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GAIL India
BSE: 532155|NSE: GAIL|ISIN: INE129A01019|SECTOR: Oil Drilling And Exploration
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« Mar 13
Notes to Accounts Year End : Mar '14
1.  Contingent Liabilities and Commitments (To the extent not provided
 for):-
 
 I.  Contingent Liability
 
 (a). Claims against the Company not acknowledged as debts: Rs. 7596.61
 Crores (Previous Year: Rs. 5968.49 Crores), which mainly include:- (i)
 Legal cases for claim of Rs. 840.74 Crores (Previous Year: Rs. 807.23
 Crores) by trade payable on account of Liquidated Damages/Price
 Reduction Schedule and Natural Gas price differential etc. and by
 customers for Natural gas transmission charges etc.
 
 (ii) Income tax assessments up to the Assessment Year 2011-12 have been
 completed and a demand (net of provision) of Rs. 1337.15 Crores relating
 to the Assessment Years 1996-97 to 2011-12 (Previous Year: Rs. 1290.25
 Crores relating to the Assessment Years 1996-97 to 2010-11) raised by
 the Department on account of certain disallowances / additions has been
 disputed by the company as it has been advised that the demand is
 likely to be deleted or may be reduced substantially by the appellate
 Authorities. The company has filed the appeal with the appropriate
 appellate authorities against all the assessment years. However, to
 avoid coercive action by the Department, Rs. 1298.14 Crores (Previous
 Year: Rs. 1221.67 Crores) has already been paid pending decision by the
 appellate authorities. Further, Department has also filed appeals
 amounting to Rs. 100.32 Crores (including interest) (Previous Year: Rs.
 93.37 Crores) before Income Tax Appellate Tribunal, Delhi against the
 relief granted by CIT (A) in favour of Company.
 
 (iii) Rs. 4238.36 Crores (Previous Year: Rs. 3147.06 Crores) relating to
 disputed tax demand towards Custom Duty, Excise duty, Sales tax, Entry
 tax, Service Tax etc.
 
 (b) (i) The Company has issued Corporate Guarantee for Rs. 1555.37 Crores
 (Previous Year: Rs. 1100.74 Crores) on behalf of subsidiary companies for
 raising loan.
 
 (ii) Share in Contingent Liabilities of Joint Ventures based on their
 audited / unaudited Financial Statement: Rs. 980.49 Crores (Previous
 Year: Rs. 728.87 Crores).
 
 II.  Commitments:- (a) Estimated amount of contracts remaining to be
 executed on capital account and not provided for: Rs. 2658.21 Crores
 (Previous Year: Rs. 4841.24 Crores).
 
 (b) Company''s share in estimated amount of contracts remaining to be
 executed on capital account and not provided for based on
 audited/unaudited Financial Statement of Joint Ventures. Rs. 842.47
 Crores (Previous Year: Rs. 1005.49 Crores).
 
 (c) Other Commitments:- (i) As at 31st March''2014, the company has
 commitment of Rs. 772.16 Crores (Previous Year: Rs. 615.65 Crores) towards
 further investment and disbursement of loan in the Joint Venture
 Entities and Associates.
 
 (ii) As at 31st March''2014, the company has commitment of Rs. 140.93
 Crores (Previous Year: Rs. 140.93 Crores) towards further investment in
 the Subsidiaries.
 
 (iii) As at 31st March''2014, the company has commitment of Rs. 147.58
 Crores (Previous Year: Rs. 177.62 Crores) towards further investment in
 the entity other than Joint Ventures, Associates & Subsidiaries.
 
 (iv) Company''s commitment towards the minimum work programme in respect
 of Jointly Controlled Assets has been disclosed in Note 47(b).
 
