Mar 31, 2023
(d) Terms / Notes
(1) Transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions and in ordinary course of business. Outstanding balances are unsecured.
(2) Apart from the above transactions, the Company has also entered into transactions including but not limited to transmission of natural gas, rendering & receiving of services, placement & maturity of term/liquid deposits, use of public utilities, receipt/payment of rent etc. with Government related entities (entities controlled, jointly controlled or significantly influenced by Government of Gujarat). ^ese transactions are entered in ordinary course of business & are at arm''s length prices based on the agreed contractual terms. Further, GSPL has significant transactions with State Government related entity, being Gujarat State Financial Services Limited [GSFS] [w.e.f. 20th October, 2022]. ^e related party transactions with GSFS during the period are Placement/renewal of deposits '' 34,436.50 Lacs, Withdrawal/maturity of Deposits '' 47,027.19 Lacs and Interest Income '' 322.94 Lacs. Further, the balance of deposit as on 31â March, 2023 is '' 4,306.10 Lacs.
C. Financial risk management
^e Company has a well-defined risk management framework. ^e Board of Directors of the Company has adopted a Risk Management Policy. ''tte Company has exposure to the following risks arising from financial instruments:
⢠Credit risk ;
⢠Liquidity risk ; and
⢠Market risk
(i) Credit risk
Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or fail to pay amounts due causing financial loss to the Company. ^e potential activities where credit risks may arise include from cash and cash equivalents and security deposits or other deposits and principally from credit exposures to customers relating to outstanding receivables and other receivables. ^e maximum credit exposure associated with financial assets is equal to the carrying amount. Details of the credit risk specific to the company along with relevant mitigation procedures adopted have been enumerated below:
Trade and other receivables
Company''s exposure to credit Risk is the exposure that Company has on account of services rendered / prodcuts sold to a contractual counterparty or counterparties, whether with collateral or otherwise for which the contracted consideration is yet to be received. ^e Company''s customer base are Industrial and Commercial.
Services are generally subject to security deposit and/or bank guarantee clauses to ensure that in the event of non-payment the Company''s receivables are not affected. ^e Company provides for allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables.
^e Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix.
Refer note 11 for ageing of trade receivables
^e above receivables which are past due but not impaired are assessed on case-to-case basis. ^e instances pertain to third party customers which have a proven creditworthiness record. Management is of the view that these financial assets are not impaired as there has not been any adverse change in credit quality and are envisaged as recoverable based on the historical payment behaviour and extensive analysis of customer credit risk, including underlying customersâ credit ratings, if they are available. Consequently, no additional provision has been created on account of expected credit loss on the receivables. ''ttere are no other classes of financial assets that are past due but not impaired. ^e provision for impairment of trade receivables, movement of which has been provided below, is not significant / material. ^e concentration of credit risk is limited due to fact that the customer base is large and unrelated.
Other financial assets
Other financial assets includes loan to employees, security deposits, investments, cash and cash equivalents, other bank balance, advances to employees etc.
⢠Cash and cash equivalents and deposits are placed with banks / financial institution having good reputation and past track record with adequate credit rating.
⢠Investments are made in credit worthy companies / group companies.
⢠^e Company has given security deposit to various government authorities (like Municipal corporation, Nagarpalika, Grampanchayat, Road & building division and Irrigation department of State Governments, credit worthy companies etc.) for the permission related to work of executing / laying pipeline network in their premises / jurisdiction. Being government authorities, the Company does not have exposure to any credit risk.
⢠Loan and advances to employees (for housing advances) are majorly secured in nature and hence the Company does not have exposure to any credit risk.
(ii) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are proposed to be settled by delivering cash or other financial asset. ^e Companyâs financial planning has ensured, as far as possible, that there is sufficient liquidity to meet the liabilities whenever due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation. ^e Company has practiced financial diligence and syndicated adequate liquidity in all business scenarios.
(iii) Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Companyâs income or the value of its holdings of financial instruments.
Currency risk
^e functional currency of the Company is Indian Rupees. ^e Company do not have derivative financial instruments. 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.
Company defines capital as total equity including issued equity capital, share premium and all other equity reserves attributable to equity holders of the Company (which is the Companyâs net asset value). ^e primary objective of the Companyâs financial framework is to support the pursuit of value growth for shareholders, while ensuring a secure financial base.
^e Company monitors capital using a ratio of âadjusted net debtâ to âadjusted equityâ. For this purpose, adjusted net debt is defined as total interest-bearing loans and borrowings less cash and bank balances. Total equity comprises all components of equity. ''ttere are no interest bearing loans and borrowings obtained by the Company which are outstanding as on 31st March 2023.
A. ^ie Company as lessee:
Nature of the lease transaction:
^e Company has taken various parcel of land with lease term ranging from 5 years to 99 years, office building with lease term ranging from 4 years to 10 years, LNG Trucks and regasification facilities for 5 years, and various guest houses / yards / office containers / vehicles on lease with the lease term of 6 to 11 months. Some lease contract can be renewed with mutual consent and some lease contract also contains the termination options. Such options are appropriately considered in determination of the lease term based on the management''s judgement. In certain contracts, the Company is restricted from assigning and subletting the leased assets. For leases where the lease term is less than 12 months with no purchase option, the Company has elected to apply exemption for short term leases and accordingly, right of use assets and lease liabilities for these contracts are not recognised.
Refer Note 3 for details relating to Right of Use Assets.
Petroleum and Natural Gas Regulatory Board (âPNGRBâ) granted authorization in favour of the Company for laying, building, operating or expanding City Gas Distribution network in geographical areas of Amritsar (May 2015) and Bhatinda (May 2016) District in the state of Punjab. In furtherance of overall strategic business objective and synergies, the Company and Gujarat Gas Limited (âGGLâ, subsidiary of the Company) requested to PNGRB for transfer of these authorizations to GGL in line with applicable PNGRB Regulations. After due examination, PNGRB provided approval dated 29th June 2020 for transfer of these authorization for Amritsar Bhatinda GAs from GSPL to GGL subject to fulfilment of below three conditions:
1) Revised Performance Bank Guarantee
2) Revised Gas Sale Agreement in name of GGL
3) Financial Closure
During the year ended 31â March 2021, on fulfilment of the above conditions, the Company had classified the CGD business as a discontinued operation. ^e associated assets and liabilities were consequently presented as held for sale in financial statements for the year ended 31â March 2021. ^e date of such classification is 18th December 2020. No impairment loss was recognised on reclassification as the management expected that the fair value less cost to sell is higher than the carrying amount.
Pursuant to the approval by the Board of Directors on 3rd June 2021, the Company had executed Business Transfer Agreement (BTA) on 26th October 2021 to transfer City Gas Distribution (CGD) Business of Amritsar and Bhatinda Geographical Areas to Gujarat Gas Limited (GGL, a subsidiary company) by way of slump sale 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 as on closing date). ^e Company has consummated the above transfer of business with effect date 1â November 2021 to reflect the same in the previous financial year.
Defined contribution plan:
Provident fund and superannuation fund benefits charged to Statement of Profit and Loss during the period are '' 404.80 Lacs and '' 204.57 lacs respectively (PY: '' 363.52 Lacs and '' 171.46 Lacs respectively).
Defined benefit plans:
^e Company has participated in Group Gratuity scheme of HDFC Standard Life Insurance Company Limited. ^e liability in respect of gratuity benefits, post retirement medical benefit scheme (PRMBS) & leave salary being defined benefit schemes, payable in future, are determined by actuarial valuation as on balance sheet date. In arriving at the valuation for gratuity, medical benefits & leave salaries, following assumptions were used:
A description of methods used for sensitivity analysis and its Limitations:
Sensitivity analysis is performed by varying a single parameter while keeping all the other parameters unchanged. Sensitivity analysis fails to focus on the interrelationships between underlying parameters. Hence, the results may vary if two or more variables are changed simultaneously. ^e method used does not indicate anything about the likelihood of change in any parameter and the extent of the change, if any.
Other notes:
^e Code on Social Security, 2020 (âCodeâ) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. ^e 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. ^e 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.
^e Company does not hold any Benami properties. No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibitions) Act, 1988 and the rules made thereunder.
^e Company has not advanced or loaned or invested funds - either borrowed funds or share premium or any other sources or kind of funds to any other person or entity, including foreign entities (Intermediaries) with an understanding that the Intermediary shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company or
(ii) provide any guarantee, security or the like to or on behalf of the Company.
^e Company has not received any fund from any person or entity, including foreign entities (Funding Party) with the understanding that the Company shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
^e Company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.
As at the reporting dates, none of the charges or satisfaction of charges are yet to registered with ROC beyond the statutory time limit.
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.
''ttere are no transactions that has been not recorded in the books of accounts and has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.
^e Company has not traded or invested in Crypto currency or Virtual Currency during the financial year and comparative period.
53 As at the balance sheet date, the Company has reviewed the carrying amounts of its assets and found that there is no indication that those assets have suffered any impairment loss. Hence, no such impairment loss has been provided.
54 Amount due for credit to Investor Education and Protection Fund is NIL (Previous year NIL).
55 In the opinion of management, any of the assets other than property, plant and equipment and non-current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.
56 Previous year figures have been reclassified or regrouped wherever necessary to enhance comparability and ensure consistency with the current yearâs financial statements.
Mar 31, 2022
30. CONTINGENT LIABILITIES & CONTINGENT ASSETS |
('' in Lacs) |
|
Sr* Particulars No. |
As at 31st March, 2022 |
As at 31st March, 2021 |
A Claims against Company not acknowledged as debts # |
||
1 By land owners seeking enhancement of compensation in respect of RoU acquired by the Company 2 By other parties including contractual disputes ## 3 Central Excise and Service Tax matters (Applicable interest & |
2,183.55 16,069.72 |
2,183.55 18,637.95 |
penalty has also been demanded by Department) |
35,904.26 |
35,904.26 |
4 Income tax matters |
2,185.40 |
2,174.72 |
B Guarantees excluding financial guarantees Bank Guarantees/ Corporate Guarantees/ Letter of Credits |
8,852.17 |
9,543.69 |
# ^e company is subject to legal proceeding and claim, which have arisen in the ordinary course of business. ^e Company does not reasonably expect that these claims, when ultimately concluded and determined, will have material and adverse effect on Company''s results of operations or financial position
## ^is includes contractual disputes under arbitration between the Company and M/s Fernas Construction Company Inc. amounting '' 12,613.60 Lacs (31st March, 2021 : '' 15,413.86 Lacs).
^e Company is having certain claims, realization of which is dependent on outcome of legal process being pursued. ^e management believe that probable outcome in all such claims are uncertain. Hence, the disclosure of such claims is not required in the financial statements.
32. EVENTS OCCURRING AFTER THE REPORTING PERIOD
Board of Directors ,in its meeting on 12th May 2022, have proposed a final dividend of '' 2.00 (P.Y.: '' 2.00) per equity share for the financial year ended on 31â March, 2022. ^e proposal is subject to the approval of shareholders at the Annual General Meeting and if approved would result in a cash outflow of approximately '' 11,284.23 Lacs (P.Y.: '' 11,284.23 Lacs).
33. RECLASSIFICATION OF COMPARATIVE FIGURES
Pursuant to amendments in Schedule III to the Companies Act, 2013, certain reclassifications have been made to the comparative period''s financial statements to ensure compliance with the amended Schedule III and revised Guidance Note on Division II - Ind AS. ^is does not have any impact on the profit, equity and cash flow statement for the comparative period.
^e borrowing cost is capitalized at rate(s) applicable to specific loan(s) used for specific project(s). ^e weighted average rate of borrowings used for projects is 7.35% for FY 2021-22 [P.Y. : 7.09%].
35. ^ere are no whole time / executive directors on the Board except Chairman & Managing Director and Joint Managing Director. ^ey are not drawing any remuneration from the Company.
36. ^e balances of trade receivables, trade payables, loans & advances and deposits are subject to confirmation. Provision for all liabilities is adequate in opinion of the Company.
Segment information has been provided under the Notes to the Consolidated financial statements of the Company.
As per the Indian Accounting Standard-24 on âRelated Party Disclosuresâ, list of related parties identified of the Company are as follows. (a) Parent Entity
Gujarat State Investment Limited (GSIL) - Ultimate Controlling Company
Gujarat State Petroleum Corporation Limited (GSPC) - Immediate Parent Company & Subsidiary of Ultimate Controlling Company
Types of inputs for determining fair value are as under:
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. ''ttis includes mutual funds that have quoted price. ^e mutual funds are valued using the closing NAV.
Level 2: ^e 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. ^is is the case for unlisted equity securities included in level 3.
B. Measurement of fair values
i) Valuation techniques and significant unobservable inputs
^e following tables show the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.
^e Company has a well-defined risk management framework. ^e Board of Directors of the Company has adopted a Risk Management Policy. ''tte Company has exposure to the following risks arising from financial instruments:
⢠Credit risk ;
⢠Liquidity risk ; and
⢠Market risk
(i) Credit risk
Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or fail to pay amounts due causing financial loss to the company. ^e potential activities where credit risks may arise include from cash and cash equivalents, derivative financial instruments and security deposits or other deposits and principally from credit exposures to customers relating to outstanding receivables. ^e maximum credit exposure associated with financial assets is equal to the carrying amount. Details of the credit risk specific to the company along with relevant mitigation procedures adopted have been enumerated below:
Trade and other receivables
^e Company''s exposure to credit Risk is the exposure that Company has on account of services rendered to a contractual counterparty or counterparties, whether with collateral or otherwise for which the contracted consideration is yet to be received. ^e Company''s customer base are Industrial and Commercial.
Services are generally subject to security deposit and/or bank guarantee clauses to ensure that in the event of non-payment the company''s receivables are not affected. ^e Company provides for allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables.
^e Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix.
Refer note 11 for ageing of trade receivables
above receivables which are past due but not impaired are assessed on case-to-case basis. ^e instances pertain to third party customers which have a proven creditworthiness record. Management is of the view that these financial assets are not impaired as there has not been any adverse change in credit quality and are envisaged as recoverable based on the historical payment behavior and extensive analysis of customer credit risk, including underlying customersâ credit ratings, if they are available. Consequently, no additional provision has been created on account of expected credit loss on the receivables. ''ttere are no other classes of financial assets that are past due but not impaired. ^e provision for impairment of trade receivables, movement of which has been provided below, is not significant / material. ^e concentration of credit risk is limited due to fact that the customer base is large and unrelated.
Other financial assets includes loan to employees, security deposits, investments, cash and cash equivalents, other bank balance, derivative asset, advances to employees etc.
⢠Cash and cash equivalents and Bank deposits are placed with banks having good reputation and past track record with adequate credit rating.
⢠Investments are made in credit worthy companies.
⢠Company has given security deposit to various government authorities (like Municipal corporation, Nagarpalika, Grampanchayat, Road & building division and Irrigation department -of State Governments, credit worthy companies etc. ) for the permission related to work of executing / laying pipeline network in their premises / jurisdiction. Being government authorities, the Company does not have exposure to any credit risk.
⢠Loan and advances to employees (for housing advances) are majorly secured in nature and hence the Company does not have exposure to any credit risk.
(ii) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are proposed to be settled by delivering cash or other financial asset. ^e Companyâs financial planning has ensured, as far as possible, that there is sufficient liquidity to meet the liabilities whenever due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation. ^e Company has practiced financial diligence and syndicated adequate liquidity in all business scenarios.
(iii) Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Companyâs income or the value of its holdings of financial instruments.
Currency risk
^e functional currency of the Company is Indian Rupees. ^e Company do not have derivative financial instruments.
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.
^e Companyâs portfolio of borrowings comprise of a mix of fixed rate and floating rate loans which are monitored continuously in the light of market conditions.
Company defines capital as total equity including issued equity capital, share premium and all other equity reserves attributable to equity holders of the Company (which is the Companyâs net asset value). ^e primary objective of the Companyâs financial framework is to support the pursuit of value growth for shareholders, while ensuring a secure financial base.
^e Company monitors capital using a ratio of âadjusted net debtâ to âadjusted equityâ. For this purpose, adjusted net debt is defined as total interest-bearing loans and borrowings less cash and bank balances. Total equity comprises all components of equity.
41. Disclosures under Ind AS 116 Leases
^e Company has taken various parcel of land with lease term ranging from 5 years to 99 years, office building with lease term ranging from 4 years to 10 years, LNG Trucks and regasification facilities for 5 years, and various guest houses / yards / office containers on lease with the lease term of 11 months. Some lease contract can be renewed with mutual consent and some lease contract also contains the termination options. Such options are appropriately considered in determination of the lease term based on the management''s judgement. In certain contracts, the Company is restricted from assigning and subletting the leased assets. For leases where the lease term is less than 12 months with no purchase option, the Company has elected to apply exemption for short term leases and accordingly, right of use assets and lease liabilities for these contracts are not recognised.
Refer Note 3 for details relating to Right of Use Assets.
42A Asset held for sale classification reversed during the previous year ended 31st March, 2021:
On 9th May, 2019, the Board of Directors of the Company had taken a strategic decision and approved the transfer/ sale of the certain items of property, plant equipment and intangible assets to Gujarat Gas Limited. In accordance with Ind AS 105, âNon-current Assets Held for Sale and Discontinued Operationsâ, the assets had been classified as held for sale as on 31â March, 2020. No impairment loss was recognised on reclassification of the assets as held for sale nor as on 31â March, 2020, as the management expected that the fair value less cost to sell is higher than the carrying amount.
42B Discontinued Operations and Disposal Group classified as held for sale:
Petroleum and Natural Gas Regulatory Board (âPNGRBâ) granted authorization in favour of the Company for laying, building, operating or expanding City Gas Distribution network in geographical areas of Amritsar (May 2015) and Bhatinda (May 2016) District in the state of Punjab. In furtherance of overall strategic business objective and synergies, the Company and Gujarat Gas Limited (âGGLâ, subsidiary of the Company) requested to PNGRB for transfer of these 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 Bhatinda GAs from GSPL to GGL subject to fulfillment of below three conditions:
1) Revised Performance Bank Guarantee
2) Revised Gas Sale Agreement in name of GGL
3) Financial Closure
During the previous year, on fulfillment of the above conditions, the Company had classified the CGD business as a discontinued operation. ^e associated assets and liabilities were consequently presented as held for sale in financial statements for the year ended 31â March, 2021 . ^e date of such classification is 18th December, 2020. No impairment loss was recognised on reclassification as the management expected that the fair value less cost to sell is higher than the carrying amount.
Pursuant to the approval by the Board of Directors on 3rd June, 2021, the Company had executed Business Transfer Agreement (BTA) on 26th October, 2021 to transfer City Gas Distribution (CGD) Business of Amritsar and Bhatinda Geographical Areas to Gujarat Gas Limited (GGL, a subsidiary company) by way of slump sale for cash consideration of INR '' 153.86 Crores ('' 164.58 Crore Business valuation determined based on an independent valuation less '' 10.72 Crore working capital adjustment as on closing date). ^e Company has consummated the above transfer of business with effect date 1â November, 2021 to reflect the same in the current financial year.
Contract asset is the right to consideration in exchange for goods or services transferred to the customer. Contract liability is the entityâs 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 Obligation for Gas Transmission is to transmit Natural Gas as per the contractual arrangement with the customer.
44. DISCLOSURES FOR EMPLOYEE BENEFITS AS PER INDIAN ACCOUNTING STANDARD - 19
Provident fund and superannuation fund benefits charged to Statement and Profit and Loss during the period are '' 363.52 Lacs and '' 171.46 lacs respectively (PY: '' 328.80 Lacs and '' 163.72 Lacs respectively).
Defined benefit plans:
^e Company has participated in Group Gratuity scheme of HDFC Standard Life Insurance Company Limited. ^e liability in respect of gratuity benefits, post retirement medical benefit scheme (PRMBS) & leave salary being defined benefit schemes, payable in future, are determined by actuarial valuation as on balance sheet date. In arriving at the valuation for gratuity, medical benefits & leave salaries, following assumptions were used:
Sensitivity analysis is performed by varying a single parameter while keeping all the other parameters unchanged. Sensitivity analysis fails to focus on the interrelationships between underlying parameters. Hence, the results may vary if two or more variables are changed simultaneously. ^e method used does not indicate anything about the likelihood of change in any parameter and the extent of the change, if any.
(i) Code on Social Security, 2020 (âCodeâ) relating to employee benefits during employment and post-employment benefits
received Presidential assent in September 2020. ^e 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. ^e 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.
45. DETAILS OF BENAMI PROPERTIES
^e Company does not hold any Benami properties. No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibitions) Act, 1988 and the rules made thereunder.
46. UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM
^e Company has not advanced or loaned or invested funds - either borrowed funds or share premium or any other sources or kind of funds to any other person or entity, including foreign entities (Intermediaries) with an understanding that the Intermediary shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company or
(ii) provide any guarantee, security or the like to or on behalf of the Company.
^e Company has not received any fund from any person or entity, including foreign entities (Funding Party) with the understanding that the Company shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
48. RELATIONSHIP WITH STRUCK OFF COMPANIES
^e company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.
49. REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES (ROC)
As at the reporting dates, none of the charges or satisfaction of charges are yet to registered with ROC beyond the statutory time limit.
50. 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.
51. DISCLOSURE IN RELATION TO UNDISCLOSED INCOME
''ttere are no transactions that has been not recorded in the books of accounts and has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961
52. DETAILS OF CRYPTO CURRENCY OR VIRTUAL CURRENCY
^e Company has not traded or invested in Crypto currency or Virtual Currency during the financial year and comparative period.
