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Directors Report of Indraprastha Gas Ltd.

Mar 31, 2017

To

The Members

The Directors have pleasure in presenting the Eighteenth Annual Report and the Company’s audited financial statements for the financial year ended March 31, 2017.

Physical Performance

During the year, the Company recorded sales as under:

Figures in Million Standard Cubic Meters (mmscm)

Product

For the Year 31 March 2017

For the Year 31 March 2016

% Growth (YoY)

Compressed Natural Gas (CNG)

1268.42

1123.00

13

Piped Natural Gas (PNG)

406.09

342.05

19

Total

1674.51

1465.05

14

Average Sales Per day (mmscmd)

4.59

4.00

Financial Results

The Company’s financial performance for the year ended March 31, 2017 is summarised below:

(Rs. in Crores)

Items

For the Year 31 March 2017

For the Year 31 March 2016

Net Sales & Other Income

3880.00

3715.68

Profit before Depreciation & Tax

1027.76

794.71

Depreciation

167.07

156.25

Profit before tax

860.69

638.46

Provision for tax

289.62

219.41

Profit after tax

571.07

419.05

Other comprehensive income

(0.86)

(0.35)

Total comprehensive income

570.21

418.70

Retained Earnings - opening balance

2072.93

1796.95

Add : Profit for the period

571.07

419.05

Profit available for appropriations

2644.00

2216.00

Appropriations:

Dividends including Interim Dividend

133.00

84.00

Corporate dividend tax

27.08

17.10

Transferred to general reserve

-

41.62

Other comprehensive income recognised directly in retained earnings

(0.86)

(0.35)

Retained Earnings - closing balance

2483.06

2072.93

Financial Review

During the year, the gross turnover of the Company increased from Rs. 4052.14 Crores in 2015-16 to Rs. 4205.43 Crores in 2016-17. The increase of 3.8% in gross turnover, despite an increase of 14% in sales volume, is mainly on account of reduction in the selling price of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG)-domestic, which was reduced in line with the reduction in the APM prices of input gas which was passed on to the customers, by reducing the selling price of CNG and PNG-domestic. Further, the selling price of gas to industrial and commercial customers was reduced on account of reduction in the price of Term-RLNG during the year.

The Profit after tax (PAT) increased by 36.28% from Rs. 419.05 Crores in 2015-16 to Rs. 571.07 Crores in 2016-17.

The Company has prepared the Consolidated Financial Statements also which includes the Company’s share of profit in its Associates combined on a equity method in accordance with Ind AS 28 - “Investment in Associates and Joint Ventures”. The Consolidated PAT during FY 2016-17 is Rs. 606.34 Crores against Rs. 457.88 Crores in the previous year.

Dividend

Your Directors are pleased to recommend a dividend of 50% (Rs. 5.00 per share) in addition to the interim dividend of 35% (Rs. 3.50 per share) paid during the FY 2016-17. The proposed dividend, including corporate dividend tax, would absorb Rs. 84.25 Crores. The outflow of interim dividend, including corporate dividend tax, was Rs. 58.98 Crores.

Performance Highlights Compressed Natural Gas Business

During the year, your Company further expanded its CNG infrastructure and commissioned 81 new CNG Stations (including 78 stations at retail outlets of Oil Marketing Companies) and thereby enhancing its installed compression capacity to 71 Lakhs kg/day in March 2017.

Your Company launched the pilot project to run two wheelers on Compressed Natural Gas (CNG), as part of its endeavour to curb pollution, thereby increasing the trust of customers in CNG as a “cleaner fuel”.

Your Company has also taken an initiative to promote the use of CNG and attract customers during non-peak hours, by providing special incentive like discount on the selling price, during non-peak hours in the night time. The Company had total 421 CNG stations as on March 31, 2017 catering to over 9,75,000 vehicles including 5,78,000 private vehicles.

Piped Natural Gas Business

PNG - Domestic Connections

Your Company has increased its steel pipeline network from 707 kms in FY 2015-16 to 778 kms in FY 2016-17 and its MDPE network from 9443 kms in FY 2015-16 to 9940 kms in FY 2016-17.

During the year, your Company provided 60,867 PNG connections in Delhi and 45,021 PNG connections in the NCR and the total number of connections went up from 6,36,318 in March 2016 to 7,42,206 in March 2017. It is noteworthy that your Company provided 1,05,888 domestic PNG connections in Financial Year 2016-17 which is the best performance of the Company. The increase in customer base from networked areas / colonies was achieved with the help of aggressive multi-media marketing and publicity drive. The use of innovative street level marketing, combined with print and popular FM channels, enabled your Company to tap additional customers from areas which were considered saturated. An increased customer base demands an infusion of information technology for more efficient operations. The conventional methods of data storage and documentation are in the process of replacement with modern IT tools. Your Company has successfully completed the testing phase of field mobility technology to replace convenient method of paper documentation at the time of new connections and visit at customer premises for operation & maintenance activities. These modules have helped to infuse information technology in all its customer operations to bring better efficiency, by sharing real time information within IGL and with our customers.

Your Company has increased its focus on 24 X 7 customer care centre for customer query/complaints redressal and additional call centre has also started for reducing the waiting time. The grievances are being monitored through CRM system and efforts are made to provide the resolution within defined timelines.

To enhance payment collection mode, your Company has started accepting payments through various options like E-Wallets, NEFT, QR Codes, Debit Card / Credit Card, Net Banking etc. Collection of smart meter reading is carried out through customized mobile application wherein photograph of meter installed at customer location is captured for improving billing accuracy. Your Company is also in process of improving the existing smart meter reading application with enhanced features. Apart from this, your Company is in process of introducing unique concepts like spot billing, self-billing, AMR, prepaid meters etc. to enhance further customer satisfaction.

Mobile application “IGL CONNECT” has been launched to enhance customer interface. The customer can download the app and can avail host of online facilities like change in profile, submit meter reading, view last invoices, make payments, lodge a request etc. The mobile application is being upgraded with new features.

PNG - Commercial & Industrial

PNG is gradually emerging as the key energy source for industrial and commercial users offering immense opportunities for growth. Your Company has plans to exploit significant demand potential for gas from industrial and commercial consumers in Delhi and NCR - Gautam Budh Nagar (Noida, Greater Noida) and Ghaziabad.

During the financial year 2016-17, your Company maintained its focus on the Industrial & Commercial segment as one of the potential growth areas in the forthcoming years. In spite of stiff competition from alternate fuels prices, like Furnace oil (FO)/ Diesel/ LPG, which have come down drastically due to lower crude prices, there was a growth of around 8% under industrial and around 6% under commercial segment in sales volume during financial year 2016-17. In terms of number of customers industrial customers increased from 821 in March, 2016 to 962 in March, 2017 and commercial customers increased from 1811 in March, 2016 to 1908 in March, 2017.

In addition, industrial and commercial segments in NCR towns of Noida, Greater Noida and Ghaziabad offer huge potential in the next few years, as PNG network is still being laid in few belts in these areas and many such units are still to be connected.

Your Company has already expanded its pipeline network to most of the major industrial areas of Delhi and the NCR i.e. Gautam Budh Nagar (Noida, Greater Noida) and Ghaziabad. Pipeline laying activities are underway in the remaining industrial areas in the NCR.

Associate Companies Central U.P. Gas Limited (CUGL)

CUGL is engaged in City Gas Distribution in the cities of Kanpur, Bareilly, Jhansi and Unnao in Uttar Pradesh. Your Company holds 50% of the paid-up equity share capital of CUGL.

CUGL achieved a gross turnover of Rs. 240.52 Crores and profit after tax of Rs. 48.37 Crores for the financial year ended March 31, 2017.

Maharashtra Natural Gas Limited (MNGL)

MNGL is in City Gas Distribution business in Pune, Pimpri, Chinchwad, Chakan, Talegaon and Hinjewadi in the State of Maharashtra. Your Company holds 50% of paid-up equity share capital of MNGL.

MNGL achieved a gross turnover of Rs. 531.16 Crores and profit after tax of Rs. 76.29 Crores for the financial year ended March 31, 2017.

The statement containing the salient features of the financial statement of Company’s Associates pursuant to the first proviso to sub-section (3) of Section 129, is appended as Annexure 1 to this Report.

Future Outlook

The Company has been expanding its area of operations in new geographical areas.

During the financial year 2016-17, your Company got authorization through bidding process from PNGRB for development of CGD network in the geographical area of Rewari in Haryana. The Company has already started sale of gas in this area. The sales volume in this area would increase gradually with the rollout of increased infrastructure.

Recently, your Company has received permission, as of now from Director of Industries & Commerce, Haryana to lay CGD network in Gurugram in the area lying between west side of Sohna Road and National Highway-8 of Gurugram. The entry of your Company in Gurugram offers vast potential of business growth. However, the matter of authorization for cities of Gurugram and Faridabad is sub judice in Hon’ble Supreme Court of India for final disposal.

Your Company has also participated in the bidding process of PNGRB for the geographical areas of Karnal, Ambala & Kurukshetra District and Bulandshar (part district).

Besides new geographies, your Company has been expanding its infrastructure in existing areas to consolidate its position for increased sales volume growth.

Your Company has earmarked Rs. 600 Crores for the FY 2017-18 for capital expenditure.

During the year FY 2016-17, your Company entered into collaboration with a renowned market player in Iran to introduce retrofittment of CNG kit in the 2-wheelers segment. The Company has completed the pilot project of installation of CNG kit in 2-wheelers successfully. Your Company has plans to carry forward this project further in a phased manner.

It is also expected that in order to further strengthen the Public Transport system in Delhi, the Government of NCT of Delhi has an aggressive plan to introduce additional buses, which would add volume to sales growth.

It is also expected, that the price differential of CNG versus alternate liquid fuel will continue to drive the conversion of petrol driven private vehicles to CNG mode. The introduction of more CNG variant models by car manufacturers would further add to CNG volumes.

MoP&NG has given target of 3 lacs connections to the Company for FY 2017-18. The Company is working aggressively to meet the target. The Company has targeted defence areas to provide PNG Connections which would provide good number of PNG connections and help in achieving targets.

Your Company has innovative plans to expand its PNG customer base as a part of mission of expanding PNG launched by the Ministry of Petroleum & Natural Gas, Government of India. Expanding PNG connectivity into newly constructed housing units in Gautam Budh Nagar by builders / government will be given priority to register ambitious growth. Though there has been a slack in demand for new residential units, which is a cause for concern in the short term, it is expected that FY 2017 -18 will witness some surge in demand from prospective buyers of properties. This demand recovery will enable your Company to push for aggressive targets for PNG connections in new residential projects. New high volume industrial & commercial customers will continue to be the target for achieving higher growth by your Company.

The landscape of CGD sector particularly in Delhi and NCR is changing quite rapidly in a dynamic environment with evolving regulatory regime and rising customer’s expectations. There has been a growing concern on the pollution levels in Delhi and NCR in the past months due to which various landmark judgments have been made by Judiciary & Statutory Authorities. Various Statutory Authorities like Environment Pollution Control Authority (EPCA), Centre for Science & Environment (CSE), Delhi Pollution Control Committee (DPCC) & Uttar Pradesh Pollution Control Board (UPPCB) are working in a synchronized manner to curb the air pollution levels further in Delhi and NCR, wherein one such proposed initiative is to ban use of Furnace Oil (FO) and Petcoke by industries in Delhi and NCR.

In this regard, your Company has made plans to take advantage of the recent opportunities under industrial segment in NCT of Delhi which can witness improvement in PNG volumes. Endeavours will be made to realize full market potential by tapping gas volumes from industries, which will come up after notification to ban use of Furnace Oil (FO) and Petcoke in NCT of Delhi and NCR.

Corporate Strategy

The Company has initiated a comprehensive internal exercise to analyse evolving business environment and technological changes that can affect future business of your Company. Various options for growth and diversification are being considered to ensure sustained long term growth for its stakeholders. It will be a continuing exercise under its Corporate Strategy Department.

Information Technology

Your Company being leader amongst major CGD companies in India is committed to establish the latest technology driven IT landscape to render world class customer centric applications and facilitate ‘ease of doing business’.

Your Company has launched “IGL Connect”, a user-friendly and feature-rich mobile app, for CNG and PNG users with simplicity of design, user interface and security. The app enables PNG customers to view billing and payment history, lodge complaints, track status of service request and complaints, share feedback, update mobile and phone number, submit meter reading and make online payments etc. Facility of ‘INSTAPAYMENT’ option is also available on IGL website as an option of online payment. PNG customers can now upload their documents online which has provided convenience to them for applying new connection. For the convenience of CNG customers, the app also includes details of CNG testing centres, Kit suppliers and useful information about CNG vehicle care, benefits of using CNG and ‘savings calculator’ etc. CNG customers can also search for CNG stations on the map or in a particular area using this app.

In order to facilitate customers visiting the walk-in-centres and to efficiently render services to them, your Company has developed “Queue Management System” through which customers shall be issued system generated tokens for assigning free counter as per the service selected by the customer. The system data may be later used for analytics for categorization of issues and resolution time taken against them. Your Company has introduced various schemes and discount offers for the benefit of PNG billing customers which are mapped in ERP system viz. EMI option on security deposit amount for new connection request, Rs. 100 discount on first bill for e-bill subscription etc.

Besides, your Company is continuously evolving and innovating upon optimizing the billing process in ERP system through working on self-billing option which shall be soon available to PNG customers. Your Company has also extended its existing SAP ERP and other customer centric applications viz. CRM etc. for enabling business in newly acquired ‘Rewari’ area in Haryana. You Company has already aligned its systems and processes to adapt and ready for GST regime wherein all the necessary changes have been incorporated in the ERP landscape.

Your Company is also committed towards ensuring convenience to employees and optimization of daily operations through applications like “File tracking system” for ensuring timely processing of approval documents, “Bill watch system” to keep track of vendor invoices etc. Many other employee related apps have been planned for helping them to perform their regular task efficiently and conveniently.

Human Resources

The Company realizes that the challenges of the future can be best met with competent and motivated human resources. Your Company is taking various HR initiatives to add value to its pool of human talent and integration of individual goals with that of Company. The Company reviews from time to time compensation packages and other policies/facilities of its employees to make them more competitive and aligned with industry practices.

Learning and development of employees forms an integral part of the Company’s policy towards accomplishing organizational goal. Mentor-mentee mechanism for new employees and town hall meetings have been introduced.

During the year, your Company also participated in Delhi Half Marathon and organised International Yoga Day, Stress Management Workshop, Brahmakumaris Workshop to take care of employees health & fitness.

During the year, the Company inducted various young professionals at entry level to infuse talent in the professional arena. Your Company has maintained a harmonious and cordial relation among its employees and appreciates the contribution of all employees in its growth path.

Health Safety and Environment (HSE)

Safety is accorded top most priority by your Company and has focused its continual efforts to maintain a good safety culture and to improve Fire and Safety standards in its business areas.

