Expanding Horizon Transmitting smiles...FY 2016-17 to 61 MMSCM in the FY 2017-18. The number of...

Expanding Horizon

Transmittingsmiles

Annual Report | 2017-18

GAIL Gas Limited

Vision

Mission

Be the leading company in retailing, distribution and marketing of Natural Gas with focus on City Gas Distribution, committed to customer care, value creation for all stakeholders and environmental responsibility.

To accelerate and optimize the effective and economic use of Natural Gas in Industries and CGD to the benefit of National Economy.

Message from The Chairman 2Board of Directors 3Directors’ Report 4Management Discussion & Analysis 13Report on Corporate Governance 19Secretarial Audit Report 25Annual Report on CSR Activities 36

Standalone Financial StatementsIndependent Auditors' Report 40Annexure to the Independent Auditors' Report 42Standalone Balance Sheet 47Standalone Statement of Profit and Loss 48Standalone Cash Flow Statement 49Notes Accompanying to the Standalone Financial Statement 52Comments of the Comptroller and Auditor General of India 82

Consolidated Financial StatementsIndependent Auditors' Report 85Annexure to the Independent Auditors' Report 88Consolidated Balance Sheet 90Consolidated Statement of Profit and Loss 91Consolidated Cash Flow Statement 92Notes Accompanying to the Consolidated Financial Statement 95Comments of the Comptroller and Auditor General of India 128

Contents

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Message from The Chairman

Dear Shareholder,thIt gives me immense pleasure to welcome you all to the 10 Annual General

Meeting of your Company.

An expanding economy and a growing population have resulted in an increase in demand for primary energy resources such as coal, oil and natural gas. With India committed to become a gas-based economy, I envisage further growth opportunities for your Company, especially with the government pushing for the use of clean fuel PNG & CNG across the country. .

As you are aware, CGD, the core business of your Company, is one of the fastest growing segments in the gas sector, owing to rapid industrialization, urbanization and growing population. Further, the Government's focus on expanding City Gas Distribution (CGD) Networks & its mandate of scaling-up the usage of PNG presents both opportunities and challenges. I would like to assure you that your Company is fully geared to continue its growth drive & further consolidate its presence in the CGD sector.

Your Company aspires to expand CGD infrastructure across the country in synergy with the objective of your parent Company, GAIL (India) Limited, to capture the larger share of the emerging downstream gas market. Your Company has taken many steps to achieve this vision.

It is in this context that I share with you, the exemplary performance of your Company for the financial year 2017-18.

Profit After Tax (PAT) grew by 24.19% from ` 65.02 crores in FY 2016-17 to ` 80.75 crores in FY 2017-18, while Turnover increased from ` 2797.99 crores to ` 4585.73 crores over the previous financial year, representing an increase of 64%.

The reserves and surplus increased to ` 212.54 crores at the end of the FY-2017-18 as compared to ` 154.65 crores during the corresponding FY 2016-17. As on March 31, 2018, the Net Worth of the Company stood at ` 1089.54 crores,Return to Net worth was 7.41%, and Return on Capital Employed was 10.14%.

Your Company has achieved long-term issuer rating of Ind-AA with stable outlook.

On the projects front, your Company has further expanded its CNG infrastructure, leading to a significant jump in CNG sales from 49 MMSCM in the FY 2016-17 to 61 MMSCM in the FY 2017-18. The number of industrial and commercial customers for PNG have increased from 580 in the FY 2016-17 to 703 in the FY 2017-18 and gas sales volume for industrial and commercial customers has grown from 1307 MMSCM (FY 2016-17) to 1780 MMSCM (FY 2017-18), representing an increase of 36.18% year-on-year.

It is a matter of pleasure for me to share that your Company has won thauthorization from PNGRB in the 9 round of CGD bidding in five Geographical

Areas viz. Dakshin Kannada (Mangalore) district, Dehradun district, Sundergarh-Jharsuguda districts, Giridih-Dhanbad districts and Puri-Ganjam & Nayagarh districts for the development of CGD networks with an approximate investment of `5000 crores in next 8 years by setting up 215 CNG Stations, connecting 8.51 lakh domestic households and laying of 4000 steel inch-kms pipeline. Natural Gas demand of approximately 4 MMSCMD is expected from these five GAs.

Apart from the above, your Company as a Consortium member with Assam Gas Company Limited and Oil India Limited has also been selected as successful bidder in Kamrup & Kamrup Metropolitan districts and Cachar-Hailakandi-Karimganj districts for the development of CGD networks with approximate investment of ` 1500 crores in next 8 years by setting up of 72 CNG Stations,

connecting 4.16 lakh domestic households and laying of 1712 steel inch-kms pipeline.

Various reforms undertaken by the Government, coupled with robust economic growth, increasing urbanization and renewed focus on clean fuel will drive strong and sustainable consumption growth over the next few years. As a leading clean energy provider, committed to creating social and environment wealth, your Company is well-positioned to capitalize on the growth opportunities in this sector and meet the clean energy aspirations of the nation.

During the year under review, your Company undertook several training sessions to strengthen both its business activities and human resources. Besides, your Company has undertaken several new IT initiatives to simplify processes and adopt user-friendly IT applications like e-registration for Domestic, Industrial & Commercial Customers.

As a socially responsible organization, your Company is not only increasing its CGD network across the country but also creating awareness and promoting the use of natural gas amongst the communities in which it has a CGD presence. In a bid to encourage people to switch to CNG, your Company has partnered with Uber, the ride-sharing taxi cab service, to catalyze the CNG eco-system in Bengaluru and incentivize their driver partners with three months of free gas to convert their vehicles to CNG. Your Company has signed a prestigious agreement with Meerut Cantonment Board for connecting 7200 houses & 200 Military Mess with PNG. Your Company is also approaching major real estate builders to incorporate PNG networks in their buildings, enabling residents to use PNG in their kitchens. Promotional schemes are also being launched to incentivize individual households to switch to PNG.

Your Company has received 'NIL' comments from the CAG on the Annual Standalone and Consolidated Financial Statements of the Company for the FY 2017-18 and has been conferred “Very Good” MoU rating for FY 2016-17.

And while delivering a sound financial performance this year, Your Company remained committed for adopting best practices of Corporate Governance to create material, social and natural wealth. Your Company has been complying with the requirements of Corporate Governance as enunciated in the DPE Guidelines on Corporate Governance.

The years ahead spell exciting times for your Company and it is your Company is well-positioned for further growth. Moving ahead, your Company will continue to focus on increasing penetration in its existing geographical areas, developing CGD in new GAs, exploring further growth opportunities, individually and building strategic partnerships with both government and private players to further expand its footprints.

On behalf of the Board of Directors and the entire management team, I would like to thank all shareholders, customers and stakeholders for reposing their faith in your Company. I look forward for the continued support and patronage in times to come.

Thank you very much,


B. C. TripathiChairman

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Board of Directors

Shri B. C. Tripathi Chairman

Shri Deepak Asija Company Secretary

Shri A. K. Jana Chief Executive Officer

(w.e.f. 01.05.2018)

Shri Pankaj Walia Chief Financial Officer

Key Managerial Personnel

Shri Subir PurkayasthaDirector

Shri Gajendra Singh Director

Smt. Anuradha Sharma Chagti Director

Shri A. K. TiwariDirector Director

(w.e.f. 19.06.2018)

Registered OfficeGAIL Bhawan16, Bhikaiji Cama PlaceR. K. Puram, New Delhi- 110066

BankersState Bank of IndiaHDFC Bank, ICICI BankIndusInd Bank

Statutory AuditorsM/s H. S. Ahuja & Co.Chartered AccountantsNew Delhi

Cost AuditorsM/s Jugal K. Puri & AssociatesNew Delhi

Shri Rajeev Mathur

(` in Crores)

Revenue from Operation (Net of ED) 4585.73 2797.99

Other Income 7.55 2.43

Total Revenue 4593.28 2800.42Cost of Sales (excluding Depreciation and including 4437.76 2685.33extraordinary items and prior period expenses)

Profit Before Depreciation & Tax (PBDT) 155.52 115.09

Depreciation 24.01 15.66

Profit Before Tax (PBT) 131.51 99.43

Provision for Tax (Incl. Def. Tax) 50.76 34.41

Profit After Tax (PAT) 80.75 65.02

Dividend Paid including Dividend Distribution Tax 22.64 9.68

Balance carried forward to Balance Sheet 58.11 55.34(Reserve & Surplus)

(*) includes both continuing & discontinuing operation.

Particulars 2017-18* 2016-17*

Dear Shareholders,

On behalf of the Board of Directors, I am delighted to present ththe 10 Directors' Report of your Company, along with the

Audited Financial Statements for the financial year 2017-18.

PERFORMANCE MILESTONES

Your Company has delivered stellar performance and healthy growth during FY 2017-18. Profit After Tax (PAT) grew by 24.19% from ` 65.02 crores in FY 2016-17 to ` 80.75 crores in FY 2017-18, while Turnover increased from ` 2797.99 croresto ` 4585.73 crores over the previous financial year, representing an increase of 64%. Your Company has expanded its pipe network (Steel and MDPE) from 1567 kms to 2362 kms over the previous financial year, in the citiesof its operation, with the aim to include more areas for domestic connections.

The salient financial parameters during the year underreview, in comparison to the previous financial year on standalone basis are mentioned below as per Ind AS:

Consolidated Financial Statement

Your Company has prepared the consolidated Financial statements in accordance with Ind AS, consolidating its Joint

Directors' Report

Venture entities. The highlights of the Consolidated Financial results are as follows:-

Revenue from Operation (Net of ED) 4585.73 2797.99Profit Before Tax 124.99 98.14Profit After Tax 74.23 63.73

(*) includes both continuing & discontinuing operation.

Particulars 2017-18* 2016-17*

Credit Rating

M/s India Rating & Research (IND-Ra) has affirmed Long-Term Issuer rating as Ind-AA to your Company, with 'Stable' outlook. Further, M/s CARE has also assigned long-term credit rating as AA with stable outlook.

BUSINESS MILESTONES

Building on its past successes, your Company sustained its growth momentum in the year under study. Going further, it is all set and committed to supply clean fuel to vehicles in the geographical areas (GAs) in which it is operating.

Compressed Natural Gas Business (CNG)

During the year, your Company further expanded its CNG infrastructure and commissioned 20 CNG stations, thereby enhancing its installed compression capacity to 8,97,800kg/ day till March, 2018. This has led to a significant jump inCNG sales from 49 MMSCM in the FY 2016-17 to 61 MMSCM in the FY 2017-18.

Piped Natural Gas Business (PNG)

PNG is gradually emerging as the key energy source for industrial and commercial users offering immense opportunities for growth and expansion. Natural gas is gaining strength as the preferred fuel when compared to the efficiency and eco-sustainability of conventional fuels.

During the year under review, your Company successfully launched various promotional schemes for enhancing PNG registrations from domestic households.

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(` in Crores)


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for the FY 2018-19. Your Company is also supplyingnatural gas through CNG cascades to some of its industrial and domestic customers.

Currently, your Company is serving 22 Industrial and 48 Commercial customers including Bosch, Bharat Heavy Electricals Limited (BHEL), Intel and Bharat Electronics Limited (BEL). We have already connected Bommasandra, Peenya, Whitefield and Jigani Industrial areas and plans are afoot to connect Hoskote, Electronics City, Doddaballapura, Dabaspete and Veerasandra Industrial areas duringFY 2018-19. Your Company is also planning to connect 150 industrial and commercial customers in FY 2018-19.

ASSOCIATES & JOINT VENTURES

• Andhra Pradesh Gas Distribution Corporation Limited (APGDC)

APGDC, a Joint Venture Company o f A n d h r a P r a d e s h G a s

Infrastructure Corporation Limited (APGIC) and GAIL Gas Ltd., was incorporated with the objective to develop Natural Gas infrastructure in the state of AndhraPradesh, which inter-alia includes, establishing an LNG Import, Storage & Regasification facility in the EastCoast and developing the pipeline network for transportation and distribution of Natural Gas invarious districts of Andhra Pradesh.

In line with the business plan, APGDC undertook the following major activities during the year under review:

• Natural Gas Pipeline Projects: PNGRB has authorized APGDC to lay and operate the 300 km Kakinada – Srikakulam Natural Gas Pipeline. The project is being executed in two phases, viz. Kakinada – Visakhapatnam Pipeline Section under Phase-1 and Visakhapatnam – Srikakulam Pipeline Section under Phase-2. All the major Supply / Work packages of KSPL (Phase-1) have already awarded and the construction works are expected to start from Aug'18 with targeted completion by Jun'19. Further, detailed Route Survey of KSPL (Phase-2) Pipeline Section has recently been completed and we are now set to initiate the tendering

The response to these schemes was overwhelming withyour Company cumulatively receiving 1,23,000 registrations in Sonepat, Meerut, Dewas, TTZ and Bengaluru GAs.

Your Company is supplying PNG to domestic customers progressively in its authorized cities. During the year under review, your Company provided approx. 62,000 PNG connections in authorized GAs and has reached approx. 78,000 households, as of March 2018.

Your Company has maintained focus on the PNG industrial and commercial segment as one of its potential growthareas. Concerted efforts have resulted in the growth in the total number of industrial and commercial customers from 580 in the FY 2016-17 to 703 in the FY 2017-18.

During the year, the gas sales volume for industrial and commercial customers grew from 1307 MMSCM (FY 2016-17) to 1780 MMSCM (FY 2017-18), representing an increaseof 36.18%, as compared to the previous FY 2016-17, backedby new partnerships with industrial customers.

Bengaluru CGD Project

Under its Minimum Work Programme (MWP), the PNGRBhad set for your Company a target of laying 1583 inch-km pipeline and providing PNG domestic connections toapprox. 1.31 lakhs houses in the initial five years of its operation in these areas from 2015.

You will be delighted to know that your Company has achieved the Pipeline MWP target well in advance. About 2684 inch-km

th pipeline has already been laid against the cumulative 5 year MWP target of 1583 inch-km. For PNG domestic connections,

rdunder the 3 year MWP target, 45,905 were completed against the cumulative MWP target of 65,578. The target

rd thfor the 3 year MWP will be met, along with the 4 yearMWP target, so as to achieve the cumulative target of 91,809

thtill the end of the 4 year.

In order to cause minimum inconvenience to the public, especially in the densely populated areas, and wherever technically possible, the pipelines are being laid through the Horizontal Directional Drilling (HDD) technique, which does not involve open cutting of the roads.

Your Company has commissioned 05 CNG stations in Bengaluru and commercial operations have already startedat 02 CNG stations. Further, 25 CNG stations are planned

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and awarding activities. The Phase-2 Pipeline Section is targeted to be completed by Dec'19.

• Floating Storage and Re-gasification Unit (FSRU) based LNG import project in Kakinada: A detailed feasibility report has been developed and the Financial Appraisal and Sensitivity Analysis as well as the Geo-Tech & Geo-Physical Studies have been completed. For implementation of this project, market is being explored for firm capacity tie-up.

• Rajasthan State Gas Limited (RSGL)

Rajasthan State Gas Limited (formally known as RSPCL GAIL Gas Limited) was incorporated

with the objective to promote CGD projects and undertake activities of gas distribution in the state of Rajasthan.

Presently, RSGL is operating Mega CNG station at Neemrana and Daughter Booster Station (DBS) at Kukas (near Jaipur) along the NH-08 between the Delhi-Jaipur stretch. Further, it has set up facilities to fulfill gas demand of the industrial customers at Ghiloth.

During the year under review, RSGL has also provided

connectivity to the state-of-the-art ceramic plant

at Ghiloth.

Your Company transferred Kota CGD assets to RSGL on

August 01, 2017 through Business Transfer Agreement

(BTA). RSGL is taking up construction activities of CNG

stations, providing domestic connections in the

authorized GA, and is also facilitating the plying of

CNG buses under the smart city programme.

• Vadodara Gas Limited (VGL)

Vadodara Gas Limited (VGL), a

Joint Venture Company of GAIL

G a s L i m i t e d a n d Va d o d a ra

Mahanagar Seva Sadan (VMSS),

was incorporated to supply CNG and PNG in Vadodara.

Presently, VGL operates 8 CNG stations in Vadodara, i.e.,4 mother stations/online stations and 4 daughterbooster stations dispensing around 55000 kg/day of CNG. VGL achieved average CNG sale of 54073 kg perday during the year as compared to 50459 kg per dayin the previous year. The total length of steel pipelinelaid was 46 km.

VGL also caters to the PNG requirements of its consumers in the domestic and commercial sectors. During the financial year under review, around 25000 nos. of new applications were received for PNG connectionsin line laid area. VGL has completed MDPE pipelaying of 252 kms and 16495 nos. of Last MileConnectivity (LMC) connections.

• Haridwar Natural Gas Private Limited (HNGPL)

Your Company has formed a Joint Ve n t u r e C o m p a n y, n a m e l y Haridwar Natural Gas Private Limited (HNGPL), with Bharat

Petroleum Corporation Limited for the implementation of its CGD business in the city of Haridwar.

HNGPL aims to cover the entire Haridwar district of approx. 2305 sq. km, which will include 3 charge areas namely, Roorkee, Haridwar and Laksar. During the initial5 years, effective from 2016, the company plans to lay a network of approx. 830 inch - km to connect 16905 households with PNG. More than 500 inch - km of steeland MDPE pipeline has already been laid. HNGPL has charged City Gate Station with gas taking tap off from GAIL Receiving Terminal (RT), Jwalapur on June 30, 2018 for gas supplies to domestic/commercial/industrial customers and CNG to automobiles.

• Goa Natural Gas Private Limited (GNGPL)

Your Company has formed a Joint Venture Company, namely Goa Natural Gas Private Limited

(GNGPL), with Bharat Petroleum Corporation Limited to


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implement its CGD business in North Goa. The North Goa GA covers approx. 1676 sq. km and includes 6 charge areas. During the initial 5 years, effective from 2017, GNGPL plans to lay a network of approx. 650 inch-km, which will connect 9600 households with PNG.

GNGPL also plans to supply PNG to Commercial and Industrial customers over the next five years by laying approximately 300 km of the Pipeline Distribution Network. Initially, two charge areas, namely Tiswadi and Ponda have been taken up for laying Steel and PE pipelines. Concurrently, last mile connectivity in housing societies and residential areas has been taken up in these areas. Agreements with BPCL, HPCL & IOCL have also been executed and Retail Outlets (ROs) identified for constructing CNG outlets.

• Kerala GAIL Gas Limited (KGGL)

Your Company has incorporated a Joint Venture Company with K e r a l a S t a t e I n d u s t r i a l D e v e l o p m e n t C o r p o r a t i o n

(KSIDC), namely, Kerala GAIL Gas Limited (KGGL), for the supply, transmission, distribution and marketing of natural gas to the domestic, commercial, industrial and transportation sector customers in Kerala.

KGGL participated in the bidding for the Ernakulum GA, but could not qualify in the financial bids submitted to PNGRB for taking up the CGD project in Ernakulum. Till date, KGGL has not been able to generate any business. Besides, the main objective of the company has become impracticable, and so both the promoters have agreed in-principle to proceed with the liquidation process of the JV company. KGGL had applied for reduction of its share capital to the National Company Law Tribunal, Chennai, and the same has been approved by the Tribunal. The paid up share capital to the tune of ` 23,85,60,000 has been reduced to ` 1,00,000 and your Company has received back an amount of ` 11,92,30,000 invested in the JV. With this reduction, your Company now equally holds 50,000 equity shares in KGGL along with KSIDC.

DIVIDEND

Your Company has proposed to declare dividend @ 2.76% of paid up capital excluding divided tax, representing 30% of

PAT, amounting to ̀ 24.23 crores being subject to the approval of Shareholders in Annual General Meeting.

DEPOSITS

During the period, your Company has not accepted deposits from the public under Section 73 of the Companies Act, 2013.

IT ADVANCEMENTS

Digitization has opened up newer possibilities for reaching consumers and delivering a convenient experience.Far-reaching market reforms in India has further mandated companies to go digital. Your Company has undertaken several IT measures to streamline its business processes and further improve its customer services viz. online registration, payment, feedback system and mobile app for customers. Further, your Company has installed smart meters for domestic customers in Bengaluru and implemented the Supervisory Control and Data Acquisition (SCADA) systemto enable centralized and online monitoring of the pipeline infrastructure and other assets.

Your Company has undertaken several new IT initiatives to simplify processes and adopt user-friendly IT applications.

Your Company is also conducting regular training for skill development of its employees to ensure smooth implementation of these technologies.

HEALTH, SAFETY AND ENVIRONMENT (HSE)

Your Company believes that safety of its workforce and all its stakeholders is of critical importance to its functioning and success. It has incorporated all the necessary measures to promote the highest level of Safety, Health, Environment and loss control in all areas of implementation of the CGD projects; natural gas transmission; distribution through CGD network and CNG systems installed within and outside the city boundary and the supply of PNG to various customers with clear emphasis on improving the environment for sustainable development. Various measures and best practices have been put in place to avoid injuries accidents or any other untoward incident. Your Company is committed to promoting globally comparable levels of HSE management in the areas of its business. A number of initiatives have been taken to ensure the safety of both people and equipment, and as a result, the average HSE index for the last financial year was 97.18%.

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The ability to share knowledge across organizational boundaries is a key aspect of a sound HSE culture. Your Company held several knowledge-sharing and training sessions to create awareness on all critical issues related to health and safety during work and beyond.

Your Company promotes good health among workers and provides a positive, safe and healthy environment for employees. Several initiatives have been taken to ensure a work-life balance for its employees thus keeping them loyal and committed to the Company. As a part of safetyawareness campaign for the stakeholders, an e-magazine 'Safety Buzz' was also published and circulated.

Your Company is complying with all relevant statutory rules and regulations including PNGRB regulations on safety, occupational health, and environment in order to achieve utmost safety in all its working and business activities.

HUMAN RESOURCE

Your Company, is a wholly owned subsidiary of GAIL (India) Limited, and all employees of GAIL Gas are employees of the Parent Company. GAIL Gas lays a strong emphasis on deploying the best talent across all its business functions. Your Company, in association with GAIL Training Institute (GTI), organizes systematic and structured trainingprograms for capability building across all levels withinthe organization.

Your Company also realizes that it is critical to develop and enhance the capability and competence of its senior level executives, in order to prepare them for future leadership positions. As a step in this direction, your Company, in association with GAIL Training Institute, undertook Senior Management Development Exercise as part of the Leadership Development Program.

As on March 31, 2018, the total employees of the Company stood at 184, out of which 23% belonged to SC, 14% to ST, 26% to OBC and 4% to the physically-challenged category. Women represented 3.8% of the workforce.

Your Company has implemented the mandate of theGovt. of India for engaging 10% of the manpower of the Company as apprentices under the skill development initiative of Govt. of India.

POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company has in place a Policy for Prevention, Prohibition and Redressal of Sexual Harassment of Women at workplace in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Your Company has also hosted the Policy on its website, https://www.gailgas.com.

During the year 2017-18, no sexual harassment complaints were received.

OFFICIAL LANGUAGE (HR)

Your Company strives to comply with the entire statutory provisions mandate by the Govt. of India. The Parliamentary Committee inspected the Official Language (OL) activities of your Company in November, 2017 and appreciated its efforts to implement the use of Hindi in the day-to-day activities of the organization.

With a view to create greater awareness of the official language among employees, Hindi Fortnight was celebrated across all offices. During the fortnight, innovative and interesting competitions, cultural activities, and seminars were conducted to promote use of Hindi. All official email IDs are in Hindi and English. Employees are encouraged to communicate in Hindi even in their e-mails. During the year, your Company undertook several initiatives to promote the official language and also released the Hindi e-Magazine – 'Abhivyakti', to encourage enhanced usage of the language in its official work.

Visiting cards, rubber seals of the employees and all other official stationeries have also been made bilingual. Employees are encouraged to participate in the Hindi Prothsahan Yojana of the Company and are also rewarded for their efforts.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

For FY 2017-18, CSR budget of ̀ 1.18 crores (2% of the average of the net profits (PBT) made during the 3 immediately


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preceding years of 2017-18), was sanctioned for taking upCSR projects, as per the provisions of the Companies Act, 2013 and various projects outlined in Schedule VII of the Companies Act, 2013.

Further, for FY 2018-19, considering the 2% of the averageof the net profits (PBT) made during the 3 immediately preceding years, CSR budget of ` 1.85 crores will be earmarked to be spent on CSR activities.

The Annual Report on CSR activities, as required under Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, read with Section 134(3) and 135(2) of the Companies Act, 2013 is placed separately at Annexure – G.

RIGHT TO INFORMATION (RTI)

In order to promote transparency and accountability, an appropriate mechanism has been implemented, in line with the Right to Information Act, 2005. Your Company has nominated ACPIOs/CPIO/Appellate authorities across the units/offices to provide information to citizens under the provisions of the RTI Act. The details of all the designated officials are hosted on the website of the Company.

During the year under review, a total of 57 requests and 7 first appeals were received and all have been disposed off within the stipulated time frame. Two second appeals were filed before Central Information Commission, New Delhi andthese two have also been disposed off.

PROCUREMENT FROM MICRO AND SMALL ENTERPRISES (MSES)

The Government of India has notified a Public Procurement Policy for MSEs, Order 2012. In terms of the said policy, out of the total annual procurement of approx. ` 451 crores, the procurement made from MSEs (including MSEs owned by SC/ST Entrepreneur) during the FY 2017-18 is ` 171 crores, which is approx. 37.91%.

One vendor development-cum-coaching program was also organized during the year to appraise the business opportunities for MSEs in your Company.

MANAGEMENT DISCUSSION AND ANALYSIS

The detailed Management Discussion and Analysis forms part of this report at Annexure-A.

CORPORATE GOVERNANCE

Your Company believes that good corporate governance plays a critical role in establishing a positive organizational culture which is evident by the virtues of responsibility, accountability, consistency, fairness and transparency it follows towards its stakeholders. Pursuant to the DPE Guidelines on Corporate Governance, a report on Corporate Governance forms part of this report at Annexure-B.

The details of the meetings of the Board, Company's policy on Directors' appointment and remuneration etc., andother matters, details of establishment of whistleblower mechanism etc., form part of the report onCorporate Governance.

A Practicing Company Secretary has examined and certified your Company's compliance with respect to conditions enumerated in the DPE Guidelines on Corporate Governance. The Certificate forms part of this report at Annexure-C.

PARTICULARS OF EMPLOYEES

The provisions of Section 197 of the Companies Act, 2013and rules notified thereunder, regarding particulars ofemployees drawing remuneration in excess of limits specified are exempt for Government Companies. Your Company is a Government Company, therefore, such particulars have not been included as part of the Directors' Report.

KEY MANAGERIAL PERSONNEL (KMP) AND DIRECTORS

During the year under review, Shri A. K. Jana ceased to be the Director w.e.f. 23.04.2018 and was appointed as the Chief Executive Officer (CEO) and Key Managerial Personnel (KMP) of the Company w.e.f. 01.05.2018. Shri Pankaj Kumar Palceased to be the CEO of the Company w.e.f. 30.04.2018 consequent upon his superannuation.

Further, Shri Rajeev Mathur was appointed as the Directorof the Company w.e.f. 19.06.2018.

The Board placed on record its appreciation for the valuable guidance and significant contribution made by outgoing Director(s) and KMP during their tenure.

Your Company is fully compliant w.r.t. appointment of Woman Director. Presently, Smt. Anuradha Sharma Chagti, Part-time (Government-Nominee) Director is the Woman Director on the Board of your Company.

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P E R F O R M A N C E E VA L UAT I O N O F B OA R D , I T S COMMITTEES AND INDIVIDUAL DIRECTORS

As per provisions of Section 134(3)(p) of the Companies Act, 2013 for public Company, a statement indicating the manner in which formal annual evaluation of the performance of the Board, its Committees and of individual Directors should form part of the Directors' Report. Your Company is a Government Company and the appointment, tenure, performance evaluation etc. of Directors is done by the Parent Company/ Government of India, therefore, such particulars have not been included as part of the Directors' Report.

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

The provisions of Section 134(3)(e) of the Companies Act, 2013 regarding the policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided in Section 178(3) are exempted for Government Companies.

Further, your Company being a wholly owned subsidiary of GAIL (India) Limited, Part time (Promoter-Nominee) Directors are nominated by GAIL and Part time (Government-Nominee) Directors are appointed by the administrative ministry, Ministry of Petroleum and Natural Gas (MoP & NG).

CODE OF CONDUCT

Pursuant to the requirements of the DPE Guidelines on Corporate Governance, the Board Members and Key Management Personnel (KMP)/Senior Management Personnel have affirmed compliance with the Code of Conduct for the financial year ending March 31, 2018.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of the

Companies Act, 2013 with respect to the Directors'

Responsibility Statement, it is hereby confirmed that:

i) In the preparation of the annual accounts for the financial

year ending March 31, 2018, the applicable accounting

standards have been followed, along with proper

explanation relating to material departures;

ii) Selected such accounting policies and applied them

consistently and made judgments and estimates that are

reasonable and prudent to give a true and fair view of the

state of affairs of the Company at the end of the financial

year and of the profit of the Company for the year 2017-18;

iii) Taken proper and sufficient care for the maintenance of

adequate accounting records in accordance with the

provisions of the Companies Act, 2013, for safeguarding

the assets of the Company and for preventing and

detecting fraud and other irregularities;

iv) Prepared the annual accounts for the financial year ending

March31, 2018 on a going concern basis;

v) Had devised proper systems to ensure compliance with

the provisions of all applicable laws and such systems

were adequate and operating effectively; and

vi) Laid down internal financial controls to be followed by the

Company and that such internal financial control are

adequate and were operating effectively.

VIGILANCE

In pursuance of the DPE Guidelines on Corporate Governance,

the Chief Vigilance Officer (CVO) of the parent Company,

GAIL (India) Limited is overseeing the vigilance functions of

your Company. Various activities such as Bill Watch System,

e-tendering, e-payments etc. have already been implemented

in the past for the benefit of vendors and suppliers and to

bring transparency in your Company's systems and

processes. A number of system improvements were effected

in your Company during the year for effective utilization of its

resources, which in turn would also help in preventing

corruption and ensure all round good governance.

During the year under review, 05 number of disciplinary matters related to vigilance cases was reported and05 cases were pending at the end of year 2017-18. Thesecases were prima-facie pertaining to misconduct.

The Vigilance Awareness Week-2017 was observed on the theme “My Vision-Corruption Free India” at the Corporate


11

thOffice and at all the work centers from 30 October toth4 November, 2017. All the employees including contract

employees and their ward whole-heartedly participated in the various events such as Essay writing, Slogan writing and Poster making competition organized during the week. Combined online Vigilance Quiz was conducted covering all

stwork centres of GAIL and GAIL Gas on 1 Nov 2017.”

AUDITORS

• Statutory Auditors

The Statutory Auditor of your Company is required to be appointed by the Comptroller and Auditor General of India (C&AG). M/s H. S. Ahuja & Co., Chartered Accountants,New Delhi is appointed as Statutory Auditors of your Company for the FY 2017-18.

Review and Comments of CAG, if any, on the Company's Financial Statements for the financial year endingMarch 31, 2018, forms part of Financial Statement. Notes on Financial Statement referred to in the Auditors'Report are self-explanatory and, therefore, do not calls for any further comment.

• Cost Auditor

Cost Auditor M/s Jugal K. Puri & Associates, New Delhihas conducted audit of Cost Accounting Records for theFY 2017-18. Your Company has maintained accounts and cost records as prescribed under Section 148 of the Companies Act, 2013.

• Internal Auditor

M/s KPMG carried out Internal Audit of your Company for FY 2017-18. M/s KPMG was also appointed as Internal Auditors for a period of 2 years w.e.f. 01.04.2018

• Secretarial Auditor

Your Company has appointed M/s Aggarwal S. &

Associates, New Delhi as Secretarial Auditor for FY

2017-18. Secretarial Audit Report confirming compliance

by Practicing Company Secretary to the applicable

provisions of the Companies Act, 2013 and other

applicable laws, forms part of this Report at Annexure-D.