53. EMPLOYEE STOCK OPTION PLANS
During the Financial Year 2010-11, the Company instituted ESOP-2010. ^e Board of Directors and the Shareholders approved the plan in the meeting held on 23rd August, 2010 and 27th October, 2010 respectively, which provides for the issue of 21,28,925 equity shares to the employees of the company. ^e Compensation Committee administers ESOP-2010. ^ese ESOPs are granted at an exercise price of '' 75 per share to be vested over the period of five years and to be exercised within a period of ten years from the date of Grant. Set out below is a summary of options granted under the plan:
^e fair value at grant date of options granted during the year ended 31â March, 2021 was '' 72.45 per option. ^e fair value at grant date is determined using the Binomial Model which takes into account the exercise price, the terms of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
54. As per the PNGRB (Access Code for Common Carrier or Contract Carrier Natural Gas Pipelines) Regulations, 2008 the amount towards imbalance and overrun charges are required to be deposited with PNGRB. Accordingly, the amount recovered from customers (net of taxes) during the period has been deposited to PNGRB Escrow Account and the remaining amount invoiced (net of taxes)is recognized as liability and grouped under âStatutory liabilitiesâ in note no. 19.
55. ^e Code on Social Security, 2020 (âCodeâ) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. ^e 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. ^e 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.
56. 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. ^e Company will continue to monitor any material changes to future economic conditions, which necessitate any further modifications.
57. As at the balance sheet date, the Company has reviewed the carrying amounts of its assets and found that there is no indication that those assets have suffered any impairment loss. Hence, no such impairment loss has been provided.
58. Amount due for credit to Investor Education and Protection Fund is NIL (Previous year NIL).
59. In the opinion of management, any of the assets other than property, plant and equipment and non-current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.
Mar 31, 2021
Terms/Rights attached to Equity Shares
The Company has only one class of equity shares having a face value of Z 10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.
During the year ended 31st March, 2021, the amount of dividend per share recognised as distribution to equity shareholders is Z 2 per
share (3Th March 2020: Z 2 per share).
In the event of liquidation of the Company, the holders of equity shares will be entitled to remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.
* MCA issued clarification dated 23rd March, 2020 that spending on various activities related to Covid â 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 Z 1,000 Lacs on 31st March 2020 to âChief Minister Relief Fund, Government of Gujaratâ with special objective in the situation of Disaster Relief for helping COVID 19 affected areas before 31st March 2020 and contributed Z 1,000 Lacs on 1st April 2020 to âChief Minister Relief Fund, Government of Gujaratâ 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 Ministerâs Relief Fundâ or âState Relief Fund for COVID-19â 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.
Types of inputs for determining fair value are as under:
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 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 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.
Other financial assets
Other financial assets includes loan to employees, security deposits, investments, cash and cash equivalents, other bank balance, derivative asset, advances to employees etc.
⢠Cash and cash equivalents and Bank deposits are placed with banks having good reputation and past track record with adequate credit rating.
⢠Investments are made in credit worthy companies.
⢠Derivative instrument comprises cross currency interest rate swaps where the counter parties are banks with good reputation, and past track record with adequate credit rating. Accordingly no default risk is perceived.
⢠Company has given security deposit to various government authorities (like Municipal corporation, Nagarpalika, Grampanchayat, Road & building division and Irrigation department of State Government, credit worthy companies etc.) for the permission related to work of executing / laying pipeline network in their premises / jurisdiction. Being government authorities, the Company does not have exposure to any credit risk.
⢠Loan and advances to employees (for housing advances) are majorly secured in nature and hence the Company does not have exposure to any credit risk.
(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 proposed to be settled by delivering cash or other financial asset. The Companyâs financial planning has ensured, as far as possible, that there is sufficient liquidity to meet the liabilities whenever due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation. The Company has practiced financial diligence and syndicated
anfnmtp linninifrv in all nncinfcc crpnarinc
(iv) Market risk
Market risk is the risk that changes in market prices â such as foreign exchange rates, interest rates and equity prices â will affect the Companyâs income or the value of its holdings of financial instruments.
Currency risk
The functional currency of the company is Indian Rupees and its revenue is generated from operations in India. It was exposed to foreign currency risk arising on the LIBOR linked floating rate external commercial borrowing (ECB) denominated in Japanese Yen. The ECB was fully hedged through cross currency interest rate swap with all critical terms mirroring the underlying ECB. Accordingly, the foreign currency exposure had been completely hedged. This aside, the Company does not have any derivative instruments used for any other purposes.
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.
On 30th March 2019, the Ministry of Corporate Affairs (âMCAâ) through the Companies (Indian Accounting Standards) Amendment Rules, 2019 and the Companies (Indian Accounting Standards) Second Amendment Rules, had notified Ind AS 116 Leases which replaced the lease standard, Ind AS 17 leases and other interpretations.
Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. It introduces a single, on-balance sheet lease accounting model for lessees.
Effective from 1st April 2019 (âthe date of transitionâ), the Company applied Ind AS 116 using the modified retrospective approach, under which the right of use asset was measured at an amount equal to lease liability adjusted for prepaid or accrued rentals. Accordingly, there was no impact on retained earnings as on 1st April 2019.
On transition to Ind AS 116, the Company had elected to apply the practical expedient to grandfather the assessment of which transactions were leases as carried out under Ind AS 17 Leases. The Company applied Ind AS 116 only to contracts that were previously identified as leases under Ind AS 17. Therefore, the definition of a lease under Ind AS 116 was applied only to contracts entered into or changed on or after 1st April 2019.
The Company as a lessee:
As a lessee, the Company leases land, building and guest houses/other assets. 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 had recognised 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 were measured at the present value of the remaining lease payments, discounted at the Companyâs incremental borrowing rate as at 1st April 2019. The Company had tested its right-of-use assets for impairment on the date of transition and had concluded that there was no indication that the right-of-use assets were impaired.
The Company used a number of practical expedients when applying Ind AS 116 to leases previously classified as operating leases under Ind AS 17. In particular, the Company:
- applied a single discount rate to a portfolio of leases with reasonably similar characteristics.
- relied on previous assessments on whether leases are onerous as an alternative to performing an impairment review â there were no onerous contracts as at 1st April 2019;
- did not recognise right-of-use assets and liabilities for leases for which the lease term ends within 12 months of the date of initial application;
- did not recognise right-of-use assets and liabilities for leases of low value assets;
- excluded initial direct costs from the measurement of the right-of-use asset at the date of initial application; and
- used hindsight when determining the lease term.
The weighted average incremental borrowing rate of 8.25% has been applied to lease liabilities recognised in the balance sheet at the date of initial application.
On transition, for leases that are classified as finance lease under Ind AS 17, the carrying amount of the right-of-use asset and the lease liability at the date of transition to Ind AS 116 was the carrying amount of the lease asset and lease liability on the transition date as measured applying Ind AS 17.
The Company as a lessor:
The Company was not required to make any adjustments on transition to Ind AS 116 for leases in which it acted as a lessor, except for a sub - lease. The Company accounted for its leases in accordance with Ind AS 116 from 1st April, 2019.
Disclosures under Ind AS 116 Leases:
A. The Company as lessee:
Nature of the lease transaction:
The Company has taken various parcel of land with lease term ranging from 5 years to 99 years, office building with lease term ranging from 4 years to 10 years and various guest houses / yards / office containers on lease with the lease term of 11 months. Some lease contract can be renewed with mutual consent and some lease contract also contains the termination options. Such options are appropriately considered in determination of the lease term based on the managements judgement. In certain contacts, the Company is restricted from assigning and subletting the leased assets. For leases where the lease term is less than 12 months with no purchase option, the Company has elected to apply exemption for short term leases and accordingly, right of use assets and lease liabilities for these contracts are not recognised.
Refer note 3 for details relating to right of use assets.
42B Disposal Group classified as held for sale and Discontinued Operations:
Petroleum and Natural Gas Regulatory Board (âPNGRBâ) granted authorization in favour of the Company for laying, building, operating or expanding City Gas Distribution network in geographical areas of Amritsar (May 2015) and Bhatinda (May 2016) District in the state of Punjab. In furtherance of overall strategic business objective and synergies, the Company and Gujarat Gas Limited (âGGLâ, subsidiary of the Company) requested to PNGRB for transfer of these authorizations to GGL in line with applicable PNGRB Regulations. After due examination, PNGRB provided approval dated 29th June 2020 for transfer of these authorization for Amritsar Bhatinda GAs from GSPL to GGL subject to fulfillment of below three conditions:
1) Revised Performance Bank Guarantee
2) Revised Gas Sale Agreement in name of GGL
3) Financial Closure
During the year, on fulfillment of the above conditions, the Company has classified the CGD business as a discontinued operation with the underlying assets and liabilities being accounted as held for sale. The date of such classification is 18th December 2020. No impairment loss was recognised on reclassification as the management expects that the fair value less cost to sell is higher than the carrying amount.
The Board of the Company has approved the valuation of CGD business of Amritsar and Bhatinda Gas at INR 163.31 Crores (subject to various transaction adjustments) and sale of CGD Business to GGL by slump sale through business transfer agreement in its meeting held on 3rd June 2021. The same is expected to be completed within next financial year. The effect of transfer of city gas distribution business will be reflected in the financial results in the period in which the transaction is consummated.
Until the transfer of assets and operation taken over by GGL, the Company had contracted with GGL to use assets owned by GGL for limited period of time in exchange of facility service charges.
Terms/Rights attached to Equity Shares
The Company has only one class of equity shares having a face value of Z 10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.
During the year ended 31st March, 2021, the amount of dividend per share recognised as distribution to equity shareholders is Z 2 per
share (3Th March 2020: Z 2 per share).
In the event of liquidation of the Company, the holders of equity shares will be entitled to remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.
* MCA issued clarification dated 23rd March, 2020 that spending on various activities related to Covid â 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 Z 1,000 Lacs on 31st March 2020 to âChief Minister Relief Fund, Government of Gujaratâ with special objective in the situation of Disaster Relief for helping COVID 19 affected areas before 31st March 2020 and contributed Z 1,000 Lacs on 1st April 2020 to âChief Minister Relief Fund, Government of Gujaratâ 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 Ministerâs Relief Fundâ or âState Relief Fund for COVID-19â 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.
Types of inputs for determining fair value are as under:
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 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 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.
Other financial assets
Other financial assets includes loan to employees, security deposits, investments, cash and cash equivalents, other bank balance, derivative asset, advances to employees etc.
⢠Cash and cash equivalents and Bank deposits are placed with banks having good reputation and past track record with adequate credit rating.
⢠Investments are made in credit worthy companies.
⢠Derivative instrument comprises cross currency interest rate swaps where the counter parties are banks with good reputation, and past track record with adequate credit rating. Accordingly no default risk is perceived.
⢠Company has given security deposit to various government authorities (like Municipal corporation, Nagarpalika, Grampanchayat, Road & building division and Irrigation department of State Government, credit worthy companies etc.) for the permission related to work of executing / laying pipeline network in their premises / jurisdiction. Being government authorities, the Company does not have exposure to any credit risk.
⢠Loan and advances to employees (for housing advances) are majorly secured in nature and hence the Company does not have exposure to any credit risk.
(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 proposed to be settled by delivering cash or other financial asset. The Companyâs financial planning has ensured, as far as possible, that there is sufficient liquidity to meet the liabilities whenever due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation. The Company has practiced financial diligence and syndicated
anfnmtp linninifrv in all nncinfcc crpnarinc
(iv) Market risk
Market risk is the risk that changes in market prices â such as foreign exchange rates, interest rates and equity prices â will affect the Companyâs income or the value of its holdings of financial instruments.
Currency risk
The functional currency of the company is Indian Rupees and its revenue is generated from operations in India. It was exposed to foreign currency risk arising on the LIBOR linked floating rate external commercial borrowing (ECB) denominated in Japanese Yen. The ECB was fully hedged through cross currency interest rate swap with all critical terms mirroring the underlying ECB. Accordingly, the foreign currency exposure had been completely hedged. This aside, the Company does not have any derivative instruments used for any other purposes.
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.
On 30th March 2019, the Ministry of Corporate Affairs (âMCAâ) through the Companies (Indian Accounting Standards) Amendment Rules, 2019 and the Companies (Indian Accounting Standards) Second Amendment Rules, had notified Ind AS 116 Leases which replaced the lease standard, Ind AS 17 leases and other interpretations.
Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. It introduces a single, on-balance sheet lease accounting model for lessees.
Effective from 1st April 2019 (âthe date of transitionâ), the Company applied Ind AS 116 using the modified retrospective approach, under which the right of use asset was measured at an amount equal to lease liability adjusted for prepaid or accrued rentals. Accordingly, there was no impact on retained earnings as on 1st April 2019.
On transition to Ind AS 116, the Company had elected to apply the practical expedient to grandfather the assessment of which transactions were leases as carried out under Ind AS 17 Leases. The Company applied Ind AS 116 only to contracts that were previously identified as leases under Ind AS 17. Therefore, the definition of a lease under Ind AS 116 was applied only to contracts entered into or changed on or after 1st April 2019.
The Company as a lessee:
As a lessee, the Company leases land, building and guest houses/other assets. 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 had recognised 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 were measured at the present value of the remaining lease payments, discounted at the Companyâs incremental borrowing rate as at 1st April 2019. The Company had tested its right-of-use assets for impairment on the date of transition and had concluded that there was no indication that the right-of-use assets were impaired.
The Company used a number of practical expedients when applying Ind AS 116 to leases previously classified as operating leases under Ind AS 17. In particular, the Company:
- applied a single discount rate to a portfolio of leases with reasonably similar characteristics.
- relied on previous assessments on whether leases are onerous as an alternative to performing an impairment review â there were no onerous contracts as at 1st April 2019;
- did not recognise right-of-use assets and liabilities for leases for which the lease term ends within 12 months of the date of initial application;
- did not recognise right-of-use assets and liabilities for leases of low value assets;
- excluded initial direct costs from the measurement of the right-of-use asset at the date of initial application; and
- used hindsight when determining the lease term.
The weighted average incremental borrowing rate of 8.25% has been applied to lease liabilities recognised in the balance sheet at the date of initial application.
On transition, for leases that are classified as finance lease under Ind AS 17, the carrying amount of the right-of-use asset and the lease liability at the date of transition to Ind AS 116 was the carrying amount of the lease asset and lease liability on the transition date as measured applying Ind AS 17.
The Company as a lessor:
The Company was not required to make any adjustments on transition to Ind AS 116 for leases in which it acted as a lessor, except for a sub - lease. The Company accounted for its leases in accordance with Ind AS 116 from 1st April, 2019.
Disclosures under Ind AS 116 Leases:
A. The Company as lessee:
Nature of the lease transaction:
The Company has taken various parcel of land with lease term ranging from 5 years to 99 years, office building with lease term ranging from 4 years to 10 years and various guest houses / yards / office containers on lease with the lease term of 11 months. Some lease contract can be renewed with mutual consent and some lease contract also contains the termination options. Such options are appropriately considered in determination of the lease term based on the managements judgement. In certain contacts, the Company is restricted from assigning and subletting the leased assets. For leases where the lease term is less than 12 months with no purchase option, the Company has elected to apply exemption for short term leases and accordingly, right of use assets and lease liabilities for these contracts are not recognised.
Refer note 3 for details relating to right of use assets.
42B Disposal Group classified as held for sale and Discontinued Operations:
Petroleum and Natural Gas Regulatory Board (âPNGRBâ) granted authorization in favour of the Company for laying, building, operating or expanding City Gas Distribution network in geographical areas of Amritsar (May 2015) and Bhatinda (May 2016) District in the state of Punjab. In furtherance of overall strategic business objective and synergies, the Company and Gujarat Gas Limited (âGGLâ, subsidiary of the Company) requested to PNGRB for transfer of these authorizations to GGL in line with applicable PNGRB Regulations. After due examination, PNGRB provided approval dated 29th June 2020 for transfer of these authorization for Amritsar Bhatinda GAs from GSPL to GGL subject to fulfillment of below three conditions:
1) Revised Performance Bank Guarantee
2) Revised Gas Sale Agreement in name of GGL
3) Financial Closure
During the year, on fulfillment of the above conditions, the Company has classified the CGD business as a discontinued operation with the underlying assets and liabilities being accounted as held for sale. The date of such classification is 18th December 2020. No impairment loss was recognised on reclassification as the management expects that the fair value less cost to sell is higher than the carrying amount.
The Board of the Company has approved the valuation of CGD business of Amritsar and Bhatinda Gas at INR 163.31 Crores (subject to various transaction adjustments) and sale of CGD Business to GGL by slump sale through business transfer agreement in its meeting held on 3rd June 2021. The same is expected to be completed within next financial year. The effect of transfer of city gas distribution business will be reflected in the financial results in the period in which the transaction is consummated.
Until the transfer of assets and operation taken over by GGL, the Company had contracted with GGL to use assets owned by GGL for limited period of time in exchange of facility service charges.
46 The Petroleum and Natural Gas Regulatory Board (PNGRB) has notified the amendment in PNGRB (Access Code for Common Carrier or Contract Carrier Natural Gas Pipelines) Regulations, 2008 whereby the accumulated amount towards imbalance and overrun charges are required to be deposited with PNGRB. Accordingly, the accumulated amount recovered from customers (net of taxes) till date has been deposited to PNGRB Escrow Account and the remaining amount invoiced (net of taxes)is recognized as liability and grouped under âStatutory liabilitiesâ in note no. 19.
47 During FY 2018-19, PNGRB vide its order dated 27th September 2018 has issued tariff order for final initial unit tariff and vide its order dated 10th December, 2018 has issued finalized zonal tariff for GSPL Gas Grid. The said order is effective from 1st April, 2018 and accordingly, the Company had raised supplementary invoices for the period from 1st April 2018 to 30 th November 2018 as per Ind AS 115 - Revenue from Contracts with Customers. However, one of the customers had approached Honourable High Court of Gujarat against retrospective applicability of order. The High Court had vide its order dated 17th June 2019 directed the customer to pay transportation charges in accordance with final tariff order from 17th June, 2019 and retrospective applicability shall be decided separately by the honourable court. Currently the matter is sub-judice and hence for the interim period (i.e. April 2018 to 16th June 2019), the Company has raised invoices as per earlier applicable tariff order and accordingly recognized revenue as per Ind AS 115 - Revenue from Contracts with Customers.
48 Due to outbreak of COVID 19 virus globally and in India, the Companyâs management has made assessment of impact on business and financial risks on account of COVID 19. The Company is in the business of gas transmission which is considered as an essential service and the management believes that the impact of this outbreak on the business and financial position of the Company is very marginal as at the date of approval of these financial statements. The management does not see any risks in the Companyâs ability to continue as a going concern and meeting its liabilities as and when they fall due. The impact of the global health pandemic may be different from that estimated as at the date of approval of these financial statements and the Company will continue to closely monitor any material changes to future economic conditions.
49 As at the balance sheet date, the Company has reviewed the carrying amounts of its assets and found that there is no indication that those assets have suffered any impairment loss. Hence, no such impairment loss has been provided.
50 Amount due for credit to Investor Education and Protection Fund is NIL (Previous year NIL).
51 In the opinion of management, any of the assets other than property, plant and equipment and non-current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.
46 The Petroleum and Natural Gas Regulatory Board (PNGRB) has notified the amendment in PNGRB (Access Code for Common Carrier or Contract Carrier Natural Gas Pipelines) Regulations, 2008 whereby the accumulated amount towards imbalance and overrun charges are required to be deposited with PNGRB. Accordingly, the accumulated amount recovered from customers (net of taxes) till date has been deposited to PNGRB Escrow Account and the remaining amount invoiced (net of taxes)is recognized as liability and grouped under âStatutory liabilitiesâ in note no. 19.
47 During FY 2018-19, PNGRB vide its order dated 27th September 2018 has issued tariff order for final initial unit tariff and vide its order dated 10th December, 2018 has issued finalized zonal tariff for GSPL Gas Grid. The said order is effective from 1st April, 2018 and accordingly, the Company had raised supplementary invoices for the period from 1st April 2018 to 30 th November 2018 as per Ind AS 115 - Revenue from Contracts with Customers. However, one of the customers had approached Honourable High Court of Gujarat against retrospective applicability of order. The High Court had vide its order dated 17th June 2019 directed the customer to pay transportation charges in accordance with final tariff order from 17th June, 2019 and retrospective applicability shall be decided separately by the honourable court. Currently the matter is sub-judice and hence for the interim period (i.e. April 2018 to 16th June 2019), the Company has raised invoices as per earlier applicable tariff order and accordingly recognized revenue as per Ind AS 115 - Revenue from Contracts with Customers.
48 Due to outbreak of COVID 19 virus globally and in India, the Companyâs management has made assessment of impact on business and financial risks on account of COVID 19. The Company is in the business of gas transmission which is considered as an essential service and the management believes that the impact of this outbreak on the business and financial position of the Company is very marginal as at the date of approval of these financial statements. The management does not see any risks in the Companyâs ability to continue as a going concern and meeting its liabilities as and when they fall due. The impact of the global health pandemic may be different from that estimated as at the date of approval of these financial statements and the Company will continue to closely monitor any material changes to future economic conditions.
49 As at the balance sheet date, the Company has reviewed the carrying amounts of its assets and found that there is no indication that those assets have suffered any impairment loss. Hence, no such impairment loss has been provided.
50 Amount due for credit to Investor Education and Protection Fund is NIL (Previous year NIL).
51 In the opinion of management, any of the assets other than property, plant and equipment and non-current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.