This is a matter of pride that your Company has crossed 106 Million Man Hours accident free till 31st March 2017. This milestone achievement is a result from continuous efforts of all the individuals working directly and indirectly for your Company. The Company has been conferred Safety Innovation Award by Institute of Engineers and Certificate of Appreciation from National Safety Council to recognize the excellence in the field of Fire & Safety management during FY 2016-17.

Safety inspections of CNG vehicles are done periodically on random basis to check compliances of safety standards and to prevent unsafe conditions arising out of gas leakage from the CNG kits. For Safety of CNG vehicles, free safety clinics are periodically organized where inspection of CNG kits and fittings is undertaken.

Training is regularly imparted to the employees, contract staff at CNG stations, DTC drivers and consumers of CNG and PNG. To create safety awareness and to impart training to all category of consumers, a dedicated group of trainers with fully equipped training van is deployed which conducts safety clinics alongwith practical demonstration.

Emergency Control Centres (ECC) established at strategic locations across Delhi & NCR, are manned round the clock to respond fast to any gas leak or emergency situation. Mock drills are carried out regularly to check preparedness to handle emergencies.

In line with Company’s HSE policy, Safety Audits and other statutory compliances are done to ensure safety at all facets of operations.

Corporate Social Responsibility

Your Company is fully conscious of its Corporate Social Responsibility. In addition to carrying forward various CSR projects started in the earlier year, many new ones were initiated in FY 2016-17.

Your Company has been supporting meritorious students from under-privileged strata of society for specialized coaching for engineering entrance examination, through a scheme run by an NGO for the last seven years. It is again a matter of satisfaction that in FY 2016-17, all the eighteen students sponsored by your Company have qualified JEE (Main) 2017 examination for admission in top engineering colleges and 11 have qualified JEE (Advanced) 2017 examination.

Your Company realizes that good health is paramount to ensure safety on the roads. Therefore, your Company is carrying forward ‘IGL Swasth Saarthi’ - a comprehensive health management programme for auto and taxi drivers in Delhi and NCR, wherein a series of comprehensive Health check-up camps and Non Communicable Diseases (NCD) camps are being organized at various CNG stations, through a leading hospital.

In addition to carrying forward the funding of the training programme for auto and taxi drivers being organized by Transport Department, the Government of NCT of Delhi, on Gender Sensitization and Skill Management, your Company has extended the scope of its funding to include the training of auto and taxi drivers of Noida and Ghaziabad. A group accident insurance cover is being provided to 3.25 lakhs drivers of CNG run public transport in the region under ‘IGL Suraksha Yojna’.

Your Company is also laying emphasis on initiatives aimed at empowerment of women especially young girls. Self-defence training has been provided to girl students of government schools through an NGO. Special training on sewing machine operatorship has been provided to rural women in Greater Noida to empower them to earn on their own.

Considering the ever growing demand for skilled manpower across sectors as a result of ‘Make in India’ programme, your Company is contributing towards Skill Development programmes for unemployed youth, in the fields of gas plumbing and welding, by providing technical oriented quality training. Your Company has set up a Gas Plumbing Training Centre in a government run ITI and is running a special module for students from government run ITIs to provide them specialised skills related to gas plumbing.

Your Company is one of the stakeholders of Road Safety Cell of Delhi Traffic Police and actively supports all Road Safety Campaigns of Delhi Traffic Police.

The Annual Report on CSR activities in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014, is appended as Annexure 2 to this report.

The Company has received following awards for its CSR activities:

- Award in the Category of “Innovations in Corporate Social Responsibility Practices” at ABP News - CSR Leadership Awards organized by World CSR Day.

- Award in the Category of “CSR/ Environment Protection and Conservation” at India Pride Awards organized by Dainik Bhaskar Group.

- CSR Community Initiative Award for its Gender Sensitization Programme at CSR Leadership Summit & Awards 2017.

Directors Responsibility Statement

Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013, your Directors hereby confirm that:

i. In the preparation of Annual Accounts for the financial year ended March 31, 2017, the applicable accounting standards have been followed;

ii. they have selected such accounting policies and applied them consistently except where otherwise stated in the Notes to Accounts and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

iv. They have prepared the Annual Accounts for the Financial Year ended March 31, 2017 on a going concern basis;

v. They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Directors

Shri S. Ramesh, nominee of Bharat Petroleum Corporation Limited (BPCL), was appointed as the Chairman of the Board in place of Shri M. Ravindran w.e.f. January 14, 2017.

Shri Manoj Jain, nominee of Gail (India) Limited (GAIL), was appointed as an Additional Director of the Company w.e.f. January 18, 2017. Shri I. S. Rao ceased to be a director w.e.f. January 14, 2017.

Shri Sandeep Kumar, nominee of Govt. of NCT of Delhi, was appointed as an Additional Director of the Company w.e.f. October 1, 2016.

Shri Vikram Dev Dutt, nominee of Govt. of NCT of Delhi, was appointed as an Additional Director of the Company in place of Shri Sandeep Kumar w.e.f. December 28, 2016.

Smt. Varsha Joshi, nominee of Govt. of NCT of Delhi, was appointed as an Additional Director of the Company in place of Shri Vikram Dev Dutt w.e.f. June 1, 2017.

The shareholders of the Company at 17th Annual General Meeting had appointed Shri E.S. Ranganathan, Managing Director of the Company w.e.f. June 1, 2016 to May 31, 2019.

The Board takes this opportunity to place on record its appreciation for valuable contribution made by Shri M. Ravindran, Shri I. S. Rao, Shri Sandeep Kumar and Shri Vikram Dev Dutt during their tenure as the Directors of the Company.

Shri S. S. Rao, Prof. V. Ranganathan and Shri Santosh Kumar Bajpai, Independent Directors were appointed for a period of three years during their first term which is ending on September 11, 2017.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as provided under section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (hereinafter referred to as the “Listing Regulations”).

The details of programmes for familiarization of Independent Directors with the Company are put up on the website of the Company:- (http://www.iglonline.net//english/5000_media/Investor_Relations/Familiarization-Programmes-for-Independent-Directors.pdf).

The Nomination & Remuneration Committee considers various criteria such as age, qualification, expertise, diversity in composition of Board and likely contribution to the Company while recommending the name of the Independent Directors.

The Board of Directors carried out the evaluation of every Director, committees of Board and the Board as a whole, based on the laid down criteria of performance evaluation.

Corporate Governance

As per the requirements of the Listing Regulations, a detailed Report on Corporate Governance and a certificate regarding compliance of conditions of Corporate Governance are annexed as part of the Annual Report.

Business Responsibility Report

As per the requirements of the Listing Regulations, a detailed Report on Business Responsibility is annexed as part of the Annual Report.

Deposits

During the financial year 2016-17, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.

Particulars of Loans, Guarantees or Investments

During the year 2016-17, your Company has not granted loans nor given guarantee nor made any investments.

Amount Which the Company Proposes to Carry to any Reserves, if any

For the year 2016-17, your Company has not transferred any amount to the general reserve of the Company.

Number of Meetings of the Board and Audit Committee

The details of the number of meetings of the Board and Audit Committee held during the financial year ended March 31, 2017 and composition of Audit Committee are given in Corporate Governance Report.

Related Party Transactions

Policy on materiality of Related Party Transactions and on dealing with Related Party Transactions has been disclosed on the website of the Company at:- http://www.iglonline.net/ english/5000_media/About_us/ Related-Party-Policy.pdf.

During the financial year 2016-17, your Company has not entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014.

However, your Company has entered into transactions with parties which fall in the definition of “Related Parties” defined under Listing Regulations. Details of transactions with related parties are being disclosed separately in the Annual Report and since transactions in two contracts with GAIL qualify as material transactions, the same are being placed for shareholders’ approval in the ensuing Annual General Meeting (AGM).

Prevention of Sexual Harassment at Workplace

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and rules made thereunder, your Company has constituted Internal Complaints Committee (ICC). During the financial year 2016-17, no complaint with allegation of sexual harassment was received by the Company.

Risk Management and Internal Financial Control Adequacy

Your Company has Risk Management System in place including The Risk Policy & identification of the Risks which are reviewed periodically.

Your Company has laid down a set of standards, processes and structure for internal financial control across the organization and ensures that the same are adequate and operating effectively.

Vigil Mechanism

The Company has a Whistle Blower Policy as part of the vigil mechanism, which provides a platform to the employees, directors, vendors and suppliers of the Company to come forward and raise their genuine concerns without any fear of retaliation and victimization. The Company has engaged an independent third party service provider to manage the operations of the whistle-blower hotline. The details of the Whistle Blower Policy are available on the website of the Company www.iglonline.net. Besides whistle Blower Policy, the Company has also framed vigil mechanism under which the stakeholders can lodge their complaints to Chief Ethics Officer of the Company.

Statutory Auditors

In exercise of powers conferred by Section 139 of the Companies Act, 2013, the Comptroller and Auditor General of India(CAG) vide its letter dated July 09, 2017 has appointed M/s Walker Chandiok & Co LLP, Chartered Accountants as Statutory Auditors of the Company for the financial Year 2017-18.

The Notes on financial statements referred to in the Auditors’ Report for FY 2016-17 of M/s Walker Chandiok & Co, Chartered Accountants are self-explanatory and do not call for any further comments.

Review and Comments of CAG, on Standalone and Consolidated financial statements for the Financial Year ending 2016-17 form part of financial statements of the Company.

Cost Auditors

Your Company had appointed M/s. Chandra Wadhwa & Co., New Delhi as Cost Auditors for the financial year 2016-17.

As per Section 148 read with Companies (Audit & Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013, the Board of Directors of your Company has re-appointed M/s. Chandra Wadhwa & Co., New Delhi, Cost Accountants, as the Cost Auditors of the Company for the financial year 2017-18. The remuneration proposed to be paid to the Cost Auditors is subject to the ratification by the members at the ensuing Annual General Meeting of the Company.

Secretarial Auditors and Secretarial Audit Report

Pursuant to Section 204 of the Companies Act, 2013, your Company had appointed M/s V.K. Sharma & Co., Practicing Company Secretaries, Noida, as its Secretarial Auditors to conduct the Secretarial Audit of the Company for the financial year 2016-17. The Report of Secretarial Auditor for the financial year 2016-17 is appended as Annexure 3 to this report.

Disclosures Regarding Remuneration

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure 4 to this report.

Extract of Annual Return

Extract of Annual Return of the Company is appended as Annexure 5 to this report.

Conservation of Energy and Technology Absorption, Foreign Exchange Earnings and Outgo

The information in accordance with the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule (8) (3) of the Companies (Accounts) Rules, 2014 is appended as Annexure 6 to this report.

Acknowledgements

Your Directors express their gratitude to the Ministry of Petroleum & Natural Gas, State Governments of NCT of Delhi, Uttar Pradesh & Haryana, Petroleum and Natural Gas Regulatory Board, and Promoter Companies (GAIL & BPCL) for their continuous patronage & support throughout the year.

Your Directors acknowledge wise counsel received from Statutory Auditors and CAG and are grateful for their support and cooperation.

The Directors also acknowledge the support of all Statutory & Local Authorities, Bankers, Media, Station Operators & their employees, contractors, vendors and suppliers.

The Directors place on record their deep appreciation towards IGL’s valued customers for their continued cooperation & support and look forward to the continuance of this relationship in future also.

The Directors wish to express their gratitude to all the shareholders for their continued trust and support.

The Directors also sincerely acknowledge the contributions made by all the employees of IGL for their dedicated services to the Company.

For and on behalf of Board of Directors

Sd/- Sd/-

V. Nagarajan E. S. Ranganathan

Director (Commercial) Managing Director

Place : New Delhi

Date : August 11, 2017


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Sixteenth Annual Report and the Company''s audited financial statements for the financial year ended March 31, 2015.

PHYSICAL PERFORMANCE

During the year, the Company recorded sales as under:

Figures in Million Standard Cubic Meters (mmscm)

Product For the Year

2014-15 2013-14 % Growth (YoY)

Compressed Natural Gas (CNG) 1073.11 1027.54 4.4

Piped Natural gas (PNG) 330.46 356.11 (7.2)

Total 1403.57 1383.65 1.4

Average Sales Per day 3.84 3.79 (mmscmd)

The Company''s financial performance, for the year ended March 31, 2015 is summarised below:

(Rs. in Crores)

For the Year ITEMS 2014-15 2013-14

Net Sales & Other Income 3715.53 3934.87

Profit before Depreciation & 797.76 759.34 Tax

Depreciation 148.72 219.54

Profit before tax 649.04 539.80

Provision for tax 211.31 179.54

Profit after tax 437.73 360.26

Profit brought forward from 1403.39 1169.25 previous year

Profit available for 1841.12 1529.51 appropriations

Appropriations:

Proposed dividend 84.00 77.00

Corporate dividend tax 17.10 13.09

Transferred to general reserve 43.77 36.03

Profit carried forward 1696.25 1403.39

1841.12 1529.51

FINANCIAL REVIEW

During the year, gross turnover of the Company has decreased by 6% from Rs. 4319.37 crores in year 2013-14 to Rs. 4048.58 crores in the year 2014-15 mainly on account of substantial reduction in the selling price of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG)-domestic due to allocation of additional domestic gas to City Gas Distribution (CGD) sector resulting in lower input cost of gas which was passed on to the customers by reducing selling price of CNG and PNG-domestic in February 2014. However, Profit after tax has increased by 22% from Rs. 360.26 crores in 2013-14 to Rs. 437.73 crores in 2014-15.

DIVIDEND

Your Directors are pleased to recommend higher dividend of 60% (Rs. 6.00 per share) as against 55% (Rs. 5.50 per share) paid in the last year. The proposed dividend including corporate dividend tax would absorb Rs. 101.10 crores.

PERFORMANCE HIGHLIGHTS

COMPRESSED NATURAL GAS BUSINESS

During the year, your Company has augmented its CNG distribution infrastructure by enhancing the installed compression capacity from 66.81 Lakhs Kg/day in March 2014 to 68.50 Lakhs Kg/day in March 2015. The total number of CNG stations were 326 as on March 31, 2015 which included 280 stations in Delhi and 46 stations in National Capital Region (NCR).

In its ongoing endeavor to keep customer satisfaction as the top most priority, your Company has taken various initiatives as under:

1. An alternate cashless mode of payment for CNG customers by using Credit / Debit card at all IGL owned CNG stations has been made available through Electronic Data Terminals (EDC).

2. In its endeavor to make genuine lubricants easily available to its CNG customers, your Company has commenced sale of MAK GE Lubes at selected IGL owned CNG stations.

The estimated number of vehicles running on CNG in Delhi and NCR as on March 31, 2015 was over 800,000 including 540,000 private vehicles.

PIPED NATURAL GAS BUSINESS

PNG - Domestic Connections

A major thrust has been given to the expansion of PNG network in Delhi and NCR i.e. Gautam Budh Nagar (Noida, Greater Noida) and Ghaziabad.

