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Notes to Accounts of Petronet LNG Ltd.

Mar 31, 2017

1. Reporting Entity

Petronet LNG Limited referred to as “PLL” or “the Company” is domiciled in India. The Company’s registered office is at World Trade Centre, 1st Floor, Babar Road, Barakhamba Lane, New Delhi - 110001.

The Company was formed by Bharat Petroleum Corporation Limited (‘BPCL’), GAIL (India) Limited (‘GAIL’), Indian Oil Corporation Limited (‘IOCL’) and Oil and Natural Gas Corporation Limited (‘ONGC’) primarily to develop, design, construct, own and operate a Liquefied Natural Gas (‘LNG’) import and regasification terminals in India. PLL was incorporated on 2 April 1998 under the Companies Act, 1956 and received certificate of commencement of business on 1 June 1998. The Company is involved in the business of import and regasification of LNG and supply to BPCL, GAIL, IOCL and others. Presently, the Company owns and operates LNG Regasification Terminal with name plate capacity of 15 MMTPA at Dahej, in the State of Gujarat. The Company has also commissioned another LNG terminal with name plate capacity of 5 MMTPA at Kochi, in the State of Kerala.

Debenture redemption reserve

The Company appropriates a portion out of the profits available for payment of dividend to debenture redemption reserve(DRR) as per the Act (which requires creation of DRR upto 25% of the outstanding amount of the bonds during the tenure of bonds)

General reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purpose. Remeasurement of defined benefit plans

Remeasurements of defined benefit plans represents the following as per Ind AS 19, Employee Benefits:

(a) actuarial gains and losses

(b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and

(c) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability (asset)

2 Contingent liabilities, contingent assets and commitments

A. Commitments

a. Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 31,839 (as on 31 March 2016 Rs. 40,497 and 1 April 2015 Rs. 108,476).

b. The Company has entered into following long term LNG purchase agreements:

a. 8.5 MMTPA with RasGas Company Limited, Qatar for a period upto April 2028.

b. 1.44 MMTPA with Mobil Australia Resources Company PTY Ltd, who have commenced supply since January 2017 for a period upto 2035.

Since the Company has entered into materially back to back sale agreements against the above purchase agreements, there is no foreseeable loss on these agreements as on the balance sheet date. The Company has issued Standby Letter of Credit of Rs. 285,412 (Rs. 591,981 as on 31 March 2016 and Rs. 512,667 as on 31 March 2015) to RasGas Company Limited and Rs 18,195 (Rs. Nil as on 31 March 2016 and Rs. Nil as on 31 March 2015) to Mobil Australia Resource Company PTY Ltd against the Long Term Purchase Agreements.

B. Contingent Liabilities

a. The Collector of Electricity Duty, Gandhinagar (Gujarat) had issued notices classifying the business activities of the Company as “Storage(HTP-IIA)” instead of “Industrial Undertaking (HTP I)” and hence levied Electricity Duty @ 45% instead of 20% of the consumption charges and charging 70 paise per unit on the power generated by the Company for its own consumption. The Company has challenged the legality and validity of the notices by way of writ petitions before the Hon’ble High Court of Gujarat. Meanwhile the Company continues to make payment of Electricity Duty @15%(Revised rate of HTP-I) on the basis of the stay order granted by the Hon’ble High Court. The High Court vide order dated 1 July 2014 has set aside the notice and quashed the supplementary bill/demand notice and remanded the case back to the Collector of Electricity Duty, Gandhinagar to decide the nature of undertaking of the Company. The Company has made its oral and written submissions before the Collector of Electricity Duty, Gandhinagar and the order is awaited. The total contingent liability till 31 March, 2017 calculated on the differential payable i.e. 25% (Revised rates for “HTP-I I A”) as classified by GEB and what is actually paid by Company on “HTP-I” rate i.e. 15%) is Rs. 3,637 ( as on 31 March 2016 Rs. 2,668 and as on 1 April 2015 Rs. 2,251) .

b. The Company has filed a writ petition before the Hon’ble Gujarat High Court challenging the legality and correctness of the notice dated 1 April 2006 from the Collector of Stamps, Bharuch stating that pursuant to the amendment to Section 24 of the Bombay Stamp Act, 1958, the Company is required to pay stamp duty @ Re.1 per Rs.1000/ or part thereof of the value mentioned in the Delivery Order of the goods imported through ports in Gujarat. The Hon’ble High Court of Gujarat vide its order dated 24 February 2010 has quashed the notice issued by the Stamp Authorities. Stamp authorities have filed Special Leave Petition (SLP) in Hon’ble Supreme Court against the same and the case is pending as on 31 March 2017. The contingent liability from the effective date of amendment i.e. 1 April 2006 till 31 March 2017 on the CIF value is estimated at Rs. 19,408. (Previous year till 31 March 2016 is Rs. 17,421 and as on 1 April 2015 is Rs.15,258).

c. The Company has received refund of Rs. 112, Rs. 284 and Rs. 346 from Customs department vide CESTAT order dated 7 November 2013, 9 September 2011 and 31 May 2010 respectively mainly pertaining to custom duty on short landing of LNG. The Custom Authorities have filed appeal against the order of the CESTAT with the Hon’ble High court of Gujarat and the outcome of the case is pending as on 31 March 2017.

d. Taxes and duties recoverable includes custom duty recoverable amounting to Rs. 959 ( relating to short lending of LNG under spot purchase agreement. The company has received favourable order for the above issue from Commissioner (Appeals) and CESTAT. However, the refund of the amount has been denied by department and Commissioner (Appeals) on the ground of time barred refund application. The company has preferred an appeal against the above order with CESTAT, the outcome of which is pending as on 31 March 2017.

e. The company had received demand for vessel hire charges under Section 65(105)(zzzzj) of the Finance Act, 1994 (as amended) - “Supply of Tangible Goods for Use” for the period 16 May 2008 to 30 September 2009 amounting Rs. 4,005 (including Interest). The company had paid the demand under protest to the department. The Commissioner of the Service Tax, vide Order dated 6 March 2012 has confirmed the demand. The Company has preferred an appeal before CESTAT against the above order and received favourable order in the above case on 24 October 2013. The department has prefered an appeal against the CESTAT order before the Hon’ble Supreme Court. Subsequently refund including interest was received from department pending adjudication of the case. The case is pending before the Hon’ble Supreme Court as on 31 March 2017. Further, the company has filed writ petition in Hon’ble High Court for the rectification of the amount of interest granted to the company.

f. The Company has cases pending with Service Tax Department at various levels pertaining to applicability of service tax on charges paid for External Commercial Borrowings. Amount involved in such cases is Rs. 848 (as on 31 March 2016 Rs. 913 and as on 1 April 2015 Rs 479).

g. The Principal Commissioner of service tax has issued order against the company regarding service tax demand on boil off quantity of LNG during regasification process (for the period April 2009 to March 2015) amounting to Rs. 1,780. The company paid the demand under protest of Rs. 3,265 (including interest and penalty). Further, the company had suo moto additionally paid service tax and interest amounting to Rs. 1,484 for the period April’15 - March’17. The company has preferred an appeal against the said orders with CESTAT and the matter is pending for hearing as on 31 March 2017.

h. The Company has filed Service Tax Refund Application for services availed in the Special Economic Zone for the LNG Terminal at Kochi, amounting to Rs.1,668 (as on 31 March 2016 Rs. 1,924 and as on 1 April 2015 Rs 1,919), out of which Rs.774 (as on 31 March 2016 Rs. 774 and as on 1 April 2015 Rs 774) is pending before the CESTAT level and Rs. 893 (as on 31 March 2016 Rs. 1,150 and as on 1 April 2015 Rs 1,145) is at Assistant Commissioner level.

i. The sales tax department has issued show cause notice dated 11 February 2016 claiming sales tax amounting to Rs 7,985 against the high seas sales transaction made by the company. The reply against the show cause notice is submitted by the company and the matter is pending for adjudication.

j. There are certain claims of Rs. 18,362 (as on 31 March 2016 Rs. 18,362 and as on 1 April 2015 Rs. 18,362) made by a Contractor against capital works for which the Company has also made certain counter claims. As per the terms of the contract, Independent expert’s opinion is being sought and pending the settlement of liability, claims are not determinable and therefore no provision has been made in the books.

