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Notes to Accounts of Indraprastha Gas Ltd.

Mar 31, 2015

1. COMPANY OVERVIEW

Indraprastha Gas Limited (the ''Company'') was incorporated on 23 December 1998 under the Companies Act, 1956. The Company is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The Company is a joint venture between GAIL (India) Limited and Bharat Petroleum Corporation Limited. The Company''s business consists of sale of Natural Gas.

2. SHARE CAPITAL

The Company has one class of equity shares having a par value of Rs. 10 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

3. DEFERRED TAX LIABILITIES (NET)

Deferred tax liability on difference between book balance and tax balance of fixed assets is net of adjustment of Rs. 0.86 crores carried out consequent upon adoption of useful life specified under schedule II of Companies Act, 2013 with respect to certain tangible fixed assets as mentioned in note no. 32.

4. OTHER CURRENT LIABILITIES

4.1 There is no amount due and outstanding as at 31 March 2015(31 March 2014 Nil) to be credited to Investors Education and Protection Fund.

4.2 Current maturities of long term borrowing - Refer Notes 5.1, and 5.2 for details of security and rate of interest.

5. ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

5.1 Contingent liabilities

(i) Claims against the company not acknowledged as debt

(a) Income tax case

For Assessment Year 2007-08 the Income Tax Department had disallowed certain deduction claimed and raised a demand amounting to Rs. 0.89 crores (Previous Year Rs. 0.89 crores) on 28 March 2013. The Company had filed an appeal on 26 April 2013 against the demand with CIT (Appeal) and the same has been decided in favour of the company during the year. Refund has been received against the same on 7 April 2015.

(b) Excise Case

The Company had received a show cause notice dated 5 June 2012 from the Directorate General of Central Excise Intelligence for not paying excise duty on the facility discount paid to Delhi Transport Corporation from December 2008 to August 2010 and raised a demand of Rs. 2.42 crores (previous year Rs. 2.42 crores). The company has already deposited Rs. 2.42 crores and filed an appeal on 20 August 2013 with the Commissioner of Central Excise. The demand was confirmed by the Commissioner of Excise in its order dated 30 September 2013 and further imposed a penalty of Rs. 2.42 crores excluding interest. The company filed an appeal on 10 January 2014 against the demand including penalty with Central Excise and Service Tax Appellate Tribunal and the stay has been granted by the tribunal against the demand. The case is pending with Central Excise and Service Tax Appellate Tribunal.

(c) Uttar Pradesh VAT Case

In respect of Assessment year 2009-10, Commercial Tax Department, Noida had raised a demand of Rs. 0.34 crores (Previous Year Rs. 0.34 crores) on 4 March 2013. The Company had deposited Rs. 0.12 crores and provided bank guarantee for the balance amount. An appeal against the demand was filed on 3 May 2013 with Additional Commissioner (Appeal) and the same has been decided in favour of the company. The amount deposited has been adjusted against VAT liability for the month of February 2015.

(d) Delhi Development Authority (DDA) case

Delhi Development Authority (DDA) has raised a total demand of Rs.155.64 crores during FY 2013-14 on account of increase in license fees in respect of 61 sites taken by the company on lease from DDA for setting up CNG stations in Delhi. This increase in license fee is related to the period from 1 April 2007 to 31 March 2014. The Company has filed a writ petition on 11 October 2013 before Hon''ble Delhi High Court against the demand raised by DDA as revised licence fees has been increased manifold and made applicable retrospectively from financial year 2007-08. The matter is pending in the Hon''ble High Court of Delhi.

(ii) Other money for which the company is contigently liable

(a) Petroleum and Natural Gas Regulatory Board (PNGRB) vide its order no. TO/03/2012 dated 9 April 2012 determined the per unit network tariff and compression charge for the CGD Network of the Company for Delhi, based on submission of data by the Company in May 2009 and certain assumptions taken by PNGRB in this regard. The tariffs determined by PNGRB are much lower than the rates submitted by the Company.

Further, PNGRB made the determined tariffs applicable with retrospective effect from 1 April 2008. In its order PNGRB stated that the modalities and time frame for refund of differential Network Tariff and Compression Charge would be decided subsequently.

