Gujarat Gas Ltd Directors Report.

Dear Members,

Gujarat Gas Limited

Your Directors have pleasure in presenting the 7th Annual Report and the Audited Financial Statements for the Financial Year ended on 31st March 2019.

Hnanda1 Highlights

Standalone Financials

Consolidated Financials

Particulars 12 Months ended 31/03/2019 12 Months ended 31/03/2018 12 Months ended 31/03/2019 12 Months ended 31/03/2018
Revenue from Operations 7,962.48 6,339.35 7,962.48 6,339.35
Other income 111.28 35.68 111.56 35.86
Total income 8,073.76 6,375.03 8,074.04 6,375.21
Profit before interest, depreciation and tax 1,078.05 930.74 1,078.33 930.92
Less : Interest 196.19 196.08 196.19 196.08
Depreciation 288.01 271.82 288.01 271.82
Profit before tax 593.85 462.84 594.13 463.02
Share of Profit from equity accounted investee - - 1.49 1.25
Minority Interest - - - -
Profit/(Loss) Before Tax and share of profit of associate 593.85 462.84 595.62 464.27
Tax expenses 176.82 171.48 177.17 171.83
Net Profit after tax for the period 417.03 291.36 418.45 292.44
Other Comprehensive Income ( after tax)(OCI)
Equity Instruments through OCI (0.03) (40.55) (0.03) (40.55)
Remeasurements of post-employment benefit obligation, net of tax (2.03) 0.43 (2.03) 0.43
Share of Other comprehensive income of equity accounted investee (0.03) 0.04
Total Comprehensive Income 414.97 251.24 416.36 252.36
Profit carried to retained earnings 417.03 291.36 418.45 292.44
Impact of Changes in accounting policy (36.96) - (36.96) -
Impact of Changes in accounting policy- share of equity accounted investee - - (0.08) -
Other Comprehensive Income carried to retained earnings (2.03) 0.43 (2.06) 0.47
Refund of earlier years Dividend distribution tax 25.96 - 25.96 -
Add: Undistributed profit /(loss) of earlier years 939.05 696.97 959.02 715.82
Balance available for Appropriation 1,343.05 988.76 1,364.33 1,008.73
Less : Appropriations :
Transfer to general reserve - - - -
Preference dividend - - - -
Equity dividend (55.07) (41.30) (55.07) (41.30)
Corporate dividend tax on Equity dividend (11.32) (8.41) (11.32) (8.41)
Surplus / (Deficit) retained 1,276.66 939.05 1,297.94 959.02
Earnings per Share (Face value of Rs. 2 each) (Basic & Diluted) 6.06 4.23 6.08 4.25


During the financial year 2018-19, the revenue from operations grew by 25.60% to Rs. 7962.48 crores from Rs. 6339.35 crores in the previous year 2017-18.

During the financial year 2018-19, the operating profit before depreciation, interest and tax (PBDIT) increased by 15.83 % to Rs 1078.05 crores in comparison to Rs 93 0.74 crores in financial year 2017-18.

The Company registered a rise in profit before tax (PBT) by 28.31% to Rs 593.85 crores in financial year 2018-19 from Rs 462.84 crores in financial year 2017-18.

The Company registered a robust growth in profit after tax (PAT) by 43.13 % to Rs 417.03 crores in financial year 2018-19 from Rs 291.36 crores during financial year 2017-18.

The Company recorded earnings per share (EPS) of Rs 6.06 in financial year 2018-19 as compared to Rs 4.23 per share in financial year 2017-18.

Your Company has an expanse of around 1,69,500 square kilometres of licensed area under its umbrella and continues to hold the leadership position as the largest CGD Company in the country catering to more than 13.5 lakh residential consumers, over 12,300 commercial customers, dispensing CNG from 344 CNG stations for vehicular consumers and providing clean energy solutions to over 3,500 industrial units through its wide spread operations with around 23,200 kilometres of Natural Gas pipeline network.

While Gujarat Gas Limited (GGL) has been resilient in sustaining the industrial volumes successfully in the ever dynamic oil & gas industry, it has continued to focus its efforts for developing and growing PNG (Domestic) and CNG business. GGL connected around 1 Lakh household customers and added 63 new CNG stations during year. Sales volume have grown by 6% in the residential and 10% in transport (CNG).