k. The Company has filed Service Tax Refund Application for services availed in the Special Economic Zone for the LNG Terminal at Kochi, amounting to Rs.1,668 (as on 31 March 2016 Rs. 1,924 and as on 1 April 2015 Rs 1,919), out of which Rs. 774 (as on 31 March 2016 Rs. 774 and as on 1 April 2015 Rs 774) is pending before the CESTAT level and Rs. 893 (as on 31 March 2016 Rs. 1,150 and as on 1 April 2015 Rs 1,145) is at Assistant Commissioner level.

l. The Company had entered into a lease agreement with Cochin Port Trust (CPT) for 33.4015 hectare of land for building and operating port and regasification facility at Kochi. CPT has raised demand for enhanced lease rent (almost 10 times), by quoting the order of Tariff Authority for Major Ports (TAMP) dated 10 June 2010. CPT has invoked arbitration and claimed Rs. 4,258 (as on 31 March 2016 Rs. 4,258 and as on 1 April 2015 Rs. 4,258 ). Further, an additional demand amounting to Rs. 2,000 (as on 31 March 2016 Rs. 2,000 and as on 1 April 2015 Rs. 2,000) has been raised by CPT for usage of dredged sand by the Company. PLL has been contesting the increase in lease rent as well as dredging sand claims. As such, the matter has been referred to Arbitration. Pending the outcome of arbitration proceedings, liability against the claims, if any, is not determinable and therefore no provision has been made in the books.

m. The Company is eligible for deduction under section 80IA of the Income Tax Act, 1961, with respect to power generation and port undertakings at Dahej. The assessing officer has disallowed deduction under Section 80-IA of Rs 7,237 for assessment years 2009-10, 2010-11 and 2011-12 against which the Company has received favourable order from CIT(A) for the abovementioned years. The Income tax department has preferred an appeal with ITAT against this order of CIT(A), the outcome of which is pending to be received as on 31 March 2017.

n. The Assessing officer has raised income tax demand of Rs. 1,244 vide its order dated 20 March 2015 w.r.t. assessment year 2008-09. The Company has filed an appeal against the same with CIT (A) which has reduced the amount of demand from Rs. 1244 to Rs. 206 (as on 31 March 2016 Rs. 1,244 and as on 1 April 2015 Rs. 1,244). The company has preferred an appeal with ITAT against the disallowance, the final outcome of which is pending as on 31 March 2017.

C. Contingent Assets

The Company has no contingent assets as at 31 March 2017, 31 March 2016 and 1 April 2015.

3 Segment information

Segment information is presented in respect of the company’s key operating segments. The operating segments are based on the company’s management and internal reporting structure.

Operating Segments

The Company’s Board of Directors have been identified as the Chief Operating Decision Maker (‘CODM’), since they are responsible for all major decision w.r.t. the preparation and execution of business plan, preparation of budget, planning, expansion, alliance, joint venture, merger and acquisition, and expansion of any new facility.

Board of Directors reviews the operating results at plant level i.e. Kochi, and Dahej to make decisions about resources to be allocated to each segment and to assess its performance. Accordingly, management has identified Kochi and Dahej as two operating segments for the Company.

However, operating segments often exhibit similar long-term financial performance if they have similar economic characteristics. For example, similar long-term average gross margins for two operating segments would be expected if their economic characteristics were similar.

Management believes that Dahej and Kochi plants will have similar long term financial performance. Accordingly, considering the fact Dahej and Kochi plants are similar in all the characteristics and have similar economic characteristics, the two operating segments will fulfill the criteria of aggregation and hence not required to be reported separately.

Accordingly, there is only one Reportable Segment for the Company which is "Natural Gas Business", hence no specific disclosures have been made.

Entity wide disclosures

A. Information about products and services

Company primarily operates in one product line, therefore product wise revenue disclosure is not applicable.

B. Information about geographical areas

The major sales of the Company are made to customers which are domiciled in India. Also, all the non-current assets of the Company other than financial instruments, deferred tax assets, postemployment benefit assets are located in India.

C. Information about major customers (from external customers)

The Company derives revenues from the following customers which amount to 10 per cent or more of an entity’s revenues:

4 Leases

Operating lease

The Company has non-cancellable operating leases agreements for taking 3 vessels on lease. The lease periods are in the range of 19-25 years which can further be renewed for a period of 2-5 years.

Further, the company has cancellable operating lease agreement in respect of office premises and guesthouse having lease period 11 months to 3 years..

Commitments for minimum lease payments in relation to the above lease arrangements are payable as follows:

5 The Company has not received information from suppliers or service providers, that they are covered under the Micro, Small and Medium Enterprises (Development) Act, 2006. The information required to be disclosed under the Micro, Small and Medium Enterprises (Development) Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

6 Employee benefits

The Company contributes to the following post-employment defined benefit plans in India.

(i) Defined Contribution Plans:

The Company makes contributions towards provident fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits.

(ii) Defined Benefit Plan:

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to Group Gratuity cum Life Assurance Schemes administered by the LIC of India.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March 2017. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

A. Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognised in the Company’s financial statements as at balance sheet date:

B. Movement in net defined benefit (asset) liability

The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit (asset) /liability and its components:

On an annual basis, an asset-liability matching study is done by the Company whereby the Company contributes the net increase in the actuarial liability to the plan manager in order to manage the liability risk.

C. Actuarial assumptions

a) Economic assumptions

The principal assumptions are the discount rate and salary growth rate. The discount rate is based upon the market yields available on government bonds at the accounting date with a term that matches that of liabilities. Salary increase rate takes into account of inflation, seniority, promotion and other relevant factors on long term basis. Valuation assumptions are as follows which have been selected by the company.

D. Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

Senstivities due to mortality and withdrawals are not material and hence impact of change not calculated. Senstivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement and life expectancy are not applicable being a lump sum benefit on retirement.

(iii) Other long-term employee benefits:

During the year ended 31 March 2017, the Company has incurred an expense on compensated absences amounting to Rs. 100 (previous year Rs. 148). The Company determines the expense for compensated absences basis the actuarial valuation of plan assets and the present value of the obligation, using the Projected Unit Credit Method.

7 Related parties

A. Related parties and their relationships

i. Joint Venturer (Promoters)

Indian Oil Corporation Limited (IOCL)

Bharat Petroleum Corporation Limited (BPCL)

Oil and Natural Gas Corporation Limited (ONGC)

GAIL (India) Limited (GAIL)

Joint Ventures/ Associates in which Joint Venturer is a Venturer

ONGC Petro additions Limited (OPAL)

Indraprastha Gas Limited (IGL)

Mahanagar Gas Limited (MGL)

Dahej SEZ Ltd (DSL)

ii. Joint Venture

Adani Petronet (Dahej) Port Pvt. Ltd (APPPL).

India LNG Transport Co (No 4) Pvt. Ltd. (ILT4)

iii. Key Managerial Personnel (KMP)

Sh. K. D. Tripathi Sh. Debasis Sen

Sh. Prabhat Singh Sh. Subir Purkayastha

Sh. Rajender Singh Mr. Philip Olivier

Sh. R K Garg Sh. Arun Kumar Misra

Sh. D. K. Sarraf Sh. Sushil Kumar Gupta

Sh. S. Varadarajan Dr. Jyoti Kiran Shukla

8 Corporate Social Responsibility

a. Amount required to be spent by the Company on Corporate Social Responsibility (CSR) activities during the year was Rs. 2,160 lac (Previous year Rs. 2,506)

b. Corporate Social Responsibility (CSR) activities undertaken during the year is Rs. 438 lac [406 has been paid in cash and Rs. 32 is yet to be paid in cash].

9 Financial instruments - Fair values and risk management

I. Fair value measurements

A. Financial instruments by category

B. Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:

(a) recognised and measured at fair value and

(b) measured at amortised cost and for which fair values are disclosed in the financial statements.

To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.

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

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

There are no transfers between level 1 and level 2 during the year

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

- the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

All of the resulting fair value estimates are included in level 2 except for unlisted equity securities and preference shares, where the fair values have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk.

The carrying amounts of trade receivables, trade payables, capital creditors, cash and cash equivalents, current maturities of long term debt, unpaid dividend, and other payable for capital goods are considered to be the same as their fair values, due to their short-term nature.

