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Notes to Accounts of Gujarat Gas Ltd.

Mar 31, 2023

Nature and purpose of reserves :

General reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purpose. As the general reserve is created by transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit and loss.

Amalgamation and Arrangement Reserve

The "Amalgamation and Arrangement Reserve", created pursuant to scheme of amalgamation and arrangement, is treated as free reserve based on the judgment of Honourable Gujarat High Court dated 18th April 2015 read with relevant other court decisions.

Retained Earnings

Retained earnings represents surplus / accumulated earnings of the company available for distribution to shareholders.

Capital Reserve

Capital Reserve not available for distribution of dividend and expected to remain invested permanently.

Negative capital reserve represents difference between the consideration and carrying amount of net assets/liabilities acquired as per business transfer agreement for transactions among entities under common control.

Equity instrument through OCI

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the Equity instrument through OCI reserve within equity.

Note 43 CONTINGENT LIABILITIES & CONTINGENT ASSETS (A) CONTINGENT LIABILITIES		('' in Crores)
Contingent liabilities	As at 31st	As at 31st
(to the extent not provided for)	March 2023	March 2022
Contingent Liabilities (a) Contingent Liabilities - Statutory claims ( Refer Note 43.1) Disputed statutory dues in respect of which Appeals are filed against / by the Company : (i) Excise Duty	17.97	18.90
(ii) Income Tax	8.15	4.29
(iii) Service Tax/ GST	47.29	41.13
Total	73.41	64.32
(b) Claims / Litigations against the company not acknowledged as debt	482.18	459.01
(Refer Note 43.2)
Total	555.59	523.34

The Company has reviewed all its pending claims, litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The company does not expect the outcome of these claims, litigations and proceedings to have a materially adverse effect on its financial position.

Note 43.1 - Disputed statutory dues in respect of which Appeals are filed against / by company

The Company is contesting the demands and the management including its advisors believe that its position is likely to be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the company''s financial position and results of operations.

Note 43.2 - Claims / Litigations against the company not acknowledged as debt includes the following major matters:

(i) UPL Limited (UPL) a customer of erstwhile Gujarat Gas Company Limited (GGCL) (now known as Gujarat Gas Limited) had filed a complaint before Petroleum and Natural Gas Regulatory Board (PNGRB) against erstwhile GGCL alleging charging of tariff illegally under the City Gas Network Distribution Agreement entered into between the parties and filed claim of approx. '' 76.98 Crores. The matter was decided against the company by PNGRB vide its Order dated 20.10.2014. The company had preferred an appeal at Appellate Tribunal for Electricity (APTEL) against the aforementioned PNGRB Order. APTEL has delivered final judgement on 10.03.2021 in favour of the Company by setting aside the aforementioned PNGRB Order, and has recorded that invocation of HAPI tariff by PNGRB for the negotiated arrangement between the parties was not only against the letter and spirit of regulations defining tariff zone but also tantamount to rewriting of contract.

UPL has preferred an appeal before the Hon''ble Supreme Court of India against the order of APTEL dated 10.03.2021. Presently, the matter is pending before Hon''ble Supreme Court of India.

(ii) One of the gas suppliers of the Company has submitted claims of '' 212.14 Crores (P. Y. '' 189.59 Crores), for use of allocated gas for other than specified purpose, related to FY 2013-14 to FY 2021-22 and no claim received from supplier for FY 2022-23. The company has refuted this erroneous claim and also there is no contractual provisions of the agreement executed with GGL that allow such claim. The management is of the firm view that the company is not liable to pay any such claim. The company has already taken up the matter with concerned party to withdraw the claim.

(iii) The company has initiated an arbitration proceeding against one of the franchisees claiming compensation for loss of revenue. While replying to the claim, the said franchisee has also filed a counter claim of '' 177.14 Crores (P.Y. '' 177.14 Crores) against the company claiming compensation for various losses. The company has filed necessary rejoinder to the counter claim strongly refuting the same mainly on the grounds that the counter claims are wrong and without merits and as are not flowing from the same agreement under which the arbitral tribunal has been constituted. Currently arbitral proceedings of this matter is pending before the sole arbitrator.

Note 43.3 - The following demands / Litigations / matters are not included in above

(i) Erstwhile Gujarat Gas Company Limited and Erstwhile GSPC Gas Company Limited (Now collectively known as Gujarat Gas Limited "GGLâ) had signed Gas supply agreement with Gujarat State Petroleum Corporation Limited (GSPCL) for purchase of Re-gasified liquified natural gas (RLNG). As per the provision of said agreement, GGL has to pay interconnectivity charges to GSPCL for the supply and purchase of RLNG at Delivery point which is charged to GSPCL by their supplier i.e. PLL Off takers (GAIL India, BPCL, IOCL).

PGNRB had vide its order dated 13.09.2011 and the majority members of PNGRB (three member panel of Board) had vide its order dated 10.10.2011 held that GAIL had adopted Restrictive Trade Practices by blocking off direct connectivity to GSPCL and further, directed Respondents (PLL Off takers -GAIL India, BPCL, IOCL) to immediately give direct connectivity to GSPCL at Dahej Terminal.

The PLL Offtakers (GAIL) filed appeals against the said PNGRB orders before the Appellate Tribunal for Electricity (APTEL). On 23.02.2012 APTEL had issued an interim order for shifting the Delivery Point from GAIL-GSPL Delivery Point to GSPL-PLL Delivery Point. On 18.12.2013 APTEL issued its judgment and required GSPCL to pay the amount of the difference between '' 8.74/MMBTU (exclusive of Service Tax) - earlier connectivity charges and '' 19.83/MMBTU (Exclusive of Service Tax) -HVJ/DVPL Zone-1 tariff to GAIL for the period from 20th November 2008 to 29th February 2012.

GSPCL had filed an appeal against the APTEL''s above referred judgment before Hon''ble Supreme Court of India (GSPCL vs. GAIL & Others, Civil Appeal No. 2473-2476 of 2014) and the Hon''ble Supreme Court of India had passed the Interim Order on 28th February 2014. The Court has stated that the ends of justice would be met if as a matter of interim arrangement, the appellant is directed to pay interconnectivity charges at the rate of '' 12.00 per MMBTU (exclusive of Taxes). The Company has already provided and paid interconnectivity charges at the rate of '' 12.00 per MMBTU (exclusive of Taxes).

GGL has not received any bill / demand note for the amount over and above '' 12.00 per MMBTU from supplier till date. As the final liability would only be determined post the final order of the court, quantification of any amount as contingent liability in the interim is inappropriate due to the uncertainty involved and hence the same is not mentioned / disclosed in the financial statement.

(ii) The Company deposited '' 464.78 crores on 12th June, 2013 into the escrow account "named BG Asia Pacific Holdings Pte. Limited GSPC Distribution Networks Limited Escrow Accountâ opened with Citibank N.A., acting as the escrow agent, pursuant to the escrow agreement executed between the BG Asia Pacific Holdings Pte. Limited (the Seller), Gujarat Gas Limited (Formerly known as GSPC Distribution Networks Limited) (the Purchaser) and Citibank N.A. The Payment of said amount into Escrow Account was to be utilized to meet future tax withholding liability (if any) based on outcome of the applications to the Authority for Advance Rulings or otherwise to be remitted to BG Asia Pacific Holdings Pte. Limited (the Seller) directly.

The Company has received the ruling from the Hon''ble Authority for Advance Ruling ("AARâ), vide consolidated ruling order dated 25th February 2021 wherein the Hon''ble AAR has held that the transaction Price is not subject to any tax withholding in India and the Purchaser is not required to withhold tax since the capital gains is not subject to tax in India in view of Article 13(4) of the India Singapore Tax Treaty under India Singapore Double Tax Avoidance Agreement in the hands of the Seller. Pursuant to the ruling of the Hon''ble AAR and as per the terms of the Escrow Agreement, amount of '' 464.78 crores kept in Escrow Account had been remitted to the BG Singapore on 7 th April 2021.

During the year, Commissioner of Income Tax (International Taxation) - 3 (CIT), has filed Civil Misc. Writ Petition against BG Singapore, challenging the AAR Ruling before the Hon''ble High Court of Uttarakhand at Nainital on 22.09.2021. CIT has also filed Impleadment /Amendment Application in Civil Misc. Writ Petition before the Hon''ble High Court of Uttarakhand at Nainital on 08.01.2022 for amendment of cause title of the petition and added Commissioner of Income Tax (IT & TP), Ahmedabad as Petitioner No. 2 and GGL as Respondent No. 2. Currently, the Impleadment /Amendment Application is in process for admission with Hon''ble High Court of Uttarakhand.

As per Share purchase agreement, the Seller had agreed to indemnify, defend and hold harmless the Purchaser from and against any Tax claim notice receives on or prior to the expiry of 10 years from the Closing date (i.e. up to 11th June, 2023) in respect of Seller''s sale of shares to the Purchaser.

In view of this, there is remote possibility of any outflow in this matter and hence, the same has not been considered as Contingent Liability.

(iii) The revision of Trade margin with the Oil Marketing Companies (OMCs namely IOCL, HPCL and BPCL) is pending from earlier years and is subject to mutual agreement between OMCs and the Company. In November 2021, the Ministry of Petroleum & Natural Gas (MoP&NG) issued an advisory pertaining to revised Trade margin and subsequently citing MoP&NG advisory, OMCs have started to claim revised Trade margin discounts & deductions in CNG sales bill payment made to the company. The Company has contested the decision of the OMCs in considering the revised trade margins without any mutual agreement with the Company.

Pending settlement, the liability is provided to the extent considered appropriate by the Company. No provision has been made for period earlier to the advisory.

(iv) Two entities, who have been authorized by the Petroleum and Natural Gas Regulatory Board (PNGRB), have filed complaints against the Company before the PNGRB for claiming compensation with respect to the unauthorized development / operations of CGD infrastructure activities carried out by the Company in their authorised area. The Company has also filed a complaint against one of the entities before the PNGRB for unauthorized development / operations of CGD infrastructure in area authorised to the Company. Further, the Company has raised objections to the maintainability of the such complaints, which are yet to be determined by the PNGRB. The quantification of any liability is not ascertainable at this stage. However, the Company is hopeful of arriving at amicable resolution of the subject issues.

(B) CONTINGENT ASSETS

(i) The Company has raised claim of '' 43.08 crores (Previous year '' 43.08 crores) for net credit of natural gas pipeline tariff as per PNGRB Order with one of the suppliers and supplier is disputing company''s claim and indicating for adjusting the partial claim of '' 30.72 crores (Previous year '' 30.72 crores) out of total claim '' 43.08 crores (Previous year '' 43.08 crores) against disputed liability for use of allocated gas other than specified purpose, against demand in earlier year (Refer Point 43.2(ii) above).

(ii) The Company has filed an appeal before the Appellate Tribunal for Electricity (APTEL) against the PNGRB order related to the matter held that the Gas Swapping Arrangement Guidelines of PNGRB is applied erroneously. APTEL has issued the order in favour of GGL. The said supplier has filed appeal at Hon''ble Supreme Court of India against the order of APTEL.

Presently, the matter is pending in Hon''ble Supreme Court of India. Currently, GGL is paying '' 19.83 per mmbtu as transmission charges for domestic gas being purchased and delivered by GAIL at one of the delivery points . If verdict is in favour of GGL, GGL will get refund of '' 229.12 Crores (Previous year '' 193.65 Crores) from December 2013 till March 2023 and the company shall be required to pass on the benefit to its customers as per relevant order of the Court.

(iii) The Company is having other certain claims, litigations and proceedings which are pursuing through legal processes. The management believe that probable outcome in all such claims, litigations and proceedings are uncertain. Hence, the disclosure of such claims, litigations and proceedings is not required in the financial statements.

(C)	COMMITMENTS		('' in Crores)
Sr No.	Commitments (to the extent not provided for)	As at 31st March 2023	As at 31st March 2022
1	Estimated amount of contracts remaining to be executed on capital account and not provided for	798.87	976.83
2	Estimated amount of contracts remaining to be executed on revenue account and not provided for	1,309.35	1,163.69
	Total	2,108.22	2,140.52

Other commitments

(i) All term contracts for purchase of natural gas with suppliers, has contractual volume off take obligation of "Take or Payâ (ToP) as specified in individual contracts. Quantification of ToP amount is dependent on various factors like actual purchase quantity, gas purchase prices of respective contract etc. As these factors are not predictable, ToP commitment amount is not quantifiable.

(ii) The Company has been granted authorization for laying, building, operating and expanding CGD network in the total 27 geographical area under the Petroleum and Natural Gas Regulatory Board (Authorizing entities to lay, build, operate or expand city or local Natural Gas Distribution Networks) Regulation 2008, against which Company is required to complete Minimum Work Programme (MWP) target for development of CGD network under the terms of authorisation awarded by Petroleum and Natural Gas Regulatory Board (PNGRB). For this purpose, the Company had submitted performance bank guarantees (issued by banks on behalf of the Company) amounting to '' 6528.83 crores (previous year '' 6528.83 crores) to the Petroleum and Natural Gas Regulatory Board.

Fair Value Hierarchy of Financial Assets and Liabilities :

Investment in equity accounted investee i.e.. Guj Info Petro Limited (GIPL) carried at cost.

# Fair value of financial assets and liabilities which are measured at amortised cost is not materially different from the carrying value

(ie..amortised cost). Accordingly, the fair value has not been disclosed separately.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3.

B. MEASUREMENT OF FAIRVALUES

i) Valuation techniques and significant unobservable inputs

The following tables show the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.

C. FINANCIAL RISK MANAGEMENT

The Company has exposure to the following risks arising from financial instruments:

â¢ Credit risk ;

â¢ Liquidity risk ; and

â¢ Market risk

i. Risk management framework

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework.

The Company has a well-defined Risk Management framework for reviewing the major risks and has adopted a Business Risk Management Policy which also takes care of all the financial risks. Further, pursuant to the requirement of Regulation 21 of SEBI (Listing obligation and disclosure Requirements) Regulation, 2015, the company has constituted a Risk Management Committee inter - alia to monitor the Risk Management Plan of the Company.

Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s trade receivables from customers and security deposits.

The carrying amount of following financial assets represents the maximum credit exposure:

(a) Other financial assets

The company maintains its Cash and cash equivalents and deposits with banks / financial institutions having good reputation, good past track record and high quality credit rating and also reviews their credit-worthiness on an on-going basis.

(b) Trade and other receivables

The Company''s exposure to credit Risk is the exposure that Company has on account of goods sold or services rendered to a contractual counterparty or counterparties, whether with collateral or otherwise for which the contracted consideration is yet to be received. The Company''s customer base are Industrial, Commercial-Non Commercial, Domestic and CNG.

The Commercial and Marketing department has established a credit policy for each category of customer viz. industrial, domestic and commercial.

The Company raises the invoice for quantities sold based on periodicity as per the agreement. Sales are subject to security deposit and/or bank guarantee clauses to ensure that in the event of non-payment the company''s receivables are secured. In case of short/non receipt of security deposit/or bank guarantee, the Company is exposed to credit risk to that extent.

For sales to domestic customers for household purposes like cooking, geyser application, etc., invoices are raised periodically. Security deposits along with connection deposits are taken for mitigation of potential credit risk arising in the event of nonpayment of invoices. Company is exposed to credit risk beyond the value of deposits.

CNG sales made through operators of the CNG stations owned by the Company and CNG Franchises outlet are exposed to credit risk as amounts so collected is deposited/transferred in company bank account on next working day. Bank Guarantee / Security Deposit is taken to mitigate the credit risk. In case of short/non receipt of security deposit/or bank guarantee, the Company is exposed to credit risk to that extent.

For CNG sales made through Oil Marketing Companies (OMCs), the Company raises the invoice for quantities sold based on periodicity as per the agreement. The OMCs are well established companies viz. HPCL, BPCL, IOCL, Nayara Energy (e-Essar Oil Ltd.) where no significant credit risk is anticipated.

The Company provides for allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables. All trade receivables are reviewed and assessed for default on regular basis. Our historical experience of collecting receivables, supported by the level of default, is that credit risk is low. Credit risk is considered high when the counter party fails to make contractual payment within 180 days of when they fall due. The risk is determined by considering the business environment in which the company operates and other macro economic factors.

Assets are written off when there are no reasonable expectation of recovery such as debtor declaring bankruptcy or failing to engage in a repayment plan with the Company. Where receivables have been written off the company continues to engage in enforcement activity to attempt to recover the receivables. where recoveries are made, these are recognised in profit and loss.

The impairment provisions above are based on management judgment / assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the company''s past history as well as forward looking estimates at the end of each reporting period.

Company has given security deposit to various government authorities (like Municipal corporation, Nagarpalika, Grampanchayat, Road & building division and Irrigation department -of Govt. of Gujarat etc. ) for the permission related to work of executing / laying pipeline network in their premises / jurisdiction. Being government authorities, the Company has no exposure to any credit risk.

The impairment provisions for financial assets - Security Deposit as disclosed above are based on management judgment / assumptions about risk of performance default . The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the company''s past history as well as forward looking estimates at the end of each reporting period.

iii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. Short term liquidity requirements comprises mainly of trade payables arising in the normal course of business and is managed primarily through internal accruals and/or short term borrowings. Long term liquidity requirement is assessed by the management on periodical basis and managed through internal accruals as well as from undrawn borrowing facilities.

- Other current financial liabilities include customer deposits which are considered repayable on demand.

- The gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to non-derivative financial liabilities held for risk management purposes and which are not usually closed out before contractual maturity.

iv. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits and FVTOCI investments.

a) Currency risk

The functional currency of the Company is Indian Rupee (''). The Company''s transactions are majorly denominated in INR and the quantum of the foreign currency transactions being immaterial, the company is not exposed to currency risk on account of payables and receivables in foreign currency. The company does not have any exports. Import amount to 0.95 % (Previous Year 0.84%) of total consumption of stores and spares, this is not perceived to be a major risk.

b) Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

Sensitivity analysis

Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of change in interest rates.

The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss, and the Company does not have any designate derivatives (interest rate swaps) . Therefore, a change in interest rates at the reporting date would not affect profit or loss.

c) Commodity Price Risk

Risk arising on account of fluctuations in price of natural gas is mitigated by ability to pass on the fluctuations in prices to customers over period of time. The company monitors movements in the prices closely on regular basis.

d) Equity Price Risk

The Company do not have any investment in quoted equity shares hence not exposed to equity price risk.

Note 46 CAPITAL MANAGEMENT

Total equity as shown in the balance sheet includes equity share capital, general reserves and retained earnings.

There are no interest bearing loans and borrowings by the Company as on 31st March 2023.

The Company''s objectives when managing capital is to Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders.

The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure. The management monitors the return on capital as well as the level of dividends to shareholders.

The Company monitors capital using a ratio of ''adjusted net debt'' to ''adjusted equity''. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing loans and borrowings, less cash and bank balances. Adjusted equity comprises all components of equity.

(i) Entity''s responsibilities for the governance of the plan :

Risk to the Plan

Following are the risk to which the plan exposes the entity : :

A Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

-Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

-Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

-Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

Land Leases

The Company has taken several plots of land on lease for setting up CNG, City Gas Station, CPRS/DPRS station and for site office purpose. The lease term mentioned in the agreements ranges from 11 months to 99 years. Lease agreements are renewable on mutually agreed terms and do not contain any non-cancellable period. In certain contacts, the Company is restricted from assigning and subletting the leased assets.

Building Leases

The Company has taken various office/warehouse buildings on lease with monthly and annual payment terms. The lease term mentioned in the agreements ranges from 11 months to 9 years. Most of the agreements are renewable on mutually agreed terms, some of them are having non - cancellable period whereas few agreements are silent on renewal. In certain contacts, the Company is restricted from assigning and subletting the leased assets.