Your Company has increased its steel pipeline network from 658 kms in FY 2013-14 to 680 kms in FY 2014-15 and MDPE network from 8437 kms in FY 2013-14 to 8967 kms in FY 2014-15.

During the year, your Company provided 59,029 PNG connections in Delhi & 42,256 PNG connections in NCR and the total number of connections went up from 4,59,467 in March 2014 to 5,60,752 in March 2015. It is noteworthy that your Company broke its own record of highest number of connections in a year by providing 1,01,285 domestic PNG connections in Financial Year 2014-15. Highest number of PNG connections provided by your Company in 2014-15 is also a record in our country''s CGD business.

Conducting business through electronic means is the buzzword in a technology driven world. During the year your Company has taken major initiative to upgrade it business process and introduce technologically advanced platform for customer interface. Customer app on mobile phone has been successfully rolled out. PNG customer will be able to obtain important services pertaining to their PNG connection through this mobile app. This customer app shall bring qualitative improvements in our service levels.

Your Company has also undertaken a pilot project of customer self help kiosk. First two such kiosks have been commissioned in prominent public places in Delhi & Noida. Depending on customer response such installations will be further increased.

PNG - Commercial & Industrial

Your Company has maintained its focus on the Industrial and Commercial segment as one of the potential growth areas in the forthcoming years. There was some decline in sales in commercial & industrial segment in financial year 2014-15, primarily due to stiff competition from alternate fuels prices like Furnace oil (FO)/Diesel which have come down drastically due to lower crude prices. However, with its concentrated efforts, the total number of commercial customers increased from 1291 in March 2014 to 1566 in March 2015 and the industrial customers from 584 in March 2014 to 726 in March 2015.

Your Company has already expanded its pipeline network to most of the major industrial areas of Delhi and NCR i.e. Gautam Budh Nagar (Noida, Greater Noida) and Ghaziabad. Pipeline laying activities are underway in the remaining major industrial areas in NCR.

REGULATORY DEVELOPMENTS

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

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

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

On July 1,2015, Hon''ble Supreme Court of India has dismissed the special leave petition of PNGRB.

ASSOCIATE COMPANIES

CENTRAL U.P. GAS LIMITED (CUGL)

CUGL is engaged in City Gas Distribution in the cities of Kanpur and Bareilly in Uttar Pradesh. Your Company holds 50% of paid-up equity share capital of CUGL.

MAHARASHTRA NATURAL GAS LIMITED (MNGL)

During Financial Year 2014-15 MNGL became an Associate Company after acquisition of 4.75 crore shares of MNGL in the first tranche at a price of Rs. 38/- per equity share from certain financial investor shareholders of MNGL. MNGL is in City Gas Distribution business in Pune in the State of Maharashtra.

During the Financial Year 2015-16, the Company has acquired 25 lac shares in the second and final tranche at a price of Rs. 38/- per equity share, making its total holding to 5 crores shares which constitutes 50% of the paid-up share capital of MNGL.

The statement containing the salient features of the financial statement of Company''s Associates pursuant to first proviso to sub-section (3) of Section 129, is appended as Annexure 1 to this Report.

FUTURE OUTLOOK

Your Company has drawn out plans to further consolidate its presence in Delhi and NCR by investing Rs. 250 Crores during the financial year 2015-16.

In an effort to curb air pollution and to improve ambient air quality in Delhi & NCR, the National Green Tribunal (NGT) in a landmark ruling on April 7, 2015 banned diesel vehicles over ten years old from plying on Delhi roads and all petrol vehicles which are more than 15 years old shall not be registered in NCR & Delhi. It is expected that more numbers of CNG private cars would be added as customers would prefer CNG over Diesel for their new purchases also.

It is also expected that with an increase in allocation of domestic gas to City Gas Distribution (CGD) entities, the price differential of CNG versus alternate liquid fuel will continue to drive the conversion of petrol driven private vehicles to CNG mode. Introduction of more CNG variant models by car manufacturers would further add to CNG volumes.

Your Company has aggressive plans to expand its PNG customer base in alignment with mission of expanding PNG launched by Government of India. The Company shall endeavour to reach 3 lakh new kitchens in FY 2015-16. Expanding PNG connectivity into newly constructed housing units in Gautam Budh Nagar by builders / government will be given priority to register ambitious growth. The sustained marketing campaign by the Company in Gautam Budh Nagar & Ghaziabad has encouraged builders & developers to integrate PNG at drawing board stage. This approach will enable your Company to utilize assets better in coming years. New high volume industrial & commercial customers will continue to be target for achieving higher growth by your Company.

The Company is looking forward to expand its footprints in new cities through participation in bidding process of PNGRB and by way of strategic investment in other CGD Companies.

INFORMATION TECHNOLOGY

Your Company has embarked on attaining new heights in the field of IT enablement through performing upgrade of their existing ERP system on latest hardware platform. As part of upgrading the ERP software landscape, your Company has performed technical and functional upgrade of the existing ERP landscape to the latest technology platform of SAP ECC6.0 EHP -7. Better monitoring and controlling of critical business processes alongwith automation and optimization have been achieved through implementation of new functionalities and modules.

Your Company has developed new & advanced customer centric applications to provide the customers user friendly experience over portal which can be accessed anywhere even on handheld devices making it convenient to process self- help related services at ease. These applications including Customer Relationship Management (CRM), Business Communication Management (BCM), Multichannel Foundation For Utilities (MCFU) would be released shortly enabling the customers to leverage the latest technology available in the market to enhance their satisfaction through portability of use, convenience, ease of operation and time saving. Apart from the above, your Company has implemented an android based mobile application "IGLCONNECT" for providing self-help related services viz. bill related information, payment options, complaints, online connection requests etc.

Your Company is committed to provide all its customers and stakeholders with latest technology related services and would continue to enhance the same through continued support and appreciation of its customers.

HUMAN RESOURCES

The Company realizes that the challenges of the future can be best met with competent and motivated human resources. The Company is taking various HR initiatives to add value to its pool of human talent and integration of individual goals with that of the Company. Company is reviewing compensation packages and other facilities of its employees to make them more competitive and aligned with industry practices.

Training & Development of the employees forms an integral part of Company''s policy towards achieving its objective. Assessment Center & 360 degree appraisal system have been introduced for DGM and above level employees.

During the year, Company also inducted various young professionals at entry level to infuse talent in the professional arena. The Company has also maintained a harmonious and cordial relation among its employees. The Company recognizes and appreciates the contribution of all its employees in its growth path.

HEALTH SAFETY AND ENVIRONMENT (HSE)

Your Company has always accorded top most priority to Fire and Safety related issues and has focused its continual efforts to maintain a good safety culture and to improve Fire and Safety standards.

It is a matter of pride that your Company has crossed 67 Million Man Hours accident free till March 31, 2015. This is a milestone achievement resulted from continuous efforts of all the individuals working directly and indirectly for the Company. During FY 2014-15, your Company has been conferred various prestigious safety awards/ appreciation certificates viz. Green Tech Safety Award (platinum category), Safety Innovation Award by Institute of Engineers, Special Commendation by Golden Peacock Occupational Health & Safety Award and Certificate of Appreciation from National Safety Council to recognize the excellence in the field of Fire & Safety management.

For ensuring safety and business sustainability, an initiative was taken to enhance CNG cylinder validation infrastructure and has successfully resulted in increasing the cylinder testing centres more than the requirement. Also, safety drives to educate the CNG consumers were taken up regularly to get their CNG cylinders validated.

Safety inspections of CNG vehicles are also done periodically on random basis to check compliances of safety standards and to prevent unsafe condition arising out of gas leakage from the CNG kits. For Safety of CNG vehicles, free safety clinics are periodically organized where inspection of CNG kits and fittings is undertaken.

Training is regularly imparted to the employees, contract staff at CNG stations, DTC drivers and consumers of CNG and PNG. To create safety awareness and to impart training to all category of consumers, a dedicated group of trainers with fully equipped training van is deployed which conducts safety clinics along with practical demonstration.

In line with Company''s HSE policy, Safety Audits and other statutory compliances are done to ensure safety in all facets of IGL''s operations.

Advanced High Pressure Water Mist cum Foam based protection systems have been installed at various Mega CNG stations and are being installed at rest of the CNG stations to deal any fire emergency in its initial stage.

Emergency Control Centres (ECC) established at strategic locations across Delhi & NCR are manned round the clock to respond fast to any gas leak or emergency situation. Two Emergency Response Vehicles (ERVs) are stationed at two distantly located ECC across Delhi. Three more ERVs planned to strengthen emergency response shall be deployed in coming months.

IMPLEMENTATION OF INTEGRATED MANAGEMENT SYSTEM

Your Company has successfully implemented and certified for Total Integrated Management System in 2014-15 for:

1. Quality Management System ISO 9001:2008

2. Environmental Management System ISO 14001:2004

3. Occupational Health and Safety Management System OHSAS 18001:2007

CORPORATE SOCIAL RESPONSIBILITY

During the financial year 2014-15, the Board of Directors of your Company approved the new CSR policy keeping in view the requirements under Companies Act, 2013. Various CSR projects have been initiated and are being taken forward under the IGL CSR Policy.

The Company has been supporting meritorious students from under-privileged strata of society for specialised coaching for engineering entrance examination (JEE) through a scheme run by an NGO. It is a matter of satisfaction that in 2014-15, eight out of twelve students sponsored by your Company have qualified for admission in IIT and other leading engineering colleges.

Your Company realizes the need that good health is paramount to ensure safety on the roads. Therefore, your Company has started the ''IGL Swasth Saarthi'' - a comprehensive health management programme for auto and taxi drivers in Delhi & NCR wherein a series of comprehensive Health check-up camps are being organised at CNG stations through a leading hospital. Your Company is also funding the daily training programme for taxi drivers on Gender Sensitisation & Skill Management being organised by Transport Department, Govt. of NCT of Delhi, for all taxi drivers going for annual fitness test. With the objective of covering the risk in case of accidents while driving for 3.25 lakh drivers of CNG run public transport, your Company has bought a Group Accident insurance cover under ''IGL Suraksha Yojna''.

Considering the ever growing demand for skilled manpower across sectors as a result of ''Make in India'' programme, your Company also contributed towards a Skill Development programme for unemployed youth in the fields of Gas plumbing, Welding, Fitting and Fashion designing, by providing technical oriented quality training.

As a part of Swach Bharat programme, your Company is in the process of working with local authorities towards development of new public toilet complexes and upgradation of toilet facilities in government run schools.

The Annual Report on CSR activities in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014, is appended as Annexure 2 to this report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013, your Directors hereby confirm that:

i) in the preparation of Annual Accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed;

ii) they have selected such accounting policies and applied them consistently except where otherwise stated in the Notes to Accounts and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) they have prepared the Annual Accounts for the Financial Year ended March 31, 2015 on a going concern basis;

v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS

Shri M. Ravindran, nominee of Gail (India) Limited (GAIL), was appointed as Chairman of the Board in place of Shri K.K. Gupta w.e.f. January 14, 2015.

Shri V. Nagarajan, nominee of Bharat Petroleum Corporation Limited (BPCL), was appointed as Director (Commercial) w.e.f. September 4, 2014.

Shri R.K. Sharma, nominee of GAIL, was appointed as Additional Director of the Company in place of Shri Rajeev Kumar Mathur w.e.f. October 15, 2014.

Shri I.S. Rao, nominee of BPCL, was appointed as Additional Director of the Company w.e.f. January 14, 2015. Shri R.K. Sharma ceased to be director w.e.f. January 14, 2015

Dr. Sudha Sharma and Shri. Raghu Nayyar were appointed as Additional and Independent Directors w.e.f. March 20, 2015.

The proposal for appointment of Dr. Sudha Sharma and Shri Raghu Nayyar, as Independent Directors of the Company is being placed before the shareholders for approval in the ensuing Annual General Meeting (AGM) of the Company.

Smt. Gitanjali Gupta Kundra, nominee of Government of NCT of Delhi, was appointed as Additional Director of the Company in place of Shri Gyanesh Bharti w.e.f. April 20, 2015.

The shareholders of the Company at 15th Annual General Meeting had appointed Shri S.S. Rao, Shri Santosh Kumar Bajpai and Shri V. Ranganathan as Independent Directors of the Company w.e.f. September 12, 2014 to September 11,2017.

Shri Rajesh Chaturvedi ceased as a Director of the Company w.e.f. August 31, 2014.

The Board takes this opportunity to place on record its appreciation for valuable contribution made by Shri K.K. Gupta, Shri Rajesh Chaturvedi, Shri Rajeev Kumar Mathur, Shri R.K. Sharma and Shri. Gyanesh Bharti during their tenure as Board Members.

In terms of Section 152 of the Companies Act, 2013, no Director is liable to retire by rotation at the ensuing Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as provided under section 149(6) ofthe Companies Act, 2013 and clause 49 ofthe Listing Agreement.

The details of programmes for familiarization of Independent Directors with the Company are put up on the website of the Company (http://iglonline.net/Documents/FamiliarizationProgrammes-for- Independent-Directors.pdf).

The Nomination & Remuneration committee considers various criteria such as age, qualification, expertise, diversity in composition of Board and likely contribution to the Company while recommending the name of Independent Director.

During the financial year 2014-15, Nomination & Remuneration committee recommended to the Board, the Performance Linked Incentive Scheme for the employees of the Company. The Company has engaged a reputed HR consultant for study and revision of remuneration of employees of the Company.

The Nomination & Remuneration Committee has laid down criteria such as attendance and participation in the meetings, adherence to ethical standards, integrity, code of conduct, interpersonal relations with other Directors, safeguard of confidential information of the Company, observing corporate governance standards etc. to carry out evaluation of every Director''s performance.

The Board of Directors carried out the evaluation of every Director, committees of Board and the Board as a whole based on the laid down criteria of performance evaluation.

CORPORATE GOVERNANCE

As per the requirements of the Clause 49 of the Listing Agreement with the Stock Exchanges a detailed Report on Corporate Governance and a certificate regarding compliance of conditions of Corporate Governance are annexed as part of the Annual Report.

DEPOSITS

During the financial year 2014-15, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year 2014-15, IGL has made investment of Rs. 180.50 crores in M/s Maharashtra Natural Gas Ltd. on March 26, 2015.

AMOUNT WHICH THE COMPANY PROPOSES TO CARRY TO ANY RESERVES, IF ANY

For the year 2014-15, your Company has proposed to transfer Rs. 43.77 crores to the general reserve of the Company.

NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE

The details of number of meetings of the Board and Audit Committee held during the financial year ended March 31, 2015 and composition of Audit Committee are given in Corporate Governance Report.

RELATED PARTY TRANSACTIONS

The Company has formulated a Policy on materiality of Related Party Transactions and on dealing with Related Party Transactions and the same has been disclosed on the website of the Company at weblink http://iglonline.net/Related-Party- Policy.pdf.

During the financial year 2014-15, your Company has not entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014.