During the year under review on account of sub division of equity shares the Authorised Share Capital of the Company had been changed from Rs 17,57,10,00,000 (Rupees One Thousand Seven Hundred Fifty Seven Crore Ten Lakh only) divided into 000 (One Hundred Seventy Three Crore Fifty One Lakh only) Equity shares of Rs.10/- each, 1,70,00,000 (One Crore Seventy Lakh only) 7.5% Redeemable Preference Shares of Rs. 10/- each and 50,00,000 (Fifty lakh only) Preference shares of Rs.10/- each to Rs 17,57,10,00,000 (Rupees One Thousand Seven Hundred Fifty Seven Crore Ten Lakh only) divided into 000 (Eight Hundred Sixty Seven Crore Fifty Five lakh only) Equity shares of Rs.2/- each 1,70,00,000 (One Crore Seventy Lakh only) 7.5% Redeemable Preference Shares of Rs. 10/- each and 50,00,000 (Fifty lakh only) Preference shares of Rs.10/- each.


The equity shares of the Company have been subdivided, post approval of the Shareholders vide postal ballot, which resulted into the sub-division of 1 equity share having face value of Rs 10/- each into 5 equity shares having face value of Rs 2/- each fully paid up (thereby keeping paid up share capital intact). Post requisite formalities with the respective Stock Exchanges and Depositories, the Record Date for the Sub-Division and ascertaining the eligibility of the shareholders of the Company entitled to receive 5 (five) equity shares of Rs 2/- each in lieu of 1 (one) equity share of Rs 10/- each was fixed on 16th January, 2019. Consequently, the Company has credited/issued certificates for 68,83,90,125 equity shares of Rs 2/- each in lieu of 13,76,78,025 equity shares of Rs 10/- each.


Your Directors recommend for consideration of the shareholders at the 7 th Annual General Meeting, the Dividend of Rs. 1/- per fully paid up equity share of Rs. 2/- each (50%) on 68,83,90,125 equity shares for the Financial Year 2018-19. The Dividend Distribution Policy is being disclosed in the Annual Report for FY 2018-19, as per requirement of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015.


Your Company does not have any subsidiary and joint venture. Guj Info Petro Limited is the Associate of your Company and the statement containing salient features of financial statements of Guj Info Petro Limited under first proviso to sub section (3) of section 129 in form AOC-1 is attached at Annexure-6.


The Consolidated Financial Statements of the Company represents consolidation of Financial Statements of Guj Info Petro Limited (GIPL), the associate company and Gujarat Gas Limited Employees Welfare Stock Option Trust (ESOP Trust), in accordance with IND


During the year under review, your Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.


The details of Loans, Guarantees, Securities and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.


All Related Party Transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. A statement giving details of all Related Party Transactions is placed before the Audit Committee for approval/ ratification on a quarterly basis, as the case may be. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board is uploaded on the Companys Website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. The particulars of contracts or arrangements with Related Parties referred to in Section 188 (1) of the Companies Act, 2013, as prescribed in Form AOC - 2 of the Companies (Accounts) Rules, 2014 is enclosed herewith as Annexure -4 to this Report.

Disclosures of transactions of the Company with person or entity belonging to the Promoter/Promoter Group which hold(s) 10% or more shareholding in the Company

Name of Related Party Relationship Nature of Transactions & Balances 2018 -19 2017-18
Gujarat State Petronet Limited - GSPL Holding Company Gas Transmission Expense 321.06 242.29
Supervision Expenses - 0.33
Recharge of Salary Expense (Net) 0.07 0.06
Right of Way Expense (ROW) 0.14 3.04
Reimbursement of Expenses 0.19 0.09
Dividend Paid 29.83 10.64
Rent Expense 1.56 1.26
CNG Sales - 0.00
PNG Sales - Income 0.03 0.03
O&M Charges Recovered - Income 0.04 0.06
Rent - Income 0.03 0.08
Recharge of Capex (by GGL to GSPL) 1.97 -
Sale of Assets - 1.53
Balance at period end
Amount Receivable/(Payable) (14.60) (10.35)
Deposits Asset / (Liability) - Net 4.47 1.99
Bank Guarantee - by GGL to GSPL 31.36 23.89
Letter of Credit - by GGL to GSPL 0.10 0.10


Your Directors hereby confirm that during the year, the Company has been compliant with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.