The fair values for loans were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit

The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

II. Financial risk management

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

- credit risk;

- liquidity risk; and

- market risk

Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company’s risk management policies. The committee reports regularly to the board of directors on its activities.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company’s Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

i. Credit risk

The Company has made investments in Debt based Mutual Funds. These Mutual funds invests in NCD / Bonds / CP / CD of various companies and banks. In case, the investee company defaults on repayment, such losses may have to be borne by the investors of Mutual funds.

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate. Further details of concentration of revenue are included in Note 38(C).

Company takes Stand by Letter of Credit (SBLC) from each of the customer with which the Company deals with the exception of its Promoters namely BPCL, GAIL, IOCL and ONGC. Option to take SBLC from Promoter is also being explored by the company.

The Company establishes an allowance for impairment that represents its estimate of expected credit losses in respect of trade and other receivables. Basis the evaluation, the management has determined that there are credit impairment loss on the trade and other receivables.

The gross carrying amount of trade receivables is Rs. 125,221 (31 March 2016 - Rs. 98,852, 1 April 2015 -Rs.134,277).

During the period, the Company has made no write-offs of trade receivables. The Company management also pursue all options for recovery of dues wherever necessary based on its internal assessment. A default on a financial asset is when counterparty fails to make payments within 365 days when they fall due.

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

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at local level in the operating companies of the Company in accordance with practice and limits set by the Company. These limits vary by location to take into account the liquidity of the market in which the entity operates. In addition, the Company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

(a) Financing arrangements

The group had access to the following undrawn borrowing facilities at the end of the reporting period:

The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in INR and have an average maturity of 1 year (as at 31 March 2016 - 1 year and as at 1 April 2015 - 1 year).

(b) Maturities of financial liabilities

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

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

The interest payments on variable interest rate loans and bond issues in the table above reflect market forward interest rates at the reporting date and these amounts may change as market interest rates change.

iii. Market risk

Market risk is the risk that changes in market prices - such as commodity prices (LNG), foreign exchange rates and interest rates - will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

a) Price risk

To protect the company from fluctuation of commodity prices, same are passed through to the off-takers in long term contract. In spot or short term contract, they are generally pass through to the customers except in few cases, up to 2 cargo load, where the company keeps the commodity price risk with themselves to take benefit from market fluctuation.

PLL imports LNG mainly from Qatar and Australia through long term chartered vessels. The foreign exchange involved in making payment to LNG suppliers, loading port charges and shipper is recovered from off-taker / customer under sale contract, both long term and short term. For foreign currency loans taken by Company, the company has entered into derivative transaction at the time of draw down itself to protect from exchange losses. Company does not take any exposure on account of currency in Foreign Currency Loans. In respect of other payments on account of repair and capex of plant, operating expenses of plant and corporate offices etc. same are monitored on a regular basis to keep the open position at an acceptable level.

Exposure to currency risk

The summary quantitative data about the Group’s exposure to currency risk as reported to the management of the Group is as follows:

Sensitivity analysis

A reasonably possible strengthening (weakening) of the INR against all other currencies at 31 March would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company cash flow to interest rate risk. Company policy is to maintain most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary especially if the borrowing is made in foreign currency. Company has some amount of loan taken from International Finance Corporation, which is at variable rate. The Company ensures that such amount is kept at an acceptable level. The investment of surplus funds made by company in debt based of mutual funds is also subject to this risk. Company makes investment in a manner which minimises such risk and also takes regular feedback from the market experts on such investments. The Company has also given loans to, India LNG Transport Company (No. 3) Limited, Malta and India LNG Transport Company (No. 4) Private Limited, Singapore, which are at Bank Rate and any change in Bank Rate will impact the earnings.

Exposure to interest rate risk

The interest rate profile of the Group’s interest-bearing financial instruments as reported to the management of the Group is as follows.

Fair value sensitivity analysis for fixed-rate instruments

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

Cash flow sensitivity analysis for variable-rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

A change of 100 basis points in interest rates would have increased or decreased equity by Rs. 103 lacs after tax (Previous year Rs. 139 lac). This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

10 Capital management

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital on a yearly basis as well as the level of dividends to ordinary shareholders which is given based on approved dividend policy.

The board of directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position

11 First Time Adoption of Ind AS

As stated in note 2, these are the Company’s first consolidated financial statements prepared in accordance with Ind AS

The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS statement of financial position at 1 April 2015 (the Company’s date of transition). In preparing its opening Ind AS statement of financial position, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Indian GAAP (previous GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables.

Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Ind AS optional exemptions

(i) Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

(ii) Leases

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such contracts / arrangements.

(iii) Investments in Joint venture:

Ind AS 101 permits a first-time adopter to choose the previous GAAP carrying amount at the entity’s date of transition to Ind AS to measure the investment in the joint venture as the deemed cost.

Accordingly, the company has opted to measure its investment in subsidiary at deemed cost, i.e. previous GAAP carrying amount.

B. Ind AS mandatory exceptions

(i) Estimates

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for Impairment of financial assets based on expected credit loss model in accordance with Ind AS at the date of transition as these were not required under previous GAAP.

(ii) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

C. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

D. Notes to first-time adoption:

1. Fair valuation of derivatives

Under the previous GAAP, in respect of external commercial borrowings the Company has entered into derivative contracts to hedge the loan repayment amount including interest. This has the effect of freezing the Rupee equivalent of this liability as reflected under the Borrowings.

Consequently, there is no restatement of the loan taken in foreign currency and there is no impact in the statement of Profit & Loss, arising out of exchange fluctuations for the duration of the loan

Under Ind AS, derivatives which are not designated as hedging instruments are fair valued with resulting changes being recognised in profit or loss. The fair valuation of swap resulted in a gain of Rs. 25,885 as at 31 March 2016 (1 April 2015 - Rs. 26,352). Consequently, the total equity as at 31 March 2016 increased by Rs. 16,927 (1 April 2015 - Rs. 17,232). The profit for the year (net of tax) ended 31 March 2016 decreased by Rs. 305 as a result of the fair value change on the swap.

2. Restatement of foreign currency liability

Under the previous GAAP, in respect of external commercial borrowings the Company has entered into derivative contracts to hedge the loan repayment amount including interest. This has the effect of freezing the Rupee equivalent of this liability as reflected under the Borrowings.

Consequently, there is no restatement of the loan taken in foreign currency and there is no impact in the statement of Profit & Loss, arising out of exchange fluctuations for the duration of the loan

Under Ind AS, all monetry items are required to be restated at the closing rate with the resulting changes being recognised in profit or loss. The restatement of monetary liability resulted in a loss of Rs. 24,071 as at 31 March 2016 (1 April 2015 - Rs. 24,361). Consequently, the total equity (net of tax) as at 31 March 2016 decreased by Rs. 15,740 (1 April 2015 - Rs. 15,930). The profit for the year ended 31 March 2016 increased by Rs. 190 as a result of the restatement of the liability.

3 Proposed dividend

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend of Rs. 22,567 as at 31 March 2016 (1 April 2015 - Rs. 18,000) included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.

4 Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year (net of tax) ended 31 March 2016 increased by Rs. 41. There is no impact on the total equity as at 31 March 2016.

5 Deferred tax

Deferred tax have been recognised on the adjustments made on transition to Ind AS.

6 Retained earnings

Retained earnings as at 1 April 2015 has been adjusted consequent to the above Ind AS transition adjustments.


Mar 31, 2016

1. Custom Duty on import of Project material / equipment has been assessed provisionally (current and previous years) and additional liability/refund, if any, on this account will be accounted for in the books on final assessment.

2. The Company has not received information from suppliers or service providers, that they are covered under the Micro, Small and Medium Enterprises (Development) Act, 2006. The information required to be disclosed under the Micro, Small and Medium Enterprises (Development) Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

3. Segment Reporting (Accounting Standard - 17)

Since the Company primarily operates in one segment - Natural Gas Business, segment reporting as required under Accounting Standard - 17 is not applicable. There is no reportable geographical segment either.

4. Corporate Social Responsibility

a) Amount required to be spent by the Company on Corporate Social Responsibility (CSR) activities during the year was Rs. 2,506 lac.

b) Corporate Social Responsibility (CSR) activities undertaken during the year is Rs. 597 lac [Rs. 565 lac has been paid in cash and Rs. 32 lac is yet to be paid in cash].