The observation made by Secretarial Auditor in his Audit report are as under:

Compliance under Clause 3.1.1 & 3.1.4 of the DPE

Guidelines on Corporate Governance with respect to the

appointment of Independent Directors on the Board of

Company & consequential non-compliances thereof.

Explanation on observations made by Secretarial Auditor in seriatim is as under:

GAIL Gas Limited being CPSE needs to comply with DPE

Guidelines on Corporate Governance for Central Public

Sector Enterprises, 2010. The said Guidelines inter-alia

mandates for appointment of at least one-third

Independent Directors on the Board (in the case of listed

but without an executive chairman or not listed CPSE).

Presently, there are no Independent Directors on the

Board of the Company. GAIL Gas Limited being

Government Company under the administrative control

of the MoP&NG, the Independent Directors are

appointed/nominated by Government of India (GOI). The

Company has been pursuing with administrative ministry

i.e., the MoP&NG for the appointment of requisite number

of Independent Directors on the Board.

PARTICULARS OF LOANS, INVESTMENTS AND CORPORATE GUARANTEES

Details of investments, loan and guarantee covered under

Section 186 of the Companies Act, 2013 forms part of

financial statement for the FY 2017-18.

RELATED PARTY TRANSACTIONS (RPTs)

The disclosures related to RPTs in accordance withapplicable accounting standards are provided at Note-58 of the Standalone Financial Statement.

The details of contracts or arrangements with related parties referred to under Section 188(1) of the Companies Act, 2013in the prescribed Form AOC-2 are attached at Annexure - Eof the report.

EXTRACT OF ANNUAL RETURN

As required under the provisions of the Companies Act, 2013,

12

the extract of Annual Return for the financial year endedst31 March, 2018 in the prescribed form MGT-9 is attached

at Annexure - F to this report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

In accordance with the provisions of the Companies Act, 2013 and rules framed thereunder, the details relating to Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo are annexed at Annexure-H to the report.

MoU PERFORMANCE

A Memorandum of Understanding (MoU) is signed every year between your Company and its parent company, GAIL (India) Limited through which performance targets are set for the year. The main thrust while fixing MoU targets during the year under review was on Creating Infrastructure for PNG and CNG, Capacity Utilization, Production Efficiency, Technology Upgradation, Leveraging Net worth, Marketing Efficiency ratios, Return on Investment etc.

Your Company achieved 'Very Good' MoU rating for theFY 2016-17. The MoU for the year 2017-18 was signedbetween GAIL (India) Limited and your Company. The

evaluation of MoU 2017-18 is under progress and the final evaluated MoU score and rating is expected to be announced by November-2018.

ACKNOWLEDGMENT

Your Directors express their gratitude for the constant support and cooperation showed by GAIL, and especially by the Ministry of Petroleum and Natural Gas (MoP&NG), various state governments, and regulatory and statutory authorities from time to time .

Your Directors acknowledge the constructive suggestions received from the Statutory Auditors and Comptroller & Auditor General of India and are grateful for their consistent support and help.

Together as a team, employees of your Company are capable to deal with the challenges. Your Directors also wish to thank all stakeholders for reposing their faith, trust and confidence in the Company.

On behalf of your Directors, I would like to state thatwith determination and hard work, and full support of a committed workforce, we will be able to take your Company to newer heights.


For and on behalf of the Board

B. C. TripathiChairman

DIN: 01657366

Place: New DelhiDate: 17.09.2018

PROFIT AFTER TAX

2016-17 2017-18

39.79

65.02

80.75

2015-16

*Standalone Data

TURNOVER

2015-16 2016-17 2017-18

1551.88

2797.99

4585.73

*Standalone Data

NATURAL GAS MARKET OVERVIEW

The global natural gas market is witnessing significant growth, driven by the availability of shale gas and the increase in the liquefied natural gas (LNG) trade. Currently, the share of natural gas in India's energy basket stands at 6.2% and is expected to reach 20% till 2030.

An expanding economy and a growing population will further propel demand for primary energy resources. India's energy consumption would grow by 4.2% p.a., faster than all major economies in the world; and by late 2020s, India would overtake China as the largest growth market for energy. Also, the country's commitment to low-carbon energy use will see greater role for the production and consumption of natural gas (Source: BP Energy Outlook, 2018).

During FY 2017-18, overall natural gas production increasedby 2.35% to 32.6 Billion Cubic Meter (BCM); public sector companies, ONGC and OIL contributed 80.4% to the production and the remaining 19.6% was attributable to private players.

The demand for natural gas in the country is majorly driven by increasing levels of industrialization, and more specifically, the Power, Fertilizer, Petrochem/Refineries and City Gas Distribution (CGD) sectors; continued coal-to-gas switching; and the increasing availability of affordable gas. Besides, the country's future lies in shifting the demand from oil to natural gas not only due to economic and diversification purposes, but also in the context of green considerations.

Currently the supply-demand gap in natural gas is being addressed through the import of Liquefied Natural Gas. To fulfil the increasing demand and strengthen the domestic gas distribution within the country, the government is planning to increase the share of natural gas in India's energy mix, necessitating investments to the tune of at least USD 10.8 Billion for augmenting gas import and pipelines infrastructure.

In this context, the Central Government has introduced several reforms to encourage domestic gas production.

a) Grant of premium price to incentivize gas production in difficult areas such as 'high-pressure, high-temperature' areas and, 'deep water and ultra-deep water' areas. However, it has also provided for a price ceiling to ensure affordability by end-users.

b) Introduction of the new Hydrocarbon Exploration and Licensing Policy (HELP), an upgraded version of the previous New Exploration Licensing Policy (NELP) and Production Sharing Contract (PSC).

c) Grant of Relief for Petroleum Exploration and Production in the Goods and Services Tax.

Going forward, the growth of demand for natural gas is likely to be driven by the development of transmission and distribution infrastructure, savings from the usage of natural gas, rising awareness of the environment-friendly characteristics of natural gas as a fuel, and the overall favorable economics of supplying gas at reasonable pricesto end-consumers.

CGD SECTOR IN INDIA

HISTORICAL BACKGROUND

The CGD business in India dates back to 1857 when Bombay and Calcutta became the first two cities in the country to benefit from gas distribution infrastructure. However, CGD gained its first major stronghold with the discovery of natural gas in the western regions of the country in the 1960s. In 1972, Surat and Vadodara in Gujarat became the first major beneficiaries of CNG and PNG. In 1984, Gas Authority of India Limited (GAIL) was formed to act as a nodal agency fornatural gas in India. The company constructed and operated the pipeline, which ran from Hazira to Jagdishpur via Vijaipur to supply gas to the fertilizer and power sectors in theregions. Slowly and steadily, piped natural gas began to gain ground, and in the eighties and nineties, made its way toDelhi and Mumbai, benefiting public at large.

The next major milestone in the CGD journey was the setting

Management Discussion and AnalysisAnnexure-A

13

14

up of the Petroleum & Natural Gas Regulatory Board (PNGRB), under The Petroleum and Natural Gas Regulatory Board Act, 2006, to regulate the refining, processing,storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas across all parts of the country.

The PNGRB is responsible for authorizing new areas to set up gas distribution infrastructure amongst interested players through auctions of geographical areas. At present, 35 entities are implementing CGD project covering 97 geographical areas in 23 States & UTs. As of date, nearly44.43 lakhs of households and 34,000 industrial and commercial units are connected with PNG. 31.71 lakhsvehicles are running on CNG with 1446 CNG stationsacross the nation for the fuel availability.

As the global agenda goes green, the CGD business has witnessed strong CAGR of 6.5% in the last 5 years, driven by the stringent environmental regulations and rapidly growing penetration of CNG-fitted vehicles across the country. Backed by booming PNG and CNG segments, the country's CGD network is anticipated to witness robust expansionand gas demand of approximately 85.6 MMSCMD by theyear 2030.

Ninth Round of CGD Bidding

With renewed interest in natural gas and backed by policy to go green, the PNGRB has initiated the ninth round of bidding for granting authorization of laying, building, operating or expanding CGD network for 86 geographical areas in 174 districts, covering 24% of its geographical area, and 29% of the population.

Unlike the previous eight rounds, this ninth round has evoked much interest from major industry players across the country because of the revised bidding norms, and the push from PNGRB / Government of India through favorable policies, such as marketing exclusivity period of 8 years (extendable by2 years, compared with 5 years earlier); floor tariffs to discourage unviable bids; removal of additional bid bond requirement; and evaluation of bids based on higher infrastructure creation. As per ratings agency, CRISIL, this

round of CGD bidding is 'set to alter the industry landscape' with government expecting investments of ` 70,000 crores from winning bidders, or four times the cumulative ` 15,000-18,000 crores invested till fiscal 2018.

The capital raised from the above is aimed to meet India's clean energy targets, specifically, close to 100% penetration of clean cooking fuel in the country; the use of green, affordable, and environment-friendly fuel in rural India;and reach 10 million households and additional thousandsof industrial and commercial customers across the countryby 2019.

Your Company, GAIL Gas Limited has emerged as successful bidder in five Geographical Areas viz. Dakshin Kannada (Mangalore) district, Dehradun district, Sundergarh-Jharsuguda districts, Giridih-Dhanbad districts and Puri-Ganjam & Nayagarh districts for development of CGD networks with approximate investment of ` 5000 crores by setting up of 215 CNG Stations, connecting 8.51 lakhs domestic households and laying of 4000 steel inch-kms pipeline. Natural Gas demand of approx. 4 MMSCMD is expected from these five GAs. Apart from the above, Consortium of GAIL Gas with Assam Gas Company Limited and Oil India Limited has also been selected as successful bidder in Kamrup & Kamrup Metropolitan districts and Cachar-Hailakandi-Karimganj districts for development of CGD networks with approximate investment of ̀ 1500 crores by setting up of 72 CNG Stations, connecting 4.16 lakhs domestic households and laying of 1712 steel inch-kms pipeline. Natural Gas demand of approx. 1 MMSCMD is expected from these two GAs.

OPPORTUNITIES

With focus shifting to clean fuel and the green agenda taking center stage globally, the natural gas business in India is at an exciting point of its journey and looking at an expanded role in fulfilling the clean energy aspirations of the nation. Your Company, GAIL Gas is well-positioned to take advantage of these trends and opportunities for the clean fuel market.

Expansion of gas pipeline infrastructure: The domestic production of natural gas in the country has been concentrated over the western and southern regions of the


15

country, and in the absence of adequate natural gas pipeline infrastructure, the northern and eastern regions have remained bereft. To ensure reachability of gas to these regions, the government has fast-tracked gas pipeline infrastructure projects in the north and eastern states like Uttar Pradesh, Odisha, West Bengal, Jharkhand, Bihar and Assam, thus opening up further market for natural gas.

Your company will be executing CGD projects in GAs of Ganjam, Nayagarh & Puri Districts, Giridih & Dhanbad Districts, Sundargarh & Jharsuguda Districts, Kamrup & Kamrup Metropolitan Districts, Cachar, Hailakandi & Karimganj Districts. This is in addition to executing six CGD projects by parent company GAIL, namely, Varanasi, Ranchi, Bhubneshwar, Cuttack, Patna & Jamshedpur in theeastern market.

Joint Ventures with state governments: The understanding and appreciation of the State governments towards the development of the CGD Network have introduced strategic joint ventures aimed at increasing PNG penetration for both domestic and commercial purposes. Your company has formed Joint Ventures with state, notably, Andhra Pradesh Gas Distribution Corporation Limited (APGDC), and Rajasthan State Gas Limited (RSGL). It is now set to form Joint Venture in Assam with the State Government for development of CGD network in geographical areas of Kamrup & Kamrup Metropolitan districts and Cachar-Hailakandi-Karimganj districts.

Rising demand for clean fuel: An expanding economy and a growing population have resulted in an increase in demand for primary energy resources such as coal, oil and natural gas. With India committed to becoming a gas-based economy, we envisage a greater demand for natural gas, especially with the government pushing for the use of clean fuel in rural India and achieving close to 100% penetration of clean cooking fuel in the country.

In a welcome step to curb pollution, the Supreme Court has recently banned the use of pet coke and furnace oil in the NCR region. The National Green Tribunal has also directed the IGI airport to comply with the emission norms and convert all

coaches, buses and other vehicles playing at the Delhi airport to CNG. In its first Green Budget, the Delhi government has introduced a subsidy scheme for those who shift to gas-based generator sets, CNG cars, coal to gas and other clean fuel. The expert committee constituted by the MoPNG has also recommended the use of natural gas as an automotive fuel and making it a national mission. It is expected that steps such as these would act as a catalyst to transition India into aclean-fuel economy.

Building of smart cities: Smart cities are also expected to provide the sector the opportunity to enhance the use of clean gas. Under the Smart Cities Mission, the government plans to encourage the use of clean energy in the state by developing CGD networks in the selected cities.

Cost benefits: To promote the CGD sector, the government had assigned first priority to low-cost domestic natural gas, in February, 2014. This decision has brought down the price of CNG (Transport) and PNG (domestic) across the nation and has led to the increase in the consumption of natural gas.

Government support: The government is committed to a green economy and has undertaken a series of policy initiatives that bode well for the CGD sector:

• Ministry of Urban Development has advised all the States / Union Territories to ensure provision of piped gas supply in all smart cities;

• Bringing in more cities under the CGD network;

• 100% allocation of domestic gas for domestic PNG and CNG segments for faster roll out of PNG connections and CNG stations in given City / Geographical Areas;

• Development of Gas Infrastructure in the eastern part of the country;

• Granting Public Utility Status to the CGD Project; and

• Allowing CGD entities to supply domestic gas to Non-Domestic Exempted Category(NDEC)

All these opportunities together may well make 2018 the defining year for natural gas in India.

16

CHALLENGES

Less availability of affordable Gas to CGD: Gas availabilityis one of the major concerns for fructification of the investments in developing the extensive CGD infrastructure. The country has limited indigenous energy resources, making it mandatory to explore global markets to diversify its fuel mix. However, development of unconventional natural gas resources is on the cards with ample weightage on CBM and Shale gas development. The government is also planning to encourage an investment of USD 20 Billion for developing domestic gas fields in India in the upcoming 5-7 years. Besides, with substantial investments being committed by ONGC and RIL/BP for developing discovered fields, gas availability is expected to increase by 35-45 MMSCMD by ONGC and BP, starting 2020.

The government of India has allocated Domestic Gas on first priority to CNG (Transport) and PNG (Domestic). Considering the huge number of upcoming CGDs after the introduction of 9th round of bidding, availability of domestic gas to cater to the demand of prevailing CGDs at the affordable rateswill be challenging.

Under-developed & under-utilized pipeline infrastructure : India's gas pipeline infrastructure is relatively under-developed. It currently has a network of 17,421 km of natural gas transmission pipelines with a design capacity of around 464 MMSCMD (for major gas pipelines). Besides, the pipeline network has been operating at low utilization levels mainly because of gas availability and affordability issues. The PNGRB has authorized the construction of many cross-country gas pipelines, covering more than 5,000 km of pipeline network.

Development of the CGD network along these proposed pipelines will largely depend on the timely completion of pipeline laying.

FUTURE OUTLOOK

Overall, India's CGD sector is well-poised to grow and play a critical role in increasing natural gas penetration in the country backed by improved regulatory environment and favourable government policies; increased awareness about

pollution and the government's commitment to promote green energy; and continuous rise in urbanization and infrastructure with special focus on smart cities andgreen corridors.

Your Company, being a wholly owned subsidiary of Maharatna GAIL (India) Limited, benefits from the core competencies that saw GAIL emerge as the gas market developer in the country with a large pipeline infrastructure covering around 11,500 kilometres and market share of more than 70% in both gas transmission and marketing.

As a leading clean energy provider, committed to creating social and environment wealth, your Company is not only increasing its CGD network across the country but also creating awareness and promoting the use of natural gas amongst the communities in which it has a CGD presence.

In the coming years, we will focus on increasing penetration in existing geographical areas by setting up additional CNG stations and increasing domestic and commercial connections. We are also focused on developing pipeline infrastructure in the northern and eastern part of the country with specific focus on states such as Uttar Pradesh, Odisha, West Bengal, Jharkhand, and Bihar. Backed by state-of-the-art technology, large pipeline infrastructure, and strategic joint ventures, we are well-positioned to capitalize on the growth opportunities in this sector.

We have strengthened our existing network and are proactively augmenting new CNG stations near our pipeline infrastructure. We have also partnered with other OMCs to set up CNG stations at their filling stations to make easy availability of gas for vehicles. In a bid to encourage people to switch to CNG, your company has partnered with Uber, the ride-sharing taxi cab service, to catalyze CNG eco-system in Bengaluru, and incentivize their driver partners with three months of free gas to convert their vehicles to CNG. Your Company is also in talks with the major automobile manufacturers to promote CNG-fitted vehicles in towns and cities where GAIL Gas has its CGD network.

Your Company had recently introduced point of sales (POS) card payments to simplify payments and also contribute


17

towards a cashless economy. Further, it is set to introduce CNG smart cards to facilitate payments.

The government has set ambitious targets for major CGD players to promote the adoption of domestic PNG, both by individual households and corporate societies and townships. Your Company is also approaching major real estate builders to incorporate PNG networks in their buildings, enabling residents to use PNG in their kitchens. Promotional schemes are also being launched to incentivize individual households to switch to PNG.

The visionary reforms undertaken by the government, coupled with robust economic growth and renewed focus on clean fuel will drive strong and sustainable consumption growth and over the next few years.

RISK MANAGEMENT FRAMEWORK

The document, Risk Management Policy and Procedures, has been framed to identify various risks associated to your Company's business and to mitigate them and protect value to the organization and its stakeholders. The risks are evaluated, quantified & prioritized, and mitigation plans are reviewed & monitored at various stages by the Senior Management of the Company periodically as per Risk Management Policy. In the changing business scenario and expansion of your Company into various other activities, business risk and their mitigation plans are re-assessed on regular basis.

INTERNAL CONTROLS

Your Company has developed Internal Control System for its various business processes, commensurate with the size and nature of business to help achieve its objectives. The system is further supplemented by extensive programs of audits, i.e., Internal Audit by M/s KPMG, Comptroller & Auditor General of India (CAG) Audit, and Statutory Audit by Statutory Auditors appointed by the CAG. Further, Promoters Audit was done by GAIL (India) Limited. Internal Audit Reports were placed and deliberated by the Audit Committee.

The Internal Control System is designed to ensure that all financials and other records are reliable for preparing financial statements and other data, and for maintaining accountability of assets and compliance with statutory

(` in Crores)Particulars 2017-18 2016-17Turnover (Net of ED) 4585.73 2797.99

Profit Before Tax 112.42 98.90

Profit After Tax 74.23 63.73

requirements. Your Company has mapped a number of business processes on to its SAP system to providemore visibility in its processes. Your Company alsocontinues to invest in Information Technology to supportits varied operations.

FINANCIAL PERFORMANCE-STANDALONE

• Revenue from Operation (Net of ED)

During the year under review, gross revenue was` 4610.34 crores as against ` 2816.47 crores during the corresponding period ending March 31, 2017.

• Profit After Tax (PAT)

Profit After Tax increased by ` 15.73 crores from ` 65.02 crores during the FY 2016-17 to ` 80.75 crores in 2017-18, registering a growth of 24.19%.

• Shareholders' Funds

The Reserves and Surplus increased to ` 212.54 crores at the end of the current financial year as compared to` 154.65 crores during the corresponding previous year. As on March 31, 2018, the Net Worth of the Company stood at ̀ 1089.54 crores, as compared to ̀ 781.65 crores as on March 31, 2017.

• Ratio Analysis

Return to Net worth for the Company as on March 31,2018 was 7.41%. Return on Capital Employed was10.14% as on March 31, 2018.

• Consolidated Financial Statements

In accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India, your Company has prepared the Consolidated Financial Statements of its subsidiaries and joint venture entities. The highlights of the Consolidated Financial Results are as follows:

Handing over Dividend Cheque to Parent Company GAIL (India) Limited

18

CORPORATE SOCIAL RESPONSIBILITY

In alignment with the vision of your Company, the CSR initiatives strive to create value for the communities in which it operates and the society at large. The Annual Report on the CSR activities as per requirement of the Companies Act, 2013 forms part of the Directors' Report at Annexure-G.

HUMAN RESOURCES

Your Company is focused on building capabilities and developing competencies of its employees. Being a 100% subsidiary of GAIL (India) Limited, all the employees are employees of the parent Company. Your Company continues to focus on various development initiatives to synergize

individual development and organizational growth. Therewas no strike or lock-out during the year under review.

CAUTIONARY STATEMENT

Statements in the Directors' Report and Management Discussion and Analysis, describing the Company's objectives, projections and estimates, expectations, predictions etc., may be 'forward-looking statements' within the meaning of the applicable laws and regulations. Actual results, performances or achievements may vary materially from those expressed or implied, depending on economic conditions, government policies and other incidental factors. Stakeholders are cautioned not to place undue conviction on the forward-looking statements.


I. Equity & Liabilities 1. Shareholders' funds (including Share Application Money

pending Allotment & Reserve and Surplus) 1239.54 781.65 1231.41 779.11

2. Non- Current Liabilities 184.49 192.67 184.49 192.67

3. Current Liabilities 500.15 271.57 500.15 271.57

Total Equity & Liabilities 1924.18 1245.89 1916.05 1243.35II. Assets 1. Non-Current Assets 1304.33 961.38 1296.20 958.84

2. Current Assets 619.85 284.51 619.85 284.51

Total Assets 1924.18 1245.89 1916.05 1243.35

(` in Crores)The summary of the financial position of your Company as on March 31, 2018 and March 31, 2017 is:

Particulars Standalone Data Consolidated

2017-2018 2016-17 2017-2018 2016-17

19

1. Company's Philosophy on Code of Governance

Your Company adheres to good corporate practices and emphasizes on commitment to values and ethical business conduct. It believes in adopting the best practices laid down in different statutes and goes beyond adherence of statutory framework to bring transparency, accountability and equity in all facets of its operations. Your Company's philosophy of Corporate Governance is to ensure transparency in all its operations and enhance stakeholder value within the framework of laws and regulations.

In its commitment to practice strong governance principles, your Company is guided by the following core principles of corporate governance:

1. To build robust internal control processes & systems for enhancing accountability and responsibility.

2. To ensure transparency and high degree of disclosure and adequate control system.

3. To ensure that the decision-making process is systematic and rational.

4. To ensure that the employees of the Company subscribe to the corporate values and apply them in their conduct.

The Board of your Company constantly endeavours toset goals and targets aligned to the Company's visionand mission.

2. Board of Directors

i. Composition of the Board

The Company is managed by the Board of Directors,which formulates strategies, policies and reviews its performance periodically. As per the Articles of Association, the number of Directors shall not be lessthan four and more than twelve.

As you are aware, your Company being a wholly owned subsidiary of GAIL (India) Limited, Part time (Promoter-Nominee) Directors are nominated by GAIL and Part time (Government-Nominee) Directors are appointed by the administrative ministry, Ministry of Petroleum and Natural Gas (MoP & NG).

As on March 31, 2018, there were 6 (Six) Directors on the Board comprising of 5 (Five) Promoter-Nominee Directors including the Chairman and one part-time Director (Government Nominee). The composition and attendance record of the Company's Board of Directors w.r.t. Board Meetings are as follows:

Report on Corporate GovernanceAnnexure-B

Part-Time (Promoter - Nominee) DirectorsShri B. C. Tripathi - Chairman 5 Yes 2 NIL

Shri Gajendra Singh(w.e.f. 05.05.2017) 5 Yes 2 1

Shri Subir Purkayastha 6 No 4 1

Shri A. K. Jana 4 Yes 2 NIL

Shri A. K. Tiwari 3 Yes 3 2(w.e.f. 04.09.2017)

Part-Time (Government - Nominee) Director Smt. Anuradha Sharma Chagti 4 No NIL NIL

Name and Designationof the Director

No. of BoardMeetingsAttended

Attendance atLast Annual

General Meeting

DirectorshipsHeld in other

Companies

Membership/Chairmanship in

Committees of theBoard of other

Companies

20

Notes:1. During the year 2017-18, 6 (Six) Board Meetings were held.

t h t h2. The 9 Annual General Meeting was held on 26September, 2017.

3. The Directors, inter-se, are not related to each other.

4. None of the Director(s) on the Board is a member of more than 10 (Ten) Committees or Chairman of more than 5 (Five) Committees across all the Companies in which he/she is a Director. Membership/Chairmanship in a Committee is reckoned pertaining to Audit Committee and Stakeholders Relationship Committee and based on the latest disclosures received from the Director(s).

ii. Details of Board Meetings

During 2017-18, 6 (Six) meetings of the Board were held, the details of which are as below:

S. No. Meeting No. Date of Board Meeting(s)th 1. 59 18.05.2017th 2. 60 30.05.2017

st 3. 61 31.07.2017nd 4. 62 07.09.2017rd 5. 63 27.10.2017th 6. 64 31.01.2018

3. Committees of the Board

The Board has constituted various statutory and non-statutory Board-level Sub-Committees to take informed decisions within the framework of delegated authority and make specific recommendations to the Board on matters in their areas on purview. The minutes of these Sub-Committees are further placed in the next respective Committee meeting for confirmation and in the Board meeting for information.

The Chief Executive Officer (CEO) and Chief Financial Officer (CFO) of your Company are the permanent invitees to the Board and Sub-Committee meeting(s). Senior functional executives are also invited, as and when required, to provide necessary information/ clarification to the Board as well as committees of the Board.

A. Audit Committee

The term of reference of Audit Committee is in accordance with Section 177(4) of the Companies Act,

2013 and DPE Guidelines on Corporate Governance which inter-alia includes the following:

(i) Recommending the appointment, remuneration and terms of appointment of auditors of the Company;

(ii) R e v i e w i n g a n d m o n i t o r i n g t h e a u d i t o r ' s independence and performance, and effectiveness of audit process;

(iii) Examination of the financial statement and the auditors' report thereon;

(iv) Approval or any subsequent modification of transactions of the Company with related parties;

(v) Scrutiny of inter-corporate loans and investments;

(vi) Valuation of undertakings or assets of the company, wherever it is necessary;

(vii) Evaluation of internal financial controls and risk management systems;

(viii) Monitoring the end use of funds raised through public offers and related matters and

(ix) Approval of the Related Party Transactions including granting of omnibus approval and laying down the criteria for the same.

The Audit Committee of the Company comprises of 3 (Three) Members, namely Shri Subir Purkayastha as the Chairman, Shri Gajendra Singh and Shri A. K. Tiwari (w.e.f.04.09.2017) as the members. The Company Secretary acts as the Secretary to the Committee.

During the 2017-18, 4 (Four) meetings of the Audit Committee were held on May 18; July 31; September 07 in 2017 and January 31 in 2018, respectively. The attendance of the members at the meetings was as under:-

No. of Meetings S. No. Members Held during Attended the tenure 1. Shri Subir Purkayastha 04 04 2. Shri Gajendra Singh (w.e.f. 05.05.2017) 04 02 3. Shri A. K. Tiwari 04 02 (w.e. f. 04.09.2017)


21

During the year, there was no instance(s), where the Board had not accepted any recommendation(s) of the Audit Committee. Your Company has ensured to remain in the regime of unqualified statement.

B. Committee of Directors

The Committee of Directors of the Company comprises of

3 (Three) Directors with, Shri Gajendra Singh (w.e.f.

05.05.2017) as the Chairman, Shri A. K. Tiwari (w.e.f.

04.09.2017) and Shri A. K. Jana as the members.

During the 2017-18, 8 (Eight) meetings of the Committee of

Directors were held on April 10; May 15; July 31; September

11; October 23; November 28; December 19 in 2017 and

March 7 in 2018.

C. Health, Safety & Environment Committee

The Health, Safety & Environment Committee of your

Company c o m p r i s e s o f t wo D i r e c t o r s n a m e l y,

Shri Gajendra Singh, (w.e.f. 05.05.2017) as the Chairman

and Shri A. K. Tiwari, (w.e.f. 04.09.2017) as the member.

No meeting of the HSE was held during the year

under review.

D. Nomination & Remuneration Committee

Ministry of Corporate Affairs vide its notification dated

July 13, 2017, amending Rule 6 of Companies (Meeting of

Board and its Power) Rules, 2014, has exempted unlisted

public Companies to constitute the Nomination and

Remuneration Committee.

However, since GAIL Gas being CPSE needs to comply

with DPE Guidelines on Corporate Governance for Central

Public Sector Enterprises, 2010. To comply with these DPE

Guidelines, your Company has already constituted the

Nomination & Remuneration Committee.

The term of reference of Nomination & Remuneration

Committee is in accordance with DPE Guidelines on

Corporate Governance. The scope of Nomination &

Remuneration Committee is to decide the annual bonus/

variable pay pool and policy for its distribution across the

executives and non-unionized supervisors, within the

prescribed limits.

The Nomination & Remuneration Committee of the

Company comprises of 3 (Three) Directors viz. Shri Subir

Purkayastha, Chairman, Shri Gajendra Singh (w.e.f.

05.05.2017) and Shri A. K. Jana as the members.

During the 2017-18, no meeting of the Nomination &

Remuneration Committee was held during the year

under review.

As you are aware, your Company being wholly owned

subsidiary of GAIL (India) Limited, Part-time (Promoter

Nominee) Director(s) are nominated by GAIL and Part-

time (Government Nominee) Director(s) are nominated by

the MoP&NG being the administrative ministry. All Key

Management Personnel (KMP)/Senior Management

Personnel (SMP) are the employees of the Parent

Company. Performance Related Pay (PRP) is being

decided and paid by the promoter Company, GAIL. The

part time Directors, which includes the Promoter

Nominee and Government Nominee, does not receive any

sitting fee/compensation from the Company for

attending the meetings of the Board as well Sub-

Committees of the Board.

E. Corporate Social Responsibility Committee

The CSR Committee consists of 3 (Three) Directors

namely, Shri Gajendra Singh (w.e.f.05.05.2017) as the

Chairman, Shri A. K. Tiwari (w.e.f. 04.09.2017) and Shri A. K.

Jana as the member.

The CSR fund approved by the Board for FY 2017-18 was

` 1.18 crores. However, some of the projects at Agra and

Meerut GAs could not be completed by 31.03.2018. As per

22

5. Means of Communication

The Annual Report is available on the website in a user-friendly format viz. www.gailgas.com and is circulated to the members and others entitled thereto.

6. Independent Director

Ministry of Corporate Affairs vide its notification dated July 05, 2017, inserted Rule 4(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, as per which the unlisted Public Companies including wholly owned subsidiary Companies under the provisions of the Companies Act, 2013 are not required to appoint requisite number of Independent Directors.

However, since GAIL Gas is a CPSE, it needs to comply with DPE Guidelines on Corporate Governance for Central Public Sector Enterprises, 2010. The said Guidelines mandates for appointment of at least one-third Independent Directors on the Board (in the case of listed but without an executive chairman or unlisted CPSE).

Presently, there are no Independent Directors on the Board of your Company. Your Company, being a Government Company under the administrative control of MoP&NG, the Independent Directors are appointed/ nominated by the Government of India (GoI). The Company has been pursuing with administrative ministry i.e. MoP&NG for the appointment of requisite number of Independent Directors on the Board.

7. Disclosures

a. The Annual Financial Statements FY 2017-18 are in conformity with applicable Accounting Standards. During the year, there have been no materially significant Related Party Transactions that may have potential conflict with the interest of the Company at large. The details of “Related Party Disclosures” are being disclosed in Notes to the accounts in the Annual Report.


the provisions of Section 135 of the Companies Act, 2013

the unspent CSR amount of ` 1.12 lakhs has been

carried forward in next FY 2018-2019 for completion of

the projects.

Your Company will endeavour to strive to enhance the value creation in the society and community as well through CSR initiatives so as to promote sustained growth. The amount will be spent on the focus areas viz. the construction of pre-fabricated bio toilets, solar street lights and distribution/ installation of dustbins etc. as identified under Schedule VII of the Companies Act, 2013. These activities mostly being a part of the “Swachh Bharat Abhiyan” of the Government of India.

During the year, 1 (One) meeting of the CSR were held on October 27, 2017.

