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GAIL India
BSE: 532155|NSE: GAIL|ISIN: INE129A01019|SECTOR: Oil Drilling And Exploration
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« Mar 12
Notes to Accounts Year End : Mar '13
1.  Contingent Liabilities and Commitments (To the extent not provided
 for):-
 
 I.  Contingent Liability
 
 (a). Claims against the Company not acknowledged as debts: Rs. 5968.49
 Crores (Previous Year: Rs. 6040.02 Crores), which mainly include:-
 
 (i) Legal cases for claim of Rs. 807.23 Crores (Previous Year: Rs.
 3261.11 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 2010-11 have been
 completed and a demand (net of provision) of Rs. 1290.25 Crores
 relating to the Assessment Years 1996-97 to 2010-11 (Previous Year:
 Rs.. 1345.92 Crores relating to the Assessment Years 1996-97 to
 2009-10) 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. 1221.67 Crores
 (Previous Year: Rs. 117733 Crores) has already been paid pending
 decision by the appellate authorities. Further, Department has also
 filed appeals amounting to Rs. 93.37 Crores (including interest) before
 Income Tax Appellate Tribunal, Delhi against the relief granted by CIT
 (A) in favour of Company.
 
 (iii) Rs. 3147.06 Crores (Previous Year: Rs. 1154.69 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. 1100.74
 Crores (Previous Year: Rs. 806.03 Crores) on behalf of subsidiary
 companies for raising loan. Further Bank Gurantees for Rs. NIL Crore
 (Previous Year: Rs. 45.88 Crore) issued on behalf of subsidiary
 companies.
 
 (ii) Share in Contingent Liabilities of Joint Ventures based on their
 audited / unaudited Financial Statement: Rs. 728.87 Crores (Previous
 Year: Rs.733.14 Crores).
 
 II.  Commitments:-
 
 (a) Estimated amount of contracts remaining to be executed on capital
 account and not provided for: Rs. 4841.24 Crores (Previous Year: Rs.
 7115.17 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.1005.49
 Crores (Previous Year: Rs.1777.91 Crores).
 
 (c) Other Commitments:-
 
 (i) As at 31st March''2013, the company has commitment of Rs. 615.65
 Crores (Previous Year : Rs. 970.70 Crores) towards further investment
 and disbursement of loan in the Joint Venture Entities and Associates.
 
 (ii) As at 31st March''2013, the company has commitment of Rs.. 140.93
 Crores (Previous Year: Rs..217.33 Crores) towards further investment in
 the Subsidiaries.
 
 (iii) As at 31st March''2013, the company has commitment of Rs.. 177.62
 Crores (Previous Year: Rs. 321.91 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 46(b).
 
 32.  Sales Tax demand of Rs. 3449.18 Crores (Previous Year: Rs. 3449.18
 Crores) and interest thereon I513.04 Crores. (Previous Year: 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.
 
 2.  (a) Freehold Land acquired valuing Rs..11.55 Crores (Previous
 Year: Rs. 6.39 Crores) and Leasehold Land acquired valuing Rs..64.07
 Crores (Previous Year : Rs..NIL) are valued / capitalized on
 provisional basis.
 
 (b) Title deeds for freehold land valuing Rs. 10.86 Crores (Previous
 Year: Rs. 7.84 Crores) and leasehold land valuing Rs. 13.19 Crores
 (Previous Year: Rs. 20.94 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. 1.03 Crores
 (Previous Year: Rs.. 1.20 Crores) earmarked for disposal but in use.
 
 3.  Disclosure as per Accounting Standard-5 on Net Profit or Loss for
 the period, Prior Period Items and changes in Accounting Policy.
 
