i) Capitalization of Producing Properties
(i) Producing Properties are capitalised when the wells in the area /
field are ready to commence commercial production having proved
developed oil and gas reserves.
(ii) Cost of Producing Properties includes cost of Successful
exploratory wells, development wells, initial depreciation of support
equipments & facilities and estimated future abandonment cost.
(iii) Depletion of Producing Properties Producing Properties are
depleted Using the ''Unit of Production Method (UOP) The depletion or
unit of production charged for all the capitalized cost is calculated
in the ratio of production during the year to the proved developed
reserves at the year end.
iv) Production cost of Producing Properties
Company''s share of production costs as indicated by Operator consists
of pre well head and post wellhead expenses including depreciation and
applicable operating costs of support equipment and facilities.
(i) Liquidated Damages / Price Reduction Schedule, if any, are
accounted for as and when recovery is effected and the matter is
considered settled by the Management. Liquidated damages / Price
Reduction Schedule, if settled, after capitalization of assets are
charged to revenue if below Rs. 50 lacs in each case, otherwise
adjusted in the cost of relevant assets.
(ii) Insurance claims are accounted for on the basis of claims admitted
by the insurers.
b) The Company has only one class of equity shares having a par value
Rs.10/- per share. The holders of the equity shares are entitled to
receive dividends as declared from time to time and are entitled to
voting rights proportionate to their share holding at the shareholders
c) 104,90,634 shares are held in the form of Global Depository Receipts
d) During the year 2008-09, the company had issued 42,28,25,800 Bonus
Equity shares of Rs. 10/-each out of General Reserve.
2. The financial statements for the year ended 31st March''2011 were
prepared as per then applicable, Schedule Vi to the Companies Act,
1956. Consequent to the notification of Revised Schedule Vi under the
Companies Act, 1956, the financial statements for the year ended 31st
March''2012 are prepared as per Revised Schedule VI. Accordingly, the
previous year figures have also been reclassified to conform to this
year''s classification. The adoption of Revised Schedule VI for previous
year figures does not impact recognition and measurement principles
followed for preparation of financial statements.
3. Contingent Liabilities and Commitments (To the extent not provided
I. Contingent Liability
(a) Claims against the Company not acknowledged as debts: Rs..6040.02
Crores (Previous Year: Rs. 4930.40 Crores), which mainly include:-
(i) Legal cases for claim of Rs..3261.11 Crores (Previous Year: Rs.
2731.63 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 2009-10 have been
completed and a demand of Rs..1345.92 Crores relating to the Assessment
Years 1996-97 to 1998-1999 and 2000-01 to 2009-10 (Previous Year: Rs..
1017.25 Crores related to Assessment years 1996-97 and 2000-01 to
2008-09) has been raised by the Department on account of certain
disallowances / additions which has been disputed by the company as
company 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.1177.33 Crores (Previous Year: Rs. 1323.66 Crores) has
already been paid pending decision by the appellate authorities.
(iii) Rs..1154.69 Crores (Previous Year: Rs.. 760.15 Crores) relating
to disputed tax demand towards Excise duty, Sales tax, Entry tax, and
Service Tax etc.
(b) (i) The Company has issued Corporate Guarantee for Rs.. 806.03
Crores (Previous Year : Rs.. 372.34 Crores) on behalf of subsidiary
companies for raising loan. Further Bank Gurantees for Rs..45.88 Crore
(Previous Year: Rs..45.88 Crore) issued on behalf of subsidiary
(ii) Share in Contingent Liabilities of Joint Ventures based on their
audited / unaudited statement of accounts : Rs..733.14 Crores (Previous
Year: Rs.. 437.20 Crores).
(a) Estimated amount of contracts remaining to be executed on Capital
account and not provided for: Rs..7115.17 Crores (Previous Year:
(b) Company''s share in estimated amount of contracts remaining to be
executed on capital account and not provided for based on
audited/unaudited statement of accounts of Joint Ventures. Rs..1777.91
Crores (Previous Year: Rs..1418.04 Crores).
(c) Other Commitments:-
(i) As at 31st March''2012, the company has commitment of Rs.. 970.70
Crores (Previous Year : Rs.1038.21 Crores) towards further investment
and disbursement of loan in the Joint Venture Entities and Associates.