The Company filed a writ petition on 10 April 2012 against the order of PNGRB dated 9 April 2012 before the Hon''ble Delhi High Court. The Hon''ble High Court of Delhi has passed the judgement in this case on 1 June 2012 and has quashed the PNGRB order dated 9 April 2012. PNGRB has filed special leave petition before the Hon''ble Supreme Court of India against the order dated 1 June 2012 of Hon''ble Delhi High Court. Matter is still pending in the Hon''ble Supreme Court of India.

(iii) Bank guarantees

The Company''s total liability towards un-expired Bank Guarantees is Rs. 0.25 crores (Previous year Nil).

5.2 (i) Estimated amount of contracts remaining to be executed on capital account not provided for;

Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 164.37 crores (Previous year Rs. 207.77 crores)

5.3 Details on derivatives instruments and unhedged foreign currency (FC) exposures

The following derivative positions are open as at 31 March, 2015. The accounting for these transactions is stated in Note 2.9.

(a) Premium on account of forward exchange contracts to be recognised in statement of Profit and loss in relation to subsequent accounting period aggregates Rs. 0.00 Crores (Previous year Rs.1.07 Crores).

6. The Company has installed various CNG Stations on land leased from various Government authorities under leases for periods ranging from one to five years. However, assets constructed/installed on such land are depreciated generally at the rates specified in Schedule II to the Companies Act, 2013, as the Management does not foresee non-renewal of the above lease arrangements by the Authorities.

7. Security deposits from customers of Natural Gas, refundable on termination/alteration of the gas sales agreements, are considered as current liabilities.

8. DISCLOSURES UNDER ACCOUNTING STANDARDS

8.1 Employee benefit plans

Defined Contribution Plan

The Company makes Provident Fund contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 2.02 crores for provident fund contributions (Previous Year Rs. 2.42 crores) in the statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

Defined Benefit-Gratuity

The gratuity liability arises on retirement, resignation and death of an employee. The aforesaid liability is calculated on the basis of fifteen days salary (i.e. last drawn basic salary plus dearness allowance) for each completed year of service subject to completion of five years'' service.

Policy for recognising actuarial gains and losses

Actuarial gains and losses arising from experience adjustments and effects of changes in actuarial assumptions are immediately recognised in the statement of profit and loss as income or expense.

8.2 Segment reporting

The Company operates in a single segment of Natural Gas business in the National Capital Region and therefore the disclosure requirements as per Accounting Standard 17 "Segment Reporting" are not applicable to the Company.

8.3 Related party transactions

List of related parties:

(a) Promoter venturers:

i. GAIL (India) Limited

ii. Bharat Petroleum Corporation Limited

(b) Associate Companies

i. Central UP Gas Limited

ii. Maharashtra Natural Gas Limited

(c) Key management personnels (KMPs):

i. Sh. Narendra Kumar Managing Director

ii. Sh. Rajesh Chaturvedi Director Commercial (upto 31st August 2014)

iii. Sh. V. Nagarajan Director Commercial (w.e.f. 4th September 2014)

8.4 Operating lease arrangements

The Company has taken certain equipment and vehicles under operating lease agreements. The total lease rentals recognised as expense during the year under the above lease agreements aggregates Rs.7.73 crores (Previous year Rs.7.51 crores).

9. The Company has revised depreciation rate on certain tangible fixed assets as per the useful life specified in Schedule II of the Companies Act, 2013 with effect from 01 April 2014 resulting in higher depreciation of Rs. 14.34 crores for the year. Tangible fixed assets having a written down value of Rs. 2.52 crores as at 01 April 2014, whose useful life had expired on that date, based on the revised estimated useful life were written-off in books. Deferred tax adjustment of Rs.0.86 crores were recognized thereon. The net balance of Rs. 1.66 crores were adjusted against the balance of General Reserve.

Further, the company has also revised the useful life of certain tangible fixed assets based on technical advice (refer note 2.6) w.e.f 1 April 2014 resulting in lower depreciation of Rs. 103.91 crores for the year.

Had there not been above changes in useful life of assets, depreciation for the year would have been higher by Rs. 89.57 crores with corresponding impact on net profit before tax.