5. Previous year figures have been regrouped/rearranged wherever necessary, to correspond to current year figures.


Mar 31, 2015

1.Company Overview

Petronet LNG Limited referred to as "PLL" or "the Company" was formed by Bharat Petroleum Corporation Limited (BPCL), GAIL (India) Limited (GAIL), Indian Oil Corporation Limited (IOC) and Oil and Natural Gas Corporation Limited (ONGC) primarily to develop, design, construct, own and operate Liquefied Natural Gas (LNG) import and regasification terminals in India. PLL was incorporated on April 2, 1998 under the Companies Act, 1956 and received certificate of commencement of business on June 1, 1998. The Company is involved in the business of import and regasification of LNG and supply to BPCL, GAIL, IOCL and others. Presently the Company owns and operates LNG Regasification Terminal with the name plate capacity of 10 MMTPA at Dahej, in the State of Gujarat. The Company has also commissioned another LNG terminal with a name plate capacity of 5 MMTPA at Kochi, in the State of Kerala.

In respect of external commercial borrowings from International Finance Corporation Washington D.C.,USA and Proparco, France, the Company has entered into derivative contracts to hedge the loan amount including interest. This has the effect of freezing the Rupee equivalent of this liability as reflected under the Borrowings. Consequently, there is no restatement of the loan taken in foreign currency and there is no impact in the Statement of Profit & loss, arising out of exchange flunctuation for the duration of the loan.The interest payable in Indian Rupees on the derivative contracts is accounted for in the Statement of Profit & Loss.

2. Contingent Liabilities and commitments (to the extent not provided for)

A. Commitments

(a) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 1,08,476 lac (previous year 1,83,213 lac).

(b) The Company has long term LNG purchase commitments against which back to back sale agreements have been made, for which there are no foreseeable losses as on the Balance Sheet date.

(c) Outstanding Bank guarantees as on 31st March 2015 Rs.5,12,667 lac (previous year 4,30,046 lac) issued to LNG suppliers against long term purchase agreement.

B. Contingent Liability

(a) The Collector of Electricity Duty, Gandhinagar (Gujarat) had issued notices classifying the business activities of the Company as "Storage(HTP-NA)" instead of "Industrial Undertaking(HTP I)" and hence levied Electricity Duty @ 45% instead of 20% of the consumption charges and charging 70 paisa per unit on the power generated by the Company for its own consumption. The Company has challenged the legality and validity of the notices by way of writ petitions before the High Court of Gujarat. Meanwhile Company continues to make payment of Electricity Duty @15%(Revised rate of HTP-I) on the basis of the stay order granted by the High Court. The High Court vide order dated 1.7.2014 has set aside the notice and quashed the supplementary bill/demand notice and remanded the case back to the Collector of Electricity Duty, Gandhinagar to decide the nature of undertaking of the Company. The Company has made it's oral and written submissions before the Collector of Electricity Duty, Gandhinagar and the order is awaited. The total contingent liability till March, 2015 calculated on the differential payable (25% Revised rates for "HTP-II A") as classified by GEB and what is actually paid by the Company on "HTP-I" rate (i.e. 15%) is Rs. 2,251 lac (Previous year Rs. 1,745 lac).

(b) The Company has filed a writ petition before the Gujarat High Court challenging the legality and correctness of the notice dated April 1, 2006 from the Collector of Stamps, Bharuch stating that pursuant to the amendment to Section 24 of the Bombay Stamp Act, 1958, the Company is required to pay stamp duty @ Re.1 per Rs. 1000/ or part thereof of the value mentioned in the Delivery Order of the goods imported through ports in Gujarat. The Hon'ble High Court of Gujarat vide its order dated February 24, 2010 has quashed the notice issued by the Stamp Authorities. Stamp authorities have filed Special Leave Petition (SLP) in Supreme Court against the same and the case is pending as on 31st March 2015. The contingent liability from the effective date of amendment i.e. April 1, 2006 till March 31, 2015 on the CIF value is estimated to be Rs. 15,258 lac. (Previous year till March, 2014 Rs.11,806 lac).

(c) The Company has received refund of Rs. 112 lac, Rs. 284 lac and Rs. 346 lac from Customs Department vide CESTAT order dated November 7, 2013, September 9, 2011 and May 31, 2010 respectively mainly pertaining to custom duty on short landing of LNG. The Custom Authorities have filed appeal against the order of the CESTAT with the Hon'ble High court of Gujarat which is pending as on March 31, 2015. Further, differential custom duty amounting Rs. 2,455 lac is lying as recoverable in books as on 31st March 2015. (Rs.2,177 lac as on 31st March 2014) against the same.

(d) Taxes and duties recoverable (Note 14) includes service tax of Rs. 4,005 lac on vessel hire charges (including interest of Rs. 297 lac) paid under protest for the period from May 16, 2008 to September 30, 2009 under section 65(105)(zzzzj) of the Finance Act, 1994 (as amended) - "Supply of Tangible Goods for Use". The Commissioner of the Service Tax, vide Order dated March 6, 2012 has confirmed the demand. Against the Order of the Commissioner, Service Tax, the Company has filed an appeal before CESTAT, Delhi on June 6, 2012. CESTAT Delhi has passed an order in favour of the Company on October 24, 2013, vide order no. ST/A/58706/2013-CU(DB), upholding Company's contention that Vessel Hire Charges are not subject to Service Tax. The department has initiated the process to file an appeal against the CESTAT order before the Supreme Court. Refund application has been pending with the department since December 13, 2013 and no refund has been received by the Company till date.

(e) Few cases are pending with Service Tax Department at various levels, pertaining to applicability of service tax on charges paid for External Commercial Borrowings taken from IFC, ADB & Proparco. Amount involved in such cases including penalty is Rs. 479 lac (approx).

(f) The DGCEI (Ahmedabad) has issued show cause notice dated 10th October 2014 claiming service tax of Rs. 1,416 lac on the boil off quantity of LNG during regasification process. The Company has adequately replied against the notice and no further query/demand has been raised by the department.

(g) During the year, the Company has received the assessment order for AY 2008-09, which was referred back to AO by ITAT for recalculation of 14A disallowance. The assessing officer has raised a demand of Rs. 1,244 lac vide it's order dated 20.03.2015. The Company is in the process of filing the appeal to CIT(A).

(h) The Company has filed Service Tax Refund Application for services availed in the Special Economic Zone for it's LNG Terminal at Kochi, amounting to Rs. 1,919 lac, out of which Rs. 774 lac is before the CESTAT level and Rs. 1,145 lac is at Assistant Commissioner level.

(i) Demand Order amounting to Rs. 882 lac raised by Dy. Commissioner of Customs, for inclusion of additional charges towards transportation in the Assessable value for Free on Board (FOB) cargoes and appeal for the same has been filled at Commissioner of Customs (Appeals).

(j) There are certain claims of Rs. 18,362 lac made by a Contractor against capital works for which the Company has also made certain counter claims. As per the terms of the contract, Independent expert's opinion is being sought and pending the settlement of liability, claims are not determinable and therefore no provision has been made in the books.

(k) Dahej Second Jetty Topside contract awarded to a consortium of two parties was terminated by the Company in July, 2012 because of the failure of the contractor to carry out the work as per schedule. Contractor invoked arbitration and claimed Rs. 15,156 lac. PLL has also filed counter claim of Rs. 11,671 lac as per the contract. Pending the outcome of arbitration proceedings, liability against the claims, if any, is not determinable and therefore no provision has been made in the books.

(l) The Company had entered into a lease agreement with Cochin port trust (CPT) for 33.4015 hectare of land for building and operating port and regasification facility at Kochi. CPT has raised demand for enhanced lease rent (almost 10 times), by quoting the order of Tariff Authority for Major Ports (TAMP) dated 10th June 2010. CPT has invoked arbitration and claimed Rs. 4,258 lac as on 31st March 2015. Further, an additional demand amounting Rs. 2,000 lac has been raised by CPT for usage of dredged sand by the Company. PLL has been contesting the increase in lease rent as well as dredging sand claims. As such, the matter has been referred to Arbitration. Pending the outcome of arbitration proceedings, liability against the claims, if any, is not determinable and therefore no provision has been made in the books.