(ii) As at 31st March''2012, the company has commitment of Rs.. 217.33
Crores (Previous Year:Rs..505.45 Crores) towards further investment in
(iii) As at 31st March''2012, the company has commitment of Rs.. 321.91
Crores (Previous Year: Rs.82.93 Crores) towards further investment in
the entity other than Joint Ventures, Associates & Subsidiaries.
(iv) Counter Guarantee issued in favour of Bank etc for issuing Bank
Guarantee & Letters of Credit : Rs..1242.63 Crores (Previous Year: Rs..
(v) Company''s commitment towards the minimum work programme in respect
of Jointly Controlled Assets has been disclosed in Note45(b).
4 (a) 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
(b) The Commissioner, Customs & Central Excise, Kanpur has issued a
Show-Cause Notice demanding Rs.2808.89 Crores as Central Excise Duty on
Natural Gas supplied by GAIL Dibiyapur Compressor Station treating it
as Compressed Natural Gas (CNG). The company is of the view that there
is remote possibility of crystallizing of this liability in view of
extant legal position and clarification issued by Ministry of Finance
vide circular no. F. No. B.1/3/2001-TRU dated 21st May 2001 on the
subject which was issued in response to GAIL''s request after
introduction of excise duty on CNG in the year 2001.
5 (a) Freehold land acquired for city gate Station at Lucknow and
Kanpur, Jhansi Maintenance Base and IMT Maneshar, Sectionalizing
Valves in Jamnagar - Loni Pipeline and Mumbai, receiving terminalat
Pune valuing Rs..6.39 Crores (Previous Year: Rs. 4.94 Crores) are valued /capitalized on provisional basis.
(b) Title deeds for freehold land valuing Rs.7.84 Crores (Previous
Year: Rs. 6.38 Crores) and leasehold land valuing Rs.20.94 Crores
(Previous Year: Rs. 10.24 Crores) are pending execution.
(c) Title Deeds in respect often 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.. 1.20 Crores
(Previous Year: Rs.. 1.21 Crores) earmarked for disposal but in use.
6 (a) The company has added Note 1.10 (iv)
in the Accounting Policy relating to foreign exchange differences
stating that Exchange differences (loss), arising from translation of
foreign currency loans relating to fixed assets to the extent regarded
as an adjustment to interest cost are treated as borrowing cost
Due to this, an amount of Rs..40.10 Crore has been debited to borrowing
(b) In view of option allowed by the Ministry of Corporate Affairs vide
its notification dated 29th Dec''2011 on Accounting Standard 11, the
company during the year has exercised the option and changed its
accounting policy to account for'' any gains or loss arising on account
of exchange difference either on settlement or on translation is
accounted for in the Profit & Loss account except in case of long term
foreign currency monetary items relating to acquisition of depreciable
capital asset (other than regarded as borrowing cost) in which case
they are adjusted to the carrying cost of such assets and in other
cases, accumulated in ''Foreign Currency Monetary item Translation
Difference Account'' in the Financial statements and amortized over the
balance period of such long terms asset or liability, by recognition as
income or expenses in each of such period.
Due to change in Accounting Policy, Fixed Assets has increased by Rs.
38.48 Crore with consequent increase in profit for the year by Rs.
38.48 Crore and also an amount of Rs. 1.63 Crore credited in Foreign
Currency Monetary item Translation Difference Account and amortised by
Rs..0.28 crore during the year resulting in net decrease in profit by
Rs..1.3S Crore. The balance in Foreign Currency Monetary item
Translation Difference Account as on 31.03.2012 remaining to be
amortized is Rs..1.35Crore.
7 (a) The balance retention from PMT JV consortium amounting to Rs.
47.06 Crores (Previous Year: Rs. 43.75 Crores) includes interest
amounting to Rs. 0.92 Crores (Previous Year: Rs. 2.64 Crores) on Short
term deposits for the year. This interest income does not belong to the
company hence not accounted as income.
(b) Liability on account of Gas Pool Money amounting to Rs. 818.83
Crores (Previous Year: Rs. 722.60 Crores) includes interest amounting
to Rs.37.71 Crores (Previous Year: Rs.. 29.10 Crores) on short term
deposits. This interest does not belong to the company hence not
accounted as income.
(c) Liability on account of Pipeline overrun and Imbalance Charges
amounting toRs. 31.67 Crores (Previous Year: Rs. 23.95 Crores)
includes interest amounting to Rs. 1.96 Crores (Previous Year: NIL) on
short term deposits. This interest does not belong to the company hence
not accounted as income.