10. During the year 2014-15, the company was required to spend a gross amount of Rs.10.12 crores for CSR activity specified under the provision of Companies Act 2013. Against the same, the company has spent Rs. 1.33 crores on CSR expenditure during the year in cash for purposes other than construction/acquision of any assets.

11. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classifications / disclosures.


Mar 31, 2014

1 COMPANY OVERVIEW

Indraprastha Gas Limited (the ''Company'') was incorporated on 23 December 1998 under the Companies Act, 1956. The Company is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The Company is a joint venture between GAIL (India) Limited and Bharat Petroleum Corporation Limited. The Company''s business consists of sale of Natural Gas.

2.1 Petroleum and Natural Gas Regulatory Board (PNGRB) vide its order no. TO/03/2012 dated 9 April 2012 determined the per unit network tariff and compression charge for the CGD Network of the Company for Delhi, based on submission of data by the Company in May 2009 and certain assumptions taken by PNGRB in this regard. The tariffs determined by PNGRB are much lower than the rates submitted by the Company.

Further, PNGRB made the determined tariffs applicable with retrospective effect from 1 April 2008. In its order PNGRB stated that the modalities and time frame for refund of differential Network Tariff and Compression Charge would be decided subsequently.

The Company filed a writ petition on 10 April 2012 against the order of PNGRB dated 9 April 2012 before the Hon''ble Delhi High Court. The Hon''ble High Court of Delhi has passed the judgement in this case on 1 June 2012 and has quashed the PNGRB order dated 9 April 2012. PNGRB has filed special leave petition before the Hon''ble Supreme Court of India against the order dated 1 June 2012 of Hon''ble Delhi High Court. Matter is still pending in the Hon''ble Supreme Court of India.

2.2 Details on derivatives instruments and unhedged foreign currency (FC) exposures

The following derivative positions are open as at 31 March, 2014. The accounting for these transactions is stated in Note 2.9.

(b) Premium on account of forward exchange contracts to be recognised in statement of Profit and loss in relation to subsequent accounting period aggregates Rs. 1.07 Crores (Previous year Rs.0.58 Crores).

3 The Company has installed various CNG Stations on land leased from various Government authorities under leases for periods ranging from one to five years. However, assets constructed/installed on such land are depreciated generally at the rates specified in Schedule XIV to the Companies Act, 1956, as the Management does not foresee non-renewal of the above lease arrangements by the Authorities.

4 Security deposits from customers of Natural Gas, refundable on termination/alteration of the gas sales agreements, are considered as current liabilities.

4.1 Employee benefit plans

Defined Contribution Plan

The Company makes Provident Fund contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 2.42 crores for provident fund contributions (Previous Year Rs. 1.68 crores) in the statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

Defined Benefit-Gratuity

The gratuity liability arises on retirement, resignation and death of an employee. The aforesaid liability is calculated on the basis of fifteen days salary (i.e. last drawn basic salary plus dearness allowance) for each completed year of service subject to completion of five years'' service.

Policy for recognising actuarial gains and losses

Actuarial gains and losses arising from experience adjustments and effects of changes in actuarial assumptions are immediately recognised in the statement of profit and loss as income or expense.

4.2 Segment reporting

The Company operates in a single segment of Natural Gas business in the National Capital Region and therefore the disclosure requirements as per Accounting Standard 17 "Segment Reporting" are not applicable to the Company.

4.3 Related party transactions

List of related parties:

(a) Promoter venturer:

i. GAIL (India) Limited

ii. Bharat Petroleum Corporation Limited

(b) Associate Company Central UP Gas Limited

(c) Key management personnels (KMPs):

i. Mr. M. Ravindran Managing Director (upto 17 April 2013)

ii. Mr. Narendra Kumar Managing Director (w.e.f 18 April 2013)

iii. Mr. Rajesh Chaturvedi Director Commercial

4.4 Operating lease arrangements

The Company has taken certain equipment and vehicles under operating lease agreements. The total lease rentals recognised as expense during the year under the above lease agreements aggregates Rs. 7.51 crores (Previous year Rs. 9.43 crores).