 (a) Ministry of Corporate Affairs has issued clarification vide
 Circular No. 25/2012 dated 09.08.2012 that Para 6 of Accounting
 Standard (AS) 11 and Para 4 (e) of the Accounting Standard (AS) 16
 shall not apply to a company which is applying Para 46-A of Accounting
 Standard (AS) 11. Accordingly, Company has modified the related
 accounting policies. Consequently, exchange differences arising on
 settlement/translation of foreign currency loans to the extent regarded
 as an adjustment to interest costs as per Para 4 (e) of AS 16 and
 hitherto charged to Statement of Profit and Loss have now been adjusted
 in the cost of related assets. As a result, profit for the year ended
 31st March 2013 is increased by Rs. 46.37 Crores and fixed assets are
 increased by the same amount.
 
 (b) During the year, a net amount of Rs. 2.42 Crores ( Previous Year
 Rs. 1.63 Crores) credited in Foreign Currency Monetary Item Translation
 Difference Account and a net amount of Rs. 1.77 Crores (Previous Year:
 Rs. 0.28 Crores) amortized during the year resulting in net decrease in
 profit by Rs. 0.65 Crores. The balance amount remaining to be amortized
 as on 31.03.2013 is Rs. 2.00 Crores ( Previous Year Rs. 1.35 Crores).
 
 (c) During the year, the company has changed its Accounting Policy No
 1.5 (vii) of charging Prepaid expenses and prior period expenses/income
 from upto Rs. 1,00,000/- to upto Rs. 5,00,000/- in each case to
 relevant heads of account. As such, Short term loans and advances
 decreased by Rs. 0.34 Crore, Prior period adjustments decreased by Rs.
 0.50 Crore, and correspondingly other expenses increased by Rs. 0.84
 Crore, resulted decrease in profit for the year by Rs. 0.34 Crore.
 
 (d) During the year, the company has reviewed and modified its
 Accounting Policy No. 1.03 related to valuation of stock of LNG and
 Natural Gas in Pipeline, Raw materials and finished products to bring
 more clarity. As such, there is no impact on the Financial Statement
 for the year.
 
 (e) During the year the company has added Note 1.03(vii) in the
 Accounting Policy for valuation of stock relating to Renewable Energy
 Certificates (RECs). As such, the profit of the company has increased
 by Rs. 0.07 Crore.
 
 (f) The company has added Note 1.10 (v) in the Accounting Policy
 relating to derivative contracts, gain/losses on settlement and losses
 on restatement (by marking them to market) at the balance sheet date
 are recognized in the Statement of Profit & Loss. As such, there is no
 impact in the Statement of Profit and Loss during the year.
 
 4.  (a) The balance retention from PMT JV consortium amounting to Rs.
 25.78 Crores (Previous Year: Rs. 47.06 Crores) includes interest
 amounting to Rs. 0.97 Crores (Previous Year: Rs. 0.92 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. 598.89
 Crores (Previous Year: Rs. 818.83 Crores) includes interest amounting
 to Rs. 4.26 Crores (Previous Year: Rs. 37.71 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 to Rs. 60.28 Crores (Previous Year: Rs. 31.67 Crores)
 includes interest for the year amounting to Rs. 3.20 Crores (Previous
 Year: Rs. 1.96 Crores) on short term deposits. This interest does not
 belong to the company hence not accounted as income.
 
 (d) (i) MOPNG has issued clarification vide letter No. L-
 12014/1/2010-GP dated 04.04.2012 on the APM gas supply to consumers
 beyond their Gas Linkage Committee (GLC) allocations and directed GAIL
 to recover the amount as per market rates for the quantum of APM gas
 supplied to consumers beyond GLC allocation for the period from July
 2005 to March 2010. Accordingly, GAIL raised the supplementary invoices
 for supply of Natural Gas for the difference of APM and Non-APM prices
 for the quantity drawn more than the GLC allocation for the said period
 by issuing the debit notes for additional amount of Rs. 68.24 Crores
 excluding taxes. Some consumers have obtained stay orders from courts
 and the cases are subjudice. The unrealized amount of Rs. 56.93 Crores
 as on 31.03.2013 has been shown as recoverable from consumers and
 correspondingly payable in Gas Pool Account (Provisional).  The amount
 payable in Gas Pool Account will be invested as and when said amount is
 recovered from the consumers.
 