However, your Company has entered into transaction with GAIL & BPCL (Promoter Companies) which falls in the definition of "Related Parties" defined under Clause 49 of the Listing Agreement. Details of transactions with related parties are being disclosed separately in the Annual Report and since transactions in a contract with GAIL qualify as material transactions, the same is being placed for shareholders'' approval in the ensuing Annual General Meeting (AGM).

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder, your Company has constituted Internal Complaints Committee. During the year, no complaint with allegation of sexual harassment was received by the Company.

RISK MANAGEMENT AND INTERNAL FINANCIAL CONTROL ADEQUACY

During the financial year 2014-15, the Company has developed a Risk Management System including The Risk Policy & identification of the Risks which are reviewed periodically.

Your Company has laid down set of standards, processes and structure which enables to implement internal financial control across the organization and ensure that the same are adequate and operating effectively.

VIGIL MECHANISM

Your Company has implemented a Whistle Blower Policy as part of the vigil mechanism to comply with the regulatory requirements laid down by the Companies Act, 2013 and Clause 49 of the Listing Agreement.With the implementation of vigil mechanism, the Company provides a platform to the employees, directors, vendors and suppliers of the Company to come forward and raise their genuine concerns without any fear retaliation and victimisation. The Company has engaged an independent third party service provider to manage the operations of whistle-blower hotline.The details of the Whistle Blower Policy are available on the website of Company (www.iglonline.net).

STATUTORY AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Auditors of the Company retire at the ensuing Annual General Meeting and being eligible, offers themselves for re-appointment.

The Notes on financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

COST AUDITORS

Your Company had re-appointed M/s. Chandra Wadhwa & Co., New Delhi as Cost Auditors for the financial year 2014-15.

As per Section 148 read with Companies (Audit & Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013, the Board of Directors of your Company has appointed M/s. Chandra Wadhwa & Co., New Delhi, Cost Accountants as the Cost Auditors of the Company for the financial year 2015-16. The remuneration proposed to be paid to the Cost Auditors is subject to the ratification by the members at the ensuing Annual General Meeting of the Company.

SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Companies Act, 2013, your Company had appointed M/s V.K. Sharma & Co., Practicing Company Secretaries, Noida as its Secretarial Auditors to conduct the Secretarial Audit of the Company for the financial year 2014-15. The Report of Secretarial Auditor for the financial year 2014-15 is appended as Annexure 3 to this report.

DISCLOSURES REGARDING REMUNERATION

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure 4 to this report. Further, none of the employees fall under the purview of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company is appended as Annexure 5 to this report.

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

The information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 is appended as Annexure 6 to this report.

ACKNOWLEDGEMENTS

Your Directors express their gratitude to the Ministry of Petroleum & Natural Gas, State Governments of NCT of Delhi & Uttar Pradesh, Petroleum and Natural Gas Regulatory Board, and Promoter Companies (GAIL & BPCL) for their continuous patronage & support throughout the year.

The Directors also acknowledge the support of all Statutory & Local Authorities, Bankers, Media, Station Operators & their employees, contractors, vendors and suppliers.

The Directors place on record their deep appreciation towards IGL''s valued customers for their continued co-operation & support and look forward to the continuance of this relationship in future also.

The Directors wish to express their gratitude to all the shareholders for their continued trust and support.

The Directors also sincerely acknowledge the contributions made by all the employees of IGL for their dedicated services to the Company.

For and on behalf of Board of Directors

sd/- sd/-

V. Nagarajan Narendra Kumar Director (Commercial) Managing Director

Place: New Delhi Date: August 5, 2015


Mar 31, 2014

THE MEMBERS

The Directors have pleasure in presenting the Fifteenth Annual Report alongwith Audited Accounts of the Company for the year ended March 31, 2014.

PHYSICAL PERFORMANCE

During the year, the Company recorded sales as under :

Figures in Million Standard Cubic Meters (mmscm)

Product For the Year % Growth 2013-2014 2012-2013 (YoY)

Compressed Natural Gas 1027.54 1004.92 2.3 (CNG)

Piped Natural 356.11 332.83 7.0 Gas (PNG)

Total 1383.65 1337.75 3.4

Average Sales Per day 3.79 3.67 (mmscmd) (Rs. in Crores)

ITEMS For the Year

2013-2014 2012-2013

Net Sales & Other Income 3943.24 3379.89

Profit before Depreciation & Tax 759.34 714.85

Depreciation 219.54 186.66

Profit before tax 539.80 528.19

Provision for tax 179.54 174.06

Profit after tax 360.26 354.13

Profit brought forward from 1169.25 940.61 previous year

Profit available for appropriations 1529.51 1294.74

Appropriations:

Proposed dividend 77.00 77.00

Corporate dividend tax 13.09 13.08

Transferred to general reserve 36.03 35.41

Profit carried forward 1403.39 1169.25

1529.51 1294.74

FINANCIAL REVIEW

The Company has been showing consistently good financial performance both in terms of turnover and profitability. During the year, gross turnover of the Company increased by 16% from Rs. 3724.06 crores in year 2012-13 to Rs. 4327.74 crores in the year 2013-14. Profit after tax also went up by 2% from Rs. 354.13 crores in 2012-13 to Rs. 360.26 crores in 2013-14.

DIVIDEND

Your Directors are pleased to recommend dividend of 55% (Rs 5.50 per share) as paid in the last year. The proposed dividend including corporate dividend tax would absorb Rs. 90.09 crores.

PERFORMANCE HIGHLIGHTS

COMPRESSED NATURAL GAS BUSINESS

During the year, your Company has augmented its CNG distribution infrastructure by enhancing the installed compression capacity from 63.82 Lakhs Kg/day in March 2013 to 66.81 Lakhs Kg/day in March 2014. The total number of CNG stations was 325 as on March 31, 2014 which included 281 stations in Delhi and 44 stations in National Capital Region (NCR).

In its ongoing endeavor to keep customer satisfaction as the top most priority, your Company has taken a number of initiatives, as elaborated below:

1. An alternate cashless mode of payment for CNG customers at select IGL owned CNG stations has been started by introducing Electronic Data Terminals (EDC) through which any CNG customer can pay for CNG fill by using Credit / Debit card.

2. In its endeavor to make genuine lubricants easily available to its CNG customers, your Company has signed an MOU with Bharat Petroleum Corporation Ltd. for sale of MAK GE Lubes at IGL owned CNG stations.

3. With the objective of providing best fuelling experience to the customer at its CNG stations, your Company is imparting behavioral training on various aspects of customer handling to contractual staff deployed at all its CNG stations across Delhi and NCR.

On behalf of your Company, M/s IMRB had conducted an independent customer satisfaction survey, wherein it has emerged that your Company has performed well on Customer Satisfaction Index (CSI).

The estimated number of vehicles running on CNG in Delhi and NCR as on March 31, 2014 was over 7,00,000 including 4,80,000 private vehicles.

PIPED NATURAL GAS BUSINESS

PNG - Domestic Connections

A major thrust has been given to the expansion of Piped Natural Gas (PNG) network in Delhi and NCR i.e. Gautam Budh Nagar (Noida, Greater Noida) and Ghaziabad.

Your Company has increased its steel pipeline network from 631 kms in FY 2012-13 to 658 kms in FY 2013-14 and MDPE network from 7783 kms in FY 2012-13 to 8437 kms in FY 2013-14.

For PNG domestic connections, Delhi has been divided into 70 areas. The pipeline network now covers 67 areas and work is in progress to extend the network to the remaining areas.

During the year, your Company provided 46,069 PNG connections in Delhi & 26,702 PNG connections in NCR and the total number of connections went up from 3,86,696 in March 2013 to 4,59,467 in March 2014. A total of 72,771 domestic PNG connections were added in Financial Year 2013-14.

Working on new initiatives to bring measurable results in terms of customer delight is a part of regular activity of the Company. Launching of customer portal also brought quantifiable improvements in our service levels.

To take this process forward a new initiative was launched recently in March 2014 to add value in our billing system. A pilot project was started to collect meter readings of PNG customers through smart phones.

PNG – Commercial & Industrial

Your Company has maintained its focus on the Industrial and Commercial segment as one of the potential growth areas in the forthcoming years. With its concentrated efforts in the year 2013-14, the total number of commercial customers increased from 964 in March 2013 to 1291 in March 2014 and the industrial customers from 418 in March 2013 to 584 in March 2014.

Your Company has already expanded its pipeline network to most of the major industrial areas of Delhi and NCR i.e. Gautam Budh Nagar (Noida, Greater Noida) and Ghaziabad. Pipeline laying activities are underway in the remaining major industrial areas in NCR.

REGULATORY DEVELOPMENTS

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

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

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

FUTURE OUTLOOK

Your Company has drawn out plans to further consolidate its presence in Delhi and NCR by investing Rs. 240 Crores during the financial year 2014-15.

In CNG segment, the fleet of Private Bus Cluster is expected to reach around 1500 buses and also DTC is expected to augment its bus fleet by around 1400 new buses by the end of 2014-15. It is also expected that with an increase in allocation of domestic gas to CGD entities, the price differential of CNG versus alternate liquid fuel will continue to drive the conversion of petrol driven private vehicles to CNG mode. Introduction of more CNG variant models by car manufacturers would further add to CNG Volumes.

Your Company has aggressive plans to expand its pipeline infrastructure to increase the coverage and penetration of the network. Company has taken proactive steps to increase its presence in domestic PNG segment with growth and development of newer parts of Gautam Budh Nagar. Dialogues with builders & developers have yielded results and PNG is now a preferred option among builders who now offer PNG as an additional feature in their offerrings. This approach will enable your Company to utilize assets better. It shall be the continuous endeavour to expand fast the customer base on both industrial & commercial and domestic fronts.

The Company is looking forward to expand its footprints in new cities through participation in bidding process of PNGRB and by way of strategic investment in other CGD Companies.

INFORMATION TECHNOLOGY

Your Company has decided to further strengthen the IT infrastructure supporting business needs by implementing new software modules and performing functional upgrade of existing SAP landscape. Under this initiative, new SAP components viz. CRM, BCM, BI&BO, DMS&DP, MII, Mobility and GRC etc. have been procured from SAP. The work for the functional upgrade to ECC - 6, EHP - 6 and implementation of these new software components is underway.

Your Company has also taken steps to train and educate the employees in their respective SAP modules to develop in-house competency for using best practices in the implementation of new SAP software components and to enhance usability of existing modules. A number of IGL employees have been cer tified by SAP in their respective modules and are ready to contribute through knowledge acquired under the training programme.

Shri Narendra Kumar, Managing Director, launches the first card payment facility for CNG customers at CGO complex CNG station.

Your Company has also added e-bill functionality in existing customer portal application with an aim to ensure convenience to customers and promoting environment friendliness. Your Company has developed a "Bill Watch System" for ensuring transparency & timely payment to vendors.

HUMAN RESOURCES

IGL values its human resources and is always committed in providing them an environment of learning and growth. Various welfare measures, employee oriented policies drive the human resources to deliver their best in achieving the organizational performance.

During the year, the Company has maintained a harmonious and cordial relation among its employees. As a welfare measure, various sports activities were organized so as to motivate employees for greater participation in the field of sports.

A scheme of "Naya Prayas" has been initiated for rewarding new ideas generated and implemented at their workplaces.

During the year, Company also inducted various young professionals at entry as well as junior management level to infuse talent in the professional arena.

There was no employee in the Company drawing remuneration more than limits prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

HEALTH SAFETY AND ENVIRONMENT (HSE)

Your Company has always accorded top most priority to Fire and Safety related issues. To maintain a good safety culture throughout the Company, continuous efforts have been made.

Your Company has been awarded Greentech Safety Award in Golden category to recognize the excellence in the field of Fire & Safety management. The Company has also won Special

Shri Narendra Kumar, Managing Director speaks at a session in the 5 th Asia Pacific Natural Gas Vehicles Association (ANGVA) Conference at Greater Noida

Shri Narendra Kumar, Managing Director, receiving Greentech Award 2013 for Safety along with senior officials of IGL.

Commendation Golden Peacock Occupational Health & Safety Award 2014 in Gas Sector.

Training is regularly imparted to the employees, contract staff at CNG stations, DTC drivers and consumers of CNG and PNG. To create safety awareness and impart training to all category of consumers, a dedicated group of trainers with fully equipped training van is deployed which conducts safety clinics along with practical demonstration.

In line with Company''s HSE policy, Safety Audits and other statutory compliances are done to ensure safety in all facets of IGL''s operations.

A Safety drive to educate the customers/ consumers through print and electronic media is taken up at major scale to educate the users of CNG vehicles to get their CNG cylinders validated.

Safety inspection of CNG vehicles is also done periodically on random basis to check compliances of safety standards and to prevent unsafe condition arising out of gas leakage from the CNG kits. For Safety of CNG vehicles, free safety camps are periodically organized where inspection of CNG kits is undertaken.

To further enhance the safety at CNG stations, all the sites are being equipped with CCTV cameras. Advanced High Pressure Water Mist cum Foam based protection systems are being installed at CNG stations to deal any fire emergency in its initial stage.

Emergency Control Centres (ECC) are established at strategic locations across Delhi & NCR and manned round the clock to respond fast to any gas leak or emergency situation. Two Emergency Response Vehicles (ERVs) are stationed at two distantly located Emergency Control Centres across Delhi. One ECC and one ERV is planned to be established in Ghaziabad, NOIDA Area of NCR, where expansion activities of IGL are underway.

Shri Narendra Kumar, Managing Director, receiving Special Commendation Golden Peacock Occupational Health & Safety Award – 2014 (in Gas Sector) along with senior officials of IGL.

SOCIAL RESPONSIBILITY

Your Company has been following a Corporate Social Responsibility (CSR) policy under which Health & Environment, Education, and Care & Empowerment of underprivileged have been the thrust areas for IGL. The Company is supporting meritorious students from under-privileged strata of society for specialised coaching for IIT entrance examination through a scheme run by an NGO. It is a matter of satisfaction that out of ten students sponsored by IGL in 2013-14, four qualified for admission in IITs, whereas the remaining six qualified for other leading engineering colleges.

Your Company realizes the need that good health including healthy eye sight of drivers is paramount to ensure safety on the roads. Therefore, your Company organised a series of Health checkup camps for drivers at its CNG stations across

Dr. M. Veerappa Moily, the then Union Minister for Petroleum & Natural Gas, Govt. of India launches IGL Suraksha Yojna, a group accident insurance scheme for CNG vehicle drivers of public transport, in the presence of Smt. Sheila Dikshit, the then Chief Minister of Delhi, Smt. Panabaaka Lakshmi, the then Union Minister of State for Petroleum & Natural Gas, Shri Ramakant Goswami, the then Transport Minister of Delhi and Shri K. K. Gupta, Chairman, IGL.

A Health Check-up camp for drivers of CNG based public transport in progress at a CNG station as a part of IGL''s CSR programme.

Delhi & NCR. With the objective of covering the risk in case of accidents for nearly 3 lakh drivers of CNG run public transport drivers, your Company also launched a group accident insurance scheme titled ''IGL Suraksha Yojna''.