(d) MOP&NG has issued clarification on the allocation of additional gas
available from ONGCL''s nominated blocks vide its letter no.
L-12018/23/2010-GP-lldated 31.10.2011 and letter no. L- 13013/5/2011-GP
dated 17.11.2011. In compliance with this clarification, GAIL has
revised the invoices for supply of Natural Gas to some Power Plants in
Pondicherry area for the period 1.7.2005 to 15.11.2011 for an
additional amount of Rs..241.98 Crores by issuing the debit notes. This
amount has been shown as recoverable from the respective power
companies and correspondingly payable in Gas Pool Account (Provisional)
amounting to Rs..234.01 crores and VAT payable amounting to Rs..7.97
crores. The amount payable in Gas Pool Account will be invested as and
when said amount is recovered from the consumers. All the respective
consumers have obtained stay orders against the recovery of these dues
from Courts and the cases are sub judice.
8. Disclosure as per Accounting Standard-11 on ''The effect of changes
in Foreign Exchange Rates
(i) The amount of exchange difference (net) debited to the statement of
Profit & Loss is Rs. 12.41 Crores (Previous Year: Rs. 3.30 Crores).
(ii) The amount of exchange difference (other than regarded as
borrowing cost) debited to the carrying amount of fixed assets is Rs..
38.48 Crores (Previous Year: Nil).
9. The required disclosure under the Revised Accounting Standard 15
Is given as below:
(i) Superannuation Benefit Fund (Defined Contribution Fund) Company has
provided for an amount of Rs..51.30 Crores towards contribution to
Superannuation Benefit Fund Trust and charged to statement of Profit
(ii) Provident Fund
Company has paid contribution of Rs..29.53 crores (Previous Year: Rs.
32.90 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..4.32 Crore, as per actuarial valuation and
the balance provision to meet any short fall in the future period, to
be compensated by the company to the Provident Fund Trust, as on
31.03.2012 is Rs..8.82 Crore.
(iii) Other Benefit Plans
15 days salary for every completed year of service. Vesting
periodis5yearsand payment is restricted to Rs. 10 Lakhs.
B) Post Retirement Medical Benefit (PRMS)
Upon payment of one time prescribed contribution by the superannuated
employees/those who resigned from service can avail the facility
subject to the completion of minimum of 10 years of service and 50
years of age.
C) Earned Leave Benefit (EL)
Accrual 30days per year. Encashment while in service75%ofEarned Leave
Balance subject to maximum of 90 days at a time, twice per calendar
year. Encashment on retirement or superannuation maximum300days.
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. Employees are gifted a gold coin weighing 25 grams.
E) Half Pay Leave(HPL)
Accrual 20days 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, 10gms each on completion of 20 years and 25 years, 20 gms each
on completion of 30 years and 35 years of service.
The following table summarizes the components of net benefit expenses
recognized in the statement of Profit and Loss.
10. Disclosure as per Accounting Standard-16 on ''Borrowing Costs''
Borrowing costs capitalized during the yearRs.215.14 Crore (Previous
Year: Rs. 35.80 Crore).
11. 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.3182.62 Crores (Previous Year: Rs. 2111.24
Crores). Corresponding adjustment on account of CST amounting to
Rs.17.54 Crores (Previous Year: Rs.6.98 Crores) has been made.
12. (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. Impact on profits, if any, is being
recognized as and when the pipeline tariff is revised in accordance
with these Regulations. The impact on profit is recognized during the
year of tariff submission.
(ii) PNGRB vide order no-TO/01/2012 dated 12th March'' 2012 and order
no. T0/06/2012 dated 01st May, 2012 have notified PROVISIONAL initial
unit natural gas pipeline tariff for Mumbai Regional Network and
Agartala Regional Pipeline respectively, effective from 20.11.2008. In
accordance with the orders, the company has derecognized the revenue by
an amount of Rs..114.68 Crore. Further, the company has also
derecognized the revenue by an amount of Rs..140.23 Crore on account of
lower tariff submitted to PNGRB for approval in respect of other
(iii) PNGRB has issued PNGRB Regulations 2010 (Determination of
Petroleum & Petroleum Products Pipelines transportation Tariff)
effective from 20.12.2010 where LPG pipeline tariff has been
benchmarked against railway freight. PNGRB vide its order no.