 (ii) MOPNG directed that APM gas price would be applicable for only
 those quantities of gas which are used for generating electricity which
 is supplied to the grid for distribution to the consumers through the
 public utilities/ licensed distribution companies. Accordingly, GAIL
 raised the supplementary invoices considering difference of APM and Non
 APM prices for the said directive for the period from July 2005 to
 February 2013 by issuing debit notes for an additional amount of Rs.
 336.09 Crores. Consumers have obtained stay orders from courts and the
 cases are subjudice. This amount has been shown as recoverable from
 consumers and correspondingly payable in Gas Pool Account (Provisional)
 amounting to Rs. 293.53 crores and VAT payable amount to Rs. 42.56
 crores. The amount payable in Gas Pool Account will be invested as and
 when said amount is recovered from the consumers.
 
 5.  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. 22.03) Crores (Previous Year: Rs.12.41
 Crores).
 
 (ii) The amount of exchange difference debited to the carrying amount
 of fixed assets is Rs. 146.18 Crores (Previous Year: Rs. 38.48 Crores).
 
 6.  Company had a Superannuation Benefit Fund (Pension) primarily
 funded by employees. In line with DPE guidelines, the old scheme was
 required to be modified to Defined Contributory Scheme with effect from
 01.01.2007. Therefore, based on actuary valuation, a provision of Rs.
 225.85 crores, being the deficit assessed in the funds of the old
 scheme along with interest up to 31.03.2013, has been made in Statement
 of Profit & Loss. A provision of Rs. 4.76 crores has also been made
 regarding employees superannuated after 01.01.2007 etc.
 
 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. 46.29 Crores (Previous Year: Rs.  51.30
 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. 55.61 crores (Previous Year: Rs.
 29.53 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 made a provision of
 Rs. 18.21 Crore, 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 31.03.2013 is Rs. 27.03
 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 Rs. 10 Lakhs.
 
 B) Post Retirement Medical Scheme (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 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. Employees are gifted a gold coin weighing 25 grams.
 
 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.
 
 The following table summarizes the components of net benefit expenses
 recognized in the statement of Profit and Loss.
 
 8.  Disclosure as per Accounting Standard (AS) 16 on ''Borrowing Costs''
 Borrowing costs capitalized during the year r 311.24 Crore (Previous
 Year: r 215.14 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 r 2687.18 Crores (Previous Year: r 3182.62
 Crores). Corresponding adjustment on account of CST amounting to r 9.58
 Crores (Previous Year: r 17.54 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. Impact on profits, if any, is being
 recognized as and when the pipeline tariff is revised in accordance
 with these Regulations.
 
 (ii) PNGRB vide order no-TO/07/2012 dated 12th July 2012 have notified
 PROVISIONAL initial unit natural gas pipeline tariff for
 Dadri-Bawana-Nangal Natural Gas Pipeline effective from 04.01.2010.In
 accordance with the order, the company has derecognized the revenue by
 an amount of r 51.49 Crore.
 
 Further PNGRB vide order no-TO/08/2013 dated 10th May 2013 have
 notified PROVISIONAL initial unit natural gas pipeline tariff for
 K.G.Basin Natural Gas Pipeline network effective from 20.11.2008. In
 accordance with the order, the company has derecognized the revenue by
 an amount of r 517.23 Crores.
 
 Further, the company has also derecognized the revenue by an amount of
 r 11.08 Crore on account of lower tariff submitted to PNGRB for
 approval in respect of other pipelines.
 
 (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.
 