 2.  Sales Tax demand of Rs. 3449.18 Crores (Previous Year: Rs. 3449.18
 Crores) and interest thereon Rs. 1513.04 Crores (Previous Year: Rs. 1513.04
 Crores) for Hazira unit in Gujarat State: Sales Tax Authorities,
 Ahmedabad have treated the transfer of Natural Gas by the company from
 the state of Gujarat to other states during the period April, 1994 to
 March, 2001 as inter-state sales under Section 3(a) of the Central
 Sales Tax Act. The company has been paying sales tax under section 12
 of the Gujarat Sales Tax Act against Form 17 since inception (1987) and
 accordingly the sales tax assessments have been completed. Based on the
 interpretation of the provisions of the Sales Tax Act and legal advice
 from the experts, the company had filed writ petition and special leave
 petition in the Supreme Court of India. In February, 2005 the case was
 transferred by Hon''ble Supreme Court to Gujarat Sales Tax Tribunal for
 decision. The Tribunal has given its judgment on 16.05.2005 accepting
 the contention of the company for interstate transfer of Natural Gas as
 branch transfer and not the interstate sale and set aside the demand
 under section 41-B of the Gujarat Sales Tax Act. The Hon''ble Tribunal
 has given further instruction to the Assessing Authority to re-assess
 and decide tax liability in accordance with the law considering
 interstate transfer of natural gas as branch transfer. The Sales Tax
 Authorities had filed rectification application under section 72 of the
 Gujarat Sales Tax Act, 1969 in Gujarat Sales Tax Tribunal against its
 judgment dated 16.05.2005. The Tribunal had dismissed the rectification
 application of the sales tax authorities vide its order dated
 06.07.2006. The sales tax authorities have now filed petition in
 Hon''ble high Court Ahmedabad against the order of the tribunal and no
 hearing has yet taken place. In opinion of the management there is a
 remote possibility of crystallizing this liability.
 
 3.  (a) Freehold Land acquired valuing Rs. 19.92 Crores (Previous Year:
 Rs. 11.55 Crores) and Leasehold Land acquired valuing Rs. 79.50 Crores
 (Previous Year : Rs. 64.07 Crore) are valued / capitalized on provisional
 basis.
 
 (b) Title deeds for freehold land valuing Rs. 14.21 Crores (Previous
 Year: Rs. 10.86 Crores) and leasehold land valuing Rs. 25.55 Crores
 (Previous Year: Rs. 13.19 Crores) are pending execution.
 
 (c) Title Deeds in respect of ten residential flats at Asiad Village,
 New Delhi, valuing Rs. 1.17 Crores (Previous Year: Rs. 1.17 Crores) are
 still in the name of ONGCL. Concerned authorities are being pursued for
 getting the same transferred in the name of the Company.
 
 (d) Net Block for Building includes an amount of Rs. 0.52 Crores
 (Previous Year: Rs. 1.03 Crores) earmarked for disposal but in use.
 
 (e) Freehold land valuing Rs. 0.63 Crores and leasehold land valuing Rs.
 0.80 Crores, registered in the name of company, does not belong to it
 and hence not capitalized.
 
 4.  Disclosure as per Accounting Standard-5 on Net Profit or Loss for
 the period, Prior Period Items and Changes in Accounting Policies.
 
 (a) In compliance of opinion of Expert Advisory Committee (EAC) of
 ICAI, the company has changed its Accounting Policy (Notes to Accounts
 No 1.04(a) (ix)) and amortised the cost of ROU considering the life as
 99 years. As such, depreciation and amortization expenses increased by
 Rs. 21.05 Crores and accordingly, profit for the year reduced by
 corresponding amount.
 
 (b) In compliance with revised Guidance Note of Accounting of Oil &
 Gas Producing Activities issued by ICAI, the company has changed its
 Accounting Policy (Notes to Accounts No. 1.19 (i) (c) and 1.19 (ii)
 (a)) relating to accounting of exploratory well in progress and
 capitalization of producing properties. There is no impact on the
 profit for the year.
 
 5.  (a) The balance retention from PMT JV consortium amounting to
 Rs. 28.06 Crores (Previous Year: Rs. 25.78 Crores) includes interest
 amounting to Rs. 2.29 Crores (Previous Year: Rs. 0.97 Crores) on Short term
 deposits for the year. This interest income does not belong to the
 company and hence not accounted as income.
 
 (b) Liability on account of Gas Pool Money amounting to Rs. 1035.71
 Crores (Previous Year: Rs. 598.89 Crores) includes interest amounting to
 Rs. 28.99 Crores (Previous Year: Rs. 4.26 Crores) on short term deposits.
 This interest does not belong to the company and hence not accounted as
 income.
 
