Gujarat State Petronet

1.  Corresponding figures of the previous period have been regrouped
 and reclassified wherever considered necessary to compare to this
 periods figures.
 
 2.  Contingent Liability
 
 a.  Bank Guarantee issued and outstanding to the extent of Rs.
 1,86,30,000 (Previous year Rs. 4,86,30,000).
 
 b.  Claims against the company not acknowledged as debt of gas
 transportation charges is Rs.15,18,13,951/- (Previous year
 7,75,01,421/-) against which the company has paid Rs. 1,31,39,756/-
 (Previous year 1,31,39,756/-) under protest and has included the amount
 so paid under other current assets.
 
 c.  Claims against the company by certain land owners seeking
 enhancement of compensation in respect of RoU acquired by the company
 is Rs. 13,83,000/- (Previous year Rs. 394,12,33,991/-).
 
 d.  Excise Department has issued a demand on Company towards service
 tax dues on Foreign Exchange expenditure incurred by the company during
 the period FY 2002-05. Company has filed an appeal against the order
 witli Commissioner of Central Excise (Appeals).
 
 The amount demanded is as under:
 
 i.  Service tax of Rs. 17,87,245/-
 
 ii.  Interest under section 75 of the Finance Act
 
 iii.  Penalty of Rs. 100/r per day till failure to pay such service tax
 under section 76 of the Finance Act
 
 iv.  Penalty of Rs. 1000/- under section 77 of the Service Tax Rules,
 1994
 
 v.  Further Penalty of Rs. 17,90,459/- under section 78 of the Finance
 Act 1994
 
 3. An amendment has been made by Finance Act 2008 to section 115JB in
 Income Tax Act, with retrospective effect from 1 st April, 2001, in
 respect of deferred tax which states that while computing book profit
 under section 115JB of the Act, the net profit as per profit and loss
 account has to be increased / decreased by deferred tax if it is
 debited / credited to profit & loss account as the case may be.
 Accordingly the additional (MAT) tax liability of Rs. 1,21,70,917 and
 Rs. 92,99,167 for AY 2004-05 and AY 2005-06 respectively has been
 provided in the current year.
 
 4. The company has raised 37260 lacs through public issue of shares in
 2005-06 and has fully utilized Rs. 37260 lacs (including Issue Expenses
 of Rs. 1404 lacs) till 31st March, 2008 for projects payments.
 
 5. Estimated amount of contracts remaining to be executed on capital
 account and not provided for is Rs. 4,504,459,124/- (Previous year
 1,044,783,621 /-).
 
 6. The amount of Capital Work in Progress (CWIP) mainly includes
 expenses incurred on Torrent Power Spurline, Bhadbhut Gana Pipeline,
 Rajkot Jamnagar Pipeline, Padamla Godhara, Morbi Mundra Pipeline, Darod
 Jafrabad Pipeline and other interconnections / spur lines, which are
 under execution.
 
 7.  The company has transferred during the year 2007-08 Ambapur
 Gandhinagar Spurline, Kalol Himmatnagar Spurline and Kalol Mehsana
 Spurline to Sabarmati Gas Limited, a company promoted by Gujarat
 State Petroleum Corporation Limited and Bharat Petroleum Corporation
 Limited to undertake city gas distribution activity. The assets have
 been ttansferred at Book Value and the consideration would be
 discharged by way of allotment of equity shares in Sabarmati Gas
 Limited.
 
 8.  The company acquires RoU / R&W (Right of Use / Right of Way) before
 the actual laying of the pipelines. RoU enables the company to obtain
 perpetual right to use the land along the pipeline route. The expenses
 involved in RoU / RoW include Consultancy fee for route survey,
 reconaissance survey, Non-refundable deposits paid to various Statutory
 Authorities, Compensation for Crops etc. falling in the way of pipeline
 route etc. Although this is a perpetual right, the expenditure is
 written off along with pipeline assets out of prudence.
 
 9.  As the company is not engaged in any business of manufacturing or
 trading activity the information as required under Part II Clause 4C of
 schedule VI to the Companies Act, 1956 in respect of Licensed Capacity,
 Capacity-utilization, Installed Capacity is not applicable.
 
 10.  The Company has incurred expenditure in foreign currency for
 Capital Goods Rs. NIL & Professional Services Rs. 21,25,124 (previous
 year corresponding figures being Rs. 88,932 & Rs. 73,46,638), Spare
 parts Rs. 72,428 (previous year Rs. 1,15,430) Training Expenses Rs.
 2,43,899 (previous year Rs. 5,91,476), Traveling Rs. NIL (previous year
 Rs. NIL) and Others Rs.  67,51,608 (previous year Rs. NIL).
 
 11.  Adjustment disclosed in Schedule E (Fixed Assets) are due to
 excess/ short capitalization during previous years and consequent
 provision for depreciation.
 
 12.  During the year there has been no further development with regard
 to the Other Claims Recoverable in Schedule J.
 
 13.  The balances of sundry debtors, creditors, loans and advances and
 deposits are subject to the confirmation by the parties and provision
 for all liabilities is adequate in opinion of the company.
 
 14.  No suppliers to the company have claimed classification under SSI
 status.
 
 14. Segment Reporting
 
 The company primarily operates in a single segment of Natural Gas
 Business, which involves transportation of natural gas from sources of
 supply to the end customers. Segment reporting as required under
 Accounting Standard 17 issued by the Institute of Chartered Accountants
 of India is not applicable.
 
 15. The Board of Directors of Company has approved salary revision with
 effect from July, 2006. As the salary revision is pending
 implementation, a provision for the same upto the period ended 31st
 March, 2008 has been made in the books of accounts.