The preparation of consolidated financial statements of Gujarat State Petronet Limited for the year ended 31st March, 2021 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the Management of the Company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under Section 139(5) of the Act are responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with the Standards on Auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 3rd June, 2021.
I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit of the consolidated financial statements of Gujarat State Petronet Limited for the year ended 31st March, 2021 under Section 143(6)(a) of the Act. We conducted supplementary audit of the financial statements of Gujarat State Petronet Limited, Gujarat Gas Limited, GSPL India Gasnet Limited, GSPL India Transco Limited and Sabarmati Gas Limited but did not conduct supplementary audit of the financial statements of Guj Info Petro Limited for the year ended 31st March, 2021. Further Section 139(5) and 143(6)(a) of the Act are not applicable to Gujarat Gas Limited Employees, Welfare Stock Option Trust being private entity/entity incorporated in foreign country under the respective laws for appointment of their Statutory Auditor and for conduct of supplementary audit. Accordingly, Comptroller and Auditor General of India has neither appointed the statutory auditor nor conducted the supplementary audit of these companies. This supplementary audit has been carried out independently without access to the working papers of the Statutory Auditors and is limited primarily to inquiries of the Statutory Auditors and Company personnel and a selective examination of some of the accounting records.
On the basis of my supplementary audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to Statutory Auditors'' report under Section 143(6)(b) of the Act.
For and on behalf of the
Comptroller and Auditor General of India
(H. K. Dharmadarshi)
Principal Accountant General (Audit-II), Ahmedabad
Place: Ahmedabad Date: 21st August, 2021
Mar 31, 2018
* Refer note 40 - Financial instruments, fair values and risk measurement ** Disclosed under âOther Current Financial Liabilitiesâ (Refer Note 16)
Term loan from banks and financial institutions are secured by first pari-passu charge on all Intangible and Tangible assets (except 36â pipeline from Hazira to Mora), Capital Work in Progress, operating cash flows, Book Debts and Other Movables of the Company.
For foreign currency loan, the Company has entered in to cross currency swap and interest rate swap in order to hedge its foreign currency risks in full.
The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required, while rest are disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position.
C. Imbalance and overrun charges as per the âModalities of maintaining & operation of Escrow Account under the PNGRB (Access Code for Common or Contract Carrier Natural Gas Pipeline) Regulations, 2008â issued by PNGRB on 7th March 2011, collected for the period prior to 1st April 2011 amounting to Rs, 226.02 Lacs (net of taxes) has been deposited in Escrow Account under protest. However, the same is not recognized as liability as these guidelines are applicable w.e.f. 1st April 2011.
Contingent Assets
The Company is having certain claims, realisation of which is dependent on outcome of legal process being pursued. 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.
1. EVENTS OCCURRING AFTER THE REPORTING PERIOD
For the year 2017-18, the Board of Director has recommended a final dividend of Rs, 1.75/- per share (P.Y.: Rs, 1.50/- per share). The same is subject to approval of shareholders in the ensuing annual general meeting.
33. Previous year figures have been reclassified or regrouped wherever necessary.
35 There are no whole time / executive directors on the Board except Managing Director and joint Managing Director. They are not drawing any remuneration from the Company.
36 The balances of sundry debtors, creditors, loans & advances and deposits are subject to confirmation. Provision for all liabilities is adequate in opinion of the Company.
2. SEGMENT INFORMATION
(a) Description of segment and principal activities
The Companyâs Board of Directors monitors the operating results of the below business segments separately for the purpose of making decisions about resource allocation and performance assessment and has identified two reportable segments of its business:
1. Gas Transportation - The Companyâs principal business comprising transportation of Gas through pipeline.
2. Windmill - Generation of electricity through windmills.
(b) Segment revenue and expenses
Revenue and Expenses have been identified to a segment on the basis of operating activities of the segment. Revenue and Expenses which relate to common activities and are not allocable to segment on reasonable basis have been disclosed as âUnallocableâ.
(c) Segment assets and liabilities
Segment assets include all operating assets in respective segments comprising of net fixed assets, Capital Work in Progress, current assets, loans and advances. Segment liabilities include operating liabilities and provisions excluding borrowings and deferred tax liabilities.
(d) Information about geographical areas
The Company does not have geographical distribution of revenue hence this disclosure is not applicable to the Company. All the customers are located within India.
(e) Information about major customers
Revenues of Rs, 75,187.37 Lacs (P.Y.: Rs, 50,565.41 Lacs) are derived from multiple major customers (accounting for 10% or more of the Companyâs revenue individually). These revenue are attributable to gas transportation segment.
(f) Information about product and services
The Companyâs revenue from external customers for each product is same as that disclosed below under âsegment revenueâ.
# List of parties having transactions during the year
* The Board of Directors of the Company, in their Board meeting held on 19th March, 2018, approved the acquisition of 39,106,328 equity shares (28.40% equity stake) of Gujarat Gas Limited (GGL) held by Gujarat State Petroleum Corporation Limited (GSPC). The acquisition was completed on 28th March, 2018 through a block deal at the recognized stock exchange at the prevailing market price in compliance with the relevant regulatory provisions. Consequent to the acquisition, GSPL holds 54.17% equity shares and voting rights in GGL. Accordingly, investment in equity shares of GGL has been reclassified and disclosed as an investment in subsidiary.
* The above transactions are inclusive of all taxes, wherever applicable.
(d) Terms and conditions
Transactions with related parties are made on terms equivalent to those that prevail in arms length transactions. All outstanding balances are unsecured. Apart from the above transactions, the Company has also entered into certain transactions in ordinary course of business with Government related entities. These are transacted at arms length prices based on the agreed contractual terms.
*Investments in equity accounted investees and subsidiaries are carried at amortized cost.
# Fair value of financial assets and liabilities measured at amortized cost is not materially different from the amortized cost. Further, impact of time value of money is not significant for the financial instruments classified as current. Accordingly, the fair value has not been disclosed separately.
Types of inputs for determining fair value are as under:
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.
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.
Financial instruments measured at fair value FVOCI in Valuation techniques: unquoted Such investments are fair valued using appropriate valuation techniques as permitted under Ind AS 113. These have been equity shares summarised below:
- Investment in equity shares of Gujarat State Energy Generation Limited has been fair valued using the Discounted Cash Flow method (DCF).
- Investment in equity shares of GSPC LNG Limited were fair valued using the DCF method in the previous year. Since no additional investment has been made during the year and the companyâs operations have not commenced, management does not expect there to be a significant change in the fair value determined as at the previous reporting date.
- Further, the investment was made in the equity shares of Swan LNG Pvt Ltd. in February 2018. Payments will be made based on the agreed milestones as and when they are due. Management believes that there is no significant change in value of the investments. Accordingly, the investment is disclosed at the transaction price represented by the cash payment made on the date of acquisition.
Significant unobservable inputs
Highest priority is given to unadjusted quoted price of listed entities and lowest priority to non-market linked inputs such as future cash flows used in income approach, market values / replacement values of assets of the investee companies, bare minimum fixed cost reimbursement, escalation in opex etc.
Inter-relationship between significant unobservable inputs and fair value measurement
The estimated fair value would increase (decrease) if there is a change in estimated cash flows and discount rate used to determine the fair value and change in pricing multiple owing to change in earnings of the entity.
Cross This instrument is valued using valuation techniques, which employs the use of market observable inputs. The most Currency frequently applied valuation techniques include swap models, using present value calculations. The model incorporate various Interest Rate inputs including credit quality of counterparties, foreign exchange spot and forward rates, yield curves of the respective Swaps__currencies, currency basis spreads, interest rate curve._
ii) Transfers between Levels 1 and 2
There have been no transfers between Level 1 and Level 2 during the reporting periods
iii) Level 3 fair values
Transfer out of Level 3
There were no movement in level 3 in either directions during the financial year ending on 31st March, 2018 and 31st March, 2017. Sensitivity analysis
Gujarat State Energy Generation Limited (GSEG)
C. Financial risk management
The Company has a well-defined risk management framework. The Board of Directors of the Company has adopted a Risk Management Policy. The Company has exposure to the following risks arising from financial instruments:
- Credit risk ;
- Liquidity risk ; and
- Market risk
(i) Credit risk
Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or fail to pay amounts due causing financial loss to the company. The potential activities where credit risks may arise include from cash and cash equivalents, derivative financial instruments and security deposits or other deposits and principally from credit exposures to customers relating to outstanding receivables. The maximum credit exposure associated with financial assets is equal to the carrying amount. Details of the credit risk specific to the company along with relevant mitigation procedures adopted have been enumerated below:
Trade and other receivables
The Companyâs exposure to credit Risk is the exposure that Company has on account of 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 and Commercial.
Services are generally subject to security deposit and/or bank guarantee clauses to ensure that in the event of non-payment the companyâs receivables are secured. The Company provides for allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables.
The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix.
The above receivables which are past due but not impaired are assessed on case-to-case basis. The instances pertain to third party customers which have a proven creditworthiness record. Management is of the view that these financial assets are not impaired as there has not been any adverse change in credit quality and are envisaged as recoverable based on the historical payment behavior and extensive analysis of customer credit risk, including underlying customersâ credit ratings, if they are available. Consequently, no additional provision has been created on account of expected credit loss on the receivables. There are no other classes of financial assets that are past due but not impaired. The provision for impairment of trade receivables, movement of which has been provided below, is not significant / material. The concentration of credit risk is limited due to fact that the customer base is large and unrelated.
Other financial assets
Other financial assets includes loan to employees, security deposits, investments, cash and cash equivalents, other bank balance, derivative asset, advances to employees etc.
- Cash and cash equivalents and Bank deposits are placed with banks having good reputation and past track record with adequate credit rating.
- Investments are made in credit worthy companies.
- Derivative instrument comprises cross currency interest rate swaps where the counter parties are banks with good reputation, and past track record with adequate credit rating. Accordingly no default risk is perceived.
- Company has given security deposit to various government authorities (like Municipal corporation, Nagarpalika, Grampanchayat, Road & building division and Irrigation department -of Government of Gujarat, credit worthy companies etc.) for the permission related to work of executing / laying pipeline network in their premises / jurisdiction. Being government authorities, the Company does not have exposure to any credit risk.
- Loan and advances to employees (for housing advances) are majorly secured in nature and hence the Company does not have exposure to any credit risk.
(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 proposed to be settled by delivering cash or other financial asset. The Companyâs financial planning has ensured, as far as possible, that there is sufficient liquidity to meet the liabilities whenever due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation. The Company has practiced financial diligence and syndicated adequate liquidity in all business scenarios.
Further, the Company has also tied-up additional sources of liquidity to meet the liabilities during the respective annual years which has ensured that the Company has a clean track record with no adverse events pertaining to 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.
(iv) Market risk
Market risk is the risk that changes in market prices â such as foreign exchange rates, interest rates and equity prices â will affect the Companyâs income or the value of its holdings of financial instruments.
Currency risk
The functional currency of the company is Indian Rupees and its revenue is generated from operations in India. It is exposed to foreign currency risk arising on the LIBOR linked floating rate external commercial borrowing (ECB) denominated in Japanese Yen. The ECB has been fully hedged using a pay fixed - receive floating cross currency interest rate swap with all critical terms mirroring the underlying ECB. Accordingly, the foreign currency exposure and interest rate exposure has been completely hedged.
This aside, the Company does not have any derivative instruments used for trading or speculative purposes.
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.
The Companyâs portfolio of borrowings comprise of a mix of fixed rate and floating rate loans which are monitored continuously in the light of market conditions. Further as disclosed above, The interest rate exposure on floating rate ECB has been fully hedged through a pay fixed â receive floating cross currency interest rate swap.
3 CAPITAL MANAGEMENT
âThe Company defines capital as total equity including issued equity capital, share premium and all other equity reserves attributable to equity holders of the Company (which is the Companyâs net asset value). The primary objective of the Companyâs financial framework is to support the pursuit of value growth for shareholders, while ensuring a secure financial base.
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 and obligations under finance leases, less cash and cash equivalents. Adjusted equity comprises all components of equity.
4. DISCLOSURES FOR GRATUITY & LEAVE SALARY PROVISIONS AS PER INDIAN ACCOUNTING STANDARD - 19
The Company has participated in Group Gratuity scheme of Life Insurance Corporation of India. The liability in respect of gratuity benefits & leave salary being defined benefit schemes, payable in future, are determined by actuarial valuation as on balance sheet date.
In arriving at the valuation for gratuity & leave salaries following assumptions were used:
5. EMPLOYEE STOCK OPTION PLANS
ESOP 2010 Scheme:
During the Financial Year 2010-11, the Company instituted ES0P-2010. The Board of Directors and the Shareholders approved the plan in the meeting held on 23rd August, 2010 and 27th October, 2010 respectively, which provides for the issue of 21,28,925 equity shares to the employees of the company. The Compensation Committee administers ES0P-2010. These ESOPs are granted at an exercise price of ''75 per share to be vested over the period of five years and to be exercised within a period of ten years from the date of Grant. Set out below is a summary of options granted under the plan:
Fair value of options granted
The fair value at grant date of options granted during the year ended 31st March, 2018 was Rs, 72.45 per option (31st March, 2017 -Rs, 72.45). The fair value at grant date is determined using the Binomial Model which takes into account the exercise price, the terms of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
6. The Company has maintained a separate escrow account as per PNGRB guidelines for modalities of maintaining and operation of escrow account for charges towards system indiscipline in terms of positive or negative imbalance or overruns. In this regard, since financial year 2011-12, amount recovered from customers is deposited in the said bank account and the amount invoiced (net of taxes) is recognized as liability.
7. As at the balance sheet date, the Company has reviewed the carrying amounts of its assets and found that there is no indication that those assets have suffered any impairment loss. Hence, no such impairment loss has been provided.
8. Amount due for credit to Investor Education and Protection Fund is NIL (Previous year NIL).
9. In continuation to the disclosure made in the Notes to Accounts in the Annual Report of FY 2015-16 regarding the status of tariff proposal submitted to PNGRB for calculation of revised tariff pursuant to APTEL ruling in its judgment dated 25-November-2014 and 28-November-2014 allowing GSPL appeals and asking PNGRB to reconsider the tariff proposal to be submitted by GSPL based on relevant data and other submissions made by the appellant in this regard, GSPL had submitted the revised tariff proposals for consideration of PNGRB and the PNGRB Tariff order is awaited. The implementation of the order shall be done once the PNGRB Order is issued.
10. In the opinion of management, any of the assets other than property, plant and equipment and non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.
* For the purposes of this clause, the term âSpecified 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.
The disclosures regarding details of specified bank notes held and transacted during 8 November 2016 to 30 December 2016 has not been made for the financial year 2017-18 since the requirement does not pertain to financial year ended 31 March 2018. Corresponding amounts as appearing in the audited Standalone Ind AS financial statements for the period ended 31 March 2017 have been disclosed.
Mar 31, 2017
1. EVENTS OCCURRING AFTER THE REPORTING PERIOD
The dividend recommended by the directors which is subject to approval of shareholders in the ensuing annual general meeting.
33. Previous year figures have been reclassified or regrouped wherever necessary.
35 There are no whole time / executive directors on the Board except Managing Director and joint Managing Director. They are not drawing any remuneration from the Company.
36 The balances of sundry debtors, creditors, loans & advances and deposits are subject to confirmation. Provision for all liabilities is adequate in opinion of the Company.
2. SEGMENT INFORMATION
(a) Description of segment and principal activities
The Companyâs Board of Directors monitors the operating results of the below business segments separately for the purpose of making decisions about resource allocation and performance assessment and has identified two reportable segments of its business:
1. Gas Transportation - The Companyâs principal business comprising transportation of Gas through pipeline.
2. Windmill - Generation of electricity through windmills.
(b) Segment revenue and expenses
Revenue and Expenses have been identified to a segment on the basis of operating activities of the segment. Revenue and Expenses which relate to common activities and are not allocable to segment on reasonable basis have been disclosed as âUnallocableâ.
(c) Segment assets and liabilities
Segment assets include all operating assets in respective segments comprising of net fixed assets, Capital Work in Progress, current assets, loans and advances. Segment liabilities include operating liabilities and provisions including borrowings and deferred tax liabilities.
(d) Information about geographical areas
The Company does not have geographical distribution of revenue hence this disclosure is not applicable to the Company. All the customers are located within India.
(e) Information about major customers
Revenues of Rs, 50,565.41 Lacs (P.Y.: Rs, 45,722.95 Lacs) are derived from multiple major customers. These revenue are attributable to gas transportation segment.
(f) Information about product and services
The Companyâs revenue from external customers for each product is same as that disclosed below under âsegment revenueâ.
** Segment assets and liabilities are measured in same way as in the financial statements. They are allocated based on the operations of the segment.
3 RELATED PARTY DISCLOSURES
As per the Indian Accounting Standard-24 on âRelated Party Disclosuresâ, list of related parties identified of the Company are as follows.
(a) Parent Entity
Gujarat State Petroleum Corporation Limited
(b) Subsidiary/Associate
Name of the entity# Type
GSPL India Gasnet Limited Joint Venture
GSPL India Transco Limited Joint Venture
Gujarat Gas Limited* Associate
Sabarmati Gas Limited** Associate
Gujarat State Energy Generation Limited Other
Gujarat Info Petro Limited Other
Gujarat Pipavav Power Company Limited Other
# List of parties having transactions during the year
* Pursuant to the scheme of amalgamation and arrangement sanctioned by the Honâble Gujarat High Court, inter-alia, GSPC Gas Company Limited and Gujarat Gas Company Limited have amalgamated with Gujarat Gas Limited (formerly known as GSPC Distribution Networks Limited). The schemes of amalgamation become effective on 14th May, 2015 with appointed date of 1st April, 2013. The shares of Gujarat Gas Limited have been listed on Bombay Stock Exchange and National Stock Exchange on 15th September,
2015.
** On 18th February, 2016, the Company acquired additional shares in Sabarmati Gas Limited.
Investments in equity accounted investees are carried at Amortized cost.
Fair value of financial assets and liabilities measured at Amortized cost is not materially different from the Amortized cost. Further, impact of time value of money is not significant for the financial instruments classified as current. Accordingly, the fair value has not been disclosed separately.
Types of inputs for determining fair value are as under:
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.
B. Measurement of fair values
i) Valuation techniques and significant unobservable inputs
The following table show the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.
ii) Transfers between Levels 1 and 2
There have been no transfers between Level 1 and Level 2 during the reporting periods
Transfer out of Level 3
There were no movement in level 3 in either directions during the financial year ending on 31st March, 2017 and 31st March, 2016. Sensitivity analysis
Gujarat State Energy Generation Limited (GSEG)
A sensitivity analysis has been carried out to determine the impact of continuation of bare minimum fixed cost reimbursement on equity valuation of GSEG. The impact on account of change in inputs is as under:
C. Financial risk management
The Company has a well-defined risk management framework. The Board of Directors of the Company has adopted a Risk Management Policy. The Company has exposure to the following risks arising from financial instruments:
- Credit risk ;
- Liquidity risk ; and
- Market risk
(i) Credit risk
Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or fail to pay amounts due causing financial loss to the company. The potential activities where credit risks may arise include from cash and cash equivalents, derivative financial instruments and security deposits or other deposits and principally from credit exposures to customers relating to outstanding receivables. The maximum credit exposure associated with financial assets is equal to the carrying amount. Details of the credit risk specific to the company along with relevant mitigation procedures adopted have been enumerated below:
Trade and other receivables
The Companyâs exposure to credit Risk is the exposure that Company has on account of 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 and Commercial.
Services are generally subject to security deposit and/or bank guarantee clauses to ensure that in the event of non-payment the companyâs receivables are secured. The Company provides for allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables.
The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix.
The above receivables which are past due but not impaired are assessed on case-to-case basis. The instances pertain to third party customers which have a proven creditworthiness record. Management is of the view that these financial assets are not impaired as there has not been any adverse change in credit quality and are envisaged as recoverable based on the historical payment behaviour and extensive analysis of customer credit risk, including underlying customersâ credit ratings, if they are available. Consequently, no additional provision has been created on account of expected credit loss on the receivables. There are no other classes of financial assets that are past due but not impaired. The provision for impairment of trade receivables, movement of which has been provided below, is not significant / material. The concentration of credit risk is limited due to fact that the customer base is large and unrelated.
Other financial assets
Other financial assets includes loan to employees, security deposits, investments, cash and cash equivalents, other bank balance, derivative asset, advances to employees etc.
- Cash and cash equivalents and Bank deposits are placed with banks having good reputation and past track record with adequate credit rating.
- Investments are made in credit worthy companies.
- Derivative instrument comprises cross currency interest rate swaps where the counter parties are banks with good reputation, and past track record with adequate credit rating. Accordingly no default risk is perceived.
- Company has given security deposit to various government authorities (like Municipal corporation, Nagarpalika, Grampanchayat, Road & building division and Irrigation department -of Government of Gujarat, credit worthy companies etc.) for the permission related to work of executing / laying pipeline network in their premises / jurisdiction. Being government authorities, the Company does not have exposure to any credit risk.
- Loan and advances to employees are majorly secured in nature and hence the Company does not have exposure to any credit risk.
(ii) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that
are proposed to be settled by delivering cash or other financial asset. The Companyâs financial planning has ensured, as far as possible, that there is sufficient liquidity to meet the liabilities whenever due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation. The Company has practiced financial diligence and syndicated adequate liquidity in all business scenarios.
Financing arrangement
The Company had access to the following undrawn borrowing facilities at the end of the reporting period:
Further, the Company has also tied-up additional sources of liquidity to meet the liabilities during the respective annual years which has ensured that the Company has a clean track record with no adverse events pertaining to 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.