3. Income Tax cases are pending at various appellate authorities/levels regarding addition of income at the time of Income Tax assessment. The Company has deposited Rs. 9,427 lac against the demand raised by the tax authorities. Pending the final outcome of the cases, demand raised by the tax authorities have been provided for in the books of account in the year of receipt of the demand.

4. Custom Duty on import of Project material / equipment has been assessed provisionally (current and previous years) and additional liability/refund, if any, on this account will be accounted for in books on final assessment.

5. The Company has not received any information from suppliers or service providers, whether they are covered under the "Micro, Small and Medium Enterprises (Development) Act, 2006. Disclosure relating to amount unpaid at the year-end together with interest payable, if any, as required under the said Act are not ascertainable.

6. Segment Reporting (Accounting Standard - 17)

Since the Company primarily operates in one segment - Natural Gas Business, segment reporting as required under Accounting Standard - 17 is not applicable. There is no reportable geographical segment either.

7. Transactions with Related Party: a) Related Party

Related parties and their relationships

i) Joint Venturer (Promoters)

Indian Oil Corporation Limited (IOCL)

Bharat Petroleum Corporation Limited (BPCL)

Oil and Natural Gas Corporation Limited (ONGC) GAIL (India) Limited (GAIL)

ii) Joint Venture

Adani Petronet (Dahej) Port Pvt. Ltd (APPPL).

iii) Key Managerial Personnel (KMP)

Dr A K Balyan Sh. Rajender Singh Sh. R K Garg

8. There is no impairment loss of any assets that has occurred in terms of Accounting Standard 28.

9. The Company is eligible for deduction under section 80IA of the Income Tax Act, 1961, with respect to power generation and port undertakings at Dahej. Till previous year, provision for Income Tax has been made in the books without considering deduction under section 80IA, as the deduction was disallowed by the Income Tax Department at the time of assessment. During the year, the Company has been allowed deduction under Section 80IA for AY 2012-13 and therefore, tax benefits amounting to Rs. 12,314 lac has been accounted for in the books w.r.t. AY 2012- 13 to AY 2014-15. Further, the Company has claimed Income tax deduction benefit of Rs. 2,048 lac under Section 32AC at the time of filing of Income Tax return for AY 2014-15 and the same has been accounted for in the books during the current year.

10. Previous year figures have been regrouped/rearranged wherever necessary, to correspond to current year figures.


Mar 31, 2014

1. Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 18,32,13 lac (previous year 5,94,17 lac).

The Company has long term LNG purchase commitments against which back to back sale agreements have been made.

2. Contingent Liability

a) Letter of credit/Bank guarantees of Rs. 43,00,46 lac (previous year 30,24,10 lac)

b) The Collector of Electricity Duty, Gandhinagar (Gujarat) had issued notices classifying the business activities of the Company as "Storage(HTP-IIA)" instead of "Industrial Undertaking(HTP I)" and hence levied Electricity Duty @ 45% instead of 20% of the consumption charges and charging 70 paise per unit on the power generated by the Company for its own consumption. The Company has challenged the legality and validity of the notices by way of writ petitions, which is pending before the Gujarat High Court. Meanwhile Company continues to make payment of Electricity Duty @15%(Revised rate of HTP-I) on the basis of the stay order granted by the High Court. The High Court has clubbed similar matters pending before it and are being tried together. The Court has so far concluded the arguments of all the Petitioners and is now listed for the arguments of GEB. The matter came up for hearing before the High Court on five dates between February and March, 2014, but no proceedings took place. The total contingent liability till March,2014 calculated on the differential payable (25%(Revised rates for "HTP-II A") as classified by GEB and what is actually paid by Company on "HTP-I" rate i.e. 15%) is Rs. 17,45 lac (Previous year Rs. 14,93 lac ).

c) The Company has filed a writ petition before the Gujarat High Court challenging the legality and correctness of the notice dated April 1, 2006 from the Collector of Stamps, Bharuch stating that pursuant to the amendment to Section 24 of the Bombay Stamp Act, 1958, the Company is required to pay stamp duty @ Re.1 per Rs.1000/ or part thereof of the value mentioned in the Delivery Order of the goods imported through ports in Gujarat. The Hon''ble High Court of Gujarat vide its order dated February 24, 2010 has quashed the notice issued by the Stamp Authorities. Stamp authorities have filed Special Leave Petition (SLP) in Supreme Court against the same and the case is pending as on 31st March 2014. The contingent liability from the effective date of amendment i.e. April 1, 2006 till March 31, 2014 on the CIF value is estimated to be Rs. 11,806 lac. (Previous year till March, 2013 Rs. 84,81 lac).

d) The company has received refund for Rs 2,84 lac pertaining to Bills of Entries related to short landing of LNG received vide Order from CESTAT dated 29/09/2011 and refund of Rs 3,46 lac vide order dated 31st May 2010 of CESTAT. The custom authorities have filled appeal against the order of the CESTAT with the Hon''ble High court of Gujarat which is pending as on March 31, 2014.

e) Taxes and duties recoverable (Note 17) includes service tax of Rs. 40,05 lac on vessel hire charges (including interest of Rs. 2,97 lac) paid under protest for the period from May 16, 2008 to September 30, 2009 under section 65(105)(zzzzj) of the Finance Act, 1994 (as amended) – "Supply of Tangible Goods for Use". The Commissioner of the Service Tax, vide Order dated March 6, 2012 has confirmed the demand. Against the Order of the Commissioner, Service Tax, The Company has filed an appeal before CESTAT, Delhi on June 6, 2012. CESTAT Delhi has passed an order in favour of the company on October 24, 2013, vide order no. ST/A/58706/2013- CU(DB) , upholding company''s contention that Vessel Hire Charges are not subject to Service Tax Refund application has been filed with the department on December 13, 2013, the department has not yet filed an appeal against the said order. Company has filed CAVEAT with the High Court of Delhi and Supreme Court to avoid ex-parte assessment of appeal.

f) The Company has cases pending with Service Tax Department at various levels, pertaining to applicability of service tax on charges paid for External Commercial Borrowings taken from IFC, ADB & Proparco. Amount involved in such cases is Rs. 475 lac (approx) including penalty.

3. Custom Duty on import of Project material / equipment has been assessed provisionally (current and previous years) and additional liability, if any, on this account will be provided on final assessment.

4. The Company has not received any information from suppliers or service providers, whether they are covered under the "Micro, Small and Medium Enterprises (Development) Act, 2006. Disclosure relating to amount unpaid at the year-end together with interest payable, if any, as required under the said Act are not ascertainable.

5. Segment Reporting (AS – 17)

Since the Company primarily operates in one segment – Natural Gas Business, segment reporting as required under Accounting Standard - 17 is not applicable. There is no reportable geographical segment either.

6. Transactions with Related Party:

a) Related parties and their relationships i) Joint Venturer (Promoters)

Indian Oil Corporation Limited (IOCL) Bharat Petroleum Corporation Limited (BPCL) Oil and Natural Gas Corporation Limited (ONGC) GAIL (India) Limited (GAIL)

ii) Joint Venture

Adani Petronet (Dahej) Port Pvt. Ltd.

iii) Subsidiary of Promoter (ONGC)

Mangalore Refinery and Petrochemicals Limited

iv) Key Managerial Personnel (KMP)

Dr. A. K. Balyan

Sh. Rajender Singh

Sh. R. K. Garg

7. There is no impairment loss of any assets that has occurred in terms of AS-28

8. The company has claimed deduction under section 80IA of the income tax act 1961 in respect of Power generation and Port Undertaking in its tax returns. However, provision for income tax has been made without considering the aforesaid deduction pending final assessment with Income tax authorities.

9. Previous year figures have been regrouped/rearranged wherever necessary, to correspond to current year figures.


Mar 31, 2013

Company Overview

Petronet LNG Limited referred to as "PLL" or "the Company" was formed by Bharat Petroleum Corporation Limited (BPCL), GAIL (India) Limited (GAIL), Indian Oil Corporation Limited (IOC) and Oil and Natural Gas Corporation Limited (ONGC) primarily to develop, design, construct, own and operate a Liquefied Natural Gas (LNG) import and regasification terminals in India. PLL was incorporated on April 2, 1998 under the Companies Act, 1956 and received certificate of commencement of business on June 1, 1998. The Company is involved in the business of import and regasification of LNG and supply to BPCL, GAIL, IOCL and others. Presently the Company owns and operates LNG Regasification Terminal with the name plate capacity of 10 MMTPA at Dahej, in the State of Gujarat. The Company is also setting up another Greenfield LNG Regasification Terminal with the name plate capacity of 5 MMTPA at Kochi, in the State of Kerala.