5 Transfer pricing regulations is made applicable by Finance Act 2012 to cover transactions between domestic related parties. The management is of the opinion that its domestic transactions are at arm''s length prices and the aforesaid legislation does not have any material impact on the financial statement, particularly on the amount of tax expense and that of provision for taxation.

6 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classifications / disclosures.


Mar 31, 2013

1 COMPANY OVERVIEW

Indraprastha Gas Limited (the ''Company'') was incorporated on December 23, 1998 under the Companies Act, 1956. The Company is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The Company is a joint venture between GAIL (India) Limited and Bharat Petroleum Corporation Limited. The Company''s business consists of sale of Natural Gas.

2 ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

2.1 Contingent liabilities and commitments

(a) Income tax case

For Assessment Year 2007-08 the Income Tax Department has disallowed certain deduction claimed and raised a demand amounting to Rs. 0.89 crores (Previous Year Rs. Nil). The Company has filed an appeal against the demand which is pending with CIT (Appeal).

(b) Excise Case

The Company offered a discount to Delhi Tranport Corporation (DTC) in relation to facilities provided by DTC and towards bulk sale made to DTC. The Company received a show cause notice dated 5th June 2012 from the Directorate General of Central Excise Intelligence for not paying excise duty on the aforesaid discount amount from December'' 2008 to August'' 2010 and raised a demand of Rs. 2.42 crores. The Company has deposited Rs. 2.42 crores and has contested the demand with Customs and Central Excise Settlement Commission.

(c) Uttar Pradesh VAT Case

In respect of Assessment year 2009-10, Commercial Tax Department, Noida has raised a demand of Rs. 0.34 crores (Previous Year Rs. Nil). The Company has filed appeal against the demand which is pending with Additional Commissioner (Appeals), Commercial Tax, Noida.

(d) Bank guarantees

The Company''s total liability towards un-expired Bank Guarantees is Rs. 60.37 crores (Previous year Rs. 34.79 crores).

(e) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 238.27 crores (Previous year Rs. 115.37 crores)

2.2 Petroleum and Natural Gas Regulatory Board (PNGRB) vide its order no. TO/03/2012 dated 9th April 2012 determined the per unit network tariff and compression charge for the CGD Network of the Company for Delhi, based on submission of data by the Company in May 2009 and certain assumptions taken by PNGRB in this regard. The tariffs determined by PNGRB are much lower than the rates submitted by the Company.

Further, PNGRB made the determined tariffs applicable with retrospective effect from 1st April, 2008. In its order PNGRB stated that the modalities and time frame for refund of differential Network Tariff and Compression Charge would be decided subsequently.

The Company filed a writ petition on 10th April, 2012 against the order of PNGRB dated 9th April, 2012 before the Hon''ble Delhi High Court. The Hon''ble High Court of Delhi has passed the judgement in this case on 1st June, 2012 and has quashed the PNGRB order dated 9th April, 2012. PNGRB has filed special leave petition before the Hon''ble Supreme Court of India against the order dated 1st June, 2012 of Hon''ble Delhi High Court. Matter is still pending in the Hon''ble Supreme Court of India.

2.3 Details on derivatives instruments and unhedged foreign currency (FCY) exposures

The following derivative positions are open as at 31 March, 2013. The accounting for these transactions is stated in Note 2.9.

(a) Outstanding forward exchange contracts for imports entered into by the Company as at the year end:

(b) Premium on account of forward exchange contracts to be recognised in statement of Profit and loss in relation to subsequent accounting period aggregates Rs. 0.58 Crores (Previous year Rs. 0.65 Crores).

3 The Company has installed various CNG Stations on land leased from various Government authorities under leases for periods ranging from one to five years. However, assets constructed/installed on such land are depreciated generally at the rates specified in Schedule XIV to the Companies Act, 1956, as the Management does not foresee non-renewal of the above lease arrangements by the Authorities.

4 Security deposits from customers of Natural Gas, refundable on termination/alteration of the gas sales agreements, are considered as short term liabilities.

