1 COMPANY OVERVIEW
Indraprastha Gas Limited (''The Company'') was incorporated on December
23, 1998 under the Companies Act, 1956. The Company is listed on the
Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
The Company is a joint venture between GAIL (India) Limited and Bharat
Petroleum Corporation Limited. The Company''s business consists of sale
of Piped Natural Gas (PNG) and manufacture and sale of Compressed
Natural Gas (CNG).
2.1 The Company has one class of equity shares having a par value of
Rs. 10 each. Each shareholder is eligible for one vote per share held.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting. In
the event of liquidation, the equity shareholders are eligible to
receive the remaining assets of the Company after distribution of all
preferential amounts, in proportion to their shareholding.
3 ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS
3.1 Contingent liabilities and commitments
(a) Income tax cases
In respect of Assessment Year 2005-06, the Income Tax Department had
disallowed certain claims made by the Company. ITAT had decided the
case in favour of the Company. The Income Tax Department has filed an
appeal in Hon''ble Delhi High Court against the decision of ITAT. The
Tax amount involved in this case is Rs. 2.40 crores (Previous year Rs.
2.40 crores). For Assessment Year 2008-09 and 2009-10 the department
has disallowed certain claims made and raised the demand amounting to
Rs. 6.36 crores (Previous Year Rs. 3 crores). The entire amount has
been adjusted with the refunds receivable for other years. The Company
has filed appeals against the above which are pending at various
(b) Trade tax case
In respect of Assessment year 2007-08 the Trade Tax Department, Uttar
Pradesh had raised a demand of Rs.0.66 crores (Previous year Rs. 0.66
crores). The demand order has been remanded back by Commercial Tax
Tribunal, Noida to Assessing Officer for Re-assessment.
(c) Bank guarantees
The company''s total liability towards un-expired Bank Guarantees is Rs.
34.79 crores (Previous year Rs. 45.51 crores).
Estimated amount of contracts remaining to be executed on capital
account and not provided for is Rs. 115.37 crores (Previous year Rs.
3.2 Petroleum and Natural Gas Regulatory Board (PNGRB) vide its order
no. TO/03/2012 dated 9th April 2012 determined the per unit network
tariff and compression charge for the CGD Network of IGL for Delhi,
based on submission of data by the company in May 2009 and certain
assumptions taken by PNGRB in this regard. The tariffs determined by
PNGRB are much lower than the rates submitted by the company.
Further, PNGRB made the determined tariffs applicable with
retrospective effect from 01.04.2008. In its order PNGRB stated that
the modalities and time frame for refund of differential Network Tariff
and Compression Charge would be decided subsequently.
The company was advised that validity of such order and refund lacks
legal authority and accordingly, IGL filed a writ petition on
10.04.2012 against the order of PNGRB dated 09.04.2012 before the
Hon''ble Delhi High Court. The Hon''ble High Court of Delhi has passed
the judgement in this case on 01.06.2012 and has quashed the PNGRB
order dated 09.04.2012 holding that the PNGRB is not empowered to fix
any component of network tariff or compression charge.
3.3 Details on derivatives instruments and unhedged foreign currency
The following derivative positions are open as at 31 March, 2012. These
transactions have been undertaken to act as economic hedges for the
Company''s exposures to various risks in foreign exchange markets. The
accounting for these transactions is stated in Note 2.9.
4. The Company has installed various CNG Stations on land leased from
various Government authorities under leases for periods ranging from
one to five years. However, assets constructed/installed on such land
are depreciated generally at the rates specified in Schedule XIV to the
Companies Act, 1956, as the management does not foresee non-renewal of
the above lease arrangements by the Authorities.
5. Deposits from customers of Natural Gas, refundable on
termination/alteration of the gas sales agreements, are considered as
long term funds.
6. DISCLOSURES UNDER ACCOUNTING STANDARDS
6.1 Based on technical evaluation and past experience, the Company has
changed the estimated useful life of some of its assets w.e.f.
01.04.2011. Accordingly, the written down value of these assets as at
the beginning of the year is being amortised over the remaining useful
life, in accordance with the provisions of Accounting Standard (AS) 6
on ''Depreciation Accounting'' and the assets capitalised during the year
under this class of assets have been depreciated based on the revised
useful life. As a result of this change, depreciation for the year is
lower by Rs. 14.75 crores with corresponding impact on net profit
6.2 Employee benefit plans
Defined benefit plan - Gratuity
The gratuity liability arises on retirement, resignation and death of
an employee. The aforesaid liability is calculated on the basis of
fifteen days salary (i.e. last drawn basic salary plus dearness
allowance) for each completed year of service subject to completion of
five years'' service.
Policy for recognising actuarial gains and losses
Actuarial gains and losses arising from experience adjustments and
effects of changes in actuarial assumptions are immediately recognised
in the statement of profit and loss as income or expense.
6.3 Segment reporting
The Company operates in a single segment of Natural Gas Business in the
National Capital Region and therefore the disclosure requirements as
per Accounting Standard 17 Segment Reporting are not applicable to
6.4 Related party transactions List of related parties: Promoter
i. GAIL (India) Limited
ii. Bharat Petroleum Corporation Limited
Key management personnel (KMP):
i. Mr. Rajesh Vedvyas Managing Director (upto 26, October 2011)
ii. Mr. M. Ravindran Managing Director (w.e.f. 27 October, 2011)
iii. Mr. Manmohan Singh Director Commercial
6.7 Management has carried out a review of the carrying value of
assets as at 31 March, 2012 in accordance with the provisions of
Accounting Standard – 28, Impairment of Assets. Based on the review,
the management is of the opinion that there are no impairment
indicators that necessitate any adjustments to the carrying value of
7. Interest accrued and due Rs. Nil (Previous year Rs. 2.15 Crores)
was funded in the bank account on the balance sheet date and same was
debited on the next working day by the bank as per their prevailing
8. The Revised Schedule VI has become effective from 1 April, 2011
for the preparation of financial statements. This has significantly
impacted the disclosure and presentation made in the financial
statements. Previous year''s figures have been regrouped / reclassified
wherever necessary to correspond with the current year''s classification