The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. Pursuant to provisions of Section 135 of the Companies Act, 2013, the Company has also formulated a Corporate Social Responsibility Policy which is available on the website of the Company at The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed herewith as Annexure - 2 to this Report.


Shri Sujit Gulati, IAS, Additional Chief Secretary, Energy & Petrochemicals Department ceased to be Director of the Company with effect from 17/07/2018 on account of relinquishing of charge of Additional Chief Secretary, Energy & Petrochemicals Department. Your Directors wish to place on record, appreciation for the services rendered by him as the Director of the Company Shri Raj Gopal, IAS, Principal Secretary, Energy & Petrochemicals Department ceased to be the Director of the Company w.e.f. 1st February, 2019, on account of his retirement from services of Government of Gujarat as Principal Secretary, Energy & Petrochemicals Department (EPD). Your Directors wish to place on record, appreciation for the services rendered by him as the Director of the Company.

Dr. T. Natarajan, IAS, had been reappointed as the Director by the shareholders at the 5th Annual General Meeting held on 28th September, 2017. He or any other Director in his place will retire by rotation and it is proposed to reappoint the Director of the Company in the ensuing 7th Annual General Meeting.

Prof Piyush Kumar Sinha and Prof Vishal Gupta had been appointed as the Independent Directors of the Company for the tenure of 2 years by the Board of Directors vide Circular Resolution, with effect from 16th August, 2017. Their appointment was subsequently approved by the Shareholders in its 5th Annual General Meeting held on 28th September, 2017. The Board of Directors have approved their re-appointment for second term of 5 years subject to concurrence from Government of Gujarat required under section 149 (6) (a) of the Companies Act, 2013 and their re-appointment will be placed for consideration of shareholders only after such concurrence of Government of Gujarat.

A brief resume of the Directors to be appointed at the ensuing Annual General Meeting, nature of expertise in specific functional areas and details regarding the Companies in which the Directorship is held together with the Membership / Chairmanship of Committees of the Board will be given in the Explanatory Statement forming part of the Notice of the 7th Annual General Meeting.


Pursuant to the provisions of Section 149 (6) of the Companies Act, 2013, the Independent Directors of the Company have given confirmation/declaration to the Board that they meet with the criteria of Independence and are Independent in terms of Section 149 (6) of the Companies Act, 2013. Further, they have also given the confirmations on independence as per provisions of Regulation 16(1)(b) and 25 (8) of the Listing Regulations.


Pursuant to the provisions of the Companies Act, 2013, the performance evaluation of the Board and individual Directors for FY 2018-19 was carried out as per the terms and conditions of their appointment based on the various parameters.


The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business. The Board / Committee Meetings are pre-scheduled to enable the Directors to plan their schedule and to ensure meaningful participation in the Meetings. However, in case of a special and urgent business need, the approval is taken by passing resolutions through circulation to the Directors, as permitted by law, which are noted in the subsequent Board/Committee Meetings.

During the period beginning from 1st April, 2018 up to 6th May, 2019, Eight (8) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.


As your Company is a Government Company, the Statutory Auditors are appointed by the Comptroller & Auditor General of India (C&AG). Accordingly, the C&AG had appointed M/s. S. R. Goyal & Co., Chartered Accountants as the Statutory Auditors of the Company for the Financial Year 2018-19.

The C&AG has carried out supplementary audit of your Company pursuant to provisions of Section 143(6) of the Companies Act, 2013. The Company has received comment certificate from the Comptroller & Auditor General of India (C&AG) on the accounts of the Company for the Financial Year ended on 31st March, 2019 and the Management response to comments of C&AG is enclosed as Annexure-7 and forms part of this Boards Report.


Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s Rutul Shukla & Associates, Practising Company Secretaries to conduct the Secretarial Audit of the Company for the Financial Year 2018-19. The Report of Secretarial Auditor on Companys Secretarial Audit for the Financial Year 2018-19 is enclosed herewith as Annexure - 3 to this Report. The


Your Company is required to carry out Cost Audit pursuant to Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014.