The Company has only one class of shares referred to as equity shares each having a par value of Rs. 10. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2013, the amount of dividend per share recognized as distribution to equity shareholders is Rs. 2.50/- (previous year Rs. 2.50/-). The total dividend appropriation for the year ended March 31, 2013 amounted to Rs.18,750 lacs (previous year Rs. 18,750 lacs) and corporate dividend tax of Rs. 3,187 lacs (previous year Rs. 3,042 lacs).

The external commercial borrowings from International Finance Corporation (Washington), Asian Development Bank & Proparco, France are borrowed at an average cost of 8.61% p.a (inclusive of hedge cost) and the loans from Indian lenders carry an average interest rate of 10.41% p.a as applicable on 31st March 2013.

1. In respect of external commercial borrowings from International Finance Corporation Washington D.C.,USA and Proparco, France, the Company has entered into derivative contracts to hedge the loan amount including interest. This has the effect of freezing the Rupee equivalent of this liability as reflected under the Borrowings. Thus there is no impact in the statement of Profit & Loss, arising out of exchange fluctuations for the duration of the loan. Consequently, there is no restatement of the loan taken in foreign currency.The interest payable in Indian Rupees on the derivative contracts is accounted for in the Statement of Profit & Loss.

2 Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 5,94,17 lacs (previous year 12,88,97 Lacs).

The Company has long term LNG purchase commitments against which back to back sale agreements have been made.

3 Contingent Liability

a) Letter of credit/Bank guarantees of Rs. 30,24,10 Lacs (previous year 28,82,53 Lacs)

b) The Collector of Electricity Duty, Gandhinagar (Gujarat) had issued notices classifying the business activities of the Company as "Storage(HTP-NA)" instead of "Industrial Undertaking(HTP I)" and hence levied Electricity Duty @ 45% instead of 20% of the consumption charges and charging 70 paise per unit on the power generated by the Company for its own consumption. The Company has challenged the legality and validity of the notices by way of writ petitions, which is pending before the Gujarat High Court. Meanwhile Company continues to make payment of Electricity Duty @15%(Revised rate of HTP-I) on the basis of the stay order granted by the High Court. The High Court has clubbed similar matters pending before it and areis being tried together. The Court has so far concluded the arguments of all the Petitioners and is now listed for the arguments of GEB. No further hearing took place in 2012. The total contingent liability till March,2013 calculated on the differential payable (25%(Revised rates for "HTP-II A") as classified by GEB and what is actually paid by Company on "HTP-I" rate i.e. 15%) is Rs. 14,93 lacs (Previous year Rs.14,34 lacs ).

c) The Company has filed a writ petition before the Gujarat High Court challenging the legality and correctness of the notice dated April 1, 2006 from the Collector of Stamps, Bharuch stating that pursuant to the amendment to Section 24 of the Bombay Stamp Act, 1958, the Company is required to pay stamp duty @ Re.1 per Rs.1000/ or part thereof of the value mentioned in the Delivery Order of the goods imported through ports in Gujarat. The Hon''ble High Court of Gujarat vide its order dated February 24, 2010 has quashed the notice issued by the Stamp Authorities. Stamp authorities have filed Special Leave Petition (SLP) in Supreme Court against the same and the case is pending as on 31st March 2013. The contingent liability from the effective date of amendment i.e. April 1, 2006 till March,2013 on the CIF value is estimated to be Rs. 84,81 lacs. (Previous year till March, 2012 Rs. 57,01 lacs).

d) The Company has received refund of Rs. 3,46 Lacs from the custom authorities by vide order dated 31st May 2010 of CESTAT. The custom authorities have filed an appeal against the order of CESTAT with the Hon''ble High Court of Gujarat which is pending as on 31st March 2013.

e) Taxes and duties recoverable (Note 17) includes service tax of Rs. 40,05 lacs on vessel hire charges (including interest of Rs. 2,97 lacs) paid under protest for the period from 16th May 2008 to 30th September 2009 under section 65(105)(zzzzj) of the Finance Act, 1994 (as amended) - "Supply of Tangible Goods for Use". Based on the opinion of the tax consultants, the Company is of the view that the demand is not tenable and the Company has filed a refund claim for the same with the Service tax Department. The Commissioner of the Service Tax, vide Order dated 6th March 2012 has confirmed the demand. Against the Order of the Commissioner, Service Tax, The Company has filed an appeal before CESTAT, Delhi on June 6, 2012. Final hearing in the matter was held on January 3, 2013. No formal Order received till date. Further, in the event of non refund of claim, the Company has counter claim of the amount from the off takers with interest. Thus, no provision is considered necessary by the management.

f) The Company has received a demand order dated 29th November 2011 for Rs. 65 lacs (including penalty of Rs. 33 lacs) towards service tax liability from the Commissioner (Adjudication) Service Tax, Delhi for the years 2003-04 to 2007-08. The Company has filed an appeal before the CESTAT on 7th March 2012 on the grounds that legal services were not taxable prior to 1st September 2009 and payment to International Finance Corporation, USA and others are not subject to service tax levy.

g) The Company has received a demand order dated 6th March 2012 for Rs. 3,77 lacs towards service tax liability, on commercial / commitment / administration charges paid on ECB''s availed, from the Director General of Central Excise Intelligence, Delhi for the years 2006-07 to 2010-11. The Company has filed an appeal against the same before CESTAT, Delhi and order is awaited as on 31st March 2013.

The future cash flow of items (b), (c), (d), (f) and (g) are determinable only on receipt of the decision judgment from the respective authorities.

4 Custom Duty on import of Project material / equipment has been assessed provisionally (current and previous years) and additional liability, if any, on this account will be provided on final assessment.

5 The Company has not received any information from suppliers or service providers, whether they are covered under the "Micro, Small and Medium Enterprises (Development) Act, 2006. Disclosure relating to amount unpaid at the year-end together with interest payable, if any, as required under the said Act are not ascertainable.

6 In term of para 10 of Accounting standard 16 "Borrowing Cost" Rs. 9,27 Lacs (Previous year 17,98 Lacs) has been reduced from the interest and finance charges (Note 11 - Capital work in progress) being income on temporary investment of surplus funds out of borrowing related to capital expenditure.

7 Segment Reporting (AS - 17)

Since the Company primarily operates in one segment - Natural Gas Business, segment reporting as required under Accounting Standard - 17 is not applicable. There is no reportable geographical segment either.

8 Disclosure in respect of Joint Venture (AS - 27)

In terms of the provisions contained in the Dahej LNG Port Terminal Concession Agreement, the Company is to develop a Solid Cargo Port along with LNG Terminal. A joint venture company "Adani Petronet (Dahej) Port Pvt Ltd (APPPL) has been formed for development of Solid Cargo Port. The Company has acquired 26% Equity in APPPL. The disclosure as per AS-27 is as follows:

9. Related Party

a) Related parties and their relationships

i. Joint Venturer (Promoters)

Indian Oil Corporation Limited (IOCL)

Bharat Petroleum Corporation Limited (BPCL)

Oil and Natural Gas Corporation Limited (ONGC)

GAIL (India) Limited (GAIL)

ii. Joint Venture

Adani Petronet (Dahej) Port Pvt. Ltd.

iii. Key Managerial Personnel (KMP)

Dr A K Balyan

Sh. Rajender Singh

Sh. R K Garg

Sh. C.S. Mani

10. There is no impairment loss of any assets that has occurred in terms of AS-28

11. The company has claimed deduction under section 80IA of the income tax act 1961 in respect of Power generation and Port Undertaking in its tax returns. However, provision for income tax has been made without considering the aforesaid deduction pending final assessment with Income tax authorities.