(iii) Market risk
Market risk is the risk that changes in market prices â such as foreign exchange rates, interest rates and equity prices â will affect the Companyâs income or the value of its holdings of financial instruments.
Currency risk
The functional currency of the company is Indian Rupees and its revenue is generated from operations in India. It is exposed to foreign currency risk arising on the LIBOR linked floating rate external commercial borrowing (ECB) denominated in Japanese Yen. The ECB has been fully hedged using a pay fixed â receive floating cross currency interest rate swap with all critical terms mirroring the underlying ECB. Accordingly, the foreign currency exposure and interest rate exposure has been completely hedged.
This aside, the Company does not have any derivative instruments used for trading or speculative purposes.
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.
The Companyâs portfolio of borrowings comprise of a mix of fixed rate and floating rate loans which are monitored continuously in the light of market conditions. Further as disclosed above, The interest rate exposure on floating rate ECB has been fully hedged through a pay fixed â receive floating cross currency interest rate swap.
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.
4. CAPITAL MANAGEMENT
The Company defines capital as total equity including issued equity capital, share premium and all other equity reserves attributable to equity holders of the Company (which is the Companyâs net asset value). The primary objective of the Companyâs financial framework is to support the pursuit of value growth for shareholders, while ensuring a secure financial base.
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 and obligations under finance leases, less cash and cash equivalents. Adjusted equity comprises all components of equity.
Fair value of options granted
The fair value at grant date of options granted during the year ended 31st March, 2017 was '' 72.45 per option (31st March, 2016 -'' 72.45). The fair value at grant date is determined using the Binomial Model which takes into account the exercise price, the terms of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
44 The Company has maintained a separate escrow account as per PNGRB guidelines for modalities of maintaining and operation of escrow account for charges towards system indiscipline in terms of positive or negative imbalance or overruns. In this regard, since financial year 2011-12, amount recovered from customers is deposited in the said bank account and the amount invoiced (net of taxes) is recognized as liability.
45 As at the balance sheet date, Company has reviewed the carrying amounts of its assets and found that there is no indication that those assets have suffered any impairment loss. Hence, no such impairment loss has been provided.
46 Amount due for credit to Investor Education and Protection Fund is NIL (Previous year NIL).
47 In continuation to the disclosure made in the Notes to Accounts in the Annual Report of FY 2015-16 regarding the status of tariff proposal submitted to PNGRB for calculation of revised tariff pursuant to APTEL ruling in its judgment dated 25-November-2014 and 28-November-2014 allowing GSPL appeals and asking PNGRB to reconsider the tariff proposal to be submitted by GSPL based on relevant data and other submissions made by the appellant in this regard, GSPL had submitted the revised tariff proposals for consideration of PNGRB and the PNGRB Tariff order is awaited. The implementation of the order shall be done once the PNGRB Order is issued.
48 In the opinion of management, any of the assets other than fixed assets and non-current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.
* For the purposes of this clause, the term âSpecifiedBank 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.
5. EXPLANATION OF TRANSITION TO IND AS
These are the Companyâs first standalone financial statements prepared in accordance with Ind ASs.
The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended 31st March, 2017, the comparative information presented in these financial statements for the year ended 31st March, 2016 and in the preparation of an opening Ind AS balance sheet at 1st April, 2015 (the Companyâs date of transition).
In preparing its opening Ind AS balance sheet, the Company has adjusted amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (Indian GAAP or previous GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables and notes:
Exemption and exception applied
In preparing these financial statements, the Company has applied the below optional exemptions and mandatory exceptions in line with principles of Ind AS 101.
Optional exemptions
1. Property, Plant and Equipment (PPE)
Ind AS 101 provides the below options with respect to the items of PPE and intangible assets:
- Carry forward the previous GAAP net carrying values as at the transition date as âdeemed costâ under Ind AS, provided there is no change in functional currency.
- Fair value the items of PPE as at the transition date and use this as the âdeemed costâ under Ind AS.
- Restate the carrying values of PPE retrospectively as at the transition date based on Ind AS 16.
The Company has opted to measure all the items of PPE and intangible assets at the previous GAAP net carrying values as at the transition date.
2. Decommissioning liabilities included in the cost of PPE
A first-time adopter need not to comply with these requirements for changes in such liabilities that occurred before the date of transition to Ind ASs. If a first-time adopter uses this exemption, it shall:
- Measure the liability at the transition date in accordance with Ind AS 37;
- Using the historical risk adjusted discount rate, determine the amount which would have been capitalized when the liability first
arose; and
- Compute the amount of depreciation based on the estimated useful life.
Accordingly, the Company has elected to apply the exemption for the obligations arising on account of decommissioning cost.
3. Determining whether an arrangement contains a lease
As per Appendix C to Ind AS 17, at the inception, an assessment is to be made whether an arrangement contains a lease or not. Ind AS 101 permits an entity to make an assessment based on the facts and circumstances existing as at the transition date.
Based on the exemption, the Company has opted not to apply the requirements retrospectively. Assessment of whether an arrangement contains a lease or not has been made on the basis of facts and circumstances existing as at the transition date. Further, lease classification i.e. operating or finance lease is made at the inception of lease.
4. Accounting for certain equity investments
Ind AS 101 permits designation of equity investments in certain entities (other than subsidiaries, associates and joint arrangements) as instruments fair valued through the other comprehensive income (FVOCI).
Accordingly, the Company has opted to designate certain equity investments as FVOCI on the transition date.
5. Deemed cost for investments in equity shares of subsidiaries, associates and joint arrangements
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 entityâs 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 subsidiary, associates and joint arrangements in the standalone financial statements.
Mandatory exceptions
Below are the key mandatory exceptions used in preparation of these financial statements:
1. Estimates
Under Ind AS 101, an entityâs estimates in accordance with Ind AS at âthe date of transition to Ind ASâ or âthe end of the comparative period presented in the entityâs first Ind AS financial statementsâ, as the case may be, should be consistent with estimates made for the same date in accordance with previous GAAP unless there is objective evidence that those estimates were in error. However, the estimates should be adjusted to reflect any differences in accounting policies.
The Companyâs Ind AS estimates as on the transition date are consistent with the estimates made under previous GAAP as on this date. Key estimates considered in preparation of these financial statements that were not required under the previous GAAP are listed below:
- Fair valuation of financial instruments carried at FVTPL or FVOCI.
- Impairment of financial assets based on the expected credit loss model.
- Determination of the discounted value for financial instruments carried at Amortized cost.
- Discounted value of liability on account of decommissioning cost.
2. Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at Amortized cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.
Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at Amortized cost has been done retrospectively except where the same is impracticable.
1. Impact of accounting security deposits at Amortized cost
Under previous GAAP, the Company accounted for refundable interest free security deposits received at historical cost. Under Ind AS, these deposits have been accounted at Amortized cost determined using the appropriate market rate. This resulted in increase in equity as on transition date by '' 99.58 Lac and as on 31st March 2016 by '' 144.68 Lac. The impact of deferred tax provided in note number 11.
2. Proposed divided and dividend distribution tax
Under previous GAAP, the Company used to provide for proposed divided including dividend distribution tax as and when the same is declared by the Board of Directors considering the same as adjusting event. Under Ind AS, declaration of dividend by Board of Directors would be considered as non-adjusting event and the same would be provided once it is approved by the shareholders in their general meeting. As a result, the Company recorded an increase of '' 8,169.41 lac in equity as on the transition date and '' 2,000.93 Lac as on 31 March 2016 i.e. amount provided for dividend is '' 8,169.41 Lac and amount reversed for dividend declared by Board of directors is '' 10,170.34 Lac.
3. Financial liabilities at Amortized cost
Under previous GAAP, transaction charges directly attributable to borrowings where either expensed or capitalised as appropriate. Under Ind AS, these have been considered to determine the Amortized cost of the respective borrowings using the effective interest rate method. This resulted in increase in equity as on transition date by '' 607.69 Lac and as on 31st March 2016 by '' 473.85 Lac. The impact of deferred tax provided in note number 11.
4. Decommissioning liability
Under the previous GAAP, estimated obligation of restoration of wind mills were not accounted. On transition to Ind AS, the Company has estimated the present value of the decommissioning cost on these assets. Based on provisions of Ind AS 101 as discussed earlier in this note, the decommissioning cost pertaining to the windmills has been accounted through the equity. Consequently, the equity as on transition date as well as 31st March, 2016 reduced by Rs, 127.68 Lacs and Rs, 158.68 Lacs. The impact of deferred tax provided in note number 11.
5. Operation and maintenance (O & M) expenses
Under previous GAAP, such expenses were accounted as and when incurred. No expense was recorded during the free period of O & M contract. Under Ind AS, such expenses have been straight lined over the contract tenure including the free period. This has decreased the equity on the transition date by Rs, 850.50 Lacs and as on 31st March, 2016 by Rs, 708.75 Lacs. The impact of deferred tax provided in note number 11.
6. Fair valuation of certain equity investments designated at FVOCI
Under previous GAAP, the Company used to carry the investments in companies other than investments in subsidiaries, associates, joint ventures at cost. Under Ind AS, the Company elected to fair value the same through the other comprehensive income. As a result, the Company recorded upward fair valuation of Rs, 5.09 Lac as on the transition date. During 2015-16, the impact for the same is nil as there was no change in the fair value of the said investments since the date of transition date.
7. Right of Use amortization
Right of Use is considered to have indefinite life. However, under previous GAAP, the Company used to claim amortization on Right of Use based on EAC opinion using 99 years as useful life. Under Ind AS, an intangible asset having indefinite life needs not to be Amortized but tested for impairment at each reporting date. As a result, the Company reversed the ROU amortisation amounting to Rs, 71.18 Lac during 2015-16. There will be no impact as on the transition date as the Company has claimed deemed cost exemption for the items of PPE and intangible assets.
8. Prior period adjustments
Under previous GAAP, the Company used to account for the prior period items in the period in which the same arose. Under Ind AS, based on requirements of Ind AS 8, the Company has accounted for the same retrospectively by restating the comparative amounts to which the same relates. Since certain periods were prior to the transition date, the impact has been considered in preparation of the opening balance sheet. Consequently, this has decreased the equity on the transition date by Rs, 122.78 Lakh and reduced the equity as on 31st March, 2016 by Rs, 131.65 Lakh.
9. Employee stock options
Under previous GAAP, the Company used to follow instinsic value based approach to value the outstanding ESOP options. Under Ind AS, the Company is required to follow fair value based approach. As a result, the Company recorded decrease in ESOP compensation expenses amounting to Rs, 23.04 Lac during 2015-16.
10. Remeasurement of post-employment benefit obligations
Under Ind AS, the Companyâs accounting policy is to recognize actuarial gains and losses pertaining to post employment benefit obligations in other comprehensive income. Under previous GAAP, the Company recognized such actuarial gains and losses in the profit or loss. However, this has no impact on the total equity as on 1st April, 2015 as well as 31st March, 2016. During 2015-16, the Company recognized Rs, 10.07 Lac in the other comprehensive income.
Mar 31, 2016
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 Share is entitled to one vote per Share. The Company declares and pays Dividend in Indian Rupees. The Dividend proposed by the Board of Directors is subject to the approval of Shareholders in the ensuing Annual General Meeting.
During the year ended 31st March, 2016, the amount of Dividend per Share recognized as distributions to Equity Shareholders is Rs,1.5 per Share. (31st March 2015: Rs, 1.2 per Share.)
In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of Equity Shares held by the Shareholders.
Detail of Shares reserved for issue under ESOP
For details of Shares reserved for issue under the Employees Stock Option Plan (ESOP) 2005 and 2010 of GSPL, please refer Note No. 37.
Term Loan from banks and financial institutions including foreign currency loans are secured by first pari-passu charge on all Intangible and Tangible assets (except 36â pipeline from Hazira to Mora), Capital Work in Progress, operating Cash Flows, Book Debts and Other Movables of the Company.
For foreign currency loan, the Company has entered in to cross currency swap and interest rate swap in order to hedge its foreign currency risks in full.
1. Previous year figures have been re-classified or regrouped wherever necessary.
2. CONTINGENT LIABILITIES AS ON 31st MARCH, 2016:
a) Claims against Company not acknowledged as debt:
- By land owners seeking enhancement of compensation in respect of RoU acquired by the Company is Rs, 2,124.57 Lacs (Previous Year: Rs, 2,124.57 Lacs) and by other parties including contractual disputes are Rs, 7,094.78 Lacs (Previous Year: Rs, 39.86 Lacs)
- As regards Central Excise and Service Tax matters, the matters lying before HonRs,ble Supreme Court- Rs, 735.04 Lacs (Previous Year: Rs, 735.04 Lacs), Honâble Gujarat High Court - Rs, 19,100.28 Lacs (Previous Year: Rs, 19,100.28 Lacs), before CESTAT -Rs, 11,777.16 Lacs (Previous Year: Rs, 10,111.30 Lacs), before Commissioner/ Asst. Commissioner - Rs, 1525.45 Lacs (Previous Year: Rs, 1525.45 Lacs). Further, the company is in process of filing appeal before CESTAT for Rs, Nil (Previous Year: Rs, 1,665.86 Lacs). (Applicable interest & penalty has also been demanded by Department).
- Income Tax assessments up to Assessment Year 2013-14 have been completed and Company had filed various appeals against orders passed by Income Tax Department for various Assessment years. The tax impact/demand of appeals lying before Honorable Gujarat High Court for Assessment Year 2005-06, 2008-09 & 2009-10 is Rs, 113.25 Lacs (Previous Year : Rs, 19.69 Lacs), lying before the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2008-09 & 2010-11 is Rs, 66.41 Lacs (Previous Year : Rs, 370.41 Lacs), lying before CIT(Appeals) for Assessment Year 2012-13 & 2013-14 is Rs, 137.51 Lacs (Previous Year : Rs, 767.08 Lacs) and matters restored back to Assessing Officer for Assessment Year 2004-05 & 2006-07 is Rs, 38.77 Lacs. (Previous Year : Rs, 38.77 Lacs)
Based on interpretation of the Acts & various judicial pronouncements in relation to similar matters, Company is of the view
that these demands are likely to be deleted or may be substantially reduced.
b) Guarantees :
- Outstanding Bank Guarantees / Letter of Credits are Rs, 2,26,226.09 Lacs (Previous year Rs, 68,983.64 Lacs)
- Corporate Guarantee of Rs, 6,500.00 Lacs (Previous year 6,500.00 Lacs) for subsidiaries and of Rs, 50,000.00 Lacs for associate (executed jointly & severally along with associate) (Previous year 50,000.00 Lacs). Out of above, Corporate Guarantee of Rs, 50,000.00 Lacs was valid till 15th April, 2016 & hence contingent liability does not exist as on date of signing Balance Sheet.
c) Other :
Imbalance and overrun charges as per the âModalities of maintaining & operation of Escrow Account under the PNGRB (Access Codefor Common or Contract Carrier Natural Gas Pipeline) Regulations, 2008â issued by PNGRB on 7th March, 2011, collected for theperiod prior to 1st April, 2011 amounting to Rs, 226.02 Lacs (net of taxes) has been deposited in Escrow Account under protest.
However, the same is not recognized as liability as these guidelines are applicable w.e.f. 1st April, 2011.
3. CAPITAL & OTHER COMMITMENT
Capital Commitment:
Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs, 21,614.46 Lacs (Previous year
Rs, 25,686.84 Lacs).
Other Commitment:
As on 31st March, 2016, the Company has following other commitments:
a) Rs, 1,93,994.99 Lacs (approx) towards further investments in subsidiaries & associates (Previous year Rs, 1,96,594.99 Lacs)
b) Advance of Rs, Nil adjustable against re-gasification services (Previous year Rs, 5,000.00 Lacs)
4. As per Accounting Standard - 16 âBorrowing Costâ issued by ICAI, the Company has capitalized the borrowing cost amounting to Rs, 3,990.68 Lacs for the current year. (Previous year Rs, 2,333.72 Lacs).
5. There are no whole time / executive directors on the Board except Managing Director. Managing director is not drawing any remuneration from the Company.
There is no earning in foreign currency during the year as well as previous year
6. The balances of sundry debtors, creditors, loans & advances and deposits are subject to confirmation. Provision for all liabilities is adequate in opinion of the Company.
7. SEGMENT REPORTING
a. Business Segments
The Company has identified and reported business segments taking into account nature of product and services, differing risks and returns and internal business reporting systems. The Companyâs principal business is transportation of Gas through pipeline. Other business segment includes generation of electricity through windmill.
b. Segment Revenue and Expense
Revenue and Expenses have been identified to a segment on the basis of operating activities of the segment. Revenue and Expenses which relate to common activities and are not allocable to segment on reasonable basis have been disclosed as âUnallocableâ.
c. Segment Assets and Liabilities
Segment Assets include all operating assets in respective segments comprising of net Fixed Assets, Capital Work in Progress, Current Assets, Loans and Advances. Segment Liabilities include Operating Liabilities and Provisions.
d. The Company does not have geographical distribution of revenue hence secondary segmental reporting based on geographical locations of its customers is not applicable to the Company.
- Segment Revenue includes Other Income which is directly attributable to each segment.
8. RELATED PARTY DISCLOSURES
As per the Accounting Standard -18 on âRelated Party Disclosuresâ issued by The Institute of Chartered Accountants of India, list of related parties identified of the company are as follows :
A. Holding Company:
- Gujarat State Petroleum Corporation Limited
B. Subsidiary:
- GSPL India Gasnet Limited
- GSPL India Transco Limited
C. Associates:
- Gujarat Gas Limited (Refer Note - 41)
- Sabarmati Gas Limited (w.e.f. 18th February, 2016 Refer Note - 42)
- Gujarat State Energy Generation Limited (associate of holding company)
D. Fellow Subsidiary:
- Guj Info Petro Limited
- GSPC Pipavav Power Company Limited
- GSPC LNG Limited
E. Key Managerial Personnel:
- Shri Atanu Chakraborty, IAS, MD (upto 11th April, 2016)
9. DISCLOSURE FOR GRATUITY & LEAVE SALARY PROVISION AS PER ACCOUNTING STANDARD-15
Company has participated in Group Gratuity Scheme of Life Insurance Corporation of India. The liability in respect of gratuity benefits & leave salary being defined benefit schemes, payable in future, are determined by actuarial valuation as on Balance Sheet date.
10. EMPLOYEE STOCK OPTION PLANS ESOP 2005 Scheme:
During the Financial Year 2005-06, the company instituted ESOP-2005. The Board of Directors and the Shareholders approved the plan in the meeting held on 13th October, 2005 and 18th October, 2005 respectively, which provides for the issue of 23,27,940 equity shares to the employees of the company and of Gujarat State Petroleum Corporation Ltd. The Compensation Committee administers ESOP-2005. These ESOPs are granted at an exercise price of Rs,14 per share to be vested equally over the period of four years and to be exercised within a period of five years from the date of vesting.
ESOP 2010 Scheme:
During the Financial Year 2010-11, the company instituted ESOP-2010. The Board of Directors and the Shareholders approved the plan in the meeting held on 23rd August, 2010 and 21th September, 2010 respectively, which provides for the issue of 21,28,925 equity shares to the employees of the company. The Compensation Committee administers ESOP-2010. These ESOPs are granted at an exercise price of Rs, 75 per share to be vested over the period of five years and to be exercised within a period of ten years from the date of Grant.
11. The Company has maintained a separate escrow account as per PNGRB guidelines for modalities of maintaining and operation of escrow account for charges towards system indiscipline in terms of positive or negative imbalance or overruns. In this regard, since financial year 2011-12, amount recovered from customers is deposited in the said bank account and the amount invoiced (net of taxes) is recognized as liability.
12. As at the balance sheet date, Company has reviewed the carrying amounts of its assets and found that there is no indication that those assets have suffered any impairment loss. Hence, no such impairment loss has been provided.
13. Amount due for credit to Investor Education and Protection Fund is NIL (Previous year NIL).
14. Pursuant to the scheme of amalgamation and arrangement sanctioned by the Honâble Gujarat High Court, inter-alia, GSPC Gas Company Limited and Gujarat Gas Company Limited have amalgamated with Gujarat Gas Limited (formerly known as GSPC Distribution Networks Limited). The schemes of amalgamation become effective on 14th May, 2015 with appointed date of 1st April, 2013. The shares of Gujarat Gas Limited have been listed on Bombay Stock Exchange and National Stock Exchange on 15th September, 2015.
15. On 18th February, 2016, the company acquired additional shares in Sabarmati Gas Limited. With present acquisition of shares, the later has become associate of the company.
16. In continuation to the disclosure made in the Notes to Accounts in the Annual Report of FY 2014-15 regarding the status of tariff proposal submitted to PNGRB for calculation of revised tariff pursuant to APTEL ruling in its judgment dated 25th November, 2014 and 28th November, 2014 allowing GSPL appeals and asking PNGRB to reconsider the tariff proposal to be submitted by GSPL based on relevant data and other submissions made by the appellant in this regard, GSPL had submitted the revised tariff proposals for consideration of PNGRB and the PNGRB Tariff order is awaited. The implementation of the order shall be done once the PNGRB Order is issued.
17. Disclosure of CSR expenditure for Financial Year 2015-16 is as follows:
(a) Gross amount required to be spent by the company during the year is Rs, 1425.82 Lacs
(b) Amount spent during the year on
18. In the opinion of management, any of the assets other than fixed assets and non-current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.