4. General Body Meetings

Forth coming AGM: Date, Time and Venue

th The 10 Annual General Meeting of the Company (AGM) is thscheduled on Wednesday, 26 day of September, 2018 at

04:00 p.m. at the Registered Office of the Company situated at GAIL Bhawan, 16, Bhikaiji Cama Place, R. K. Puram, New Delhi-110066.

Location and Time of the Last Three AGMs

The location, time and details of the special resolutions passed during last three AGMs are as follows:

AGM th7 th8 th9

Date andTime

th14 September, 201504.00 p.m.

th29 September, 201603:00 p.m.

th26 September, 201711:00 a.m.

VenueGAIL Bhawan,

16, Bhikaiji CamaPlace, R. K. Puram,New Delhi-110066

GAIL Bhawan,16, Bhikaiji Cama

Place, R. K. Puram,New Delhi-110066

GAIL Bhawan,16, Bhikaiji Cama

Place, R. K. Puram,New Delhi-110066

SpecialResolution

Passed

No item warrantedthe SpecialResolution.

To approve increasein the AuthorisedShare Capital of

the Company.

No item warrantedthe SpecialResolution.

Year 2014-15 2015-16 2016-17

23

b. Your Company has implemented online legal compliance management system covering the compliance of the applicable laws to your Company. A Compliance Report is generated and the same is put up to Board for review of Board from time to time.

c. CEO and CFO of the Company, inter-alia, confirmed the

correctness of the financial statements, adequacy of

the internal control and certified other matters to the

Board and Audit Committee, as per the requirements

of DPE guidelines.

d. The Company has implemented Whistle Blower (Vigil

Mechanism) Policy wherein employees are free to

report any improper activity resulting in violations of

laws, rules, regulations or code of conduct by any of the

employees, to the competent authority. In exceptional

cases, Whistle Blowers have been provided with direct

access to the Chairman of the Audit Committee.

Central Vigilance Commission is authorized to inquire

into the complaints from 'Whistle Blowers” and take

requisite action. The same has been hosted on the

website of your Company.

e. The CEO has given a declaration that Board Members

and Senior Management Personnel have affirmed

compliance with the Code of Conduct of your Company

for the financial year ending on March 31, 2018.

f. During the year under review, no Presidential

Directives have been received by your Company.

g. No item of expenditure has been debited in the books

of accounts, which are not for the purposes of the

business, and no expenses, which are personal in nature

have been incurred for the Board of Directors.

h. The administrative and office expenses were 2.37% of

the total expenses in FY 2017-18 as against 2.59% in

the FY 2016-17.

8. Training of Board Members

Five out of the six Directors on the Board are nominees of

GAIL. GAIL has the policy in place for Training of Directors

and its employees. Though no specific training

programmes were arranged for the Board members,

however, detailed presentations were made by senior

executives/consultants on business-related issues

at the Board and its Sub-Committee meetings from time

to time.

st9. Share Ownership Pattern as on 31 March, 2018

During the year under review, your Company has allotted

shares of ` 250 crores to GAIL (India) limited. With this

allotment, issued and paid-up Share Capital of the

Company was ̀ 877 crores, as per following details:

Category/ No. of shares Paid-up Shareholding (%) held of ̀ 10 each Share Capital GAIL (India) Limited and 87,70,00,000 8,77,00,00,000 its Nominees (100%)


24

The Members,

GAIL Gas Limited,

We have examined the compliance of Guidelines on Corporate Governance for Central Public Sector Enterprise, 2010issued by DPE.

The compliance of Guidelines on Corporate Governance is the responsibility of the management. Our examination was limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the Guidelines on Corporate Governance. It is neither an audit nor an expression of opinion on financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us by the management, we certify that, except the Composition of the Board of Directors with regard to Functional and Independent Directors & composition of its Statutory Committee(s) viz. Audit Committee and Remuneration Committee with regard to Independent Directors, the Company has complied with the Guidelines on Corporate Governance as stipulated in DPE guidelines.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

Certificate on Compliance of DPEGuidelines on Corporate Governance

Annexure-C

For Agarwal S. & Associates,Company Secretaries,

Sd/-(C. S. Anuradha Jain)

PartnerACS No. : 36639

C. P. No. : 14180Place: New DelhiDate: July 27, 2018

Inauguration of CNG Station in Bengaluru Signing of MoU with UBER

25

stFOR THE FINANCIAL YEAR ENDED 31 MARCH, 2018{Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remunerationof Managerial Personnel) Rules, 2014}

To,The Members,GAIL Gas Limited,We have conducted the Secretarial Audit of the Compliance of applicable statutory provisions and the adherence to good Corporate Practices by GAIL Gas Limited (hereinafter called the “Company”). Secretarial Audit was conductedin a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing my opinion thereon.

Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the

staudit period covering the financial period ended on 31 March, 2018 complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and Compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the stCompany for the financial year ended on 31 March, 2018 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder; Not Applicable(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; Not Applicable(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign

Direct Investment, Overseas Direct Investment and External Commercial Borrowings; Not Applicable(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992

('SEBI Act'):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation, 2011;Not Applicable

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; Not Applicable (c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

Not Applicable (d) The SEBI (Share Based Employee Benefits) Regulations, 2014; Not Applicable (e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

Not Applicable (f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations,

1993 regarding the Companies Act and dealing with client; Not Applicable

Secretarial Audit ReportAnnexure-D


26

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; Not Applicable and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; Not Applicable(vi) Compliances/ processes/ systems under other applicable Laws to the Company are not being verified us.

We have also examined compliance with the applicable clauses of the following:

(a) Secretarial Standards, as amended from time to time, issued by the Institute of Company Secretaries of India- Generally complied with.

(b) Securities & Exchange Board of India (Listings Obligations and Disclosure Requirements) Regulations, 2015.Not Applicable.

(c) DPE Guidelines on Corporate Governance for CPSE.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards etc. mentioned above subject to the following observation:

1. Compliance under Clause 3.1.1 & 3.1.4 of the DPE Guidelines on Corporate Governance with respect to the appointment of Independent Directors on the Board of Company & consequential non-compliances thereof.

We further report that the Board of Directors of the Company is duly constituted except for non-appointment of Independent Directors on the Board of the Company as require under DPE Guidelines. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Generally, adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members' views are captured and recorded as part of the minutes, if any.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period, there were no specific events/actions having a major bearing on the Company's affairs in pursuance of the above referred laws.





NOTE : This report is to be read with our letter of even date which is annexed as and forms an integral part of this report.

27

To,The Members,GAIL Gas Limited.

Our report of even date is to be read along with this letter.1. Maintenance of secretarial records is the responsibility of the management of the Company. Our Responsibility is to

express an opinion on these secretarial records, based on our inspection of records produced before us for Audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company and our report is not covering observations/ comments/ weaknesses already pointed out by the other Auditors.

4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulation and happening of events etc.

5. The Compliance of the provisions of corporate and other applicable laws, rules, regulations, standards are the responsibility of management. Our examination was limited to the verification of procedures on test basis and to give our opinion whether Company has proper Board-processes and Compliance-mechanism in place or not.

6. The Secretarial Audit Report is neither an assurance as to future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.





CNG Station at Hardware Technology Park, Bengaluru Inauguration of CNG Retail Outlet in Bengaluru

28


Form No. AoC - 2Annexure-E

Form for disclosure of particulars of contracts/arrangements entered into by the company with related partiesreferred to in Sub-Section (1) of Section 188 of the Companies Act, 2013 including certain arm's length transactionsunder third proviso there to1. Details of contracts or arrangements or transactions not at arm's length basis – During the year, based on the approval of the Board, GAIL Gas has executed Asset Transfer Agreement (ATA) with

GAIL (India) Limited for transfer of 5 (Five) Last Mile Connectivity (LMC) assets in Bengaluru city at an Book value of` 5339 Lakh as on the date of transfer plus any taxes.

2. Details of material contracts or arrangement or transactions at arm's length basisa. Name(s) of the related party and nature of relationship- GAIL (India) Limited, holding Company

b. Nature of contracts/arrangements/transactions - Purchase of Regasified Liquefied Natural Gas (RLNG), Spot Agreement, APM & PMT.

thc. Duration of the contracts/arrangements/transactions- RLNG (Long Term) Agreements dated 15 May, 2009 which ison-going till year 2028, Spot Agreement dated 08.06.2015 which is ongoing till year March 2020, Non-APM dated 16.08.2017 which is ongoing till year July 2021, APM dated 23.12.2013 which is ongoing till year 05.07.2021, PMT dated 23.12.2013 & Mid-Term dated 01.01.2018 which is expiring on 31.12.2018 the Seller ceases to be the Government nominee/ Sole nominee for purchasing the Sales gas or occurrence of an event of termination under the terms of thiscontract respectively.

d. Salient terms of the contracts or arrangements or transactions including the value, if any-Purchase of Natural Gas from GAIL (India) Limited Transactions during FY 2017-18 were approx. ̀ 2607.74 crores.

e. Date(s) of approval by the Board, if any-Not applicable, since the contract was entered into in the ordinary course of business and on arm's length basis.

f. Amount paid as advances, if any - NIL

Place: New DelhiDated: 17.09.2018

Business Review Meeting Industry Meet of CGD Companies

For and on behalf of the Board

Sd/-B. C. Tripathi

Chairman DIN: 01657366

{Pursuant to Section 134(3) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014}

29

Form No. MGT-9Extract of Annual Return

Annexure-F

I. REGISTRATION AND OTHER DETAILS :

CIN U40200DL2008GOI178614

Registration Date 27.05.2008

Name of the Company GAIL Gas Limited

Category/Sub-Category of the Company Government Company

Address of the registered office and contact details GAIL Bhawan, 16, Bhikaiji Cama Place, R. K. Puram New Delhi -110066 Tel: +91-11-26172580, +91-120-2446400

Whether listed company (Yes/No) No

Name, Address and Contact details of Registrar and Transfer Agent, if any Not Applicable

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANYAll the business activities contributing 10% or more of the total turnover of the company shall be stated:-

S. No. Name and Description of main Products / Services NIC Code of the % to total turnover of the Product/ Service Company1 PNG (Piped Natural Gas Supplied to Domestic, 410 96.16% Commercial & Industrial Sector) and CST Sales

2 CNG (Compressed Natural Gas Supplied to 410 3.84% Transport Sector)

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

1. GAIL (India) Limited GAIL Bhawan, Holding 100 2(46) 16, Bhikaiji Cama Place, L40200DL1984 GOI 018976 R. K. Puram, New Delhi-110066

2. Kerala GAIL Gas Limited KSIDC Ltd.,nd (KGGL) 2 Floor, Choice U40200KL2011 GOI 029899 Associate 50 2(6)

Tower, Manorama Junction, Ernakulam - 682016

3. Rajasthan State Gas C- 89-90, Jan Path, Associate 50 2(6) Limited (RSGL) Lalkothi Scheme, U11101RJ2013 SGC 043884 Jaipur, Rajasthan - 302004

S.No.

Name of the Company Address of the Company

Applicable Section

Holding/ Subsidiary/

Associate

% of Shares

Held CIN/GLN

stAs on the Financial Year Ended on 31 March, 2018[Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014]

30


S.No.

Name of the Company Address of the Company

Applicable Section

Holding/ Subsidiary/

Associate

% of Shares

Held CIN/GLN

4. Andhra Pradesh Gas Parisrama Bhavanam, Associate 50 2(6)nd Distribution Corporation 2 Floor 5-9-58/ B, U11100TG2011 SG C072140

Limited (APGDC) Fateh Maidan Road Hyderabad - 500004

5. Vadodara Gas Shri Muni Commi Associate 50 2(6) Limited (VGL) Gas Office Building, U40106GJ2013 PLC 076828 Dandia Bazar, Vadodara Gujarat - 390001

6. Haridwar Natural Gas Bharat Petroleum Associate 50 2(6) Private Limited (HNGPL) Corporation Ltd. U40300UR2016 PTC 007004 Landhora Roorkee Haridwar Uttrakhand - 2476677. Goa Natural Gas Private Plot No 32, EDC Associate 50 2(6) Limited (GNGPL) Complex Patto, Post U40300GA2017 PTC 013095 Bag No 228, Panaji Goa North Goa GA - 403001

IV. SHARE HOLDING PATTERN (Equity Share Capital Break up as percentage of Total Equity)

i) Category-wise Share Holding

Category of Shareholders

No. of Shares held at the end of the yearst[As on 31 March 2017]


% Change during

the year

De- Physical Total % of Total Demat Physical Total % of Total mat Shares SharesA. Promoters(1) Indian a) Individual/ HUF - - - - - - - - - b) Central Govt. - - - - - - - - - c) State Govt. (s) - - - - - - - - - d) Bodies Corp.GAIL (India) Limited - 62,70,00,000 62,70,00,000 100% 87,70,00,000 - 87,70,00,000 100% - e) Banks / FI - - - - - - - - - f) Any other - - - - - - - - -Sub-total (A) (1):- - 62,70,00,000 62,70,00,000 100% 87,70,00,000 - 87,70,00,000 100% -(2) Foreign a) NRIs-Individual - - - - - - - - - b) Other Individuals - - - - - - - - - c) Bodies Corp. - - - - - - - - - d) Banks/FI - - - - - - - - - e) Any other - - - - - - - - -Total shareholding - 62,70,00,000 62,70,00,000 100% 87,70,00,000 - 87,70,00,000 100% -of Promoter (A) =(A) (1) + (A) (2)

31

Category of Shareholders



% Change during

the year

De- Physical Total % of Total Demat Physical Total % of Total mat Shares SharesB. Public Shareholding 1. Institutions a) Mutual Funds - - - - - - - - - b) Banks / FI - - - - - - - - - c) Central Govt - - - - - - - - - d) State Govt(s) - - - - - - - - - e) Venture Capital Funds - - - - - - - - - f) Insurance Companies - - - - - - - - - g) FIIs - - - - - - - - - h) Foreign Venture - - - - - - - - - Capital Funds i) Others (specify) - - - - - - - - -Sub-Total (B)(1) - - - - - - - - -2. Non-Institutions - a) Bodies Corp. - - - - - - - - - i) Indian - - - - - - - - - ii) Overseas - - - - - - - - -b) Individuals - - - - - - - i) Individual shareholders - - - - - - - - - holding nominal share capital up to ` 1 lakh ii) Individual shareholders - - - - - - - - - holding nominal share capital in excess of ` 1 lakh c) Others (specify) - - - - - - - - -Sub-total (B)(2):- - - - - - - - - -Total Public Shareholding - - - - - - - - -(B)=(B)(1)+ (B)(2)C. Shares held by Custodian for GDRs & ADRs - Grand Total (A+B+C) - 62,70,00,000 62,70,00,000 100% 87,70,00,000 - 87,70,00,000 100% -

No. of Shares held at the beginning stof the year [As on 1 April 2017]

(ii) Share holding of Promoters

No. of Shares held at the end of the styear [As on 31 March 2018]

% change in

share holding during

the year

1 GAIL (India) Limited 62,70,00,000 100% - 87,70,00,000 100% - -

Total 62,70,00,000 100% - 87,70,00,000 100% - -

S. No. Share holder's Name

No. of Shares

% of total Shares of the

company

%of Shares Pledged/

encumbered to total shares

No. of Shares

%of total Shares of

the company

%of Shares Pledged/

encumbered to total shares

32


Reason

Cumulative Shareholding atthe end of the Year

(01-04-17 to 31-03-18)Increase/Decrease in

shareholding

No. of Shares atthe Beginning

(01-04-17)/ endof the Year(31-03-18)

Shareholding

Name % of totalShares of

the company

Date

-

No. of shares% of totalShares of

the company

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):NOT APPLICABLE

- - - - - - -

Reason



shareholding


(01-04-17)/ endof the Year(31-03-18)

Shareholding


the company

Date

GAIL (India) Limited


the company

(iii) Change in Promoters' Shareholding (please specify, if there is no change) -

62,70,00,000 100% 31.03.17 07.09.17 6,00,00000 Allotment 68,70,00,000 100% 27.10.17 6,00,00000 Allotment 74,70,00,000 100% 18.01.18 8,00,00000 Allotment 82,70,00,000 100% 31.01.18 5,00,00000 Allotment 87,70,00,000 100%87,70,00,000 100% 31.03.18

Reason



shareholding


(01-04-17)/ endof the Year(31-03-18)

Shareholding


the company

Date

-


the company

(v) Shareholding of Directors and Key Managerial Personnel: NOT APPLICABLE

- - - - - - -

33

V. INDEBTEDNESSIndebtedness of the Company including interest outstanding / accrued but not due for payment

i) Principal Amount 219.70 - 219.70ii) Interest due but not paid - - - -iii) Interest accrued but not due - - -Total (i +ii + iii) 219.70 - 219.70Change in Indebtedness during the Financial YearAddition 35.57 - - 35.57Reduction 101.59 - (101.59)Exchange Rate Fluctuation - - - -Net Change (66.02) - (66.02)Indebtedness at the end of the Financial Year i) Principal Amount 153.68 - - 153.68ii) Interest due but not paid - - - -iii) Interest accrued but not due - - - -Total (i +ii + iii) 153.68 - - 153.68

Particulars Secured Loans excluding deposits

UnsecuredDeposits

Total

Loans (Short Term Loan) IndebtednessIndebtedness at the beginning of the Financial Year 2017-18

(` in Crores)

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNELA. Remuneration to Managing Director, Whole-time Directors and / or Manager : NOT APPLICABLE

Name of MD/WTD/Manager

1. Gross Salary (a) Salary as per provisions contained in Section 17 (1) - - - - - - -

of the Income Tax Act, 1961 (b) Value of perquisites u/s 17(2) of the Income Tax - - - - - - -

Act, 1961 (c) Profits in lieu of salary under Section 17 (3) - - - - - - -

of the Income Tax Act, 19612. Stock Option - - - - - - -3. Sweat Equity - - - - - - -4. Commission - as% of profit - Others, specify - - - - - - -5. Others - - - - - - - Total(A) - - - - - - - Ceiling as per the Act

S. No. Particulars of remuneration TotalAmount

(` in lakhs)

34


B. Remuneration to other Directors : NOT APPLICABLE

Name of Directors

1. Independent Directors --- --- --- --- Fee for attending Board and Committee meetings

Commission Others, please specify Total(1) 2. Other Non-Executive Directors Fee for attending Board and Committee meetings Commission Others, please specify Total (2) Total (B) = (1+2) Total Managerial Remuneration Overall Ceiling as per the Act

S. No. Particulars of remuneration Total Amount

Note: The Promoter Nominee Director(s) and Government Nominee Directors do not receive any remuneration fromthe Company.

(` in Lakhs)

C. Remuneration to Key Managerial Personnel Other Than MD/Manager/WTD

Key Managerial Personnel

1. Gross Salary (a) Salary as per provisions contained in 71.41 59.75 46.04 177.20 Section 17(1) of the Income Tax Act, 1961 (b) Value of perquisites u/s 17(2) of the 8.73 3.37 3.77 15.87 Income Tax Act, 1961 (c) Profits in lieu of salary under Section 17(3) of the Income Tax Act, 1961 2. Stock Option 3. Sweat Equity 4. Commission As % of profit Others, specify 5. Others, please specify Total 80.14 63.12 49.81 193.07

S. No. Particulars of remuneration

CEO TotalCS CFO

(` in Lakhs)

35

VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES : NONE

A. COMPANY Penalty - - - - -Punishment - - - - -Compounding - - - - -B. DIRECTORS Penalty - - - - -Punishment - - - - -Compounding - - - - -C. OTHER OFFICERS IN DEFAULT Penalty - - - - -Punishment - - - - -Compounding - - - - -

TypeSection of the

Companies Act

Details of Penalty /

punishment /Compounding Fess imposed

Brief Description

Authority (RD/NCLT/

Court)

Appeal made, if Any

(Give Details)

CII Investors' Meet in Bengaluru

(` in lakhs)

36


Annual Report on CSR ActivitiesAnnexure-G

4. PRESCRIBED CSR EXPENDITURE (TWO PERCENT OF THE AMOUNT AS IN ITEM 3)

The prescribed CSR expenditure for FY 2017-18 as per provisions of Companies Act, 2013 was ̀ 1.18 crores.

5. DETAILS OF CSR SPENDS DURING THE FINANCIAL YEAR

1. Total amount spent for the Financial Year - As per the extant guidelines, your company earmarked ̀ 1.18 crores for various CSR projects for FY 2017-18.

2. Amount unspent, if any- An Amount of ` 1.12 lakhs isunspent in FY 2017-18 which shall be added to the CSR budget of next financial year.

3. Manner in which the amount spent during the Financial Year is detailed below:

During FY 2017-18 your Company has executedvarious CSR initiatives towards fulfillment of thesocial obligation of the Company and the following projects were approved by the Board of your Companyfor implementation. The CSR projects so approvedare on pan India basis and has social impact in fourstates and one Union Territory (UT) viz. M. P., Haryana, UP, Karnataka and Delhi.

1. BRIEF OUTLINE OF CSR POLICY AND PROJECTS OR PROPOSED PROGRAMMES TO BE UNDERTAKEN

Your Company being a socially responsible and environment friendly organization has always strived for creation of value in the society & community where it is carrying out its operations through meaningful & sustainable CSRinitiatives. Your Company strives to contribute towards uplifting of the socially and economically weaker sections of the communities in and around the company's CGD business areas by undertaking useful CSR programmes.

In terms of the provisions of Section 135 and CSR rules therein, CSR policy has been framed covering major thrust areas as mentioned in Schedule VII of the Companies Act, 2013. The CSR policy is hosted on your company's website www.gailgas.com.

2. CSR COMMITTEE OF BOARD

In compliance with the provisions of Section 135(1) of the Companies Act, 2013, the CSR Committee of the Board comprises of Shri Gajendra Singh as the Chairman,Shri A. K. Jana (upto 01.05.2018) and Shri A. K. Tiwari asthe member(s).

Based on the 2% of the average of the net profits (PBT) made during the 3 immediately preceding years, ` 1.18 crores was available for taking up CSR projects in 2017-18 FYs, as per the provisions of the Companies Act, 2013 and various projects outlined in Schedule VII of the Companies Act, 2013.

3. AVERAGE NET PROFIT FOR LAST THREE FINANCIAL YEARS

Financial Year Net Profit Before Tax (` in Crore)* 2014-2015 18.39 2015-2016 59.75 2016-2017 99.43 Total (A) 177.57 Average of 3 Financial 59.19 Year=(A)/3

* Net Profit Before Tax for CSR is as per the provisions of the Companies Act, 2013

Vendor Development Meet

37

7. RESPONSIBILITY STATEMENT OF THE CSR COMMITTEE OF THE BOARD

T h i s i s t o c e r t i f y t h a t t h e i m p l e m e n t a t i o n a n dmonitoring of CSR Policy is in compliance with theCSR objectives and Policy of the Company and theCSR objectives as provisioned under Section 135 of the Companies Act, 2013.

6. REASON FOR LESS THAN STIPULATED EXPENDITURE

Requisite amount as per provisions of the CompaniesAct, 2013 has been allocated. However, in one of theCSR projects, the projected completed with ` 1.12 lakhsl e s s t h a n t h e a m o u n t e a r m a r k e d f o r t h e s a i dproject which shall be carried forward and utilized in FY 2018-19.

Sd/- (A. K. Jana)Chief Executive Officer(PAN: ABIPJ0467D)

Sd/-(Gajendra Singh)

Chairman, CSR Committee(DIN: 03290248)

1. Providing of Bio- Toilet for General Public Health & Sanitation MP 0.16 0.16 0.16 Through Implementing Agency - Govt.2. Providing of Industrial Dust-bins and Health & Sanitation Haryana 0.18 0.18 0.18 Through Bio-Toilets at Public places Implementing Agency - Govt.3. Providing Bio-Toilet, Solar Light, Solar Health, Sanitation UP 0.25 0.25 0.25 Through High- mask Light & Street Lighting Implementing (Infrastructure Agency - Govt. Development 4. Providing furniture and sports items (TT Table Infrastructure UP 0.05 0.05 0.05 Through etc.) for (1) Primary / Upper Primary Schools, Development Implementing Bichpuri and (2) Primary / Upper Primary & Education Agency - Govt. School, Dahtora5. Installation of 11 Nos. hand pumps in Etmadpur Drinking Water UP 0.10 0.10 0.10 Through and Khandoli Gram- panchayat of Agra district Implementing Agency - NGO.6. Funding 25 Economically weaker girl students Promotion of Karnata-ka 0.37 0.36 0.36 Through for Pre-University (PU) studies in addition to Education Implementing preparation for various competitive Agency - NGO. examinations7. Installation of a plant for manufacturing Health and UP 0.05 0.05 0.05 Through sanitary napkins and maternity pads at Sanitation Implementing Panchayat Industry, Tundla, Distt. Firozabad Agency - Govt. for promoting Menstrual Hygiene Management activities under Swachh Bharat Mission Gramin scheme of Govt. of India 8. Contribution to Swachh Bharat Kosh under CSR Health, Delhi (UT) 0.02 0.02 0.02 Direct to Govt. program for Swachh Bharat Mission to achieve Environment a Swachh and Open Defecation Free (ODF) India and SanitationTotal 1.18 1.17 1.17*includes service tax

Amountspent:

Direct orthrough

ImplementingAgency

S.No.

CSR Project orActivity Identified

Sector inwhich

the projectis covered

Cumulative Expenditure

upto the reporting

period

Amountoutlay*

(Budget)project orprogramwise ForFinancial

Year2017-18

Amountspent on

the projectsor programsSubheads:(1) Direct

Expenditureon projects

or programs(2) Overheads

Projects or programs(1) Local

Area or other

(2) State or district

where projects or programs

was undert-aken

(` in Crores)

38


A. CONSERVATION OF ENERGYi. Your Company has taken various steps for conservation of energy which are as under: Vacuum drying technology is used for commissioning of Steel Pipeline Network in City Gas Distribution which

helps in saving time & energy.ii. Steps taken by the Company for utilizing alternate sources of energy PV Solar Panels has been installed in some of the CNG Station, to reduce electrical power consumption from

power distribution companies.iii. The capital investment on energy conversation equipment NIL

Annexure-H

Conservation of Energy and TechnologyAbsorption, Foreign Exchange Earnings and Outgo

1. The efforts made towards technology absorption

B. TECHNOLOGY ABSORPTION

C. FOREIGN EXCHANGE EARNING AND OUTGO F & A During the year under review, the foreign exchange earnings and outgo are given below: Foreign Exchange Earned : NIL Foreign Exchange Outgo * : 1.00 lakh (*on foreign tours and training and NIL on advertising and publicity)

Supervisory Control & Data Acquisition (SCADA) system has been implemented as a result the operation in CNG Stations and PNG Distribution monitored as real time data can be accessed through various Control Centers enhancing the efficiency & reriabilitySmart Metering System has been implemented for collecting periodic metering reading of domestic customers.GIS based pipeline patrolling system has implemented for safeguarding Steel & MDPE Pipelines from external damages.

2. The benefits derived like improvement, cost reduction,product development or import substitution

3. In case of imported technology (imported during thelast 3 years reckoned from the beginning of the financial year):

a) The details of technology imported; b) Year of import c) Whether the technology been fully absorbed d) If not fully absorbed, areas where absorption has not taken

place, and the reasons thereof. 4. The expenditure incurred on Research and Development

Overall reduction in cost of maintenance.

NIL

No direct expenditure

{As per Section 134(3) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014}

39

Financial Statements


40

Independent Auditors' Reporttaken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India , of the state of affairs (financial position) of the

stCompany as at 31 March, 2018, and its profit (financial performance including other comprehensive income),its cash flows and the changes in equity for the year endedon that date.

To, The Members of GAIL Gas LimitedReport on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of GAIL Gas Limited ('the Company'), which

stcomprise the balance sheet as at 31 March 2018, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have

(d) in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act read with relevant rule issued thereunder;

(e) on the basis of the written representations received stfrom the directors as on 31 March 2018 taken on

record by the Board of Directors, none of the stdirectors is disqualified as on 31 March 2018 from

being appointed as a director in terms of Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; and

(g) with respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements – Refer Note No. 45 to the standalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts which may lead to any material foreseeable losses.

iii. There has not been any occasion where any amount is required to be transferred, to the Investor Education and Protection Fund bythe Company.

3. As required by Section 143(5) of the Companies Act, 2013, please refer Annexure-C enclosed.

Emphasis of Matter

We draw attention to the following matters in Notes to Financial Statements:-

Note No : 38 in respect of stating of investment in jointventure entity which includes the additional contribution made as a part of investment.

Note No : 41 regarding sale of Kota business for which activities as per Business Transfer Agreement are in process including audit of accounts.

Note No : 48 regarding operation of CNG stations for which procurement of factory license is in process.

Note No : 54 regarding non-incurring of expenses for Corporate Social Responsibility (CSR) activity.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 3 and 4 of the order.

2. As required by Section 143(3) of the Act, we report that:

(a) we have sought and obtained all the informationand explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) in our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) the Balance Sheet, the Statement of Profit and Loss (including the other comprehensive income), the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

For H S AHUJA & CO.Chartered Accountants

Firm's Reg. No.: 000099N

(CA Jaswant Singh)Partner

Membership Number: 095483Place : New DelhiDated : 23.05.2018

41

42


physical verification of inventories of store and spare except for the inventories lying with contractors and project consultants. No material discrepancies were noticedon verification between the physical stocks and thebook records.

As explained to us, having regard to the nature of the inventory of natural gas, management has followed policy for estimation of natural gas quantities which is based on volume of pipelines and the volume cascades containing the natural gas considering standard temperature and pressure whereas opening stock of gas has been arrived at on the basis of book balances since as per the management it is not possible as gas is flowing continuously in pipelines.

(iii) According to the information and explanation given to us, the Company has not granted any loan to a party covered in the register maintained under Section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to the investments made. According to the information and explanation given to us, the Company has not given any guarantee and not granted any loan and security during the year in respect of which the provisions of Section 185 and 186 are to be complied with, hence not commented upon.

(v) The Company has not accepted any deposits from the public during the year covered under directive issued by the Reserve Bank of India and under Section 73 to 76 or any other relevant provision of Companies Act, 2013 and rules framed thereunder.

(vi) The Central Government has prescribed the maintenance of cost records under Section 148(1) of the Companies Act, 2013 for the products sold by the Company. The company has maintained proper cost records which are yet to be audited.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company is generally regular in depositing undisputed statutory dues including provident fund, income-tax, sales tax, value added tax, duty of customs, duty of excise, service tax, goods and service tax, cess and other material statutory dues

The Annexure referred to in Independent Auditor's Report to the members of the Company on the standalone financial

ststatements for the year ended 31 March 2018, we report that:

(i) In respect of fixed assets:-

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets other than fixed assets related to the underground natural gas distribution which as per the Management cannot be physically verified, by the committee constituted by the company during the year. In accordance with this programme, certain fixed assets like Land & Building, CNG stations including Natural Gas Generator, Scada & its AMR systems, were not verified during the year, however no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us and on the basis of our examination the records of the Company, the title deeds of immovable properties are held in the name of the Company except for the cases as follows:

Annexure - A to the IndependentAuditors' Report

Gross block Net blockDescription No. of Area in (Deemed Cost) as onof Assets Cases sq. meter as on 31.03.2018 31.03.2018 (in Cr.) (in Cr.)LandFreehold 1 3004.42 2.05 2.05Building & 19 -- 25.68 19.73Structures

(ii) In respect of its inventory:

The Inventories of the Company comprise inventory of stores and spare parts and inventory of natural gas. On the basis of information and explanation provided by the management, the Company has a regular programme of

43

with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, goods and service tax, value added tax, duty of customs, duty of excise, service tax, cess and other material statutory dues were in arrears

stas at 31 March 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there were no dues of provident fund or income-tax or sales tax or value added tax or duty of customs or service tax or goods and service tax or cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues of duty of excise have not been deposited by the Company on account of disputes:

(` in Crores)

Name Nature Amount Period to Forum whereof the of (in `) which the dispute isstatute dues amount relates pending

#Central Excise 1.74 2010-11 CESTAT,Excise Duty & New DelhiAct, 1944 Penalty

##Sales UP VAT 0.17 2010-11 Sales TaxTax/VAT Demand Tribunal Noida

# a stay order has been obtained against the amount disputed and not been deposited.

## ̀ 0.02 Crores deposited out of ̀ 0.17 Crores

(viii) The Company has got outstanding dues of term loan taken from Oil Industry Development Board (OIDB) and there are no dues of Term Loans from banks at the end of the year and there is no default to any of these institutions during the year. The Company did not have any borrowings from government or debenture holders during the year.