Your Company also contributed towards development of green area for children in MCD run primary schools in East Delhi.

Keeping in view the provisions of the Companies Act 2013, your Company has formed a Board level CSR Committee and the formulation of new CSR policy is under process.

A demonstration of Advanced Fire Protection System at a CNG Station in progress

Shri Narendra Kumar, Managing Director and Shri Rajesh Chaturvedi, Director (Commercial) presenting the contribution cheque of IGL employees towards LG/CM Relief Fund in view of Uttarakhand Flood tragedy to the then Delhi Chief Minister, Smt. Sheila Dikshit in the presence of senior IGL officials.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm that:

i) in the preparation of Annual Accounts for the financial year ended March 31, 2014, the applicable accounting standards have been followed;

ii) they have selected such accounting policies and applied them consistently except where otherwise stated in the Notes to Accounts and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) they have prepared the Annual Accounts for the Financial Year ended March 31, 2014 on a going concern basis.

BOARD OF DIRECTORS

Shri K. K. Gupta, retires by rotation at the ensuring Annual General Meeting and being eligible, offers himself for re- appointment.

Shri Gyanesh Bharti, nominee of Government of NCT of Delhi, was appointed as Additional Director of the Company in place of Shri Puneet Kumar Goel w.e.f. February 10, 2014.

The Board takes this opportunity to place on record its appreciation for valuable contribution made by Shri Puneet Kumar Goel, during his tenure as Board Member.

Shri Oscar Fernandes, the then Union Minister for Transport, Road and Highways and Labour & Employment, inaugurates IGL stall at the 5th ANGVA Exhibition at Greater Noida in the presence of Shri B. C. Tripathi, CMD, GAIL (India) Ltd., Shri Narendra Kumar, Managing Director and Shri Rajesh Chaturvedi, Director (Commercial).

Shri S. S. Rao, Shri Santosh Kumar Bajpai and Prof. V. Ranganathan, Independent Directors of the Company, have given declarations that they meet the criteria of independence as provided under section 149(6) of the Companies Act, 2013. Keeping in view the relevant provisions of the Companies Act, 2013, these Directors are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the Notice of the forthcoming Annual General Meeting (AGM) of the Company.

STATUTORY AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Auditors of the Company retire at the ensuing Annual General Meeting and being eligible, offers themselves for re-appointment.

Shri Praful Patel, the then Union Minister of Heavy Industries and Public Enterprises, being welcomed at IGL Stall by Shri B. C. Tripathi, CMD, GAIL (India) Ltd. and Shri Rajesh Chaturvedi, Director Commercial, at the 5th ANGVA Exhibition held in Greater Noida.

A view of IGL Stall at the 5th ANGVA Exhibition at Greater Noida

COST AUDITORS

Your Company had re-appointed M/s. Chandra Wadhwa & Co., New Delhi as Cost Auditors for the financial year 2013-14.

As per Section 148 read with Companies (Audit & Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013, the Board of Directors of your Company has appointed M/s. Chandra Wadhwa & Co., New Delhi, Cost Accountants as the Cost Auditors of the Company for the financial year 2014-15. The remuneration proposed to be paid to the Cost Auditors is subject to the ratification by the members at the ensuing Annual General Meeting of the Company.

CORPORATE GOVERNANCE

As per the requirements of the Clause 49 of the Listing Agreement with the Stock Exchanges a detailed Report on Corporate Governance and Auditor''s certificate regarding compliance of conditions of Corporate Governance are annexed as part of the Annual Report.

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

The information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto.

ACKNOWLEDGEMENTS

Your Directors express their gratitude to the Ministry of Petroleum & Natural Gas, State Governments of NCT of Delhi & Uttar Pradesh, Petroleum and Natural Gas Regulatory Board, and Promoter Companies (GAIL & BPCL) for their continuous patronage & support throughout the year.

The Directors also acknowledge the support of all Statutory & Local Authorities, Bankers, Media, Station Operators & their employees, contractors, vendors and suppliers.

The Directors place on record their deep appreciation towards IGL''s valued customers for their continued co-operation & support and look forward to the continuance of this relationship in future also.

The Directors wish to express their gratitude to all the shareholders for their continued trust and support.

The Directors also sincerely acknowledge the contributions made by all the employees of IGL for their dedicated services to the Company.

For and on behalf of Board of Directors

sd/- sd/-

Rajesh Chaturvedi Narendra Kumar

Director (Commercial) Managing Director

Place : New Delhi Date : August 4, 2014


Mar 31, 2013

TO, THE MEMBERS

The Directors have pleasure in presenting the Fourteenth Annual Report alongwith Audited Accounts of the Company for the year ended March 31, 2013.

PHYSICAL PERFORMANCE

During the year, the Company recorded sales as under :

Figures in Million Standard Cubic Meters (mmscm)

For the Year % Growth Product 2012-2013 2011-2012 (YoY)

Compressed Natural Gas 1004.92 937.55 7.2 (CNG)

Piped Natural 332.83 282.45 17.8 Gas (PNG)

Total 1337.75 1220.00 9.7

Average Sales Per day 3.67 3.33 (mmscmd)

financial results

(Rs. in Crores)

For the Year

ITEMS 2012-2013 2011-2012

Net Sales & Other Income 3379.89 2525.34

Profit before Depreciation 714.85 593.30 & Tax

Depreciation 186.66 143.21

Profit before tax 528.19 450.09

Provision for tax 174.06 143.66

Profit after tax 354.13 306.43

Profit brought forward from 940.61 746.17 previous year

Profit available for 1294.74 1052.60 appropriations

Appropriations:

Proposed dividend 77.00 70.00

Corporate dividend tax 13.08 11.35

Transferred to general 35.41 30.64 reserve

Profit carried forward 1169.25 940.61

1294.74 1052.60

FINANCIAL REVIEW

The Company has been showing consistently good financial performance both in terms of turnover and profitability. During the year, gross turnover of the Company increased by 33% from Rs. 2790.10 crores in year 2011-12 to Rs. 3724.06 crores in the year 2012-13. Profit after tax also went up by 16% from Rs. 306.43 crores in 2011-12 to Rs. 354.13 crores in 2012-13.

DIVIDEND

Your Directors are pleased to recommend higher dividend of 55% (Rs 5.50 per share) as against 50% (Rs. 5 per share) paid in the last year. The proposed dividend including corporate dividend tax would absorb Rs. 90.08 crores.

PERFORMANCE HIGHLIGHTS COMPRESSED NATURAL GAS BUSINESS

During the year, your Company augmented its CNG distribution infrastructure by enhancing the capacity of existing stations and adding new stations. The number of stations went up from 308 in March 2012 to 324 in March 2013, which included 276 stations in Delhi and 48 stations in National Capital Region (NCR). The installed compression capacity went up from 59.56 Lakhs Kg/day in March 2012 to 63.82 Lakhs Kg/day in March 2013.

New concept of CNG Station was introduced where all equipments are installed at roof top of canopy due to which more dispensing area is available at forecourt level. One such CNG Station is now in operation at Nanglamachi, Ring Road, New Delhi.

Another first, a CNG integrated compressor package unit, where all compression, dispensing & storage is within an enclosure, has been introduced. This unit requires a very small area and can take CNG refueling to customer premises such as societies, malls, offices, schools, other institutions etc. When used at aforesaid premises, this can help in decongesting the existing CNG stations.

As CNG facilities at OMCs Retail outlets contribute almost 22% of CNG retail business, your Company has entered into agreements for setting up of CNG facilities with all three Public Sector Oil Marketing Companies upto March 2015.

As route buses have gone off the road in FY 2012-2013, your Company has filled the vacuum created by exiting of route buses by executing an agreement with Delhi Integrated Multi Modal Transit System (DIMMTS) for setting up of CNG facilities for Cluster Buses at their depots for a period of ten years i.e. up to the year 2022.

The estimated number of vehicles running on CNG in Delhi and NCR as on March 31, 2013 was over 6,48,000 including 4,20,000 private vehicles.

PIPED NATURAL GAS BUSINESS

PNG - Domestic Connections

A major thrust has been given to the expansion of Piped Natural Gas (PNG) network in Delhi and NCR i.e. Gautam Budh Nagar (Noida, Greater Noida) and Ghaziabad.

Your Company has increased its steel pipeline network from 575 kms in FY 2011-12 to 631 kms in FY 2012-13 and MDPE network from 6479 kms in FY 2011-12 to 7783 kms in FY 2012-13.

For PNG domestic connections, Delhi has been divided into 70 areas (each area is equivalent to MLA constituency). The pipeline network is already extended to 63 areas and work is in progress to extend the network to the remaining areas.

During the year, your Company provided 32,322 PNG connections in Delhi & 21,530 PNG connections in NCR and the total number of connections went up from 3,32,844 in March 2012 to 3,86,696 in March 2013. A total of 53,852 domestic PNG connections were added in Financial Year 2012-13.

Your Company rolled out a major initiative to upgrade customer services by infusion of technology. You may be aware that in May 2011 customer portal was launched through which domestic PNG customers could register their complaints/service requests online and check the status of the same. The business process of customer acquisition was also integrated into customer portal from August, 2012 onwards. With this development prospective customers are now able to register their PNG connection requests online. The progress of their requests can be viewed online. On completion of process of confirmation of technical feasibility of PNG connection and after customer has made payment for PNG connection, customer can also track progress on customer portal. Further information pertaining to colony- wise & city-wise schedule of registrations is made available on the customer portal prospectively. Now all the customer requests for PNG connections received at 24 Hour Customer Care or from field marketing teams are also routed through portal and action taken on such requests is updated on the portal. With these developments the business process of domestic PNG customer acquisition has been made more convenient for the customers. Your Company received overwhelming response to this initiative from prospective customers as a large number of them registered their requests online from August 2012 onwards.

PNG - Commercial & Industrial

Your Company has maintained its focus on the Industrial and Commercial segment as one of the potential growth areas in the forthcoming years. With its concentrated efforts in the year 2012-13, the total number of commercial customers increased from 639 in March 2012 to 964 in March 2013 and industrial customers from 223 in March 2012 to 418 in March 2013.

Your Company has expanded its pipeline network to some of the major industrial areas of Delhi and NCR i.e. Gautam Budh Nagar (Noida, Greater Noida) and Ghaziabad. Pipeline laying activities are underway in the remaining major industrial areas in NCR which have huge demand potential.

EQUITY PARTICIPATION IN CENTRAL U.P. GAS LTD. (CUGL)

As a first step for stepping outside the geographical boundaries of the NCR territory, your Company has recently acquired 50% of the paid-up equity share capital (3,00,00,000 equity shares of Rs. 10 each) of CUGL at a price of Rs. 23 per equity share aggregating to Rs. 69 crores from certain financial investor shareholders of CUGL. CUGL is engaged in City Gas Distribution in the cities of Kanpur and Bareilly in Uttar Pradesh.

REGULATORY DEVELOPMENTS

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

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

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

FUTURE OUTLOOK

Your Company has drawn out plans to further consolidate its presence in Delhi and NCR by investing over Rs. 400 Crores during the financial year 2013-14.

In CNG segment, the fleet of Private Bus Cluster is expected to reach around 1000 buses by the end of 2013-14. The price differential of CNG versus alternate liquid fuel will continue to drive the conversion of petrol driven private vehicles into CNG mode. Introduction of more CNG variant models by car manufacturers will add to CNG sales.

Your Company has aggressive plans to expand its pipeline infrastructure to increase the coverage and penetration of the network. Company has taken proactive steps to increase its presence in domestic PNG segment with growth and development of newer parts of Gautam Budh Nagar. Dialogue with builders & developers are going on with an objective to provide PNG facility in upcoming residential projects before new residential units are occupied. This approach will enable your Company to utilize assets better. It shall be the continuous endeavour to expand fast the customer base on both industrial & commercial and domestic fronts.

The pipeline expansion plans have been aligned with development of industrial belts in coming years in NCT of Delhi & NCR cities of Noida, Greater Noida and Ghaziabad. Your Company has expanded its pipeline network to some of the new industrial clusters planned under redevelopment guidelines in NCT of Delhi and work is underway to expand the network in the remaining areas which will witness substantial improvement in their infrastructure & facilities. Endeavours will be made to realize full market potential by tapping gas volumes from industries, predominantly Small Scale Industries, which will come up during the redevelopment phase in notified clusters of NCT of Delhi.

Your Company also has plans to provide PNG supplies to upcoming industrial belts along Delhi Mumbai Railway Freight Corridor in Dadri Noida Ghaziabad Investment Zone and part of Ludhiana Kolkata freight corridor which will pass through Ghaziabad District.

Your Company alongwith Delhi Jal Board (DJB) had signed an MOU to set up a Pilot Project for production of Compressed Natural Gas (CNG) out of Sewage Treatment Plant (STP) situated at Keshopur, Delhi. Detailed Feasibility Report (DFR) to assess techno-commercial feasibility of the project has been prepared and the same is now under third party evaluation.

INFORMATION TECHNOLOGY

Your Company has extended the customer services to commercial & industrial segment through customer portal with enhanced features.

The Company has completed technical upgradation of SAP to ERP-6.0 on new and upgraded hardware. This will provide latest technology platform for existing processes and functionalities in SAP.

The Company has set up a Disaster Recovery site hosted at remote location to enable continuity of IT operations by securing applications and database in case of any disaster. The Company has also initiated SAP functional upgrade which is the follow-on project to SAP technical upgradation performed recently. This will provide new and improved processes and functionalities.

As part of GIS (Geographical Information System) Project initiative, most of the PNG network for north and west zone of Delhi has been captured and is being used for network reference.

HUMAN RESOURCES

During the year, your Company enjoyed harmonious and cordial human relations amongst all its employees. Your Company took various HR initiatives such as revision in salary and formulation of various welfare schemes for the employees. There has been emphasis on employees training to enhance their competencies aimed at better organizational performance.

There was no employee in the Company drawing remuneration more than limits prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

HEALTH SAFETY AND ENVIRONMENT (HSE)

Your Company has always accorded top most priority to fire and safety related issues. To maintain a good safety culture throughout the Company, continuous efforts have been made.

Regular training is being imparted to the employees, contract staff at CNG Stations, DTC Drivers and consumers of CNG and PNG. To create safety awareness and impart training to all category of consumers, a dedicated group of trainers with fully equipped training van is deployed which conducts safety clinics along with practical demonstration.

In line with Company''s HSE policy, regular Safety Audits and other statutory compliances are done to ensure safety in all facets of Company''s operations.

A safety drive to educate the consumers through print and electronic media is already taken up at major scale to educate the users of CNG vehicles to get their CNG Cylinders validated.

For safety of CNG vehicles, free safety camps are periodically organized where inspection of CNG kits is undertaken. Safety inspection of CNG vehicles is also done periodically on random basis to check compliances of safety standards and to prevent unsafe condition arising out of gas leakage from the CNG kits.