19. The figures appearing in financial statements are rounded off to the nearest rupees in lacs.
Gujarat State Petroleum Corporation Limited.
Membership excludes Chairmanship.
* Excluding Directorship held in Foreign Companies.
$ Shri Atanu Chakraborty, IAS has tendered resignation from the Board of Directors on 11th April, 2016 and Dr. J N Singh, IAS has been appointed as Managing Director of the Company w.e.f. 16th April, 2016.
** Indicates Membership/Chairmanship in the Audit Committee, Stakeholders Relationship Committee (excluding Private Limited Companies, Foreign Companies and Section 8 Companies).
None of the Directors of the Company are related inter-se.
B. Board Meetings held during the year 2015 - 2016:
The Board meets at regular intervals to discuss and decide on various issues including strategy related matters pertaining to the business/ company. The tentative calendar of Board Meetings is circulated to the Directors in advance to facilitate them and to ensure their active participation in the Meetings of the Company. Apart from this, the Meetings of the Board are also convened or the approval of the Board is obtained through circulation of resolution to all the Directors in case some urgent/special situation arises. Such circular resolution is also confirmed in the next Board Meeting.
Mar 31, 2015
1 CORPORATE INFORMATION
Gujarat State Petronet Limited (GSPL) is a public limited company
domiciled in India and incorporated under the provisions of the
Companies Act, 1956. GSPL 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. Te Company is primarily engaged in
transmission of natural gas through pipeline on an open access basis
from supply points to demand centres. Te Company also sells electricity
generated through Windmills.
2 BASIS OF PREPARATION
(i) The financial statements are prepared on accrual basis of accounting
under historical cost convention in accordance with generally accepted
accounting principles in India and the relevant provisions of the
Companies Act, 2013 including accounting standards notified there under.
(ii) The preparation of financial statements requires management to make
certain judgments, estimates and assumptions that affect the amounts
reported in the financial statements and notes thereto. Management
believes these assumptions are reasonable and prudent.
3 Previous year figures have been re-classified or regrouped wherever
necessary.
4 CONTINGENT LIABILITIES AS ON 31ST MARCH, 2015:
a) Claims against Company not acknowledged as debt:
- By land owners seeking enhancement of compensation in respect of RoU
acquired by the Company is Rs. 2,124.57 Lacs (Previous Year: Rs.
2,128.53 Lacs) and by other parties are Rs. 39.86 Lacs (Previous Year:
Rs. 39.86 Lacs) )
- As regards Central Excise and Service Tax matters, the matters lying
before Hon''ble Supreme Court- Rs. 735.04 Lacs (Previous Year: Rs. Nil),
Hon''ble Gujarat High Court - Rs. 19,100.28 Lacs (Previous Year: Rs.
19,100.28 Lacs), before CESTAT - Rs.10,111.30 Lacs (Previous Year: Rs.
9,018.14 Lacs), before Commissioner/ Asst. Commissioner - Rs. 1525.45
Lacs (Previous Year: Rs. 2,671.78 Lacs). Further, the company is in
process of fling appeal before CESTAT for Rs. 1,665.86 Lacs (Previous
Year: Rs. 91.01 Lacs). (Applicable interest & penalty has also been
demanded by Department).
- Income Tax assessments up to Assessment Year 2012-13 have been
completed and Company had fled various appeals against orders passed by
Income Tax Department for various Assessment years. Te tax
impact/demand of appeals lying before Hon''ble Gujarat High Court for
Assessment Year 2005-06 & 2009-10 is Rs. 19.69 Lacs (Previous Year :
Rs. 26.77 Lacs), lying before the Income Ta x Appellate Tribunal (ITAT)
for Assessment Year 2008-09 & 2009-10 is Rs. 370.41 Lacs (Previous Year
: Rs. 370.41 Lacs), lying before CIT(Appeals) for Assessment Year
2008-09, 2010-11, 2011-12 & 2012-13 is Rs. 767.08 Lacs (Previous Year :
Rs. 657.48 Lacs) and matters restored back to Assessing Officer for
Assessment Year 2004-05 & 2006-07 is Rs. 38.77 Lacs. (Previous Year :
Rs. 38.77 Lacs)
Based on interpretation of the Acts & various judicial pronouncements
in relation to similar matters, Company is of the view that these
demands are likely to be deleted or may be substantially reduced.
b) Guarantees :
- Outstanding Bank Guarantees / Letter of Credits are Rs. 68,983.64
Lacs (Previous year Rs. 9,813.12 Lacs)
- Corporate Guarantee executed jointly & severally along with associate
is Rs. 56,500.00 Lacs (Previous year 50,000.00 Lacs).
c) Other :
Imbalance and overrun charges as per the ''Modalities of maintaining &
operation of Escrow Account under the PNGRB (Access Code for Common or
Contract Carrier Natural Gas Pipeline) Regulations, 2008''issued by
PNGRB on 7th March, 2011, collected for the period prior to 1st April,
2011 amounting to Rs. 226.02 Lacs (net of taxes) has been deposited in
Escrow Account under protest. However, the same is not recognised as
liability as these guidelines are applicable w.e.f. 1st April, 2011.
5 CAPITAL & OTHER COMMITMENT
Capital Commitment:
Estimated amount of contracts remaining to be executed on capital
account and not provided for is Rs. 25,686.84 Lacs (Previous year Rs.
40,086.24 Lacs).
Other Commitment:
As on 31st March, 2015, the Company has following other commitments:
a) Rs. 1,96,594.99 Lacs (approx.) towards further investments in
subsidiaries & associates (Previous year Rs. 2,00,494.99 Lacs)
b) Advance of Rs. 5,000.00 Lacs adjustable against re-gasification
services (Previous year Rs. 15,000.00 Lacs)
-27 As per Accounting Standard - 16 "Borrowing Cost" issued by ICAI,
the Company has capitalised the borrowing cost amounting to Rs.
2,333.72 Lacs for the current year. (Previous year Rs. 1,879.50 Lacs).
6 The balances of sundry debtors, creditors, loans & advances and
deposits are subject to confirmation. Provision for all liabilities is
adequate in opinion of the Company.
7 SEGMENT REPORTING
a. Business Segments
The Company has identified and reported business segments taking into
account nature of product and services, differing risks and returns and
internal business reporting systems. Te Company''s principal business is
transportation of Gas through pipeline. Other business segment includes
generation of electricity through windmill.
b. Segment Revenue and Expense
Revenue and Expenses have been identified to a segment on the basis of
operating activities of the segment. Revenue and Expenses which relate
to common activities and are not allocable to segment on reasonable
basis have been disclosed as "Unallowable".
c. Segment Assets and Liabilities
Segment Assets include all operating assets in respective segments
comprising of net Fixed Assets, Capital Work in Progress, Current
Assets, Loans and Advances. Segment Liabilities include Operating
Liabilities and Provisions.
d. The Company does not have geographical distribution of revenue hence
secondary segmental reporting based on geographical locations of its
customers is not applicable to the Company.
8 RELATED PARTY DISCLOSURES
As per the Accounting Standard -18 on "Related Party Disclosures"
issued by The Institute of Chartered Accountants of India, list of
related parties identified of the company are as follows :
A. Holding Company:
- Gujarat State Petroleum Corporation Limited
B. Subsidiary: :
- GSPL India Gasnet Limited
- GSPL India Transco Limited
C. Associates:
- GSPC Gas Company Limited
- GSPC Distribution Network Limited
- Gujarat State Energy Generation Limited (associate of holding
company)
D. Fellow Subsidiary:
- Guj Info Petro Limited
- GSPC Pipavav Power Company Limited
- GSPC LNG Limited
- Gujarat Gas Company Limited
E. Key Managerial Personnel:
- Shri Tapan Ray, IAS, MD (upto 30th September, 2014)
- Shri Atanu Chakraborty, IAS, MD (w.e.f. 6th November, 2014)
9 EMPLOYEE STOCK OPTION PLANS
ESOP 2005 Scheme:
During the Financial Year 2005-06, the company instituted ESOP-2005. The
Board of Directors and the Shareholders approved the plan in the
meeting held on 13th October, 05 and 18th October, 05 respectively,
which provides for the issue of 23,27,940 equity shares to the
employees of the company and of Gujarat State Petroleum Corporation
Ltd. The Compensation Committee administers ESOP-2005. These ESOPs are
granted at an exercise price of Rs.14 per share to be vested equally
over the period of four years and to be exercised within a period of
five years from the date of vesting.
ESOP 2010 Scheme:
During the Financial Year 2010-11, the company instituted ESOP-2010. The
Board of Directors and the Shareholders approved the plan in the
meeting held on 23rd August, 2010 and 21st September, 2010
respectively, which provides for the issue of 21,28,925 equity shares
to the employees of the company. The Compensation Committee administers
ESOP-2010. These ESOPs are granted at an exercise price of Rs. 75 per
share to be vested over the period of five years and to be exercised
within a period of ten years from the date of Grant.
10. The Company has maintained a separate escrow account as per PNGRB
guidelines for modalities of maintaining and operation of escrow
account for charges towards system indiscipline in terms of positive or
negative imbalance or overruns. In this regard, since financial year
2011-12, amount recovered from customers is deposited in the said bank
account and the amount invoiced (net of taxes) is recognized as
liability.
11. As at the balance sheet date, Company has reviewed the carrying
amounts of its assets and found that there is no indication that those
assets have suffered any impairment loss. Hence, no such impairment loss
has been provided.
12. Amount due for credit to Investor Education and Protection Fund is
NIL (Previous year NIL).
13. In the matter of appeal filed by few customers with The Appellate
Tribunal for Electricity (APTEL) against the stipulation in the PNGRB
Tariff order No. TO/09/2012 dated 11th September, 2012 requiring GSPL to
implement the order with retrospective effect from 20th November, 2008,
being the date on which Petroleum and Natural Gas Regulatory Board
(Determination of Tariff for Natural Gas Pipelines) Regulations, 2008
were notified, APTEL passed judgment on 6th January, 2014 against such
retrospective application of tariff. Accordingly, PNGRB has vide Letter
Ref: PNGR/M/(C)/43/Tariff GSPL Vol III dated 19th February, 2014 read
with PNGRB Order Ref.No: TO/04/2014 dated 11th July, 2014 issued
revised Provisional Initial Unit Natural Gas Pipeline tariff Order and
zonal apportionment Order thereof for GSPL''s High Pressure Pipeline
Network. Te same has been implemented during the year w.e.f. 27th July,
2012 being the authorization date for GSPL''s High Pressure Pipeline
Network.
14. Further APTEL in the matter of the appeals filed by GSPL against the
various provisions of the order No. TO/09/2012 dated 11th September,
2012 has in judgment dated 25th November, 2014 and 28th November, 2014
allowed the appeals asking PNGRB to reconsider the tariff proposal to be
submitted by GSPL based on relevant data and other submissions made by
the appellant in this regard. GSPL has submitted the revised tariff
proposals for consideration of PNGRB.
15. During the current year, the company has adopted useful lives of
fixed assets as per Schedule II of Companies Act, 2013. Accordingly, the
carrying value of fixed assets as on 1st April, 2014, net of residual
value, has been depreciated over remaining useful lives. Further, an
amount of Rs. 2.24 crores representing the carrying value of assets,
whose remaining useful life as at 1st April, 2014 as per schedule II
has already elapsed, has been charged to the opening balance of
retained earnings in accordance with Companies Act, 2013.
16. In compliance of opinion of Expert Advisory Committee (EAC) of ICAI
and Accounting Standard 26 - Intangible Assets, during the year,
estimated useful life of ROU and ROW has been changed to 99 years and
30 years respectively. As a result, depreciation and amortization
expenses increased by Rs. 1,391.99 lacs (out of which Rs. 1,210.36 lacs
pertains up to financial year 2013-14) and accordingly, profit for the
year reduced by corresponding amount.
17. The figures appearing in financial statements are rounded of to the
nearest rupees in lacs.
Mar 31, 2014
1 CORPORATE INFORMATION
Gujarat State Petronet Limited (GSPL) is a Public Limited Company
domiciled in India and incorporated under the provisions of the
Companies Act, 1956. GSPL is a Government Company u/s 617 of Companies
Act. Its shares are listed on Bombay Stock Exchange Limited and
National Stock Exchange of India Limited in India. Te Company is
primarily engaged in transmission of natural gas through pipeline on an
open access basis from supply points to demand centres. The Company also
sells electricity generated through Windmills.
2 BASIS OF PREPARATION
(i) The Financial Statements are prepared on accrual basis of accounting
under historical cost convention in accordance with Generally Accepted
Accounting Principles in India and the relevant provisions of the
Companies Act, 1956 including Accounting standards notifed there under.
(ii) The preparation of Financial Statements requires management to make
certain judgments, estimates and assumptions that afect the amounts
reported in the Financial Statements and notes thereto. Management
believes these assumptions are reasonable and prudent.
3 Previous year figures have been re-calssifed or regrouped whereever
necessary.
4 CONTINGENT LIABILITIES AS ON 31ST MARCH, 2014:
a) Claims against Company not acknowledged as debt:
- By land owners seeking enhancement of compensation in respect of RoU
acquired by the Company is Rs. 2,128.53 Lacs (Previous Year: Rs. 2,430.75
Lacs) and by other parties are Rs. 39.86 Lacs (Previous Year: Rs. 39.86
Lacs)
- As regards Central Excise and Service Tax matters, the matters lying
before Honorable Gujarat High Court - Rs. 19,100.28 Lacs (Previous Year:
Rs. 9,370.58 Lacs), before CESTAT - Rs. 9,018.14 Lacs (Previous Year: Rs.
9,018.14 Lacs) , before Commissioner/ Asst. Commissioner - Rs. 2,671.78
Lacs (Previous Year: Rs. 1,096.92 Lacs). Further, the Company is in
process of fling appeal before CESTAT for Rs. 91.01 Lacs.
- Income Tax assessments up to Assessment Year 2011-12 have been
completed and Company had fled various appeals against orders passed by
Income Tax Department for various Assessment years. The Tax
impact/demand of appeals lying before Honorable Gujarat High Court for
Assessment Year 2005-06 & 2009-10 is Rs. 26.77 Lacs (Previous Year : Rs.
5.53 Lacs), lying before the Income Tax Appellate Tribunal (ITAT) for
Assessment Year 2008-09 & 2009-10 is Rs. 370.41 Lacs (Previous Year : Rs.
300.71 Lacs), lying before CIT(Appeals) for Assessment Year 2010-11 &
2011-12 is Rs. 657.48 Lacs (Previous Year : Rs. 543.50 Lacs) and matters
restored back to Assessing officer for Assessment Year 2004-05 & 2006-07
is Rs. 38.77 Lacs. (Previous Year : Rs. 38.77 Lacs)
Based on interpretation of the Acts & various judicial pronouncements
in relation to similar matters, Company is of the view that these
demands are likely to be deleted or it may be substantially reduced.
b) Guarantees :
- Outstanding Bank Guarantees / Letter of Credits are Rs. 9,813.12 Lacs
(Previous year Rs. 9,024.00 Lacs)
- Corporate Guarantee executed jointly & severally along with an
associate is Rs. 50,000.00 Lacs (Previous year Nil).
c) Other :
Imbalance and overrun charges as per the ''Modalities of maintaining &
operation of Escrow Account under the PNGRB (Access Code for Common or
Contract Carrier Natural Gas Pipeline) Regulations, 2008'' issued by
PNGRB on 7th March, 2011, collected for the period prior to 1st April,
2011 amounting to Rs. 226.02 Lacs (net of taxes) has been deposited in
Escrow Account under protest. However, the same is not recognised as
liability as these guidelines are applicable w.e.f. 1st April, 2011.
5 CAPITAL & OTHER COMMITMENT
Capital Commitment:
Estimated amount of contracts remaining to be executed on capital
account and not provided for is Rs. 40,086.24 Lacs (Previous year Rs.
53,438.64 Lacs).
Other Commitment:
As on 31st March, 2014, the Company has following other commitments:
a) Rs. 2,00,494.99 Lacs (approx) towards further investments in
subsidiaries & associates (Previous year Rs. 2,41,589.99 Lacs)
b) Advance of Rs. 15,000.00 Lacs adjustable against re-gasifcation
services (Previous year Rs. Nil)
6 As per Accounting Standard - 16 "Borrowing Cost" issued by ICAI, the
Company has capitalised the borrowing cost amounting to Rs. 1,879.50 Lacs
for the current year. (Previous year Rs. 2,321.97 Lacs).
7 During the year, the Company has changed its Accounting Policy of
charging prepaid expenses and prior period expenses/income up to Rs.
50,000/- in each case to relevant heads of account for the year. As a
result, prepaid expenses decreased by Rs. 0.97 Lacs and correspondingly
resulted in decrease in Profit for the year by Rs. 0.97 Lacs.
8 There are no Whole Time / Executive Director on the Board except Shri
Tapan Ray, Managing Director. He is not drawing any remuneration from
the Company.
9 The balances of Sundry Debtors, Creditors, Loans & Advances and
Deposits are subject to confirmation. Provision for all Liabilities is
adequate in opinion of the Company.
10 SEGMENT REPORTING
a. Business Segments
The Company has identified and reported business segments taking into
account nature of product and services, difering risks and returns and
internal business reporting systems. The Company''s principal business is
transportation of Gas through pipeline. Other business segment includes
generation of electricity through windmill.
b. Segment Revenue and Expense
Revenue and Expenses have been identified to a segment on the basis of
operating activities of the segment. Revenue and Expenses which relate
to common activities and are not allocable to segment on reasonable
basis have been disclosed as "Unallocable".
c. Segment Assets and Liabilities
Segment Assets include all operating assets in respective segments
comprising of net Fixed Assets, Capital Work in Progress, Current
Assets, Loans and Advances. Segment Liabilities include Operating
Liabilities and Provisions.
d. The Company does not have geographical distribution of revenue hence
secondary segmental reporting based on geographical locations of its
customers is not applicable to the Company.
11 RELATED PARTY DISCLOSURES
As per the Accounting Standard -18 on "Related Party Disclosures"
issued by The Institute of Chartered Accountants of India, list of
related parties identified of the company are as follows :
A. Holding Company:
- Gujarat State Petroleum Corporation Limited
B. Subsidiary: :
- GSPL India Gasnet Limited
- GSPL India Transco Limited
C. Associates:
- GSPC Gas Company Limited
- GSPC Distribution Networks Limited
- Sabarmati Gas Limited (associate of Holding Company)
- Gujarat State Energy Generation Limited (associate of Holding
Company)
D. Fellow Subsidiary:
- Guj Info Petro Limited
- GSPC Pipavav Power Company Limited
- GSPC LNG Limited
- Gujarat Gas Company Limited
E. Key Managerial Personnel:
- Shri Tapan Ray, IAS, MD
12 DISCLOSURE FOR GRATUITY & LEAVE SALARY PROVISION AS PER ACCOUNTING
STANDARD-15
Company has participated in Group Gratuity Scheme of Life Insurance
Corporation of India. The liability in respect of gratuity benefits &
leave salary being Defined benefit schemes, payable in future, are
determined by actuarial valuation as on Balance Sheet date.
In arriving at the valuation for gratuity & leave salary following
assumptions were used:
13 EMPLOYEE STOCK OPTION PLANS
ESOP 2005 Scheme:
During the Financial Year 2005-06, the Company instituted ESOP-2005. The
Board of Directors and the Shareholders approved the Plan in the
Meeting held on 13th October, 2005 and 18th October, 2005 respectively,
which provides for the issue of 23,27,940 Equity Shares to the
employees of the Company and of Gujarat State Petroleum Corporation
Ltd. The Compensation Committee administers ESOP-2005. These ESOPs are
granted at an Exercise Price of Rs. 14 per Share to be vested equally
over the period of four years and to be exercised within a period of
five years from the date of vesting.
ESOP 2010 Scheme:
During the Financial Year 2010-11, the Company instituted ESOP-2010. The
Board of Directors and the Shareholders approved the Plan in the
Meeting held on 23rd August, 2010 and 21st September, 2010
respectively, which provides for the issue of 21,28,925 Equity shares
to the employees of the Company. The Compensation Committee administers
ESOP-2010. These ESOPs are granted at an exercise price of Rs. 75 per
Share to be vested over the period of five years and to be exercised
within a period of ten years from the date of Grant.
14 The Company has maintained a separate escrow account as per PNGRB
guidelines for modalities of maintaining and operation of escrow
account for charges towards system indiscipline in terms of positive or
negative imbalance or overruns. In this regard, since Financial Year
2011-12, amount recovered from customers is deposited in the said bank
account and the amount invoiced (net of taxes) is recognized as
liability.
15 As at the Balance Sheet date, Company has reviewed the carrying
amounts of its assets and found that there is no indication that those
assets have sufered any impairment loss. Hence, no such impairment loss
has been provided.
16 Amount due for credit to Investor Education and Protection Fund is
NIL (Previous year NIL).
17 The figures appearing in Financial Statements are rounded of to the
nearest Rs. in Lacs.
Mar 31, 2013
1 CORPORATE INFORMATION
Gujarat State Petronet Limited (GSPL) is a Public Limited Company
domiciled in India and incorporated under the provisions of the
Companies Act, 1956. GSPL is a Government Company u/s 617 of Companies
Act. Its Shares are listed on Bombay Stock Exchange Limited and
National Stock Exchange of India Limited in India. The Company is
primarily engaged in transmission of natural gas through pipeline on an
open access basis from supply points to demand centres. The Company
also sells electricity generated through Windmills.