Other Leases

The Company has also taken various commercial vehicles, CNG Cascade, booster compressor and other equipments, IT equipment etc. on lease. The lease term mentioned in the agreements ranges from 6 months to 10 years. Some portion of the lease rentals is based on usage of the equipment considered as variable lease payment. Lease rentals include lease and non lease component viz. manpower, fuel cost, repair and maintenance etc. and only hiring portion is considered for ROU accounting.

B Investment Risk:

For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.

C Liquidity Risk:

Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If some of such employees resign / retire from the company there can be strain on the cash flows.

D Market Risk:

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate / government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.

E Legislative Risk:

Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation / regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be recognized immediately in the year when any such amendment is effective.

(ii) The company has participated in Group Gratuity Scheme Plan with Life Insurance Corporation of India (LIC), HDFC Life Insurance Co. Ltd, Aditya Birla Sun Life Insurance Co. Ltd, ICICI Prudential Life Insurance Co. Ltd, SBI Life Insurance Co. Ltd., Bajaj Allianz Life Insurance Company Ltd and Kotak Mahindra Life Insurance Co. Ltd (collectively referred as Insurance Co.) through Gratuity Trust to meet its gratuity liability. The present value of the plan assets represents the balance available at the end of the year. The total value of plan assets is as certified by the various Insurance Co.

(b) The trustees of the plan have outsourced the investment management of the fund to an insurance company. The insurance company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it may not be possible to explicitly follow an asset-liability matching strategy to manage risk actively in a conventional fund.

(g) Other Notes:

(i) The expected rate of return on Plan Assets is determined considering several applicable factors, mainly the composition of Plan Assets held, assessed risks, historical results of return on Plan Assets and the Company''s policy for the Plan Assets management.

(ii) The actuarial valuation takes into account the estimates of future salary increases, inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. The management has relied on the overall actuarial valuation conducted by the actuary.

(iii) The company has provided long service award benefits to its employees who completed 15/20/25 Years of employment with company. Long Service Awards are recognised as a liability based on actuarial valuation of the defined benefit obligation as at the balance sheet date. Accordingly, expenses of '' 0.10 Crores (previous year '' 0.10 Crores) has been charged to the Statement of Profit and Loss towards Long service awards. The Company has recognised Current Liability of '' 0.07 Crores (Previous year '' 0.07 Crores) and Non- Current Liability of '' 0.98 Crores (Previous year '' 0.93 Crores) as at 31st March 2023 and Discount rate considered for current year is 7.50% (previous year 7.00%).

(iv) The Company has provided '' Nil (previous year '' 3.85 Crores) during the year on account of death compensation benefits and current provision as on 31st March 2023 is Nil (previous year '' 3.05 Crores) as the Company has taken group life insurance policy during the year.

The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period when the Code becomes effective.

(vi) Employee Stock Option Plan : There are no options outstanding as on 31st March 2023, 31st March 2022.

Note 48 RELATED PARTY TRANSACTIONS

As per the Indian Accounting Standard-24 on "Related Party Disclosuresâ, list of parent & subsidiary of the Company are as follows.

(a) Parent Entity

Gujarat State Petroleum Corporation Limited (GSPC) -Ultimate Holding Company (w.e.f.,20th October,2022) & Intermediate Holding Company (upto 19th October, 2022)

Gujarat State Petronet Limited (GSPL) - Holding Company

Gujarat State Investment Limited (GSIL) - Ultimate Holding Company (Upto 19th October, 2022)

(b) Subsidiary / Associate / Enterprise Controlled by the Company

Guj Info Petro Limited- GIPL - Associate

Gujarat Gas Limited Employee Stock Option Welfare Trust - Enterprise controlled by the company Gujarat Gas Limited Employees Group Gratuity Scheme - Enterprise controlled by the company

Contract asset is the right to consideration in exchange for goods or services transferred to the customer. Contract liability is the entity''s obligation to transfer goods or services to a customer for which the entity has received consideration from the customer in advance. Contract assets (unbilled receivables) are transferred to receivables when the rights become unconditional and contract liabilities are recognised as and when the performance obligation is satisfied.

Performance obligations -Connection, Service and Fitting Income

Connection charges from customers deferred over the period when the performance obligation is satisfied:

Industrial Customers: The performance obligations as per the contractual arrangement with the customer is to deliver gas over the tenure of the contract. Consequently, the connection charges is to be deferred over the contract period.

Domestic Customer: The connection charges is to be deferred over the period of delivery of gas. It is reasonably expected by the Company that the gas is procured by the customer and supplied by the Company on a perpetual basis. Consequently the connection charges are to be deferred over the useful life of the connection facility (i.e. 18 years).

Note 50 LEASES (Ind AS 116)

The Company has adopted Ind AS 116 ''Leases'', effective from 1st April, 2019, using modified retrospective approach.

Note 50.1 The Company as a lessee

The Company has taken various assets on lease primarily consist of leases for land, buildings, vehicles and Plant & machinery. Under Ind AS 116, the Company recognises right-of-use assets and lease liabilities.

The weighted average incremental borrowing rate of 8.59% p.a. has been applied to lease liabilities recognised in the balance sheet at the date of initial application.

The likely weighted average incremental borrowing rate of 5.5 % to 8 % p.a. has been applied to lease liabilities recognised in the balance sheet during the year.

50.1.1 The Company used a number of practical expedients summarised here below:

1) Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

2) Applied the exemption not to recognize right-of-use assets and liabilities for leases of low value assets.

Land Leases

Building Leases

Other Leases

Note 51.3 Willful Defaulter

The company is not declared as willful defaulter by any bank or financial institution or other lender.

Note 51.4 Utilisation of borrowed funds

The company has used the borrowings from banks for the specific purpose for which it was taken. The company has not taken any borrowings from financial institution.

Note 51.5 Registration of charges or satisfaction with Registrar of Companies (ROC)

The company has registered charge and satisfaction with ROC within statutory time period.

Note 51.6 Details of Benami Property held

The company does not hold any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder, hence no proceedings initiated or pending against the company under the said Act and Rules.

Note 51.7 Utilisation of borrowed funds, share premium and other funds

The Company has not given any advance or loan or invested funds from borrowed funds or share premium or any other sources with the understanding that intermediary would directly or indirectly lend or invest in other person or equity identified in any manner whatsoever by or on behalf of the company as ultimate beneficiaries or provide any guarantee or security or the like to on behalf of ultimate beneficiaries.

The Company has not received any fund from any person or entity with the understanding that the Company would directly or indirectly lend or invest in other person or entity identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiary) or provided any guarantee or security or the like on behalf of the ultimate beneficiary. Note 51.8 Compliance with number of layers of companies

As the company is a Government Company, in terms of section 2(45) of the Companies Act, compliance with number of layers of the companies as per section 2(87) of the Companies Act read with Companies (Restriction on number of Layers) Rules 2017, is not applicable.

Note 52 ADDITIONAL DISCLOSURES

Note 52.1 Details of Crypto Currency or Virtual Currency

The company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

Note 52.2 Undisclosed Income

There is no transaction, which has not been recorded in books of accounts, that has been surrendered or disclosed as income during the year in tax assessments under the Income Tax Act, 1961.

Note 55 SEGMENT REPORTING

The Company primarily operates in the segment of Natural Gas Business. Natural gas business involves distribution of gas from sources of supply to centres of demand and to the end customers. The Managing Director of the Company allocate resources and assess the performance of the Company, thus are the Chief Operating Decision Maker (CODM). The CODM monitors the operating results of the business as a one, hence no separate segment needs to be disclosed.

Information about products and service:

The Company is in a single line of business of Sale of Natural Gas.

Information about geographical areas:

1. The Company does not have geographical distribution of revenue outside India and hence segmentwise disclosure is not applicable to the Company.

2. None of the Company''s assets are located outside India hence segmentwise disclosure is not applicable to the Company.

Information about major customers:

None of the customer account for more than 10% of the total revenue of the Company.

Note 56 ACCOUNTING FOR BUSINESS COMBINATION TRANSACTIONS

BUSINESS TRANSFER AGREEMENT FOR GEOGRAPHICAL AREAS OF AMRITSAR AND BHATINDA (PUNJAB)

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, a holding company) to Gujarat Gas Limited (GGL, the Company) for cash consideration of '' 153.86 Crores ('' 164.58 Crore Business valuation determined based on an independent valuation less '' 10.72 Crore working capital adjustment) and the Company has completed the above transfer of business as per BTA with effect from 1st November 2021.

Accordingly in the financial year 2021 - 22, Business combination transaction between the common control entities, GSPL (Holding Company) and GGL (Subsidiary Company) had been recorded in the books of the Company in accordance with Appendix C - ''Business combinations of entities under common control'' of Ind AS 103 - ''Business Combinations'' using the pooling of interests method which involves the following:-

1. In the previous financial year, the financial information in the financial statements in respect of prior periods was restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. Accordingly, business combinations was accounted with effect from 1st April, 2020. Accordingly figures for the year ended March 31 2021 were reinstated after giving effect to the Business transfer arrangement. The obligation to pay consideration in cash was recognised as a liability in the comparative financial year.

2. The Company had recorded the asset, liabilities and accumulated losses of the City Gas Distribution (CGD) Business of GSPL pursuant to this arrangement at the respective book values appearing in the books of GSPL.

3. No adjustments were made to reflect fair values and only adjustments are recorded to harmonise accounting policies and intercompany eliminations.

4. The difference between aggregated book value of net assets acquired, accumulated loss of the CGD business and deferred tax recognised on acquisition and consideration paid by the Company to GSPL was transferred to negative capital reserve. Detailed working of the same is given hereunder:

Note 57 RECLASSIFICATION OF COMPARATIVE FIGURES

Certain reclassifications have been made to the comparative period''s financial statements to:

- enhance comparability and ensure consistency with the current year''s financial statements; and

- ensure compliance with the Guidance Note on Division II - Ind AS Schedule III to the Companies Act, 2013."

The Company believes that such presentation is more relevant for understanding of the Company''s performance. However, this does not have any impact on the profit, equity and cash flow statement for the comparative period.

Note 58 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As on date of approval of these financial statements, there are no subsequent events to be recognized or reported that are not already disclosed.

Note 59 PREVIOUS YEAR FIGURES

Previous period figures have been re-grouped / re-classified wherever necessary, to conform to current period''s presentation.

The Accompanying Notes (1-59) are an integral part of the financial Statements.

Mar 31, 2022

The Company is engaged in the business of City Gas Distribution (CGD) in India which involves distribution of gas from sources of supply to the end user customers. The CGD project is designed considering demand, supply and future requirements based on the facilities envisaged for CGD network in authorised areas for 25 years on the basis of authorization from Petroleum and Natural Gas Regulatory Board (PNGRB) to lay, build, operate or expand city or local natural gas distribution network. On the basis of demand projections, the CGD network is planned. Project execution plans are modulated on the basis of continuous ongoing expansion and all the projects are executed and expanded on ongoing basis as per rolling annual plan. Hence, it is considered that there is no project whose completion is overdue or has exceed its cost compared to its original plan.

The Company had recognized the rental - facilitation fees on Investment property for the financial year 2016-17 and 201718 on the basis of provisional working of rental -facilitation fees submitted by tenants. The company is contesting the issue of valuation of land for rental -facilitation fees with tenants which has not been agreed between both the parties (company & tenants ) till end of the financial year.

On similar lines, company has recognized rental -facilitation fees on Investment property for the financial year 2018-19, 2019-20, 2020-21 and 2021-22 on the basis of previous years working, as no further working of rental -facilitation fees has been submitted by tenants post FY 2017-18.

Contractual Obligations

The Company has no contractual obligations to purchase, construct or develop investment property or for its repair, maintenance or enhancements.

Leasing Arrangements

The investment property is leased to tenants under long term operating leases with rentals payable annually as per the formula given in the agreement executed by both the parties. The lease period is 10 years(extendable as mutually agreed). Either party can terminate the agreement by giving 6 months notice(Non cancellable period). The future minimum lease payments receivables for 6 months can not be determined as the amount of rent is dependent on various other factors.

Estimation of Fair Value

The fair value of investment property is based on the valuation by a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017.

The Company obtains independent valuations for its investment properties once in every three to five years interval. Last fair valuation was done on 31st March 2021.

(v) Security Pledge : Refer to Note 20 on borrowings for details in terms of pledge of assets as security.

(vi) There is no restriction on the title and realisability of investment property or remittance of income and proceeds of disposals.

Note 4.1. Details of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favor of the lessee) whose title deeds are not held in the name of the Company.

Note no. 9.1: The Company has given refundable security deposits in form of fixed bank deposits to various project authorities to be held in their name and custody. It will be refunded after satisfactory completion of work. The company has therefore shown these fixed bank deposits amounting '' 38.66 Crores (Previous Year '' 34.05 Crores) and interest accrued on such fixed bank deposits '' 7.81 Crores (Previous Year '' 6.99 Crores), till they are in custody with project authorities as "Security Depositsâ under the Note-"Non- Current Financial Assets : Othersâ in the balance sheet.

Refer Note 45 for financial Instruments, fair value and measurements Refer Note 20 on borrowings for details in terms of pledge of assets as security.

Note 18.3 : Terms/ rights attached to equity shares

In the event of liquidation of the company, the holders of equity shares will be entitled to receive residual assets of the company. The distribution will be in proportion to the number of equity shares held by the shareholders.

Note 18.7 Details of Bought back of shares, Bonus Shares and Shares issue without payment being received in Cash:

The company has not bought back any equity shares, has not allotted any shares as fully paid up pursuant to contracts without payment being received in cash and has not allotted bonus shares during the period of five years immediately preceding the date of balance sheet. Further, there are no shares which are reserved for issue under options and contracts or commitments for the sale of shares or disinvestment.

Note 18.8 Proposed Dividend:

The Board of Directors, in its meeting on 10th May, 2022, have proposed a final dividend of '' 2.00 per equity share (Face value of '' 2/- each) for the financial year ended on 31st March,2022. The proposal is subject to the approval of shareholders at the Annual General Meeting and, if approved, would result in a cash outflow of '' 137.68 crores.

The Board of Directors, in its meeting on 1st June, 2021, had proposed a final dividend of '' 2.00 per equity share (Face value of '' 2/-each) for the financial year ended on 31st March,2021.The proposal was approved by shareholders at the Annual General Meeting and this resulted in a cash outflow of '' 137.68 crores.

Nature and purpose of reserves :

General reserve

Amalgamation and Arrangement Reserve

Retained Earnings

Retained earnings represents surplus / accumulated earnings of the company available for distribution to shareholders.

Capital Reserve

Capital Reserve not available for distribution of dividend and expected to remain invested permanently.

Equity instrument through OCI

Note 27.1: The balance with the bank for unpaid dividend is not available for use by the Company and the money remaining unpaid will be deposited in Investor Protection and Education Fund u/s 124(5) of Companies Act, 2013 after the expiry of seven years from the date of declaration of dividend. No amount is due at the end of the period for credit to Investors education and protection fund. Note 27.2: The Company deposited '' 464.78 crores on 12th June, 2013 into the escrow account ("named BG Asia Pacific Holdings Pte. Limited GSPC Distribution Networks Limited Escrow Account") opened with Citibank N.A., acting as the escrow agent, pursuant to the escrow agreement executed between the BG Asia Pacific Holdings Pte. Limited (the Seller), Gujarat Gas Limited (Formerly known as GSPC Distribution Networks Limited) (the Purchaser) and Citibank N.A. The Payment of said amount into Escrow Account was to be utilized to meet future tax withholding liability (if any) based on outcome of the applications to the Authority for Advance Rulings or otherwise to be remitted to BG Asia Pacific Holdings Pte. Limited (the Seller) directly.

As per the clause 12.3 & 12.4 of the Share purchase agreement, the Seller had agreed to indemnify, defend and hold harmless the Purchaser from and against any Tax claim notice receives on or prior to the expiry of 10 years from the Closing date (i.e. up to 11th June, 2023) in respect of Seller''s sale of shares to the Purchaser

Note 38.1 Leases charges-Others includes rental charges of all assets that have lease period of 12 month or less, rental charges of low value assets, variable lease payments and component of taxes of ROU lease charges.

LCV/HCV Hiring, Operating and Maintenance Charges includes non lease component viz. manpower, fuel cost, repair and maintenance and rental charges of LCV/HCV lease assets that have lease period of 12 month or less.

(Refer note 50).

Note:- Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

The Company does not have any outstanding dilutive potential equity shares. Consequently, the basic and diluted earnings per share of the Company remain the same.

The company is contesting the demands and the management including its advisors believe that its position is likely to be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the company''s financial position and results of operations.

Note 43.2 - Claims against the company not acknowledged as debt includes the following major matters:

UPL has preferred an appeal before the Hon''ble Supreme Court of India against the order of APTEL dated 10.03.2021. Presently, the matter is pending before Hon''ble Supreme Court of India.

(iii) One of the gas suppliers of the Company has submitted claims of '' 189.59 Crores (P. Y. '' 523.82 Crores), for use of allocated gas for other than specified purpose, related to FY 2013-14 to FY 2020-21 and no claim received from supplier for FY 202122. The company has refuted this erroneous claim and also there is no contractual provisions of the agreement executed with GGL that allow such claim. The management is of the firm view that the company is not liable to pay any such claim. The company has already taken up the matter with concerned party to withdraw the claim.

(iv) The company has initiated an arbitration proceeding against one of the franchisees claiming compensation for loss of revenue While replying to the claim, the said franchisee has also filed a counter claim of '' 177.14 Crores (P. Y. '' 177.14 Crores) against the company claiming compensation for various losses. The company has filed necessary rejoinder to the counter claim strongly refuting the same mainly on the grounds that the counter claims are wrong and without merits and as are not flowing from the same agreement under which the arbitral tribunal has been constituted. Currently arbitral proceedings of this matter is pending before the sole arbitrator.

(B) CONTINGENT ASSETS

Presently, the matter is pending in Hon''ble Supreme Court of India. Currently, GGL is paying '' 19.83 per mmbtu as transmission charges for domestic gas being purchased and delivered by GAIL at one of the delivery points . If verdict is in favour of GGL, GGL will get refund of '' 193.65 Crores (Previous year '' 173.27 Crores) from December 2013 till March 2022 and the company shall be required to pass on the benefit to its customers as per relevant order of the Court.

(C)	COMMITMENTS		('' in Crores)
Sr	Commitments (to the extent not provided for)	As at 31st	As at 31st
No.		March 2022	March 2021
1	Estimated amount of contracts remaining to be executed on capital account and not provided for	976.83	1,196.42
2	Estimated amount of contracts remaining to be executed on revenue account and not provided for	1,163.69	1,077.30
	Total	2,140.52	2,273.73

Other commitments

All term contracts for purchase of natural gas with suppliers, has contractual volume off take obligation of "Take or Payâ (ToP) as specified in individual contracts. Quantification of ToP amount is dependent on various factors like actual purchase quantity, gas purchase prices of respective contract etc. As these factors are not predictable, ToP commitment amount is not quantifiable.

Fair Value Hierarchy of Financial Assets and Liabilities :

Investment in equity accounted investee i.e.. Guj Info Petro Limited (GIPL) carried at cost.

# Fair value of financial assets and liabilities which are measured at amortised cost is not materially different from the carrying value

(ie..amortised cost). Accordingly, the fair value has not been disclosed separately.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3.

B. MEASUREMENT OF FAIRVALUES

i) Valuation techniques and significant unobservable inputs

The following tables show the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.

