselves and those around them to ensure that safe practice is adhered to at all times. We expect all our personnel to recognize their personal responsibility for supporting outstanding HSSE performance and to accept a duty to intervene when necessary to promote and reinforce compliance with the Company Policy.

The Company continues to support the "Swachh Bharat Abhiyaan" with effective involvement and continuous efforts from all employees and contract employees across all locations.

There was no strike or lock-out during the year under review.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has always believed that appropriate standard of conduct should be maintained by the employees in their conduct and that there should be a safe, in discriminatory and harassment-free (including sexual harassment) work environment for every individual working in the Company. The Company has in place a Policy on Prevention of Sexual Harassment at workplace as a part of its Human Resource Policy. It aims at prevention of harassment of employees and lays down the guidelines for reporting and prevention of sexual harassment. During the year ended 31st March, 2015, no complaint has been received pertaining to sexual harassment.

CORPORATE GOVERNANCE

The Company believes that good governance can deliver continuous good business performance. The Company was listed w.e.f. 15th September 2015 and the particulars on Corporate Governance as required under Clause 49 of the Listing Agreement is incorporated as a part of this Board's Report (Annexure - 1).

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT - 9 is enclosed herewith as Annexure - 6.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Prior to Amalgamation, during FY 2014-15, the information required to be disclosed pursuant to provisions of the Companies Act, 2013 read with rules thereto with respect to Conservation of Energy and Technology Absorption are not applicable. The Company has incurred expenditure in Foreign Exchange to the extent of Rs. 0.47 Crores during FY 2014-15 and the Foreign Exchange Earnings during FY 2014-15 were nil.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations during the year.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013:

a. that in the preparation of the annual financial statements for the year ended 31 st March, 2015, the applicable accounting standards have been followed and no material departures have been made from the same;

b. that accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

ACKNOWLEDGEMENTS

The Directors place on record their deep appreciation to employees of the Company at all levels for their hard work, dedication and commitment. The Directors are extremely grateful for all the support given by the Government of Gujarat at all levels. The Directors place on record their sincere thanks to the Promoters, Shareholders and Lenders for their valuable support, trust and confidence reposed in the Company.

For and on behalf of the Board of Directors

Date: 5th November, 2015 G.R Aloria, IAS

Place: Gandhinagar Chairman

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