TO/02/2012 dated 02nd April''2012 has notified transportation tariff for
Vizag-Secunderabad LPG Pipeline effective from 27.12.2010. In
accordance with the order, the company has derecognized the revenue by
an amount of Rs..14.34 Crore. Further, the company has also
derecognized the revenue by an amount of Rs..29.60 Crore (Previous
Year: Rs..6.33 Crore) on account of lower tariff submitted to PNGRB for
approval in respect of another pipeline.
(d) Value of Annual Take or Pay Quantity (ATOPQ) of Gas is accounted
for on receipt basis and shown as liability till make up Gas is
delivered to customer, during the recovery period, in terms of the Gas
Sales Agreement with the customers.
13. 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
(i) Transmission services
a) Natural Gas
(ii) Natural Gas Trading (Hi) Petrochemicals
(iv) LPG and other Liquid Hydrocarbons
(v) Other Segments (include GAIL TEL, E&P, City Gas and Power
There are no geographical segments.
The disclosures of segment wise information is given as per Annexure-A.
14. 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.
15. In compliance to Accounting Standard 20 on Earning Per Share,
the calculation of Earnings Per Share (Basic and Diluted) is as under:
16. 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,2012 amounting to
Rs..1768.64 Crores (Previous Year: Rs. 1633.24 Crores). Net Deferred
tax expense for the year of Rs.. 135.40 Crores (Previous Year: Rs..
243.68 Crores) has been charged to Profit & Loss Account. The item-
wise details of deferred tax liability and assets are as under:
17. 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
(a) Jointly Controlled Entities
(i) Mahanagar Gas Limited: A Joint Venture with British Gas Pic and
Government of Maharashtra to supply gas to domestic, commercial, Small
industrial consumers and CNG for transport sector in Mumbai.T he
company has equity participation of 49.75% ofthe paid up capital and
has invested 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 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, lOCL 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 for acquiring 9,37,50,000 equity shares of Rs. 10/-
each in Joint Venture Company.
(iv) Bhagyanagar Gas Limited: A Joint Venture with HPCL for
distribution and marketing of CNG, Auto LPG, NaturalGas and other
gaseous fuels in Andhra Pradesh. The company has equity participation
of 22.50% of the paid upcapital and has invested Rs..0.01 Crores for
acquiring 12,500equity 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 naturalgas through pipelines in
Tripura. The company has equity participation of 29% of the paid up
Capital and has invested Rs. 0.55 Crores for acquiring 55,000 equity
shares of Rs. 100/-each in Joint Venture Company. The Company has also
paid Rs.. 0.28 Crores (Previous Year: Rs.0.28 Crores) as advance
pending allotment of equity shares 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% (Previous Year: 22.5%)of the paid up capital and
has invested 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 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
GAIL, NTPC and other Financial institutions for the revival of the
Dabhol Project. The company has equity participation of 32.88% of the
paid up capital and has invested Rs.776.90 Crores for acquiring
77,69,00,000 equity shares of Rs.10/- each in Joint Venture Company.
The Company has also paid Rs. 118.36 Crores (Previous Year: NIL) as
advance pending allotment of equity shares in Joint Venture Company.
(x) Avantika Gas Ltd. A Joint Venture with GAIL and HPCL to supply gas
to domestic, commercial and small industrial consumers and CNG for
transport sector in MP. The company has equity participation of 22.50%
of the paid upcapital and has invested Rs. 0.01 Crores for acquiring
12,500 equity shares ofRs. 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
(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
Dahejin Gujarat. The company has equity participation of 17% (Previous
Year: 17%) ofthe paid up capital. The Company has paid Rs. 335.88
Crores (Previous Year: Rs. 299.41 Crores) as advance pending allotment
of equity shares in Joint Venture Company.
(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
(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 29 Blocks (PY 25 Blocks) as on 31.03.2012
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, where it is a joint operator and CY-ONN-2005/1 and
CY-ONN-2010/11, where it is an operator, and shares in Expenses,
Income, Assets and Liabilities based upon its percentage in production
The participating interest in the twenty nine NELP Blocks in India as
on 31st March, 2012 is as under:
*ln addition, the company has 8.5% participating interest in offshore
Midstream pipeline project in Myanmar for the purpose of transportation
of gas from the delivery point in offshore, Myanmar to landfall point
(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 statement of accounts submitted by the operators and are
given below : (Finalad justments are effected during the year in which
audited accounts are received).