Equity Instrument:- Fair value of investment in GSPC shares is based on Market approach, Income approach and cost approach. Transfer out of Level 3

There were no movement in level 3 in either directions during the year ended 31st March 2022 and the year ended 31st March 2021. Ind AS 101 allows an entity to designate certain investments in equity instruments as fair valued through the OCI on the basis of the facts and circumstances at the transition date to Ind AS.

The Company has elected to apply this exemption for its investment in equity shares.

C. FINANCIAL RISK MANAGEMENT

The Company has exposure to the following risks arising from financial instruments:

â¢ Credit risk ;

â¢ Liquidity risk ; and

â¢ Market risk

i. Risk management framework

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework.

Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities.

ii. Credit risk

The carrying amount of following financial assets represents the maximum credit exposure:

(a) Other financial assets

(b) Trade and other receivables

The Commercial and Marketing department has established a credit policy for each category of customer viz. industrial, domestic and commercial.

iii. Liquidity risk

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.

The gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to nonderivative financial liabilities held for risk management purposes and which are not usually closed out before contractual maturity.

iv. Market risk

a) Currency risk

The functional currency of the Company is Indian Rupee (''). The Company''s transactions are majorly denominated in INR and the quantum of the foreign currency transactions being immaterial, the company is not exposed to currency risk on account of payables and receivables in foreign currency. The company does not have any exports. Import amount to 0.84% (Previous Year 0.85%) of total consumption of stores and spares, this is not perceived to be a major risk.

b) Interest rate risk

On period under review the Company do not have any borrowings at fixed rate and has not entered into interest rate swaps for its exposure to long term borrowings at floating rate.

Sensitivity analysis

Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of change in interest rates.

c) Commodity Price Risk

d) Equity Price Risk

The Company do not have any investment in quoted equity shares hence not exposed to equity price risk.

Note 46 CAPITAL MANAGEMENT

The Company''s objectives when managing capital are to:

- Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- Maintain an optimal capital structure to reduce the cost of capital.

The Company seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The management monitors the return on capital as well as the level of dividends to shareholders.

(i) Entity''s responsibilities for the governance of the plan :

Risk to the Plan

Following are the risk to which the plan exposes the entity : :

A Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

-Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

B Investment Risk:

C Liquidity Risk:

D Market Risk:

E Legislative Risk:

(ii) The company has participated in Group Gratuity Scheme Plan with Life Insurance Corporation of India (LIC), HDFC Life Insurance Co. Ltd, Aditya Birla Sun Life Insurance Co. Ltd, ICICI Prudential Life Insurance Co. Ltd, SBI Life Insurance Co. Ltd., Bajaj Allianz Life Insurance Company Ltd, Kotak Mahindra Life Insurance Co. Ltd and Reliance Nippon Life Insurance Co. Ltd (collectively referred as Insurance Co. / Fund Managers) through Gratuity Trust to meet its gratuity liability. The present value of the plan assets represents the balance available at the end of the year. The total value of plan assets is as certified by the various Insurance Co./ fund managers.

(g) Other Notes:

(iii) The company has provided long service award benefits to its employees who completed 15/20/2 5 Years of employment with company. Accordingly company has provided '' 1.00 Crores (Previous year '' 0.97 crores) on account of Long service award benefit. Current Liability as at 31 st March 2022 is '' 0.07 Crores (Previous year '' 0.07 Crores) and Non- Current Liability is '' 0.93 Crores(Previous year '' 0.90 Crores) Discount rate considered for current year is 7% (previous year 6.45%).

(iv) The Company has provided '' 3.85 Crores during the year on account of death compensation benefits and current provision as on 31st March 2022 is '' 3.05 Crores.

(v) The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come in to effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period when the Code becomes effectiv.

(vi) Employee Stock Option Plan : There are no options outstanding as on 31st March 2022, 31st March 2021.

Notes

1 All transactions with related parties were carried out in the ordinary course of business and at arm''s length.

2 All transactions amount disclosed above are inclusive of tax.

3 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 for cash consideration of INR '' 153.86 Crores ('' 164.58 Crores Business valuation determined based on an independent valuation less '' 10.72 Crores working capital adjustment) and the Company has completed the above transfer of business as per BTA with effect from 1st November 2021.

4 The company sells natural gas to domestic, commercial, industrial and CNG consumers. The above related party transaction do not include the transactions of Gas sales to the related parties in ordinary course of business, as all such transactions are done at arm''s length basis. As per Para 11(c)(iii) of Ind AS-24 "Related Party Disclosuresâ, normal dealings of Company with related parties by virtue of public utilities are excluded from the purview of Related Party Disclosures.

5 The company deals on regular basis with entities directly or indirectly controlled by the State Government of Gujarat through government authorities, agencies, affiliations and other organizations (collectively referred as "Government related entitiesâ). Apart from transactions with its group companies, the Company has transactions with such Government related entities including but not limited to the followings:

â¢ Sale and Purchase of Natural Gas

â¢ Rendering and Receiving Services

â¢ Payment of Rent

â¢ Use of Public Utilities

These transactions are conducted in the ordinary course of the business and at arm''s length.

Performance obligations -Connection, Service and Fitting Income

Connection charges from customers deferred over the period when the performance obligation is satisfied:

NOTE 50 LEASES (Ind AS 116)

The Company has adopted Ind AS 116 ''Leases'', effective from 1st April, 2019, using modified retrospective approach.

Note 50.1 The Company as a lessee

The weighted average incremental borrowing rate of 8.59% p.a. has been applied to lease liabilities recognised in the balance sheet at the date of initial application.

The weighted average incremental borrowing rate of 5.50 % p.a. has been applied to lease liabilities recognised in the balance sheet during the year.

50.1.1 The Company used a number of practical expedients summarised here below:

1) Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

2) Applied the exemption not to recognize right-of-use assets and liabilities for leases of low value assets.

50.1.2 Nature of the lease transaction:

Land Leases

Building Leases

Other Leases

Note 51.3 Willful Defaulter

The company is not declared as willful defaulter by any bank or financial institution or other lender.

Note 51.4 Utilisation of borrowed funds

The company has used the borrowings from banks for the specific purpose for which it was taken. The company has not taken any borrowings from financial institution.

Note 51.5 Registration of charges or satisfaction with Registrar of Companies (ROC)

The company has registered charge and satisfaction with ROC within statutory time period.

Note 51.6 Details of Benami Property held

Note 52 ADDITIONAL DISCLOSURES

Note 52.1 Details of Crypto Currency or Virtual Currency

The company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

Note 52.2 Undisclosed Income

There is no transaction, which has not been recorded in books of accounts, that has been surrendered or disclosed as income during the year in tax assessments under the Income Tax Act, 1961.

*MCA issued clarification dated 23rd March, 2020 stated that "Keeping in view the spread of novel corona virus (COVID-19) in India, its declaration as pandemic by the world health organisation (WHO), and decision of Government of India to treat this as a notified disaster, it is hereby clarified that spending of CSR Funds for COVID-19 is eligible CSR activity. Accordingly, spending on various activities related to Covid - 19 will be considered as CSR under item No. (i) and (xii) of Schedule VII of the Companies Act, 2013 relating to promotion of health care, including preventive health care and sanitation and Disaster Management. Considering this, the Company has obtained approval of CSR committee and contributed '' 10 Crores on 1st April,2020 to "Chief Minister Relief Fund, Government of Gujaratâ with special objective in the situation of Disaster Relief for helping COVID 19 affected areas. Hence, Contribution of '' 10 crores made in Chief Minister Relief Fund is covered & eligible under CSR activities as per MCA Circular dated 23rd March, 2020. Subsequently on 10th April, 2020, MCA had issued COVID-19 related Frequently Asked Questions (FAQs) on Corporate Social Responsibility (CSR) where in it was clarified that "''Chief Minister''s Relief Fund'' or ''State Relief Fund for COVID-19'' is not included in Schedule VII of the Companies Act, 2013 and therefore any contribution to such funds shall not qualify as admissible CSR expenditure. The Company has made representation to Government for considering contribution to CM Relief Fund as eligible CSR expenditure. It may be noted that the Company had made contribution of '' 10 crores on 1st April 2020 (cheque cleared on 2nd April 2020) to Gujarat State CM Relief Fund for the financial year 2020-21 under CSR activities prior to the FAQs dated 10th April, 2020, issued by MCA.

Note 55 SEGMENT REPORTING

Information about products and service:

The Company is in a single line of business of Sale of Natural Gas.

Information about geographical areas:

1. The Company does not have geographical distribution of revenue outside India and hence segmentwise disclosure is not applicable to the Company.

2. None of the Company''s assets are located outside India hence segmentwise disclosure is not applicable to the Company.

Information about major customers:

None of the customer account for more than 10% of the total revenue of the Company.

Note 56 ACCOUNTING FOR BUSINESS COMBINATION TRANSACTIONSBUSINESS TRANSFER AGREEMENT FOR GEOGRAPHICAL AREAS OF AMRITSAR AND BHATINDA (PUNJAB)

Business combination transaction between the common control entities, GSPL (Holding Company) and GGL (Subsidiary Company) has been recorded in the books of the Company in accordance with Appendix C - ''Business combinations of entities under common control'' of Ind AS 103 - ''Business Combinations'' using the pooling of interests method which involves the following:-

1. The financial information in the financial statements in respect of prior periods is restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. Accordingly, business combinations is accounted with effect from 1st April, 2020. Accordingly figures for the year ended March 31 2021 are reinstated after giving effect to the Business transfer arrangement. The obligation to pay consideration in cash is recognised as a liability in the comparative financial year.

2. The Company has recorded the asset, liabilities and accumulated losses of the City Gas Distribution (CGD) Business of GSPL pursuant to this arrangement at the respective book values appearing in the books of GSPL.

3. No adjustments are made to reflect fair values and only adjustments are recorded to harmonise accounting policies and intercompany eliminations.

4. The difference between aggregated book value of net assets acquired, accumulated loss of the CGD business and deferred tax recognised on acquisition and consideration paid by the Company to GSPL is transferred to negative capital reserve. Detailed working of the same is given hereunder:

Note 57 RECLASSIFICATION OF COMPARATIVE FIGURES

Certain reclassifications have been made to the comparative period''s financial statements to:

- comply with the requirements of the amended Schedule III to the Companies Act, 2013 effective 1st April 2021

- enhance comparability and ensure consistency with the current year''s financial statements; and

- ensure compliance with the Guidance Note on Division II - Ind AS Schedule III to the Companies Act, 2013.

Note 58 IMPACT OF COVID-19 PANDEMIC

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.

Note 59 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

Previous period figures have been re-grouped / re-classified wherever necessary, to conform to current period''s presentation.

The Accompanying Notes (1-60) are an integral part of the financial Statements.

As per our report attached.

Mar 31, 2021

The Company had recognized the rental - facilitation fees on Investment property for the financial year 2016-17 and 201718 on the basis of provisional working of rental -facilitation fees submitted by tenants. As the company is defending the issue of valuation of land for rental -facilitation fees with tenants and not recognize the rental -facilitation fees on fair value of land because no such decision is arrived at by both the parties (company & tenants ) till end of the financial year.

On similar line, company has recognized rental -facilitation fees on Investment property for the financial year 2018-19, 201920 and 2020-21 on the basis of previous years working as no further working of rental -facilitation fees has been submitted by tenants for the financial year 2020-21.

(ii) Contractual Obligations

The Company has no contractual obligations to purchase, construct or develop investment property or for its repair, maintenance or enhancements.

(iii) Leasing Arrangements

Estimation of Fair Value

The Company obtains independent valuations for its investment properties once in every three to five years interval. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the Company consider information from a variety of sources including:

1. Current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences.

2. Discounted cash flow projections based on reliable estimates of future cash flows.

3. Capitalised income projections based upon a property''s estimated net market income, and a capitalisation rate derived from an analysis of market evidence.

The fair values of investment properties have been determined by based on independent valuer''s valuation certificate. The main inputs used are the rental growth rates, jantry value guideline and sales comparison approach based on comparable transactions and industry data. All resulting fair value estimates for investment properties are included in level 3.

(v) Security Pledge : Refer to Note 20 on borrowings for details in terms of pledge of assets as security.

(vi) There is no restriction on the title and realisability of investment property or remittance of income and proceeds of disposals.

Note no. 8.1: The Company has given refundable security deposits in form of fixed deposits to various project authorities to be held in their name and custody. It will be refunded after satisfactory completion of work. The company has therefore shown these fixed bank deposits amounting '' 34.05 Crores (Previous Year '' 32.19 Crores) and interest accrued on such fixed bank deposits '' 6.99 Crores (Previous Year '' 6.61 Crores), till they are in custody with project authorities as "Security Depositsâ under the Note- "Loans (including Security Deposits)â in the balance sheet.

Note 18.3 : Terms/ rights attached to equity shares

The company has only one class of equity shares having a face value of '' 2 per share (previous year '' 2 each). Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. 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 of the company, the holders of equity shares will be entitled to receive residual assets of the company. The distribution will be in proportion to the number of equity shares held by the shareholders.

Note 18.6 Details of Bought back of shares, Bonus Shares and Shares issue without payment being received in Cash:

Note 18.7 Proposed Dividend:

The Board of Directors, in its meeting on 1st June, 2021, have proposed a final dividend of '' 2.00 per equity share (Face value of '' 2/-each) for the financial year ended on 31st March,2021. The proposal is subject to the approval of shareholders at the Annual General Meeting and if approved would result in a cash outflow of approximately '' 137.68 crores.

The Board of Directors, in its meeting on 5th June, 2020, had proposed a final dividend of '' 1.25 per equity share (Face value of '' 2/-each) for the financial year ended on 31st March,2020. The proposal was approved by shareholders at the Annual General Meeting and this resulted in a cash outflow of approximately '' 86.05 crores.

Nature and purpose of reserves :

General reserve

Amalgamation and Arrangement Reserve

The "Amalgamation and Arrangement Reserve" created pursuant to scheme of amalgamation and arrangement is treated as free reserve based on the judgment of Honourable Gujarat High Court dated 18th April 2015 read with relevant other court decisions.

Retained Earnings

Retained earnings represents surplus / accumulated earnings of the company available for distribution to shareholders.

Equity instrument through OCI

**Pursuant to the Taxation Laws (Amendment) Ordinance 2019 dated 20th September 2019 (which subsequently became Act), tax rates have changed with effect from 1st April, 2019 as company has opted for concessional tax rate as permitted under section 115BAA of the Income Tax Act, 1961. The Company has first time opted concessional tax rate and re-measured its deferred tax liabilities and the full impact of these changes has been recognised in the Statement of Profit & Loss for the year ended on 31st March 2020.(tax rate for 2019-20 - 25.17% and tax rate for 2018-19 - 34.94%).

The company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

Significant management judgment is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income by each jurisdiction in which the relevant entity operates and the period over which deferred income tax assets will be recovered.

Refer Note 44 for financial Instruments, fair value and measurements Refer Note 48 for Related party balances

Note 26.1: The balance with the bank for unpaid dividend is not available for use by the Company and the money remaining unpaid will be deposited in Investor Protection and Education Fund u/s 124(5) of Companies Act, 2013 after the expiry of seven years from the date of declaration of dividend. No amount is due at the end of the period for credit to Investors education and protection fund.

Note 26.2: The Company deposited Rs. 464.78 crores on 12th June, 2013 into the escrow account (""named BG Asia Pacific Holdings Pte. Limited GSPC Distribution Networks Limited Escrow Account"") opened with Citibank N.A., acting as the escrow agent, pursuant to the escrow agreement executed between the BG Asia Pacific Holdings Pte. Limited (the Seller), Gujarat Gas Limited (Formerly known as GSPC Distribution Networks Limited) (the Purchaser) and Citibank N.A. The Payment of said amount into Escrow Account was to be utilized to meet future tax withholding liability (if any) based on outcome of the applications to the Authority for Advance Rulings or otherwise to be remitted to BG Asia Pacific Holdings Pte. Limited (the Seller) directly.

During the year, the Company has received the ruling from the Hon''ble Authority for Advance Ruling ("AARâ), vide consolidated ruling order dated 25th February 2021 wherein the Hon''ble AAR has held that the Purchaser is not required to withhold tax since the capital gains is not subject to tax in India under India Singapore Double Tax Avoidance Agreement in the hands of the Seller. Pursuant to the ruling of the Hon''ble AAR and as per the terms of the Escrow Agreement, Escrow Account amount Rs. 464.78 crores will be remitted to the BG Asia Pacific Holdings Pte. Limited (the Seller). Accordingly, Escrow Account amount have been paid to BG Asia Pacific Holdings Pte Ltd''s bank account in Singapore on 7th April 2021.

Note 42.2 - Claims against the company not acknowledged as debt includes the following major matters:

(i) UPL Limited (UPL) a customer of erstwhile Gujarat Gas Company Limited(now known as Gujarat Gas Limited) had filed a complaint before Petroleum and Natural Gas Regulatory Board (PNGRB) against erstwhile GGCL alleging charging of tariff illegally under the City Gas Network Distribution Agreement entered into between the Parties. The matter was decided against the company by PNGRB vide its Order dated 20.10.2014. The company had preferred an appeal at Appellate Tribunal for Electricity (APTEL) against the aforementioned PNGRB Order. The company had submitted a bank guarantee of '' 40.00 Crores in favour of UPL.

APTEL has delivered final judgement on 10.03.2021 in favour of the Company by setting aside the aforementioned PNGRB Order, and has recorded that invocation of HAPI tariff by PNGRB for the negotiated arrangement between the parties was not only against the letter and spirit of regulations defining tariff zone but also tantamount to rewriting of contract.

PGNRB had vide its orders dated 13.09.2011 of Chairman and dated 10.10.2011 of the majority members (three member panel of Board) unanimously held that GAIL had adopted Restrictive Trade Practices by blocking off direct connectivity to GSPC and further, directed Respondents to immediately give direct connectivity to GSPC at Dahej Terminal. The PLL Offtakers (GAIL) filed appeals against the said PNGRB orders before the Appellate Tribunal for Electricity (APTEL). On 23-February-2012 APTEL had issued an interim order for shifting the Delivery Point from GAIL-GSPL Delivery Point to GSPL-PLL Delivery Point. On 18-December-2013 APTEL issued its judgment and required GSPCL to pay the amount of the difference between '' . 8.74/MMBTU (exclusive of Service Tax) - earlier connectivity charges and '' 19.83/MMBTU (Exclusive of Service Tax) - HVJ/DVPL Zone-1 tariff to GAIL for the period from 20th November 2008 to 29th February 2012.

GSPCL has filed an appeal against the APTEL''s above referred judgment before Hon''ble Supreme Court of India (GSPCL vs. GAIL & Others, Civil Appeal No. 2473-2476 of 2014) and the Hon''ble Supreme Court of India had passed the Interim Order on 28th February 2014. The Court has stated that the ends of justice would be met if as a matter of interim arrangement, the appellant is directed to pay interconnectivity charges at the rate of '' 12.00 per MMBTU (exclusive of Taxes). The Company has already provided and paid interconnectivity charges at the rate of '' 12.00 per MMBTU (exclusive of Taxes).

(iii) One of the gas suppliers of the Company has submitted a claim of '' 523.82 Crores (P. Y. '' 508.24 Crores), for use of allocated gas for other than specified purpose, demand in earlier years related to FY 2013-14 to FY 2019-20 (H1) and no claim received from supplier for FY 2019-20 (H2) and FY 2020-21. The company has refuted this erroneous claim contending that there is gross error in actual domestic gas purchase and actual sales considered by supplier and also there is no contractual provisions of the agreement executed with GGL that allow such claim. The management is of the firm view that the company is not liable to pay any such claim. The company has already taken up the matter with concerned party/authorities to withdraw the claim.