5 DISCLOSURES UNDER ACCOUNTING STANDARDS

5.1 Employee benefit plans Defined Benefit-Gratuity

The gratuity liability arises on retirement, resignation and death of an employee. The aforesaid liability is calculated on the basis of fifteen days salary (i.e. last drawn basic salary plus dearness allowance) for each completed year of service subject to completion of five years'' service.

Policy for recognising actuarial gains and losses

Actuarial gains and losses arising from experience adjustments and effects of changes in actuarial assumptions are immediately recognised in the statement of profit and loss as income or expense.

5.2 Segment reporting

The Company operates in a single segment of Natural Gas business in the National Capital Region and therefore the disclosure requirements as per Accounting Standard 17 "Segment Reporting" are not applicable to the Company.

5.3 Related party transactions

List of related parties:

Promoter venturer:

i. GAIL (India) Limited

ii. Bharat Petroleum Corporation Limited Key management personnels (KMPs):

i. Mr. M. Ravindran Managing Director

ii. Mr. Manmohan Singh Director Commercial (upto 30th November, 2012)

iii. Mr. Rajesh Chaturvedi Director Commercial (w.e.f. 1st December, 2012)

5.4 Operating lease arrangements

The Company has taken certain equipment and vehicles under operating lease agreements. The total lease rentals recognised as expense during the year under the above lease agreements aggregates Rs. 9.43 crores (Previous year Rs. 12.90 crores). Lease obligations under non-cancellable periods are as follows:

6 Transfer pricing regulations have been extended by Finance Act 2012 to cover transactions between domestic related parties. The management is of the opinion that its domestic transactions are at arm''s length prices and the aforesaid legislation will not have any material impact on the financial statement, particularly on the amount of tax expense and that of provision for taxation.

7 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classifications / disclosures.


Mar 31, 2012

1 COMPANY OVERVIEW

Indraprastha Gas Limited ('The Company') was incorporated on December 23, 1998 under the Companies Act, 1956. The Company is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The Company is a joint venture between GAIL (India) Limited and Bharat Petroleum Corporation Limited. The Company's business consists of sale of Piped Natural Gas (PNG) and manufacture and sale of Compressed Natural Gas (CNG).

2.1 The Company has one class of equity shares having a par value of Rs. 10 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

3 ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

3.1 Contingent liabilities and commitments

(a) Income tax cases

In respect of Assessment Year 2005-06, the Income Tax Department had disallowed certain claims made by the Company. ITAT had decided the case in favour of the Company. The Income Tax Department has filed an appeal in Hon'ble Delhi High Court against the decision of ITAT. The Tax amount involved in this case is Rs. 2.40 crores (Previous year Rs. 2.40 crores). For Assessment Year 2008-09 and 2009-10 the department has disallowed certain claims made and raised the demand amounting to Rs. 6.36 crores (Previous Year Rs. 3 crores). The entire amount has been adjusted with the refunds receivable for other years. The Company has filed appeals against the above which are pending at various stages.

(b) Trade tax case

In respect of Assessment year 2007-08 the Trade Tax Department, Uttar Pradesh had raised a demand of Rs.0.66 crores (Previous year Rs. 0.66 crores). The demand order has been remanded back by Commercial Tax Tribunal, Noida to Assessing Officer for Re-assessment.

(c) Bank guarantees

The company's total liability towards un-expired Bank Guarantees is Rs. 34.79 crores (Previous year Rs. 45.51 crores).

(d) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 115.37 crores (Previous year Rs. 356.85 crores).

3.2 Petroleum and Natural Gas Regulatory Board (PNGRB) vide its order no. TO/03/2012 dated 9th April 2012 determined the per unit network tariff and compression charge for the CGD Network of IGL for Delhi, based on submission of data by the company in May 2009 and certain assumptions taken by PNGRB in this regard. The tariffs determined by PNGRB are much lower than the rates submitted by the company.

Further, PNGRB made the determined tariffs applicable with retrospective effect from 01.04.2008. In its order PNGRB stated that the modalities and time frame for refund of differential Network Tariff and Compression Charge would be decided subsequently.

The company was advised that validity of such order and refund lacks legal authority and accordingly, IGL filed a writ petition on 10.04.2012 against the order of PNGRB dated 09.04.2012 before the Hon'ble Delhi High Court. The Hon'ble High Court of Delhi has passed the judgement in this case on 01.06.2012 and has quashed the PNGRB order dated 09.04.2012 holding that the PNGRB is not empowered to fix any component of network tariff or compression charge.