12. Previous year figures have been regrouped/rearranged wherever necessary, to correspond to current year figures.


Mar 31, 2012

Company Overview

Petronet LNG Limited referred to as "PLL" or "the Company" was formed by Bharat Petroleum Corporation Limited (BPCL), GAIL (India) Limited (GAIL), Indian Oil Corporation Limited (IOC) and Oil and Natural Gas Corporation Limited (ONGC) primarily to develop, design, construct, own and operate a Liquefied Natural Gas (LNG) import and regasification terminals in India. PLL was incorporated on April 2, 1998 under the Companies Act, 1956 and received certificate of commencement of business on June 1, 1998. The Company is involved in the business of import and regasification of LNG and supply to BPCL, GAIL, IOCL and others. Presently the Company owns and operates LNG Regasification Terminal with the name plate capacity of 10 MMTPA at Dahej, in the State of Gujarat. The Company is also setting up another Greenfield LNG Regasification Terminal with the name plate capacity of 5 MMTPA at Kochi, in the State of Kerala.

Note :

1. Secured by first ranking mortgage and first charge on pari passu basis on all movable and immovable properties, both present and future including current assets except on trade receivables on which second charge is created on pari passu basis.

2. In respect of external commercial borrowings of USD 150 Million from International Finance Corporation Washington D.C., USA and USD 100 million from Proparco, France, outstanding as on 31st March, 2012, the Company has entered into derivative contracts to hedge the loan including interest. This has the effect of freezing the rupee equivalent of this liability as reflected under the Borrowings. Thus there is no impact of in the Profit & Loss, arising out of exchange fluctuations for the duration of the loan. Consequently, there is no restatement of the loan taken in foreign currency. The interest payable in Indian Rupees on the derivative contracts is accounted for in the Statement of Profit & Loss.

* Under lock in for a period of 5 years from the date of commercial operation (i.e. 01.09.2010) of the investee company as per the Dahej LNG Port Terminal Concession Agreement dated 20th December 2005 with Gujarat Maritime Board.

** Pledged with Sumitomo Mitsui Banking Corporation.

Other Notes on Accounts

1 Estimated amount of Contracts remaining to be executed on Capital Account (net of advances) and not provided for - Rs. 12,88,97 lacs (Previous year - Rs. 22,09,96 lacs).

2 Contingent Liabilities

a. Letter of Credit/ Bank Guarantees Rs. 28,82,53 lacs. (Previous year - Rs. 20,91,80 lacs)

b. The Collector of Electricity Duty, Gandhinagar (Gujarat) had issued notices classifying the business activities of the Company as "Storage" instead of "industrial Undertaking" and hence levied Electricity Duty @ 45% instead of 20% of the consumption charges and charging 70 paise per unit on the power generated by the Company for its own consumption. The Company has challenged the legality and validity of the notices by way of two writ petitions, which are pending before the Hon'ble High Court of Gujarat. Meanwhile Company continues to make payment of Electricity Duty @ 15% on the basis of the stay order granted by the High Court.

The total contingent liability till 31st March, 2012 calculated on the differential payable (25% for "HTP-II A" as classified by GEB and what is actually paid by Company on "HTP-I" rate is 15%) is Rs. 14,34 lacs (Previous year - Rs. 13,87 lacs).

c. The Company had filed a writ petition before the Gujarat High Court challenging the legality and correctness of the notice dated 1st April, 2006 from the Collector of Stamps; Bharuch stating that pursuant to the amendment to Section 24 of the Bombay Stamp Act, 1958, the Company is required to pay stamp duty @ Re. 1 per Rs. 1000 or part thereof the value mentioned in the delivery order of the goods imported through ports in Gujarat. The Hon'ble High Court of Gujarat has upheld the plea of the Company and quashed the notice issued by the Stamp Authorities. The Stamp Authorities have filed a Special Leave Petition (SLP) in the Hon'ble Supreme Court of India, which has been admitted for hearing. The contingent liability from the effective date of amendment i.e. 1st April, 206 till 31st March, 2012 on the CIF value is estimated at Rs. 57,01 lacs. (Previous year - Rs. 37,09 lacs).

d. The Company has received refund of custom duty of Rs. 3,46 lacs from the customs authorities by an Order dated 31st May, 2010 of the CESTAT. The customs authorities have filed an appeal against the Order of the CESTAT with the Hon'ble High Court of Gujarat which is pending.

e. Taxes and duties recoverable (Note 18.) includes service tax of Rs. 40,05 lacs on vessel hire charges (Including interest of Rs. 2,97 lacs) paid under protest for the period from 16th May, 2008 to 30th September, 2009 under section 65 (105) (zzzzj) of the Finance Act, 1994 (as amended) - "Supply of Tangible Goods for Use". Based on the opinion of the tax consultants, the Company is of the view that the demand is not tenable and the Company has filed a refund claim for the same with the Service tax Department. The Commissioner of the Service Tax, vide Order dated 6th March, 2012 has confirmed the demand. The Company is in process of filling an appeal before CESTAT, Delhi. Further, in the event of non refund of claim, the Company has counter claim of the amount from the Off takers with interest. Thus, no provision is considered necessary by the management.

f. During the year, the Company has received a demand order dated 29th November, 2011 for Rs. 65 lacs (including penalty of Rs. 33 lacs) towards service tax liability from the Commissioner (Adjudication) Service Tax, Delhi for the years 2003-04 to 2007-08. The Company has filed an appeal before the CESTAT on 7th March, 2012 on the grounds that legal services were not taxable prior to 1st September, 2009 and payment to International Finance Corporation, USA and others are not subject to service tax levy.

g. During the year, the Company has received a demand order dated 6th March, 2012 for Rs. 3,77 lacs towards service tax liability, on commercial/commitment / administration charges paid on ECB's availed, from the Director General of Central Excise Intelligence, Delhi for the years 2006-07 to 2010-11. The Company is in process of filling an appeal before CESTAT, Delhi.

The future cash flow of items (b), (c), (d), (f) and (g) are determinable only on receipt of the decision / judgment from the respective authorities.

3 Custom Duty on import of Project material/ equipment has been assessed provisionally (current and previous years) and additional liability, if any, on this account will be provided on final assessment.

4 The Company has not received any information from suppliers or service providers, whether they are covered under the "Micro, Small and Medium Enterprises (Development) Act, 2006". Disclosure relating to amount unpaid at the year - end together with interest payable, if any, as required under the said Act are not ascertainable.

5 In terms of para 10 of Accounting Standard 16 "Borrowing Costs". Rs. 17,98 lacs (previous year - Rs. 21,73 lacs) has been reduced from the Interest and Finance Charges (Note 11 - Capital Work in Progress) being income on temporary investment of surplus funds out of borrowings related to Capital Expenditures.

6 Segment Reporting (AS - 17)

Since the Company primarily operates in one segment - Natural Gas Business, segment reporting as required under Accounting Standard - 17 is not applicable. There is no reportable geographical segment either.

7 Related Party Transactions (AS - 18)

a) Related parties and their relationships

i. Promoters

Indian Oil Corporation Limited Bharat Petroleum Corporation Limited

Oil & Natural Gas Corporation Limited GAIL (India) Limited

ii. Joint Venture

Adani Petronet (Dahej) Port Pvt. Ltd

iii. Key Managerial Personnel (KMP)

P. Dasgupta (Managing Director & CEO) (Till 30th June, 2010)

A. K. Balyan (Managing Director & CEO) (Since 16th July, 2010)

Amitava Sengupta (Director - Finance & Commercial) (Till 26th April, 2011) C. S. Mani (Director - Technical)

R. K. Garg (Director - Finance) (Since 20th July, 2011)

8 There is no impairment loss of any asset that has occurred in terms of AS - 28.

9 The Company has claimed deduction under section 801A of the Income Tax Act, 1961 in respect of Power Generation and Port Undertaking in its Tax Returns. However, provision for income tax has been made without considering the aforesaid deductions.

10 Previous year figures have been regrouped/rearranged wherever necessary, to correspond to current year figures.


Mar 31, 2011

1. Estimated amount of Contracts remaining to be executed on Capital Account (net of advances) and not provided for Rs. 22,09,95.65 lacs. (Previous year Rs. 19,61,96.99 lacs).