(iv) The company has initiated an arbitration proceeding against one of the franchisee claiming compensation for loss of revenue While replying to the claim, the said franchisee has also filed a counter claim of '' 177.14 Crores (P. Y. '' 177.14 Crores) against the company claiming compensation for various losses. The company has filed necessary rejoinder to the counter claim strongly refuting the same mainly on the grounds that the counter claims are wrong and without merits and as are not flowing from the same agreement under which the arbitral tribunal has been constituted. Further, the tribunal does not have any jurisdiction to adjudicate the counter claim filed by the franchisee.

B) CONTINGENT ASSETS

(i) Company has raised claim of '' 43.08 crores (Previous year '' 43.08 crores) for net credit of natural gas pipeline tariff as per PNGRB Order with one of the suppliers and supplier is disputing company''s claim and indicating for adjusting the partial claim of '' 30.72 (Previous year '' 30.72 crores) crores out of total claim '' 43.08 crores (Previous year '' 43.08 crores) against disputed liability for use of allocated gas other than specified purpose, against demand in earlier year (Refer Point 42 A-(iii) above).

(ii) Company has filed an appeal before the Appellate Tribunal for Electricity (APTEL) against the PNGRB order related to the matter held that the Gas Swapping Arrangement Guidelines of PNGRB is applicable erroneously. APTEL has issued the order in favour of GGL. The said supplier has filed appeal at Hon''ble Supreme Court of India against the order of APTEL. Presently, the matter is pending in Hon''ble Supreme Court of India. Currently, GGL is paying '' 19.83 per mmbtu as transmission charges for domestic gas being purchased and delivered by GAIL at one of the delivery points . If verdict is in favour of GGL, GGL will get refund of '' 173.29 Crores (Previous year '' 163.58 Crores) from December 2013 till March 2021 and company shall endeavour to pass on the benefit to its customers.

Other commitments

Note: Note: No interest has been paid by the Company to the enterprises covered under Micro, Small and Medium Enterprises Development Act, 2006 according to the terms agreed with the enterprises.

The above information regarding micro, small and medium enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company.

Note 44 FINANCIAL INSTRUMENTS (FAIR VALUE MEASUREMENTS) AND FINANCIAL RISK MANAGEMENT

The Company has various financial assets and liabilities. The disclosures regarding the classification, fair value hierarchy, markets risk, credit risks and liquidity risks are as follows:

Fair Value Hierarchy of Financial Assets and Liabilities :

Investment in equity accounted investee i.e.. Guj Info Petro Limited (GIPL) carried at cost.

# Fair value of financial assets and liabilities which are measured at amortised cost is not materially different from the carrying value (ie..amortised cost). Accordingly, the fair value has not been disclosed separately.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have quoted price. The mutual funds are valued using the closing NAV.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3.

B. Measurement of fair values

i) Valuation techniques and significant unobservable inputs

The following tables show the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.

C. FINANCIAL RISK MANAGEMENT

The Company has exposure to the following risks arising from financial instruments:

â¢ Credit risk ;

â¢ Liquidity risk; and

â¢ Market risk

i. Risk management framework

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework.

The Group Heads Committee supported by Managing Director oversees the management of these risks. The Company''s senior management is supported by Risk Management Committee that advises on financial risk and appropriate financial risk governance framework for the Company. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The audit committee oversees how management monitors compliance with the company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee. The Board of Directors reviews and agrees policies for managing each of these risks.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investments in debt securities.

Note 44 FINANCIAL INSTRUMENTS (FAIR VALUE MEASUREMENTS) AND FINANCIAL RISK MANAGEMENT (continued)

The carrying amount of following financial assets represents the maximum credit exposure:

(a) Other financial assets

(b) Trade and other receivables

The Commercial and Marketing department has established a credit policy for each category of customer viz. industrial, domestic and commercial.

Assets are written off when there are no reasonable expectation of recovery such as debtor declaring bankruptcy or failing to engage in a repayment plan with group. Where receivables have been written off the company continues to engage in enforcement activity to attempt to recover the receivables. where recoveries are made, these are recognised in profit and loss.

iii. Liquidity risk

The Company maintains the following lines of credit outstanding:

Term loans from banks and financial institution of '' 897.26 crores (Previous year: '' 1998.34 crores) that is secured by First pari - passu charge on all Present and future fixed assets & Property, plant, equipment (PPE)(Movable & Immovable) of the Company and Second pari -passu charge on Present & Future Current Assets (financial and non financial assets) of the Company. Interest rate payable @ 5.50% p.a. (for more details - Refer Note no. 20 Secured borrowings).

iv. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits and FVTOCI investments.

a) Currency risk

The functional currency of the Company is Indian Rupee ( ). The Company''s transactions are majorly denominated in INR and the quantum of the foreign currency transactions being immaterial, the company is not exposed to currency risk on account of payables and receivables in foreign currency. The company does not have any exports. Import amount to 0.85 % (Previous Year 1.30%) of total consumption of stores and spares, this is not perceived to be a major risk.

b) Interest rate risk

On period under review the Company do not have any borrowings at fixed rate and has not entered into interest rate swaps for its exposure to long term borrowings at floating rate.

c) Commodity Price Risk

d) Equity Price Risk

The Company do not have any investment in quoted equity shares hence not exposed to equity price risk.

Note 45 Capital Management

The Company''s objectives when managing capital are to:-

Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- Maintain an optimal capital structure to reduce the cost of capital.

The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The Company has achieved a return on capital 28% in March 31, 2021 (Previous year: 36%). The weighted-average interest expense on interest-bearing borrowings (excluding liabilities with imputed interest) was 6.88% p.a.(Previous year: 8.35% p.a.)

Note 46 EMPLOYEE STOCK OPTION PLAN :

The erstwhile GSPC Gas Company Limited (''e-GSPC''), erstwhile Gujarat Gas Company Limited (''e-GGCL''), erstwhile Gujarat Gas Financial Services Limited (''e-GFSL'') and erstwhile Gujarat Gas Trading Company Limited (''e-GTCL'') merged with and into GSPC Distribution Network Limited (''GDNL'') under the Composite Scheme of Amalgamation and Arrangement (the "Scheme of Amalgamationâ). The effective date of Scheme of Amalgamation was 14 May 2015. Upon the Scheme of Amalgamation becoming effective, the name of GDNL has been changed to Gujarat Gas Limited (''GGL'') as per the provisions of the Companies Act.

Pursuant to the Scheme of Amalgamation, the Addendum Gujarat Gas Limited Employee Stock Option Plan 2016 ("ESOP 2016â) being supplementary to the Gujarat Gas Company Limited Employee Stock Option Plan 2008 ("ESOP 2008â) has been formulated for the limited purpose of adopting the ESOP 2008 in the Company.

The e-GGCL had formulated the above ESOP 2008, whereby Stock Options had been granted by e-GGCL to its employees. The ESOP 2008 has been effective from 1 November 2008 for a tenure of 8 years. As on the effective date of the Scheme of Amalgamation, certain employees of e-GGCL to whom Options had been Granted and Vested under the ESOP 2008, have not Exercised the said Options and hence as per the Scheme of Amalgamation, they are the Eligible Employees for the purpose of the ESOP 2016 as follows:

1 Revised Grants have been made to them with effect from the effective date under the Scheme of Amalgamation of 13000 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 were not Exercised by them on the effective date under the Scheme of Amalgamation.

2 The above Revised Grants of Options-I has been on the basis of the Share Exchange Ratio of 1 (one) equity share of '' 10/- each of GGL, for every 1 (one) equity share of '' 2/- each of e-GGCL, pursuant to the Scheme of Amalgamation.

3 The Options-I bear the Exercise Price as per the ESOP 2008. The Exercise Price payable for Options-I under ESOP 2016 is based on the Exercise Price payable by such Eligible Employees under the ESOP 2008 that has been adjusted after taking into account the effect of the Share Exchange Ratio of 1:1 as mentioned above.

4 Upon such Revised Grant of Options-I to the Eligible Employees the Options Granted under the ESOP 2008 stand cancelled and the Eligible Employees shall continue to be bound by all the terms and conditions of the ESOP 2008 in addition to this ESOP 2016.

The Gujarat Gas Company Limited Employee Welfare Stock Option Trust ("ESOP 2008 Trustâ). which has been formed and created vide execution of the Deed of Gujarat Gas Company Limited Employee Welfare Stock Option Trust dated 4 November 2008 has been renamed as Gujarat Gas Limited Employee Welfare Stock Option Trust ("ESOP 2016 Trustâ).The ESOP 2016 Trust is an irrevocable Trust that functions for the limited purpose of adopting the ESOP 2008 and ESOP 2016 and to hold the existing share inventory of the ESOP 2008 Trust for the benefit of Eligible Employees under ESOP 2016 and the balance to be appropriated in line with the SEBI Regulations.

The ESOP 2016 and the ESOP 2016 Trust are governed by the provisions of the Companies Act 1956 or the Companies Act 2013, as may be applicable and the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 or the SEBI (Share Based Employee Benefits) Regulation, 2014, as may be applicable.

The ESOP 2008 Trust had purchased out of the funds advanced by the Company, the shares equivalent to the number of options granted. IDBI Trusteeship Services Limited are the Trustees. The Trustees can sell the shares in the market as per the approved scheme and for the year ended on 31st March 2021, there are no purchases from the market.

The exercise price is calculated at 10% discount to the closing price of the shares on record date, being the date on which the grant of options were approved as per ESOP 2008. The graded vesting of options granted, over a period of 4 years from the date of grant is as follows:

The options are to be exercised within a maximum period of 2 years from the date of vesting. Within the exercise period, the employee would have the option to either purchase the shares from the trust at the exercise price or to give a mandate of sale to the trust at the best available market price, in which event the difference between the net price realized on sale after taxes and charges and the Exercise Price will accrue as gains to the employee.

The employee share based payment plans have been accounted based on the Fair value method of accounting using the Black-Scholes Option Pricing Formula. There are no options outstanding as on 31 March 2021,31 March 2020 and 31 March 2019. Note 47 Disclosure Of Employee Benefits

The Company has implemented Ind AS - 19 on "Employee Benefitsâ.

(i) Entity''s responsibilities for the governance of the plan Risk to the Plan

Following are the risk to which the plan exposes the entity : :

A Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

- Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

- Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

- Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

B Investment Risk:

C Liquidity Risk:

D Market Risk:

E Legislative Risk:

(ii) The company has participated in Group Gratuity Scheme Plan with Life Insurance Corporation of India (LIC), HDFC Life Insurance Co. Ltd, Aditya Birla Sun Life Insurance Co. Ltd, ICICI Prudential Life Insurance Co. Ltd, SBI Life Insurance Co. Ltd., Bajaj Allianz Life Insurance Company Ltd, Kotak Mahindra Life Insurance Co. Ltd and Reliance Nippon Life Insurance Co. Ltd (collectively referred as Insurance Co. / Fund Managers) through Gratuity Trust to meet its gratuity liability. The present value of the plan assets represents the balance available at the end of the year. The total value of plan assets is as certified by the various Insurance Co./ fund managers.

(g) Other Notes:

(iii) The company has provided long service award benefits to its employees who completed 15/20/25 Years of employment with company. Accordingly company has provided '' 0.97 Crores (Previous year '' 0.89 crores) on account of Long service award benefit. Current Liability as at 31st March 2021 is '' 0.07 Crores(Previous year '' 0.09 Crores) and Non- Current Liability is '' 0.90 Crores(Previous year '' 0.80 Crores) Discount rate considered for current year is 6.45% (previous year 6.85%).

(iv) The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come in to effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period when the Code becomes effective.

RELATED PARTY TRANSACTIONS

As per the Indian Accounting Standard-24 on "Related Party Disclosuresâ, list of parent & subsidiary of the Company are as f

(a) Parent Entity

Gujarat State Investment Limited (GSIL) - Ultimate Holding Company

Gujarat State Petroleum Corporation Limited (GSPC) -Intermediate Holding Company

Gujarat State Petronet Limited (GSPL) - Holding Company

(b) Subsidiary / Enterprise Controlled by the Company

Guj Info Petro Limited- GIPL - Associate

Gujarat Gas Limited Employee Stock Option Welfare Trust - Enterprise controlled by the company Gujarat Gas Limited Employees Group Gratuity Scheme - Enterprise controlled by the company

Note 49 RECEIVABLES, CONTRACT ASSETS AND CONTRACT LIABILITIES (WITH REFERENCE TO IND AS 115-REVENUE FROM CONTRACTS WITH CUSTOMERS)

Revenue recognised in the statement of profit and loss :

Revenue from contracts with customers (refer note 30):

Sale of Natural gas is the main activity of city gas distribution business and other operating income is incidental to sale of natural gas. Company sells and distributes natural gas in India.Sale of natural gas includes excise duty but excludes VAT and GST collected from the customers on behalf of the Government. All the revenue mentioned above are earned by transfer of goods or services at a point of time.

Performance obligations -Connection, Service and Fitting Income

Connection charges from customers deferred over the period when the performance obligation is satisfied:

NOTE 50 TRANSITION TO IND AS 116 LEASES

Transition to Ind AS 116 Leases ( Effective from 1st April, 2019) The Company has adopted Ind AS 116 ''Leases'', effective from 1st April, 2019, using modified retrospective approach. This has resulted in recognizing a right of use lease assets of '' 33.42 Crores (an amount equal to lease liability '' 33.27 Crores and adjustment from pre-paid accrued rent '' 0.15 Crores) as at 1st April 2019.

In respect of leases that were classified as finance leases, applying Ind AS 17, an amount of '' 36.16 Crores has been reclassified from property, plant and equipment to right-of-use lease assets.

On transition to Ind AS 116, the Company elected to apply the practical expedient to grandfather the assessment of which transactions are leases. The Company applied Ind AS 116 only to contracts that were previously identified as leases under Ind AS 17. Note 50.1 The Company as a lessee

The Company has taken various assets on lease primarily consist of leases for land and buildings. The Company previously classified leases as operating or finance leases based on its assessment of whether the lease transferred significantly all of the risks and rewards incidental to ownership of the underlying asset to the Company. Under Ind AS 116, the Company recognises right-of-use assets and lease liabilities for most of these leases.

On transition, for leases classified as operating leases under Ind AS 17, the lease liabilities are measured at the present value of the remaining lease payments, discounted at the Company''s incremental borrowing rate as at 1st April 2019. Right-of-use assets are measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments. The Company has tested its right-of-use assets for impairment on the date of transition and has concluded that there is no indication that the right-of-use assets are impaired. The weighted average incremental borrowing rate of 8.59% P.a. has been applied to lease liabilities recognised in the balance sheet at the date of initial application.

50.1.1 The Company used a number of practical expedients summarised here below:

1) Grandfather their previous lease assessment for existing contracts.

2) Applied a single discount rate to a portfolio of leases with reasonably similar characteristics.

3) Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

4) Applied the exemption not to recognize right-of-use assets and liabilities for leases of low value assets;

5) Excluded initial direct costs from the measurement of the right-of-use asset at the date of initial application; and

6) Used hindsight when determining the lease term.

50.1.2 Nature of the lease transaction:

Land Leases

The Company has taken several plots of land on lease for setting up CNG, City Gas Station, CPRS/DPRS station and for site office purpose. The lease term mentioned in the agreements ranges from 11 months to 99 years. Lease agreements are renewable on mutually agreed terms and do not contain any non-cancellable period.In certain contacts, the Company is restricted from assigning and subletting the leased assets.

Building Leases

The Company has taken various office/warehouse buildings on lease with monthly and annual payment terms. The lease term mentioned in the agreements ranges from 11 months to 9 years. Most of the agreements are renewable on mutually agreed terms, some of them are having non - cancellable period whereas few agreements are silent on renewal.In certain contacts, the Company is restricted from assigning and subletting the leased assets.

Other Leases

The Company has also taken various commercial vehicles, CNG Cascade, booster compressor and other equipments, IT equipment etc. on lease. The lease term mentioned in the agreements ranges from 6 months to 10 years. Some portion of the lease rentals is based on usage of the equipment considered as variable lease payment. Lease rentals include lease and non lease component viz. manpower, fuel cost, repair and maintenance etc and only hiring portion is considered for ROU accounting.

*MCA issued clarification dated 23rd March, 2020 that spending on various activities related to Covid - 19 will be considered as CSR under item No. (i) and (xii) of Schedule VII of the Companies Act, 2013 relating to promotion of health care, including preventive health care and sanitation and Disaster Management. Considering this, the Company has obtained approval of CSR committee and contributed '' 10 Crores on 31st March 2020 and additional '' 10 Crores on 1st April,2020 to "Chief Minister Relief Fund, Government of Gujaratâ with special objective in the situation of Disaster Relief for helping COVID 19 affected areas and considered the same as CSR expenditure. Subsequently on 10th April, 2020, MCA had issued COVID-19 related Frequently Asked Questions (FAQs) on Corporate Social Responsibility (CSR) where in it was clarified that ''Chief Minister''s Relief Fund'' or ''State Relief Fund for COVID-19'' is not included in Schedule VII of the Companies Act, 2013 and therefore any contribution to such funds shall not qualify as admissible CSR expenditure. The Company has made representation to Government for considering contribution to CM Relief Fund as eligible CSR expenditure. It may be noted that Company had made above contribution to Gujarat State CM Relief Fund for the financial year 2019-20 and 2020-21 under CSR activities prior to the FAQs dated 10th April, 2020, issued by MCA.

Note 52-SEGMENT REPORTING

Information about products and service:

The Company is in a single line of business of Sale of Natural Gas.

Information about geographical areas:

1. The Company does not have geographical distribution of revenue outside India and hence segmentwise disclosure is not applicable to the Company.

2. None of the Company''s assets are located outside India hence segmentwise disclosure is not applicable to the Company.

Information about major customers:

None of the customer account for more than 10% of the total revenue of the Company.

Note 53 RECLASSIFICATION OF COMPARATIVE FIGURES

Certain reclassifications have been made to the comparative period''s financial statements to:

- enhance comparability and ensure consistency with the current year''s financial statements; and

- ensure compliance with the Guidance Note on Division II - Ind AS Schedule III to the Companies Act, 2013.

Note 54 STATUS OF TRANSFER OF AUTHORIZATION IN FAVOUR OF GUJARAT GAS LIMITED FOR GEOGRAPHICAL AREAS OF AMRITSAR AND BHATINDA (PUNJAB)

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 to 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. Same is subject to approval of the Board of GSPL.

As on 31 March 2021, the Company has incurred total capital expenditure INR 197.46 Crores (previous year INR 122.19 Crores) with respect to 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 '' 5.79 Crores (Previous year '' 2.56 Crores) and facilitation fees income of '' 2.73 Crores (Previous year '' 0.21 Crores) from GSPL during the year for use of these assets. [Refer note 3.1,3.2 & 5.1 for PPE, CWIP & Intangible assets]

Note 55 IMPACT OF COVID-19 PANDEMIC

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 201920 to that extent.

Note 56 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

Note 57 PREVIOUS YEAR FIGURES

Previous year''s figures have been regrouped or reclassified wherever necessary to confirm to the current period''s presentation.

Mar 31, 2018

1. Corporate Information

a) Gujarat Gas Limited (GGL or âCompanyâ) (CIN : L40200GJ2012SGC069118) formerly known as GSPC Distribution

Networks Limited (GDNL) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. GGL is a Government Company u/s 2(45) of Companies Act 2013. Its shares are listed on Bombay Stock Exchange and National Stock Exchange in India.