 (c) The amount in Gas Pool Money (Provisional) account shown under
 Other Long Term Liabilities amounting to Rs. 652.20 Crores (Previous
 Year: Rs. 584.47 Crores) will be invested as and when said amount is
 received from the customers.
 
 (d) Liability on account of Pipeline overrun and Imbalance charges
 amounting to Rs. 70.62 Crores (Previous Year: Rs. 60.28 Crores) includes
 interest for the year amounting to Rs. 5.62 Crores (Previous Year: Rs. 3.20
 Crores) on short term deposits. This interest does not belong to the
 company and hence not accounted as income.
 
 6.  Disclosure as per Accounting Standard-11 on The effect of changes
 in Foreign Exchange Rates
 
 (i) The amount of exchange difference (net) recognized in the Statement
 of Profit & Loss is Rs. 25.21 Crores (Previous Year: Rs. 22.03 Crores).
 
 (ii) The amount of exchange difference debited to the carrying amount
 of fixed assets is Rs. 502.49 Crores (Previous Year: Rs. 146.18 Crores).
 
 7.  The required disclosure under the Revised Accounting Standard 15
 is given as below:
 
 (i) Superannuation Benefit Fund (Defined Contribution Fund)
 
 Company has paid for an amount of Rs.52.07 Crores (Previous Year: Rs.
 46.29 Crores) towards contribution to Superannuation Benefit Fund Trust
 and charged to Statement of Profit and Loss.
 
 (ii) Provident Fund
 
 Company has paid contribution of Rs.43.83 crores (Previous Year:Rs.37.40
 Crores) to Provident Fund Trust at predetermined fixed percentage of
 eligible employee''s salary and charged to Statement of Profit and Loss.
 Further, the obligation of the company is to make good shortfall, if
 any, in the fund assets based on the statutory rate of interest in the
 future period. During the year, the company has reversed a provision of
 Rs.24.72 Crore (Previous Year : made a provision of Rs.18.21 Crores), as
 per actuarial valuation and the balance provision to meet any shortfall
 in the future period to be compensated by the company to the Provident
 Fund Trust as on 31.03.2014 is Rs.2.31 Crore.
 
 (iii) Other Benefit Plans
 
 a) Gratuity
 
 15 days salary for every completed year of service. Vesting period is 5
 years and payment is restricted to ?10 Lakhs.
 
 b) Post Retirement Medical Scheme (PRMS)
 
 The company has Post Retirement Medical Scheme under which eligible
 ex-employees are provided medical facilities upon payment of one time
 prescribed contribution. The liability for the same is recognised on
 the basis of actuarial valuation.
 
 c) Earned Leave Benefit (EL)
 
 Accrual 30 days per year. Encashment while in service 75% of Earned
 Leave balance subject to maximum of 90 days at a time, twice per
 calendar year. Encashment on retirement or superannuation maximum 300
 days.
 
 d) Terminal Benefits (TB)
 
 At the time of superannuation, employees are entitled to settle at a
 place of their choice and they are eligible for Transfer Traveling
 Allowance.
 
 e) Half Pay Leave (HPL)
 
 Accrual 20 days per year. Encashment while in service NIL. Full
 encashment on retirement.
 
 f) Long Service Award (LSA)
 
 Employees are eligible for gold coin weighing 5 gms on completion of 15
 years, 10 gms each on completion of 20 years and 25 years, 20 gms each
 on completion of 30 years and 35 years of service.  Employees are also
 gifted a gold coin weighing 25 grams at the time of superannuation.
 
 The following table summarizes the components of net benefit expenses
 recognized in the statement of Profit and Loss based on actuarial
 valuation.
 
 8.  Disclosure as per Accounting Standard (AS) 16 on ''Borrowing Costs''
 Borrowing costs capitalized during the year Rs. 351.35 Crore (Previous
 Year: Rs. 311.24 Crore).
 