3.3 Details on derivatives instruments and unhedged foreign currency exposures

The following derivative positions are open as at 31 March, 2012. These transactions have been undertaken to act as economic hedges for the Company's exposures to various risks in foreign exchange markets. The accounting for these transactions is stated in Note 2.9.

4. The Company has installed various CNG Stations on land leased from various Government authorities under leases for periods ranging from one to five years. However, assets constructed/installed on such land are depreciated generally at the rates specified in Schedule XIV to the Companies Act, 1956, as the management does not foresee non-renewal of the above lease arrangements by the Authorities.

5. Deposits from customers of Natural Gas, refundable on termination/alteration of the gas sales agreements, are considered as long term funds.

6. DISCLOSURES UNDER ACCOUNTING STANDARDS

6.1 Based on technical evaluation and past experience, the Company has changed the estimated useful life of some of its assets w.e.f. 01.04.2011. Accordingly, the written down value of these assets as at the beginning of the year is being amortised over the remaining useful life, in accordance with the provisions of Accounting Standard (AS) 6 on 'Depreciation Accounting' and the assets capitalised during the year under this class of assets have been depreciated based on the revised useful life. As a result of this change, depreciation for the year is lower by Rs. 14.75 crores with corresponding impact on net profit before tax.

6.2 Employee benefit plans

Defined benefit plan - Gratuity

The gratuity liability arises on retirement, resignation and death of an employee. The aforesaid liability is calculated on the basis of fifteen days salary (i.e. last drawn basic salary plus dearness allowance) for each completed year of service subject to completion of five years' service.

Policy for recognising actuarial gains and losses

Actuarial gains and losses arising from experience adjustments and effects of changes in actuarial assumptions are immediately recognised in the statement of profit and loss as income or expense.

6.3 Segment reporting

The Company operates in a single segment of Natural Gas Business in the National Capital Region and therefore the disclosure requirements as per Accounting Standard 17 "Segment Reporting" are not applicable to the Company.

6.4 Related party transactions List of related parties: Promoter venturer:

i. GAIL (India) Limited

ii. Bharat Petroleum Corporation Limited

Key management personnel (KMP):

i. Mr. Rajesh Vedvyas Managing Director (upto 26, October 2011)

ii. Mr. M. Ravindran Managing Director (w.e.f. 27 October, 2011)

iii. Mr. Manmohan Singh Director Commercial

6.7 Management has carried out a review of the carrying value of assets as at 31 March, 2012 in accordance with the provisions of Accounting Standard – 28, Impairment of Assets. Based on the review, the management is of the opinion that there are no impairment indicators that necessitate any adjustments to the carrying value of assets.

7. Interest accrued and due Rs. Nil (Previous year Rs. 2.15 Crores) was funded in the bank account on the balance sheet date and same was debited on the next working day by the bank as per their prevailing practice.

8. The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2011

1. Background

Indraprastha Gas Limited (The Company) was incorporated on December 23, 1998 under the Companies Act, 1956. The Company is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The Company is a joint venture between GAIL (India) Limited and Bharat Petroleum Corporation Limited. The Companys business consists of sale of Piped Natural Gas (PNG) and manufacture and sale of Compressed Natural Gas (CNG).

2. Contingent liabilities

a. Income Tax cases

In respect of Assessment Year 2001-02 to Assessment Year 2008-09, the department disallowed certain claims made or set offs availed by the Company. This resulted into adjustments to past carried forward losses aggregating Rs.294.49 lakhs (Previous year Rs.294.49 lakhs) and demands raised aggregating Rs.1,208.18 lakhs (Previous year Rs. 868.26 lakhs) against which company has deposited Rs. 938.07 lakhs (Previous Year Rs. 461.59 lakhs) under protest. The Company has filed appeals against the above which are pending at various stages.

b. Trade Tax case

In respect of Assessment year 2007-08 the Trade Tax Department, Uttar Pradesh has raised a demand of Rs. 66.11 lakhs (Previous year Rs. Nil). The Company has filed appeal against the above which is pending with the authorities.

c. Bank Guarantees

The companys total liability towards un-expired Bank Guarantees is Rs.4,550.81 lakhs (Previous year Rs.2,332.57 lakhs).