To further enhance the safety at CNG Stations, all the sites are equipped with CCTV cameras and Water & Foam based advanced fire protection systems are being installed at the stations to deal any fire emergency in its initial stage.

Emergency Control Centres (ECC) are established at strategic locations across Delhi & NCR and manned round the clock to respond fast to any gas leak or emergency situation. Two Emergency Response Vehicles (ERVs) are stationed at two distantly located Emergency Control Centres across Delhi.

SOCIAL RESPONSIBILITY

Your Company has formulated a Corporate Social Responsibility (CSR) policy under which 1% of Profit After Tax (PAT) each year is earmarked for social causes. Thrust areas for CSR programme have been identified as Health & Environment, Education, and Care & Empowerment of underprivileged. The Company is supporting meritorious students from under-privileged strata of society for IIT coaching through a scheme run by an NGO. It is a matter of satisfaction that all the 10 children who were sponsored by the Company qualified in the IIT JEE examination 2012. During 2012-13 also, your Company has sponsored 10 students for specialized coaching for IIT entrance. The Company also organised eyesight screening camps at its CNG stations for the auto drivers during 2012-13 with the objective of minimizing the risk of road accidents as well as to create awareness about basics of eye care.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm that:

i) in the preparation of Annual Accounts for the financial year ended March 31, 2013, the applicable accounting standards have been followed;

ii) they have selected such accounting policies and applied them consistently except where otherwise stated in the Notes to Accounts and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) they have prepared the Annual Accounts for the financial year ended March 31, 2013 on a going concern basis.

BOARD OF DIRECTORS

Shri K. K. Gupta, nominee of BPCL, was appointed as Chairman of the Board in place of Shri S. Venkatraman w.e.f. January 14, 2013.

Shri Narendra Kumar, nominee of GAIL, was appointed as Managing Director in place of Shri M. Ravindran w.e.f. April 18, 2013.

Shri Rajesh Chaturvedi, nominee of BPCL, was appointed as Director (Commercial) in place of Shri Manmohan Singh w.e.f. December 1, 2012.

Shri Rajendra Kumar, nominee of Government of NCT of Delhi, was appointed as Additional Director of the Company in place of Shri R. Chandra Mohan w.e.f. December 1, 2012.

Shri Santosh Kumar Bajpai was appointed as Additional Director of the Company w.e.f. December 27, 2012.

Shri Rajeev Kumar Mathur, nominee of GAIL, was appointed as Additional Director of the Company in place of Shri S. Venkatraman w.e.f. January 14, 2013.

Shri Puneet Kumar Goel, nominee of Government of NCT of Delhi, was appointed as Additional Director of the Company in place of Shri Rajendra Kumar w.e.f. March 25, 2013.

Prof. V. Ranganathan, retires by rotation at the ensuring Annual General Meeting and being eligible, offers himself for re-appointment.

The Board takes this opportunity to place on record its appreciation for valuable contribution made by Shri S. Venkatraman, Shri M. Ravindran, Shri Manmohan Singh, Shri R. Chandra Mohan and Shri Rajendra Kumar, during their tenure as Board Members.

STATUTORY AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Auditors of the Company retire at the ensuing Annual General Meeting and being eligible, offers themselves for reappointment.

COST AUDITORS

Your Company has re-appointed M/s. Chandra Wadhwa & Co., New Delhi as Cost Auditors for the financial year 2012-13.

CORPORATE GOVERNANCE

As per the requirements of the Clause 49 of the Listing Agreement with the Stock Exchanges a detailed Report on Corporate Governance and Auditor''s certificate regarding compliance of conditions of Corporate Governance are annexed as part of the Annual Report.

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

The information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto.

CORPORATE AWARDS

Declared as winner in the category of Infrastructure Development at India Pride Awards 2012-13.

ACKNOWLEDGEMENTS

Your Directors express their gratitude to the Ministry of Petroleum & Natural Gas, State Governments of NCT of Delhi & Uttar Pradesh, Petroleum and Natural Gas Regulatory Board, and Promoter Companies (GAIL & BPCL) for their continuous support throughout the year.

The Directors also acknowledge the support of all Statutory & Local Authorities, Bankers, Media, Station Operators & their employees, contractors, vendors and suppliers.

The Directors place on record their deep appreciation towards IGL''s valued customers for their continued co-operation & support and look forward to the continuance of this relationship in future also.

The Directors wish to express their gratitude to all the shareholders for their continued trust and support.

The Directors also sincerely acknowledge the contributions made by all the employees of IGL for their dedicated services to the Company.

For and on behalf of Board of Directors

sd/- sd/-

Rajesh Chaturvedi Narendra Kumar

Director (Commercial) Managing Director

Place : New Delhi

Date : July 8, 2013


Mar 31, 2012

The Directors have pleasure in presenting the Thirteenth Annual Report alongwith Audited Accounts of the Company for the year ended March 31, 2012.

PHYSICAL PERFORMANCE

During the year, the Company recorded sales as under :

Figures in Million Standard Cubic Meters (mmscm)

Product For the Year % 2011-12 2010-11 Growth (YoY)

Compressed

Natural Gas (CNG) 937.55 817.76 14.6

Piped Natural Gas 282.45 179.89 57.0

(PNG)

Total 1220.00 997.65 22.3

Average Sales

Per day (mmscmd) 3.33 2.73

FINANCIAL RESULTS

(Rs. in Crores)

ITEMS For the Year

2011-2012 2010-2011

Net Sales & Other Income 2525.34 1753.55

Profit before Depreciation & Tax 593.30 488.58

Depreciation 143.21 102.87

Profit before tax 450.09 385.71

Provision for tax 143.66 125.94

Profit after tax 306.43 259.77

Profit brought forward from previous year 746.17 593.73

Profit available for appropriations 1052.60 853.50

Appropriations:

Proposed dividend 70.00 70.00

Corporate dividend tax 11.35 11.35

Transferred to general reserve 30.64 25.98

Profit carried forward 940.61 746.17

1052.60 853.50

FINANCIAL REVIEW

The Company has been showing consistently good financial performance both in terms of turnover and profitability. During the year, gross turnover of the Company increased by 43% from Rs. 1951.50 crores in year 2010-11 to Rs. 2790.10 crores in the year 2011-12. Profit after tax also went up by 18% from Rs. 259.77 crores in 2010-11 to Rs. 306.43 crores in 2011-12.

DIVIDEND

Your Directors are pleased to recommend dividend of 50% (Rs. 5 per share) as paid in the last year. The proposed dividend including corporate dividend tax would absorb Rs. 81.35 crores.

PERFORMANCE HIGHLIGHTS

COMPRESSED NATURAL GAS BUSINESS

During the year, your Company augmented its CNG distribution infrastructure by enhancing the capacity of existing stations and adding new stations. The number of stations went up from 278 in March 2011 to 308 in March 2012, which included 258 stations in Delhi and 50 stations in National Capital Region (NCR). By capacity enhancement as well as new stations, the installed compression capacity went up by 16.5% from 51.13 Lakhs Kg/day in March 2011 to 59.56 Lakhs Kg/day in March 2012.

New concept of cluster buses took off in NCT of Delhi and 238 cluster buses were operational in March 2012.

The estimated number of vehicles running on CNG in Delhi and NCR as on 31st March 2012 was over 5,50,000 including 17,000 buses and around 3,20,000 private vehicles.

PIPED NATURAL GAS BUSINESS

PNG - Domestic Connections

A major thrust has been given to the expansion of Piped Natural Gas (PNG) network in Delhi and NCR i.e. Gautam Budh Nagar (Noida, Greater Noida) and Ghaziabad.

Your Company has increased its steel pipeline network from 420 kms in FY 2010-11 to 575 kms by laying additional 155 kms of Steel pipeline during the FY 2011-12.

For PNG domestic connections, Delhi has been divided into 70 areas (each area is equivalent to MLA constituency). The pipeline network is already extended to 56 areas and work is in progress to extend the network to the remaining areas. During the year, your Company has extended the PNG network in various localities in Delhi, namely:

- North Delhi – Rohini (Sectors 15-18, 20-25), B D Estate, Civil Lines, Kamla Nagar, Roop Nagar, Shastri Nagar, Kalyan Nagar, Gulabi Bagh, Nimri Colony, Timarpur, Mukherjee Nagar.

- South Delhi – Vasant Kunj (remaining areas), East of Kailash, Vikram Vihar National Park, Sheikh Sarai Ph-I, Green Park Extension, Saket (remaining areas), Qutub Institutional Area, Shivalik, Geetanjali Enclave, Navjeevan Vihar.

- West Delhi – Dwarka (remaining areas), Nangloi, Bakarwala, Loknayak Puram, Janakpuri (remaining areas), Vaishali (Dabri), Hari Nagar (remaining areas).

- East Delhi – East Guru Angad Nagar, Mayur Vihar Phase- III (C1&2, B1-B8, D1&2), Vivek Vihar –ITI Quarters, BSNL Quarters.

- Central Delhi – Karol Bagh, Rajouri Garden, B-Block, Rajinder Nagar(old &new), NDMC areas (remaining areas), Minto Road, Defence Colony, Siddhartha Enclave.

In Noida, your Company during the year has extended the PNG supply to Sectors- 11, 15-A, 17, 19, 20, 23, 26, 27, 30, 31, 36, 40, 41, 49, 55-60, 62, 63, 65, 67, 82 and 110.

In Greater Noida, your Company during the year has extended the PNG supply to Sectors Omega-I, Zeta-I, II and Delta-I, II,III Chai, Alpha-II, Sigma-I, II, III, Gamma-II.

In Ghaziabad, the PNG supply has been extended to Raj Nagar, Sanjay Nagar, Kavi Nagar, Patel Nagar, Shastri Nagar, Nehru Nagar, Surya Nagar, Chander Nagar, Ramprastha, Brij Vihar, Chiranjivi Vihar, Avantika, Shalimar Garden, Rajender Nagar and Nandgram.

During the year, your Company provided 53,689 PNG connections in Delhi & 34,231 PNG connections in NCR and the total number of connections went up from 2,44,924 in March 2011 to 3,32,844 in March 2012. Addition of 87920 domestic PNG connections is the highest addition in a Financial Year in the history of the Company.

Your Company has increased its MDPE network from 4419 kms in FY 2010-11 to 6479 kms in FY 2011-12 by adding 2060 km MDPE pipelines.

PNG – Commercial & Industrial

During the year, the Company gave a major thrust to boost the sales volume of Commercial and Industrial customers. In Delhi and NCR, the total number of commercial customers increased from 463 in March 2011 to 639 in March 2012 and industrial customers from 68 in March 2011 to 223 in March 2012. During the year 2011-12, the sales volume from industrial & commercial customers grew by 71% over the previous year.

In Delhi, the Company has expanded its pipeline network to industrial areas like Wazirpur, Jahangirpuri, Narela, Okhla, Nangloi, Mangolpuri, Naraina, Kirti Nagar, Bawana, Mundka etc.

In Noida, your Company has expanded its pipeline network to industrial areas of Sector 57, 58, 59, 63, 65 and 67. In Greater Noida, your Company has expanded its pipeline network to Industrial areas of Sectors of Omega, Chai, KP-V, Industrial Area-B & C. In Ghaziabad, your Company has expanded its pipeline network to industrial area of Kavi Nagar Industrial Area, Goldhar Industrial Area, Meerut Road Industrial Area, Loni Road Industrial Area, Anand Industrial Area, Sahibabad Industrial Area (Site-IV). Pipeline laying activities are underway in the remaining major industrial areas in NCR which have huge demand potential.

REGULATORY DEVELOPMENTS

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

Further, PNGRB made the determined tariffs applicable with retrospective effect from 01st April 2008. In its order PNGRB stated that the modalities and time frame for refund of differential Network Tariff and Compression Charge shall be decided subsequently.

IGL filed a writ petition on 10th April 2012 against the order of PNGRB challenging the vires of Network Tariff

Regulations and order dated 9th April 2012 before the Hon'ble Delhi High Court.

The Hon'ble Delhi High Court in its judgement delivered on 1st June 2012 has held that PNGRB is not empowered to fix or regulate maximum retail price at which gas is to be sold by IGL to its consumers. The judgement has also held that the Board is not empowered to fix any component of Network Tariff and Compression Charge for any entity like IGL having its own distribution network. The Hon'ble Court has quashed PNGRB Order dated 9th April 2012.

FUTURE OUTLOOK

Your Company has drawn out plans to further consolidate its presence in Delhi and NCR by investing over Rs. 500 crores during the financial year 2012-13.

In CNG, the new concept of Private Bus Cluster introduced by Government of Delhi is expected to reach 1,000 buses by the end of 2012-13. Decision of Delhi Government to introduce 45,000 new auto rickshaws will add to volume in sales. The growth in private car owners segment is expected to maintain the trend of previous years.

Your Company has aggressive plans to expand its pipeline infrastructure to increase the coverage and penetration of the network. It shall be the continuous endeavour to expand fast the customer base on both industrial & commercial and domestic fronts.

The pipeline expansion plans have been aligned with development of industrial belts in coming years in NCT of Delhi & NCR cities of Noida, Greater Noida and Ghaziabad. Your Company has made plans to expand pipeline network to take advantage of the recent notification of regulations and guidelines for redevelopment of industrial clusters in NCT of Delhi which will witness substantial improvement in their infrastructure & facilities. Endeavours will be made to realize full market potential by tapping gas volumes from industries, predominantly Small Scale Industries, which will come up during the redevelopment phase in notified clusters of NCT of Delhi.

Your Company also has plans to provide PNG supplies to upcoming industrial belts along Delhi Mumbai Railway Freight Corridor in Dadri Noida Ghaziabad Investment Zone and part of Ludhiana Kolkata freight corridor which will pass through Ghaziabad District.

Your Company alongwith Delhi Jal Board (DJB) and a group Company of Bharat Forge, M/s KG Renewables Limited has signed an MOU to set up a Pilot Project for production of Compressed Natural Gas (CNG) out of Sewage Treatment Plant (STP) situated at Keshopur, Delhi. The project includes converting Sewage Gas generated from STP's to usable Energy which can be utilized for fueling CNG vehicles. Detailed Feasibility Report (DFR) is under preparation to evaluate the techno-commercial feasibility of the project.

INFORMATION TECHNOLOGY

Your Company has taken initiatives for Disaster Recovery and Business Continuity planning. This Project is in advance phase and scheduled to be completed during the financial year 2012-13. This will help your Company to continue its business during and after any disaster.

Your Company has implemented customer portal which includes CRM (Customer Relationship Management) functionalities last year. This portal extends facilities such as online PNG bill viewing & payment, complaint logging etc. as self service to customers. This system also provides common platform for IGL employees, customers and third parties to work collaboratively and achieve greater customer satisfaction. Your Company is continuously making efforts to improve and reap more benefits from this system.

Apart from this, your Company has also taken initiative for technology enhancement at primary data centre alongwith up-gradation of SAP (ERP System). An initiative has also been taken for advanced surveillance of CNG stations.