 9.  MOP&NG had issued scheme of sharing of under recoveries on
 sensitive petroleum products. During the year, the Company has given
 discounts amounting to Rs. 1,900 Crores (Previous Year: Rs. 2687.18
 Crores). Corresponding adjustment on account of CST amounting to Rs.
 12.83 Crores (Previous Year: Rs. 9.58 Crores) has been made.
 
 10.  (a) The Company is raising provisional invoices for sale of R-LNG
 as the supplier M/s Petronet LNG (PLL) is also raising provisional
 invoices on the Company since customs duty on import of LNG by PLL has
 been assessed on provisional basis.
 
 (b) With effect from April 1, 2002, Liquefied Petroleum Gas prices has
 been deregulated and is now based on the import parity prices fixed by
 the Oil Companies. However, the pricing mechanism is provisional and is
 pending finalization. Additional asset/liability or impact on profits,
 if any, arising due to such change, will be recognized on finalization
 of pricing mechanism.
 
 (c) (i) Natural Gas Pipeline Tariff is subject to various Regulations
 issued by PNGRB from time to time. With a view to provide fair
 opportunity to the consumers and public to participate in the pipeline
 tariff determination, PNGRB by way of Public notice issues Public
 Consultation Documents and solicites views of the stakeholders. Impact
 on profits, if any, is being recognized consistently as and when the
 pipeline tariff is revised by orders of PNGRB in accordance with these
 Regulations.
 
 (ii) The company has derecognized the revenue by an amount of Rs. 28.33
 Crore on account of lower tariff submitted to PNGRB for approval in
 respect of Gujarat Pipelines Network during the year.
 
 (d) Petroleum & Natural Gas Regulatory Board (PNGRB) on 19.02.2014
 notified insertion in Affiliate Code of Conduct that an entity engaged
 in both marketing and transportation of natural gas shall create a
 separate legal entity for transportation of natural gas by 31.03.2017
 and the right of first use shall however remain with the affiliate of
 such entity. Company has filed an appeal against the PNGRB notification
 in the High Court.
 
 11.  In compliance of Accounting Standard 17 (AS-17) on Segment
 Reporting as notified under Companies Accounting Standard Rules 2006,
 the company has adopted following Business segments as its reportable
 segments:
 
 (i) Transmission services
 
 a) Natural Gas
 
 b) LPG
 
 (ii) Natural Gas Trading
 
 (iii) Petrochemicals
 
 (iv) LPG and other Liquid Hydrocarbons
 
 (v) Other Segments (include GAIL TEL, E&P, City Gas and Power
 Generation)
 
 There are no geographical segments.
 
 The disclosures of segment wise information is given as per Annexure-A.
 
 12.  In compliance of Accounting Standard 18 on Related party
 Disclosures as notified under Companies Accounting Standard Rules
 2006, the names of related parties, nature of relationship and detail
 of transactions entered therewith are given in Annexure - B.
 
 13. In compliance of Accounting Standard 22 on Accounting for taxes on
 Income as notified under Companies Accounting Standard Rules 2006, the
 Company has provided accumulated net deferred tax liability in respect
 of timing difference as on 31st March,2014 amounting to Rs. 2566.37
 Crores (Previous Year: Rs. 2300.06 Crores). Net Deferred tax expense for
 the year of Rs. 266.31 Crores (Previous Year: Rs. 531.42 Crores) has been
 charged to Statement of Profit & Loss. The item- wise details of
 deferred tax liability and assets are as under:
 
 14. In Compliance of Accounting Standard 27 on Financial Reporting of
 Interests in Joint Ventures as notified under Companies Accounting
 Standard Rules 2006, brief description of Joint Ventures of the Company
 are:
 
 (a) Jointly Controlled Entities
 
 (i) Mahanagar Gas Limited: A Joint Venture with British Gas Plc and
 Government of Maharashtra to supply gas to domestic, commercial, small
 industrial consumers and CNG for transport sector in Mumbai. The
 company has equity participation of 35% of the paid up capital and has
 invested Rs. 44.45 Crores (Previous Year Rs. 44.45 Crores) for acquiring
 4,44,50,000 equity shares of Rs. 10/- each in Joint Venture Company.
 