2 BASIS OF PREPARATION
(i) The Financial Statements are prepared on accrual basis of
accounting under historical cost convention in accordance with
Generally Accepted Accounting Principles (GAAP) in India and the
relevant provisions of the Companies Act, 1956 including Accounting
Standards notified there under.
(ii) The preparation of Financial Statements requires management to
make certain judgments, estimates and assumptions that affect the
amounts reported in the Financial Statements and notes thereto.
Management believes these assumptions are reasonable and prudent.
However, actual results could differ from estimates.
3 Previous Year figures have been reclassified or regrouped wherever
necessary.
4 CONTINGENT LIABILITIES
a) Bank Guarantee/Letter of Credit issued and outstanding as on 31st
March 2013 is for an amount of Rs. 9,024.00 Lacs (Previous Year Rs.
6,870.00 Lacs)
b) As on 31st March, 2013, the ascertainable claims against the
Company:
I. By land owners seeking enhancement of compensation in respect of
RoU acquired by the Company is Rs. 2,430.75 Lacs (Previous Year: Rs.
2,544.84 Lacs) and
II. By other parties are Rs. 39.86 Lacs (Previous Year: Rs. 39.86
Lacs)
c) As regards Central Excise & Service Tax related matters, Department
vide order for the period 2002-03 to 2004-05 has demanded Service Tax
of Rs. 17.90 Lacs (Previous Year: Rs. 17.90 Lacs) along with interest
and penalty, against which the Company filed an appeal with CCE
(Appeals) and got favourable order. However, the Department has
preferred an appeal against order of CCE (Appeals) with Custom Excise &
Service Tax Appellate Tribunal (CESTAT), pending disposal.
Department vide various orders amounting to Rs. 28,835.56 Lacs
(Previous Year: Rs. 18,699.49 Lacs) for the period 2005-06 to 2011- 12
has raised demand towards CENVAT credit on input services and capital
goods availed by the Company plus applicable Interest and Penalty.
Being aggrieved by the said orders, the Company has filed appeals
before CESTAT, of which appeals of Rs. 4,980.84 Lacs as regards denial
of CENVAT credit on input services are pending disposal.
As regards appeals filed against the orders confirming demand of Rs.
19,835.32 Lacs along with interest and penalty, CESTAT set aside demand
for extended period of limitation and penalty however, confirming
denial of CENVAT credit on capital goods. Being aggrieved by negative
portion of order of CESTAT, the Company has filed Tax Appeals before
Honourable Gujarat High Court which is pending for disposal.
As regards order denying CENVAT credit on capital goods for Rs.
4,019.40 Lacs, Company is in process of filling appeals before CESTAT.
Further, various Show Cause Notices amounting to Rs. 1,096.92 Lacs
(Previous Year: 10,227.07 Lacs) plus Interest and Penalty have been
issued by the department on various service tax related matters, for
which suitable replies have been submitted by the Company, pending
final disposal.
d) Income Tax assessments up to Assessment Year 2010-11 have been
completed. Company had filed appeals against the various orders passed
by assessing officers, whereby appeals lying before Honourable Gujarat
High Court for Assessment Year 2005-06 Â Rs. 5.53 Lacs, before the
Income Tax Appellate Tribunal (ITAT) for Assessment Year 2008-09 to
Assessment Year 2009-10 Â Rs. 300.71 Lacs, before CIT(Appeals) for
Assessment Year 2010-11 Â Rs. 543.50 Lacs & matters restored back to
Assessing Officer for Assessment Year 2004-05 & 2006-07 - Rs. 38.77
Lacs
Based on interpretation of the Acts & various judicial pronouncements
in relation to similar matters, Company is of the view that these
demands are likely to be deleted or it may be substantially reduced.
e) Imbalance and overrun charges as per the ''Modalities of
maintaining & operation of Escrow Account under the PNGRB (Access Code
for Common or Contract Carrier Natural Gas Pipeline) Regulations, 2008''
issued by PNGRB on 7th March 2011, collected for the period prior to
1st April 2011 amounting to Rs. 212.73 Lacs (Net of Taxes) has been
deposited in Escrow Account under protest. However, the same is not
recognised as liability as these guidelines are applicable w.e.f. 1st
April 2011.
5 CAPITAL & OTHER COMMITMENT Capital Commitment:
Estimated amount of contracts remaining to be executed on capital
account and not provided for is Rs. 53,438.64 Lacs (Previous Year Rs.
58,301.58 Lacs).
Other Commitment:
As on 31st March 2013, the Company has commitment of around Rs.
2,41,589.99 Lacs towards further investments in Subsidiaries and
Associates ( Previous Year Rs. 2,09,589.98 Lacs )
6 As per AS-16 "Borrowing Cost" issued by ICAI, the Company has
capitalised the borrowing cost amounting to Rs. 2,321.97 Lacs (Previous
Year Rs. 2,646.70 Lacs).
7 MANAGERIAL REMUNERATION
There are no Whole Time / Executive Director on the Board except Shri
Tapan Ray, Managing Director. He is not drawing any remuneration from
the Company.
8 The balances of Sundry Debtors, Creditors, Loans and Advances and
Deposits are subject to confirmation by the parties and provision for
all liabilities is adequate in opinion of the Company.
9 SEGMENT REPORTING
a. Business Segments : The Company has identified and reported
business segments taking into account nature of product and services,
differing risks and returns and internal business reporting systems.
The Company''s principal business is transportation of Gas through
Pipeline. Other business segment includes generation of electricity
through windmill.
b. Segment Revenue and Expense : Revenue and Expenses have been
identified to a segment on the basis of operating activities of the
segment. Revenue and Expenses which relate to common activities and are
not allocable to segment on reasonable basis have been disclosed as
"Unallocable".
c. Segment Assets and Liabilities : Segment Assets include all
operating Assets in respective segments comprising of net Fixed Assets,
Capital Work in Progress, Current Assets, Loans and Advances. Segment
Liabilities include Operating Liabilities and Provisions
d. The Company does not have geographical distribution of revenue
hence secondary segmental reporting based on geographical locations of
its customers is not applicable to the Company.
10 DISCLOSURE FOR GRATUITY & LEAVE SALARY PROVISION AS PER AS-15
Company has participated in Group Gratuity Scheme of Life Insurance
Corporation of India. The liability in respect of gratuity benefits &
leave salary being defined benefit schemes, payable in future, are
determined by actuarial valuation as on Balance Sheet date.
11. EMPLOYEE STOCK OPTION PLANS ESOP 2005 Scheme:
During the Financial Year 2005-06, the company instituted ESOP-2005.
The Board of Directors and the Shareholders approved the Plan in the
Meeting held on 13th October, 2005 and 18th October, 2005 respectively,
which provides for the issue of 23,27,940 Equity Shares to the
Employees of the Company and of Gujarat State Petroleum Corporation
Ltd. The Compensation Committee administers ESOP-2005. These ESOPs are
granted at an Exercise Price of Rs. 14 per Share to be vested equally
over the period of four years and to be exercised within a period of
five years from the date of vesting.
ESOP 2010 Scheme:
During the Financial Year 2010-11, the Company instituted ESOP-2010.
The Board of Directors and the Shareholders approved the Plan in the
Meeting held on 23rd August, 2010 and 21st September, 2010
respectively, pursuant to which 21,28,925 Options have been granted to
the Employees of the Company. The Compensation Committee administers
ESOP-2010. These ESOPs are granted at an exercise price of Rs. 75 per
Share to be vested over the period of five years and to be exercised
within a period of ten years from the date of Grant.
12. The Company has maintained a separate escrow account as per PNGRB
Guidelines for modalities of maintaining and operation of escrow
account for charges towards system indiscipline in terms of positive or
negative imbalance or overruns. In this regard, since Financial Year
2011-12, amount recovered from customers is deposited in the said
account and the amount invoiced (Net of Taxes) is recognized as
liability.
13. As at the balance sheet date, Company has reviewed the carrying
amounts of its Assets and found that there is no indication that those
assets have suffered any impairment loss. Hence, no such impairment
loss has been provided.
14. The ''Petroleum & Natural Gas Regulatory Board'' has granted
authorization to GSPL''s Pipeline Network under Section 18(1) of the
''Petroleum & Natural Gas Regulatory Board (Authorizing Entities to
Lay, Build, Operate or Expand Natural Gas Pipelines) Regulations, 2008
during the year. The Authorization Letter for GSPL''s High Pressure
Natural gas Pipeline Network totalling to 2239 Kms was issued on 27th
July, 2012 and Authorization Letter for GSPL''s Low Pressure Natural
gas Pipeline Network totalling to 57.6 Kms was issued on 19th March,
2013.
15. PNGRB has vide Order No. TO/09/2012 dated 11th September, 2012
determined the "Provisional" Initial Unit Natural Gas Pipeline
Tariff (IUNGPT) for GSPL''s High Pressure Natural Gas Pipeline
Network. Further, PNGRB has vide Order No. TO/02/2013 dated 19th
February, 2013 determined the zonal tariff apportionment of the
"Provisional" Initial Unit Natural Gas Pipeline Tariff (IUNGPT) for
GSPL''s High Pressure Natural Gas Pipeline Network.
GSPL has filed appeal with The Appellate Tribunal for Electricity
(APTEL) against the various provisions of the Order No. TO/09/2012
dated 11th September, 2012. Further few customers have also filed
appeal with The Appellate Tribunal for Electricity (APTEL) against the
stipulation in the order requiring GSPL to implement the order with
retrospective effect from 20th November, 2008, being the date on which
Petroleum and Natural Gas Regulatory Board (Determination of Tariff for
Natural Gas Pipelines) Regulations, 2008 were notified. Accordingly
APTEL has passed an order dated 25th February, 2013, staying the
retrospective application of the Order No. TO/09/2012 dated 11th
September, 2012. Thus in accordance with the APTEL Order, GSPL has
implemented the Order No. TO/09/2012 dated 11th September, 2012 read
with Order No. TO/02/2013 dated 19th February, 2013 from 27th July,
2012.
Further GSPL in compliance with APTEL Order dated 22nd March, 2013 has
started bearing the expense on account of System Use Gas on account of
transmission loss w.e.f. 16th February, 2013 against the earlier system
of customers bearing the same based on periodical reconciliation of
such loss with customers.
16. Amount due for credit to Investor Education and Protection Fund
towards unclaimed interest warrant  Fixed Deposit from Public &
Unclaimed Dividend is NIL (Previous year NIL).
17. The figures appearing in Financial Statements are rounded off to
the nearest Rupees in Lacs.
Mar 31, 2012
1 CORPORATE INFORMATION
Gujarat State Petronet Limited (GSPL) is a Public Company domiciled in
India and incorporated under the provisions of the Companies Act, 1956.
GSPL is a Government Company u/s 617 of Companies Act, 1956. It''s
Shares are listed on Bombay Stock Exchange Limited and National Stock
Exchange of India Limited in India. The Company is primarily engaged in
transportation of natural gas through pipeline on open access basis
from supply points to demand centres. The Company also sells
electricity generated through Windmills.
2 BASIS OF PREPARATION
The Financial Statements have been prepared under historical cost
convention on accrual and going concern basis of accounting. The
Financial Statements have been prepared and presented to comply in all
material aspects with the Generally Accepted Accounting Principles
(Indian GAAP) in India and the Accounting Standards issued by the
Institute of Chartered Accountants of India, as notified by the
Companies (Accounting Standards) Rules, 2006 to the extent applicable
and the relevant provisions of the Companies Act, 1956. The Company has
consistently applied the Accounting Principles and Policies and these
Accounting Polices not referred to otherwise, are in conformity with
Generally Accepted Accounting Principles (Indian GAAP) in India.
3 Till year ended 31st March, 2011, the Company was using pre-revised
Schedule VI to the Companies Act, 1956, for preparation and
presentation of Financial Statements. During the year ended 31st March,
2012 the revised Schedule VI notified under the Companies Act, 1956, has
become applicable to Company. Accordingly, corresponding figures of the
previous year have been regrouped and reclassified wherever considered
necessary to compare to this year''s figures.
4 CONTINGENT LIABILITY
Bank Guarantee/Letter of Credit issued and outstanding as on 31st
March, 2012 is for an amount of Rs. 6,870.00 Lacs (Previous Year: Rs.
5,450.00 Lacs)
As on 31st March, 2012, the Ascertainable Claims against the Company:
1) by certain land owners seeking enhancement of Compensation in
respect of RoU acquired by the Company is Rs. 2,544.84 Lacs
(Corresponding Previous Period: Rs. 2,591.93 Lacs) and 2) by other
parties are Rs. 39.86 Lacs (Corresponding Previous Period: NIL)
As regards Excise & Service Tax Related matters, Dept. vide various
Orders for the period 2005-06 to 2008-09 has demanded basic duty of Rs.
18,717.39 Lacs (Previous Year: 18717.39 Lacs) plus applicable interest
& penalty, aggrieved by which Company had fled Appeals before CESTAT,
pending final disposal. Also, various show cause notices for the period
2009-10 & 2010-11 amounting to Rs. 10,227.07 Lacs (Previous Year:
6,900.54 Lacs) plus applicable interest & penalty has also been issued
by Department for which suitable replies have been filed by Company,
pending final disposal.
Out of Rs. 18,717.39 Lacs lying at CESTAT stage as mentioned above, Rs.
10,859.94 Lacs related to 1st year of litigation (period covered
2005-06 to 2007-08), CESTAT has granted "Unconditional Stay of Demand"
considering strong merits of the case, pending final disposal.
Income Tax Assessments up to Assessment Year 2009-10 have been
completed. Company had fled Appeals against the various Orders passed
by Assessing Officers, whereby Appeals lying before Gujarat High Court
for Assessment Year 2005-06 Â Rs. 5.53 Lacs, before the Income Tax
Appellate Tribunal (ITAT) for Assessment Year 2004-05 to Assessment
Year 2008-09 Â Rs. 409.36 Lacs, before CIT (Appeals) for Assessment Year
2009-10 Rs. 97.72 Lacs & matters restored back to Assessing Officer for
Assessment Year 2004-05 & Assessment Year 2006-07 Â Rs. 50.89 Lacs.
Imbalance and Overrun charges as per the ÂModalities of maintaining &
operation of Escrow Account under the PNGRB (Access Code for Common or
Contract Carrier Natural Gas Pipelines) Regulations, 2008'' issued by
PNGRB on 7th March, 2011, collected for the period prior to 1st April,
2011 amounting to Rs. 212.73 Lacs (net of taxes) has been neither
deposited in Escrow Account nor recognised as liability as these
guidlines are applicable w.e.f. 1st April, 2011.
Based on interpretation of the Acts & various judicial pronouncements
in relation to similar matters, Company is of the view that these
demands are likely to be deleted or it may be substantially reduced.
5 CAPITAL & OTHER COMMITMENT
Capital Commitment:
Estimated amount of contracts remaining to be executed on capital
account and not provided for is approximately Rs. 58,301.58 Lacs
(Previous Year: Rs. 27,160.36 Lacs).
Other Commitment:
During the year, Company has formed two SPVs (Special Purpose Vehicles)
namely GSPL India Gasnet Limited for implementation of Mehsana-Bhatinda
and Bhatinda-Jammu-Srinagar Pipeline Projects and GSPL India Transco
Limited for implementation of Mallavaram-Bhopal-Bhilwara-Vijaipur
Pipeline Project. For this purpose, Company is required to contribute Rs.
209,589.98 Lacs as on 31st March, 2012 (Previous Year: NIL) as Equity
Share Capital over a period of three years.
6 As per AS-16 "Borrowing Cost" issued by ICAI, the Company has
capitalised the borrowing cost amounting to Rs. 2,646.70 Lacs (Previous
Year: Rs. 3,729.97 Lacs).
7 MANAGERIAL REMUNERATION
There are no Whole Time / Executive Director on the Board except Shri
Tapan Ray, Managing Director. He is not drawing any remuneration from
the Company.
8 In the opinion of Management, any of the Assets other than Fixed
Assets and Non-Current Investments have a value on realisation in the
ordinary course of business at least equal to the amount at which they
are stated.
9 An Investment of Rs. 57.50 Lacs was made by the Company in 2006-07 in
Equity Shares of Krishna Godavari Gas Network Ltd. (KGGNL), which was
set-up to implement CGD Network in the State of Andhra Pradesh. The
Board of Directors of KGGNL in its Meeting held on 27th June, 2011 have
decided to go for Voluntary Winding-Up of KGGNL. Accordingly, as
required by Accounting Standard 13 an estimated provision of 45%
reduction in value of Investment amounting to Rs. 25.88 Lacs is made in
P&L Account in Current Year.
10 The balances of Sundry Debtors, Creditors, Loans and Advances and
Deposits are subject to the confirmation by the parties and provision
for all Liabilities is adequate in opinion of the Company.
11 EMPLOYEE STOCK OPTION PLANS
ESOP Scheme 2005:
During the Financial Year 2005-06, the Company instituted ESOP-2005.
The Board of Directors and the Shareholders approved the Plan in the
Meetings held on 13th October, 2005 and 18th October, 05 respectively,
which provides for the issue of 23,27,940 Equity Shares to the
employees of the Company and of Gujarat State Petroleum Corporation
Ltd. The Compensation Committee administers ESOP-2005. These ESOPs are
granted at an exercise price of Rs. 14 per Share to be vested over the
period of four years and to be exercised within a period of five years
from the date of vesting.
ESOP Scheme 2010:
During the Financial Year 2010-11, the Company instituted ESOP-2010.
The Board of Directors and the Shareholders approved the Plan in the
Meetings held on 23rd August, 2010 and 21st September, 2010
respectively, pursuant to which 21,28,925 Options have been granted to
the Employees of the Company. The Compensation Committee administers
ESOP-2010. These ESOPs are granted at an Exercise Price of Rs. 75 per
Share to be vested over the period of five years and to be exercised
within a period of ten years from the date of grant.
12 SEGMENT REPORTING
a. Business Segments
The Company has identified and reported business segments taking into
account nature of product and services, differing risks and returns and
internal business reporting systems. The Company''s principal business
is Transportation of Gas through pipeline. Other business segment
includes Generation of Electricity through Windmill.
b. Segment Revenue and Expense
Revenue and Expenses have been identified to a segment on the basis of
operating activities of the segment. Revenue and Expenses which relate
to common activities and are not allocable to segment on reasonable
basis have been disclosed as "Unallocable".
c. Segment Assets and Liabilities
Segment assets include all Operating Assets in respective segments
comprising of Net Fixed Assets, Capital Work in Progress, Other
non-current Assets, Loans and Advances and Other Current Assets.
Segment Liabilities include Operating Liabilities and Provisions.
d. The Company does not have geographical distribution of revenue
hence secondary segmental reporting based on geographical locations of
its customers is not applicable to the Company.
13 The Company has maintained a separate Escrow Account as per PNGRB
Guidelines for modalities of maintaining and operation of Escrow
Account for charges towards system indiscipline in terms of positive or
negative imbalance or overruns. In this regard, during the year
2011-12, amount recovered from customers is deposited in the said
account. Further the amount invoiced (Net of Taxes) during the year
2011-12 is recognised as Liability.
14 During the Year, the Company has changed it''s Accounting Policy for
Amortising Preliminary Expenditure. Accordingly, the unamortised amount
of Preliminary Expenditure to the tune ofRs. 14.74 Lacs has been debited
to P&L Account. Due to this change in Accounting Policy, the Profit and
Other Asset (Unamortised Preliminary Expenditure) has been reduced by Rs.
14.74 Lacs.
15 As at the Balance Sheet date Company has reviewed the carrying
amounts of its assets and found that there is no indication that those
assets have suffered any impairment loss. Hence, no such impairment
loss has been provided.
16 GSPL has applied to the ÂPetroleum & Natural Gas Regulatory Board''
in December 2008 for authorization of its Pipeline Network under
section 18(1) of the ÂPetroleum & Natural Gas Regulatory Board
(Authorizing Entities to Lay, Build, Operate or Expand Natural Gas
Pipelines) Regulations, 2008. The Board is currently processing the
application of the Company.
17 Amount due for credit to Investor Education and Protection Fund
towards unclaimed Interest Warrant  Fixed Deposit from Public &
Unclaimed Dividend is NIL (Previous Year: NIL).
18 The figures appearing in Financial Statements are rounded off to the
nearest Rs. in Lacs.
Mar 31, 2011
1. Corresponding figures of the previous year have been regrouped and
reclassified wherever considered necessary to compare to this year''s
figures.
2. Contingent Liability:
a. Bank Guarantee/Letter of Credit issued and outstanding as on 31st
March, 2011 is for an amount of Rs. 54,50,00,000 (Previous year: Rs.
12,50,00,000)
b. As at 31st March, 2011, ascertainable Claims against the Company by
certain land owners seeking enhancement of compensation in respect of
RoU acquired by the Company is Rs. 25.91 crores (Previous year: Rs.
1.69 crores)
c. Excise Department had issued a demand of Rs. 17.90 lacs on Company
towards service tax plus interest & penalty dues as "Recipient of
Services of Consulting Engineer from Non-Resident" by the Company
during the period F.Y. 2002-03, 2003- 2004 & 2004-2005. Company fled an
appeal against the order with Commissioner of Central Excise (Appeals)
& got the order in favour. However, Department has fled an appeal
against the order of CCE (Appeals) before CESTAT.
d. Excise Department during it''s audit in 2008 had passed three orders
demanding Rs. 142.95 crores, interest as applicable & penalty
equivalent to basic demand, in relation to periods from 2005-2006 to
2007-2008. Company has fled appeal against the same before the CESTAT.
Out of the above, one of the matter involving an amount of Rs. 34.35
crores as basic demand has been decided in Company''s favour by CESTAT.