The above includes Rs.. 7.31 Crore, Rs.. Nil, Rs. 0.36 Crores, Rs..5.59
crores, and Rs..27.41 Crores towards total value of Income, Expenses,
Fixed Assets (Gross Block), Other Assets and Current Liabilities
respectively pertaining to 12 E&P Blocks (including 11 Blocks
relinquished in the earlier years for which Rs.Nil, Rs..17.39 Crore,
Rs..0.24 Crore, Rs..6.15 Crore, Rs..47.65 Crore were Income, Expenses,
Fixed assets (Gross Block), Other Assets, Current Liabilities
respectively) relinquished till 31st March 2012 .The company is non
operator in these E & P Blocks.
(v) Share of Minimum work program committed under various production
sharing contracts in respect of E&P joint ventures is Rs..650.17 Crores
(Previous Year: Rs.837.46Crores).
Note: Company''s interest in Oil Reserves is in Indian blocks and in Gas
Reserves is in Myanmar
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.. 691.27
Crores at the end of year (previous year: Rs. 369.81 Crores).
18. 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..2.12 Crore (Previous Year: Nil) and same amount has been recognized
as impairment loss in statement of Profit & Loss.
Additions include Rs.37.88 Crores (Previous Year: Rs.47.40 Crores)
capitalized during the year. Expected timing of outflows is not
ascertainable at this stage being legal cases under litigation.
19 In compliance with amended Clause 32 of the Listing Agreement with
Stock Exchanges, the required information is given in Annexure-C.
20. Foreign currency exposure not hedged by a derivatives instrument
21. 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 Suppliers is made within 7 -10 days.
No payments beyond appointed date were noticed. The amount remaining
unpaid as at 31st March 2012 is Rs..3096.39 Crores (Previous Year:Rs..
2336.12 Crores). No payments beyond the appointed date were noticed. No
interest was paid or payable under the Act.
22. (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.. 255.68 Crores as on 31st
March 2012 (Previous Year: Rs..258.33 Crores).
(b) In pursuance with the Board Resolution passed in its 287th Meeting
held on 06th April''2011, existing and ongoing expansion of local
distribution assets amounting to Rs. 44.22 Crore in Agra and Firozabad
has been transferred to GAIL Gas Limited, a wholly-owned subsidiary of
GAIL, on 16th November,2011.
(c) 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.
23. Non-Refundable Deposits Rs..7.34 Crores (Previous Year: Rs. 24.09
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.
24. During the year 2011-12, a newly wholly- owned Subsidiary in the
name of GAIL Global(USA) Inc. was incorporated in USA on 26th
September, 2011 with an investment of Rs..179.17Crore(USD36 million).
25. (a) Request for confirmations of balances of trade receivable and
payables were send. Confirmation of balances has been received from
majority of cases. These confirmations are subject to reconciliation
and consequential adjustments which in the opinion of the managements
(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.
26. The Statement of Profit & Loss includes:-
(a) Expenditure on Public Relations and Publicity amounting to
Rs..24.21 Crores (Previous Year: Rs. 20.92 Crores). The ratio of annual
expenditure on Public Relations and Publicity to the annual turnover is
0.0006:1 (Previous Year: 0.0006:1).
(b) Research and Development Expenses Rs..1.19 Crores (Previous
(c) Entertainment Expenses Rs..0.17 Crores (Previous Year: Rs..0.15
27. Other disclosures as per Schedule VI of the Companies Act, 1956.
A) Joint Venture Companies/Associates
1) Mahanagar Gas Limited
2) Indraprastha Gas Limited
3) Petronet LNG Limited
4) Bhagyanagar Gas Limited
5) Tripura NaturalGas Corporation Limited
6) Central UP Gas Limited
7) Green Gas Limited
8) Maharashtra NaturalGas Limited
9) Avantika Gas Ltd.
10) GAIL China Gas Global Energy Holding Ltd.
11) ONGC Petro additions Ltd (OPAL)
12) Shell Compressed NaturalGas (Disposed off during FY 2011-12)
13) Gujrat State Energy Generation Ltd.
14) National Gas Company Nat Gas
15) Fayum Gas Company
16) China Gas Holdings Ltd.
B) Key Management Personnel Whole time Directors(KMP):
1) Shri B C Tripathi ,Chairman and Managing Director
2) Shri R D Goyal
3) Shri S L Raina
4) Shri Prabhat Singh
5) Shri S Venkatraman
6) Shri P KJain