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purposes for which they were raised.

(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) According to the information and explanations given to us, the Company has not paid/provided any managerial remuneration during the year. Accordingly, Paragraph 3(xi) of the Order is not applicable.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, Paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, Paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

Place : New DelhiDated: 23.05.2018




Membership Number: 095483

44


India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with

Report on the Internal Financial Controls under Clause (i)of Sub-section 3 of Section 143 of the Companies Act,2013 (“the Act”)

We have audited the internal financial controls over financial streporting of GAIL Gas Limited (“the Company”) as of 31 March

2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and both issued by the Institute of Chartered Accountants of

Annexure - B to the IndependentAuditors' Report

45

periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial

streporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future





Kosi CNG Station

46


Annexure - C to the IndependentAuditors' Report

DIRECTIONS UNDER SECTION 143(5) OF COMPANIES ACT, 2013S.

No. Directions Auditor's Remark

1 Whether the Company has clear title/leasedeeds for freehold and leasehold respectively? If not, please state the area of freehold and leasehold land for which title/lease deeds arenot available.

On the basis of information and explanation given to us and on the basis of our examination of the records of company, title deeds in respect of immovable properties are held in the Company except for thecases as disclosed in Note No. 33 (a) & 34 (a) to (d)along with the area of these lands.

2 Whether there are any case of waiver/write off of debts/ interest etc., if yes, the reasons thereof and the amount involved.

There are no case of waiver/write off of debts/interest etc. during the year under audit. Hence no comments are made on requirement of Direction No. 2.

3 Whether proper records are maintained for inventories lying with third parties & assets received as gift / grant (s) from Govt. or other authorities.

Material Reconciliation Statement duly certified bythe contractor and Mecon (Engineer In-charge) hasbeen shown to us in respect of materials lying withthe third parties/contractors and also informed tous that the Company does not carry out physical verification of the materials (free issue material) lying with the third parties .

We have been informed that no asset has been receivedas gift/grant (s) from Govt. or other authorities.





47

Standalone Balance Sheetstas at 31 March 2018

The accompanying Notes form an integral part of the standalone financial statements. 1 to 66

(` in Crores)

Particulars Note As at As atst st No. 31 March 2018 31 March 2017

ASSETS Non Current Assets Property, Plant and Equipment 3 712.91 519.48 Capital Work-In-Progress 3 411.60 319.15 Intangible Assets 4 12.32 14.37 Financial Assets i. Investments 5 155.44 105.44 ii. Loans & Other Receivables 6A 1.51 2.69 Non Current Tax Assets (Net) 7A 0.35 0.25 Other Non Current Non Financial Assets 11A 10.20 - Total Non-Current Assets (A) 1,304.33 961.38 Current Assets Inventories 8 8.67 8.77 Financial Assets i. Trade Receivable 9 270.50 111.59 ii. Cash and Cash Equivalents 10 269.56 2.76 iii. Loans & Other Receivables 6B 8.70 6.21 iv. Other Financial Assets 6C 0.18 - Current Tax Assets (Net) 7B 2.58 2.80 Other Current Non Financial Assets 11B 59.66 152.38 Total Current Assets (B) 619.85 284.51 Total Assets (A+B) 1,924.18 1,245.89 EQUITY AND LIABILITIES EQUITY i. Equity Share Capital 12 877.00 627.00 ii. Other Equity 13 362.54 154.65 Total Equity (C) 1,239.54 781.65 LIABILITIESNon Current LiabilitiesFinancial Liabilities i. Borrowings 14 138.12 169.22 Deferred Tax Liabilities (net) 15 46.37 23.45 Total Non-Current Liabilities (D) 184.49 192.67 Current LiabilitiesFinancial Liabilities i. Borrowings 16 - 9.48 ii. Trade Payables 17 235.72 111.29 iii. Other Financial Liabilities 18 118.62 106.92 Provisions 19 83.71 37.78 Other Current Non Financial Liabilities 20 62.10 6.10 Total Current Liabilities ( E) 500.15 271.57 Total Equity and Liabilities (C+D+E) 1,924.18 1,245.89

Deepak AsijaCompany SecretaryPAN-ADRPA0983E

Pankaj WaliaCFOPAN-AABPW1139M

A. K. JanaCEOPAN-ABIPJ0467D

Subir PurkayasthaDirectorDIN-06850526

B. C. TripathiChairmanDIN-01657366

For & on behalf of the Board of Directors of GAIL Gas Ltd.

For H S Ahuja & Co.Chartered Accountants

Firm Reg. No: 000099N

Place: New Delhi Dated: 23.05.2018

CA Jaswant SinghPartner

Membership No: 095483

As per our report of even date attached

48



Standalone Statement of Profit and Lossstfor the Year ended 31 March 2018

(` in Crores)

Particulars Note Year Ended Year Endedst st No. 31 March 2018 31 March 2017

I . INCOME Revenue from Operations (Gross) 21 4,602.13 2,794.32 Other Income 22 7.52 2.37 Total Income 4,609.65 2,796.69II. EXPENSES Gas Consumed 23 4,330.83 2,585.20 Excise Duty 23.89 16.62 Employee Benefit Expenses 24 35.32 20.88 Finance Cost 25 8.10 15.40 Depreciation and Amortization Expenses 26 23.36 13.72 Other Expenses 27 69.21 44.68 Total Expenses 4,490.71 2,696.50 III. Profit Before Tax from continuing operations 118.94 100.19 IV. Tax Expenses 28 42.90 34.41 - Current Year 23.31 21.57 - Deferred Tax 19.59 12.84 V. Profit After Tax from continuing operations 76.04 65.78 VI. Profit After Tax from discontinued operations 29 4.71 (0.76)VII. Other comprehensive income Other comprehensive income to be reclassified to profit or loss in subsequent periods: - - Net other comprehensive income to be reclassified to - - profit or loss in subsequent periods Other comprehensive income not to be reclassified to profit or loss in - - subsequent periods: Re-measurement gains/ (losses) on defined benefit plans - - Revaluation of land and buildings - - Net other comprehensive income not to be - - reclassified to profit or loss in subsequent periods Other comprehensive income for the year (net of tax) - -VIII. Total comprehensive income (Net of Tax) (V+VI+VII) 80.75 65.02 IX. Earning Per Share for profit from continuing operations 58 Basic Earning per Share In (`) 0.26 1.23 Diluted Earning Per Share In (`) 0.26 1.23 Earning Per Share for profit from discontinued operations 58 Basic Earning Per Share In (`) 0.01 (0.01) Diluted Earning Per Share In (`) 0.01 (0.01) Earning Per Share for profit from continuing & discontinued operations 58 Basic Earning Per Share In (`) 0.27 1.22 Diluted Earning Per Share In (`) 0.27 1.22













49

Standalone Cash Flow Statementstfor the Year ended 31 March 2018

(` in Crores)

A. CASH FLOW FROM OPERATING ACTIVITIES

1. Net Profit Before Tax from

Continuing operations 118.94 100.19

Discontinued operations 12.57 (0.76)

Profit Before Tax including discontinued operations 131.51 99.43

2. ADD :

Depreciation & Amortization Expenses 24.01 15.66

Exchange Rate Variation on foreign currency 0.01 (0.04)

Provision for employee benefit 15.29 7.70

Provision for probable obligation 1.40 -

Provision for Doubtful Debts 0.32 0.16

Gain on sale of discontinued operations (12.53) -

Loss on sale of fixed assets 0.01 -

Interest Expenditure 8.10 17.45

Interest Income (4.64) (0.93)

31.97 40.00

3. Operating Profit Before Working Capital Changes (1+2) 163.48 139.43

4. Changes in Working Capital (Excluding Cash & Bank Balances)

Trade and Other Receivables (79.28) (24.58)

Inventories 0.10 (0.88)

Trade and Other Payables 246.48 58.77

167.30 33.31

5. Cash Generated from Operations (3+4) 330.78 172.74

6. Direct Taxes Paid (28.42) (22.50)

NET CASH FROM OPERATING ACTIVITIES (5+6) 302.36 150.24

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (Net) (373.44) (239.69)

Investment in Other Companies (Net) (50.00) (12.97)

Proceeds from discontinued operations 80.00 -

Interest Received 4.64 0.93

NET CASH FROM INVESTING ACTIVITIES (338.80) (251.73)

C. CASH FLOW FROM FINANCING ACTIVITIES

Share Application Money Received 150.00 -

Proceeds from Equity 250.00 191.00

YEAR ENDED YEAR ENDEDst st 31 March 2018 31 March 2017

50



NOTES :1. Net Cash flow from operating activities includes an amount of (` 8.24) Crores from sale of discontinued operations during the FY 2017-18. 2. Net Cash flow from investing activities includes an amount of ̀ 12.53 Crores from sale of discontinued operations during the FY 2017-18. 3. Net Cash flow from financing activities includes an amount of (` 0.37) Crores from sale of discontinued operations during the FY 2017-18. 4. Proceed from discontinued operations is of ̀ 80 Crores out of which ̀ 40 Crores received in the form of equity shares which has been shown as in Investment in Other Companies. 5. Previous year's figure have been regrouped /reclassified wherever necessary to correspond with current year's classification/disclosure.

(` in Crores)

Proceeds from Long Term Borrowings 35.57 87.35

Repayment of Long Term Borrowings (92.11) (45.85)

Repayment of Cash Credit Facilities from HDFC Bank (9.48) (102.47)

Interest Paid (8.10) (17.45)

Dividend & Dividend Tax Paid (22.64) (9.68)

NET CASH FROM FINANCING ACTIVITIES 303.24 102.89

NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) 266.80 1.41

CASH AND CASH EQUIVALENTS AS AT 01.04.2017 2.76 1.35

CASH AND CASH EQUIVALENTS AS AT 31.03.2018 269.56 2.76














Inauguration of DRS at Sonipat Inauguration of Mathura Retail Outlet

51


(` in Crores)

I. Equity Share Capital (Note 12) (Issued, Subscribed & Paid Up Equity Share of ` 10 Each)

II. Other Equity (Note 13)(` in Crores)

Share Application money Reserves and surplus Other Pending allotment comprehensive income Total

Balance as at April 1, 2017 - 154.65 - 154.65

Share application money received 150.00 - 150.00

Add: Profit for the year - 80.75 - 80.75

Less: Tax adjustment - 0.22 - 0.22

Dividend Paid - 18.81 - 18.81

Dividend Distribution Tax - 3.83 - 3.83

Balance as at March 31, 2018 150.00 212.54 - 362.54

Balance as Changes during the Year Balance as at April 1, 2017 at 31.03.2018

627.00 250.00 877.00

Statement of Changes in Equitystfor the Year ended 31 March 2018













52


Notes Accompanying to the StandaloneFinancial Statement

('INR') and the values are rounded to the nearest crore,except otherwise indicated.

b) Summary of significant accounting policies

(i) Property, Plant and Equipment (PPE)

(a) Tangible Assets

Property, plant and equipment are stated at original cost net of tax / duty credit availed, less accumulated depreciation. All costs relating to acquisition of fixed assets till commissioning of such assets are capitalized.

When significant parts of property, plant and equipment (identified individually as component) are required to be replaced at intervals, the Company derecognizes the replaced part, and recognizes the new part with its own associated useful life and it is depreciated accordingly.

Stores and Spares having the value of each item of ` 5 lakhs and above which meet the definition of PPE (whether as component or otherwise) and satisfy the recognition criteria, are capitalized as PPE in the underlying asset.

Property, plant and equipments are eliminated from financial statements, either on disposal or when retired from active use. Losses/gains arising in case retirement/disposals of property, plant and equipment are recognized in the statement of profit and loss in the year of occurrence.

Depreciation on tangible fixed assets is provided in accordance with the manner and useful life as specified in Schedule II of the Companies Act, 2013, on straight line method (SLM) on pro-rata basis (monthly pro-rata for bought out assets).

Leasehold lands are amortized over the lease period. Leasehold improvements are amortized over the remaining period of the primary leaseor expected useful economic lives, whicheveris shorter.

1. Corporate Information

GAIL Gas Limited is a company domiciled in India with registered office in New Delhi. GAIL Gas Limited is a wholly owned subsidiary of GAIL (India) Limited. It was incorporated on May 27, 2008 for the smooth implementation of City Gas Distribution (CGD) projects. GAIL Gas has been authorized by Petroleum and Natural Gas Regulatory Board (PNGRB) for implementing City Gas Distribution Projects in Dewas (Madhya Pradesh), Kota (Rajasthan), Sonepat (Haryana), Meerut (Uttar Pradesh), Taj Trapezium Zone (Uttar Pradesh), Mandigovindgar (Punjab) and Bengaluru (Karnataka). In addition, GAIL Gas is pursuing City Gas Business in the state of Kerala, Andhra Pradesh, Karnataka, Rajasthan, Vadodara (Gujarat), Haridwar (Uttrakhand), North Goa (Goa) through its Joint Ventures.

The financial statements of the company for the year endedst31 March 2018 were authorized for issue by Board of Directors

on 23.05.2018.

2. Basis of preparation and significant Accounting Policy

a) Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind-AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

The financial statements have been prepared on a historical cost basis except for certain assets and liabilities which have been measured at fair value or revalued amount. The fact is disclosed in the relevant accounting policy.

Effective April 1, 2016, the company has adopted all the IndAS standards and the adoption was carried out in accordance with Ind AS 101 First time adoption of Indian Accounting Standards, with April 1, 2015 as the transition date. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under section 133 of the Companies Act 2013, read with Rule 7 of the Companies (Accounts) Rules 2014 (IGAAP) which was the previous GAAP.

The financial statements are presented in Indian Rupees

53

Notes Accompanying to the Standalone Financial Statement (Contd.)

recoverable amount of an asset is estimated to determine the extent of impairment, if any.

(iv) Inventories

Inventories are measured at the lower of cost and net

realizable value.

The cost of inventories is based on the first-in first-out

principle, and includes expenditure incurred in

acquiring the inventories, production or conversion

costs and other costs incurred in bringing them to their

existing location and condition. In the case of

m a n u fa c t u r e d i n ve n t o r i e s , c o s t i n c l u d e s a n

appropriate share of production overheads based on

normal operating capacity.

Stores & Spares which meet the definition of property

plant and equipment and satisfy the recognition criteria

are capitalized as property, plant and equipment.

Net realizable value is determined based on estimated

selling price, less further costs expected to be incurred

to completion and disposal.

Raw materials and finished products are valued at cost

or net realizable value, whichever is lower.

Stock in process is valued at cost or net realizable

value, whichever is lower. It is valued at cost where the

finished products in which these are to be incorporated

are expected to be sold at or above cost.

Stock of gas in pipeline is valued at cost (FIFO) or net

realizable value whichever is lower.

Stores & spares and other material for use in

production of inventories are valued at weighted

average cost or net realizable value, whichever is lower.

It is valued at weighted average cost where the finished

products in which they will be incorporated are

expected to be sold at/or above cost.

Surplus/obsolete stores and spares are valued at cost

or net realizable value, whichever is lower.

Surplus/obsolete capital stores, other than held for

use in construction of a capital assets, are valued at

lower of cost or net realizable value.

The asset's residual values, useful lives and methods of depreciation/amortization are reviewed at each reporting period and adjusted prospectively, if appropriate.

(b) Capital Work in Progress

Capital work in progress includes construction stores including material in transit/ equipment / services, etc. received at site for use in the projects.

All revenue expenses incurred during construction period, which are exclusively attributable to acquisition/construction of fixed assets, are capitalized at the time of commissioning ofsuch assets.

(ii) Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any a c c u m u l a t e d a m o r t i za t i o n a n d a c c u m u l a t e dimpairment losses.

Intangible assets with finite lives (i.e. software and licenses) are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired.

Intangible assets with indefinite useful lives (principally comprise those 'right of use' for which there is no foreseeable limit to the period over which they are expected to generate net cash flows given the fact that these rights can be used even after the life of respective pipelines) are not amortized, but are tested for impairment annually. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

(iii) Impairment of Assets

At each Balance Sheet date, the Company assesses whether there is any indication that any property, plant and equipments and intangible assets with finite life may be impaired. If any such impairment exists, the

54


such as salaries, wages, short-term compensated absences, performance incentives etc. are recognized during the period in which the employee renders related service.

(viii) Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction, or production of a qualifying asset are capitalized as a part of the cost of such asset till such time the asset is ready for its intended use or sale, after netting off any income earned on temporary investment of such funds. A qualifying asset is an asset that necessarily requires a substantial period of time (generally over twelve months) to get ready for its intended use or sale.

All other borrowing costs are recognized as expense in the period in which they are incurred.

(ix) Leases

A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidentalto ownership of the company is classified as afinance lease.

Finance lease are capitalized at the commencement of the lease at the inception date at fair value of the leased property or, if lower, at the present value of the minimum lease payment. Lease Payments are apportioned between finance charge and reduction of the lease liability to achieve a constant rate of interest on the remaining balance of the liability. Finance Charges are recognized in finance costs in the Statement of Profit and Loss.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognized as operating leases. Lease rentals under operating leases are recognized in the statement of profit and loss on straight line basis unless the payments are structured to increase in line with expected general inflation to compensate for the lessor's expected inflationary cost increases.

(v) Foreign Currency Transactions

The Company's financial statements are presented in INR, which is also the Company's functional currency.

Foreign currency transactions are recorded on initial recognition in the functional currency, using the exchange rate at the date of the transaction.

At each balance sheet date, foreign currency monetary items (such as Cash, Receivables, Loans, Payables, etc.) are reported using the closing exchange rate (BC selling rate for payable and TT buying rate for receivable).

Exchange differences that arise on settlement of monetary items or on reporting at each balance sheet date of the Company's monetary items at the closing rate are recognized as gain or loss in the period inwhich they arise.

Non-monetary items (such as Investments, Fixed Assets, etc.) which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

(vi) Revenue and Other Income

Sales are recognized on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the deliver of goods to customers. Sales include excise duty but exclude value added tax. Any retrospective revision in prices is accounted for in the years of such revision.

Income in respect of MGO of Natural Gas and Interest on delayed realization from customers is not provided on accrual basis. Receipts during the year on account of MGO and Interest on delayed realization from customers are accounted on receipt basis.

Entire revenue from provision of extra pipelines at customers premises is accounted for as Income in the year of receipt / incurrence.

(vii) Employee Benefits

All employee benefits that are expected to be settled wholly within twelve months after the end of period in which the employee render the related services are classified as short term employee benefits. Benefits


55

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

(xii) Government Grants

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with.

When loans or similar assistance are provided by governments or related institutions, with an interest rate below the current applicable market rate, the effect of this favorable interest is regarded as a government grant. The loan or assistance is initially recognized and measured at fair value and the government grant is measured as the difference between the initial carrying value of the loan and the proceeds received. The loan is subsequentlymeasured as per the accounting policy applicable to financial liabilities.

(xiii) Current Versus Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.

An asset as current when it is:

• Expected to be realised or intended to sold or consumed in normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised within twelve months after the reporting period, or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the

(x) Taxes

(a) Current Income Tax

Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

(b) Deferred Tax

Deferred tax is provided, using the balance sheet method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and is adjusted to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

(xi) Provisions, Contingent Liabilities, Contingent Assets and Commitments

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent liabilities exceeding ` 5 Lakhs in each case are disclosed by way of notes to accounts.


56


comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal a n d i n t e r e s t o n t h e p r i n c i p a l a m o u n t outstanding.

• Financial Assets at fair value through statement of profit and loss

A financial asset which is not classified in any of the above categories are subsequently fair valued through statement of profit and loss.

Derecognition

A financial asset is primarily derecognized when the rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.

Investment in Subsidiaries, Joint Ventures and Associates

The company has accounted for its investment in joint ventures at cost.

Impairment of Financial Assets

The Company assesses impairment based on expected credit losses (ECL) model for measurement and recognition of impairment loss on the financial assets that are trade receivables or contract revenue receivables and all lease receivables.

(b) Financial Liabilities

Classification

The Company classifies all financial liabilities as subsequently measured at amortized cost, except for financial liabilities at fair value through statement of profit and loss. Such liabilities, including derivatives that are liabilities, shall be subsequently measured at fair value.

settlement of the liability for at least twelve months after the reporting period

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

(xiv) Financial Instruments

A financial instrument is any contract that gives rise toa financial asset of one entity and a financial liabilityor equity instrument of another entity.

(a) Financial Assets

Classification

The Company classifies financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through statement of profit and loss on the basis of its business model for managing the financial assets and the contractual cash flows characteristics of the financial asset.

Initial Recognition and Measurement

All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through statement of profit and loss, transaction costs that are attributable to the acquisition of the financial asset.

Subsequent Measurement

For purposes of subsequent measurement financial assets are classified in below categories:

• Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

• Financial Assets at fair value through other


existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit and loss.

(c) Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

(xv) Others

Liquidated damages, if any, are accounted for as and when recovery is affected and the matter is considered settled by the management.

Insurance claims are accounted for on the basis of claims admitted by the insurers

Custom duty and other claims (Including interest on delayed payments) are accounted for on acceptance in principle.

(xvi) Earnings Per Share

Basic earnings per equity share is calculated by dividing the net profit after tax attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period.

Diluted earnings per equity share is calculated by dividing the adjusted net profit after tax attributable to equity shareholders of the Company by the we i g h t e d a ve ra g e n u m b e r o f e q u i t y s h a r e s outstanding during the period.

(xvii) Significant Accounting Judgments, Estimates and Assumptions

The preparation of the Company's financial s t a t e m e n t s r e q u i r e s m a n a g e m e n t t o m a ke judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and

Initial Recognition and Measurement

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts.

Subsequent Measurement

The measurement of financial liabilities depends on their classification, as described below:

• Financial Liabilities at amortised cost

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.

• Financial Liabilities at fair value through profitor loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognized in the statement of profit and loss.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an

57


58


amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market change or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.


The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company's past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

(xviii) Standards Issued but not yet Effective

Ind - AS 115 “Revenue from Contract with Customers"

Ind AS 115 was issued in February, 2015. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to the customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts with customers.

This standard will come into force from accounting stperiod commencing on or after 1 April, 2018. The

company will adopt the new standard on the required effective date. The Company is in the process of making an assessment of the impact of Ind - AS 115 upon initial application, which is subject to changes arising from a more detailed ongoing analysis.

the disclosure of contingent liabilities at the date of financial statements. Estimates and assumptions are c o n t i n u o u s l y e v a l u a t e d a n d a r e b a s e d o n management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

In particular, the Company has identified the following

areas where significant judgements, estimates and

assumptions are required. Further information on each

of these areas and how they impact the various

accounting policies are described below and also in the

relevant notes to the financial statements. Changes in

estimates are accounted for prospectively.

(a) Judgments

In the process of applying the Company's

accounting policies, management has made the

following judgements, which have the most

significant effect on the amounts recognized in the

stand alone financial statements:

Contingencies

Contingent liabilities may arise from the ordinary

course of business in relation to claims against the

Company, including legal, contractor, land access

and other claims. By their nature, contingencies will

be resolved only when one or more uncertain future

events occur or fail to occur. The assessment of the

existence, and potential quantum, of contingencies

inherently involves the exercise of significant

judgement and the use of estimates regarding the

outcome of future events.

(b) Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying


59

Note 3 - Property, Plant and Equipment and Capital Work in Progress(` in Crores)

Cost/ Valuation Free Lease Plant Buildings Furniture Office Equipment Total Capital hold hold and and Fixtures Including Electrical Work-in- Land Land Machinery Equipments Progress

1. Cost or Deemed Cost (gross carrying amount)

stBalance at 1 April 2017 12.79 10.95 477.58 35.50 0.79 7.99 545.59 319.15Additions 5.82 - 243.32 15.44 0.27 3.37 268.22 373.46 Transfer to Capitalisation - - - - - - - (269.32)Disposals - (3.71) (46.57) (3.45) (0.14) (0.39) (54.26) (11.69)Transfer - - (0.06) (0.01) (0.04) 0.11 -

stAs at 31 March 2018 18.61 7.24 674.27 47.48 0.88 11.08 759.55 411.60

Note 4 - Intangible Assets (` in Crores)

Cost/Valuation Right of Use Computer Total Soware/Licenses1. Cost or deemed cost (gross carrying amount)

stBalance as at 1 April 2017 0.35 18.22 18.56Additions - 1.10 1.10

stAs at 31 March 2018 0.35 19.32 19.66

(` in Crores)

Accumulated amortization and impairment Right of Use Computer Soware/ Total Licenses

stBalance at 1 April 2017 0.00 4.20 4.20Amortization expense - 3.14 3.14

stAs at 31 March 2018 0.00 7.34 7.34

(` in Crores)

Net book value Right of Use Computer Software/ Total Licenses

stAs at 31 Mar 2018 0.35 11.97 12.32 stAs at 31 Mar 2017 0.35 14.02 14.37

(` in Crores)

Depreciation and Free Lease Plant Buildings Furniture Office Equipment Total Capital Impairment hold hold and and Fixtures Including Electrical Work-in- Land Land Machinery Equipments Progress

Balance at 1 April 2017 - 0.23 22.65 1.75 0.15 1.22 26.01 st

Depreciation expense - 0.09 17.20 1.17 0.09 2.32 20.87 - Impairment - - - - - - - - Disposal - (0.01) (0.03) (0.19) (0.23) - Transfer - - (0.02) - - 0.02 - -

stAs at 31 March 2018 - 0.32 39.82 2.92 0.21 3.37 46.64 -

(` in Crores)

Net Book Value Free Lease Plant Buildings Furniture Office Equipment Total Capital hold hold and and Fixtures Including Electrical Work-in- Land Land Machinery Equipments ProgressAs at 31 Mar 2018 18.61 6.92 634.45 44.56 0.67 7.71 712.91 411.60 st

stAs at 31 Mar 2017 12.79 10.73 454.89 33.67 0.63 6.77 519.48 319.15


60


5 - Investments (` in Crores)

Investments Nature of Basis of As at As at Investment Valuation 31-Mar-18 31-Mar-17Non-Current InvestmentsIn Joint Venture Companies:1. Andhra Pradesh Gas Distribution Corporation Limited (APGDCL) Equity shares Cost 20.00 15.00 2,00,00,000 Equity shares of ` 10 each fully paid up (Previous year 1,50,00,000 Equity shares of ` 10 each fully paid up)

2. Kerala GAIL Gas Ltd. (KGGL) Equity shares Cost 11.93 11.93 1,19,28,000 Equity shares of ` 10 each fully paid up (Previous year 1,19,28,000 Equity shares of ` 10 each fully paid up)

3. Rajasthan State Gas Limited (RSGL) Equity shares Cost 65.00 17.03 6,50,00,000 Equity shares of `10 each fully paid up (Previous year 1,70,25,000 Equity shares of ` 10 each fully paid up)

4. Vadodara Gas Limited (VGL) Equity shares Cost 41.01 41.01 4,10,08, 943 Equity shares of ` 10 each fully paid up (Previous year 4,10,08, 943 Equity shares of ` 10 each fully paid up)

5. Haridwar Natural Gas Private Limited (HNGPL) Equity shares Cost 7.50 7.50 75,00,000 Equity shares of ` 10 each fully paid up) (Previous year 75,00,000 Equity shares of ` 10 each fully paid up)

6 Goa Natural Gas Private Ltd. (GNGPL) Equity shares Cost 7.50 2.50 75,00,000 Equity shares of ` 10 each fully paid up (Previous year 25,00,000 Equity shares of ` 10 each fully paid up)

Advances for Investments (Pending Allotment)7. Rajasthan State Gas Limited (RSGL) Equity shares Cost - 2.97

8. Andhra Pradesh Gas Distribution Corporation Limited (APGDCL) Cost 2.50 7.50 Total 155.44 105.44Current - - Non current 155.44 105.44

Note 6 - Loans & Other Receivables (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Other recoverables from related parties: - Receivables from joint ventures (Unsecured considered good) 8.70 6.21 Other loans and receivables: - Security deposits: - Unsecured, Considered Good 1.51 2.69 - Unsecured, Considered Doubtful 3.54 3.54 Less : Provision for Doubtful Deposits 3.54 3.54Total 10.21 8.90 Total 6A- Non Current 1.51 2.69 Total 6B-Current 8.70 6.21


61

Note 9 - Trade Receivables (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Trade Receivables 270.50 111.59 Receivables from related parties - -Total Trade and Other Receivables 270.50 111.59 Current 270.50 111.59 Non Current - -

Note 7 - Current Tax Assets (Net) (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Advance Tax and TDS 64.67 36.72 Less: Provision for Tax 61.74 33.67 Total 2.93 3.05 Total 7 A Non Current 0.35 0.25 Total 7 B Current 2.58 2.80

Note 8 - Inventories (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Stock in Trade 0.74 0.76 Finished Goods: Compressed Natural Gas 0.15 0.11 Stores and Spares: Stores and Spares 7.12 7.08 Material In Transit 0.66 0.82 Total 8.67 8.77

Note 6C - Other Financial Assets (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Interest Accrued but not due 0.18 -Total 0.18 - Non Current - - Current 0.18 -


62


Break-up of Security details of Trade ReceivablesParticulars As at As at 31-Mar-18 31-Mar-17Debts Outstanding for a period exceeding six months : Secured (Considered good) - - Unsecured (Considered good) 4.46 3.61 Unsecured (Considered doubtful): 1.57 1.25 6.03 4.86 Less: Provisions for bad and doubtful debts 1.57 1.25 4.46 3.61 Others DebtsSecured (Considered good) - - Unsecured (Considered good) 266.04 107.98 Unsecured (Considered doubtful): - - 266.04 107.98 Less: Provisions for bad and doubtful debts - - Total 266.04 107.98 Total Trade and Other Receivables 270.50 111.59

Note 10 - Cash and Cash equivalents (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Balances with Banks: - Current accounts 2.59 0.80 - Corporate Liquid Term Deposit - SBI with maturity less than three months. 105.50 - - Corporate Liquid Term Deposit - ICICI with maturity less than three months. 158.40 - - Term Deposit with - SBI - 0.28Cash in hand 3.07 1.68Total 269.56 2.76

Note 11 - Other Non Financial Assets (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Claims recoverables: 53.93 148.19 (Unsecured considered good)Other advances recoverable in cash or in kind 4.97 3.54 (Unsecured considered good)Capital Advances 9.24 - (Unsecured considered good)Prepaid Expenses 1.72 0.65 Total 69.86 152.38 Total 11 A Non current 10.20 - Total 11 B Current 59.66 152.38


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Note 12 - Equity Share Capital (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Share CapitalAuthorised 2,00,00,00,000 Equity Shares of ` 10 each 2,000.00 1,000.00 (Previous Year 1,00,00,00,000 Equity shares of ` 10 each) 2,000.00 1,000.00 Issued, subscribed and fully paid up 74,43,34,132 Equity shares of ` 10 each (in cash) 744.33 494.33 (Previous Year 49,43,34,132 Equity shares of ` 10 each) 13,26,65,868 Equity Shares of ` 10 each (otherwise than in cash). 132.67 132.67 (Previous Year 13,26,65,868 Equity shares of ` 10 each) 877.00 627.00

Note 13 - Other Equity (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Other Equity:Share Application Money pending Allotmenti) Consideration received in Cash pending Allotment of equity shares 150.00 - from GAIL (India) Ltd.Retained earningsOpening balance 154.65 99.30Add: Current Year Profit 80.75 65.02Less: Appropriation -Tax adjustment 0.22 - -Dividend Paid 18.81 8.04 -Dividend Distribution tax Paid 3.83 1.64 Total 362.54 154.65

c) The company has only one class of equity shares having a per value of ̀ 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 shareholdings at the shareholders meetings.

d) During the current year the company paid dividend of ̀ 0.30 per equity share for FY 2016-17 amounting to ̀ 18.81 Crores (excluding dividend distribution tax of ̀ 3.83 Crores) {in FY 2015-16 ̀ 0.20 per equity share amounting to ̀ 8.04 Crores (excluding dividend distribution tax of ̀ 1.64 Crores).