3. Capital commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.35,684.63 lakhs(Previous year Rs. 45,840.66 lakhs).

4. The Company has installed CNG Stations on land leased from various Government authorities under leases for periods ranging from one to five years. However, assets constructed/installed on such land are depreciated generally at the rates specified in Schedule XIV to the Companies Act, 1956, as the management does not foresee nonrenewal of the above lease arrangements by the Authorities.

5. Deposits from customers of natural gas, refundable on termination/alteration of the gas sales agreements, are considered as long term funds.

6. Segment reporting

The Company operates in a single segment of Natural Gas Business mainly in the National Capital Region and therefore the disclosure requirements as per Accounting Standard 17 "Segment Reporting” are not applicable to the Company.

7. Management has carried out a review of the carrying value of assets as at 31 March, 2011 in accordance with the provisions of Accounting Standard – 28, Impairment of Assets. Based on the review, the management is of the opinion that there are no impairment indicators that necessitate any adjustments to the carrying value of assets.

8. Additional information pursuant to the provisions of paragraphs 3 and 4 of Part II of Schedule VI of the Companies Act, 1956

a. Licensed and installed capacity

The Company is operating on the basis of allocation of 2.70 Million Metric Standard Cubic Meters per day (MMSCMD) (Previous year 2.70 MMSCMD) of natural gas on firm basis by the order from Ministry of Petroleum & Natural Gas.

9. Foreign currency exposure:

a. As at 31 March, 2011 the company has outstanding forward contracts for imports amounting to USD 99.31 lakhs equivalent to Rs. 4,434.28 lakhs (Previous year Nil) to hedge its foreign currency exposure.

b. Premium on account of forward exchange contracts to be recognised in Profit and Loss Account of subsequent accounting period aggregates Rs. 198.75 lakhs (Previous year Rs. Nil).

c. The Companys foreign currency exposure on accounts payable not hedged by a derivative instrument or otherwise as at 31 March, 2011 is as follows:

10. Disclosure pursuant to Accounting Standard 15 (revised 2005) on Employee Benefits

a. Gratuity plan

The gratuity liability arises on retirement, withdrawal, resignation and death of an employee. The aforesaid liability is calculated on the basis of fifteen days salary (i.e. last drawn basic salary plus dearness allowance) for each completed year of service subject to completion of five years service.

b. Policy for recognising actuarial gains and losses

Actuarial gains and losses arising from experience adjustments and effects of changes in actuarial assumptions are immediately recognised in the statement of profit and loss account as income or expense.

c. The following tables set out the status of the unfunded gratuity plan and amounts recognised in the Companys financial statements as at 31 March, 2011:

Demographic assumptions:

1. Retirement age 60 years

2. Mortality rate Published rates under LIC (1994-96) mortality tables

18. Related Party Transactions

a. List of related parties Promoter Venturer

- GAIL (India) Limited

- Bharat Petroleum Corporation Limited

Key management personnel (KMP)

- Mr. Rajesh Vedvyas - Managing Director

- Mr. Manmohan Singh - Director Commercial

11. Interest accrued and due Rs.215.46 lakhs (Previous year Rs. Nil) was funded in the bank account on the balance sheet date and same was debited on the next working day by the bank as per their prevailing practice.

12. Corresponding figures of the previous year have been regrouped/ reclassified, wherever considered necessary, to conform to current year figures.

13. Schedules1 to 17 form an integral part of the financial statements.


Mar 31, 2010

1. Background

Indraprastha Gas Limited (The Company) was incorporated on December 23, 1998 under the Companies Act, 1956. It is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The Company is a joint venture between GAIL India Limited and Bharat Petroleum Corporation Limited. The Companys business consists of sale of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG).