The Board of Directors has on the recommendation of the Audit Committee appointed M/s Kailash Sankhlecha & Associates, Cost Accountants, as the cost auditor to audit the Cost Accounts of the Company for financial year 2019-20 on remuneration of Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand Only) plus GST and out of pocket expenses.

The Cost Audit Report for FY 2018-19 will be submitted to the Central Government in the prescribed format within stipulated time period.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in General Meeting for their ratification. Accordingly, the necessary resolution seeking Members ratification for the remuneration payable to the Cost Auditors for FY 2019-20 will be included in the Notice convening the 7 th Annual General Meeting.


The Audit Committee at its Meeting held on 6th May, 2019, approved the Financial Statements for the Financial Year ended on 31st March, 2019 and recommended the same for approval of the Board which had been subsequently approved by the Board of Directors at its meeting held on 6th May, 2019.


Risk Management

The Company has a well-defined Risk Management Framework for reviewing the major Risks and has adopted a Business Risk Management Policy. Further, pursuant to the requirement of Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted a Risk Management Committee inter-alia to monitor the Risk Management Plan of the Company.

Internal Control System

The Company has a proper and adequate system of Internal Controls commensurate with its size of operations and nature of business. These are routinely tested and certified by Auditors. Significant audit observations of audit team and follow up actions thereon are reported to the Audit Committee. The details about the identification of elements of Risk and Internal Control Systems are provided in detail in the Management Discussion & Analysis Report forming part of this Boards Report.


The Company has in place adequate internal financial controls, with reference to financial statement. The internal financial controls have been documented in the business processes. Such controls have been assessed during the year under review and were operating effectively.


The Company has established a Whistle Blower Policy/Vigil Mechanism for Directors, Employees to report their genuine concerns, details of which have been given in the Corporate Governance Report forming part of this Boards Report.


Health, Safety and Environment (HSE) is a core value in GGL, a GSPC Group Company. GGL believes that outstanding business performance requires outstanding HSE performance. GGL recognizes that HSE is everyones responsibility and every individual has a duty to intervene and prevent unsafe actions and to reinforce safe behaviors.

GGL has established its Quality, Occupational Health, Safety & Environment (QHSE) management system with reference to international standards ISO 9001:2015, ISO 14001:2015 & OHSAS 18001:2007 and has been certified by a third party certification body after rigorous audit. The certificates demonstrate companys commitment to quality, health, safety and environment management and customer satisfaction which is the key to sustainable business performance. GGL ensures that all management decisions reflect its Quality, Health, Safety & Environment (QHSE) intentions and QHSE management systems reflect best industry practices and are properly resourced. GGL aims to be an industry leader in City Gas Distribution business through its QHSE performance.

GGL recognizes that the protection of the health and safety of all those involved in its operation and public at large and protection of the environment is an integral part of the companys performance and the prime responsibility of management at every level. GGL assets have been designed, constructed, commissioned, operated and maintained, such that the risks to personnel are reduced to as low as reasonably practicable (ALARP).

GGL conducts its business in a safe and responsible manner and ensures compliance with the legal and regulatory requirements by conducting various internal and external audits. The safe delivery of projects and safe operations of assets is a critical success factor for the companys business. GGL sets HSE targets and closely monitors it to achieve continual improvement in QHSE performance.

GGL recognizes that leadership commitment is fundamental for continual improvement in HSE performance. GGL management team members review HSE performance on regular basis. The team regularly carries out HSE tour at different worksites to engage and involve site staff in HSE processes, to reinforce best HSE practices and to understand and address their HSE related concerns. In FY 2018-19, compliance to HSE tour plan was 91%.

GGL is committed to protect safety, health and well-being of people working for the organization. Lost Time Injury Frequency (LTIF) is the industry standard key indicator which is used to measure GGLs occupational safety performance. GGL has achieved Lost Time Injury Frequency of 0.287 for the FY 2018-19. Total man-hours of GGL in FY 2018-19 is 20.84 Million.

GGL, as a responsible organization, recognizes and understands the various global challenges with respect to environmental degradation and climate change. Building awareness among the employees and community about these challenges is an effective way of addressing these challenges. GGL raises the awareness through various activities like knowledge sharing programs, quiz, various other competitions, etc. throughout the entire organization as well as sapling plantation drives. GGL also educates and influences various third party utility companies, authorities and their contractors who undertake digging activities on or near the underground GGL gas pipeline network. This is done to stress on the safety risks and environmental impact of the release of Natural gas which can occur as a result of damaging GGLs natural gas pipelines during the digging operations. The third parties are urged to dial in to GGL to confirm the location prior to starting any digging/excavation activities so that damage to Natural gas pipeline network can be prevented.