2. Contingent Liabilities

a. Letters of Credit / Bank Guarantees Rs.20,91,80.20 lacs. (Previous year Rs. 13,20,91.02 lacs)

b. The Collector of Electricity Duty, Gandhinagar ( Gujarat) had issued notices classifying the business activities of the Company as " Storage" instead of " Industrial Undertaking" and hence levied Electricity Duty @ 45% instead of 20% of the consumption charges and charging 70 paise per unit on the power generated by the Company for its own consumption. The Company has challenged the legality and validity of the notices by way of two writ petitions, which is pending before the Gujarat High Court. Meanwhile Company continues to make payment of Electricity Duty @15% on the basis of the stay order granted by the High Court.

The High Court has clubbed similar matters pending before it and is being tried together. Court has so far concluded the arguments of all the Petitioners and is now listed for the arguments of GEB .The total contingent liability till March 31,2011 calculated on the differential payable ( 25% for "HTP-II A" as classified by GEB and what is actually paid by Company on "HTP-I" rate ie 15%) is Rs. 13,87.34 lacs (Previous year Rs.13,36.69 lacs).

c. The Company has filed a writ petition before the Gujarat High Court challenging the legality and correctness of the notice dated April 1, 2006 from the Collector of Stamps, Bharuch stating that pursuant to the amendment to Section 24 of the Bombay Stamp Act ,1958, the Company is required to pay stamp duty @ Re.1 per Rs.1000/ or part thereof of the value mentioned in the Delivery Order of the goods imported through ports in Gujarat. The Honorable High Court of Gujarat vide its order dated February 24, 2010 has upheld the plea of the Company and quashed the notice issued by the Stamp Authorities. The Stamp Authorities have filed an appeal on 14.12.2010, well beyond the limitation period for filing appeal. Delay is condoned by the Court and appeal is pending for hearing. The contingent liability from the effective date of amendment i.e. April 1, 2006 till March 31, 2011 on the CIF value is estimated to be Rs.3,708.52 Lacs. ( Previous year till March 31, 2010 Rs. 2,589.13 lacs)

The future cash flow of items (b) & (c) are determinable only on receipt of the decision / judgment from the respective authorities.

d. Advances recoverable in cash or in kind or for value to be received (Schedule 11) includes service tax of Rs. 40.05 crores on vessel hire charges (including interest of Rs.2.97 crore) paid under protest for the period from 16th May 2008 to 30th September 2009 under section 65(105)(zzzzj) of the Finance Act, 1994 (as amended) - Supply of Tangible Goods for Use. Based on the opinion of the tax consultants, the Company is of the view that the demand is not tenable and the Company has filed a refund claim for the same with the Service tax Department. Further, in the event of non refund of claim, the Company has counter claim of the amount from the Off takers with interest. Thus, no provision is considered necessary by the management.

3. Custom Duty on import of Project material / equipment has been assessed provisionally (current and previous years) and additional liability, if any, on this account will be provided on final assessment.

4. The Company has not received any information from suppliers or service providers, whether they are covered under the "Micro, Small and Medium Enterprises (Development) Act, 2006. Disclosure relating to amount unpaid at the year-end together with interest payable, if any, as required under the said Act are not ascertainable.

5. Segment Reporting (AS – 17)

Since the Company primarily operates in one segment – Natural Gas Business, segment reporting as required under Accounting Standard - 17 is not applicable. There is no reportable geographical segment either.

6. Related Party Transactions (AS – 18)

a) Related parties and their relationships

i. Promoters

Indian Oil Corporation Limited Bharat Petroleum Corporation Limited Oil & Natural Gas Corporation Limited GAIL (India) Limited

ii. Key Managerial Personnel (KMP)

P Dasgupta (Managing Director & CEO) (Till 30th June 2010) A K Balyan (Managing Director & CEO) (Since 16th July 2010) Amitava Sengupta (Director – Finance & Commercial) C S Mani (Director – Technical)

b) Transactions with the above in the ordinary course of business

7. In terms of para 10 of Accounting Standard 16 "Borrowing Costs" Rupees 21,72.86 lacs (previous year Nil) has been reduced from the Interest and Finance Charges (Schedule 5 – Capital Work in Progress) being income on temporary surplus invested out of borrowings related to Capital Expenditures.

8. In respect of external commercial borrowing of USD 150.00 million from International Finance Corporation, Washington D.C., USA outstanding as on 31st March, 2011, the Company has entered into derivative contracts to hedge the loan including interest. This has the effect of freezing the rupee equivalent of this liability as reflected under the Secured Loans (Schedule No. 3). Thus there is no impact in the Profit & Loss account, arising out of exchange fluctuations for the duration of the loan. Consequently, there is no restatement of the loan taken in foreign currency. The interest payable in Indian Rupees on the derivative contracts is accounted for in the Profit & Loss account.

9. There is no impairment loss of any asset that has occurred in terms of AS – 28.

10. The Company has claimed deduction under section 80IA of the Income Tax Act, 1961 in respect of Power Generation and Port Undertaking in its Ta x Returns. However, provision for income tax has been made without considering the aforesaid deductions.

11. Previous year figures have been regrouped/rearranged wherever necessary, to correspond to current year figures.


Mar 31, 2010

1. Estimated amount of Contracts remaining to be executed on Capital Account (net of advances) and not provided for Rs. 19,61,96.99 lacs (Previous year Rs. 10,84,62.35 lacs).

2. Contingent Liabilities

a. Letters of Credit / Bank Guarantees Rs. 13,20,91.02 lacs (Previous year Rs. 14,91,87.54 lacs)

b. The Collector of Electricity Duty, Gandhinagar (Gujarat) had issued notices classifying the business activity of the Company as ‘Storage’ instead of ‘Industrial Undertaking’ and hence levied Electricity Duty @ 45% instead of 20% of the consumption charges and charging 70 paise per unit instead of 40 paise per unit on the power generated by the Company for its own consumption. The Company has challenged the legality and validity of the notices by way of a writ petitions and the matters are pending with the Gujarat High Court. Company has obtained stay against the notices issued by GEB. The High Court has clubbed similar matters pending before it and is expected to be heard on the next date of hearing i.e. April 28, 2010. The total contingent liability till March 31, 2010 is estimated at Rs. 13,36.69 lacs (Previous year Rs. 12,27.67 lacs).

c. The Company has filed a writ petition before the Gujarat High Court challenging the legality and correctness of the notice dated April 1, 2006 from the Collector of Stamps, Bharuch stating that pursuant to the amendment to Section 24 of the Bombay Stamp Act 1958, the Company is required to pay stamp duty @ Re.1 per Rs.1000/or part thereof of the value mentioned in the Delivery Order of the goods imported through ports in Gujarat. The Honorable High Court of Gujarat vide its order dated February 24,2010 has upheld the plea of the Company and quashed the notices issued by the Stamp Authorities.No appeal has been filed by the Stamp Authorities so far against the above order.

The future cash flow of items (b) is determinable only on receipt of the decision/judgment from the respective authorities.

3. Custom Duty on import of Project material / equipment has been assessed provisionally (current and previous years) and additional liability, if any, on this account will be provided on final assessment.

4. The Company has not received any information from suppliers or service providers, whether they are covered under the “Micro, Small and Medium Enterprises (Development) Act, 2006”. Disclosure relating to amount unpaid at the year-end together with interest payable, if any, as required under the said act are not ascertainable.

5. Segment Reporting (AS-17)

Since the Company primarily operates in one segment – Natural Gas Business, segment reporting as required under Accounting Standard - 17 is not applicable. There is no reportable geographical segment either.

6. Related Party Transactions (AS-18)

a) Related parties and their relationships

i. Promoters

Indian Oil Corporation Limited

Bharat Petroleum Corporation Limited

Oil & Natural Gas Corporation Limited

GAIL (India) Limited

ii. Key Managerial Personnel

Prosad Dasgupta (Managing Director &CEO)

Amitava Sengupta (Director – Finance & Commercial)

C. S. Mani (Director – Technical)

b) Transactions with the above in the ordinary course of business

7 The Company has option to claim deduction under Section 80IA of the Income Tax Act, 1961 in respect of Power Generation and Port Undertaking and also under Section 80IB in respect of its Regasification Undertaking. However, provision for income tax has been made without considering the aforesaid deductions.

8 There is no impairment loss on any assets that has occured in terms of AS-28.

9 Previous year figures have been regrouped/rearranged wherever necessary, to correspond to current year figures.

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