The registered office is located at Block No. 15, 3rd Floor, Udyog Bhavan, Sector-11, Gandhinagar - 382 011 Gujarat, India. The Company is engaged in Natural Gas Business in India. Natural gas business involves distribution of gas from sources of supply to centres of demand and to the end customers.

The scheme of amalgamation and arrangement was sanctioned by the Honâble Gujarat High Court at Ahmedabad vide its order dated 30th March 2015 between the following transferors companies -

1. GSPC Gas Company Limited (GSPC Gas)

2. Gujarat Gas Company Limited (GGCL)

3. Gujarat Gas Financial Services Limited (GFSL)

4. Gujarat Gas Trading Company Limited (GTCL)

(Collectively called Transferor Companies)

with Gujarat Gas Limited (formerly known as GSPC Distribution Networks Limited-GDNL) (the transferee) under the Scheme of Amalgamation and Arrangement with an appointed date of 1st April, 2013. Subsequently, the companyâs name has been changed from GSPC Distribution Networks Limited to Gujarat Gas Limited (GGL) with effect from 15th May 2015.

b) Authorization of financial statements

The Standalone Financial Statements were approved and authorized for issue in accordance with a resolution passed in meeting of Board of the Directors held on 11th May 2018.

c) Functional and Presentation Currency

The financial statements are presented in Indian rupee (Rs.), which is the functional and presentation currency of the Company.

Note No. 2.1: The Company has given refundable security deposits in form of fixed deposits to various project authorities to be held in their name and custody. It will be refunded after satisfactory completion of work. The company has therefore shown these fixed bank deposits amounting Rs.42.70 Crores - (Previous Year - Rs.37.39 Crores) and interest accrued on such fixed bank deposits Rs.6.61 Crores (Previous Year - Rs.4.48 Crores), till they are in custody with project authorities as âSecurity Depositsâ under the Note- âLoans (including Security Deposits)â in the balance sheet.

Note 3.1 : The balances in dividend accounts are not available for use by the Company and the money remaining unpaid will be deposited in the Investor Protection and Education Fund after the expiry of 7 years from the date they became due for payment. No amount is due at the end of the period for credit to Investor Protection and Education fund.

Terms/ rights attached to equity shares

The Company has only one class of equity shares having a face value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. 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 of the company, the holders of equity shares will be entitled to receive residual assets of the company. The distribution will be in proportion to the number of equity shares held by the shareholders. Note 18.4 Share holding by prescribed entities

Out of Equity shares issued by the company, shares held by its holding company and their subsidiaries and associates are as under:

Note 3.2 Details of Bought back of shares, Bonus Shares and Shares issue without payment being received in Cash:

The Board of Directors, in its meeting on 11th May 2018, have proposed a final dividend of Rs.4 per equity share for the financial year ended on 31st March,2018. The proposal is subject to the approval of shareholders at the Annual General Meeting and if approved would result in a cash outflow of approximately Rs.66.39 crore including corporate dividend tax of Rs.11.32 crores.

Nature and purpose of reserves:

General reserve

Amalgamation and Arrangement Reserve

The âAmalgamation and Arrangement Reserveâ created pursuant to scheme of amalgamation and arrangement is treated as free reserve based on the judgment of Honorable Gujarat High Court dated 18 th April 2015 read with relevant other court decisions.

Debenture redemption reserve

The Company had issued Non convertible debentures and as per the provisions of the Companies Act, 2013, had created debenture redemption reserve out of the profits of the company available for payment of dividend. The Non convertible debentures had been redeemed in April 2016 hence balance of debenture redemption reserve transferred to retained earnings.

Employees Stock Options Outstanding

The Employee stock options outstanding account is used to recognise the grant date fair value of options issued to employees under Employee stock option plan.

Equity instrument through OCI

*Amount disclosed under the head âCurrent financial liabilities : Othersâ (Note 25)

The Company does not have any continuing defaults in repayment of loans and interest as at the reporting date.

Note 4.1: The balance with the bank for unpaid dividend is not available for use by the Company and the money remaining unpaid will be deposited in Investor Protection and Education Fund u/s 124(5) of Companies Act, 2013 after the expiry of seven years from the date of declaration of dividend. No amount is due at the end of the period for credit to Investors education and protection fund. Note 25.2: The Company deposited Rs.464.78 crores on 12th June, 2013 into the escrow account (ânamed BG Asia Pacific Holdings Pte. Limited GSPC Distribution Networks Limited Escrow Accountâ) opened with Citibank N.A. , acting as the escrow agent, pursuant to the escrow agreement executed between the BG Asia Pacific Holdings Pte. Limited (the Seller), Gujarat Gas Limited (Formerly known as GSPC Distribution Networks Limited) (the Purchaser) and Citibank N.A. The Payment of said amount into Escrow Account is to be utilized to meet future tax withholding liability (if any) based on outcome of the applications to the Authority for Advance Rulings or otherwise to be remitted to BG Asia Pacific Holdings Pte. Limited (the Seller) directly.

Note 5.1: Advances from customers includes amount of Rs.0.00 Crores (Previous Year Rs.0.01 Crores) outstanding more than 365 days. These amounts are in the nature of security deposits for providing capital goods or services in the normal course of business.

Note 6.1 - The company has taken premises for business and residential use for its employees under cancellable operating lease arrangements. The total lease rentals recognised as an expense during the year for such lease arrangements is Rs.6.40 Crores (Previous Year Rs.6.04 Crores). The lease arrangement typically ranges from 11 months to 9 years.

Note

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

Note 7.1 - Claims against the company not acknowledged as debt

(i) UPL Limited (UPL) a customer of erstwhile Gujarat Gas Company Limited(now known as Gujarat Gas Limited) filed a complaint before Petroleum and Natural Gas Regulatory Board (PNGRB) against erstwhile GGCL alleging charging of tariff illegally under the City Gas Network Distribution Agreement entered into between the Parties. The matter was decided against the company by PNGRB. The company has preferred an appeal at Appellate Tribunal for Electricity (APTEL) against the PNGRB Order. The company has also sought an interim stay on the PNGRB order which was granted by APTEL. The APTEL has in its order stated that it is an interim order without considering the merits of the case. The company has submitted bank guarantee of Rs.40 Crores in favour of UPL.

(ii) Erstwhile Gujarat Gas Company Limited and Erstwhile GSPC Gas Company Limited (Now collectively known as Gujarat Gas Limited âGGLâ) had signed Gas supply agreement with Gujarat State Petroleum Corporation Limited (GSPCL) for purchase of Regasified liquefied natural gas (RLNG). As per the provision of said agreement, GGL has to pay interconnectivity charges to GSPCL for the supply and purchase of RLNG at Delivery point which is charged to GSPCL by their supplier i.e.PLL Off takers (GAIL India, BPCL, IOCL).

PGNRB had vide its orders dated 13.09.2011 of Chairman and dated 10.10.2011 of the majority members (three member panel of Board) unanimously held that GAIL had adopted Restrictive Trade Practices by blocking off direct connectivity to GSPC and further, directed Respondents to immediately give direct connectivity to GSPC at Dahej Terminal. The PLL Offtakers (GAIL) filed appeals against the said PNGRB orders before the Appellate Tribunal for Electricity (APTEL). On 23-February-2012 APTEL had issued an interim order for shifting the Delivery Point from GAIL-GSPL Delivery Point to GSPL-PLL Delivery Point. On 18-December-2013 APTEL issued its judgment and required GSPCL to pay the amount of the difference between Rs.8.74/MMBTU (exclusive of Service Tax) - earlier connectivity charges and Rs.19.83/MMBTU (Exclusive of Service Tax) - HVJ/DVPL Zone-1 tariff to GAIL for the period from 20th November 2008 to 29th February 2012.

GSPCL has filed an appeal against the APTELâs above referred judgment before Honâble Supreme Court of India (GSPCL vs. GAIL & Others, Civil Appeal No. 2473-2476 of 2014) and the Honâble Supreme Court of India had passed the Interim Order on 28th February 2014. The Court has stated that the ends of justice would be met if as a matter of interim arrangement, the appellant is directed to pay interconnectivity charges at the rate of Rs.12.00 per MMBTU (exclusive of Taxes). The Company has already provided and paid interconnectivity charges at the rate of Rs.12.00 per MMBTU (exclusive of Taxes).

(iii) One of the gas suppliers of the Company has submitted a claim of Rs.134.90 Crores (P. Y. Rs.108.44 Crores), for overdrawn use of gas against demand in earlier years. The company has refuted this erroneous claim contending that no contractual provisions of the agreement executed with GGL allow such claim. The management is of the firm view that the company is not liable to pay any such claim. The company has already taken up the matter with concerned party/authorities to withdraw the claim.

(iv) During this year, the company has initiated an arbitration proceeding against one of the franchisees claiming compensation for loss of revenue While replying to the claim, the said franchisee has also filed a counter claim of Rs.177.14 Crores against the company claiming compensation for various losses. The company has filed necessary rejoinder to the counter claim strongly refuting the same mainly on the grounds that the claims are wrong and as are not flowing from the same agreement under which the arbitral tribunal has been constituted the tribunal does not have anyjurisdiction to adjudicate the claim.

Note 7.2 - Contingent Liabilities - Stamp duty on amalgamation

The office of superintendent of stamp has issued demand of stamp duty of Rs.43.53 crores for the transaction of scheme of amalgamation and arrangement. The Company has filed the appeal before Chief Controlling Revenue Authority - CCRA on 20.12.2016 by paying 25% of demand of Rs.10.88 crores. The Company has already provided the liability of Rs.25 crores in the books of accounts for the financial year 2015-16.

(B) CONTINGENT ASSETS

The Company is having certain claims, litigations and proceedings which are pursuing through legal processes. The management believe that probable outcome in all such claims, litigations and proceedings are uncertain. Hence, the disclosure of such claims, litigations and proceedings is not required in the financial statements.

Note: No interest has been paid by the Company to the enterprises covered under Micro, Small and Medium Enterprises Development Act, 2006 according to the terms agreed with the enterprises.

Investment in equity accounted investee i.e.. Guj Info Petro Limited (GIPL) carried at cost.

# Fair value of financial assets and liabilities which are measured at amortised cost is not materially different from the carrying value (ie..amortised cost).

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have quoted price. The mutual funds are valued using the closing NAV.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3.

B. Measurement of fairvalues

i) Valuation techniques and significant unobservable inputs

The following tables show the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.

Transfer out of Level 3

There were no movement in level 3 in either directions during the year ended 31st March 2018 and the year ended 31st March 2017. Ind AS 101 allows an entity to designate certain investments in equity instruments as fair valued through the OCI on the basis of the facts and circumstances at the transition date to Ind AS.

The Company has elected to apply this exemption for its investment in equity shares.

Sensitivity analysis

Based on the valuation report for investments in unquoted shares, the sensitivity as as 31st March 2018 is provided below.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk ;

- Liquidity risk; and

- Market risk

i. Risk management framework

The Companyâs Board of Directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework.

The Group Heads Committee supported by Chief Financial Officer oversees the management of these risks. The Companyâs senior management is supported by Risk Management Committee that advises on financial risk and appropriate financial risk governance framework for the Company. The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The audit committee oversees how management monitors compliance with the companyâs risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee. The Board of Directors reviews and agrees policies for managing each of these risks.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and investments in debt securities.

The carrying amount of following financial assets represents the maximum credit exposure:

(a) Other financial assets

The company maintains its Cash and cash equivalents and Bank deposits with banks having good reputation, good past track record and high quality credit rating and also reviews their credit-worthiness on an on-going basis.

(b) Trade and other receivables

The Companyâs exposure to credit Risk is the exposure that Company has on account of goods sold or services rendered to a contractual counterparty or counterparties, whether with collateral or otherwise for which the contracted consideration is yet to be received. The Companyâs customer base are Industrial, Commercial-Non Commercial, Domestic and CNG.

The Commercial and Marketing department has established a credit policy for each category of customer viz. industrial, domestic and commercial.

The Company raises the invoice for quantities sold based on periodicity as per the agreement. Sales are subject to security deposit and/or bank guarantee clauses to ensure that in the event of non-payment the companyâs receivables are secured. In case of short/non receipt of security deposit/or bank guarantee, the Company is exposed to credit risk to that extent.

For CNG sales made through Oil Marketing Companies (OMCs), the Company raises the invoice for quantities sold based on periodicity as per the agreement. The OMCs are well established companies viz. HPCL, BPCL, IOC, Essar Oil Ltd. where no significant credit risk is anticipated.

The Company provides for allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables.

A default on a financial asset is when the counter party fails to make contractual payment within 180 days of when they fall due. This definition of default is determine by considering the business environment in which the company operates and other macro economic factors.

The impairment provisions above are based on management judgment / assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the companyâs past history as well as forward looking estimates at the end of each reporting period.

The impairment provisions for financial assets - Loan and advances - Security Deposit as disclosed above are based on management judgment / assumptions about risk of performance default . The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the companyâs past history as well as forward looking estimates at the end of each reporting period.

iii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.

The Company maintains the following lines of credit outstanding:

(a) Term loans from banks and financial institution of Rs.2326.94 crores (Previous year: Rs.2351.60 crores) that is secured by First pari - passu charge on all Present and future fixed assets & Property, plant, equipment (PPE)(Movable & Immovable) of the the Company and Second pari -passu charge on Present & Future Current Assets (financial and non financial assets) of the Company. Interest rate payable varying from 8 % - 8.35 %.

Financing arrangement

The Company had access to the following undrawn borrowing facilities at the end of the reporting period.

Exposure to liquidity risk

iv. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits and FVTOCI investments.

a) Currency risk

The functional currency of the Company is Indian Rupee. The Companyâs transactions are majorly denominated in â and the quantum of the foreign currency transactions being immaterial, the company is not exposed to currency risk on account of payables and receivables in foreign currency. The company does not have any exports. Import amount to 0.002% (Previous Year 0.01%) of total consumption, this is not perceived to be a major risk.

b) Interest rate risk

On period under review the Company do not have any borrowings at fixed rate and has not entered into interest rate swaps for its exposure to long term borrowings at floating rate.

Sensitivity analysis

Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of change in interest rates The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss, and the Company does not have any designate derivatives (interest rate swaps) . Therefore, a change in interest rates at the reporting date would not affect profit or loss.

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) Equity and Profit or Loss by the amount shown below:

c) Commodity Price Risk

Risk arising on account of fluctuations in prices of natural gas is managed through long term purchase contracts entered with the respective parties. The company monitors the movements in the prices closely while entering into new contracts.

d) Equity Price Risk

The Company do not have any investment in quoted equity shares hence not expose to equity price risk.

Note 8 Capital Management

The Companyâs objectives when managing capital are to:

- Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- Maintain an optimal capital structure to reduce the cost of capital.

The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The Company has achieved a return on capital 16%; in March 31, 2018 (Previous year: 13%). The weighted-average interest expense on interest-bearing borrowings (excluding liabilities with imputed interest) is 8.07%.(Previous year: 9.04%).

The Company monitors capital using a ratio of âadjusted net debtâ to âadjusted equityâ. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing loans and borrowings, less cash and cash equivalents. Adjusted equity comprises all components of equity.

Note 9-Employee Stock Option Plan :

The erstwhile GSPC Gas Company Limited (âe-GSPCâ), erstwhile Gujarat Gas Company Limited (âe-GGCLâ), erstwhile Gujarat Gas Financial Services Limited (âe-GFSLâ) and erstwhile Gujarat Gas Trading Company Limited (âe-GTCLâ) merged with and into GSPC Distribution Network Limited (âGDNLâ) under the Composite Scheme of Amalgamation and Arrangement (the âScheme of Amalgamationâ). The effective date of Scheme of Amalgamation was 14 May 2015. Upon the Scheme of Amalgamation becoming effective, the name of GDNL has been changed to Gujarat Gas Limited (âGGLâ) as per the provisions of the Companies Act.

Pursuant to the Scheme of Amalgamation, the Addendum Gujarat Gas Limited Employee Stock Option Plan 2016 (âESOP 2016â) being supplementary to the Gujarat Gas Company Limited Employee Stock Option Plan 2008 (âESOP 2008â) has been formulated for the limited purpose of adopting the ESOP 2008 in the Company.

(1) Revised Grants have been made to them with effect from the effective date under the Scheme of Amalgamation of 13000 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 were not Exercised by them on the effective date under the Scheme of Amalgamation.

(2) The above Revised Grants of Options-I has been on the basis of the Share Exchange Ratio of 1 (one) equity share of â10/- each of GGL, for every 1 (one) equity share of Rs.2/- each of e-GGCL, pursuant to the Scheme of Amalgamation.

(3) The Options-I bear the Exercise Price as per the ESOP 2008. The Exercise Price payable for Options-I under ESOP 2016 is based on the Exercise Price payable by such Eligible Employees under the ESOP 2008 that has been adjusted after taking into account the effect of the Share Exchange Ratio of 1:1 as mentioned above.

(4) Upon such Revised Grant of Options-I to the Eligible Employees the Options Granted under the ESOP 2008 stand cancelled and the Eligible Employees shall continue to be bound by all the terms and conditions of the ESOP 2008 in addition to this ESOP 2016.

The Gujarat Gas Company Limited Employee Welfare Stock Option Trust (âESOP 2008 Trustâ). which has been formed and created vide execution of the Deed of Gujarat Gas Company Limited Employee Welfare Stock Option Trust dated 4 November 2008 has been renamed as Gujarat Gas Limited Employee Welfare Stock Option Trust (âESOP 2016 Trustâ).The ESOP 2016 Trust is an irrevocable Trust that functions for the limited purpose of adopting the ESOP 2008 and ESOP 2016 and to hold the existing share inventory of the ESOP 2008 Trust for the benefit of Eligible Employees under ESOP 2016 and the balance to be appropriated in line with the SEBI Regulations.

The Company has adjusted gain of â Nil (Previous year Rs.0.17 Crores) to General Reserve as the difference between the cost incurred by the ESOP Trust for the purchase of shares and the exercise price of those options which have been exercised by the employees.

Note 10 Disclosure Of Employee Benefits

The Company has implemented Ind AS - 19 on âEmployee Benefitsâ.

(a) Provident Fund - Defined Contribution Plan

All employees are entitled to provident fund benefits and amount charged to Statement of Profit and Loss during the period of 12 months ended is Rs.7.94 Crores (Previous year Rs.7.32 Crores).

(b) Gratuity and Leave Encashment - Defined Benefit Plans (payable in future)

Provision has been made for gratuity and leave encashment as per actuarial valuation. The principal assumptions used in actuarial valuation and necessary disclosures are as below:

(i) Entityâs responsibilities for the governance of the plan Risk to the Plan

Following are the risk to which the plan exposes the entity :

A Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

B Investment Risk:

C Liquidity Risk:

D Market Risk:

E Legislative Risk:

(ii) The company has participated in Group Gratuity Scheme Plan with Life Insurance Corporation of India (LIC), Reliance & HDFC life insurance co. Ltd through Gratuity Trust to meet its gratuity liability. The present value of the plan assets represents the balance available at the end of the year. The total value of plan assets is as certified by the LIC, Reliance, HDFC life insurance co. Ltd and SBI life insurance co. Ltd.

(a) Composition of the plan assets

(g) Other Notes:

(iii) The company has provided long service award benefits to its employees who completed 15/20/25 Years of employment with company. Accordingly company has provided Rs.0.83 Crores (Previous year Rs.0.94 crores) on account of Long service award benefit. Current Liability as at 31st March 2018 is 0.13 Crores(Previous year Rs.0.17 Crores) and Non- Current Liability is Rs.0.70 Crores(Previous year Rs.0.77 Crores).