No. of Share Amount No. of Share AmountAt the beginning of the year 62,70,00,000 627.00 40,20,00,000 402.00Issued during the year 25,00,00,000 250.00 22,50,00,000 225.00Outstanding at the end of the year 87,70,00,000 877.00 62,70,00,000 627.00

a) Reconciliation of the Shares outstanding at the beginning and end of the yearst st 31 March 2018 31 March 2017

No of Share Amount No of Share AmountEquity share of ` 10 Each fully Paid UpGAIL (India) Ltd. 87,70,00,000 100% 62,70,00,000 100%

b) Details of Shareholding more than 5% shares in the companyst st 31 March 2018 31 March 2017


Note 14 - Borrowings (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Non Current BorrowingsSecured Term loans: - HDFC Bank Ltd - 51.11 Loan has been Swaped with HDFC w.e.f 27.01.2016. Secured against all the assets of Dewas, Kota, Meerut and Sonepat. Rate of Interest is 8.15 % p.a. during FY 2017-18 & FY 2016-17. - Oil Industry Development Board 138.12 118.11 Secured against all the assets of Dewas, Sonepat, Meerut, TTZ &Bengaluru Projects.Availed up to 31.03.2015 of ` 58 crore for TTZ Project.Availed during 2015-16 of ` 24.23 crore for Sonepat, Meerut and Dewas Project.Availed during 2016-17 and 2017-18 of ` 87.35 crore and ` 35.57 crorerespectively for Bengaluru Project.Loan is repayable in four equal instalments after expiry of moratoriumof one year from the date of disbursement, for the amount of loandisbursed till financial year 2015-16.Loan is repayable in eight equal instalments after expiry of moratorium of two years from the date of disbursement, for the amount of loan disbursed from financial year 2016-17 onwards. Loan disbursed in instalment from Feb 2013 to March 2018 with rate ofinterest from 7.00% to 9.27% per annum depending on dateof disbursement.Total 138.12 169.22 Current - - Non current 138.12 169.22

Particulars As at As at 31-Mar-18 31-Mar-17Deferred Tax Liabilities 57.18 38.42Less: Corporate MAT Receivable 10.81 14.97Total 46.37 23.45

Note 15 - Deferred Tax Liabilities (Net) (` in Crores)

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Particulars As at As at 31-Mar-18 31-Mar-17Cash Credit from HDFC Bank - 9.48 Total - 9.48 Current - 9.48 Non Current - -

Note 16 - Current Liabilities - Borrowings (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Trade Payables (to related parties) 212.90 100.57 Trade Payable-Others 22.82 10.72Total 235.72 111.29Current 235.72 111.29Non Current - -

Note 17 - Trade Payables (` in Crores)

Note 18 - Other Financial Liabilities (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Current maturity of long term BorrowingsSecured Term loans: - HDFC Bank Ltd. - 20.44 Loan has been Swaped with HDFC w.e.f 27.01.2016. Secured against all the assets of Dewas, Kota, Meerut and Sonepat. Rate of Interest is 8.15 % p.a. during FY 2017-18 & FY 2016-17 - Oil Industry Development Board 15.56 20.56Secured against all the assets of Dewas, Sonepat, Meerut & TTZ ProjectsAvailed up to 31.03.2015 of ` 58 crore for TTZ Project.Availed during 2015-16 of ` 24.23 crore for Sonepat, Meerut and Dewas Project.Loan is repayable in four equal instalments after expiry of moratorium of one year from the date of disbursementLoan disbursed in instalment from Oct 2013 to Jan 2016 with rate of interest from 7.97% to 9.27% per annum depending on date of disbursement

Deposits/Retention Money from Customers/contractors/others 96.36 61.58 Other PayableOther Liabilities 6.70 4.34 Total other financial liabilities at amortised cost 118.62 106.92 Current 118.62 106.92 Non Current - -


Note 19 - Provisions (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Provisions : Provisional Liabilities 66.55 30.08 Provision for Employee benefits 15.29 7.70 Provision for probable obligations 1.87 - Total 83.71 37.78 Current 83.71 37.78 Non Current - -

Note 20 - Other Current Non Financial Liabilities (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Statutory PayablesService Tax Payable - 0.19TDS, VAT, Excise, GST and WCT payable 62.10 5.91Total 62.10 6.10Current 62.10 6.10Non Current - -

Note 21 - Revenue from Operations (Gross) (` in Crores)

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Sale of products/Gas 4,533.43 2,728.06Gas Transmission Charges 65.94 63.58Other operating Revenues: Application Fees Domestic Connections 0.62 0.46 Interest Income from Customers & Others 0.95 0.59 Income from Extra Pipe Line 0.21 0.14 Income from Other Sales Service 0.09 0.01 Minimum Guranteed Offtake Receipts 0.89 1.48 Total 4,602.13 2,794.32

Note : 22 - Other Income (` in Crores)

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Interest income 4.64 0.87 Miscellaneous Receipts 2.88 1.47 Tender fees - 0.03 Total 7.52 2.37

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Note : 23 - Gas Consumed (` in Crores)

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Opening Stock 0.87 0.37Add: Purchases 4344.05 2595.29less: Gas used as Fuel and gas loss 13.20 9.59Less: Closing Stock 0.89 0.87Gas Consumed 4330.83 2585.20

Note : 24 - Employee Benefit Expenses (` in Crores)

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Salary, Wages & Allowances 46.88 26.63 Contribution to Provident Fund 3.32 2.36 Welfare Expenses 9.42 8.59 Less: Employees Benefits Transferred to IEDC 24.30 16.70 Total 35.32 20.88

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Interest on Term Loan From Banks 2.92 5.80 Interest on Cash Credit Facilities 1.54 6.94 Interest on OIDB Loan 9.88 5.07 Interest -Others 1.03 - Less: Interest & Finance Charges transferred to IEDC 7.27 2.41 Total 8.10 15.40

Note : 25 - Finance Cost (` in Crores)

Note : 26 - Depreciation & Amortisation Expenses (` in Crores)

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Depreciation & Amortisation Expenses 23.36 13.72 Total 23.36 13.72


Note : 27 - Other Expenses (` in Crores)

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Power & Fuel Charges - Electricity Charges 1.25 0.73 - Fuel Charges 3.46 2.57 Rent-Office & Others 6.90 5.99 Repairs and Maintenance - Plant & Machinery 23.18 12.77 - Buildings 0.22 0.09 Insurance Charges 0.34 0.30 Rates & Taxes 0.85 0.32 Payment to Auditors - Audit Fees (incl other Certification) 0.05 0.05 - Taxation matter 0.01 - - Out of Pocket Expenses - 0.02 Stores & Spares Consumed 1.65 3.20 Loss/(Gain) of Foreign Currency Transaction 0.01 (0.04)Water Charges 0.01 0.01 Communication Expenses 0.24 0.25 Printing & Stationery 0.41 0.37 Travelling Expenses 2.17 2.23 Books & Periodicals 0.01 0.01 Advt & Publicity 3.96 1.08 Training Expenses 1.91 0.14 Vehicle Hire & Running Expenses 2.17 1.36 Consultancy & Legal Charges 6.02 2.39 Data Processing Expenses 2.69 2.06 Selling & Distribution Expenses 0.14 0.16 Dealer Commission 6.04 3.18 Security Expenses 3.44 1.63 Other Misc Expenses 3.13 1.30 CSR Expenses 0.79 - Loss on sale of Fixed asset 0.01 - Provision for Doubtful debts 0.32 0.16 Other Expenses - Abnormal Loss - 7.02 Business Development Expenses 0.80 - Other Expenses - Interest/Penalty Charges-Statutory - 0.10 Less: Expenditure transferred to CWIP IEDC- Security Expenses - 0.57 IEDC- Rent & Warehouse Expenses 1.96 2.98 IEDC - Travelling & Conv Expenses 1.01 0.90 IEDC – Vehicle Hire Charges - 0.31 Total 69.21 44.68

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Note : 28 - Tax Expenses (` in Crores)

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Current tax 23.31 21.57 Deferred Tax 19.59 12.84 Total 42.90 34.41

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17I. Revenue from Operations (Gross) 8.21 22.15 II. Other Income 0.03 0.06 III. Total Income (I+II) 8.24 22.21 IV. Expenses Gas Consumed 4.50 12.10 Excise Duty 0.72 1.86 Employee Benefit Expenses 0.38 1.74 Finance Cost 0.37 2.05 Depreciation and Amortization Expenses 0.65 1.94 Other Expenses 1.58 3.28 Total Expenses 8.20 22.97V. Profit before tax from discontinued Operations 0.04 (0.76)VI. Gain/ (Loss) before tax on disposal of discontinued operations 12.53 - Total 12.57 (0.76)VII. Tax Expenses Discontinued operations - Current 0.01 - - Deferred - - - Disposal of discontinued operations 7.85 - Total 7.86 - VIII. Profit after tax from Discontinued Operations 4.71 (0.76)

st stFor the four months ended 31 July 2017 (Year Ended 31 March 2018 column) and stfor the entire year for Year Ended 31 March 2017

Note : 29 - Profit from Discontinued Operations

(` in Crores)


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Crores) is in the name of the company but the physical possession of the land has been transferred to M/s Rajasthan State Gas Ltd. (RSGL) on 31.07.2017 on account of transfer of Kota City Gas Distribution Business and the same has been de-capitalized during the year. The transfer in the name of RSGL is in the process.

34. Building of ̀ 47.48 Crores (Previous Year : ̀ 35.50 Crores) mainly includes :-

(a) Building of ` 12.46 Crores (Previous Year : ` 12.46 Crores) which is constructed on the land provided by GAIL (India) Ltd. and the terms and conditions of these lands are yet to be finalized.

(b) Building of ` 1.66 Crores (Previous Year : ` 1.66 Crores) is constructed on the land (2080 sq. mtr.) taken from Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd. (MPAKVNL).

(c) Building of ` 8.32 Crores (Previous Year : ` 8.32 Crores) is constructed on the land measuring 993 sq. meter provided by the Bengaluru Municipal Transport Corporation (BMTC) at free of cost for the CNG Station installed at BMTC bus depot with the condition of filling CNG Gas only to BMTC Buses. The documentation of which is pending for execution.

(d) Building of ` 3.24 Crores (Previous Year : ` 3.24 Crores) is constructed on the land provided by the dealer, warehouse providers etc.

35. Company has incurred an amount of ` 8.80 Crores (Previous Year : 0.44 Crores) for purchase of 8 no. of lands measuring 14,148 sq. meter from Karnataka Industrial Area Development Board (KIADB) under Lease cum Sale Basis for setting up of Industrial Project such as CNG Station etc. at Bengaluru. The total amount of` 9.24 Crores as on 31.03.2018 pending execution of Lease cum Sale Agreement is lying under Capital Advance as KIADB shall sell the said land to the company at the end of two years or the extended period, if any, on satisfactory utilization of land as per the terms and conditions of agreement. The said land will be capitalized after execution of sale / transfer agreement with KIADB on the fulfillment of the conditions.

30. The employees working in the various disciplines have been identified as working for (a) project activities and (b) operation activities. Therefore, the employee cost and travelling expenses have been directly identified to the project activities and operation activities on actual basis and accounted for accordingly. Expenses related to office rent of on going project have been allocated to Incidental Expenditure during the Construction and Statement of Profit & Loss in the ratio of manpower identified for project activities and operation activities during the year.

31. (a) The Authorized Share Capital of the Company has been increased to ` 2,000 Crores (Previous Year:` 1,000 Crores) during the year against which Equity Shares of ` 877 Crores (Previous Year : ` 627 Crores) have been issued as on balance sheet date with the approval of Board. Further, an amount of ̀ 150 Crores (Previous Year : NIL) has been received which is lying as Equity Share Capital pending Allotment of Equity Shares as on 31.03.2018.

(b) The Company is a 100% subsidiary of GAIL (India) Ltd. and the shares have been issued with the approval of Board.

32. (a) Capital Work-in-Progress (CWIP) includes asset under construction which are under different stage of completion and capitalization will be made as and when assets are ready to put to use.

(b) During the year, company has charged to revenue expenses amounting to ̀ 0.68 Crores incurred during the earlier years which were lying in CWIP on account of market survey expenses for Jabalpur and Jaipur cities being of revenue nature.

33. a) Title Deed in respect of Freehold Land measuring 3004.42 sq. mtr. amounting to ` 2.05 Crores (Previous Year: ` 1.90 Crores) which includes ` 0.15 crores (Previous Year: NIL) towards registration charges provided on provisional basis is pending for execution. Mutation of Freehold Lands is in process.

b) Title Deeds in respect of Leasehold Land at Kota amounting to ` 3.71 Crores (Previous Year : ` 3.72


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Profit & Loss (Refer to Note-29) for the period ended 31.03.2018.

36. In terms of disclosure requirement as per Ind-AS 23 on “Borrowing Costs”, total finance cost amounting to ̀ 13.17 Crores (Previous Year ̀ 13.00 Crores) was incurred, out of which an amount of ` 7.27 Crores (Previous Year ` 2.41 Crores) was capitalized including amount allocated towards Capital Work in Progress during the period.

37. Company has pre-paid the entire term loan during the year amounting to ` 61.33 Crores availed from HDFC Bank as per terms of Loan Agreement which wassecured against all the assets of Sonepat, Meerut, Dewas and Kota.

38. The company has an equity investment in a Joint Venture Company namely M/s Andhra Pradesh Distribution Corporation (APGDC) of ` 22.50 Crores which includes funds contributed of ` 2.50 Crores in APGDC. It has been contributed as per the joint venture agreement and shown as a part of investment as advances for investments pending allotment.

39. Claim Recoverable includes an amount of ` 48.50 Crores (Previous Year ` 112.67 Crores) towards refund of VAT (excess of VAT paid on purchase of gas over the amount of VAT recovered on sale of gas) in the state of Haryana and Gujarat. The recovery of balance refund isbeing pursued with concerned authorities and is considered good.

40. The Incidental Expenditure during Construction amounting to ` 27.33 Crores (Previous Year ` 21.98 Crores) have been allocated to completed Project& Capital Work in Progress in the ratio of allocatedcost of assets.

41. Company has sold Kota CGD Business (dealing in Natural Gas Business) to M/s Rajasthan State Gas Ltd. (RSGL) on 31.07.2017, a joint venture company of GAIL Gas Ltd and Rajasthan State Petroleum Corporation Ltd., at a total consideration of ` 80 Crores as per Business Transfer Agreement (BTA). Company has transferred all the assets including Land, Building, Plant & Machinery, CWIP etc. to the joint venture company on 31.07.2017 and net profit (net of tax) of ` 4.71 Crores has been shown as Income from discontinued operation in the Statement of

a. The details of sales are as under :` in Crores

Description 31.03.2018 31.03.2017Cash Received 40.00 -Equity Share Received 40.00 -Total Consideration Received 80.00 -Carrying amount of net assets 67.47 -on the date of sale Gain on sale before Income tax 12.53 -Income Tax on Gain on sale 7.85 -of BusinessGain on sale after Income tax 4.68 -

b. The details of carrying amount of assets and liabilities as on date of sales (31.07.2017) are as under :-

(` in Crores)Description Amount Property, Plant and Equipment 53.91Capital Work-in-Progress 11.69Inventories 0.08Other Current Assets 1.79Total Assets 67.47Other Current Liabilities -Net Assets 67.47

c. Further, other activities pertaining to the BTA are in process including transfer of security deposits of` 0.92 Crores received by the company from the various customers to the RSGL.

42. The net assets amounting to ` 5.27 Crores as on 31.03.2018 includes Building of ` 2.92 Crores and Plant & Machinery of ` 2.35 Crores on which no depreciation has been charged during the year as the same are not in use by the Company as they are in the possession of Andhra Pradesh Gas Distribution Corporation Ltd., a Joint Venture Company. These assets have not been classified as “Assets held for sale” as on reporting date as the final decision and approval of the Shareholders and Holding Company is pending since 12.11.2014.


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48. In compliance to PNGRB Regulation all the CNG Stations of the Company are having PESO/CCOE License which is mandatory for commencement of commercial operations. However, additionally the company has also applied for Factory Licenses for its Company Owned CNG stations, which is under progress. Further, necessary advice has been given to owners of CNG Stations operated under Retail Outlet of Oil Marketing Companies and Dealer Owned Dealer Operated Modelto obtain the Factory License in respect of theirCNG Stations.

49. rdBoard of Directors in its 63 meeting held on 27.10.2017 approved the purchase of 5 Last Mile Connectivity Assets from GAIL (India) Ltd. in Bengaluru City at an estimated book value of ` 53.39 Crores as on 30.06.2017 plus applicable taxes. Further, the asset transfer value shall be at the book value as on the date of transfer plus any taxes (other than taxes on income) involved in the transaction including any stamp duty. These assets are yet to be transferred to the Company.

50. During the year, company has issued the “Letter of Comfort” to PNGRB to meet the minimum eligibility criteria by Andhra Pradesh Gas Distribution Corporation Ltd., (APGDCL) a joint venture company of GAIL Gas Ltd. and Andhra Pradesh Gas Infrastructure Corporation, as per regulation 5(6) of the PNGRB Regulations 2008 (Authorising Entities to lay, build, Operate or Expand Natural gas Pipelines) as necessary documentary evidence in support for application submitted to PNGRB for Expression of Interest for Natural Gas Pipeline from Srikakulam to Angul by APGDCL. The process of bidding by PNGRB is awaited, hence, it has not been treated as Contingent liability.

51. Investments include a sum of ` 11.93 Crores as equity investment in Kerala GAIL Gas Ltd (KGGL), one of the joint venture company, which is in the process of voluntary winding up and reduction of equity share capital. No diminution in value of the investment has been considered and the investment has been valued at cost as the assets of KGGL mainly consists of current assets in the form of deposits with Schedule Commercial

43. Salary and Allowances payment of employees posted at GAIL Gas Ltd. are being paid by GAIL Gas Ltd. However, the provisions in respect of employee's benefits and disclosure requirements in terms of Ind AS 19 have not been provided in accounts as the same have been complied by Holding Company (M/s GAIL (India) Ltd.)

44. Capital Commitment: a) i. The estimated amount of contracts over ` 5 lacs

amounting to ` 393.09 Crores (Previous Year` 258.14 Crores) are remaining to be executed on capital accounts and not provided for.

ii. The Company has no uncalled liability on shares and other investments partly paid.

45. Contingent Liabilities : a) Claims against the company not acknowledged as

debts :

i) Legal & other cases for claims of ` 123.94 Crores (Previous year : ` 44.69 Crores) by vendors/ suppliers/ contractors etc.

ii) Disputed Indirect tax Demand in respect of Excise and VAT cases is of ` 1.89 Crores (Previous year :` 1.74 Crores).

iii) Bank Guarantee taken from Banks of ` 12.26 Crores (Previous year : ` 12.32 Crores) towards permission charges for various cities from Central and State Authorities.

iv) Company has issued Corporate Guarantee of ` 6703.99 Crores (Previous year : ` 6703.99 Crores) to PNGRB towards minimum work programme in respect of Bengaluru City and for Goa Natural Gas Pvt. Ltd., a joint venture company.

46. Provisional liability of ` 66.55 Crores (Previous Year` 30.08 Crores) has been made in the books of accounts as at 31.03.2018 which will be settled as per actual bills.

47. During the year, PNGRB en-cashed the Bank Guarantee amounting to ̀ 0.75 Crores for not meeting the Minimum Work Commitment Programme for TTZ CGD in terms of Court Order dated 03.11.2017 and the same has been accounted for in Capital Work in Progress.


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Banks and there is no diminution in the value of such deposits on the reporting date.

52. Department of Investment & Public Asset Management (DIPAM) Government of India, Ministry of Finance, has vide OM No. F.No. 5/2/2016-Policy dated 27.05.2016 issued Guidelines on Capital Restructuring of Central Public Sector Enterprises (CPSEs) which inter-alia includes Payment of Dividend, Issue of Bonus Shares, Buyback of Shares etc. The guidelines for payment of dividend shall be applicable from financial year ending on

stor after 31 March, 2016. Since, the company has paid the lower dividend during the FY 2015-16 and FY 2016-17 and submitted an application on 01.09.2017 for FY 2015-16 and 27.09.2017 for FY 2016-17 for grant of relaxationto Department of Investment and Public Asset Management (DIPAM) on dividend payment through Administrative Ministry to Secretary, Department of Economic Affairs and Secretary, DIPAM. Reply is awaited.

53. As per Ind AS 17 on Lease, the disclosure in respect of Leases is as under :-

Finance Leases

(a) Lease Deed executed with UPSIDC for lease hold land in Kosi Industrial Area, Uttar Pradesh for putting up CNG Station and Gas Grid on commercial terms.

- The period of lease is 90 years from 07.10.2013with one time premium of ` 5.95 crore (including Registration Charges and One Time Lease Rental for 90 years of ̀ 0.46 crore).

- The net carrying amount on 31.03.2018 is ` 5.76 Crores (Previous Year : ̀ 5.83 Crores)

- Since entire lease rent has been paid at the inception and no future lease rent is payable, the other disclosure requirements does not exist.

(b) Lease Deed executed with RIICO, Jaipur for lease hold land in Bharatpur, Rajasthan for putting up CNG Station and District Regulating Station (DRS) on commercial terms.

- The period of lease is 99 years from 16.07.2014 with one time premium of ` 1.20 crore (including Registration Charges).

- The net carrying amount on 31.03.2018 is ̀ 1.16 Crores (Previous Year : ̀ 1.18 Crores)

- Since annual lease rent is only ` 209/- per annum therefore the other disclosures requirement are not material.

Operating Leases

(a) During the year, company has paid a sum of ` 55.60 Lakhs as one time premium in respect of land taken on lease from Nazul Department, Collectorate Dewas, MP for a period of 30 years for purpose of setting up of a District Regulating Station (DRS). The rent payable has been determined at circle rates. Lease is renewable after 30 years and lease rent will be decided based upon the then prevailing terms and conditions at that time and there is no contingent rent payable.

Accordingly, a sum of ` 0.64 Lakhs has been charged to Profit and Loss Statement during the year andthe balance amount of ` 54.96 lakhs has been shown as pre-paid expenses (Refer Note 11–Other Non Financial Assets)

As per terms of agreement, an annual lease / ground rent of ̀ 0.42 lakhs is payable and lease is renewable. Total of future minimum lease payment for each of the period as specified in Ind AS 17 is as under :-

Not later than 1 year ` 0.42 lakhs Later than 1 year but not ` 1.67 lakhs later than 5 year Later than 5 years ` 10.00 lakhs (b) Lease Deed executed with Bharat Electronics

Limited, Bengaluru for land in Bengaluru, Karnataka for putting up District Regulating Station (DRS). The period of lease is 10 years from 01.10.2015 to 30.09.2025 with a provision of yearly rent of ` 3.20 lakhs subject to renewal at every 12 months commencing from 01.10.2016 for an annual rent of


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` 3.35 lakhs with 5% escalation every year on enhanced rent. Total of future minimum lease payment for each of the period as specified in Ind AS 17 is as under :-

Not later than 1 year ` 3.61 lakhs Later than 1 year but not ` 16.34 lakhs later than 5 year Later than 5 years ` 9.45 lakhs (c) Lease deed executed with Kerala Rural Poor and

handicapped Women's Development Society, Bengaluru for land in Bengaluru, Karnataka for putting up District Regulating Station (DRS). The period of lease is 10 years from 11.01.2017 to 10.01.2027 with a provision of yearly rent of ` 4.79 lakhs with 5% escalation every year. Total of future minimum lease payment for each of the period as specified in Ind AS 17 is as under :-

Not later than 1 year ` 5.08 lakhs Later than 1 year but not ` 16.92 lakhs later than 5 year Later than 5 years ` 32.21 lakhs54. Disclosure under Corporate Social Responsibility

Expenses :- (a) As per Section 135 of the Companies Act 2013 read

with DPE Guidelines, the company is required to spend ` 1.18 Crores during the current year. Amount incurred during the year is ` 0.79 Crores (Previous Year – ̀ NIL) as per details given below :-

(` in Crores) In Cash Yet to be Total paid in Cash(i). Construction/ NIL NIL NIL acquisition of any asset(ii). On purposes other 0.79 0.39 1.18 than (i) above

th b. Further, Board of Directors in its 59 meeting held on 18.05.2017 approved the CSR Policy along with administrative guidelines of the Company. Therefore, no CSR activity was identified by the company before the approval of CSR Policy and no

provision has been made in the books of accounts in accordance with generally accepted accounting principles. Accordingly, a non-lapsable CSR expenditure of ` 1.52 Crores upto financial year2016-17 is required to be spent in the subsequent financial years.

55. Disclosure under the Micro, Small and Medium Enterprises Development Act, 2006 (“MSMED Act, 2006”):

(` in Crores)Particulars 2017-18 2016-17

i) The principal amount and the interest due thereon remaining unpaid to any supplier as at the end of each accounting year;

ii) The amount of interest paid by the buyer in terms of Section 16 of MSMED Act 2016, along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year;

iii) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act;

iv) The amount of interest accrued and remaining unpaid at the end of each accounting year; and

v) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure under Section 23 of MSMED Act 2016.

NIL NIL

NIL NIL

NIL NIL

NIL NIL

NIL NIL

The above information regarding micro, small and medium enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company.


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56. Information required as per Schedule III of the Companies Act, 2013

I. CIF Value of Import

(` in Crores) 2017-18 2016-17Others – Travelling 0.01 0.03

III. Value of Raw Materials, Stores & Spares and Components consumed during the year –

(` in Crores)

Description

Consumption of Raw Material NIL NIL NIL NILStores & Spares and 1.66 98.81% 3.09 88.03%components consumed(Indigenous)Stores & Spares and 0.02 1.19% 0.42 11.97%components consumed(Imported)TOTAL 1.68 100% 3.51 100%

2017-18 2016-17Value % Value %

IV. Earning in Foreign Currency – Earning in Foreign Currency during FY 2017-18 is NIL

(Previous Year – NIL)57. The company operates in a single segment of Natural Gas

Business, therefore, disclosure requirements as per Ind AS 108 “Operating Segment” are not required. However Entity-wise disclosures are as below:-

Information about products and services: The Company is in a single line of business of “Sale of

Natural Gas”. Geographic Information: The company operates presently in the business of

Natural Gas, including City Gas Distribution in India. Accordingly, revenue from customers and all assets are located in India only.

Information about major customers:st Two customers during the year ended 31 March 2018 and

stNine Customers during the year ended 31 March 2017 contributed to more than 10% of the revenue individually. Revenue from these customers was ̀ 3550.67 Crores and

st` 2019.90 Crores during the year ended 31 March, 2018 and st31 March, 2017 respectively.

58. Related Party Disclosures A. The entire Equity Share Capital of the Company is

held by GAIL (India) Ltd (Holding Company) either singly or jointly.

B. Related Party disclosure as per Ind AS 24. a. Relation and name of the related parties are: i. Holding Company - GAIL (India) Ltd. ii. Indian Joint Venture Companies Andhra Pradesh Gas Distribution Corporation Ltd.

(APGDCL) Kerala GAIL Gas Limited (KGGL) Vadodara Gas Limited (VGL) Rajasthan State Gas Limited (RSGL) Haridwar Natural Gas Pvt. Ltd. (HNGPL) Goa Natural Gas Pvt. Ltd. (GNGPL) iii. Other (Joint Venture Companies of Holding

Company) Indraprastha Gas Ltd. Central UP Gas Ltd. Green Gas Ltd. iv. Key Management Personnel: Chairman & Non-Executive Director - Mr. B. C. Tripathi Non-Executive Director - Mr. Ashutosh Karnatak (upto 05.05.2017) Mr. Subir Purkayastha Mr. Gajendra Singh (from 05.05.2017) Mrs. Anuradha Sharma Chagti Mr. R. C. Gupta (upto 31.08.2017) Mr. A. K.Tiwari (from 04.09.2017) Mr. A. K. Jana (upto 23.04.2018) Mrs. Vandana Chanana (upto 05.05.2017)

Chief Executive Officer: - Mr. Pankaj Kumar Pal (upto 30.04.2018) and Mr. A. K. Jana (from 01.05.2018)

Chief Financial Officer: - Mrs. Jyoti Dua (upto 31.05.2017) and Mr. Pankaj Walia (from 31.05.2017)

Company Secretary: - Mr. Deepak Asija

(`in Crores) 2017-18 2016-17CIF Value of Import NIL NIL

II. Expenditure in Foreign Currency


76


1. Purchase of Goods / Material 4348.81 - - (2607.74) (-) (-)2. Interest on Delayed Payment 0.01 - - (-) (-) (0)3. Sales of Goods (Material) / Material Issued on Loans 9.51 138.12 -- (-) (-) (0)4. Reimbursement of Remuneration to Key Management personnel- - - 1.93 Salary & Allowances (-) (-) (1.00)5. Reimbursement of remuneration to staff - 14.74 - (-) (8.63) (-)6. Rent, Electricity and UCS Expenses 3.47 - - (3.00) (-) (-)7. Outstanding Balance Payable 221.53 0.20 - (101.73) (-) (-)8. Outstanding Balance Receivable 9.51 14.58 - (-) (6.21) (-)9. Provision for Bad Debt - - - (-) (0.16) (-)10. Bad Debt written off - - - (-) (-) (-)11. Corporate Guarantee given to OIDB for term loan availed as at - - - Balance Sheet date (118.00) (-) (-)12. Corporate Guarantee given to Banks for BG issued on behalf of the 5951.99 - - Company as at Balance Sheet date (5951.99) (-) (-)13. Investment in APGDCL as at Balance Sheet date (JV) - 20.00 - (-) (15.00) (-)14. Advance to APGDCL against Equity Share pending Allotment of Share - 2.50 - (-) (7.50) (-)15. Investment in KGGL as at Balance Sheet date (JV) - 11.93 - (-) (11.93) (-)16. Investment in VGL as at Balance Sheet date (JV) - 41.01 - (-) (41.01) (-)17. Investment in RSGL as at Balance Sheet date (JV) - 65.00 - (0) (17.03) (0)18. Advance to RSGL against Equity Share pending Allotment of Share - - - (-) (2.97) (-)19. Investment in HNGPL as at Balance Sheet date (JV) - 7.50 - (-) (7.50) (-)20. Investment in GNGPL as at Balance Sheet date (JV) - 7.50 - (-) (2.50) (-)21. Share allotment to Holding Company. 250 - - (225) (-) (-)22. Advance against Equity Share pending Allotment of Share 150 - - (-) (-) (-)

*Others include joint venture companies of Holding Company.

(Figure shown in brackets pertains to previous year).

Sl.No.

Particulars Holding Co.Joint

Venture &Others*

KeyManagement

Personnel

(` in Crores) b. Related Party Transactions


77

The company has formed six Joint Venture Companies by executing Joint Venture Agreement/Shareholder Agreement with various State Governments and Corporates. In all these companies, it was agreed that Equity Shareholding of both the promoters will be in equal ratio till the time strategic investor comes in. However, after the investment of strategic investor, the shareholding of both the promoters will be as per the Shareholder Agreement executed amongst them.

There is no provision towards payment of Management Fees to the operator hence no management fee has been paid and no provision has been made in the books of accounts for same.

No provision has been made for the leasehold charges in respect of land provided by Holding Company M/s GAIL (India) Ltd. used for setting up CNG Station at Dibiyapur, Vijaipur and Bengaluru as the terms and conditions are yet to be finalized.