For other two matters involving basic demand Rs. 108.60 crores, Company
has been granted unconditional stay of demand, based on strong merits
of the case, pending final disposal.
e. Department has continued adjudicating the issue mentioned in point
(d) above, which were pending before CESTAT for earlier years, for F.Y.
2008-2009 and 2009-2010 (being subsequent periods) & passed
corresponding orders demanding Rs. 78.40 Crores, interest as
applicable & penalty equivalent to basic demand for F.Y. 2008-2009 and
issued Show Cause Notices for Rs. 69 crores for F.Y. 2009-2010,.
Against, order of Department for F.Y. 2008-2009, Company has fled an
appeal before the CESTAT, pending final disposal.
f. Income Ta x assessments up to A.Y. 2008-2009 have been completed.
Company had fled appeals against the various orders passed by assessing
Officers, whereby appeals lying before Gujarat High Court for A.Y.
2005-2006 - Rs. 0.151 crores, before the Income Tax Appellate Tribunal
(ITAT) for A.Y. 2004-2005 to A.Y. 2009-2010 - Rs. 25.419 crores &
before Commissioner of Income Tax (Appeals) for A.Y. 2008-2009 -
Rs.13.54 crores.
g. Based on interpretation of the Acts & various judicial
pronouncements in relation to similar matters, Company is of the view
that these demands are likely to be deleted or it may be substantially
reduced.
3. Estimated amount of contracts remaining to be executed on capital
account and not provided for is approximately Rs. 271.60 crores
(Previous year: Rs. 687.85 crores).
4. As per AS-16 "Borrowing Cost" issued by ICAI, the Company has
capitalised the borrowing cost amounting to Rs. 37.29 crores during the
year. (Previous year: Rs.16.87 crores).
5. The Company has undertaken windmill project of 52.50 MW at three
sites Maliya Miyana (Dist: Rajkot), Gorsar (Dist: Porbandar) and Adodar
(Dist: Porbandar) in the State of Gujarat. Company has commissioned the
balance capacity of 46.50 MW during the financial year.
6. During the year, Company has transferred Atul Spurline, Dhuva
Spurline and Thangadh Spurline to ''GSPC Gas Company Limited'', a company
promoted by ''Gujarat State Petroleum Corporation Limited'' to undertake
city gas distribution activity at Book Value and the consideration
would be discharged by way of allotment of fully paid up Equity Shares
in ''GSPC Gas Company Limited''.
7. During the year, the Company, has changed it''s accounting policy
for treatment of "Land Compensation relating to RoU" & non- refundable
"RoW Payments" from part of Plant & Machinery to "Intangible Asset" for
better presentation. Company will not amortize the said asset but will
test it for impairment on periodic basis since the useful life is not
accurately ascertainable. Because of the said change in policy, the
Company has written back depreciation amounting to Rs. 23.38 crores
provided up to F.Y. 2009-2010.
8. The company has changed the depreciation rate on natural gas
pipelines from 8.33% per annum to 3.17% per annum on SLM basis w.e.f.
1st April, 2010 in terms of approval of Ministry of Corporate Affairs
vide its letter no. 45/2/2011-CL-III dated 13th May, 2011. Due to
change in depreciation rate, there is a reduction in depreciation
charged to Profit & Loss Account amounting to Rs. 142.49 crores with
consequent increase in PBT.
9. During the year, there has been no further development with regard
to the ''Other Claims Recoverable'' in Schedule ''K''.
10. The balances of sundry debtors, creditors, loans and advances and
deposits are subject to the conformation by the parties and provision
for all liabilities is adequate in opinion of the Company.
11. SEGMENT REPORTING
a. Business Segments:
The Company has identified and reported business segments taking into
account nature of product and services, differing risks and returns and
internal business reporting systems. The Company''s principal business
is transportation of Gas through pipeline. Other business segment
includes generation of electricity through windmill.
b. Segment Revenue and expense:
Revenue and Expenses have been identified to a segment on the basis of
operating activities of the segment. Revenue and Expenses which relate
to common activities and are not allocable to segment on reasonable
basis have been disclosed as "Unallocable".
c. Segment Assets and liabilities:
Segment Assets include all operating assets in respective segments
comprising of Net Fixed Assets, Capital Work in Progress, Current
Assets, Loans and Advances. Segment Liabilities include Operating
Liabilities and Provisions.
d. The Company does not have geographical distribution of revenue
hence secondary segmental reporting based on geographical locations of
its customers is not applicable to the Company.
12. Employee Stock Option Plans
ESOP - 2005:
During the Financial Year 2005-2006, the Company instituted ESOP -
2005. The Board of Directors and the Shareholders approved the plan in
the meeting held on 13th October, 2005 and 18th October, 2005
respectively, which provides for the issue of 23,27,940 Equity Shares
to the employees of the Company and of Gujarat State Petroleum
Corporation Ltd. The Compensation Committee administers ESOP - 2005.
ESOP - 2010:
During the Financial Year 2010-2011, the Company instituted ESOP -
2010. The Board of Directors and the Shareholders approved the plan in
their meetings held on 23rd August, 2010 and 21st September, 2010
respectively, which provides for the issue of 62,40,000 Equity Shares
to the employees of the Company and Gujarat State Petroleum Corporation
Limited at future dates. The Compensation Committee administers the
ESOP-2010. The Compensation Committee has granted 21,28,925 Options to
the eligible employees under ESOP - 2010.
Accounting for ESOP:
In accordance with SEBI (Employees Stock Option Plan and Employees
Share Purchase Plan) Guidelines, 1999, the difference between market
price as on the date of grant of Option and the exercise price of total
no. of Options granted is recognized as an asset called ''Deferred ESOP
Compensation'' and as a liability called ''ESOP Outstanding Account''. The
asset called ''Deferred ESOP Compensation'' is amortized over the vesting
period on straight line basis and considered as a part of ''Employee
Cost'' in Profit & Loss Account, whereas the liability called ''ESOP
Outstanding Account'' is derecognized at the time of exercise of Shares
by the employees.
13. Company has exercised its Call Option on 30th March, 2011 to
redeem the outstanding bonds and accordingly liability in regards to
bond is discharged in full.
14. As at the Balance Sheet date Company has reviewed the carrying
amounts of its assets and found that there is no indication that those
assets have suffered any impairment loss. Hence no such impairment loss
has been provided.
15. GSPL has applied to the ''Petroleum & Natural Gas Regulatory Board''
in December 2008 for authorization of its Pipeline Network under
section 18(1) of the ''Petroleum & Natural Gas Regulatory Board
(Authorizing Entities to Lay, Build, Operate or Expand Natural Gas
Pipelines) Regulations, 2008. The Board is currently processing the
application of the Company.
16. Amount due for credit to Investor Education and Protection Fund
towards Unclaimed Interest Warrant - Fixed Deposit from Public &
Unclaimed Dividend is NIL (Previous year: NIL).
Mar 31, 2010
1. Corresponding figures of the previous year have been regrouped and
reclassified wherever considered necessary to compare to this years
figures.
2. Contingent Liability
a. Bank Guarantee/Letter of Credit issued and outstanding to the
extent of Rs. 12,50,00,000 (Previous year Rs. 4,00,00,000)
b. Ascertainable Claims against the company by certain land owners
seeking enhancement of compensation in respect of RoU acquired by the
company is Rs. 168,33,738 /- (Previous year Rs. 99,33,591/-)
c. Excise Department had issued a demand on Company towards service
tax dues as "Recipient of Services of Consulting Engineer from
Non-Resident" by the company during the period FY 2002-03, 2003-04 &
2004-05. Company filed an appeal against the order with Commissioner of
Central Excise (Appeals) & got the order in favour. However, department
has filed an appeal against the order of CCE (Appeals) before CESTAT.
The amount under adjudication is as under:
i. Service tax (Including Education Cess) of Rs. 17,90,459/-
ii. Interest under section 75 of the Finance Act
iii. Penalty of Rs. 100/- per day till failure to pay such service tax
under section 76 of the Finance Act
iv. Penalty of Rs. 1000/- under section 77 of the Service Tax Rules,
1994,
v. Further Penalty of Rs. 17,90,459/- under section 78 of the Finance
Act 1994
d. During FY 2008-09 Audit was conducted by Central Excise & Service
Tax Department & three different orders were issued against the
company. Details of the same have been summarized as below:
Particulars OIO NO. 33/ OIO NO. 35/ OIO NO. 34/ Remarks
COMMR/2009 COMMR/2009 COMMR/2009
Issue Involved Non- Non- Taxing the
Allowability Allowability services Company
has
of "CENVAT of "Service of GSPL filed the
Tax under the appeal
Credit on credit on category befor
Capital input "Clearing CESTAT
Goods" used services" & Forwarding against
in used in the
relation to relation to Agency" for impugned
the Order,
providing of providing of period pending
01.04.03 disposal
output output to 15.06.05
services services
(For the (For the
Period Period
1.7.2005 to 1.7.2005 to
31.3.2008) 31.3.2008)
Service Tax Company
has also
including 44.90 crores 63.70 crores 34.35crores been
granted
E. Cess Un condi
tional
Interest Interest under section 75 of the
Finance Act stay of
demand
Penalty u/s 76 Rs. 200 per day or 2% per month whichever
is higher, subject by CESTAT
to maximum of basic demand amount against
such
orders
Penalty u/s 78 44.90 crores 63.70 crores 34.35 crores
e. Company has also received 2 orders from Central Excise & Service
Tax department for matters covered under above referred OIO
33/COMMR/2009 & 35/COMMR/2009 for subsequent period of FY 2008-09
amounting to Rs. 44.80 crores & Rs. 33.60 crores respectively,
interest as applicable & penalty equivalent to the basic demand.
Company is in the process of filing an appeal before CESTAT against the
impugned orders.
f. Company has received order from CIT (Appeals) for A.Y. 2004-05,
regarding appeal made by company against various dis- allowances made
by AO. Order was partially un-favoured to the company for which company
has filed appeal before ITAT, Pending disposal (Amount involved Rs.
9.12 lacs). Department has also filed appeal before ITAT for matters
decided against them by CIT(Appeals) (Amount Involved Rs. 30.89 lacs)
g. Company has received order from Income Tax appellate Tribunal (ITAT)
for A.Y. 2005-06, disallowing companys claim u/s 35D of Rs. 15.12
lacs, for which company has filed appeal before High Court pending
disposal.
h. For A.Y. 2006-07, AO has made various disallowances aggregating to
Rs. 9.5 crores, company had filed appeal against the same before CIT
(Appeals) & got the relief to the extent of Rs. 6.75 crores. For the
balance disallowance, company has filed appeal before ITAT, pending
disposal. Department has also filed appeal before ITAT for matters
decided against them by CIT (Appeals), pending disposal.
i. Company has received order from CIT (Appeals) for A.Y. 2007-08,
regarding appeal made by company against various dis- allowances made
by AO. Order was partially un-favoured to the company to the extent of
Rs.4.31 crores for which company has filed an appeal before ITAT,
pending disposal.
j. Income tax department has passed the orders of Re-assessment u/s 147
for A.Y. 2004-05 & A.Y. 2005-06, based on opinion framed by AO during
A.Y. 2006-07 for disallowance of depreciation claim on cost added in
block of "Plant & Machinery" for "Compensation for acquiring Right of
User in Land", "Right of Way" payments & "Crop Compensation". The dis-
allowance on account of the same was Rs. 3.46 crores & Rs. 7.50 crores
for A.Y. 2004-05 & A.Y. 2005-06 respectively. Being aggrieved by such
order, company has filed an appeal against the same before CIT(
Appeals), pending disposal.
k. Company has filed an appeal before CIT(A) against the order passed
u/s 201 relating to A.Y. 2009-10, pending disposal. The amount involved
is Rs. 1.32 lacs & interest as applicable.
3. Estimated amount of contracts remaining to be executed on capital
account and not provided for is Rs. 6,87,85,75,899/- (Previous year
6,33,80,95,036/-).
4. The amount of Capital Work in Progress (CWIP) mainly includes
expenses incurred Darod-Jafrabad Pipeline and other interconnections /
spur lines and Windmill project, which are under execution.
5. As per AS-16 "Borrowing Cost" issued by ICAI, the company has
capitalised the borrowing cost amounting to Rs.16,87,04,843/ -
(Previous year Rs. 21,31,66,629).
The cost of pipeline system is arrived at considering purchase value,
cost incurred for development of pipeline system, commissioning &
testing charge, interest cost, Civil Works and expenses directly
attributable for putting the pipeline to use.
6. During the year, Company has undertaken windmill project of 52.5
MW, out of which windmill of 6 MW has been successfully commissioned in
Maliya region of Rajkot District of Gujarat and the balance are
expected to be on stream during the financial year 2010-11.
7. The company had proposed transfer of Atul Spurline, Palej Spurline,
Dhuva Spurline and Thangadh Spurline to ÂGSPC Gas Company Limited, a
company promoted by ÂGujarat State Petroleum Corporation Limited to
undertake city gas distribution activity during the year 2009-10. The
assets would be transferred at Book Value and the consideration would
be discharged by way of cash or allotment of equity shares in ÂGSPC Gas
Company Limited. The matter is currently under process and is expected
to be completed in financial year 2010-11.
8. The company acquires RoU / RoW (Right of Use / Right of Way) before
the actual laying of the pipelines. RoU enables the company to obtain
perpetual right to use the land along the pipeline route for specified
purpose. The expenses involved in RoU / RoW include Consultancy fee for
route survey, reconnaissance survey, Non-refundable deposits paid to
various Statutory Authorities, Compensation for Crops etc. falling in
the way of pipeline route etc.
9. The Company has incurred expenditure in foreign currency for
Capital Goods Rs. NIL & Professional Services Rs. 1,05,694 (Previous
year being Rs. NIL & Rs.36,83,573), Spare parts Rs. 1,40,22,624
(Previous year Rs. 61,16,525) Training Expenses Rs. 1,07,977 (Previous
year Rs.13,10,013), and Others Rs. 2,09,794 (Previous year Rs.
4,10,507). Earning of the company in foreign currency is NIL (Previous
year Rs.NIL)
10. During the year there has been no further development with regard
to the ÂOther Claims Recoverable in Schedule ÂK.
11. The balances of sundry debtors, creditors, loans and advances and
deposits are subject to the confirmation by the parties and provision
for all liabilities is adequate in opinion of the company.
12. SEGMENT REPORTING
a. Business Segments:
The Company has identified and reported business segments taking into
account nature of product and services, differing risks and returns and
internal business reporting systems. The Companys principal business
is transportation of Gas through pipeline. Other business segment
includes generation of electricity through windmill.
b. Segment Revenue and Expense
Revenue and Expenses have been identified to a segment on the basis of
operating activities of the segment. Revenue and Expenses which relate
to common activities and are not allocable to segment on reasonable
basis have been disclosed as "Unallocable".
c. Segment Assets and Liabilities
Segment assets include all operating assets in respective segments
comprising of net fixed assets, Capital Work in Progress, current
assets, loans and advances. Segment liabilities include operating
liabilities and provisions.
d. The Company does not have geographical distribution of revenue
hence secondary segmental reporting based on geographi- cal locations
of its customers is not applicable to the Company.
e. As the Company was operating in only one segment till previous
year, previous year figures have not been disclosed.
13. Employee Stock Option Plans
During the Financial Year 2005-06, the company instituted ESOP-2005.
The Board of Directors and the Shareholders approved the plan in the
meeting held on 13-Oct-05 and 18-Oct-05 respectively, which provides
for the issue of 23,27,940 equity shares to the employees of the
company and of Gujarat State Petroleum Corporation Ltd. The
Compensation Committee administers ESOP-2005.
* Total options vested during the period under review does not include
the ESOPs which have been lapsed / cancelled before getting vested on
account of retirement / resignation etc. of employees.
**ESOPs which have lapsed / cancelled before getting vested during the
period under review on account of retirement / resignation etc. of
employees are included in "Total options lapsed / cancelled during the
period under review.
14. As at the balance sheet date Company has reviewed the carrying
amounts of its assets and found that there is no indication that those
assets have suffered any impairment loss. Hence no such impairment loss
has been provided
15. GSPL has applied to the "Petroleum & Natural Gas Regulatory Board"
in December 2008 for authorization of its Pipeline Network under
section 18(1) of the ÂPetroleum & Natural Gas Regulatory Board
(Authorizing Entities to Lay, Build, Operate or Expand Natural Gas
Pipelines) Regulations, 2008. The Board is currently processing the
application of the company.
16. Amount due for credit to Investor Education and Protection Fund
towards unclaimed interest warrant  Fixed Deposit from Public &
Unclaimed Dividend is NIL (Previous year NIL).
17. The company had made a Provision of Rs.5,08,78,172 for a proposed
salary revision till 31st March ,2009. Out of the same, an amount of
Rs. 1,74,96,507 has been paid /payable to the employees based on
implementation of Sixth Pay Commission Pay Scale and the balance of Rs.
3,33,81,655 has been reversed during the current financial year.
Mar 31, 2009
1. Corresponding figures of the previous period have been regrouped
and reclassified wherever considered necessary to compare to this
periods figures.
2. Contingent Liability
a. Bank Guarantee/Letter of Credit issued and outstanding to the
extent of Rs. 4,00,00,000 (Previous year Rs. 1,86,30,000)
b. Claims against the Company not acknowledged as debt of gas
transportation charges is Rs. NIL (Previous year 15,18,13,951/-)
against which the Company has paid Rs. NIL (Previous year
1,31,39,756/-) under protest and has included the amount so paid under
other current assets.
c. Claims against the Company by certain land owners seeking
enhancement of compensation in respect of RoU acquired by the company
is Rs. 99,33,591/- (Previous year Rs. 13,83,000/-)
d. Excise Department had issued a demand on Company towards service
tax dues as "Recipient of Services of Consulting Engineer from
Non-Resident" by the Company during the period FY 2002-03, 2003-04 &
2004-05. Company filed an appeal against the order with Commissioner of
Central Excise (Appeals) & got the order in favour. However, department
has filed an appeal against the order of CCE (Appeals) before CESTAT.
The amount under adjudication is as under:
i. Service tax (Including Education Cess) of Rs. 17,90,459/-
ii. Interest under section 75 of the Finance Act
iii. Penalty of Rs. 100/- per day till failure to pay such service tax
under section 76 of the Finance Act
iv. Penalty of Rs. 1000/-under section 77 of the Service Tax Rules,
1994 Further Penaltyof Rs. 17,90,459/- under section 78 of the Finance
Act 1994
f. Company has received order from Income Tax Appellate Tribunal
(FIAT) for A.Y. 2005-06, disallowing Companys claim u/s 35D of Rs.
15.12 lacs, for which Company has filed appeal before High Court
pending disposal.
g. During the year, Income Tax assessment proceeding for A.Y. 2006-07
was completed. AO has made various disallowances aggregating to Rs. 9.5
crores, Company has filed appeal against the same to CIT (Appeals)
pending disposal.
3. Estimated amount of contracts remaining to be executed on capital
account and not provided for is Rs.633,80,95,036/- (Previous year
450,44,59,124 /-).
4. The amount of Capital Work in Progress (CWIP) mainly includes
expenses incurred on Bhadbhut Gana Pipeline, Morbi Mundra Pipeline,
Gana Hadala Pipeline, Darod Jafrabad Pipeline and other
interconnections / spur lines, which are under execution.
The cost of pipeline system is arrived at considering purchase value,
cost incurred for development of pipeline system, commissioning &
testing charge, interest cost, civil works and expenses directly
attributable for putting the pipeline to use.
5. The Company proposes to transfer during the year 2009-10 Atul
Spurline, Palej Spurline, Dhuva Spurline and Thangadh Spurline to GSPC
Gas Company Limited, a Company promoted by Gujarat State Petroleum
Corporation Limited to undertake city gas distribution activity. The
assets would be transferred at Book Value and the consideration would
be discharged by way of cash or allotment of equity shares in GSPC Gas
Company Limited. The matter is currently under process.
6. The Company acquires RoU / RoW (Right of Use / Right of Way) before
the actual laying of the pipelines. RoU enables the Company to obtain
perpetual right to use the land along the pipeline route. The expenses
involved in RoU / RoW include Consultancy Fee for route survey,
reconnaissance survey, non-refundable deposits paid to various
Statutory Authorities, Compensation for Crops etc. falling in the way
of pipeline route etc.
7. As the Company is not engaged in any business of manufacturing or
trading activity the information as required under Pan II Clause 4C of
schedule VI to the Companies Act, 1956 in respect of Licensed Capacity,
Capacity-utilization, Installed Capacity is not applicable.
8. The Company has incurred expenditure in foreign currency for
Capital Goods Rs. NIL & Professional Services Rs. 36,83,573 (previous
year corresponding figures being Rs. NIL & Rs. 21,25,124), Spare parts
Rs. 61,16,525 (previous year Rs. 72,428) Training Expenses Rs.
13,10,013 (previous year Rs. 2,43,899), Traveling Rs. NIL (previous
year Rs. NIL) and Others Rs. 4,10,507 (previous year Rs. 67,51,608).
Earning of the company in foreign currency is NIL.(Previous year
Rs.NIL)
9. During the year there has been no further development with regard
to the Other Claims Recoverable in Schedule J.
10. The balances of sundry debtors, creditors, loans and advances and
deposits are subject to the confirmation by the parties and provision
for all liabilities is adequate in opinion of the Company.
11. The Company has not received any memorandum (as required to be
filed by the suppliers with the notified authority under the Micro,
Small and Medium Enterprises Development Act, 2006) claiming their
status as on 31st March, 2009 as micro, small or medium enterprises.