 (ii) Indraprastha Gas Limited: A Joint Venture with BPCL and Government
 of National Capital Territory (NCT) of Delhi to supply gas to domestic,
 commercial units and CNG for transport sector in Delhi. The company has
 equity participation of 22.50% of the paid up capital and has invested
 Rs. 31.50 Crores (Previous Year Rs. 31.50 Crores) for acquiring 3,15,00,000
 equity shares of Rs. 10/- each in Joint Venture Company.
 
 (iii) Petronet LNG Limited: A Joint Venture with BPCL, IOCL and ONGCL
 for setting up LNG imports facilities. The company has equity
 participation of 12.50% of the paid up capital and has invested Rs. 98.75
 Crores (Previous Year Rs. 98.75 Crores) for acquiring 9,37,50,000 equity
 shares of Rs. 10/- each in Joint Venture Company (includes 1,00,00,000
 equity shares allotted at a premium of Rs. 5/- per share)
 
 (iv) Bhagyanagar Gas Limited: A Joint Venture with HPCL for
 distribution and marketing of CNG, Auto LPG, Natural Gas and other
 gaseous fuels in Andhra Pradesh. The company has equity participation
 of 22.50% of the paid up capital and has invested Rs. 0.01 Crores for
 acquiring 12,500 equity shares of Rs. 10/- each in Joint Venture Company.
 The Company has also paid Rs. 22.49 Crores (Previous Year Rs. 22.49 Crores)
 as advance pending allotment of equity shares in Joint Venture Company.
 
 (v) Tripura Natural Gas Company Limited: A Joint Venture with Assam Gas
 Company Limited and Tripura Industrial Development Corporation for
 transportation and distribution of natural gas through pipelines in
 Tripura. The company has equity participation of 29% (previous year
 29%) of the paid up capital and has invested Rs. 1.92 Crores (Previous
 Year Rs. 1.92 Crores) for acquiring 1,92,000 equity shares (previous Year
 1,92,000 equity shares) of Rs. 100/- each in Joint Venture Company.
 
 (vi) Central UP Gas Limited: A Joint Venture with BPCL to supply gas to
 domestic, commercial and small industrial consumers and CNG for
 transport sector in Kanpur, Uttar Pradesh. The company has equity
 participation of 25% of the paid up capital and has invested Rs. 15
 Crores (Previous Year Rs. 15 Crores) for acquiring 1,50,00,000 equity
 shares of Rs. 10/- each in Joint Venture Company.
 
 (vii) Green Gas Limited: A Joint Venture with IOCL to supply gas to
 domestic, commercial and small industrial consumers and CNG for
 transport sector in Agra, Lucknow & Uttar Pradesh. The company has
 equity participation of 22.50% of the paid up capital and has invested
 Rs. 0.01 Crores for acquiring 12,500 equity shares of Rs. 10/- each in
 Joint Venture Company. The Company has also paid Rs. 23.03 Crores
 (Previous Year Rs. 23.03 Crores) as advance pending allotment of equity
 shares in Joint Venture Company.
 
 (viii) Maharashtra Natural Gas Limited: A Joint Venture with BPCL to
 supply gas to domestic, commercial and small industrial consumers and
 CNG for transport sector in Pune, Maharashtra. The company has equity
 participation of 22.50% of the paid up capital and has invested Rs. 22.50
 Crores (Previous Year Rs. 22.50 Crores) for acquiring 2,25,00,000 equity
 shares of Rs. 10/- each in Joint Venture Company.
 
 (ix) Ratnagiri Gas and Power Private Limited: A Joint Venture with
 NTPC, MSEB and other Financial Institutions for the revival of the
 Dabhol Project. The company has equity participation of 32.88%
 (previous year 32.88%) of the paid up capital and has invested Rs. 974.31
 Crores (Previous Year Rs. 974.31 Crores) for acquiring 9,74,308,300
 equity shares (Previous Year 9,74,308,300 equity shares) of Rs. 10/- each
 in Joint Venture Company.
 