59. Earning Per Share

Particulars 2017-18 2016-17Profit after Tax from Continuing 76.04 65.78Operations (` in Crores) Profit after Tax from Discontinued 4.71 (0.76) Operation (` in Crores) Weighted Average 2,95,79,81,756 53,18,41,096No. of Equity Shares Nominal Value per Share (in ̀ ) 10.00 10.00Basic Earning per Share (in ̀ )From Continuing Operations 0.26 1.23From Discontinued Operations 0.01 (0.01)Total 0.27 1.22Diluted Earning per Share (in ̀ )From Continuing Operations 0.26 1.23From Discontinued Operations 0.01 (0.01)Total 0.27 1.22

Company has created tax liability as per detailsgiven below:-

a) Income Tax related to items charged or credited directly to profit or loss during the year

60. In compliance of Ind AS 12 on “Income Taxes” issued bythe Institute of Chartered Accountants of India, the

(` in Crores)st stStatement of Profit or Loss 31 March 31 March

2018 2017Current Income Tax:Current Income Tax Charge from 23.31 21.57ordinary activities (ContinuingOperations) Current Income Tax Charge from 0.01 -ordinary activities (DiscontinuedOperations) Current Income Tax Charge on 7.85 -Gain on disposal of DiscontinuedOperations. 31.17 21.57 Deferred Tax: Relating to origination and reversal 19.59 12.84of temporary differences(Continuing Operations) Relating to origination and reversal - -of temporary differences(Discontinued Operations) 19.59 12.84Income Tax Expense (Continuing 42.90 34.41 Operations) Income Tax Expense (Discontinued 7.86 - Operations)

b) Reconciliation of Effective Tax Rate (Continuing Operations)

(` in Crores)st st 31 March 31 March

2018 2017Profit Before Income Taxes 118.94 100.19 Effective Tax Rate 19.60% 21.53%Computed Effective Tax Expenses 23.31 21.57 Movement in Deferred Tax Liability 19.59 12.84 Income Tax charged to Statement 42.90 34.41 of Profit & Loss Effective Tax Rate 36.07% 34.34%


78


61. In compliance of Ind AS 36 on “Impairment of Assets”, company has carried out an assessment of impairment of assets and there are no impaired assets.

62. In compliance of Ind AS 37 on “Provisions, Contingent Liabilities and Contingent Assets” the required information on provision for probable obligations is as under :-

The company's share in the assets and liabilities and in the income and expenditure for the year in respect of above joint venture companies based on audited financial statement of Haridwar Natural Gas Pvt. Ltd. and unaudited financial statements of other 5 joint venture companies as furnished by management of these companies is as under :-

(` in Crores)

Sl. No. Description 2017-18 2016-17A. Summary of Balance Sheet1. Assets Non Current 160.06 92.09 Current 43.85 23.06 Total 203.91 115.152. Liabilities & Provisions Non Current 25.48 5.36 Current 25.89 10.41 Total 51.37 15.77B. Summary of Profit and Loss A/c1. Income 38.54 24.922. Expenditure 37.95 24.76C. Contingent Liability 17.64 31.01D. Capital Commitment 44.83 11.56

(` in Crores)

Direct Tax 33.67 31.17 3.10 61.74Deferred Tax 23.45 19.59 (3.33) 46.37Legal & Arbitration 44.69 83.78 4.53 123.94Cases

Provisions OpeningBalance

Additionsduring

the year

Reversal /adjustment

duringthe year

ClosingBalance

63. Disclosure under Ind AS 112 on “Disclosure of Interests in other Entities”, is as under :-

1 Andhra Pradesh Gas Joint Venture 50% 50% Distribution Corporation Ltd. (APGDCL) 2 Kerala GAIL Gas Joint Venture 50% 50% Limited. (KGGL)

Sl.No.

Name of Companies(Indian Entities) Relation 31.03.2018 31.03.2017

Proportion of ownership as on

64. Notes on Financial Risk Management

Financial Risk Management The Company's Financial Risk Management is an integral

part of how to plan and execute its business strategies. This note explains the sources of risk which the entity is exposed to and how the company manages the risk. The Company is exposed to market risk, credit risk and

c) Recognized Deferred Tax Assets and Liabilities :- Deferred Tax Assets/ (Liabilities) are attributable to

the following:

(` in Crores)

Property, Plant and (59.62) (40.08) (20.37) (12.90)Equipment

Provisions 2.44 1.66 0.78 0.06

Deferred Tax Assets/ (57.18) (38.42) (19.59) (12.84)(Liabilities)Offsetting of Deferred Tax - - - -Assets/ (Liabilities)

Net Deferred Tax Assets / (57.18) (38.42) (19.59) (12.84)(Liabilities)

ParticularsStatement ofProfit & Loss

st31 March2017

Balance Sheetst31 March2018

st31 March2018

st31 March2017

3 Vadodara Gas Joint Venture 17.07% 17.07% Limited. (VGL)

4 Rajasthan State Joint Venture 50% 50% Gas Limited. (RSGL)

5 Haridwar Natural Joint Venture 50% 50% Gas Pvt. Ltd. (HNGPL)

6 Goa Natural Gas Joint Venture 50% 50% Pvt. Ltd. (GNGPL)

Sl.No.

Name of Companies(Indian Entities) Relation 31.03.2018 31.03.2017

Proportion of ownership as on


79

liquidity risk. Board of Directors of the company has overall responsibility for the establishment and oversight of the Company's Risk Management Framework.

(i) Market risk Market risk is the risk that the fair value of future cash

flows of a financial instrument will fluctuate because of changes in market prices. It is a risk of changes in market prices such as foreign exchange rates and interest rates that will affect Company's income or the value of its holding of financial instruments.

(a) Interest Rate Risk: Interest rate risk is the risk that the fair value or future

cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long term debt obligations with floating interest rates. The company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and investing in fixed interest instruments.

Sensitivity analysis: The table below summarizes the impact of a potential

increase or decrease on the Company's profit before tax as applied to the variable element of interest rates on loans and borrowings. The increase/decrease is based on management estimates of potential interest rate movements.

(b) Foreign Currency Risk: The Company does not have significant exposure in

currency other than INR.

(ii) Liquidity risk Liquidity Risk is the risk that the Company will

encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company's objective is to maintain at all times optimum levels of liquidity to meet its cash and collateral requirements to meet the payment obligations. The Company closely monitors its liquidity position and deploys a robust cash management system. It also maintains adequate source of finance in the form of short term and long term borrowings. The contractual maturities of the Company's financial liabilities are presented below:

(` in Crores)

Reporting Increase/decrease in Impact on profit period interest rate basis points before taxes31.03.2018 +100 NIL -100 NIL31.03.2017 +100 (0.81) -100 0.81

The sensitivity analysis is limited only to variable rate on loans and borrowings and is conducted with all other variables held constant. The analysis is prepared with the assumption that the amount of variable rate liability outstanding at the balance sheet date was outstanding for the whole year. Further, there is no loan outstanding as on 31.03.2018 having variable rate of interest, hence, there is no impact on the Company's profit before tax during the year ended 31.03.2018.

Morethan

5 yearsTotalAs at

31.03.2018On

demand

(` in Crores)Less

than 3months

3-12months

1-5years

Interest-bearing - 3.08 12.48 72.22 65.90 153.68Loans andBorrowings Trade and - 235.72 - - - 235.72Other Payables Other Financial 71.28 0.34 31.44 - - 103.06Liabilities

Morethan

5 yearsTotalAs at

31.03.2017On

demand

(` in Crores)

Lessthan 3

months

3-12months

1-5years

Interest-bearing 9.48 17.02 38.81 167.37 36.98 269.66Loans andBorrowings Trade and Other - 111.29 - - - 111.29Payables Other Financial 43.39 4.63 17.90 - - 65.92Liabilities

(iii) Credit Risk Credit Risk is the risk that a counter party will not meet

its obligations under a financial instrument or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily from trade receivables) and from


80


its financing activities, including deposits with banks and financial institutions. Credit exposure also exists in relation to guarantees issued by the company.

Customer credit risk is managed by each business unit subject to the Company's established policy, procedures and control relating to customer credit r i s k m a n a g e m e n t . O u t s t a n d i n g c u s t o m e r receivables are regularly monitored and reviewed for impairment. The summary of the Company's product wise credit policy is tabulated below:

Product Credit periodPiped Natural Gas (Domestic) 21 daysPiped Natural Gas (Industrial) 03/ 07 daysPiped Natural Gas (commercial) 07 daysCompressed Natural Gas (CNG) Cash sales

The company does not expect any significant credit risk out of its exposure to trade receivable as the major part of revenue is contributed by either through cash sales or within credit period of 3-21 days. The aging analysis of trade receivables as of the reporting date is as follows:

(` in Crores)

31.03.2018 257.81 2.90 3.13 0.63 6.03 270.5031.03.2017 103.63 3.32 0.55 0.49 3.60 111.59*Net of Provision

Tradereceivables

Neitherpast due

norimpaired

Past due but not impaired

Lessthan

30 days

30-60days

60-90days

Above90 days Total*

The following table summarizes the changes in the allowances for doubtful accounts for trade receivables:

(` in Crores)st stProvisions 31 March 2018 31 March 2017

Start of the year 1.25 1.08Provision for Doubtful Debt 0.32 0.17Receivables written off duringthe year as uncollectible - -Unused amounts reversed - -End of year 1.57 1.25

Cash deposits: The cash deposits are held with public and private sector

banks. Further, company is also investing its surplus funds into Banks linked with Current Account. There is no impairment on these cash deposits as on the reporting date and comparative period.

Capital Management For the purpose of the Company's capital management,

capital includes issued capital and all other equity reserves attributable to the equity holders of the parent company. The primary objective of the Company's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise the shareholder value.

The Company's management assesses regularly the net debt to capital employed ratio to ensure it maintains a balance between borrowings and capital position. The net debt to capital employed ratio enables the users to see how significant net debt is relative to capital employed. The Company's net debt to capital employed ratio was as follows:

(` in Crores)

Particulars 31.03.2018 31.03.2017Total Liabilities 684.64 464.24Less: Cash and cash equivalents (269.56) (2.76)Net debt (A) 415.08 461.48Total equity (B) 1239.54 781.65Capital and net debt (A+B) 1654.62 1243.13Gearing ratio 25.09% 37.12%

Fair value measurementsThe Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data


81

(` in Crores)

Financial Assets atamortised cost: Loans and Other Receivables 10.21 - - -Trade Receivables 270.50 - - -Cash and Cash Equivalents 269.56 - - -At fair value through - - - -Profit and Loss At fair value through OCI - - - -Total Financial Assets 550.27 - - -Financial Liabilities atamortized cost Borrowings 138.12 - - -Trade Payables 235.72 - - -Other Financial Liabilities 118.62 - - -At fair value through - - - -Profit and Loss Total Financial Liabilities 492.46 - - -

Level -1 Level-2 Level-3

As at 31.03.2018:

Financial assets Carryingamount

Fair value

(` in Crores)

Financial Assets atamortised cost:Loans and Other Receivables 8.90 - - -Trade Receivables 111.59 - - -Cash and Cash Equivalents 2.76 - - -At fair value through - - - -profit and loss At fair value through OCI - - - -Total Financial Assets 123.25 - - -Financial Liabilities atamortized cost Borrowings 178.70 - - -Trade Payables 111.29 - - -Other Financial Liabilities 106.92 - - -At fair value throughprofit and loss - - - -Total Financial Liabilities 396.91 - - -


As at 31.03.2017:


Fair value

Cash and short-term receivables, trade receivables, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair values of non-current financial assets (such as security deposits) and long-term fixed-rate and variable-rate borrowings are considered to be same as their carrying values as the impact of fair valuation is not material.

65. Balance confirmation has been sought from vendors / contractors / authorities / joint venture companies for balances grouped under loan and advances, deposits and sundry creditors. However reconciliation of accounts with parties is carried out as ongoing process and balances are subject to reconciliation and consequent adjustment which in the opinion of the management are not material.

66. Previous Year's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification/disclosure.














82


stThe preparation of financial statement of GAIL Gas Limited for the year ended 31 March 2018 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the company. The statutory auditor appointed by the Comptroller and Auditor General of India under Section 139(5) of the Act is responsible for expressing opinion on the financial statements under Section 143 of the Act based on the independent audit in accordance with the standards on auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide Audit

rdReport dated 23 May 2018.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 143(6) (a) of stthe financial statements of GAIL Gas Limited for the year ended 31 March 2018. This supplementary audit has been carried out

independently without access to the working papers of the statutory auditor and is limited primarily to inquiries of the statutory auditor and company personnel and a selective examination of some of the accounting records. On the basis of my audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to statutory auditor's report.

For and on behalf of theComptroller and Auditor General of India

Sd/-(Nandana Munshi)

Director General of Commercial Audit& Ex- officio Member, Audit Board- II

New Delhi

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL

stSTATEMENTS OF GAIL GAS LIMITED FOR THE YEAR ENDED 31 MARCH 2018.


Gas Sales Agreement signed with Biocon Limited Agreement with HPCL for CNG dispensing atRetail Outlets in TTZ Area

83

Consolidated Financial Statements

84


Andhra Pradesh Gas DistributionCorporation Limited (APGDC)

Goa Natural Gas Private Limited (GNGPL)

Haridwar Natural Gas Private Limited (HNGPL)

Kerala GAIL Gas Limited (KGGL)

Rajasthan State Gas Limited (RSGL)

Vadodara Gas Limited (VGL)

85

Independent Auditors' Reportgive a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.


Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company's preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company's Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditor in terms of his report referred to in sub-paragraph of the Other Matters

To, The Members of GAIL Gas Limited

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of GAIL Gas Limited (“the Holding Company”) and its jointly controlled entities (collectively referred to as “the Company” or “the Group”), which comprise the consolidated

stbalance sheet as at 31 March 2018, the consolidated statement of profit and loss (including other comprehensive income), the consolidated statement of cash flows and the consolidated statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Consolidated Financial Statements

The Holding Company's Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”) that give a true and fair view of the consolidated state of affairs (financial position), consolidated profit or loss (financial performance including other comprehensive income), consolidated cash flows and consolidated changes in equity of the Group in accordance with the accounting principles generally accepted in India, including the Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated financial statements that


86

paragraph below, is sufficient and appropriate to providea basis for our audit opinion on the consolidated financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs (financial

stposition) of the Group, as at 31 March 2018 and its consolidated profit (financial performance including other comprehensive income), its consolidated cash flows and the consolidated changes in equity for the year then ended.

Emphasis of Matter

We draw attention to the following matters in Notes to Consolidated Financial Statements:-

Note No: 40 in respect of stating of investment in joint venture entity which includes the additional

contribution made as a part of investment.

Note No: 43 regarding sale of Kota business for which activities as per Business Transfer Agreement are in process including audit of accounts.

Note No: 50 regarding operation of CNG stations for which procurement of factory license is in process.

Note No: 57 regarding non-incurring of expenses for Corporate Social Responsibility (CSR) activity.

Our opinion is not modified in respect of these matters.

Other Matters

We did not audit the financial statements/financial information of following jointly controlled entities, whose financial statements/financial information reflect the detail given below:

(` in Crores)

S. Name of the Assets Total Net Cash No. Company Revenue Flow01 Haridwar Natural Gas 56.34 0.03 3.15 Private Limited

These financial statements have been audited by other auditor whose report has been furnished to us by the management.

(` in Crores)

S. Name of the Assets Total Net Cash No. Company Revenue Flow01 Andhra Pradesh Gas Distribution Corporation 49.40 0.44 0.56 Limited02 Rajasthan State Gas Limited 125.29 27.11 8.2803 Vadodara Gas Limited 327.50 139.17 0.1004 Kerala GAIL Gas Limited 27.49 1.87 1.3205 Goa Natural Gas Private Ltd. 37.50 0.11 0.34

(ii)

These financial statements/financial information are unaudited and have been furnished to us by the management.

Our opinion on the consolidated financial statements, in so far as it relates to the amount and disclosures included in respect of aforesaid jointly controlled entities and our report in terms of Sub-Sections (3) and (11) of Section 143 of the Act, in so far as it relates to the aforesaid jointly controlled entities, is based solely on the report of the other auditor and such unaudited financial statements/financial information .

Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the report of the other auditor and the financial statements/financial information certified by the management.

Report on Other Legal and Regulatory Requirements

1. Companies (Auditor's Report) Order,2016 issued by the Central Government of India in terms of Sub-Section (11) of Section 143 of the Act is not applicable on consolidated financial Statements as referred in proviso to para 2 of the Order.

2. As required by Section 143(3) of the Act, we report, to the extent applicable, that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and

(i)

87





stdisqualified as on 31 March 2018 from being appointed as a Director of that company in termsof Section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Holding Company and its jointly controlled entities/ joint ventures incorporated in India and the operating effectiveness of such controls, refer to our separate report in “Annexure A”; and

(g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group. Refer Note 47 to the consolidated financial statements;

ii. The Company did not have any long-term contracts including derivative contracts which may lead to any material foreseeable losses.

iii. There has not been any occasion where any amount is required to be transferred, to the Investor Education and Protection Fund by the Company.

belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.

(b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and report of the other auditor.

(c) The consolidated Balance Sheet, the consolidated statement of profit and loss, the consolidated statement of cash flows and consolidated statement of changes in equity dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.

(d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder.

(e) On the basis of the written representations received from the directors of the Holding Company as on

st31 March 2018 taken on record by the Board of Directors of the Holding Company and the report of the statutory auditor of its jointly controlled companies incorporated in India, none of the Directors of the Group companies and jointly controlled companies incorporated in India is


88

Financial Reporting (the “Guidance Note”) issued by ICAI and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A

Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended

stMarch 31 , 2018. We have audited the internal financial controls over financial reporting of GAIL Gas Limited (hereinafter referred to as ('Holding Company') and its jointly controlled companies which are incorporated in India, as of that date.

Management's Responsibility for Internal Financial Controls

The Respective Board of Directors of the Holding Company and its jointly controlled companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over

Annexure - A to the IndependentAuditors' Report

89





Opinion

In our opinion, the Holding Company and its jointly controlled companies, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating

steffectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

Other Matters

Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial control over financial reporting in so far it relates to 1(One) jointly controlled entity which is incorporated in India, is based on the corresponding report of the auditor of such company incorporated in India. In the audit report of joint venture entity Haridwar Natural Gas Private Limited, the auditor has observed certain discrepancies that in the case of M/s Agro Farms, the company has taken the warehouse on rent for which no proper agreement has been undertaken by the company and the condition stated in the letter was contradicted by utilizing the same space for the commercial purposes (i.e for pipe storage) and the same has been vacated later on. The information of 5 joint venture companies is not available as these are under audit.

company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


(` in Crores)

Particulars Note As at As atst st 31 March 2018 31 March 2017

Consolidated Balance Sheetstas at 31 March 2018

The accompanying Notes form an integral part of the consolidated Financial Statements. 1 to 67













ASSETSNon Current AssetsProperty, Plant and Equipment 3 712.91 519.48 Capital Work-In-Progress 3 411.60 319.15 Intangible Assets 4 12.32 14.37 Financial Assets i. Investments 5 147.31 102.90 ii. Loans & Other Receivables 6A 1.51 2.69 Non Current Tax Assets (Net) 7A 0.35 0.25 Other Non Current Non Financial Assets 11A 10.20 - Total Non-Current Assets (A) 1,296.20 958.84Current AssetsInventories 8 8.67 8.77 Financial Assets i. Trade Receivable 9 270.50 111.59 ii. Cash and Cash Equivalents 10 269.56 2.76 iii. Loans & Other Receivables 6B 8.70 6.21 iv. Other Financial Assets 6C 0.18 - Current Tax Assets (Net) 7B 2.58 2.80 Other Current Non Financial Assets 11B 59.66 152.38Total Current Assets (B) 619.85 284.51Total Assets (A+B) 1,916.05 1,243.35EQUITY AND LIABILITIES EQUITY i. Equity Share Capital 12 877.00 627.00 ii. Other Equity 13 354.41 152.11 Total Equity (C) 1,231.41 779.11 LIABILITIESNon Current Liabilities Financial Liabilities i. Borrowings 14 138.12 169.22 ii. Deferred Tax Liabilities (net) 15 46.37 23.45 Total Non-Current Liabilities (D) 184.49 192.67Current Liabilities Financial Liabilities i. Borrowings 16 - 9.48 ii. Trade Payables 17 235.72 111.29 iii. Other Financial Liabilities 18 118.62 106.92 Provisions 19 83.71 37.78Other Current Non Financial Liabilities 20 62.10 6.10Total Current Liabilities (E) 500.15 271.57Total Equity and Liabilities (C+D+E) 1,916.05 1,243.35

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(` in Crores)


Particulars Note YEAR ENDED YEAR ENDEDst st No. 31 March 2018 31 March 2017

I INCOME Revenue from Operations (Gross) 21 4,602.13 2,794.32 Other Income 22 7.52 2.37

Total Income 4,609.65 2,796.69II EXPENSES Gas Consumed 23 4,330.83 2,585.20 Excise Duty 23.89 16.62 Employee Benefit Expenses 24 35.32 20.88 Finance Cost 25 8.10 15.40 Depreciation and Amortization Expenses 26 23.36 13.72 Other Expenses 27 69.21 44.68

Total Expenses 4,490.71 2,696.50III Profit Before Tax from continuing operations before share of 118.94 100.19 Profit/Loss of JV IV Share of Profit/Loss of Joint ventures (6.52) (1.29)V Profit/Loss Before Tax from Continuing Operations 112.42 98.90 VI Tax Expenses 28 42.90 34.41 - Current Year 23.31 21.57 - Deferred Tax 19.59 12.84

V Profit After Tax from continuing operations 69.52 64.49 VI Profit After Tax from discontinued operations 29 4.71 (0.76)VII Other comprehensive income Other comprehensive income to be reclassified to profit or loss in subsequent periods: - - Net other comprehensive income to be reclassified to - - profit or loss in subsequent periods Other comprehensive income not to be reclassified to profit or loss in - - subsequent periods: Re-measurement gains/ (losses) on defined benefit plans - - Revaluation of land and buildings - -

Net other comprehensive income not to be - - reclassified to profit or loss in subsequent periods

Other comprehensive income for the year (net of tax) - -

VIII Total comprehensive income (Net of Tax) (V+VI+VII) 74.23 63.73 IX Earning Per Share for profit from continuing operations 58 Basic Earning per Share In (`) 0.24 1.21 Diluted Earning Per Share In (`) 0.24 1.21 Earning Per Share for profit from discontinued operations 58 Basic Earning Per Share In (`) 0.01 (0.01) Diluted Earning Per Share In (`) 0.01 (0.01) Earning Per Share for profit from continuing & discontinued operations 58 Basic Earning Per Share In (`) 0.25 1.20 Diluted Earning Per Share In (`) 0.25 1.20

Consolidated Statement of Profit and Lossstfor the Year ended 31 March 2018














Consolidated Statement of Cash Flow Statement stfor the Year ended 31 March 2018

(` in Crores)

A. CASH FLOW FROM OPERATING ACTIVITIES 1 Net Profit Before Tax from Continuing operations 112.42 98.90 Discontinued operations 12.57 (0.76) Profit Before Tax including discontinued operations 124.99 98.14 2 ADD : Depreciation & Amortization Expenses 24.01 15.66 Exchange Rate Variation on foreign currency 0.01 (0.04) Provision for employee benefit 15.29 7.70 Provision for probable obligation 1.40 - Provision for Doubtful Debts 0.32 0.16 Gain on sale of discontinued operations (12.53) - Loss on sale of fixed assets 0.01 - Interest Expenditure 8.10 17.45 Interest Income (4.64) (0.93) Share of profit/loss of Joint Ventures 6.52 1.29 38.49 41.29 3 Operating Profit Before Working Capital Changes (1 + 2) 163.48 139.43 4 Changes in Working Capital (Excluding Cash & Bank Balances) Trade and Other Receivables (79.28) (24.58) Inventories 0.10 (0.88) Trade and Other Payables 246.48 58.77 167.30 33.31 5 Cash Generated from Operations (3+4) 330.78 172.746 Direct Taxes Paid (28.42) (22.50) NET CASH FROM OPERATING ACTIVITIES (5+6) 302.36 150.24 B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets (Net) (373.44) (239.69) Investment in Other Companies (Net) (50.00) (12.97) Proceeds from discontinued operations 80.00 - Interest Received 4.64 0.93

NET CASH FROM INVESTING ACTIVITIES (338.80) (251.73)C. CASH FLOW FROM FINANCING ACTIVITIES Share Application Money Received 150.00 - Proceeds from Equity 250.00 191.00 Proceeds from Long Term Borrowings 35.57 87.35


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Consolidated Statement of Cash Flow Statement stfor the Year ended 31 March 2018

(` in Crores)

Repayment of Long Term Borrowings (92.11) (45.85) Repayment of Cash Credit Facilities from HDFC Bank (9.48) (102.47) Interest Paid (8.10) (17.45) Dividend & Dividend Tax Paid (22.64) (9.68)

NET CASH FROM FINANCING ACTIVITIES 303.24 102.89 NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) 266.80 1.41 CASH AND CASH EQUIVALENTS AS AT 01.04.2017 2.76 1.35 CASH AND CASH EQUIVALENTS AS AT 31.03.2018 269.56 2.76



NOTES : 1. Net Cash flow from operating activities includes an amount of (` 8.24) Crores from sale of discontinued operations during the FY 2017-18. 2. Net Cash flow from investing activities includes an amount of ` 12.53 Crores from sale of discontinued operations during the FY 2017-18. 3. Net Cash flow from financing activities includes an amount of (` 0.37) Crores from sale of discontinued operations during the FY 2017-18. 4. Proceed from discontinued operations is of ` 80 Crores out of which ` 40 Crores received in the form of equity shares which has been shown as

in Investment in Other Companies. 5. Previous year's figure have been regrouped /reclassified wherever necessary to correspond with current year's classification/disclosure.













Signing of Kolkata JV Agreement Agreement between RSGL and IOCL forCNG dispensing at retail outlet



Consolidated Statement of Changes in Equity stfor the Year ended 31 March 2018

(` in Crores)

I. Equity Share Capital (Note 12) (Issued, Subscribed & Paid Up Equity Share of ` 10 Each)

II. Other Equity (Note 13)(` in Crores)

Share Application money Other Pending allotment Reserves and Surplus comprehensive Total income

Balance as at April 1, 2017 - 152.11 - 152.11 Share application money received 150.00 - 150.00 Add: Adjustment in Retained Earnings 0.93 0.93 Add: Profit for the year 74.23 - 74.23 Less: Tax adjustment - 0.22 - 0.22 Dividend Paid - 18.81 - 18.81 Dividend Distribution Tax - 3.83 - 3.83

Balance as at March 31, 2018 150.00 204.41 - 354.41

Balance as Changes during the Year Balance as at April 1, 2017 at 31.03.2018

627.00 250.00 877.00













Hindi Workshop Swachhta Fortnight

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b) Summary of significant accounting policies (i) Property, Plant and Equipment (PPE) (a) Tangible Assets Property, plant and equipment are stated at

original cost net of tax / duty credit availed, less accumulated depreciation. All costs relating to acquisition of fixed assets till commissioningof such assets are capitalized.

When significant parts of property, plant and equipment (identified individually as component) are required to be replaced at intervals, the Company derecognizes the replaced part, and recognizes the new part with its own associated useful life and it is depreciated accordingly.

Stores and Spares having the value of each item of ` 5 lakhs and above which meet the definition of PPE (whether as component or otherwise) and satisfy the recognition criteria, are capitalized as PPE in the underlying asset.

Property, plant and equipments are eliminated from financial statements, either on disposalor when retired from active use. Losses/gains arising in case retirement/disposals of property, plant and equipment are recognizedin the statement of profit and loss in the yearof occurrence.

Depreciation on tangible fixed assets is provided in accordance with the manner and useful life as specified in Schedule II of the Companies Act, 2013, on straight line method (SLM) on pro-rata basis (monthly pro-rata for bought out assets).

Leasehold lands are amortized over thelease period. Leasehold improvements are amortized over the remaining period of the primary lease or expected useful economic lives, whichever is shorter.

The asset's residual values, useful lives and methods of depreciation/amortization are reviewed at each reporting period and adjusted prospectively, if appropriate.

1. Corporate Information GAIL Gas Limited is a company domiciled in India with

registered office in New Delhi. GAIL Gas Limited is a wholly owned subsidiary of GAIL (India) Limited. It was i n c o r p o ra t e d o n M a y 2 7 , 2 0 0 8 fo r t h e s m o o t h implementation of City Gas Distribution (CGD) projects. GAIL Gas has been authorized by Petroleum and Natural Gas Regulatory Board (PNGRB) for implementing City Gas Distribution Projects in Dewas (Madhya Pradesh), Kota (Rajasthan), Sonepat (Haryana), Meerut (Uttar Pradesh), Taj Trapezium Zone (Uttar Pradesh), Mandigovindgar (Punjab) and Bengaluru (Karnataka). In addition, GAIL Gas is pursuing City Gas Business in the state of Kerala, Andhra Pradesh, Karnataka, Rajasthan, Vadodara (Gujarat), Haridwar (Uttrakhand), North Goa (Goa) through its Joint Ventures.

The financial statements of the company for the year ended s t3 1 M a r c h 2 0 1 8 w e r e a u t h o r i ze d fo r i s s u e by

Board of Directors on 23.05.2018.2. Basis of preparation and significant Accounting Policy a) Basis of preparation The Consolidated financial statements of the Company

have been prepared in accordance with Indian Accounting Standards (Ind-AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

The Consolidated financial statements have been prepared on a historical cost basis except for certain assets and liabilities which have been measured at fair value or revalued amount. The fact is disclosed in the relevant accounting policy.

Effective April 1, 2016, the company has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101 First time adoption of Indian Accounting Standards, with April 1, 2015 as the transition date. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under section 133 of the Companies Act 2013, read with Rule 7 of the Companies (Accounts) Rules 2014 (IGAAP) which was the previous GAAP.

The financial statements are presented in Consolidated Indian Rupees ('INR') and the values are rounded to the nearest crore, except otherwise indicated.

Notes Accompanying to the Consolidated Financial Statement


(iv) Inventories Inventories are measured at the lower of cost and

net realizable value.

The cost of inventories is based on the first-in first-out principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories, cost includes an appropriate share of production overheads based on normal operating capacity.

Stores & Spares which meet the definition of property plant and equipment and satisfy the recognition criteria are capitalized as property, plant and equipment.

Net realizable value is determined based on estimated selling price, less further costs expected to be incurred to completion and disposal.

Raw materials and finished products are valued at cost or net realizable value, whichever is lower.

Stock in process is valued at cost or net realizable value, whichever is lower. It is valued at cost where the finished products in which these are to be incorporated are expected to be sold at orabove cost.

Stock of gas in pipeline is valued at cost (FIFO) or net realizable value whichever is lower.

Stores and spares and other material for use in production of inventories are valued at weighted average cost or net realizable value, whichever is lower. It is valued at weighted average cost where the finished products in which they will be incorporated are expected to be sold at/orabove cost.

Surplus/obsolete stores and spares are valued at cost or net realizable value, whichever is lower.

Surplus/obsolete capital stores, other than held for use in construction of a capital assets, are valued at lower of cost or net realizable value.

(b) Capital Work-in-Progress Capital work in progress includes construction

stores including material in transit/ equipment / services, etc. received at site for use in the projects.

All revenue expenses incurred during construction period, which are exclusively attributable to acquisition/construction of fixed assets, are capitalized at the time of commissioning ofsuch assets.

(ii) Intangible Assets Intangible assets acquired separately are

measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses.

Intangible assets with finite lives (i.e. software and licenses) are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset maybe impaired.

Intangible assets with indefinite useful lives (principally comprise those 'right of use' for which there is no foreseeable limit to the period over which they are expected to generate net cash flows given the fact that these rights can be used even after the life of respective pipelines) are not amortized, but are tested for impairment annually. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

(iii) Impairment of Assets At each Balance Sheet date, the Company

assesses whether there is any indication that any property, plant and equipments and intangible assets with finite life may be impaired. If any such impairment exists, the recoverable amount of an asset is estimated to determine the extent of impairment, if any.

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Notes Accompanying to the Consolidated Financial Statement (Contd.)

97

settled wholly within twelve months after the end of period in which the employee render the related services are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc. are recognized during the period in which the employee renders related service.

(viii) Borrowing Costs Borrowing costs that are attributable to the

acquisition, construction, or production of a qualifying asset are capitalized as a part of the cost of such asset till such time the asset is ready for its intended use or sale, after netting off any income earned on temporary investment of such funds. A qualifying asset is an asset that necessarily requires a substantial period of time (generally over twelve months) to get ready for its intended use or sale.