GIS (Geographical Information System) Project which has been taken up for effective Asset Management, Network Planning and Operations Management is in advance phase and is scheduled to be completed during the financial year 2012-13.

HUMAN RESOURCES

During the year, your Company enjoyed harmonious and cordial human relations among all its employees. Your Company inducted employees at entry level from various premier technical institutes / colleges to infuse new talent in the workforce of the Company. There has been a continuous emphasis on building capabilities & learning of all employees aimed at better organizational performance.

There was no employee in the Company drawing remuneration more than the limits prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

HEALTH SAFETY AND ENVIRONMENT (HSE)

Your Company has always accorded top most priority to Fire and Safety related issues. To maintain a good safety culture throughout the Company, continuous efforts have been made.

Regular training is being imparted to the employees, contract staff at CNG Stations, DTC Drivers and consumers of CNG and PNG. To create safety awareness and impart training to all category of consumers, a dedicated group of trainers with fully equipped training van is deployed which conducts safety clinics alongwith practical demonstration.

For Safety of CNG vehicles, free safety camps are periodically organized where inspection of CNG kits is undertaken. Safety inspection of CNG vehicles is also done periodically on random basis to check compliances of safety standards and to prevent unsafe conditions arising out of gas leakage from the CNG kits.

To add a cutting edge to the safety at CNG Stations, dry chemical powder based fire protection systems for roof mounted cascades have been successfully installed at various CNG Stations.

In line with Company's HSE policy, Safety Audit, HAZOP & Risk Assessment of CNG Stations and PNG installations are carried out by third parties. The onsite emergency action plan is regularly rehearsed and updated. Emergency Control Centres have already been established at strategic locations. Emergency response vehicles are under procurement, which shall be stationed at emergency control centres, manned round the clock to respond fast to any gas leak or emergency situation.

SOCIAL RESPONSIBILITY

Your Company has formulated a CSR policy under which 1% of Profit After Tax (PAT) each year is earmarked for social causes. Thrust areas for CSR programme have been identified as Health & Environment, Education, and Care & Empowerment of underprivileged. The Company is supporting meritorious students form underprivileged strata of society for IIT coaching through a scheme run by an NGO. It is a matter of satisfaction that all the 10 children who were sponsored by the Company qualified in the IIT JEE examination 2012. The Company has also extended help to DTC by providing equipment and facilities aimed at inculcating safe driving habits among the drivers.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm that:

i) in the preparation of Annual Accounts for the financial year ended March 31, 2012, the applicable accounting standards have been followed;

ii) they have selected such accounting policies and applied them consistently except where otherwise stated in the Notes to Accounts and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) they have prepared the Annual Accounts for the Financial Year ended 31st March, 2012 on a going concern basis.

BOARD OF DIRECTORS

Shri S. Venkatraman, nominee of GAIL was appointed as Chairman of the Board in place of Shri B. C. Tripathi w.e.f. October 21, 2011.

Shri M. Ravindran, nominee of GAIL (India) Ltd. was appointed as Managing Director in place of Shri Rajesh Vedvyas w.e.f. October 27, 2011.

Shri R. Chandra Mohan, nominee of Government of NCT of Delhi was appointed as Additional Director in place of Shri R. K. Verma w.e.f. October 31, 2011.

Shri Manmohan Singh, nominee of BPCL was re-appointed as Director (Commercial) for a period of one year from December 1, 2011 to November 30, 2012.

Shri S. S. Rao, retires by rotation at the ensuring Annual General Meeting and being eligible, offers himself for re-appointment.

The Board takes this opportunity to place on record its appreciation for valuable contribution made by Shri B.C. Tripathi, Shri Rajesh Vedvyas and Shri R.K. Verma, during their tenure as Board Members.

STATUTORY AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Auditors of the Company retire at the ensuing Annual General Meeting and being eligible, offers themselves for reappointment.

COST AUDITORS

Pursuant to the directions of the Central Government for audit of cost accounts, your Company appointed M/s. Chandra Wadhwa & Co as Cost Auditors for the financial year 2011-12.

CORPORATE GOVERNANCE

As per the requirements of the Clause 49 of the Listing Agreement with the Stock Exchanges a detailed Report on Corporate Governance is annexed as part of the Annual Report.

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

The information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto.

CORPORATE AWARDS

- The Company was finalist in the category of "Industry Leadership" at Platts Global Energy Awards 2011

- Received "Special Jury Award for Contribution to the Society" in India Pride Awards 2011

- Declared as the winner in the category of Urban Infrastructure at the Infrastructure Excellence Awards 2012.

ACKNOWLEDGEMENTS

Your Directors express their gratitude to the Ministry of Petroleum & Natural Gas, State Governments of NCT of Delhi & Uttar Pradesh, Petroleum and Natural Gas Regulatory Board, and Promoter Companies (GAIL & BPCL) for their continuous support throughout the year.

The Directors also acknowledge the support of all Statutory & Local Authorities, Bankers, Media, Station Operators & their employees, contractors, vendors and suppliers.

The Directors place on record their deep appreciation towards IGL's valued customers for their continued co- operation & support and look forward to the continuance of this relationship in future also.

Shri Rajesh Vedvyas, then Managing Director receiving 'Award of Excellence' on behalf of IGL for being a finalist in the category of 'Industry Leadership' in Platts Global Energy Awards 2011.

The Directors wish to express their gratitude to all the shareholders for their continued trust and support.

The Directors also sincerely acknowledge the contributions made by all the employees of IGL for their dedicated services to the Company.

For and on behalf of Board of Directors

sd/- sd/-

Manmohan Singh M. Ravindran

Director (Commercial) Managing Director

Place: New Delhi Date : June 21, 2012


Mar 31, 2011

The Directors have pleasure in presenting the Twelfth Annual Report alongwith Audited Accounts of the Company for the year ended March 31, 2011.

PHYSICAL PERFORMANCE

During the year, the Company recorded sales as under

Figures in Million Standard Cubic Meters (mmscm)

Product For the Year %

2010-2011 2009-2010 Growth (YoY)

Compressed 817.76 695.13 17.6 Natural Gas (CNG)

Piped Natural Gas 179.89 87.31 106.0 (PNG)

Total 997.65 782.44 27.5

Average Sales 2.73 2.14 27.5 Per day (mmscmd)

FINANCIAL RESULTS (Rs. in Crores)

For the year ITEMS 2010-2011 2009-2010

Net Sales & Other Income 1753.55 1099.22

Profit before Depreciation & Tax 488.58 401.89

Depreciation 102.87 77.45

Profit before tax 385.71 324.44

Provision for tax 125.94 108.94

Profit after tax 259.77 215.50

Profit brought forward from 593.73 473.25

previous year Profit available 853.50 688.75 for appropriations

Appropriations:

Proposed dividend 70.00 63.00

Corporate dividend tax 11.35 10.46

Transferred to general reserve 25.98 21.55

Profit carried forward 746.17 593.74

853.50 688.75

FINANCIAL REVIEW

The Company has been showing consistently good financial performance both in terms of turnover and profitability. During the year, gross turnover of the Company increased by 60.86% from Rs. 1213.13 crores in year 2009-10 to Rs. 1951.50 crores in the year 2010-11. Profit after tax also went up by 20.54% from Rs. 215.50 crores in 2009-10 to Rs. 259.77 crores in 2010-11.

DIVIDEND

Your Directors are pleased to recommend higher dividend of 50% (Rs 5 per share) as against 45% (Rs 4.50 per share) in the last year. The proposed dividend including corporate dividend tax would absorb Rs. 81.35 crores.

PERFORMANCE HIGHLIGHTS

CNG BUSINESS

During the year, your Company augmented its CNG distribution infrastructure significantly by enhancing the capacity of existing stations and adding new stations. The number of stations went up from 241 in March 2010 to 278 in March 2011, which included 240 stations in Delhi and 38 stations in National

Capital Region (NCR). By capacity enhancement as well as new stations, the installed compression capacity went up substantially by 40.5% from 36.40 Lakh Kg/day in March 2010 to 51.13 Lakh Kg/day in March 2011.

During the year 2010–11, the Company for the first time started online CNG supply to vehicles in Ghaziabad.

The estimated number of vehicles running on CNG in Delhi and NCR as on 31st March 2011 was over 4,30,000 including 16,500 buses and 2,70,000 private vehicles.

PIPED NATURAL GAS BUSINESS PNG - Domestic Connections

A major thrust has been given to the expansion of Piped Natural Gas (PNG) network in Delhi and NCR i.e. Gautambudh Nagar (Noida, Greater Noida) and Ghaziabad.

For PNG domestic connections, Delhi has been divided into 70 areas (each area is equivalent to MLA constituency). The pipeline network is already extended to 55 areas and work is in progress to extend the network to the remaining areas. During the year, your Company has extended the PNG network in various localities in Delhi, namely:

- North Delhi – Rohini (sectors 1 to 8), Ashok Vihar, Tagore Park, Outram Lines, Hudson Lane, Keshav Puram.

- South Delhi – Anand Niketan, Shanti Niketan, West End, IIT, NCERT, Kaushalya Park, Hauz Khas, Ayurvigyan Nagar.

- West Delhi – Paschim Vihar (remaining areas), Vikas Puri, Hari Nagar, Arihant Nagar, Madipur, Tagore Garden, Rajouri Garden, Punjabi Bagh West and Extn. (remaining areas), Janak Puri (remaining areas).

- East Delhi – Preet Vihar, Nirman Vihar, Vikas Marg Societies, Chitra Vihar, GTB Janta Flats, Jafrabad, Gagan Vihar, Madhuban Enclave, Nirman Vihar, Ramnagar, Mansarovar DDA Flats, Swasthya Vihar.

- Central Delhi – Patel Nagar, Ramesh Nagar, Bali Nagar, Kirti Nagar, Mansarovar Garden, Saraswati Garden, Punjabi Bagh (East).

In Noida, your Company during the year has extended the PNG supply to Sectors 33 – 35, 39 – 41, 50 – 53, 55 and 56.

In Greater Noida, your Company during the year has extended the PNG supply to Sectors Beta I & II and Pie.

In Ghaziabad, the PNG supply has been extended to Indirapuram, Vaishali, Vasundhara, Surya Nagar, Chander Nagar, Rampuri, Shalimar Garden, Rajender Nagar and Lajpat Nagar.

During the year, your Company provided total 62,918 new domestic PNG connections in Delhi and NCR and the total number of connections went up from 1,82,006 in March 2010 to 2,44,924 in March 2011. In Delhi, your Company provided 45,289 PNG connections as against the target of 35,000 connections set by the Petroleum & Natural Gas Regulatory Board (PNGRB).

PNG – Commercial & Industrial

During the year, the Company gave a major thrust to boost the sales volume of Commercial and Industrial customers. In Delhi and NCR, the total number of commercial customers increased from 355 in March 2010 to 463 in March 2011 and industrial customers from 14 in March 2010 to 68 in March 2011. During the year 2010-11, the sales volume from industrial & commercial customers grew by 136% over the previous year.

In Delhi, the Company has expanded its network to industrial areas of Mayapuri, Lawrence Road, Nangla Macchi, Badli etc, while MDPE laying activities are in progress in other industrial areas like Wazirpur, Jahangirpuri, Narela, Okhla, Nangloi, Mangolpuri, Naraina, Kirtinagar, Bawana, Mundka etc.

In Noida, your Company has expanded its pipeline network to industrial areas of sector 60, 63 and 65. In Greater Noida, your Company has expanded its pipeline network to Industrial areas of Kasna Site IV & V, Udyog Vihar, Udyog Kendra & Surajpur Site B & C. In Ghaziabad, your Company has expanded its pipeline network to industrial area of Sahibabad. Pipeline laying activities are underway in the remaining major industrial areas in NCR which have huge demand potential.

FUTURE OUTLOOK

Your Company has drawn out plans to further consolidate its presence in Delhi and NCR by investing over Rs. 500 crores during the financial year 2011-12.

In CNG, the new concept of Private Bus Cluster introduced by Government of Delhi is expected to add to good volume in sales. A significant growth is also expected from the private car owners in line with current trend of CNG conversion and launch of CNG variants by vehicle manufactures, in view of the economy offered by CNG in comparison to other fuels.

Your Company has aggressive plans to expand its pipeline infrastructure to increase the coverage and penetration of the network. It shall be the continuous endeavour to expand fast the customer base on both Industrial & Commercial and domestic fronts.

TOWARDS CUSTOMER DELIGHT

In view of the changing dynamics in the business environment, your Company has been proactive in taking various initiatives towards customer delight. Your Company is the first city gas

distribution Company to have launched an interactive customer portal to address customer needs and ensure speedy complaint redressal alongwith a 24x7 single number dialing customer care facility. The Company has taken a number of initiatives to promote wider use of natural gas such as through gas geysers, gas gensets etc. In this regard, the Company has tied up with leading manufacturers of gas gensets and gas geysers. With a view to promote genuine CNG retrofittment, the Company alongwith reputed suppliers is setting up model workshops at selected CNG stations.

INFORMATION TECHNOLOGY

Your Company has recently implemented customer portal which includes CRM (Customer Relationship Management) functionalities. The portal extends facilities such as PNG bill viewing & payment, complaint logging, new connection

application etc as self service to customers. This system also provides single platform for IGL employees, customers and third parties to work collaboratively and achieve customer satisfaction. The Company has taken initiatives for advanced surveillance for its CNG stations, Disaster Recovery and Business Continuity planning, and GIS (Geographical Information System) use for effective Asset Management, Network Planning and Operations Management.

HUMAN RESOURCES

During the year, your Company enjoyed harmonious and cordial human relations amongst all its employees. Your Company undertook various HR initiatives to further infuse professionalism in the workforce, such as revised performance management system, induction only through campus recruitment of GETs / ETs and streamlining other HR policies.

Comprehensive induction training was provided to new employees in association with GAILs Training Institute at Noida. Training was imparted to employees on regular basis for knowledge and skill enhancement.

There was no employee in the Company drawing remuneration more than the limits prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

HEALTH SAFETY AND ENVIRONMENT (HSE)

Your Company has always accorded highest priority to Fire and Safety related issues. It is a matter of pride that your Company has crossed 78 million man hours without any reportable lost time accident.

Training is regularly imparted to the employees, contract staff at CNG stations, DTC Drivers and consumers of CNG and PNG. To create safety awareness and impart training to all category of consumers, a dedicated group of trainers with fully equipped training van is deployed which conducts safety clinics alongwith practical demonstration.

For safety of CNG vehicles, free safety camps are periodically organized where inspection of CNG kits is undertaken. Safety inspection of CNG vehicles is also done periodically on random basis to check compliances of safety standards and to prevent unsafe conditions arising out of gas leakage from the CNG kits.

As per your Companys HSE policy, Safety Audit, HAZOP & Risk assessment of CNG Stations and PNG installations are carried out by third parties. The onsite emergency action plan is regularly rehearsed and updated. Emergency response vehicles are under procurement, which shall be stationed at emergency control centers, manned round the clock to respond fast to any gas leak or emergency situation.