Notes

1 All transactions with related parties were carried out in the ordinary course of business and at arms length.

2 Total sitting fees & out of pocket expense paid to directors in 2017-18 amounts to Rs.0.09 Crs (previous year Rs.0.10 Crs.) and Rs.0.04 Crs (previous year Rs.0.02 Crs.) respectively.

3 Sitting fees which becomes payable to ShriJ.N.Singh, IAS. Shri.T.Natarajan, IAS, Shri.Sujit Gulati, IAS, Shir.Milind Torawane, IAS and Shri.Sanjeev Kumar, IAS during FY 2017-18 are directly deposited in Govt. Treasury Account.

Note 11 Corporate Social Responsibility Expenditure

As per Section 135 of the Companies Act, 2013, a company needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. A CSR committee has been formed by the company as per the Act. CSR expenditure is contain the following:

Note 12-Segment Reporting

The Company primarily operates in the segment of Natural Gas Business. Natural gas business involves distribution of gas from sources of supply to centres of demand and to the end customers. The Managing Director/Chief Executive Officer of the Company allocate resources and assess the performance of the Company, thus are the Chief Operating Decision Maker (CODM). The CODM monitors the operating results of the business as a one, hence no separate segment needs to be disclosed.

Information about geographical areas

1. The Company does not have geographical distribution of revenue and hence segmentwise disclosure is not applicable to the Company.

2. None of the companyâs assets are located outside India hence segmentwise disclosure is not applicable to the Company. Information about major customers

None of the customers account for more than 10% of the revenue of the revenue of the company.â

Note 13 Previous year figures

Previous yearâs figures have been regrouped or reclassified wherever necessary to confirm to the current periodâs presentation.

Mar 31, 2017

Note 1. Right of Way (ROW) Permissions: The useful lives of Right of Way (ROW) Permissions as estimated by the management for the amortization is 30 years. The useful lives of ROW Permission are inextricably linked with the pipeline networks being laid, which corresponds with the useful life of 30 years of Plant and Machinery - Pipelines network for which the Right of Way (ROW) Permission has been obtained. The Useful life of 30years of the Right of Way (ROW) Permissions is dependent on the useful life of Plant and Machinery - Pipelines i.e. Pipeline network of the company."

Note 2 Right of Use (ROU): The company acquires the ''right of use'' (hereinafter referred to as ''ROU'') for the purpose of laying and maintenance of the underground pipeline and vests in the company and the company has the right to use the same in the manner for which it has been acquired. The acquisition of ROU is governed by the legal process as per the Act, the company has paid the compensation /consideration of the ROU -land determined by the competent authority under the Act and any person authorized by the company, have unrestricted right of entry and lay pipeline or do any other act necessary for the purpose of laying of pipeline. The company has disclosed the cost incurred for acquisition of ROU as''Right of Use''in the Intangible Asset schedule. Since the ROU does not have a defined life, it is perpetual in nature. Accordingly based on requirements of Ind AS 38-Intangible Assets, the same is tested for impairment and not amortized."

Note 3 Impairment of Assets: There is no impairment of any assets in terms of Ind AS - 36 on "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 intangible assets.

Note 4 Borrowing Cost: Additions to the Intangible assets during the current year includes borrowing costs capitalized Rs. 0.09 Crores (Previous Year Rs. 0.37 Crores) pertaining to borrowings for qualifying assets as perthe requirements of lndAS-23 "Borrowing Costs".

Note 5 Security Pledge of Assets: Refer to Note 21 on borrowings for details in terms of pledge of assets as security.

Note 6 Refer to note 43 for disclosure of contractual commitments for the acquisition of intangible assets.

Note 7 There is no restriction on the title of intangible assets.

Note No. 8.1: The Company has given refundable security deposits in form of fixed deposits to various project authorities to be held in their name and custody. It will be refunded after satisfactory completion of work. The company has therefore shown these fixed bank deposits amounting Rs. 37.39 Crores - (Previous Year - Rs. 16.16 Crores, 1st April 2015 - Rs. 7.37 Crores) and interest accrued on such fixed bank deposits Rs. 4.48 Crores (Previous Year - Rs. 2.76 Crores, 1st April 2015 - Rs. 1.24 Crores), till they are in custody with project authorities as "Security Depositsâ under the Note- "Loans (including Security Deposits)â in the balance sheet.

* For Valuation- Refer note 2(m)

**Refer to Note 21 on borrowings for details in terms of pledge of assets as security.

Note 8 : The balances in dividend accounts are not available for use by the Company and the money remaining unpaid will be deposited in the Investor Protection and Education Fund after the expiry of 7 years from the date they became due for payment. No amount is due at the end of the period for credit to Investor Protection and Education fund.

Note 9 Terms/ rights attached to equity shares

The company has only one class of equity shares having a face value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

Note 10. Details of Bought back of shares, Bonus Shares and Shares issue without payment being received in Cash:

The Board of Directors, in its meeting on 24th May,2017, have proposed a final dividend of''Rs. 3.00 per equity share for the financial year ended on 31st March,2017. The proposal is subject to the approval of shareholders at the Annual General Meeting and if approved would result in a cash outflow of approximately Rs. 49.71 crore including corporate dividend tax of Rs. 8.41 crores.

The Board of Directors, in its meeting on17th May, 2016, proposed a final dividend of Rs. 2.50 per equity share for the financial year ended on 31st March,2016 and the same was approved by the shareholders at the Annual General Meeting held on 29th September, 2016, this resulted in a cash outflow of Rs. 41.43 crore including corporate dividend tax of Rs. 7.01 Crores.

Nature and purpose of reserves :

General reserve

Amalgamation and Arrangement Reserve

The "Amalgamation and Arrangement Reserve" created pursuant to scheme of amalgamation and arrangement is treated as free reserve based on the judgment of Honorable Gujarat High Court dated 18th April 2015 read with relevant other court decisions. Equity instrument through OCI

The Company has elected to recognize changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the Equity instrument through OCI reserve within equity.

Debenture redemption reserve

The Company had issued Non convertible debentures and as per the provisions of the Companies Act, 2013, is required to create debenture redemption reserve out of the profits of the company available for payment of dividend.

Employees Stock Options Outstanding

The Employee stock options outstanding account is used to recognize the grant date fair value of options issued to employees under Employee stock option plan.

*Amount disclosed under the head "Current financial liabilities : Others" (Note 26)

The Company does not have any continuing defaults in repayment of loans and interest as at the reporting date.

Note 11.: The balance with the bank for unpaid dividend is not available for use by the Company and the money remaining unpaid will be deposited in Investor Protection and Education Fund u/s 124(5) of Companies Act, 2013 after the expiry of seven years from the date of declaration of dividend. No amount is due at the end of the period for credit to Investors education and protection fund. Note 26.2: The Company deposited Rs. 464.78 crores on 12th June, 2013 into the escrow account ("named BG Asia Pacific Holdings Pte. Limited GSPC Distribution Networks Limited Escrow Account") opened with Citibank N.A. , acting as the escrow agent, pursuant to the escrow agreement executed between the BG Asia Pacific Holdings Pte. Limited (the Seller), Gujarat Gas Limited (Formerly known as GSPC Distribution Networks Limited) (the Purchaser) and Citibank N.A. The Payment of said amount into Escrow Account is to be utilized to meet future tax withholding liability (if any) based on outcome of the applications to the Authority for Advance Rulings or otherwise to be remitted to BG Asia Pacific Holdings Pte. Limited (the Seller) directly.

Note 12.: Advances from customers includes amount of Rs. 0.01 Crores (Previous Year Rs. 3.07 Crores, 1st April 2015 Rs. 2.54 Crores) outstanding more than 365 days. These amounts are in the nature of security deposits for providing capital goods or services in the normal course of business.

Note 13. Earnings per Share -(EPS)

Earnings per equity share of FV of Rs 10 each

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

Note 14. Claims against the company not acknowledged as debt

(i) UPL Limited (UPL) a customer of erstwhile Gujarat Gas Company Limited(GGCL) filed a complaint before Petroleum and Natural Gas Regulatory Board (PNGRB) against erstwhile GGCL alleging charging of tariff illegally under the City Gas Network Distribution Agreement entered into between the Parties. The matter was decided against erstwhile GGCL by PNGRB. Erstwhile GGCL has preferred an appeal at Appellate Tribunal for Electricity (APTEL) against the PNGRB Order. Erstwhile GGCL has also sought an interim stay on the PNGRB order which was granted by APTEL. The APTEL has in its order stated that it is an interim order without considering the merits of the case. Company has submitted bank guarantee of Rs. 40 Crores in favour of UPL.

(ii) Erstwhile Gujarat Gas Company Limited and Erstwhile GSPC Gas Company Limited (Now collectively known as Gujarat Gas Limited "GGLâ) had signed Gas supply agreement with Gujarat State Petroleum Corporation Limited (GSPCL) for purchase of Re-gasified liquefied natural gas (RLNG). As per the provision of said agreement, GGL has to pay interconnectivity charges to GSPCL for the supply and purchase of RLNG at Delivery point which is charged to GSPCL by their supplier i.e.PLL Off takers (GAIL India, BPCL, IOCL).PGNRB had vide its orders dated 13.09.2011 of Chairman and dated 10.10.2011 of the majority members (three member panel of Board) unanimously held that GAIL had adopted Restrictive Trade Practices by blocking off direct connectivity to GSPC and further, directed Respondents to immediately give direct connectivity to GSPC at Dahej Terminal. The PLL Off takers (GAIL) filed appeals against the said PNGRB orders before the Appellate Tribunal for Electricity (APTEL). On 23-February-2012 APTEL had issued an interim order for shifting the Delivery Point from GAIL-GSPL Delivery Point to GSPL-PLL Delivery Point. On 18-December-2013 APTEL issued its judgment and required GSPCL to pay the amount of the difference between Rs. 8.74/MMBTU (exclusive of Service Tax) - earlier connectivity charges and Rs. 19.83/MMBTU (Exclusive of Service Tax) - HVJ/DVPL Zone-1 tariff to GAIL for the period from 20th November 2008 to 29th February 2012.GSPCL has filed an appeal against the APTEL''s above referred judgment before Hon''ble Supreme Court of India (GSPCL vs.

GAIL & Others, Civil Appeal No. 2473-2476 of 2014) and the Hon''ble Supreme Court of India had passed the Interim Order on 28th February 2014. The Court has stated that the ends of justice would be met if as a matter of interim arrangement, the appellant is directed to pay interconnectivity charges at the rate of Rs. 12.00 per MMBTU (exclusive of Taxes). The Company has already provided and paid interconnectivity charges at the rate of Rs. 12.00 per MMBTU (exclusive of Taxes).

(iii) One of the gas suppliers of the Company has submitted a claim of Rs. 108.44 Crores (P. Y. Rs. 481.85 Crores), for overdrawn use of gas against demand in earlier years. The company has refuted this erroneous claim contending that no contractual provisions of the agreement executed with GGL allow such claim. The management is of the firm view that the company is not liable to pay any such claim. The company has already taken up the matter with concerned party/authorities to withdraw the claim.

Note 15. Contingent Liabilities - Stamp duty on amalgamation

The office of superintendent of stamp has issued demand of stamp duty of Rs 43.53 crores for the transaction of scheme of amalgamation and arrangement. The Company has filed the appeal before Chief Controlling Revenue Authority - CCRA on 20.12.2016 by paying 25% of demand of Rs 10.88 crores. The Company has already provided the liability of Rs 25 crores in the books of accounts for the financial year 2015-16.

B) CONTINGENT ASSETS

The Company is having certain claims which are pursuing through legal processes. The management believe that probable outcome in all such claims are uncertain. Hence, the disclosure of such claims is not required in the financial statements.

Note: No interest has been paid by the Company to the enterprises covered under Micro, Small and Medium Enterprises Development Act, 2006 according to the terms agreed with the enterprises.

Investment in equity accounted investee i.e.. Guj Info Petro Limited (GIPL) carried at cost.

# Fair value of financial assets and liabilities which are measured at amortized cost is not materially different from the carrying value (ie..amortized cost).

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have quoted price. The mutual funds are valued using the closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3.

Transfer out of Level 3

There were no movement in level 3 in either directions during the year ended 31st March 2017 and the year ended 31st March 2016. Ind AS 101 allows an entity to designate certain investments in equity instruments as fair valued through the OCI on the basis of the facts and circumstances at the transition date to Ind AS .The Company has elected to apply this exemption for its investment in equity shares.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk ;

- Liquidity risk ; and

- Market risk

i. Risk management framework

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework.

The Company has a well-define Risk Management framework for reviewing the major risks and has adopted a Business Risk Management Policy which also takes care of all the financial risks. Further, pursuant to the requirement of Regulation 21 of SEBI (Listing obligation and disclosure Requirements) Regulation, 2015, the company has constituted a Risk Management Committee inter - alia to monitor the Risk Management Plan of the Company.

The Group Heads Committee supported by Chief Financial Officer oversees the management of these risks. The Company''s senior management is supported by Risk Management Committee that advises on financial risk and appropriate financial risk governance framework for the Company. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

Note 45 Financial instruments - Fair values and risk management (continued)

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investments in debt securities.

The carrying amount of following financial assets represents the maximum credit exposure:

(a) Other financial assets

(b) Trade and other receivables

The Commercial and Marketing department has established a credit policy for each category of customer viz. industrial, domestic and commercial.

CNG sales made through operators of the CNG stations owned by the Company and CNG Franchises outlet are exposed to credit risk as amounts so collected is deposited/transferred in company bank account on next working day. Bank Guarantee / Security Deposit is taken to mitigate the credit risk. For CNG sales made through Oil Marketing Companies (OMCs), the Company raises the invoice for quantities sold based on periodicity as per the agreement. The OMCs are well established companies viz. HPCL, BPCL, IOC, Essar Oil Ltd. where no significant credit risk is anticipated.

The Company provides for allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables.

The impairment provisions for financial assets - Loan and advances - Security Deposit as disclosed above are based on management judgment / assumptions about risk of performance default . The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the company''s past history as well as forward looking estimates at the end of each reporting period.

iii. Liquidity risk

The Company maintains the following lines of credit outstanding:

(a) Term loans from banks and financial institution of Rs. 2351.60 crores (March 31, 2016: Rs. 1833.88 crores and April 1, 2015: Rs. 2727.41 crores) that is secured by First pari - passu charge on all Present and future fixed assets & Property, plant, equipment (PPE)(Movable & Immovable) of the the Company and Second pari -passu charge on Present & Future Current Assets (financial and non financial assets) of the Company. Interest would be payable at the rate of varying from 8 % - 8.25 %.

(b) Non convertible debentures of Rs. Nil (March 31, 2016: Rs. 522.73 crores , April 1, 2015: Rs. 522.80 crores) that is unsecured. Interest is paable at the rate of 10.30 % p.a. on semi annually basis.

Other current financial liabilities include customer deposits which are considered repayable on demand and hence current. These were classified as non-current under the previous GAAP.

The gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to no derivative financial liabilities held for risk management purposes and which are not usually closed out before contractual maturity.

iv. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits and FVTOCI investments.

a) Currency risk

The functional currency of the Company is Indian Rupee. The Company''s transactions are majorly denominated in INR and the quantum of the foreign currency transactions being immaterial, the company is not exposed to currency risk on account of payables and receivables in foreign currency. The company does not have any exports. Import amount to 0.01% (previous year 0.07 %) of total consumption, this is not perceived to be a major risk.

b) Interest rate risk

On period under review the Company do not have any borrowings at fixed rate and has not entered into interest rate swaps for its exposure to long term borrowings at floating rate.

Sensitivity analysis

Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of change in interest rates.

c) Commodity Price Risk

d) Equity Price Risk

The Company do not have any investment in quoted equity shares hence not expose to equity price risk.

Note 46 Capital Management

The Company''s objectives when managing capital are to

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- Maintain an optimal capital structure to reduce the cost of capital.

The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The Company has achieved a return on capital 13%; in March 31, 2017 (March 31, 2016: 12%). The weighted-average interest expense on interest-bearing borrowings (excluding liabilities with imputed interest) was 9.04%.( March 31, 2016: 10.28%)

The Company monitors capital using a ratio of ''adjusted net debt'' to ''adjusted equity''. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing loans and borrowings, less cash and cash equivalents. Adjusted equity comprises all components of equity.

Note16. Employee Stock Option Plan :

1) Revised Grants have been made to them with effect from the effective date under the Scheme of Amalgamation of 13000 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 were not Exercised by them on the effective date under the Scheme of Amalgamation.

2) The above Revised Grants of Options-I has been 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 e-GGCL, pursuant to the Scheme of Amalgamation.

3) The Options-I bear the Exercise Price as per the ESOP 2008. The Exercise Price payable for Options-I under ESOP 2016 is based on the Exercise Price payable by such Eligible Employees under the ESOP 2008 that has been adjusted after taking into account the effect of the Share Exchange Ratio of 1:1 as mentioned above.

4) Upon such Revised Grant of Options-I to the Eligible Employees the Options Granted under the ESOP 2008 stand cancelled and the Eligible Employees shall continue to be bound by all the terms and conditions of the ESOP 2008 in addition to this ESOP 2016.

The employee share based payment plans have been accounted based on the Fair value method of accounting using the Black-Scholes Option Pricing Formula. There are no options outstanding as on 31 March 2017. The weighted average remaining contractual life of options outstanding as on 31 March 2016 was 0.52 years( as on 01.04.2015 1.79 years).

An amount of Rs. Nil (Previous year Rs. 0.01 Crores) has been recognized as an expense in Employee Benefits Expenses (Note 33) and corresponding liability has been disclosed as Stock Options Outstanding Account (Note 20). The balance of Rs. Nil (Previous year Rs. 0.17 Crores, 1 April 2015 Rs. 0.31 Crores ) in Stock Options Outstanding Account (Note 20) represents the amortized cost of stock options outstanding. As on 31 March 2017, the amount recoverable from ESOP trust is Rs. Nil (Previous year Rs.3.01 Crores, 1 April 2015 Rs. 3.01 crores).

The Company has adjusted gain of Rs. 0.17 Crores (Previous year Rs. 0.49 Crores) to General Reserve as the difference between the cost incurred by the ESOP Trust for the purchase of shares and the exercise price of those options which have been exercised by the employees.

Note 17.Disclosure Of Employee Benefits

The Company has implemented Ind AS - 19 on "Employee Benefitsâ.

(a) Provident Fund - Defined Contribution Plan

All employees are entitled to provident fund benefits and amount charged to Statement of Profit and Loss during the period of 12 months ended is INR 7.32 Crores (Previous year INR 5.87 Crores).

(i) Entity''s responsibilities for the governance of the plan Risk to the Plan

Following are the risk to which the plan exposes the entity :

A Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons: Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected. Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate. Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

B Investment Risk:

C Liquidity Risk:

D Market Risk:

E Legislative Risk:

(g) Other Notes:

(iii) The company has provided long service award benefits to its employees who completed 15/20/25 Years of employment with company. Accordingly company has provided Rs. 0.94 Crores (Previous year Rs. 1.43 crores) on account of Long service award benefit. Current Liability as at 31st March 2017 is Rs. 0.17 Crores(Previous year Rs. 0.31 Crores) and NonCurrent Liability is Rs. 0.77 Crores(Previous year Rs. 1.12 Crores).

Note 18. Segment Reporting

The Company primarily operates in the segment of Natural Gas Business. Natural gas business involves distribution of gas from sources of supply to centres of demand and to the end customers. The MD/CEO of the Company allocate resources and assess the performance of the Company, thus are the Chief Operating Decision Maker (CODM). The CODM monitors the operating results of the business as a one, hence no separate segment needs to be disclosed.