All other borrowing costs are recognized as expense in the period in which they are incurred.

(ix) Leases A lease is classified at the inception date as a

finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership of the company is classified as a finance lease.

F i n a n c e l e a s e a r e c a p i t a l i z e d a t t h e commencement of the lease at the inception date at fair value of the leased property or, if lower, at the present value of the minimum lease payment. Lease Payments are apportioned between finance charge and reduction of the lease liability to achieve a constant rate of interest on the remaining balance of the liability. Finance Charges are recognized in finance costs in the Statement of Profit and Loss.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognized as operating leases. Lease rentals under operating leases are recognized in the statement of profit and loss on

(v) Foreign Currency Transactions The Company's financial statements are

presented in INR, which is also the Company's functional currency.

Foreign currency transactions are recorded on initial recognition in the functional currency, using the exchange rate at the date of the transaction.

At each balance sheet date, foreign currency monetary items (such as Cash, Receivables, Loans, Payables, etc.) are reported using the closing exchange rate (BC selling rate for payable and TT buying rate for receivable).

Exchange differences that arise on settlement of monetary items or on reporting at each balance sheet date of the Company's monetary items at the closing rate are recognized as gain or loss in the period in which they arise.

Non-monetary items (such as Investments, Fixed Assets, etc.) which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

(vi) Revenue and Other Income Sales are recognized on transfer of significant

risks and rewards of ownership to the buyer, which generally coincides with the deliver of goods to customers. Sales include excise duty but exclude value added tax. Any retrospective revision in prices is accounted for in the years of such revision.

Income in respect of MGO of Natural Gas and Interest on delayed realization from customers is not provided on accrual basis. Receipts during the year on account of MGO and Interest on delayed realization from customers are accounted on receipt basis.

Entire revenue from provision of extra pipelines at customers premises is accounted for as Income in the year of receipt / incurrence.

(vii) Employee Benefits All employee benefits that are expected to be



specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent liabilities exceeding ` 5 Lakhs in each case are disclosed by way of notes to accounts.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

(xii) Government Grants Government grants are recognized where there is

reasonable assurance that the grant will be received and all attached conditions will be complied with.

When loans or similar assistance are provided by governments or related institutions, with an interest rate below the current applicable market rate, the effect of this favorable interest is regarded as a government grant. The loan or assistance is initially recognized and measured at fair value and the government grant is measured as the difference between the initial carrying value of the loan and the proceeds received. The loan is subsequently measured as per the accounting policy applicable to financial liabilities.

(xiii) Current versus Non-Current Classification The Company presents assets and liabilities in the

balance sheet based on current/ non-current classification.

An asset as current when it is: • Expected to be realised or intended to sold or

consumed in normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised within twelve months after the reporting period, or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

straight line basis unless the payments are structured to increase in line with expected general inflation to compensate for the lessor's expected inflationary cost increases.

(x) Taxes (a) Current Income Tax Current tax is provided at amounts expected to

be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

(b) Deferred Tax Deferred tax is provided, using the balance

sheet method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enactedor substantively enacted at the balancesheet date.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and is adjusted to the extent that it is no longer probable that sufficient taxable profit willbe available to allow all or part of the asset to be recovered.

(xi) Provisions, Contingent Liabilities, Contingent Assets and Commitments

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks

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model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

• Financial Assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

• Financial Assets at fair value through statement of profit and loss

A financial asset which is not classified in any of the above categories are subsequently fair valued through statement of profit and loss.

Derecognition

A financial asset is primarily derecognized when the rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.

Investment in Subsidiaries, Joint Ventures and Associates

The company has accounted for its investment in joint ventures at cost.


The Company assesses impairment based on Expected Credit Losses (ECL) model for measurement and recognition of impairment loss on the financial assets that are trade receivables or contract revenue receivables and all lease receivables.

A liability is current when: • It is expected to be settled in normal operating

cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

(xiv) Financial Instruments A financial instrument is any contract that gives

rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(a) Financial Assets Classification The Company classifies financial assets as

subsequently measured at amortized cost, fair value through other comprehensive income or fair value through statement of profit and loss on the basis of its business model for managing the financial assets and the contractual cash flows characteristics of the financial asset.

Initial Recognition and Measurement All financial assets are recognized initially at fair

value plus, in the case of financial assets not recorded at fair value through statement of profit and loss, transaction costs that are attributable to the acquisition of the financial asset.

Subsequent Measurement For purposes of subsequent measurement

financial assets are classified in below categories:

• Financial Assets carried at amortised cost A financial asset is subsequently measured at

amortised cost if it is held within a business



Derecognition A financial liability is derecognized when the

obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit and loss.

(c) Offsetting of Financial Instruments Financial assets and financial liabilities are offset

and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

(xv) Others Liquidated damages, if any, are accounted for as

and when recovery is affected and the matter is considered settled by the management.

Insurance claims are accounted for on the basis of claims admitted by the insurers

Custom duty and other claims (Including interest on delayed payments) are accounted for on acceptance in principle.

(xvi) Earnings Per Share Basic earnings per equity share is calculated by

dividing the net profit after tax attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period.

Diluted earnings per equity share is calculated by dividing the adjusted net profit after tax attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period.

(xvii) Significant Accounting Judgments, Estimates and Assumptions

(b) Financial Liabilities Classification The Company classifies all financial liabilities as

subsequently measured at amortized cost, except for financial liabilities at fair value through statement of profit and loss. Such liabilities, including derivatives that are liabilities, shall be subsequently measured at fair value.

Initial Recognition and Measurement All financial liabilities are recognized initially at

fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts.

Subsequent Measurement The measurement of financial liabilities depends

on their classification, as described below: • Financial Liabilities at amortised cost After initial recognition, interest-bearing loans

and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.

• Financial Liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognized in the statement of profit and loss.

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other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market change or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Impairment of Financial Assets The impairment provisions for financial assets are

based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company's past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

(xviii) Standards Issued but not yet Effective Ind-AS 115 “Revenue from Contract with

Customers" Ind AS 115 was issued in February, 2015. The core

principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to the customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts with customers.

This standard will come into force from accounting stperiod commencing on or after 1 April, 2018. The

company will adopt the new standard on the required effective date. The Company is in the process of making an assessment of the impact of Ind - AS 115 upon initial application, which is subject to changes arising from a more detailedongoing analysis.

The preparation of the Company's financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities at the date of financial statements. Estimates and assumptions are continuously evaluated and are based on management's experience and other factors, including expectations of future events that are b e l i e v e d t o b e r e a s o n a b l e u n d e r t h e circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

In particular, the Company has identified the following areas where significant judgements, estimates and assumptions are required. Further information on each of these areas and how they impact the various accounting policies are described below and also in the relevant notes to the financial statements. Changes in estimates are accounted for prospectively.

(a) Judgments In the process of applying the Company's

accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the standalone financial statements:

Contingencies Contingent liabilities may arise from the ordinary

course of business in relation to claims against the Company, including legal, contractor, land access and other claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgement and the use of estimates regarding the outcome of future events.

(b) Estimates and Assumptions The key assumptions concerning the future and



Note 3 - Property, Plant and Equipment and Capital Work in Progress (` in Crores)

Cost/ Valuation Free Lease Plant Buildings Furniture Office Total Capital hold hold and and Fixtures Equipment Work-in- Land Land Machinery Including Progress Electrical Equipments

1. Cost or Deemed Cost (gross carrying amount)

st Balance at 1 April 2017 12.79 10.95 477.58 35.50 0.79 7.99 545.59 319.15Additions 5.82 - 243.32 15.44 0.27 3.37 268.22 373.46 Transfer to Capitalisation - - - - - - - (269.32)Disposals - (3.71) (46.57) (3.45) (0.14) (0.39) (54.26) (11.69)Transfer - - (0.06) (0.01) (0.04) 0.11 - -

stAs at 31 March 2018 18.61 7.24 674.27 47.48 0.88 11.08 759.55 411.60

Depreciation and Free Lease Plant Buildings Furniture Office Total Capital Impairment hold hold and and Fixtures Equipment Work-in- Land Land Machinery Including Progress Electrical Equipments

stBalance at 1 April 2017 0 0.23 22.65 1.75 0.15 1.22 26.01 -Depreciation expense - 0.09 17.20 1.17 0.09 2.32 20.87 - Impairment - - - - - - - - Disposal - (0.01) (0.03) (0.19) (0.23) - Transfer - - (0.02) - - 0.02 - -

stAs at 31 March 2018 - 0.32 39.82 2.92 0.21 3.37 46.64 -

Net Book Value Free Lease Plant Buildings Furniture Office Total Capital hold hold and and Fixtures Equipment Work-in- Land Land Machinery Including Progress Electrical Equipments

stAs at 31 Mar 2018 18.61 6.92 634.45 44.56 0.67 7.71 712.91 411.60 stAs at 31 Mar 2017 12.79 10.73 454.89 33.67 0.63 6.77 519.48 319.15

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Note 4 - Intangible Assets (` in Crores)

Cost/Valuation Right of Use Computer Total Soware/Licenses

1. Cost or Deemed Cost (gross carrying amount) stBalance as at 1 April 2017 0.35 18.22 18.56

Additions - 1.10 1.10 stAs at 31 March 2018 0.35 19.32 19.66

(` in Crores)

Accumulated Amortization and Impairment Right of Use Computer Soware/ Total Licenses

stBalance at 1 April 2017 0.00 4.20 4.20Amortization expense - 3.14 3.14

stAs at 31 March 2018 0.00 7.34 7.34

(` in Crores)

Net Book Value Right of Use Computer Software/ Total Licenses

stAs at 31 Mar 2018 0.35 11.97 12.32 stAs at 31 Mar 2017 0.35 14.02 14.37

Awareness Campaign at Various Sites



5 - Investments (` in Crores)

Investments Nature of Basis of Consol Consol Consol investment valuation adjustments adjustments adjustments As at As at As at As at As at 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-17 INR Crores INR Crores INR Crores INR Crores INR Crores Adj in P&L Adj in Retained Investments Earnings during the year

In Joint Venture Companies:

1 Andhra Pradesh Gas Distribution Equity shares Cost 17.73 (0.85) - 5.00 13.58 Corporation Limited 2,00,00,000 Equity shares of ` 10 each fully paid up (Previously 1,50,00,000 Equity shares of ` 10 each fully paid up)

2 Kerala GAIL Gas Ltd. Equity shares Cost 13.74 0.62 0.03 - 13.09 1,19,28,000 Equity shares of ` 10 each fully paid up (Previously 1,19,28,000 Equity shares of ` 10 each fully paid up)

3 Rajasthan State Gas Ltd. Equity shares Cost 54.19 (7.17) 0.02 47.98 13.37 6,00,00,000 Equity shares of ` 10 each fully paid up (Previously 1,70,25,000 Equity shares of ` 10 each fully paid up)

4 Vadodara Gas Limited Equity shares Cost 44.89 1.27 0.88 - 42.74 4,10,08, 940 Equity shares of ` 10 each fully paid up (Previously 4,10,08,940 Equity shares of ` 10 each fully paid up)

5 Haridwar Natural Gas Private Limited Equity shares Cost 7.10 (0.05) - - 7.15 75,00,000 Equity shares of ` 10 each

fully paid up) (Previously 75,00,000

Equity shares of ` 10 each fully paid up)

6 Goa Natural Gas Private Ltd. Equity shares Cost 7.16 (0.34) - 5.00 2.50 75,00,000 Equity shares of ` 10 each fully paid up (Previously 25,00,000 Equity shares of ` 10 each fully paid up)

Advances for Investments (Pending Allotment)

- Rajasthan State Gas Ltd. Cost - 2.97 - Andhra Pradesh Gas Distribution Corporation Limited Cost 2.50 7.50

-

Total (a) 147.31 (6.52) 0.93 57.98 102.90

Grand Total 147.31 (6.52) 0.93 57.98 102.90

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Note 6C - Loans & Other Receivables (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Interest Accrued but not due 0.18 -Total 0.18 - Non Current - - Current 0.18 -

Note 6 - Loans & Other Receivables (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Other Recoverables from related parties: - Receivables from joint ventures (Unsecured considered good) 8.70 6.21 Other Loans and Receivables: - Security deposits: - Unsecured, Considered Good 1.51 2.69 - Unsecured, Considered Doubtful 3.54 3.54 Less : Provision for Doubtful Deposits 3.54 3.54Total Loans and Receivables 10.21 8.90 Total 6A- Non Current 1.51 2.69 Total 6B-Current 8.70 6.21

Note 7 - Current Tax Assets (Net) (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Advance Tax and TDS 64.67 36.72 Less: Provision for Tax 61.74 33.67 Total 2.93 3.05 Total 7 A Non Current 0.35 0.25 Total 7 B Current 2.58 2.80

Note 8 - Inventories (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Stock in Trade 0.74 0.76 Finished Goods: Compressed Natural Gas 0.15 0.11 Stores and Spares: Stores and Spares 7.12 7.08 Material In Transit 0.66 0.82 Total 8.67 8.77



Break-up of Security details of Trade Receivables

Note 9 - Trade Receivables (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Trade Receivables 270.50 111.59 Receivables from related parties - -Total Trade and Other Receivables 270.50 111.59 Current 270.50 111.59 Non Current - -

Particulars As at As at 31-Mar-18 31-Mar-17Debts Outstanding for a period exceeding six months : Secured (Considered good) - - Unsecured (Considered good) 4.46 3.61 Unsecured (Considered doubtful): 1.57 1.25 6.03 4.86 Less: Provisions for bad and doubtful debts 1.57 1.25 4.46 3.61 Others DebtsSecured (Considered good) - - Unsecured (Considered good) 266.04 107.98 Unsecured (Considered doubtful): - - 266.04 107.98 Less: Provisions for bad and doubtful debts - - Total 266.04 107.98 Total Trade and Other Receivables 270.50 111.59

Note 10 - Cash and Cash Equivalents (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Balances with Banks: - Current accounts 2.59 0.80 - Corporate Liquid Term Deposit - SBI with maturity less than three months. 105.50 - - Corporate Liquid Term Deposit - ICICI with maturity less than three months. 158.40 - - Term Deposit with - SBI - 0.28Cash in hand 3.07 1.68Total 269.56 2.76

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Note 11 - Other Non Financial Assets (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Claims Recoverables: 53.93 148.19 (Unsecured considered good)Other advances recoverable in cash or in kind 4.97 3.54 (Unsecured considered good)Capital Advances 9.24 - (Unsecured considered good)Prepaid Expenses 1.72 0.65 Total 69.86 152.38 Total 11 A Non current 10.20 - Total 11 B Current 59.66 152.38

Note 12 - Equity Share Capital (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Share CapitalAuthorised 2,00,00,00,000 Equity Shares of ` 10 each 2,000.00 1,000.00 (Previous Year 1,00,00,00,000 Equity shares of ` 10 each) 2,000.00 1,000.00 Issued, subscribed and fully paid up 74,43,34,132 Equity shares of ` 10 each (in cash) 744.33 494.33 (Previous Year 49,43,34,132 Equity shares of ` 10 each) 13,26,65,868 Equity Shares of ` 10 each (otherwise than in cash). 132.67 132.67 (Previous Year 13,26,65,868 Equity shares of ` 10 each) 877.00 627.00

a) Reconciliation of the Shares outstanding at the beginning and end of the year

No. of Share Amount No. of Share AmountAt the beginning of the year 62,70,00,000 627.00 40,20,00,000 402.00 Issued during the year 25,00,00,000 250.00 22,50,00,000 225.00 Outstanding at the end of the year 87,70,00,000 877.00 62,70,00,000 627.00

st st 31 March 2018 31 March 2017

No. of Share % Holding No. of Share % HoldingEquity share of ` 10 Each fully Paid Up GAIL (India) Ltd. 87,70,00,000 100% 62,70,00,000 100%

st st 31 March 2018 31 March 2017

b) Details of Shareholding more than 5% shares in the company

c) The company has only one class of equity shares having a per value of ` 10 per share. The holders of the equity shares are entitled to receive dividendsas declared from time to time and are entitled to voting rights proportionate to their shareholdings at the shareholders meetings.

d) During the current year the company paid dividend of ̀ 0.30 per equity share for FY 2016-17 amounting to ̀ 18.81 Crores (excluding dividend distribution tax of ̀ 3.83 Crores) { in FY 2015-16 ̀ 0.20 per equity share amounting to ̀ 8.04 Crores (excluding dividend distribution tax of ̀ 1.64 Crores)

(` in Crores)



Note 14 - Borrowings (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Non Current BorrowingsSecured Term loans: - HDFC Bank Ltd - 51.11 Loan has been Swaped with HDFC w.e.f 27.01.2016. Secured against all the assets of Dewas, Kota, Meerut and Sonepat. Rate of Interest is 8.15 % p.a. during FY 2017-18 & FY 2016-17. - Oil Industry Development Board 138.12 118.11 Secured against all the assets of Dewas, Sonepat, Meerut, TTZ &Bengaluru Projects.Availed up to 31.03.2015 of ` 58 crores for TTZ Project.Availed during 2015-16 of ` 24.23 crores for Sonepat, Meerutand Dewas Project.Availed during 2016-17 and 2017-18 of ` 87.35 crores and ` 35.57 croresrespectively for Bengaluru Project.Loan is repayable in four equal instalments aer expiry of moratoriumof one year from the date of disbursement, for the amount of loandisbursed till financial year 2015-16.Loan is repayable in eight equal instalments aer expiry of moratorium of two years from the date of disbursement, for the amount of loan disbursed from financial year 2016-17 onwards. Loan disbursed in instalment from Feb 2013 to March 2018 with rate ofinterest from 7.00% to 9.27% per annum depending on dateof disbursement.Total 138.12 169.22 Current - - Non Current 138.12 169.22

Note 13 - Other Equity (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Other EquityShare Application Money pending AllotmentI) Consideration received in Cash pending Allotment of equity shares 150.00 - from GAIL (India) Ltd.Retained earningsOpening balance 152.11 98.06 Adjustment in Retained Earnings 0.93 - Add: Current Year Profit 74.23 63.73 Less: Appropriation - Tax adjustment 0.22 - - Dividend Paid 18.81 8.04 - Dividend Distribution tax Paid 3.83 1.64 Total 354.41 152.11

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Particulars As at As at 31-Mar-18 31-Mar-17Cash Credit from HDFC Bank - 9.48 Total - 9.48 Current - 9.48 Non Current - -

Note 16 - Current Liabilities - Borrowings (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Trade Payables (to related parties) 212.90 100.57 Trade Payable-Others 22.82 10.72Total 235.72 111.29Current 235.72 111.29Non Current - -

Note 17 - Trade Payables (` in Crores)

Note 18 - Other Financial Liabilities (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Current maturity of long term BorrowingsSecured Term loans: - HDFC Bank Ltd - 20.44 Loan has been Swaped with HDFC w.e.f 27.01.2016. Secured against all the assets of Dewas, Kota, Meerut and Sonepat. Rate of Interest is 8.15 % p.a. during FY 2017-18 & FY 2016-17 - Oil Industry Development Board 15.56 20.56Secured against all the assets of Dewas, Sonepat, Meerut & TTZ ProjectsAvailed up to 31.03.2015 of ` 58 crores for TTZ Project.Availed during 2015-16 of ` 24.23 crores for Sonepat, Meerut and Dewas ProjectLoan is repayable in four equal instalments aer expiry of moratorium of one year from the date of disbursementLoan disbursed in instalment from Oct 2013 to Jan 2016 with rate of interest from 7.97% to 9.27% per annum depending on date of disbursementDeposits/Retention Money from Customers/contractors/others 96.36 61.58 Other PayableOther Liabilities 6.70 4.34 Total other financial liabilities at amortised cost 118.62 106.92 Current 118.62 106.92 Non Current - -

Particulars As at As at 31-Mar-18 31-Mar-17Deferred Tax Liabilities 57.18 38.42Less: Corporate MAT Receivable 10.81 14.97Total 46.37 23.45

Note 15 - Deferred Tax Liabilities (Net) (` in Crores)



Note 19 - Provisions (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Provisions : Provisional Liabilities 66.55 30.08 Provision for Employee benefits 15.29 7.70 Provision for probable obligations 1.87 - Total 83.71 37.78 Current 83.71 37.78 Non Current - -

Note 20 - Other Current Non Financial Liabilities (` in Crores)

Particulars As at As at 31-Mar-18 31-Mar-17Statutory PayablesService Tax Payable - 0.19TDS, VAT, Excise, GST and WCT payable 62.10 5.91Total 62.10 6.10Current 62.10 6.10Non Current - -

Note 21 - Revenue from Operations (Gross) (` in Crores)

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Sale of products/Gas 4,533.43 2,728.06Gas Transmission Charges 65.94 63.58Other operating Revenues: Application Fees Domestic Connections 0.62 0.46 Interest Income from Customers & Others 0.95 0.59 Income from Extra Pipe Line 0.21 0.14 Income from Other Sales Service 0.09 0.01 Minimum Guranteed Oake Receipts 0.89 1.48 Total 4,602.13 2,794.32

Note : 22 - Other Income (` in Crores)

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Interest income 4.64 0.87 Miscellaneous Receipts 2.88 1.47 Tender fees - 0.03 Total 7.52 2.37

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Note : 23 - Gas Consumed (` in Crores)

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Opening Stock 0.87 0.37Add: Purchases 4344.05 2595.29less: Gas used as Fuel and gas loss 13.20 9.59Less: Closing Stock 0.89 0.87Gas Consumed 4330.83 2585.20

Note : 24 - Employee Benefit Expenses (` in Crores)

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Salary, Wages & Allowances 46.88 26.63 Contribution to Provident Fund 3.32 2.36 Welfare Expenses 9.42 8.59 Less: Employees Benefits Transferred to IEDC 24.30 16.70 Total 35.32 20.88

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Interest on Term Loan From Banks 2.92 5.80 Interest on Cash Credit Facilities 1.54 6.94 Interest on OIDB Loan 9.88 5.07 Interest -Others 1.03 - Less: Interest & Finance Charges transferred to IEDC 7.27 2.41 Total 8.10 15.40

Note : 25 - Finance Cost (` in Crores)

Note : 26 - Depreciation & Amortisation Expenses (` in Crores)

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Depreciation & Amortisation Expenses 23.36 13.72 Total 23.36 13.72



Note : 27 - Other Expenses (` in Crores)

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Power & Fuel Charges - Electricity Charges 1.25 0.73 - Fuel Charges 3.46 2.57 Rent-Office & Others 6.90 5.99 Repairs and Maintenance - Plant & Machinery 23.18 12.77 - Buildings 0.22 0.09 Insurance Charges 0.34 0.30 Rates & Taxes 0.85 0.32 Payment to Auditors - Audit Fees (incl other Certification) 0.05 0.05 - Taxation maer 0.01 - - Out of Pocket Expenses - 0.02 Stores & Spares Consumed 1.65 3.20 Loss/(Gain) of Foreign Currency Transaction 0.01 (0.04)Water Charges 0.01 0.01 Communication Expenses 0.24 0.25 Printing & Stationery 0.41 0.37 Travelling Expenses 2.17 2.23 Books & Periodicals 0.01 0.01 Advt & Publicity 3.96 1.08 Training Expenses 1.91 0.14 Vehicle Hire & Running Expenses 2.17 1.36 Consultancy & Legal Charges 6.02 2.39 Data Processing Expenses 2.69 2.06 Selling & Distribution Expenses 0.14 0.16 Dealer Commission 6.04 3.18 Security Expenses 3.44 1.63 Other Misc Expenses 3.13 1.30 CSR Expenses 0.79 - Loss on sale of Fixed asset 0.01 - Provision for Doubtful debts 0.32 0.16 Other Expenses - Abnormal Loss - 7.02 Business Development Expenses 0.80 - Other Expenses - Interest/Penalty Charges-Statutory - 0.10 Less: Expenditure transferred to CWIP IEDC- Security Expenses - 0.57 IEDC- Rent & Warehouse Expenses 1.96 2.98 IEDC - Travelling & Conv Expenses 1.01 0.90 IEDC – Vehicle Hire Charges - 0.31 Total 69.21 44.68

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Note : 28 - Tax Expenses (` in Crores)

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17Current Tax 23.31 21.57 Deferred Tax 19.59 12.84 Total 42.90 34.41

Particulars Year Ended Year Ended 31-Mar-18 31-Mar-17I. Revenue from Operations (Gross) 8.21 22.15 II. Other Income 0.03 0.06 III. Total Income (I+II) 8.24 22.21 IV. Expenses Gas Consumed 4.50 12.10 Excise Duty 0.72 1.86 Employee Benefit Expenses 0.38 1.74 Finance Cost 0.37 2.05 Depreciation and Amortization Expenses 0.65 1.94 Other Expenses 1.58 3.28 Total Expenses 8.20 22.97V. Profit before tax from discontinued operations 0.04 (0.76)VI. Gain/ (Loss) before tax on disposal of discontinued operations 12.53 - Total 12.57 (0.76)VII. Tax Expenses Discontinued Operations - Current 0.01 - - Deferred - - - Disposal of Discontinued Operations 7.85 - Total 7.86 - VIII. Profit Aer Tax from Discontinued Operations 4.71 (0.76)

st stFor the four months ended 31 July 2017 (Year Ended 31 March 2018 column) and stfor the entire year for Year Ended 31 March 2017

Note : 29 - Profit from Discontinued Operations

(` in Crores)



Share of Profit or Loss

1 Parent GAIL Gas Ltd. Balance as at March 31, 2018 100.66% 1,239.54 108.57% 80.75 0.00% - 108.57% 80.75 Balance as at March 31, 2017 100.33% 781.65 102.02% 65.02 0.00% - 102.02% 65.022 Joint Ventures (Investment as per equity method)A) Indiani) Andhra Pradesh Gas Distribution Company Limited Balance as at March 31, 2018 50.00% 1.44% 17.73 -1.14% (0.85) 0.00% - -1.14% (0.85) Balance as at March 31, 2017 50.00% 1.74% 13.58 -1.04% (0.66) 0.00% - -1.04% (0.66)ii) Vadodra Gas Limited Balance as at March 31, 2018 17.07% 3.62% 44.89 1.71% 1.27 0.00% - 1.71% 1.27 Balance as at March 31, 2017 17.07% 5.49% 42.74 0.73% 0.47 0.00% - 0.73% 0.47 iii) Rajasthan State Gas Limited Balance as at March 31, 2018 50.00% 4.37% 54.19 -9.66% (7.17) 0.00% - -9.66% (7.17) Balance as at March 31, 2017 50.00% 1.72% 13.37 -1.98% (1.26) 0.00% - -1.98% (1.26)iv) Kerala GAIL Gas Limited Balance as at March 31, 2018 50.00% 1.11% 13.74 0.83% 0.62 0.00% - 0.83% 0.62 Balance as at March 31, 2017 50.00% 1.68% 13.09 0.81% 0.51 0.00% - 0.81% 0.51 v) Haridwar Natural Gas Private Limited Balance as at March 31, 2018 50.00% 0.58% 7.10 -0.07% (0.05) 0.00% - -0.07% (0.05) Balance as at March 31, 2017 50.00% 0.92% 7.15 -0.54% (0.35) 0.00% - -0.54% (0.35)vi) Goa Natural Gas Private Limited Balance as at March 31, 2018 50.00% 0.58% 7.16 -0.46% (0.34) 0.00% - -0.46% (0.34) Balance as at March 31, 2017 50.00% 0.32% 2.50 0.00% - 0.00% - 0.00% -

S. No.

Name of theEntity

(% of Share)

As % of Consoli-

dated Profit or

Loss

Note : 30 - Additional Information as Required by Schedule III of Companies Act 2013 (` in Crores)

Proportion of

ownership interest as

ston 31 March, 2018

Net Asset (i.e., Total Asset

minus Total Liabilities)

As % of Consoli-

datedNet

Asset

Amount (` Crore)

Amount (` Crore)

Share in Total Comprehensive

Income

Share in Other Comprehensive

Income (OCI)

As % of Consoli-

dated OCI

Amount (` Crore)

As % of Total

Comprehensive Income

Amount (` Crore)

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31. Basis of Preparation

The Consolidated Financial Statements of the Company along with its Joint Ventures have been prepared in accordance with Indian Accounting Standards (IND-AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended. The consolidated f i n a n c i a l s t a t e m e n t s c o m p r i s e t h e f i n a n c i a lstatements of the company and its joint ventures as at

st31 March, 2018.

A joint ventures is a type of joint arrangement whereby the parties that have a joint control of the arrangement have right to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

Basis of Consolidation

The Company's investments in its joint ventures are accounted for using equity method. Under the equity method, the investment in a joint venture is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Company's share of net assets of the joint venture since the acquisition date. Goodwill relating to the joint venture is included in the carrying amount of the investment and is not tested for impairment individually.

Consolidation of the financial statements has been made based on the unaudited financial statements of the joint venture companies except Haridwar Natural Gas Private Limited (HNGPL) which is based on audited financial statements of the company. Further, consolidated financial statements include consolidated financial statements of Andhra Pradesh Gas Distribution Corporation Limited (APGDCL).

32. The employees working in the various disciplines have been identified as working for (a) project activities and (b) operation activities. Therefore, the employee cost and travelling expenses have been directly identified to

the project activities and operation activities on actual basis and accounted for accordingly. Expenses related to office rent of on going project have been allocated to Incidental Expenditure during the Construction and Statement of Profit & Loss in the ratio of manpower identified for project activities and operation activities during the year.

33. (a) The Authorized Share Capital of the Company has been increased to ` 2,000 Crores (Previous Year:` 1,000 Crores) during the year against which Equity Shares of ` 877 Crores (Previous Year: ̀ 627 Crores) has been issued as on balance sheet date with the approval of Board. Further, an amount of ` 150 Crores (Previous Year : NIL) has been received which is lying as Equity Share Capital pending Allotment of Equity Shares as on 31.03.2018.

(b) The Company is a 100% subsidiary of GAIL (India) Ltd. and the shares have been issued with the approval of Board.

34. (a) Capital Work in Progress (CWIP) includes asset under construction which are under different stage of completion and capitalization will be made as and when assets are ready to put to use.

(b) During the year, company has charged to revenue expenses amounting to ` 0.68 Crores incurred during the earlier years which were lying in CWIP on account of market survey expenses for Jabalpur and Jaipur Cities being of revenue nature.

35. (a) Title Deed in respect of Freehold Land measuring 3004.42 sq. mtr. amounting to ` 2.05 Crores (Previous Year: ` 1.90 Crores) which includes ` 0.15 crores (Previous Year: NIL) towards registration charges provided on provisional basis is pending for execution. Mutation of Freehold Lands is in process.

(b) Title Deeds in respect of Leasehold Land at Kota amounting to ` 3.71 Crores (Previous Year : ` 3.72 Crores) is in the name of the company but the physical possession of the land has been



transferred to M/s Rajasthan State Gas Ltd. (RSGL) on 31.07.2017 on account of transfer of Kota City Gas Distribution Business and the same has beende-capitalized during the year. The transfer in the name of the RSGL is in process.

36. Building of ̀ 47.48 Crores (Previous Year: ̀ 35.50 Crores) mainly includes :-

(a) Building of ` 12.46 Crores (Previous Year: ` 12.46 Crores) which is constructed on the land providedby GAIL (India) Ltd. and the terms and conditions of these lands are yet to be finalized.

(b) Building of ` 1.66 Crores (Previous Year: ` 1.66 Crores) is constructed on the land (2080 sq. mtr.) taken from Madhya Pradesh Audyogik KendraVikas Nigam Ltd. (MPAKVNL).

(c) Building of ` 8.32 Crores (Previous Year: ` 8.32 Crores) is constructed on the land measuring993 sq. meter provided by the Bengaluru Municipal Transport Corporation (BMTC) at free of costfor the CNG Station installed at BMTC bus depot with the condition of filling CNG Gas only to BMTC Buses. The documentation of which is pendingfor execution.

(d) Building of ` 3.24 Crores (Previous Year: ` 3.24 Crores) is constructed on the land provided by the dealer, warehouse providers etc.