SOCIAL RESPONSIBILITY

Your Company has formulated a CSR policy under which 1% of Profit After Tax (PAT) each year is earmarked for social causes. Thrust areas for CSR programme have been identified as Health & Environment, Education and Care & Empowerment of underprivileged. The Company is making regular contribution to NGOs and charitable institutions towards social welfare. Your Company organizes regular medical health and eye check up camps for CNG vehicle drivers. The Company is supporting meritorious students from under-privileged strata of society for IIT coaching through a scheme run by an NGO. It is a matter of satisfaction that all the 7 children who were sponsored by the Company qualified in the IIT JEE examination 2011. The Company is also extending help to DTC by providing equipment and facilities aimed at inculcating safe driving habits among the drivers.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm that:

i) in the preparation of Annual Accounts for the financial year ended March 31, 2011, the applicable accounting standards have been followed;

ii) they have selected such accounting policies and applied them consistently except where otherwise stated in the Notes to Accounts and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) they have prepared the Annual Accounts for the Financial Year ended 31st March, 2011 on a going concern basis.

BOARD OF DIRECTORS

Shri B. C. Tripathi, nominee of GAIL was appointed as Chairman of the Board w.e.f. January 14, 2011 in place of Shri S. Radhakrishnan.

Shri K. K. Gupta, nominee of BPCL was appointed as Additional Director in place of Shri S. Radhakrishnan w.e.f. March 01, 2011 and in terms of Section 260 of the Companies Act, 1956, he holds office until the ensuing Annual General Meeting. Notice under Section 257 of the Companies Act, 1956 has been received proposing his name for appointment as Director at the Annual General Meeting.

Shri Rajesh Vedvyas, nominee of GAIL was appointed as Managing Director for a period of three years i.e. upto July 28, 2011. GAIL has extended the secondment period of Shri Vedvyas upto March 31, 2012 and accordingly it is proposed to re-appoint him in the ensuing Annual General Meeting.

Shri R. K. Verma, retires by rotation at the ensuring Annual General Meeting and being eligible, offers himself for re- appointment.

Shri S. S. Dalal, retires by rotation at the ensuring Annual General Meeting and does not offer himself for re-appointment.

The Board takes this opportunity to place on record its appreciation for valuable contribution made by Shri S. Radhakrishnan, during his tenure as Chairman and Director of the Company.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Auditors of the Company retire at the ensuing Annual General Meeting and being eligible, offers themselves for reappointment.

CORPORATE GOVERNANCE

As per the requirements of the Clause 49 of the Listing Agreement with the Stock Exchanges a detailed Report on Corporate Governance is annexed as part of the Annual Report.

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

The information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto.

ACKNOWLEDGEMENTS

Your Directors express their gratitude to the Ministry of Petroleum & Natural Gas, State Governments of NCT of Delhi & Uttar Pradesh and Promoter Companies (GAIL & BPCL) for their continuous patronage & support throughout the year.

The Directors also acknowledge the support of all the Local Authorities, Bankers, Media, Station Operators & their employees, contractors, vendors and suppliers.

The Directors place on record their deep appreciation towards IGLs valued customers for their continued co-operation & support and look forward to the continuance of this relationship in future also.

The Directors wish to express their gratitude to all the shareholders for their continued trust and support.

The Directors also sincerely acknowledge the contributions made by all the employees of IGL for their dedicated services to the Company.

For and on behalf of Board of Directors

sd/- sd/-

Manmohan Singh Rajesh Vedvyas

Director (Commercial) Managing Director

Place : New Delhi

Date : June 14, 2011


Mar 31, 2010

The Directors have pleasure in presenting the Eleventh Annual Report alongwith Audited Accounts of the Company for the year ended March 31, 2010.

PHYSICAL PERFORMANCE

During the year, the Company recorded sales as under:

(Figures in Standard Cubic Meters)

Product For the Year

2009-2010 2008-2009

Compressed

Natural Gas (CNG) 695,127,167 605,255,608

Piped Natural Gas (PNG) 87,310,564 54,257,774

Total 782,437,731 659,513,382

FINANCIAL RESULTS

(Rs. in Million)

ITEMS For the Year

2009-2010 2008-2009

Net Sales & Other Income 10992.24 8789.91

Profit before Depreciation & Tax 4018.90 3262.94

Depreciation 774.52 674.34

Profit before tax 3244.38 2588.60

Provision for tax 1089.42 863.86

Profit after tax 2154.96 1724.74 Profit brought forward from

previous year 4732.53 3835.43

Profit available for appropriations 6887.49 5560.17

Appropriations:

Proposed dividend 630.00 560.00

Corporate dividend tax 104.64 95.17

Transferred to general reserve 215.49 172.47

Profit carried forward 5937.36 4732.53 6887.49 5560.17

FINANCIAL REVIEW

The Company has been showing consistently good financial performance both in terms of turnover and profitability. During the year, gross turnover of the Company increased by 26% from Rs. 9621.37 million in year 2008-09 to Rs. 12131.31 million in the year 2009-10. Profit after tax also went up by 25% from Rs. 1724.74 million in 2008-09 to Rs. 2154.96 million in 2009-10.

DIVIDEND

Your Directors are pleased to recommend dividend of 45% (Rs. 4.50 per share) as against 40% (Rs 4/- per share) in the last year. The proposed dividend including corporate dividend tax would absorb Rs. 734.64 million.

PERFORMANCE HIGHLIGHTS

CNG BUSINESS:

Your Company augmented its CNG distribution infrastructure in a massive way during the year. The total number of CNG stations increased from 181 in March 2009 to 241 in March 2010, which included 223 stations in NCT of Delhi and 18 stations in NCR towns. The installed compression capacity also went up substantially from 26.76 Lakh Kg/day in March 2009 to 36.40 Lakh Kg/day in March 2010.

During the financial year 2009-10, the Company for the first time started CNG supply to vehicles in the town of Ghaziabad. The first online CNG station in this town was also set up during the year.

The estimated number of vehicles running on CNG in Delhi and NCR towns as on 31st March 2010 was around 3,50,000 including 14,000 buses and over 200,000 private vehicles.

PNG BUSINESS:

Your Company is giving thrust to expansion of PNG network in NCT of Delhi and NCR towns of Noida, Greater Noida and Ghaziabad.

The Company has extended the Piped Natural Gas distribution infrastructure to the new areas in Delhi which include Safdarjung Development Area, Safdarjung Enclave, Vigyan Vihar, Vigyan Lok, Manak Vihar, Anand Vihar, Nanak Vihar, Jagrati Vihar, Surajmal Vihar, Pushpanjali Enclave, Saini Enclave, Bahubali Enclave, Kiran Vihar, Ram Vihar, Mayur Vihar (Phase III), Rishab

Vihar, Sharad Vihar, Priya Enclave, AGCR Enclave, Shyam Enclave, Shanti Vihar, Madhu Vihar, North Avenue, South Avenue, Meena Bagh, AIIMS, GTB Hospital, Rohini (selected sectors) besides providing connections to new applicants in areas which have been covered with PNG supply during earlier years.

The PNG supply has also been extended to Sector 61 in Noida and Sectors Sigma, Beta 1, Alpha of Greater Noida.

Your Company also started PNG supply for the first time in the town of Ghaziabad in Ram Prasth colony during 2009 -2010.

During 2010-11, the Company plans to extend its PNG distribution network to Chitrakoot, GTB Enclave, Dwarka (Sector-8), Paschim Puri, Rajender Nagar, Patel Nagar, Kirti Nagar, Keshavpuram, Model Town, Derawal Nagar, Gujranwala Town, Mukharjee Nagar, Hakikat Nagar, Kingsway Camp, Tagore Park, Outram Lines, Punjabi Bagh (E), Tagore Garden, Vishal Enclave, Rajouri Garden, Hari Nagar, Ashok Nagar, Yamuna Vihar, Jhilmil, CBD Shahdara, Preet Vihar, Geeta Colony in NCT of Delhi.

In Noida, your Company has planned to spread out its network in Sectors 33, 34, 35, 39, 50, 51 and 52. In Greater Noida, the Company shall extend its PNG network to sectors Gamma & Delta. In Ghaziabad, residents of Surya Nagar, Chander Nagar, Ram Puri, Brij Vihar, Kaushambi, Vaishali, Indirapuram & Vasundhara are planned to be provided with PNG supply during 2010 -11.

During the year, the Company added 44,000 PNG connections and 40 commercial customers. As on 31st March 2010, the Company has provided PNG connections to over 182,000 domestic and more than 355 commercial customers.

R-LNG BUSINESS:

The Company is presently supplying R-LNG to 21 industrial consumers in Delhi. Your Company has also started supplying R-LNG to the industrial segment in Noida and Greater Noida and these cities shall contribute major volumes of gas sale in industrial segment from 2010-2011 onwards. In the city of Ghaziabad also, the work of extending supply to industrial and commercial segment is in progress and supplies shall commence during the year 2010-11.

Your Company has already tied up with GAIL and BPCL for gas supply for meeting the demand of this segment.

FUTURE OUTLOOK

NCT OF DELHI

Your Company has drawn out plans to further consolidate its presence in the NCT of Delhi by investing Rs. 915 million during the financial year 2010-11 for CNG expansion.

CNG being an eco-friendly and economical fuel, a large number of private car manufacturers are introducing their CNG variants. Due to wide acceptance of CNG, there has been a large-scale conversion of private cars into CNG mode. This segment will give a boost to CNG sales in the coming years.

In view of forthcoming Commonwealth Games in 2010, a large number of high capacity buses and Radio Taxis running on CNG are being added to the public transport fleet in the Capital for the convenience of visitors. The Government of NCT of Delhi has directed all Light Commercial Vehicles (LCVs) operating in NCT of Delhi to convert to CNG mode. The Company has drawn up plans to augment its infrastructure to meet the growing demand of CNG.

Your Company has planned a large expansion in PNG segment. A capital expenditure of Rs.1940 million has been earmarked for augmenting infrastructure in the existing areas as well as for expansion in new areas of Delhi during the financial year 2010- 11. The Company has plans to provide new PNG connections to over 50000 domestic households.

EXPANSION PROJECTS IN NATIONAL CAPITAL REGION (NCR)

Your Company has planned capital investment of Rs. 2400 million for the NCR towns of Noida, Greater Noida & Ghaziabad to augment its CNG and PNG infrastructure.

The Company plans to tap prospective industrial users of natural gas in industrial segment in these towns in the coming years.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm that:

i) in the preparation of Annual Accounts for the financial year ended March 31, 2010, the applicable accounting standards have been followed;

ii) they have selected such accounting policies and applied them consistently except where otherwise stated in the Notes to Accounts and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) they have prepared the Annual Accounts for the Financial Year ended 31st March, 2010 on a going concern basis.

BOARD OF DIRECTORS

Prof. V. Ranganathan was appointed as Additional Director w.e.f. November 1, 2009 and in terms of Section 260 of the Companies Act, 1956, he holds office until the ensuing Annual General Meeting. Notice under Section 257 of the Companies

Act, 1956 has been received proposing his name for appointment as Director at the Annual General Meeting.

Shri S. Radhakrishnan and Shri S.S. Rao retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Auditors of the Company retire at the ensuing Annual General Meeting and being eligible, offers themselves for reappointment.

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

The information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto.

CORPORATE GOVERNANCE

As per the requirements of the Clause 49 of the Listing Agreement with the Stock Exchanges a detailed Report on Corporate Governance is annexed as part of the Annual Report.

HUMAN RESOURCES

During the year, your Company enjoyed harmonious and cordial human relations amongst all its employees. Your Company took various HR initiatives such as revision in pay structure, formulation of welfare schemes for the employees and streamlining of HR policies. There has been a continuous emphasis on employees training to enhance their competencies aimed at better organisational performance.

A statement showing particulars of employees under Section 217 (2A) of the Companies Act, 1956 is annexed.

FIRE AND SAFETY

Your Company has accorded top-most priority to Fire & Safety related issues. It is a matter of pride that the Company has crossed 66 million man-hours without any reportable lost time accident, as a result of good safety culture in the Company. This achievement is due to the continuous efforts put in by providing fire fighting training on a regular basis to the employees, DSMs, Station Operators, DTC Drivers and consumers of CNG and PNG. Besides this, your Company has made arrangements to impart two days certified external training to all contract personnel working at CNG stations from a recognized training institute.

Core Safety Group comprising trained & qualified Company executives of multi-disciplines from all control rooms was imparted internationally accredited safety training from NEBOSH, UK. Safety Clinics alongwith practical demonstrations / training to operate portable fire extinguishers are regularly carried out at consumer premises. For better understanding and to further improve quality of training module, the Company is intending to depute a dedicated group of trainers with fully equipped Training Van to cover each and every sector of consumers, contract workers and employees. Also in line with the commitment for safety of CNG consumers and energy conservation, safety checks of CNG propelled cars were carried out through free service camps of CNG Kits across NCT of Delhi.

External Safety Audit, HAZOP & Risk Assessment of CNG Stations and PNG installations are carried out by third parties and recommendations/observations are complied with. Safety inspections of CNG vehicles are done on random basis to check compliances of safety standards, statutory provisions and also to detect unsafe conditions arising out of gas leakage from the CNG kits in order to ascertain safety of the vehicles and the occupants.

SOCIAL RESPONSIBILITY

Your Company has been actively involved in fulfilling the Social causes besides keeping the environment clean through reduction in vehicular pollution by providing eco-friendly fuel to the transport sector in NCT of Delhi and neighbouring towns. The Company has won accolades for the same, nationally as well as internationally.

Your Company has taken Natural Gas beyond vehicles by reaching the households through pipelines for better convenience and ease of use in the form of PNG (Piped Natural Gas) and now aims to delight the customers through enhanced customer services.

The Company made contributions to NGOs working in the field of environment and social welfare, as a part of your Company’s commitment to the society.

Your Company has formulated a CSR policy under which 1% of Profit After Tax (PAT) each year, would be earmarked for social causes.

ACKNOWLEDGEMENTS

Your Directors express their gratitude to the Ministry of Petroleum & Natural Gas, State Governments of NCT of Delhi & Uttar Pradesh and Promoter Companies (GAIL & BPCL) for their continuous patronage & support throughout the year.

The Directors also acknowledge the support of all the Local Authorities, Bankers, Media, Station Operators & their employees, contractors, vendors and suppliers.

The Directors place on record their deep appreciation towards IGL’s valued customers for their continued cooperation & support and look forward to the continuance of this relationship in future also.

The Directors wish to express their gratitude to all the shareholders for their continued trust and support.

The Directors also sincerely acknowledge the contributions made by all the employees of IGL for their dedicated services to the Company.

For and on behalf of Board of Directors

sd/- sd/-

Manmohan Singh Rajesh Vedvyas

Director (Commercial) Managing Director

Place : Uttaranchal Date : May 22, 2010

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