2. Contingent liabilities

a. Income Tax cases

In respect of Assessment Year 2001-02 to Assessment Year 2007-08, the department disallowed certain claims made or set offs availed by the Company. This resulted into adjustments to past carried forward losses aggregating Rs.29,448,913 (previous year Rs.29,448,913) and demands raised aggregating Rs.86,825,906 (previous year Rs.63,289,287) against which company has deposited Rs. 46,158,902 (previous Year Rs.32,858,902) under protest. The Company has filed appeals against the above which are pending at various stages.

b. Bank Guarantees

The companys total liability towards un-expired Bank Guarantees is Rs. 233,256,847 (Previous year Rs. 494,809,876).

3. Capital commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 4,584,065,702 (previous year Rs. 701,143,333).

4. The Company has installed CNG Stations on land leased from various Government Authorities under leases for periods ranging from one to five years. However, assets constructed/installed on such land are depreciated generally at the rates specified in Schedule XIV to the Companies Act, 1956, as the management does not foresee non-renewal of the above lease arrangements by the Authorities.

5. Deposits from customers of natural gas, refundable on termination/alteration of the gas sales agreements, are considered as long term funds.

6. Segment reporting

The Company operates in a single segment of Natural Gas Business mainly in the National Capital Region and therefore the disclosure requirements as per Accounting Standard 17 “Segment Reporting” are not applicable to the Company.

7. Management has carried out a review of the carrying value of assets as at 31 March, 2010 in accordance with the provisions of Accounting Standard – 28, Impairment of Assets. Based on the review, the management is of the opinion that there are no impairment indicators that necessitate any adjustments to the carrying value of assets.

Note:

Managerial Remuneration does not include:

Rs. 1,800,000 (previous year Rs. 2,059,062, including Rs. 559,062 for the year 2007-2008) payable to Managing Director and Whole Time Director as commission on profit based on the period of directorship held during the financial year ended on 31 March, 2010, since the amount will be paid to their parent organisation as per their advice.

8. Operating lease arrangements

The Company has taken certain equipments and vehicles under operating lease agreements. The total lease rentals recognised as expense during the year under the above lease agreements aggregates Rs. 113,573,769 (previous year Rs. 76,402,132).

9. Additional information pursuant to the provisions of paragraphs 3 and 4 of Part II of Schedule VI of the Companies Act, 1956.

a. Licensed and installed capacity

The Company is operating on the basis of allocation of 2.70 Million Metric Standard Cubic Meters per day (MMSCMD, previous year 2.70 MMSCMD) of natural gas on firm basis by the order from Ministry of Petroleum & Natural Gas.

Notes:

1. Difference in reconciliation of opening stock, purchases, sales and closing stock of gas quantities is on account of measurement tolerance and normal loss of 13,026,286 SCM (previous year 15,061,670 SCM).

2. Natural gas is purchased in SCM and Compressed Natural Gas is sold in Kgs.

3. Sale of CNG is net of discounts and gross of excise duty.

10. Disclosure pursuant to Accounting Standard 15 (revised 2005) on Employee Benefits

a. Gratuity plan

The gratuity liability arises on retirement, withdrawal, resignation and death of an employee. The aforesaid liability is calculated on the basis of fifteen days salary (i.e. last drawn basic salary plus dearness allowance) for each completed year of service subject to completion of five years service.

b. Policy for recognising actuarial gains and losses

Actuarial gains and losses arising from experience adjustments and effects of changes in actuarial assumptions are immediately recognised in the statement of profit and loss account as income or expense.

c. The following tables set out the status of the unfunded gratuity plan and amounts recognised in the Companys financial statements as at 31 March, 2010:

Notes:

1. The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of obligations.

2. The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

Demographic assumptions:

1. Retirement age 60 years

2. Mortality rate Published rates under LIC (1994-96) mortality tables

18. Related Party Transactions

a. List of related parties Promoter Venturer

- GAIL (India) Limited

- Bharat Petroleum Corporation Limited

Key management personnel (KMP)

- Mr. Om Narayan - Managing Director (upto 28 July 2008)

- Mr. Rajesh Vedvyas - Managing Director

- Mr. Manmohan Singh - Director Commercial

11.Corresponding figures of the previous year have been regrouped/ reclassified, wherever considered necessary to conform to current year figures.

12.Scheduled 1 to 15 forman integral part of the financial statements.

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