37. Company has incurred an amount of ` 8.80 Crores (Previous Year: 0.44 Crores) for purchase of 8 no. of lands measuring 14,148 sq. meter from Karnataka Industrial Area Development Board (KIADB) under Lease cum Sale Basis for setting up of Industrial Project such as CNG Station etc. at Bengaluru. The total amount of ` 9.24 Crores as on 31.03.2018 pending execution of Lease cum Sale Agreement is lying under Capital Advance as KIADB shall sell the said land to the company at the end of two years or the extended period, if any, on satisfactory utilization of land as per the terms and conditions of agreement. The said land will be capitalized after

execution of sale / transfer agreement with KIADB on the fulfillment of the conditions.

38. In terms of disclosure requirement as per Ind-AS 23 on “Borrowing Costs”, total finance cost amounting to ̀ 13.17 Crores (Previous Year ` 13.00 Crores ) was incurred, out of which an amount of ` 7.27 Crores (Previous Year ` 2.41 Crores) was capitalized including amount allocated towards Capital Work in Progress during the period.

39. Company has pre-paid the entire term loan during the year amounting to ̀ 61.33 Crores availed from HDFC Bank as per terms of Loan Agreement which was secured against all the assets of Sonepat, Meerut, Dewasand Kota.

40. The company has an equity investment in a Joint Venture Company namely M/s Andhra Pradesh Gas Distribution Corporation Limited (APGDCL) of ` 22.50 Crores which includes funds contributed of ̀ 2.50 Crores in APGDCL. It has been contributed as per the joint venture agreement and shown as a part of investment as advances for investments pending allotment.

41. Claim Recoverable includes an amount of ̀ 48.50 Crores (Previous Year ` 112.67 Crores) towards refund of VAT (excess of VAT paid on purchase of gas over the amount of VAT recovered on sale of gas) in the state of Haryana and Gujarat. The recovery of balance refund isbeing pursued with concerned authorities and is considered good.

42. The Incidental Expenditure during Construction amounting to ̀ 27.33 Crores (Previous Year ̀ 21.98 Crores) have been allocated to completed Project & Capital Work in Progress in the ratio of allocated cost of assets.

43. Company has sold Kota CGD Business (dealing in Natural Gas Business) to M/s Rajasthan State Gas Ltd. (RSGL) on 31.07.2017, a joint venture company of GAIL Gas Ltd and Rajasthan State Petroleum Corporation Ltd., at a total consideration of ` 80 Crores as per Business Transfer Agreement (BTA). Company has transferred all the assets including Land, Building, Plant & Machinery, CWIP

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etc. to the joint venture company on 31.07.2017 and net profit (net of tax) of ` 4.71 Crores has been shown as Income from discontinued operation in the Statement of Profit & Loss (Refer to Note-29) for the period ended 31.03.2018.

Venture Company. These assets have not been classified as “Assets held for sale” as on reporting date as the final decision and approval of the Shareholders and Holding Company is pending since 12.11.2014.

45. Salary and Allowances payment of employees posted at GAIL Gas Ltd. are being paid by GAIL Gas Ltd. However, the provisions in respect of employee's benefits and disclosure requirements in terms of Ind AS 19 havenot been provided in accounts as the same have been complied by Holding Company (M/s GAIL (India) Ltd.)

46. Capital Commitment:

a) i. The estimated amount of contracts over ` 5 lacs amounting to ` 393.09 Crores (Previous Year` 258.14 Crores) are remaining to be executed on capital accounts and not provided for.

ii. The Company has no uncalled liability on shares and other investments partly paid.

iii. Company's Share in estimated amount of contracts remaining to be executed on capital accounts and not provided for in JV Companies based on audited / unaudited financial statements is ` 44.83 Crores (Previous Year:` 11.56 Crores)

47. Contingent Liabilities :

a) Claims against the company not acknowledgedas debts :

i) Legal & other cases for claims of ̀ 123.94 Crores (Previous year: ` 44.69 Crores) by vendors/ suppliers/contractors etc.

ii) Disputed Indirect tax Demand in respect of Excise and VAT cases is of ` 1.89 Crores (Previous year : ̀ 1.74 Crores).

iii) Bank Guarantee taken from Banks of ` 12.26 Crores (Previous year : ` 12.32 Crores) towards permission charges for various cities from Central and State Authorities.

iv) Company has issued Corporate Guarantee of

a. The details of sales are as under :` in Crores

Description 31.03.2018 31.03.2017Cash Received 40.00 -Equity Share Received 40.00 -Total Consideration Received 80.00 -Carrying amount of net assets 67.47 -on the date of sale Gain on sale before Income tax 12.53 -Income Tax on Gain on sale 7.85 -of BusinessGain on sale after Income tax 4.68 -

b. The details of carrying amount of assets and liabilities as on date of sales (31.07.2017) are as under :-

(` in Crores)Description Amount Property Plant and Equipment 53.91Capital Work in Progress 11.69Inventories 0.08Other Current Assets 1.79Total Assets 67.47Other Current Liabilities -Net Assets 67.47

c. Further, other activities pertaining to the BTA are in process including transfer of security deposits of` 0.92 Crores received by the company from the various customers to the RSGL.

44. The net assets amounting to ` 5.27 Crores as on 31.03.2018 includes Building of ` 2.92 Crores and Plant & Machinery of ` 2.35 Crores on which no depreciation has been charged during the year as the same are not in use by the Company as they are in the possession of Andhra Pradesh Gas Distribution Corporation Ltd., a Joint



` 6703.99 Crores (Previous year: ` 6703.99 Crores) to PNGRB towards minimum work programme in respect of Bengaluru City andfor Goa Natural Gas Pvt. Ltd., a joint venture company.

v) Share in Contingent Liabilities JV Companies b a s e d o n a u d i t e d / u n a u d i t e d f i n a n c i a lstatements is ` 17.64 Crores (previous Year :` 31.01 Crores).

48. Provisional liability of ` 68.89 Crores (Previous Year :` 30.83 Crores) has been made in the books of accounts as at 31.03.2018 which will be settled as per actual bills.

49. During the year, PNGRB en-cashed the Bank Guarantee amounting to ̀ 0.75 Crores for not meeting the Minimum Work Commitment Programme for TTZ CGD in terms of Court Order dated 03.11.2017 and the same has been accounted for in Capital work in progress.

50. In compliance to PNGRB Regulation all the CNG Stations of the company are having PESO/CCOE License which is mandatory for commencement of commercial operations. However, additionally the company has also applied for Factory Licenses for its Company Owned CNG stations, which is under progress. Further, necessary advice has been given to owners of CNG Stations operated under Retail Outlet of Oil Marketing Companies and Dealer Owned Dealer Operated Model to obtain the Factory License in respect of their CNG Stations.

51. rdBoard of Director in its 63 meeting held on 27.10.2017 approved the purchase of 5 Last Mile Connectivity Assets from GAIL (India) Ltd. in Bengaluru City at an estimated book value of ` 53.39 Crores as on 30.06.2017 plus applicable taxes. Further, the asset transfer value shall be at the book value as on the date of transfer plus any taxes (other than taxes on income) involved in the transaction including any stamp duty. These assets are yet to be transferred to the Company.

52. During the year, company has issued the “Letter of

Comfort” to PNGRB to meet the minimum eligibility criteria by Andhra Pradesh Gas Distribution Corporation Ltd., (APGDCL) a joint venture company of GAIL Gas Ltd. and Andhra Pradesh Gas Infrastructure Corporation, as per regulation 5 (6) of the PNGRB Regulations 2008 (Authorising Entities to lay, build, Operate or Expand Natural gas Pipelines) as necessary documentary evidence in support for application submitted to PNGRB for Expression of Interest for Natural Gas Pipeline from Srikakulam to Angul by APGDCL. The process of bidding by PNGRB is awaited, hence, it has not been treated as Contingent liability.

53. Investments include a sum of ` 11.93 Crores as equity investment in Kerala GAIL Gas Ltd. (KGGL), one of the joint venture company, by the company which is in the process of voluntary winding up and reduction of equity share capital. No diminution in value of the investment has been considered and the investment has been valued at cost as the assets of KGGL mainly consists of current assets in the form of deposits with Schedule Commercial Banks and there is no diminution in the value of such deposits on the reporting date.

54. Department of Investment & Public Asset Management (DIPAM) Government of India, Ministry of Finance, has vide OM No. F. No. 5/2/2016-Policy dated 27.05.2016 issued Guidelines on Capital Restructuring of Central Public Sector Enterprises (CPSEs) which inter-alia includes Payment of Dividend, Issue of Bonus Shares, Buyback of Shares etc. The guidelines for payment of dividend shall be applicable from financial year ending on

stor after 31 March, 2016. Since, the company has paid the lower dividend during the FY 2015-16 and FY 2016-17 and submitted an application on 01.09.2017 for FY 2015-16 and 27.09.2017 for FY 2016-17 for grant of relaxation to Department of Investment and Public Asset Management (DIPAM) on dividend payment through Administrative Ministry to Secretary, Department of Economic Affairs and Secretary, DIPAM. Reply is awaited.

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119

55. As per Ind AS 17 on Lease, the disclosure in respect of Leases is as under :-

Finance Leases

(a) Lease Deed executed with UPSIDC for lease hold land in Kosi Industrial Area, Uttar Pradesh for putting up CNG Station and Gas Grid on commercial terms.

- The period of lease is 90 years from 07.10.2013 with one time premium of ` 5.95 crores (including Registration Charges and One Time Lease Rental for 90 years of ̀ 0.46 crores).


- Since entire lease rent has been paid at the inception and no future lease rent is payable, therefore, the other disclosure requirements does not exist.

(b) Lease Deed executed with RIICO, Jaipur for lease hold land in Bharatpur, Rajasthan for putting up CNG Station and District Regulating Station (DRS) on commercial terms.

- The period of lease is 99 years from 16.07.2014 with one time premium of ̀ 1.20 crores (including Registration Charges).


- Since annual lease rent is only ̀ 209/- per annum therefore the other disclosures requirementare not material.

Operating Leases

a. During the year, company has paid a sum of ` 55.60 Lakhs as one time premium in respect of land taken on lease from Nazul Department, Collectorate Dewas, MP for a period of 30 years for purpose of setting up of a District Regulating Station (DRS). The rent payable has been determined at circle rates. Lease is renewable after 30 years and lease rent will be decided based upon the then prevailing

terms and conditions at that time and there is no contingent rent payable.

Accordingly, a sum of ̀ 0.64 Lakhs has been charged to Profit and Loss Statement during the year and the balance amount of ` 54.96 lakhs has been shownas pre-paid expenses (Refer Note 11–OtherNon Financial Assets)

As per terms of agreement, an annual lease / ground rent of ` 0.42 lakhs is payable and lease is renewable. Total of future minimum lease payment for each of the period as specified in Ind AS 17 isas under :-

Not later than 1 year ` 0.42 lakhs

Later than 1 year but not ` 1.67 lakhs later than 5 year

Later than 5 years ` 10.00 lakhs

b. Lease Deed executed with Bharat Electronics Limited, Bengaluru for land in Bengaluru, Karnataka for putting up District Regulating Station (DRS). The period of lease is 10 years from 01.10.2015 to 30.09.2025 with a provision of yearly rent of ` 3.20 lakhs subject to renewal at every 12 months commencing from 01.10.2016 for an annual rent of` 3.35 lakhs with 5% escalation every year on enhanced rent. Total of future minimum lease payment for each of the period as specified in IndAS 17 is as under :-




c. Lease deed executed with Kerala Rural Poor and handicapped Women's Development Society, Bengaluru for land in Bengaluru, Karnataka for putting up District Regulating Station (DRS). The period of lease is 10 years from 11.01.2017 to 10.01.2027 with a provision of yearly rent of `4.79



lakhs with 5% escalation every year. Total of future minimum lease payment for each of the period as specified in Ind AS 17 is as under :-




56. Disclosure under the Micro, Small and Medium Enterprises Development Act, 2006 (“MSMED Act, 2006”):

(` in Crores)Particulars 2017-18 2016-17

i) The principal amount and the interest due thereon remaining unpaid to any supplier as at the end of each accounting year;

ii) The amount of interest paid by the buyer in terms of Section 16 of MSMED Act 2016, along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year;

iii) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act;

iv) The amount of interest accrued and remaining unpaid at the end of each accounting year; and

v) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure under Section 23 of MSMED Act 2016.

NIL NIL

NIL NIL

NIL NIL

NIL NIL

NIL NIL

The above information regarding micro, small and medium enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company.

57. Disclosure under Corporate Social Responsibility Expenses :-

a. As per Section 135 of the Companies Act 2013 read with DPE Guidelines, the company is required to spend ` 1.18 Crores during the current year. Amount incurred during the year is ` 0.79 Crores (Previous Year – ̀ NIL) as per details given below :-

(` in Crores) In Cash Yet to be Total paid in Cashi). Construction/ NIL NIL NIL acquisition of any assetii). On purposes other 0.79 0.39 1.18 than (i) above

th b. Further, Board of Directors in its 59 meeting held on 18.05.2017 approved the CSR Policy along with administrative guidelines of the Company. Therefore, no CSR activity was identified by the company before the approval of CSR Policy and no provision has been made in the books of accounts in accordance with generally accepted accounting principles. Accordingly, a non-lapsable CSR expenditure of ` 1.52 Crores upto financial year 2016-17 is required to be spent in the subsequent financial years.

58. The company operates in a single segment of Natural Gas Business, therefore, disclosure requirements as per IndAS 108 “Operating Segment” are not required. HoweverEntity-wise disclosures are as below:-

Information about products and services: The Company is in a single line of business of “Sale of

Natural Gas”. Geographic Information: The company operates presently in the business of Natural

Gas, including City Gas Distribution in India. Accordingly, revenue from customers and all assets are located inIndia only.

120


121

Information about major customers:st Two customers during the year ended 31 March 2018 and

stNine Customers during the year ended 31 March 2017 contributed to more than 10% of the revenue individually. Revenue from these customers was ` 3550.67 Crores and

st` 2019.90 Crores during the year ended 31 March, 2018 and st31 March, 2017 respectively.

59. Related Party Disclosures A. The entire Equity Share Capital of the Company is

held by GAIL (India) Ltd. (Holding Company) either singly or jointly.

B. Related Party disclosure as per Ind AS 24. a. Relation and name of the related parties are:

i. Holding Company - GAIL (India) Ltd.

ii. Indian Joint Venture Companies Andhra Pradesh Gas Distribution Corporation Ltd.

(APGDCL)

Kerala GAIL Gas Limited (KGGL)

Vadodara Gas Limited (VGL)

Rajasthan State Gas Limited (RSGL)

Haridwar Natural Gas Pvt. Ltd. (HNGPL)

Goa Natural Gas Pvt. Ltd. (GNGPL)

iii. Other (Joint Venture Companies of Holding Company)

Indraprastha Gas Ltd.

Central UP Gas Ltd.

Green Gas Ltd.

iv. Key Management Personnel: Chairman & Non-Executive Director-Mr. B. C. Tripathi

Non-Executive Director - Mr. Ashutosh Karnatak (upto 05.05.2017) Mr. Subir Purkayastha Mr. Gajendra Singh (from 05.05.2017) Mrs. Anuradha Sharma Chagti Mr. R. C. Gupta (upto 31.08.2017) Mr. A. K. Tiwari (from 04.09.2017) Mr. A. K. Jana (upto 23.04.2018) Mrs. Vandana Chanana (upto 05.05.2017) Chief Executive Officer: - Mr. Pankaj Kumar Pal (upto

30.04.2018) and Mr. A. K. Jana (from 01.05.2018) Chief Financial Officer: - Mrs. Jyoti Dua (upto

31.05.2017) and Mr. Pankaj Walia (from 31.05.2017) Company Secretary: - Mr. Deepak Asija

Consortium with Assam Gas Limited & Oil India Limited Independence Day



1. Purchase of Goods / Material 4348.81 - - (2607.74) (-) (-)2. Interest on Delayed Payment 0.01 - - (-) (-) (0)3. Sales of Goods (Material) / Material Issued on Loans 9.51 138.12 -- (-) (-) (0)4. Reimbursement of Remuneration to Key Management personnel- - - 1.93 Salary & Allowances (-) (-) (1.00)5. Reimbursement of remuneration to staff - 14.74 - (-) (8.63) (-)6. Rent, Electricity and UCS Expenses 3.47 - - (3.00) (-) (-)7. Outstanding Balance Payable 221.53 0.20 - (101.73) (101.73) (101.73)8. Outstanding Balance Receivable 9.51 14.58 - (-) (6.21) (-)9. Provision for Bad Debt - - - (-) (0.16) (-)10. Bad Debt written off - - - (-) (-) (-)11. Corporate Guarantee given to OIDB for term loan availed as at - - - Balance Sheet date (118.00) (-) (-)12. Corporate Guarantee given to Banks for BG issued on behalf of the 5951.99 - -- Company as at Balance Sheet date (5951.99) (-) (-)13. Investment in APGDCL as at Balance Sheet date (JV) - 20.00 - (-) (15.00) (-)14. Advance to APGDCL against Equity Share pending Allotment of Share - 2.50 - (-) (7.50) (-)15. Investment in KGGL as at Balance Sheet date (JV) - 11.93 - (-) (11.93) (-)16. Investment in VGL as at Balance Sheet date (JV) - 41.01 - (-) (41.01) (-)17. Investment in RSGL as at Balance Sheet date (JV) - 65.00 - (0) (17.03) (0)18. Advance to RSGL against Equity Share pending Allotment of Share - - - (-) (2.97) (-)19. Investment in HNGPL as at Balance Sheet date (JV) - 7.50 - (-) (7.50) (-)20. Investment in GNGPL as at Balance Sheet date (JV) - 7.50 - (-) (2.50) (-)21. Share allotment to Holding Company. 250 - - (225) (-) (-)22. Advance against Equity Share pending Allotment of Share 150 - - (-) (-) (-)

*Others include joint venture companies of Holding Company. (Figure shown in brackets pertains to previous year).

Sl.No.

Particulars Holding Co.Joint

Venture &Others*

KeyManagement

Personnel

(` in Crores) (b) Related Party Transactions

122


123

The company has formed six Joint Venture Companies by executing Joint Venture Agreement/Shareholder Agreement with various State Governments and Corporates. In all these companies, it was agreed that Equity Shareholding of both the promoters will be in equal ratio till the time strategic investor comes in. However, after the investment of strategic investor, the shareholding of both the promoters will be as per the Shareholder Agreement executed amongst them.

There is no provision towards payment of Management Fees to the operator hence no management fee has been paid and no provision has been made in the books of accounts for same.

No provision has been made for the leasehold charges in respect of land provided by Holding Company M/s GAIL (India) Ltd. used for setting up CNG Station at Dibiyapur, Vijaipur, and Bengaluru as the terms and conditions are yet to be finalized.

61. In compliance of Ind AS 36 on “Impairment of Assets”, company has carried out an assessment of impairment of assets and there are no impaired assets.

62. In compliance of Ind AS 37 on “Provisions, Contingent Liabilities and Contingent Assets” the required information on provision for probable obligations is as under :-

60. Earning Per Share

Particulars 2017-18 2016-17Profit after Tax from Continuing 69.52 64.49Operations (` in Crores)

Profit after Tax from Discontinued 4.71 (0.76) Operation (` in Crores)

Weighted Average 2,95,79,81,756 53,18,41,096No. of Equity Shares

Nominal Value per Share (in ̀ ) 10.00 10.00

Basic Earning per Share (in ̀ )

From Continuing Operations 0.24 1.21

From Discontinued Operations 0.01 (0.01)

Total 0.25 1.20

Diluted Earning per Share (in ̀ )

From Continuing Operations 0.24 1.21

From Discontinued Operations 0.01 (0.01)

Total 0.25 1.20

(` in Crores)

Direct Tax 33.67 31.17 3.10 61.74Deferred Tax 23.45 19.59 (3.33) 46.37Legal & Arbitration 44.69 83.78 4.53 123.94Cases

Provisions OpeningBalance

Additionsduring

the year

Reversal /adjustment

duringthe year

ClosingBalance

63. In compliance of Ind AS 12 on “Income Taxes” issued by the Institute of Chartered Accountants of India, the Company has created tax liability as per details given below:-

a) Income Tax related to items charged or credited directly to profit or loss during the year

(` in Crores)st stStatement of Profit or Loss 31 March 31 March

2018 2017Current Income Tax:Current Income Tax Charge from ordinary 23.31 21.57activities (Continuing Operations) Current Income Tax Charge from ordinary 0.01 - activities (Discontinued Operations) Current Income Tax Charge on Gain on 7.85 -disposal of Discontinued Operations 31.17 21.57 Deferred Tax: Relating to origination and reversal 19.59 12.84of temporary differences(Continuing Operations) Relating to origination and reversal - -of temporary differences(Discontinued Operations) 19.59 12.84Income Tax Expense (Continuing 42.90 34.41 Operations) Income Tax Expense (Discontinued 7.86 - Operations)



b) Reconciliation of Effective Tax Rate (Continuing Operations)

(` in Crores)st st 31 March 31 March

2018 2017Profit Before Income Taxes 118.94 100.19 Effective Tax Rate 19.60% 21.53%Computed Effective Tax Expenses 23.31 21.57 Movement in Deferred Tax Liability 19.59 12.84 Income Tax charged to Statement 42.90 34.41 of Profit & Loss Effective Tax Rate 36.07% 34.34%

c) Recognized Deferred Tax Assets and Liabilities :-

Deferred Tax Assets/ (Liabilities) are attributable to the following:

64. The management of the Kerala GAIL Gas Ltd. in its Board meeting of the Directors held on 15.09.2017 decided that the share capital of the company be reduced to ` 1 lakhs i.e. 10,000 equity shares of ` 10/- each from 23,85,60,000/- i.e. 2,38,56,000 equity shares of ` 10/- each by buyback of shares. The decision of the Board of Directors was further confirmed in the General Body Meeting of the Company also held on 15.09.2017. The Managing Director of the Company was authorized to file the necessary documents with the Regional Directors, National Company Law Tribunal and such other authorities to complete the formalities. The petition for the reduction of share capital of the company has been filed with the National Company Law

(` in Crores)

Property, Plant and Equipment (59.62) (40.08) (20.37) (12.90)Provisions 2.44 1.66 0.78 0.06Deferred Tax Assets/ (Liabilities) (57.18) (38.42) (19.59) (12.84)Offsetting of Deferred Tax - - - -Assets/ (Liabilities)Net Deferred Tax Assets /(Liabilities) (57.18) (38.42) (19.59) (12.84)

Particulars st31March2018

st31March2017

st31March2017

st31March2018

BalanceSheet

Statement ofProfit & Loss

Tribunal, Chennai Bench on 25.01.2018. the hearing of the petition filed with the NCLT was held on Monday, 25.03.2018 and as directed by NCLT, company has published notice in Form No. RSC-4 in Newspapers. The next hearing for the proposed reduction of share capital has been posted on 02.07.2018. As these situation exists, going concern assumption not followed in preparationof financial statements.

65. Notes on Financial Risk Management

Financial Risk Management

The Company's Financial Risk Management is an integral part of how to plan and execute its business strategies. This note explains the sources of risk which the entity is exposed to and how the company manages the risk. The Company is exposed to market risk, credit risk and liquidity risk. Board of Directors of the company has overall responsibility for the establishment and oversight of the Company's Risk Management Framework.

(i) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. It is a risk of changes in market prices such as foreign exchange rates and interest rates that will affect Company's income or the value of its holding of financial instruments.

(a) Interest Rate Risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long term debt obligations with floating interest rates. The company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and investing in fixed interest instruments.

124


125

The sensitivity analysis is limited only to variable rate on loans and borrowings and is conducted with all other variables held constant. The analysis is prepared with the assumption that the amount of variable rate liability outstanding at the balance sheet date was outstanding for the whole year. Further, there is no loan outstanding as on 31.03.2018 having variable rate of interest, hence, there is no impact on the Company's profit before tax during the year ended 31.03.2018.

(b) Foreign Currency Risk:

The Company does not have significant exposure in currency other than INR.

(ii) Liquidity risk

Liquidity Risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company's objective is to maintain at all times optimum levels of liquidity to meet its cash and collateral requirements to meet the payment obligations. The Company closely monitors its liquidity position and deploys a robust cash management system. It also maintains adequate source of finance in the form of short term and long

(` in Crores)

Reporting Increase/decrease in Impact on profit period interest rate basis points before taxes31.03.2018 +100 NIL -100 NIL31.03.2017 +100 (0.81) -100 0.81

Sensitivity analysis:

The table below summarizes the impact of a potential increase or decrease on the Company's profit before tax as applied to the variable element of interest rates on loans and borrowings. The increase/decrease is based on management estimates of potential interest rate movements.

(iii) Credit Risk

Credit Risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily from trade receivables) and from its financing activities, including deposits with banks and financial institutions. Credit exposure also exists in relation to guarantees issued by the company.

Customer credit risk is managed by each business unit subject to the Company's established policy, procedures and control relating to customer credit r i s k m a n a g e m e n t . O u t s t a n d i n g c u s t o m e r receivables are regularly monitored and reviewed for impairment. The summary of the Company's product wise credit policy is tabulated below:

Morethan

5 yearsTotalAs at

31.03.2018On

demand

(` in Crores)Less

than 3months

3-12months

1-5years

Interest-bearing - 3.08 12.48 72.22 65.90 153.68loans andborrowings Trade and - 235.72 - - - 235.72other payables Other financial 71.28 0.34 31.44 - - 103.06liabilities

Morethan

5 yearsTotalAs at

31.03.2017On

demand

(` in Crores)

Lessthan 3

months

3-12months

1-5years

Interest-bearing 9.48 17.02 38.81 167.37 36.98 269.66loans andborrowings Trade and other - 111.29 - - - 111.29payables Other financial 43.39 4.63 17.90 - - 65.92liabilities

term borrowings. The contractual maturities of the Company's financial liabilities are presented below:



Product Credit periodPiped Natural Gas (Domestic) 21 daysPiped Natural Gas (Industrial) 03/ 07 daysPiped Natural Gas (Commercial) 07 daysCompressed Natural Gas (CNG) Cash sales

(` in Crores)

31.03.2018 257.81 2.90 3.13 0.63 6.03 270.5031.03.2017 103.63 3.32 0.55 0.49 3.60 111.59*Net of Provision

Tradereceivables

Neitherpast due

norimpaired

Past due but not impaired

Less than30 days

30-60days

60-90days

Above90 days Total*

The company does not expect any significant credit risk out of its exposure to trade receivable as the major part of revenue is contributed by either through cash sales or within credit period of 3-21 days. The aging analysis of trade receivables as of the reporting date is as follows:

The following table summarizes the changes in the allowances for doubtful accounts for trade receivables:

(` in Crores)st stProvisions 31 March 2018 31 March 2017

Start of the year 1.25 1.08Provision for Doubtful Debt 0.32 0.17Receivables written off duringthe year as uncollectible - -Unused amounts reversed - -End of year 1.57 1.25

Cash Deposits:

The cash deposits are held with public and private sector banks. Further, company is also investing its surplus funds into Banks linked with Current Account. There is no impairment on these cash deposits as on the reporting date and comparative period.

Capital Management For the purpose of the Company's capital management,

capital includes issued capital and all other equity reserves attributable to the equity holders of the parent

company. The primary objective of the Company's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise the shareholder value.

The Company's management assesses regularly the net debt to capital employed ratio to ensure it maintains a balance between borrowings and capital position. The net debt to capital employed ratio enables the users to see how significant net debt is relative to capital employed. The Company's net debt to capital employed ratio was as follows:

(` in Crores)

Particulars 31.03.2018 31.03.2017Total Liabilities 684.64 464.24Less: Cash and cash equivalents (269.56) (2.76)Net debt (A) 415.08 461.48Total equity (B) 1231.41 779.11Capital and net debt (A+B) 1646.49 1240.59Gearing ratio 25.21% 37.19%

Fair value measurementsThe Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data

(` in Crores)

Financial Assets atamortised cost: Loans and Other Receivables 10.21 - - -Trade Receivables 270.50 - - -Cash and Cash Equivalents 269.56 - - -At fair value through - - - -Profit and Loss


As at 31.03.2018:


Fair value

126


127

Cash and short-term receivables, trade receivables, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair values of non-current financial assets (such as security deposits) and long-term fixed-rate and variable-rate borrowings are considered to be same as their carrying values as the impact of fair valuation is not material.

66. Balance confirmation has been sought from vendors / contractors / authorities / joint venture companies for balances grouped under loan and advances, deposits and sundry creditors. However reconciliation of accounts with parties is carried out as ongoing process and balances are subject to reconciliation and consequent adjustment which in the opinion of the management are not material.

67. Previous Year's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification/disclosure.

(` in Crores)

At fair value through OCI - - - -Total Financial Assets 550.27 - - -Financial Liabilities atamortized cost Borrowings 138.12 - - -Trade Payables 235.72 - - -Other Financial Liabilities 118.62 - - -At fair value through - - - -Profit and Loss Total Financial Liabilities 492.46 - - -


As at 31.03.2018:


Fair value

(` in Crores)

Financial Assets atamortised cost:Loans and Other Receivables 8.90 - - -Trade Receivables 111.59 - - -Cash and Cash Equivalents 2.76 - - -At fair value through - - - -profit and loss At fair value through OCI - - - -Total Financial Assets 123.25 - - -Financial Liabilities atamortized cost Borrowings 178.70 - - -Trade Payables 111.29 - - -Other Financial Liabilities 106.92 - - -At fair value throughprofit and loss - - - -Total Financial Liabilities 396.91 - - -


As at 31.03.2017:


Fair value















stThe presentation of consolidated financial statements of GAIL Gas Limited for the year ended 31 March 2018 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the Management of the company. The statutory auditor appointed by the Comptroller and Audit General of India under Section 139(5) readwith Section 129(4) of the act is responsible for expressing opinion on the financial statements under section 143 readwith Section 129(4) of the Act based on independent audit in accordance with the standards on auditing prescribed

rdunder Section 143(10) of the act. This is stated to have been done by them vide their Audit report dated 23 May 2018.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 143(6) (a)read with Section 129(4) of the Act of the consolidated financial statements of GAIL Gas Limited for the year ended

st31 March 2018. We conducted the supplementary audit of the financial statements of GAIL Gas Limited (the Company)and two Joint Venture companies viz. Haridwar Natural Gas Private Limited and Goa Natural Gas Private Limited, butdid not conduct supplementary audit of financial statements of joint venture companies viz. Kerela GAIL Gas Limited,Rajasthan State Gas Limited and Andhra Pradesh Gas Distribution Corporation Limited for the year ended on that date. Further, Section (139) (5) and Section 143(6) (b) of the act are not applicable to Vadodara Gas Limited (Joint Venture), beingprivate entity, for appointment of its statutory auditor and for conduct of supplementary audit. Accordingly, C&AG hasneither appointed the statutory auditor nor conducted the supplementary audit of Vadodara Gas Limited. This supplementary audit has been carried out independently without access to the working papers of the statutory auditor and is limitedprimarily to inquiries of the statutory auditor and company personnel and a selective examination of some of theaccounting records.

On the basis of my audit nothing significant has come to my knowledge which would give rise to any comment uponor supplement to statutory auditor's report.

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) READ WITH SECTION 129(4) OF THE COMPANIES ACT, 2013 ON THE CONSOLIDATED FINANCIAL STATEMENTS OF GAIL GAS LIMITED FOR THE YEAR ENDED

st31 MARCH 2018.


For and behalf of the Comptroller & Audit General of India

Sd/-(Nandana Munshi)

Director General of Commercial Audit& Ex- officio Member, Audit Board- II, New Delhi

128

Registered Office :GAIL Bhawan, 16, Bhikaiji Cama Place,R. K. Puram, New Delhi-110066, India

Phone +91-11-26172580Corporate Office :

th th13 & 14 Floor, GAIL Jubilee Tower, B-35 & 36, Sector-1, NOIDA - 201301, U.P, India

Phone : +91-120-2446400 Fax : +91-11-26185941 Website : www.gailgas.com

CIN : U40200DL2008GOI178614

(A wholly owned subsidiary of GAIL (India) Limited)GAIL Gas Limited

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