Consequently the amount paid/payable to these parties could not be
ascertainable.
12. Provision for Gratuity Liability:
The following table sets out the status of the gratuity plan as
required under Accounting Standard 15 (Revised) on "Employee Benefit".
13. Employee Stock Option Plans
During the Financial Year 2005-06, the company instituted ESOP-2005.
The Board of Directors and the Shareholders approved the plan in the
meeting held on 13-Oct-05 and 18-Oct-05 respectively, which provides
for the issue of 23,27,940 equity shares to the employees of the
company and of Gujarat State Petroleum Corporation Ltd. The
Compensation Committee administers ESOP-2005.
"Total options vested during die year does not include die ESOPs which
have been lapsed / cancelled before getting vested on account of
retirement / resignation etc. of employees".
"ESOPs which have lapsed / cancelled before getting vested on account
of retirement / resignation etc. of employees are included in "Total
options lapsed / cancelled during the year".
14. Segment Reporting
The company primarily operates in a single segment of Natural Gas
Business, which involves transportation of natural gas from sources of
supply to the end customers. Segment reporting as required under
Accounting Standard 17 issued by the Institute of Chartered Accountants
of India is not applicable.
15. Related Party Transactions:
As per the Accounting Standard -18 on "Related Party disclosures"
issued by the Institute of Chartered Accountants of India, the
transactions entered into with the related parties of the Company arc
as follows:
16. The Company has provided for salary arrears on account of pending
implementation of Sixth Pay Commission scales for the period from
January 2006 to June 2006 and Salary revision on the basis of GAIL
Scales from July, 2006 to March, 2009.
Increase in the Net Deferred Tax Liability of Rs. 144,895,200 has been
charged to P&L Account.
17. As at the balance sheet date Company has reviewed the carrying
amounts of its assets and found that there is no indication that those
assets have suffered any impairment loss. Hence no such impairment loss
has been provided.
18. GSPL has applied to the Petroleum & Natural Gas Regulatory Board
in December 2008 for authorization of its Pipeline Network under
section 18(1) of the Petroleum & Natural Gas Regulatory Board
(Authorizing Entities to Lay, Build, Operate or Expand Natural Gas
Pipelines) Regulations, 2008. The Board is currently processing the
application of the Company.
Mar 31, 2008
1. Corresponding figures of the previous period have been regrouped
and reclassified wherever considered necessary to compare to this
periods figures.
2. Contingent Liability
a. Bank Guarantee issued and outstanding to the extent of Rs.
1,86,30,000 (Previous year Rs. 4,86,30,000).
b. Claims against the company not acknowledged as debt of gas
transportation charges is Rs.15,18,13,951/- (Previous year
7,75,01,421/-) against which the company has paid Rs. 1,31,39,756/-
(Previous year 1,31,39,756/-) under protest and has included the amount
so paid under other current assets.
c. Claims against the company by certain land owners seeking
enhancement of compensation in respect of RoU acquired by the company
is Rs. 13,83,000/- (Previous year Rs. 394,12,33,991/-).
d. Excise Department has issued a demand on Company towards service
tax dues on Foreign Exchange expenditure incurred by the company during
the period FY 2002-05. Company has filed an appeal against the order
witli Commissioner of Central Excise (Appeals).
The amount demanded is as under:
i. Service tax of Rs. 17,87,245/-
ii. Interest under section 75 of the Finance Act
iii. Penalty of Rs. 100/r per day till failure to pay such service tax
under section 76 of the Finance Act
iv. Penalty of Rs. 1000/- under section 77 of the Service Tax Rules,
1994
v. Further Penalty of Rs. 17,90,459/- under section 78 of the Finance
Act 1994
3. An amendment has been made by Finance Act 2008 to section 115JB in
Income Tax Act, with retrospective effect from 1 st April, 2001, in
respect of deferred tax which states that while computing book profit
under section 115JB of the Act, the net profit as per profit and loss
account has to be increased / decreased by deferred tax if it is
debited / credited to profit & loss account as the case may be.
Accordingly the additional (MAT) tax liability of Rs. 1,21,70,917 and
Rs. 92,99,167 for AY 2004-05 and AY 2005-06 respectively has been
provided in the current year.
4. The company has raised 37260 lacs through public issue of shares in
2005-06 and has fully utilized Rs. 37260 lacs (including Issue Expenses
of Rs. 1404 lacs) till 31st March, 2008 for projects payments.
5. Estimated amount of contracts remaining to be executed on capital
account and not provided for is Rs. 4,504,459,124/- (Previous year
1,044,783,621 /-).
6. The amount of Capital Work in Progress (CWIP) mainly includes
expenses incurred on Torrent Power Spurline, Bhadbhut Gana Pipeline,
Rajkot Jamnagar Pipeline, Padamla Godhara, Morbi Mundra Pipeline, Darod
Jafrabad Pipeline and other interconnections / spur lines, which are
under execution.
7. The company has transferred during the year 2007-08 Ambapur
Gandhinagar Spurline, Kalol Himmatnagar Spurline and Kalol Mehsana
Spurline to Sabarmati Gas Limited, a company promoted by Gujarat
State Petroleum Corporation Limited and Bharat Petroleum Corporation
Limited to undertake city gas distribution activity. The assets have
been ttansferred at Book Value and the consideration would be
discharged by way of allotment of equity shares in Sabarmati Gas
Limited.
8. The company acquires RoU / R&W (Right of Use / Right of Way) before
the actual laying of the pipelines. RoU enables the company to obtain
perpetual right to use the land along the pipeline route. The expenses
involved in RoU / RoW include Consultancy fee for route survey,
reconaissance survey, Non-refundable deposits paid to various Statutory
Authorities, Compensation for Crops etc. falling in the way of pipeline
route etc. Although this is a perpetual right, the expenditure is
written off along with pipeline assets out of prudence.
9. As the company is not engaged in any business of manufacturing or
trading activity the information as required under Part II Clause 4C of
schedule VI to the Companies Act, 1956 in respect of Licensed Capacity,
Capacity-utilization, Installed Capacity is not applicable.
10. The Company has incurred expenditure in foreign currency for
Capital Goods Rs. NIL & Professional Services Rs. 21,25,124 (previous
year corresponding figures being Rs. 88,932 & Rs. 73,46,638), Spare
parts Rs. 72,428 (previous year Rs. 1,15,430) Training Expenses Rs.
2,43,899 (previous year Rs. 5,91,476), Traveling Rs. NIL (previous year
Rs. NIL) and Others Rs. 67,51,608 (previous year Rs. NIL).
11. Adjustment disclosed in Schedule E (Fixed Assets) are due to
excess/ short capitalization during previous years and consequent
provision for depreciation.
12. During the year there has been no further development with regard
to the Other Claims Recoverable in Schedule J.
13. The balances of sundry debtors, creditors, loans and advances and
deposits are subject to the confirmation by the parties and provision
for all liabilities is adequate in opinion of the company.
14. No suppliers to the company have claimed classification under SSI
status.
14. Segment Reporting
The company primarily operates in a single segment of Natural Gas
Business, which involves transportation of natural gas from sources of
supply to the end customers. Segment reporting as required under
Accounting Standard 17 issued by the Institute of Chartered Accountants
of India is not applicable.
15. The Board of Directors of Company has approved salary revision with
effect from July, 2006. As the salary revision is pending
implementation, a provision for the same upto the period ended 31st
March, 2008 has been made in the books of accounts.
Mar 31, 2007
1. Corresponding figures of the previous period have been regrouped and
reclassified wherever considered necessary to compare to this period's
figures.
2. Contingent Liability
a. Letter of Credit issued and outstanding to the extent of Rs. NIL
(Previous year Rs. NIL). Bank Guarantee issued and outstanding to the
extent of Rs. 48,630,000/- (Previous year Rs. 18,630,000/-)
b. Claims against the company not acknowledged as debt of gas
transportation charges is Rs.77,501,421/- (Previous year
Rs. 47,845,827/-) against which the company has paid Rs. 13,139,756/-
(Previous year Rs. 13,139,756/-) under protest and has included the
amount so paid under other current assets.
c. Claims against the company by certain land owners seeking
enhancement of compensation in respect of RoU acquired by the company
is Rs. 3,941,233,991/- (Previous year Rs. 3,951,201,461/-)
3. The company has raised 37260 lacs through public issue of shares in
2005-06 and utilized Rs. 29242 lacs (including Issue Expenses of
Rs. 1404 lacs) till 31.03.07 for projects payments and balance of
Rs. 8018 lacs deposited in short term deposits with banks.
4. Estimated amount of contracts remaining to be executed on capital
account and not provided for is Rs. 1,044,783,621/- (Previous year
Rs. 4,159,370,510/-).
5. The amount of Capital Work in Progress (CWIP) mainly includes
expenses incurred on Torrent Power Spurline, NTPC Jhanore Pipeline,
Bhadbhut Gana Pipeline, Rajkot Jamnagar Pipeline and other
interconnections/spur lines, which are under execution.
The cost of pipeline system is arrived at considering purchase value,
cost incurred for development of pipeline system, commissioning &
testing charge, interest cost, Civil Works and expenses directly
attributable for putting the pipeline to use.
6. The company proposes to transfer during the year 2007-08 Ambapur -
Gandhinagar Spurline, the assets related to Kajol - Himmatnagar
Spurline (Asian Spurline/DRS System and Oracle/City Tiles PE Network)
and the assets related to Kalol - Mehsana Spurline (Ambavpura - Kadi -
Chhatral Spurline) to `Sabarmati Gas Limited', a company promoted by
`Gujarat State Petroleum Corporation Limited' and 'Bharat Petroleum
Corporation Limited' to undertake city gas distribution activity. The
assets would be transferred at Book Value and the consideration would
be discharged by way of allotment of equity shares in `Sabarmati Gas
Limited'.
7. The company acquires RoU/RoW (Right of Use/Right of Way) before the
actual laying of the pipelines. RoU enables the company to obtain
perpetual right to use the land along the pipeline route. The expenses
involved in RoU/RoW include Consultancy fee for route survey,
reconaissance survey, Non-refundable deposits paid to various Statutory
Authorities, Compensation for Crops etc. falling in the way of pipeline
route etc. Although this is a perpetual right, the expenditure is
written off along with pipeline assets out of prudence.
8. As the company is not engaged in any business of manufacturing or
trading activity the information as required under Part II Clause 4C of
schedule VI to the Companies Act, 1956 in respect of Licensed Capacity,
Capacity-utilization, Installed Capacity is not applicable.
9. The Company has incurred expenditure in foreign currency for Capital
Goods Rs. 88,932/- & Professional Services Rs. 7,346,638/- (Last year
corresponding figures being Rs. NIL & Rs. 48,544,167/-), Spare parts
Rs. 115,430/- (Last year Rs. NIL) Training Expenses Rs. 591,476/-
(Last year Rs. 298,241/- and Travelling Rs. NIL (Last year
Rs. 225,358/-).
10. Adjustment disclosed in Schedule `D' (Fixed Assets) are due to
excess/short capitalization during previous years and consequent
provision for depreciation.
11. During the year there has been no further development with regard
to the `Other Claims Recoverable' in Schedule T.
12. The balances of sundry debtors, creditors, loans and advances and
deposits are subject to the confirmation by the parties and provision
for all liabilities is adequate in opinion of the company.
13. No suppliers to the company have claimed classification under SSI
status.
14. Stock Option Plans
(i) ESOP
During the Financial Year 2005-06, the company instituted ESOP-2005.
The Board of Directors and the Shareholders approved the plan in the
meeting held on 13th October 2005 and 18th October 2005 respectively,
which provides for the issue of 2327940 equity shares to the employees
of the company and of Gujarat State Petroleum Corporation Ltd. The
Compensation Committee administers ESOP-2005.
Number of Options granted, vested, exercised and lapsed under ESOP
Part-1 during the year
Year ended 2007 Year ended 2006
Options granted NIL 764000
Vested 764000 NIL
Exercised 388050 NIL
Lapsed/Cancelled 80000 NIL
15. Segment Reporting
The company primarily operates in a single segment of Natural Gas
Business, which involves transportation of natural gas from sources of
supply to the end customers. Segment reporting as required under
Accounting Standard 17 issued by the Institute of Chartered Accountants
of India is not applicable.
Mar 31, 2006
1. Corresponding figures of the previous period have been regrouped and
reclassified wherever considered necessary to compare to this period's
figures.
2. Contingent Liability
a. Letter of Credit issued and outstanding to the extent of Rs. NIL
(Previous year Rs. 4,26,79,706).
b. Claims against the company not acknowledged as debt of gas
transportation charges is Rs.4,78,45,827/- (Previous year
3,04,10,995/-) against which the company has paid Rs.1,31,39,756/-
(Previous year 1,31,39,756/-) under protest and has included the amount
so paid under other current assets.
c. Claims against the company by certain land owners seeking
enhancement of compensation in respect of RoU acquired by the company
is Rs. 395,12,01,461.
3. The company has raised Rs. 37260 lacs through public issue of shares
during the year and utilized Rs. 16260 lacs (including Issue Expenses
of Rs. 1404 lacs) till 31.03.06 for projects payments and balance of
Rs. 21000 lacs deposited in short term deposits with banks.
4. Estimated amount of contracts remaining to be executed on capital
account and not provided for is Rs. 415,93,70,510 (Previous year
340,35,53,689/-).
5. The amount of Capital Work in Progress (CWIP) mainly includes
expenses incurred on Mora Vapi, Anand-Rajkot, Kalol Himmatnagar, Kalol
Mehsana and other interconnections/spur lines, which are under
execution.
The cost of project is arrived at considering purchase value, cost
incurred for development of terminal, commissioning & testing charge,
interest cost, civil works and expenses directly attributable for
putting the facilities to use.
6. The company acquires RoU/RoW (Right of Use/Right of Way) before the
actual laying of the pipelines. Roll enables the company to obtain
perpetual right to use the land along the pipeline route. The expenses
involved in RoU/RoW include Consultancy fee for route survey,
reconaissance survey, Non-refundable deposits paid to various Statutory
Authorities, Compensation for Crops etc. falling in the way of pipeline
route etc. Although this is a perpetual right, the expenditure is
written off along with pipeline assets out of prudence.
7. As the company is not engaged in any business of manufacturing or
trading activity the information as required under Part II Clause 4C of
schedule VI to the Companies Act, 1956 in respect of Licensed Capacity,
Capacity-utilization, Installed Capacity is not applicable.
8. The Company has incurred expenditure in foreign currency for Capital
Goods Rs. NIL & Professional Services Rs. 4,85,44,167 (Last year
corresponding figures being Rs. NIL & Rs. 57,72,030), Spare parts Rs.
NIL (Last year Rs. 9,17,543) Training Expenses Rs. 2,98,241 (Last year
Rs. 9,92,790) Traveling Rs. 2,25,358 (Last year Rs. 5,02,482) and
Subscription for periodicals Rs. NIL (Last year Rs. 12,633).
9. Adjustment disclosed in Schedule `D' (Fixed Assets) are due to
excess/short capitalization during previous years and consequent
provision for depreciation.
10. During the year there has been no further development with regard
to the `Other Claims Recoverable' in Schedule T.
11. The balances of sundry debtors, creditors, loans and advances and
deposits are subject to the confirmation by the parties and provision
for all liabilities is adequate in opinion of the company.
12. No suppliers to the company have claimed classification under SSI
status.
13. The reconciliation of IPO refund accounts is in process.
14. Stock Option Plans
(i) ESOP
During the Financial Year 2005-06, the company instituted ESOP-2005.
The Board of Directors and the Shareholders approved the plan in the
meeting held on 13-Oct-05 and 18-Oct-05 respectively, which provides
for the issue of 23,27,940 equity shares to the employees of the
company and of Gujarat State Petroleum Corporation Ltd. The
Compensation Committee administers ESOP-2005.
15. Segment Reporting
The company primarily operates in a single segment of Natural Gas
Business, which involves transportation of natural gas from sources of
supply to the end customers. Segment reporting as required under
Accounting Standard 17 issued by the Institute of Chartered Accountants
of India is not applicable.
Mar 31, 2005
1. Corresponding figures of the Previous year have been regrouped
/reclassified and rearranged wherever necessary to make them comparable
with those of current year..
2. Contingent Liability
a. Letter of Credit issued and outstanding to the extent of Rs.
4,26,79,706/- (Previous year Rs. 3,88,68,138/-).
b. Claims against the company not acknowledged as debt of gas
transportation charges is Rs.3,04,10,995/- (Previous year Rs.
2,02,99,366/-) against which the company has paid
Rs.l,3l,39,756/-(Previous year Rs. 93,16,654/-) under protest and has
included the amount so paid under other current assets.
3. Estimated amount of contracts remaining to be executed on capital
account and not provided for is Rs. 340,35,53,689/- (Previous year Rs.
151,80,52,151/-).
4. The amount of Capital Work in Progress (CWIP) mainly includes
expenses incurred on Mora Vapi, Ambapur Gandhinagar Spur, Anand-Rajkot,
Kalol Himmatnagax, Anklav Duvaran, Kalol Mehsana and other
interconnections/spur lines, which are under execution.
5. The Company commissioned the following major Trunk Pipelines during
the year.
6. The company acquires RoU / RoW (Right of Use / Right of Way) before
the actual laying of the pipelines. RoU enables the company to obtain
perpetual right to use the land along the pipeline route. The expenses
involved in RoU / RoW include Consultancy fee for route survey,
reconaissance survey, Non-refundable deposits paid to various Statutory
Authorities. Compensation for Crops etc falling in the way of pipeline
route etc Although this is a perpetual right, the expenditure is
written off along with pipeline assets out of prudence.
7. Non-refundable Deposits made with concerned authorities for railway
crossings, etc have been accounted for under the CWIP.
8. As the company is not engaged in any business of manufacturing or
trading activity the information as required under Part II Clause 4C of
schedule VI to the Companies Act, 1956 in respect of Licensed Capacity,
Capacity-unlization, Installed Capacity is not applicable.
10. The Company has incurred expenditure in foreign currency for
Capital Goods Rs. NIL & Professional Services Rs. 0.58 crores (Last
year corresponding figures being Rs. 0.03 crores & Rs. 1.70 crores),
Spare parts Rs. 9,17,543 (Last year Rs. NIL), Training Expenses Rs.
9,92,790/- (Last year Rs. 74,723/-), Travelling Rs. 5,02,482/- (Last
year Rs. 1,91,386/-) & Subscription for periodicals Rs. 12,633 (Last
year Rs. Nil /-).
11. During the year, Rs. 3,62,54,254/- is regrouped from Fixed Assets
to Inventory- subsequent to project closures & Project Material
Reconciliation .
12 Adjustment disclosed in Schedule D (Fixed Assets) arc due to
excess/ short capitalization during previous years and consequent
provision for depreciation.
13. During the year there has been no further development with regard
to the Other Claims Recoverable" in Schedule
14. The balances of sundry debtors, creditors, loans & advances and
deposits are subject CO the confirmation.
15. No suppliers to the company have claimed classification under SSI
status.
Mar 31, 2004
I. Corresponding figures of the Previous year have been regrouped and
reclassified wherever considered necessary to confirm to this year"
figures.
2. Contingent Liability
a.Ixtter of Credit issued and outstanding to the extent of Rs.
388.68,138/-.
b. Claims against the company acknowledged as debt of gas transportaion
charges is Rs.2,02,99,366/- [Previous year rs.9025316/-) against which
the company has paid
Rs.93,l6,654/-(Previou); year Rs.7359257/-) under protest and has
included the amount so paid under oilier current assets.
3. Estimated amount of contracts remaining to be executed on capital
account and not provided for is Rs. 151,80,52,151/- (last year Rs.
256,92,64,511/-).
The amount of Capital Work in Progress (CWIP) mainly includes expenses
incurred on Baroda-Ahmedabad Kalol, Mora-Sajod, and other
interconnections/spur lines, which are under execution.
4. The company acquires RoU / RoW (Right of Use / Right of Way) before
the actual laving of the pipelines. RoU enables the company to obtain
perpetual right to use the land along the pipeline route. The expenses
involved in RoU / RoW include Consultancy fee for route survey,
reconaissance survey. Non-refundable deposits paid to various Statutory
Authorities, Compensation for Crops etc. falling in the way ot pipeline
route etc. Although this is a perpetual right, the expenditure is
written off along with pipeline assets out of prudence.
Non-refundable Deposits made with concerned authorities for railway
crossings, etc have been accounted for under the CWIP.
5. As the company is not engaged in any business of manufacturing or
trading activity the information as required under Part II Clause 4C of
schedule VI to the Companies Act, 1956 in respect of Licensed Capacity,
Capacity-utilization, Installed Capacity is no applicable.
6. Balances arc subject to the confirmation by the parties and
provisions for all liabilities is adequate in opinion of the company.
7. No suppliers to the company have claimed classification under SSI
status.
8. Adjustment due to excess/ short capitalization during previous
years and consequent provision for. depreciation .
9. Provision for current tax is made after taking into consideration
bene fits admissible under the provisions of the Income tax Act,196l
Deferred tax resulting from timing difference" is accounted for using
the tax rates and laws that have been enacted as on the balance sheet
date.The deferred tax asset is recognised and carried forward only to
the extend that there is a reasonable certainny that the assets will be
realised in future.
10. The company has Bled an FIR against a person in relation to
misappropriation of funds to the tune of Rs.7,14,000 /- who was
previously assisting in the accounting function of the company The same
has been disclosed as Other Claims Recoverable in Schedule(-).