 (x) Avantika Gas Ltd. A Joint Venture with HPCL to supply gas to
 domestic, commercial and small industrial consumers and CNG for
 transport sector in M P. The company has equity participation of 22.50%
 of the paid up capital and has invested Rs. 0.01 Crores for acquiring
 12,500 equity shares of Rs. 10/- each in Joint Venture Company. The
 Company has also paid Rs. 22.48 Crores (Previous Year Rs. 22.49 Crores) as
 advance pending allotment of equity shares in Joint Venture Company.
 
 (xi) ONGC Petro additions Ltd (OPAL). A Joint Venture with Oil and
 Natural Gas Corporation Ltd, GAIL (India) Ltd and Gujarat state
 Petroleum Corporation Ltd. for setting up Petrochemical Project at
 Dahej in Gujarat. The company has equity participation of 15.50%
 (Previous Year : 15.50%) of the paid up capital and has invested Rs.
 994.95 Crores (Previous Year Rs. 634.44 Crores) for acquiring
 99,49,45,000 equity shares (Previous Year 63,44,40,001 equity shares)
 of Rs. 10/- each.
 
 (xii) GAIL China Gas Global Energy Holdings Ltd. A Joint Venture with
 China Gas Holdings Ltd. to pursue gas sector opportunities mainly in
 China. The company has equity participation of 50% of the paid up
 capital.
 
 The Company''s share in the assets and liabilities and in the Income and
 expenditure for the year in respect of above Joint ventures, based on
 audited/unaudited Financial Statements as furnished by them, is as
 under: (Final adjustments are effected during the year in which audited
 financial statement are received).
 
 (b) Jointly Controlled Assets
 
 (i) The Company has participated in joint bidding under the Government
 of India New Exploration Licensing Policy (NELP) and overseas
 exploration bidding and has 18 Blocks (PY 28 Blocks) as on 31.03.2014
 for which the Company has entered into Production Sharing Contract with
 respective host Governments along with other partners for Exploration &
 Production of Oil and Gas. The Company is a non-operator, except in
 Block RJ-ONN -2004/1, CY-ONN-2005/1 and CB- ONN-2010/11, where it is an
 operator, and shares in Expenses, Income, Assets and Liabilities based
 upon its percentage in production sharing contract.
 
 (iii) The Company''s share in the Assets, Liabilities, Income and
 Expenditure for the year in respect of joint operations project blocks
 has been incorporated in the Company''s financial statements based upon
 un-audited financial statement submitted by the operators and are given
 below : (Final adjustments are effected during the year in which
 audited financial statement are received).
 
 (v) Share of Minimum work program committed under various production
 sharing contracts in respect of E&P joint ventures is Rs. 475.31 Crores
 vious Year: Rs. 643.50 Crores).
 
 (vi) Quantitative information:
 
 (a) Details of Company''s Share of Production of Crude Oil and Natural
 Gas during the year ended 31.03.2014:
 
 c) In terms of Production Sharing Agreements/Contracts, the balance
 (company''s share) in cost recovery of Blocks (having proved reserves)
 to be made from future revenue of such Blocks, if any, is Rs. 1300.77
 Crores at the end of year (previous year : Rs. 940.75 Crores).
 
 (vii) Jointly Owned Assets:
 
 GAIL''s interest in jointly owned asset i.e. Heat Recovery Steam
 Generation System (HRSG) installed at GAIL, Vaghodia at a project cost
 of Rs. 61.61 crores, is Rs. 30.81 Crores.
 
 15. In Compliance of Accounting Standard 28, impairment of assets
 notified under the Companies Accounting Standard Rules 2006, the
 company has carried out the assessment of impairment of assets.  Based
 on such assessment, GAILTEL assets have been impaired to the extent of
 Rs. 5.62 Crore (Previous Year: Rs. 0.39 Crore) and same amount has been
 recognized as impairment loss in Statement of Profit & Loss.
 
 16.  In compliance with amended Clause 32 of the Listing Agreement with
 Stock Exchanges, the required information is given in Annexure – C.
 
 17.  Foreign currency exposure not hedged by a derivatives instrument
 or otherwise:
 
 18.  In some cases, the Company has received intimation from Micro and
 Small Enterprises regarding their status under The Micro, Small and
 Medium Enterprises Development Act, 2006. The Company has certified
 that as a practice, the payment to all suppliers is made within 7 -10
 days. No payments beyond appointed date were noticed. The amount
 remaining unpaid to all suppliers as at 31st March 2014 is Rs. 4105.68
 Crores (Previous Year: Rs. 3832.93 Crores). No interest was paid or
 payable under the Act.
 