Information about geographical areas

1. The Company does not have geographical distribution of revenue and hence segment wise disclosure is not applicable to the Company.

2. None of the company''s assets are located outside India hence segment wise disclosure is not applicable to the Company. Information about major customers

None of the customerâs account for more than 10% of the revenue of the revenue of the company.

Note 52 Disclosure on Specified Bank Notes (SBNs)

Details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December, 30 2016:

For the purposes of this clause, the term ''Specified Bank Notes'' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.

Note 19.Transition to Ind AS:

These financial statements, for the year ended 31 March 2017, are the first the company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the company prepared its financial statements in accordance with IGAAP, including accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended).The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS balance sheet at 1 April 2015 (the "transition dateâ).In preparing the opening Ind AS balance sheet, the company has adjusted amounts reported in financial statements prepared in accordance with IGAAP. An explanation of how the transition from IGAAP to Ind AS has affected our financial performance, cash flows and financial position is set out in the following tables and the notes that accompany the tables. On transition, we did not revise estimates previously made under IGAAP except where required by Ind AS.

A Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional and mandatory exceptions applied in the transition from IGAAP to Ind AS. A1 Ind AS optional exemptions A1.1 Business Combination

Ind AS 101 permits an entity to apply the requirements of Ind AS 103 - Business combinations (Ind AS 103) prospectively from the transition date or opt for retrospective application of Ind AS 103. Retrospective application could be either done since inception or from a date determined by the management. The exemption for past business combinations also applies to past acquisitions of investments in associates, interests in joint ventures and interests in joint operations in which the activity of the joint operation constitutes a business, as defined in Ind AS 103.

Accordingly, the Group has elected not to restate past business combinations with an acquisition date prior to the transition date. However, any consequential deferred tax adjustments as required by Ind AS) have been duly considered. An explanation of the same has been provided in the note no. 53.10 subsequently.

A1.2 Share based payment

Ind AS 102 deals with the accounting and disclosure requirements related to share-based payment transactions. The standard addresses three types of share-based payment transactions: equity-settled, cash-settled, and with cash alternatives. A first time adopter is encouraged, but is not required, to apply Ind AS 102 to:

(i) Equity instruments that vested before the transition date to Ind AS,

(ii) Liabilities arising from share-based payment transactions that were settled before the transition date to Ind AS.The Company has elected to apply this exemption for its stock options which have vested prior to the transition date.

A1.3 Leases

Ind AS 101 permits an entity to assess whether a contract or an arrangement contains a lease on the basis of facts and circumstances existing at the transition date to Ind AS. The Company has elected to apply this exemption for such contracts/arrangements.

A1.4 Recognition of financial instruments through OCI

Ind AS 101 allows an entity to designate certain investments in equity instruments as fair valued through the OCI on the basis of the facts and circumstances at the transition date to Ind AS. The Company has elected to apply this exemption for its investment in equity instruments.

A1.5 Disclosure of investments Associates

Under, Ind AS 101 an entity can determine the value of investment in a subsidiary, associate or joint arrangement as either of the below:

- Cost determined in accordance with Ind AS 27 (i.e. retrospective application of Ind AS 27)

- Fair value at the entity''s date of transition to Ind AS

- Previous GAAP carrying amount

- Accordingly, if an entity chooses to measure its investment at fair value at the date of transition then that is deemed to be cost of such investment for the company and, therefore, it shall carry its investment at that amount (i.e. fair value at the date of transition) after the date of transition. The Company has elected to carry forward the previous GAAP amounts as the deemed cost for investment in equity shares of associates in the standalone financial statements.

A2 Mandatory Exceptions A2.1 Embedded derivative

Under Ind AS 101, a first-time adopter shall assess whether an embedded derivative is required to be separated from the host contract and accounted for as a derivative on the basis of the conditions that existed at the later of the date it first became a party to the contract and the date a reassessment is required by Ind AS 109 when there is a change in the terms of the contract that significantly modifies the cash flows. Accordingly the Company has applied this exception.

A2.2 Estimates

An entity''s estimates in accordance with Ind ASs at the transition date to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at 1 April 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the transition date as these were not required under previous GAAP:

- Investment in financial instruments carried at FVTPL or FVTOCI; and

- Impairment of financial assets based on expected credit loss model

- Determination of the discounted value for financial instrument carried at amortized cost.

A2.3 Classification and measurement of financial asset

Ind AS 101 provides exemption to certain classification and measurement requirement of financial assets under Ind AS 109, where these are impracticable to implement. Classification and measurement is done on the basis of facts and circumstances existing on the transition date. Accordingly the Company has determined classification of financial asset based on facts and circumstances existing on the transition date.

Footnotes to the above reconciliation are as under:

1) Investment property

Under Ind AS, land and building held to earn rental income or for capital appreciation or both, rather than for use in production or supply of goods and services or sale in the ordinary course of business are to be classified as Investment Property. Under the IGAAP, investment properties were presented as part of Freehold Land. The Company has reclassified land valuing Rs 1.30 Crores as Investment property. However, there is no impact on the total equity or profit as a result of this adjustment.

2) Own your asset scheme (OYAS)

Under IGAAP, assets given to employees under OYAS scheme were reflected as fixed assets and depreciated over their respective useful lives. Under Ind AS, this has been accounted as a finance lease and the WDV of the underlying assets has been derecognized. The difference between the cost of the asset and present value of the consideration received in the future has been recognized as an employee cost over the period. The consideration due from the employees over the period has been recognized as receivable. Consequently an amount of Rs 0.39 crores has been derecognized from PPE on the transition date. The total equity of the Company reduced by Rs 0.03 Crore as on the transition date. The impact of reversal of the depreciation and the employee cost are similar to each other for the year ended 31 st March 2016, hence there is no significant impact on equity as on 31 st March 2016.

3) Fair valuation of investments in mutual funds

Under IGAAP, the company accounted for short term investments in mutual funds at cost . Under Ind AS, the company has designated such investments as FVTPL investments. Carrying value of investments in mutual fund was Rs. 936.99 Crores as per previous GAAP on the date of transition. Consequently the value of total equity on the transition date has increased by Rs. 0.22 Crores(net of tax) while the value of investment have increased by Rs 0.34 crores.

4) Interest accrued but not due

Under IGAAP, the company has invested in fixed deposits with the banks. The interest is accrued on the same at each reporting date which is disclosed separately as interest accrued and due separate from the fixed deposit. Under Ind AS, the fixed deposits are to be reported at amortised cost. Accordingly interest accrued but not due of Rs 1.24 Crores and Rs. 2.76 Crores as on the transition date and 31st March 2016 respectively has been reclassified to respective fixed deposits. There is no impact on the total equity or profit as a result of this adjustment.

5) Interest bearing loans and borrowings

Under IGAAP, transaction costs incurred in connection with interest bearing loans and borrowings were charged to profit or loss when incurred. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the EIR method. Accordingly the total equity increased by Rs 1.57 Crores on the transition date and Rs 0.64 Crores on 31st March 2016. The profit for the year ended 31st March 2016 reduced by Rs 0.93 Crores as a result of additional interest expense.

6) Proposed Dividend and Tax thereon

Under IGAAP, dividends proposed by the Board of Directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting. Accordingly the liability proposed dividend of Rs 41.43 as at 31 March 2016 and Rs 82.85 as on the transition date included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.

7) FVTOCI financial assets

Under IGAAP, the company accounted for long term investments in unquoted and quoted equity shares as investment measured at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, the company has designated such investments as FVTOCI investments. At the transition date , difference between the fair value and IGAAP carrying amount has been recognized as a separate component of equity, net of related deferred taxes. This has resulted in a decrease in total equity by Rs 31.97 Crores on 31 March 2016 (net of tax).

8) Accounting for excise duty on sale of goods

Under IGAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty which is considered as an expense. Thus sale of goods for the financial year 2015-16 under Ind AS has increased by Rs. 139.90 Crores with a corresponding increase in other expense. This adjustment has no impact on the total equity on the transition date as well as 31 March 2016.

9) Employee benefits

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit or loss. Under IGAAP, these remeasurements were forming part of the profit or loss for the year. This adjustment has no impact on the total equity on the transition date as well as 31 March 2016.

10) Deferred tax assets (net)

IGAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on certain temporary differences which was not required under IGAAP as discussed below. Further, company has reclassified MAT credit entitlement to deferred tax assets.

10 (a) Deferred tax on temporary differences on account of scheme

The composite Scheme of Amalgamation and Arrangement resulting in merger of GSPC Gas Company Limited (""GSPC Gas""), Gujarat Gas Company Limited (""GGCL""), Gujarat Gas Financial Services Limited (""GFSL""), Gujarat Gas Trading Company Limited (""GTCL"") and GSPC Distribution Networks Limited (""GDNL"") (consequently renamed to Gujarat Gas Limited (""GGL"")) was accounted using purchase method wherein all tangible as well as intangible assets were acquired at fair values as prescribed in the scheme approved by Hon''ble High court of Gujarat. The carrying amounts of these assets for tax purposes remained unchanged. Under IGAAP, based on the principles of AS 22 - Income taxes, being permanent difference no deferred tax was created on difference of fair value and book value as the differences arose on balance sheet items. Ind AS 12 -Income taxes, mandates creation of deferred tax on temporary differences based on difference in book base and tax base including those arising on account of a fair valuation of assets due to business combination. Consequently, a deferred tax liability of Rs 641.89 Crores through the reserves has been accounted for on the transition date i.e. 01 April 2015 to Ind AS. The impact of this on 31 March 2016 is Rs 607.44 Crores with the difference of Rs. 34.46 Crores has been reversed through the statement of profit and loss .

C Cash flow statement

There were no significant reconciliation items between cash flows prepared under Indian GAAP and those prepared under Ind AS.

Note 54 Previous year figures

Figures have been regrouped or reclassified wherever necessary to confir

Mar 31, 2016

Note 1: Pursuant to the scheme, the authorized share capital of the Company on the effective date has automatically stand increased by merging the authorized share capital of transferor Company with transferee Company without any further act or deed on the part of the transferee Company, including payment of stamp duty and Registrar of Companies fees, for the authorized share capital of transferor Company.

Note 2: Out of the above, 12,45,20,130 Equity Shares of Rs. 10 each have been allotted as fully paid at face value to the shareholders of transferor companies without payments being received in cash pursuant to the Scheme of Amalgamation and arrangement for transfer of the assets and liabilities determined by the management as on appointed date.

3 TERMS/ RIGHTS ATTACHED TO EQUITY SHARES

*Adjustment of deferred tax for the carrying value of assets, whose remaining useful life is Nil as at 1 April 2014, and therefore its residual value is charged to the opening balance of retained earnings as per the provisions of the Companies Act, 2013.

Note :4 Deferred tax assets and deferred tax liabilities have been offset as they relate to the same governing tax laws.

Note : 5 Security Deposits received from customers have been considered as long-term liabilities based on the commercial practice and the intention of the company to continue long-term relationship with its customers for the foreseeable future.

Note 6: Advances from customers includes amount of Rs 3.07 Crores (Previous Year Rs. 2.54 Crores) outstanding more than 365 days. These amounts are in the nature of security deposits for providing capital goods or services in the normal course of business. Note 9.2: The balance with the bank for unpaid dividend is not available for use by the Company and the money remaining unpaid will be deposited in Investor Protection and Education Fund u/s 124(5) of Companies Act, 2013 after the expiry of seven years from the date of declaration of dividend. No amount is due at the end of the period for credit to Investors education and protection fund.

Note 7: The Company deposited Rs. 464.78 crores on 12th June, 2013 into the escrow account ("named BG Asia Pacific Holdings Pte. Limited GSPC Distribution Networks Limited Escrow Account") opened with Citibank N.A. , acting as the escrow agent, pursuant to the escrow agreement executed between the BG Asia Pacific Holdings Pte. Limited (the Seller), Gujarat Gas Limited (Formerly known as GSPC Distribution Networks Limited) (the Purchaser) and Citibank N.A. The Payment of said amount into Escrow Account is to be utilized to meet future tax withholding liability (if any) based on outcome of the applications to the Authority for Advance Rulings or otherwise to be remitted to BG Asia Pacific Holdings Pte. Limited (the Seller) directly.

Note 8: The Company has given refundable security deposits in form of fixed deposits to various project authorities to be held in their name and custody. It will be refunded after satisfactory completion of work. The company has therefore shown these fixed deposits amounting Rs. 16.16 Crores- (Previous Year Rs. 7.37 Crores), till the same are in custody with project authorities as "Security Depositsâ under the Note- "Long term Loans and Advancesâ in the balance sheet.

Note 9 : The balances in dividend accounts are not available for use by the Company and the money remaining unpaid will be deposited in the Investor Protection and Education Fund after the expiry of 7 years from the date they became due for payment. No amount is due at the end of the period for credit to Investor Protection and Education fund.

10. The company has taken premises for business and residential use for its employees under cancellable operating lease arrangements. The total lease rentals recognized as an expense during the year for such lease arrangements is INR 6.18 Crores (Previous Year 3.80 Crores). The lease arrangement typically ranges from 11 months to 9 years.

Note 11. Exceptional item pertains to stamp duty charges and other expenses incurred pursuant to Scheme of Amalgamation and Arrangement.

12. (i) In addition to above, Claims of Rs 2.22 Crores (P. Y. Rs. 2.22 Crores) against the Company have been disputed by the Company. The Company is, however, indemnified by an insurance policy.

(ii) UPL Limited (UPL) a customer of erstwhile Gujarat Gas Company Limited(GGCL) filed a complaint before Petroleum and Natural Gas Regulatory Board (PNGRB) against erstwhile GGCL alleging charging of tariff illegally under the City Gas Network Distribution Agreement entered into between the Parties. The matter was decided against erstwhile GGCL by PNGRB. Erstwhile GGCL has preferred an appeal at Appellate Tribunal for Electricity (APTEL) against the PNGRB Order. Erstwhile GGCL has also sought an interim stay on the PNGRB order which was granted by APTEL. Company has submitted bank guarantee of Rs. 40 Crores to in favour of UPL. The APTEL has in its order stated that it is an interim order without considering the merits of the case.

(iii) One of the gas suppliers of the Company has submitted a claim of Rs. 481.85 Crores, for unauthorized use of gas in earlier years. The company has refuted this erroneous claim contending that no contractual provisions of the agreement executed with GGL allow such claim. The management is of the firm view that the company is not liable to pay any such claim. The company has already taken up the matter with concerned party/authorities to withdraw the claim.

(iv) Erstwhile Gujarat Gas Company Limited and Erstwhile GSPC Gas Company Limited (Now collectively known as Gujarat Gas Limited "GGLâ) had signed Gas supply agreement with Gujarat State Petroleum Corporation Limited (GSPCL) for purchase of Re-gasified liquefied natural gas (RLNG). As per the provision of said agreement, GGL has to pay interconnectivity charges to GSPCL for the supply and purchase of RLNG at Delivery point which is charged to GSPCL by their supplier i.e.PLL Off takers (GAIL India, BPCL, IOCL).

PGNRB had vide its orders dated 13.09.2011 of Chairman and dated 10.10.2011 of the majority members (three member panel of Board) unanimously held that GAIL had adopted Restrictive Trade Practices by blocking off direct connectivity to GSPC and further, directed Respondents to immediately give direct connectivity to GSPC at Dahej Terminal. The PLL Off takers (GAIL) filed appeals against the said PNGRB orders before the Appellate Tribunal for Electricity (APTEL). On 23-February-2012 APTEL had issued an interim order for shifting the Delivery Point from GAIL-GSPL Delivery Point to GSPL-PLL Delivery Point. On 18-December-2013 APTEL issued its judgment and required GSPCL to pay the amount of the difference between Rs. 8.74/MMBTU (exclusive of Service Tax) - earlier connectivity charges and Rs. 19.83/MMBTU (Exclusive of Service Tax) - HVJ/DVPL Zone-1 tariff to GAIL for the period from 20th November 2008 to 29th February 2012.

The Company has already provided and paid interconnectivity charges at the rate of Rs. 12.00 per MMBTU (exclusive of Taxes).

Note: No interest has been paid by the Company to the enterprises covered under Micro, Small and Medium Enterprises Development Act, 2006 according to the terms agreed with the enterprises.

NOTE 13. DISCLOSURE OF EMPLOYEE BENEFITS

The Company has implemented Accounting Standard - 15 (AS-15) (Revised 2005) on "Employee Benefitsâ.

(a) Provident Fund - Defined Contribution Plan

All employees are entitled to provident fund benefits and amount charged to Statement of Profit and Loss during 12 months ended is INR 5.87 Crores (Previous year I NR 5.36 Crores).

(b) Gratuity and Leave Encashment - Defined Benefit Plans (payable in future)

Provision has been made for gratuity and leave encashment as per actuarial valuation. The principal assumptions used in actuarial valuation and necessary disclosures are as below:

* Not applicable in case of Gratuity plan for GSPC gas employees

Note: The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Note

(I) During this year, the company has introduced/provided long service award benefits to its employees who completed 15/20/25 Years of employment with company. Accordingly company has provided Rs. 1.43 Crores (Previous year -Nil) on account of Long service award benefit. Current Liability as at 31st March 2016 is Rs. 0.31 Crores and Non- Current Liability is Rs. 1.12 Crores.

(ii) During this year, the company has removed the ceiling of liability of Gratuity payment of Rs. 10 Lacs which was applicable to certain employees. The impact of the change of limit is Rs. 3.74 crores and same is charged to Statement of profit and loss during this financial year.

(iii) The company has participated in Group Gratuity Scheme Plan with LIC, Reliance & HDFC life insurance co. Ltd through Gratuity Trust to meet its gratuity liability. The present value of the plan assets represents the balance available at the end of the year. The total value of plan assets is as certified by the LIC, Reliance & HDFC life insurance co. Ltd.

(iv) The expected rate of return on Plan Assets is determined considering several applicable factors, mainly the composition of Plan Assets held, assessed risks, historical results of return on Plan Assets and the Company''s policy for the Plan Assets management.

(v) The actuarial valuation takes into account the estimates of future salary increases, inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. The management has relied on the overall actuarial valuation conducted by the actuary.

NOTE 14.

Employee Stock Option Plan :

(2) The above Revised Grants of Options-I has been 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 e-GGCL, pursuant to the Scheme of Amalgamation.

The Gujarat Gas Company Limited Employee Welfare Stock Option Trust ("ESOP 2008 Trustâ). which has been formed and created vide execution of the Deed of Gujarat Gas Company Limited Employee Welfare Stock Option Trust dated 4 November 2008 has been renamed as Gujarat Gas Limited Employee Welfare Stock Op-tion Trust ("ESOP 2016 Trustâ).The ESOP 2016 Trust is an irrevocable Trust that functions for the limited purpose of adopting the ESOP 2008 and ESOP 2016 and to hold the existing share inventory of the ESOP 2008 Trust for the benefit of Eligible Employees under ESOP 2016 and the balance to be appropriated in line with the SEBI Regulations.

The employee share based payment plans have been accounted based on the Fair value method of accounting using the Black-Scholes Option Pricing Formula. The weighted average remaining contractual life of options outstanding as on 31 March 2016 is 0.52 years. (Previous year 1.79 years)

In accordance with Guidance Note on Accounting for Employee Share-based Payments issued by Institute of Chartered Accountants of India (ICAI) and SEBI (Share Based Employee Benefits) Regulations, 2014 issued by Securities Exchange Board of India, an amount of 0.01 Crores (Previous year Rs. Nil) has been recognized as an expense in Employee Benefits Expenses (Note 26) and corresponding liability has been disclosed as Stock Options Outstanding Account (Note 3). The balance of Rs. 0.17 Crores (Previous year Rs. 0.32 Crores) in Stock Options Outstanding Account (Note 3) represents the amortized cost of stock options outstanding. As on 31 March 2016, the amount recoverable from ESOP trust is Rs. 3.01 Crores (Previous year Rs.3.01 Crores).