 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 to Accounting Standard 20 on Earning Per Share,
 the calculation of Earnings Per Share (Basic and Diluted) is as under:
 
 14.  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, 2013 amounting to r
 2300.06 Crores (Previous Year: r 1768.64 Crores). Net Deferred tax
 expense for the year of r 531.42 Crores (Previous Year: r 135.40
 Crores) has been charged to Statement of Profit & Loss. The item- wise
 details of deferred tax liability and assets are as under:
 
 15.  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 49.75% of the paid up capital and
 has invested r 44.45 Crores (Previous Year r 44.45 Crores) for
 acquiring 4,44,50,000 equity shares of r 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
 r 31.50 Crores (Previous Year r 31.50 Crores) for acquiring 3,15,00,000
 equity shares of r 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 r 98.75
 Crores (Previous Year r 98.75 Crores) for acquiring 9,37,50,000 equity
 shares of r 10/- each in Joint Venture Company.
 
 (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 r 0.01 Crores for
 acquiring12,500 equity shares of r 10/- each in Joint Venture Company.
 The Company has also paid r 22.49 Crores (Previous Year r 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 r 1.92 Crores (Previous
 Year r 0.55 Crores) for acquiring 1,92,000 equity shares ( previous
 Year 55,000 equity shares) of r 100/- each in Joint Venture Company.
 The Company has also paid r NIL (Previous Year: r 0.28 Crores) as
 advance pending allotment of equity shares in JointVenture 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 r 15
 Crores (Previous Year r 15 Crores) for acquiring 1,50,00,000 equity
 shares of r 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
 r 0.01 Crores for acquiring12,500 equity shares of r 10/- each in Joint
 Venture Company. The Company has also paid r 23.03 Crores (Previous
 Year r 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 r 22.50
 Crores (Previous Year r 22.50 Crores) for acquiring 2,25,00,000 equity
 shares of r 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 r 974.31
 Crores (Previous Year r 776.90 Crores) for acquiring 9,74,308,300
 equity shares (Previous Year 77,69,00,000 equity shares) of r 10/- each
 in Joint Venture Company. The Company has also paid r NIL (Previous
 Year: r 118.36 Crores) as advance pending allotment of equity shares in
 JointVenture 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 MP. The company has equity participation of 22.50%
 of the paid up capital and has invested r 0.01 Crores for acquiring
 12,500 equity shares of r 10/- each in Joint Venture Company. The
 Company has also paid r 22.49 Crores (Previous Year r 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 : 17%) of the paid up capital and has invested r 634.44
 Crores for acquiring 63,44,40,001 equity shares of Rs.10/- each. The
 Company has paid Rs.. NIL (Previous Year: Rs. 335.88 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
 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 28 Blocks (PY 29 Blocks) as on 31.03.2013
 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.
 
 The participating interest in the twenty eight NELP Blocks in India as
 on 31st March, 2013 is as under:
 
 16.  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
 r 0.39 Crore (Previous Year: r 2.12 Crore) and same amount has been
 recognized as impairment loss in Statement of Profit & Loss.
 
 17. In compliance with amended Clause 32 of the Listing Agreement with
 Stock Exchanges, the required information is given in Annexure - C.
 
 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 2013 is r 3832.93
 Crores (Previous Year: r 3096.39 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.260.15 Crores as on 31st
 March 2013 (Previous Year: Rs.255.68 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.11.85 Crores (Previous Year: Rs.7.34
 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 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 management is
 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 amount of Rs.24.98 Crore capitalized towards
 the Expenditure on Research and Development.
 
 23.  The Statement of Profit & Loss includes: -
 
 (a) Expenditure on Public Relations and Publicity amounting to Rs.
 33.76 Crores (Previous Year: Rs.24.21 Crores). The ratio of annual
 expenditure on Public Relations and Publicity to the annual turnover is
 0.0007:1 (Previous Year: 0.0006:1).
 
 (b) Research and Development Expenses Rs.12.91 Crores (Previous Year :
 Rs.1.19 Crores).
 
 (c) Entertainment Expenses Rs.0.37 Crores (Previous Year:Rs.0.17
 Crores).
 
 24.  Other Quantitative details are given in Annexure-D.
 
 25.  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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