 19.  (a) Following Government of India''s approval, the shareholders of
 the Company in the Annual General Meeting held on 15th September, 1997
 approved the transfer of all the assets including Plant and Machinery,
 accessories and other related assets which are part of Lakwa Project to
 Assam Gas Cracker Complex at a price to be determined by an independent
 Agency and on terms and stipulations as the Board may in its discretion
 deem fit. The Cabinet committee on Economic affairs (CCEA) has approved
 the setting up of Assam Gas based cracker project at Lepetkata by
 formation of a company in which GAIL has equity participation of 70%. A
 company by the name of Brahmaputra Cracker and Polymer Limited has been
 incorporated during 2006-07 and construction of Gas cracker complex is
 in progress. Further, Public Investment Board (PIB) in meeting dated
 13th July 2011 recommended that the issue of ownership of the Lakwa
 facility may be decided by the Committee comprising of representative
 from Department of Expenditure, Planning Commission, MoPNG and the
 administrative Ministry. The gross block of fixed assets and Capital
 work in progress value of Lakwa unit is Rs. 261.14 Crores as on 31st
 March 2014 (Previous Year: Rs. 260.15 Crores ).
 
 (b) Further the Board in its 287th Meeting held on 06th April''2011 has
 approved transfer of CNG stations and its associated pipeline in
 Vadodara to proposed Joint Venture Company of GAIL Gas Ltd.  and
 Vadodra Municipal Seva Samiti at market value yet to be determined. The
 transfer has not been effected during the financial year.
 
 20.  Non-Refundable Deposits Rs. 17.21 Crores (Previous Year: Rs. 11.85
 Crores) made with the concerned authorities for railway crossings,
 forest crossings, removal and laying of electric/telephone poles and
 lines are accounted for under Capital Work-in-Progress on the basis of
 work done/confirmation from the concerned department.
 
 21.  (a) Request for confirmations of balances of trade receivable and
 payables were sent. Confirmation of balances has been received in
 majority of cases. These confirmations are subject to reconciliation
 and consequential adjustments, which in the opinion of the management
 are not material.
 
 (b) In the opinion of management, the value of assets, other than fixed
 assets and non-current investments, on realization in the ordinary
 course of business, will not be less than the value at which these are
 stated in the Balance Sheet.
 
 22.  During the year, an overseas Original Equipment Manufacturer (OEM)
 who is supplier of the equipment to GAIL has made a declaration of
 payment of USD 4.34 Million and GBP 3,48,549 to an Agent over and above
 the declared amount in the bid. This is considered violation of tender
 / contract condition as well as Integrity Pact (IP) signed by the
 bidder. The company has issued a show cause Notice followed by Legal
 Notice claiming the refund of above amount including interest thereon.
 The company is contemplating further appropriate action in the matter.
 Meanwhile, the matter is under examination by Independent External
 Monitors (IEMs) in terms of IP.
 
 23.  During the year, an amount of Rs. 28.96 Crore (Previous Year: Rs.
 24.98 Crores) has been capitalized towards Research and Development
 Assets.
 
 24.  The Statement of Profit & Loss includes: -
 
 (a) Expenditure on Public Relations and Publicity amounting to Rs. 36.20
 Crores (Previous Year: Rs. 33.76 Crores). The ratio of annual expenditure
 on Public Relations and Publicity to the annual turnover is 0.0006:1
 (Previous Year: 0.0007:1).
 
 (b) Research and Development Expenses Rs. 28.45 Crores (Previous Year : Rs.
 12.91 Crores).
 
 (c) Entertainment Expenses Rs. 0.21 Crores (Previous Year: Rs. 0.37
 Crores).
 
 25.  Other Quantitative details are given in Annexure-D.
 
 26.  Previous year''s figures have been regrouped / reclassified
 wherever necessary to correspond with the current year''s classification
 / disclosure.
Source : Dion Global Solutions Limited
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