The Company has adjusted gain of Rs. 0.49 Crores (Previous year Rs. 2.06 Crores) to General Reserve as the difference between the cost incurred by the ESOP Trust for the purchase of shares and the exercise price of those options which have been exercised by the employees, in accordance with Guidance Note on accounting for Employee Share-based Payment, issued by the ICAI.

Note 15. Related Party Transactions

(A) Name of related parties and description of relationship :

Sr. Relationships Name of Company

No.__

1 Holding company Gujarat State Petroleum Corporation Limited

2 Subsidiary of Holding Company Gujarat State Petronet Limited

GSPC Pipavav Power Company Limited GSPC (JPDA) Limited GSPC Offshore Ltd GSPC Energy Ltd.

GSPC Marginal Fields Limited GSPL India Gasnet Limited GSPL India Transco Limited

3 Associate of GGL Guj Info Petro Limited

4 Associate of Holding Company Gujarat State Energy Generation Limited

Sabarmati Gas Limited GSPC LNG Limited

5 Enterprise controlled by the Entity Gujarat Gas Company Limited Employee Stock Option Welfare Trust

Gujarat Gas Company Limited Employees Gratuity Trust Fund GSPC Gas Company Limited Employees'' Group Gratuity Scheme

6 Key Managerial Personnel Name of Related Parties Relationship

Mr.Atanu Chakraborty, IAS Director (w.e.f 16.04.2015)

Mr.Manoj Kumar Das, IAS Director (upto 21.04.2015)

Mr.PPG Sarma Chief Executive Officer

(upto 01.03.2016)

Mr.Nitin Patil In-Charge Chief Executive Officer

(w.e.f. 02.03.2016)

7 Relatives of Key Managerial Personnel Ms. P Subbalakshmi is related to Mr. PPG Sarma (upto 01.03.2016)

Note 16. Corporate Social Responsibility

During the year, the Company spent Rs 1.01 crores on corporate social responsibility out of which Rs. 1.00 Crores is included in Donation in Note 28.

Note 17. SEGMENT REPORTING

The Company primarily operates in the segment of Natural Gas Business. Natural gas business involves distribution of gas from sources of supply to centres of demand and to the end customers. Accordingly, disclosures relating to primary and secondary business segments under the Accounting Standard 17 on Segment Reporting are not relevant to the Company.

Previous year figures are in brackets

Note 18. RECOVERABLE VALUE OF ALL ASSETS OTHER THAN FIXED ASSETS AND NON CURRENT INVESTMENTS

In the opinion of management, the current assets including loans and advances, Trade receivables and other current assets are recoverable at the value stated in the balance sheet in ordinary course of business.

Note 19. Authorization with PNGRB :

Erstwhile GSPC GAS Company Limited had applied to the ''Petroleum & Natural Gas Regulatory Board'' in May 2008 for authorization of its various Geographical Areas (GA)- City Gas Distribution Network under section 18(1) of the ''Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand local or City Gas Distribution Network) Regulations, 2008. The authorizations for Palej and Gandhinagar are under process of authorization with PNGRB.

The PNGRB has rejected the application of authorization of Halol and Khambhat GA by issuing a speaking orders in May, 2011. The management of company had replied to PNGRB against the said speaking order and requested to continue to operate in Halol and Khambhat GA in public interest and company has continued to operate and book the income thereof. Though the company''s application for reviewing of the decisions are pending before the board, it is exposed to penal provisions for contravention and continued contravention of the directions of the Board of the PNGRB Act, 2006.

Further, PNGRB has invited bidding for authorization of Anand GA and Panchmahal GA which now covers area of Halol and Khambhat also. Company has filed bid for said GA in the month of January 2016. The PNGRB is in process of review of said bid.

Erstwhile GSPC Gas has incurred capital expenditure amounting to Rs. 9.63 Crores during FY 2015-16 (Previous year Rs. 5.44 crores) in said GA. Total Capital expenditure till Balance sheet date is Rs. 150.54 Crores (Previous year Rs. 141.14 Crores) in said GA. Total revenue of Rs. 127.02 Crores (Previous year Rs. 163.50 Crores) is generated from said GA.

Note 20. Previous year figures

Previous year''s figures have been regrouped or reclassified wherever necessary to confirm to the current period''s presentation.

The above details represent Membership/ Chairmanship of Audit Committee and Stakeholders Relationship Committee as per Regulation 18 and 20 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including details of GGL).

Membership does not include chairmanship

Mar 31, 2015

Note 1. The Company has taken premises for business and residential use for its employees under cancellable operating lease arrangements. The total lease rentals recognized as an expense during the year for such lease arrangements is Rs. 3.80 Crores (P.Y. 4.52 Crores). The lease arrangement typically ranges from 11 months to 9 years.

The company is contesting the demands and the management including its tax advisors believe that its position is likely to be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the company's financial position and results of operations.

Note 2. PGNRB had vide its orders dated 13.09.2011 of Chairman and dated 10.10.2011 of the majority members (three member panel of Board) unanimously held that GAIL had adopted Restrictive Trade Practices by blocking off direct connectivity to GSPC and further, directed Respondents to immediately give direct connectivity to GSPC at Dahej Terminal.

The PLL Off takers (GAIL) filed appeals against the said PNGRB orders before the Appellate Tribunal for Electricity (APTEL). On 23.02.2012 APTEL had issued an interim order for shifting the Delivery Point from GAIL-GSPL Delivery Point to GSPL-PLL Delivery Point. On 18.12.2013 APTEL issued its judgment and required GSPCL to pay the amount of the difference between Rs. 8.74/MMBTU (exclusive of Service Tax) - earlier connectivity charges and Rs. 19.83/MMBTU (Exclusive of Service Tax) - HVJ/ DVPL Zone-1 tariff to GAIL for the period from 20.11.2008 to 29.02.2012.

GSPCL has filed an appeal against the APTEL's above referred judgment before Hon'ble Supreme Court of India (GSPCL vs. GAIL & Others, Civil Appeal No. 2473-2476 of 2014) and the Hon'ble Supreme Court of India had passed the Interim Order on 28.02.2014. The Court has stated that the ends of justice would be met if as a matter of interim arrangement, the appellant is directed to pay interconnectivity charges at the rate of Rs. 12.00 per MMBTU (exclusive of Taxes).

Note: No interest has been paid by the Company to the enterprises covered under Micro, Small and Medium Enterprises Development Act, 2006 according to the terms agreed with the enterprises.

Note 3. DISCLOSURE OF EMPLOYEE BENEFITS

The Company has implemented Accounting Standard - 15 (Revised 2005) on "Employee Benefits", issued by the Institute of Chartered Accountants of India.

(a) Provident Fund - Defined Contribution Plan

All employees are entitled to provident fund benefits and amount charged to Statement of Profit and Loss during 12 months ended is Rs. 5.40 Crores (Previous year Rs. 5.01 Crores).

(b) Gratuity and Leave Encashment - Defined Benefit Plans (payable in future)

Provision has been made for gratuity and leave encashment as per actuarial valuation. The principal assumptions used in actuarial valuation and necessary disclosures are as below:

Note 4. Employee Stock Option Plan 2008:

The erstwhile Gujarat Gas Company Ltd implemented an Employee Stock Option Plan 2008 ('ESOP 2008') which provides for the allotment of equity shares of Rs. 2 /- each to eligible employees of the erstwhile Gujarat Gas Company Ltd and its subsidiaries. The Scheme is administered by an ESOP Trust (Gujarat Gas Company Limited Employee Stock Option Welfare Trust) which purchases, out of the funds advanced by the Company, the shares equivalent to the number of options granted, for allotment to the grantees. IDBI Trusteeship Services Limited are the trustees of the said trust. The trustees can purchase or sell the shares from the market as per the approved scheme. For the year ended on 31 st March 2015, there are no purchases from the market.

Pursuant to the above scheme, the Company has granted options, as mentioned here below, convertible into equity shares of Rs. 2/- each to employees of erstwhile Gujarat Gas Company Ltd and its subsidiaries. The exercise price is calculated at 10% discount to the closing price of the shares on record date, being the date on which the grant of options were approved. The Scheme provides for graded vesting of options granted, over a period of 4 years from the date of grant.

In accordance with the approval granted by the members of the erstwhile Gujarat Gas Company Limited, to the issue of Bonus Shares in the ratio of one equity share of the Company of Rs. 2/- each for every one equity share of the Company held by the Shareholders of the Company as on September 19, 2009, being the Record Date, the Compensation Committee of the Board of Directors of the Company, on September 22, 2009, had approved adjustments to the Options granted and unvested as on September 19, 2009, under the Gujarat Gas Company Ltd - Employee Stock Option Plan 2008, whereby each option had been doubled and the Exercise Price thereof been halved with effect from September 22, 2009.

The employee share based payment plans have been accounted based on the Fair value method of accounting using the Black-Scholes Option Pricing Formula. The weighted average remaining contractual life of options outstanding as on 31 March 2015 is 1.79 years. (Previous year 1.67 years).

In accordance with Guidance Note on Accounting for Employee Share-based Payments issued by Institute of Chartered Accountants of India and SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 issued by Securities Exchange Board of India, an amount of Nil (Previous year Rs. 0.56 Crores) has been recognized as an expense in Employee Benefits Expenses (Note 27) and corresponding liability has been disclosed as Stock Options Outstanding Account (Note 3). The balance of Rs. 0.32 Crores (Previous year Rs. 2.69 Crores) in Stock Options Outstanding Account (Note 3) represents the amortized cost of stock options outstanding. As on 31 March 2015, the amount recoverable from ESOP trust is Rs. 3.01 Crores (Previous year Rs.8.63 Crores).

The Company has adjusted gain of Rs.2.06 Crores (Previous year loss of Rs. 1.05 Crores) to General Reserve (to Surplus in Statement of Profit and Loss in previous year) to as the difference between the cost incurred by the ESOP Trust for the purchase of shares and the exercise price of those options which have been exercised by the employees during the current year, in accordance with Guidance Note on accounting for Employee share based payment, issued by the ICAI.

Note 5. Corporate Social Responsibility

During the year, the Company spent Rs 1.07 crores on corporate social responsibility out of which Rs. 1.05 Crores is included in Donation in Note 29.

Note 6. SEGMENT REPORTING

The Company primarily operates in the segment of Natural Gas Business. Natural gas business involves distribution of gas from sources of supply to centres of demand and to the end customers. Accordingly, disclosures relating to primary and secondary business segments under the Accounting Standard 17 on Segment Reporting are not relevant to the Company.

Note 7. RECOVERABLE VALUE OF ALL ASSETS OTHER THAN FIXED ASSETS AND NON CURRENT INVESTMENTS

In the opinion of management, the current assets including loans and advances, Trade receivables and other current assets are recoverable at the value stated in the balance sheet in ordinary course of business.

Note 8. Authorization with PNGRB :

Erstwhile GSPC GAS Company Limited had applied to the 'Petroleum & Natural Gas Regulatory Board' in May 2008 for authorization of its various Geographical Areas (GA)- City Gas Distribution Network under section 18( 1) of the 'Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand local or City Gas Distribution Network) Regulations, 2008. The authorizations for Palej and Gandhinagar are under process of authorization with PNGRB.

The PNGRB has rejected the application of authorization of Halol and Khambhat GA by issuing a speaking orders in May, 2011. The management of company has replied to PNGRB against the said speaking order and requested to continue to operate in Halol and Khambhat GA in public interest and company has continued to operate and book the income thereof. Erstwhile GSPC Gas has incurred capital expenditure amounting to Rs. 5.44 Crores during FY 2014-15 (Previous year Rs. 8.82 crores) in said GA. Though the company's application for reviewing of the decisions are pending before the board, it is exposed to penal provisions for contravention and continued contravention of the directions of the Board of the PNGRB Act, 2006. Total Capital expenditure till Balance sheet date is Rs. 141.14 Crores (Previous year Rs. 135.69 Crores) in said GA. Total revenue of Rs. 207.57 Crores (Previous year Rs. 207.06 Crores) is generated from said GA. Further, the company is engaged with PNGRB to obtain authorization for Halol and Khambhat GA as well along with other GA's under relevant rules of the PNGRB Act, 2006. Company has not received any further communication from PNGRB in this regard.

NOTE 9. Scheme of Amalgamation and Arrangement

Scheme of Amalgamation and Arrangement and Capital Reduction

Overview of the scheme of amalgamation and arrangement

The Board of Directors of the following Companies at their meeting held on 21st April, 2014 passed a resolution to consider the Composite Scheme of Amalgamation and Arrangement under section 391 to 394 read with section 100 to 103 and other relevant provisions of the Companies Act 1956 between the following transferors companies -

1. GSPC Gas Company Limited (GSPC Gas)

2. Gujarat Gas Company Limited (GGCL)

3. Gujarat Gas Financial Services Limited (GFSL)

4. Gujaratgas Trading Company Limited (GTCL) (Collectively called Transferor Companies)

with Gujarat Gas Limited (formerly known as GSPC Distribution Networks Limited-GDNL) (the transferee) under the Scheme with appointed date as 1st April, 2013. The Scheme of Amalgamation and Arrangement was approved by respective board of directors and the shareholders of the transferor and transferee companies.

The scheme of arrangement was sanctioned by the Hon'ble Gujarat High Court at Ahmadabad vide its order dated 30th March 2015. The certified copy of order was received on 18th April 2015 and filed with Registrar of Companies (ROC) at Ahmadabad on 14th May 2015. The Scheme of Amalgamation became effective on 14th May, 2015 on submission of the order of the High Court of Gujarat with the Registrar of Companies at Ahmadabad. Subsequently, the company's name has been changed from GSPC Distribution Networks Limited to Gujarat Gas Limited (GGL) with effect from 15th May 2015.

The scheme of amalgamation and arrangement covers the below entities:

1. GSPC Distribution Networks Limited (GDNL) is an unlisted company incorporated under the Companies Act 1956 and main objective of the company is to engage in Natural Gas Business in Gujarat.

2. GSPC Gas Company Limited (GSPC Gas), an unlisted company incorporated under the Companies Act 1956, was also engaged in the business of Natural Gas. It caters to the requirements of retail segment comprising of industrial, commercial, CNG and residential customers.

3. Gujarat Gas Company Limited (GGCL), a listed company incorporated under the Companies Act 1956, was also engaged in the business of transmission and distribution of natural gas to industrial, commercial, CNG and residential customers.

4. Gujarat Gas Financial Services Limited (GFSL), an unlisted company incorporated under the Companies Act 1956, was also engaged in the business of sale of gas connections in India to GGCL and other commercial as well as non- commercial customers in India.

5. Gujarat gas Trading Company Limited (GTCL), an unlisted company incorporated under the Companies Act 1956, was also engaged in the business of distribution of gas from sources of supply to centers of demand and/or end customers.

As a part of the scheme of amalgamation and arrangement, GSPC Gas, GGCL, GFSL and GTCL (transferor companies) have merged into to Gujarat Gas Limited (formerly known as GSPC Distribution Networks Limited-GDNL).

The appointed date of the Scheme of Amalgamation for the merger is 1 st April 2013 (the appointed date). Upon the coming into effect of the Scheme of Amalgamation and with effect from the appointed date, the transferor company carried all business and activities relating to the transferor company and stand possessed of all the estates, assets, rights, title, all debts, liabilities (including contingent liabilities), duties and obligations of every kind, nature and interest of the transferor company for and on account of, and in trust for, the transferee Company.

Upon the Scheme becoming effective, all the Transferor Companies are dissolved without winding up pursuant to the provisions of Section 394 of the Companies Act, 1956

Accounting Treatment

The above Scheme of Amalgamation is an amalgamation in the nature of purchase in accordance with the requirements of Accounting Standard 14- "Accounting for Amalgamations" and has been accounted in books of the company with effect from the appointed date (1st April 2013) as per the Purchase method under AS -14 "Accounting for Amalgamations". Consequent to order dated 6th July 2015 of the Honourable High Court of Gujarat for sanctioning permission of re- opening and revision of books of accounts for the year 2013-14, the audited financial statements of transferee company Gujarat Gas Limited (formerly known as GSPC Distribution Networks Limited-GDNL) for year 2013-14 have been re- opened and revised to give effect of the said amalgamation and arrangement in books of accounts for the year 2013-14. Accordingly, operation of all the transferors companies from 1 st April 2013, as detailed below have been accounted for in the financial statements for financial year 2013-14.

1 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 1st April 2013.

Note : The above mentioned figures have been increased/(deceased) due to alignment of accounting policies as on 1st April, 2013 as mentioned below. These adjustments have been recorded in the opening reserves as per the accounting treatment prescribed under the scheme.

(a) Inventories have been increased by Rs. 2.12 Crores on account of recognition of Gas Inventory of erstwhile GGCL

(b) Long Term loans and advances have been decreased by Rs. 1.55 Crores on account of recognition of provision for doubtful advances of erstwhile GSPC GAS.

(c) Trade Receivables have been increased by Rs. 0.33 Crores on account of recognition of interest income accrual of erstwhile GSPC GAS.

(d) Unbilled Revenue has been decreased by Rs. 18.37 Crores to align accrual of sales income of erstwhile GGCL with erstwhile GSPC Gas.

3 As a purchase consideration for the transfer of the above mentioned assets and liabilities determined by the Board as on the appointed date 1 st April, 2013 and consequential expected future cash flows from the transferor companies, the company has to issue 4,731,764,975 equity shares of Rs. 10 each totaling value Rs. 4,731.77 Crores. This has resulted in recognition of goodwill of Rs. 742.99 crores (equity shares of Rs. 4,731.77 Crores for net assets of Rs. 3,988.77 Crores) based on the Purchase method of accounting as prescribed under AS 14 - "Accounting for Amalgamations". Pursuant to the scheme and after re-organation of share capital, new 124,520,130 equity shares have been issued to equity shareholders of Transferor Companies in the swap ratio as specified in the scheme.

4 Pursuant to the scheme, equity shares of the Company held by the transferor Company and transferor companies inter-company investments stood cancelled. Accordingly, investments of Rs. 2,811.14 crores (GDNL investments in GGCL) and Rs. 0.13 Crores (GGCL investments in GTCL) and Rs. 1.40 Crores (GGCL investments in GFSL) and Rs. 400.05 Crores (GSPC Gas investments in GDNL) have been cancelled.

Further, in accordance with the scheme, cancellation of equity shares of transferor companies has resulted in creation of goodwill of Rs. 2,812.67 Crores. This along with the amount of goodwill as mentioned in (3) above has been adjusted against the reserves arising on account of capital reduction to reduce the share capital to comprise of 137,678,025 equity shares of Rs. 10/- each aggregating value Rs. 137.68 Crores. The reduction in the share capital of the Company has been effected as an integral part of the Scheme in accordance with the provisions of Sections 100 to 103 of the Companies Act, 1956 and the order of the High Court sanctioning the Scheme.

5 Considering above points no. 1 to 4 and pursuant to the Scheme, the net assets of the transferor companies acquired by the transferee company in excess of the consideration issued as share capital by the transferee company to the shareholders of the transferor company after adjustments of the inter-company investment holdings and inter-company balances, if any, and reduction of share capital has been adjusted against the "Reserve Account" of the transferee company (Refer Note 3) in accordance with the requirements of the approved Scheme of Amalgamation.

Note 10 Previous year figures

Previous year's figures have been regrouped or reclassified wherever necessary to confirm to the current period's presentation.

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