GGL has a well-developed and certified Emergency Response and Disaster Management Plan for each Geographical Areas. GGL conducts mock-drills at defined intervals to check adequacy of preparedness against various anticipated emergency scenarios across all locations. In FY 2018-19, GGL carried out onsite 71 Level-1 Mock-drills & 21 Level-2 Mock-drills. GGL has also carried out/participated in 09 district level offsite Mock-drills.

GGL has defined Lifesavers rules for all the critical activities and monitors lifesaver compliance. In FY 2018-19, GGL has achieved close to 93% compliance to lifesavers rules.

To improve HSE performance, various HSE initiatives and programs are implemented as part of HSE improvement plan. In FY 2018-19, GGL has achieved more than 96% compliance to HSE improvement plan.

GGL always ensures that safety training programs are conducted periodically for employees and contractor staff which includes basic safety, practical fire-fighting, first aid, defensive driving and other technical competency trainings in various areas such as plumbing, CNG filling, Welding, Working at height etc. More than 600 Safety & Technical competency training programs have been conducted during FY 2018-19.

GGL organizes various safety awareness programs including awareness regarding Natural Gas related safety for its customers, general public, employees, contractors and other stakeholders. Around 685 safety awareness programs have been conducted during FY 2018-19.

GGL has also established a system for evaluating contractor performance on monthly basis. HSE performance has been made an integral part of this performance evaluation with pre-defined key indicators.

GGL has put in place HSE reward and recognition scheme to acknowledge significant HSE contribution of employees and contractor staff.

GGL cares about the health of all its employees and its family members. GGL has completed annual medical check-up for all of its employees in FY 2018-19. GGL has also arranged medical health check-up camps for contractor staff at various locations in South Gujarat collaboration with Government of Gujarat initiative.

GGL encourages participation and involvement of its employees and contractor staff in HSE related activities through monthly HSE committee meetings, Hazard and Near miss reporting, monthly quiz, risk assessment and numerous safety awareness programs.

GGL, being a prudent organization, celebrates various HSE related events like National Safety Week, Road Safety Week and World Environment Day. Under these umbrella, GGL organizes various initiatives such as display of custom banners, pledge ceremony, quiz / poster making / slogan competitions, Skit / drama / song programs and number of awareness sessions etc. with an aim to involve employees and contractors and enhance their awareness regarding importance of HSE and related best practices.

GGL operations are driven by the goal of zero injuries, with the aim to ensure that every individual working for and on behalf of the company returns home safely at the end of each working day.


The Management Discussion & Analysis is as under:


Natural Gas is the cleanest and most efficient of the fossil fuels. It is the only fossil fuel whose share of the primary energy mix is expected to grow, as it has the potential to play an important role in the worlds transition to a cleaner, more affordable and secure energy future due to its high energy content, which results in lower emissions of carbon and volatile organic compounds (VOCs) at combustion, relative to coal and oil. These characteristics of gas provide substantial environmental benefits such as improved air quality and reduced CO2 emissions.

World energy demand has been increasing steadily with Natural Gas accounting nearly half of increased consumption. Gas demand growth was especially strong in China and the United States, where cheap gas continues to replace coal for electricity generation. Indias energy demand outpaced global demand growth in 2018 according to the International Energy Agency.

Crude Oil prices have always been at the forefront for all energy prices including Natural Gas. The crude oil prices has seen some hardening over the past 2 years mainly influenced by economical and geo-political factors

The oil prices in FY 2018 has seen major volatility with oil prices reaching nearly $86 /bbl in October 2018 mainly on account of sanctions imposed by United States of America on Iran. However, prices fell sharply in November after the United States announced temporary waivers to the sanctions on Iran for eight countries, including China and India. The decline in prices also reflected continued rapid growth in oil production in the United States, as well as a substantial increase in supply by the Organization of the Petroleum Exporting Countries (OPEC) and the Russian Federation.

With the completion of temporary waiver, the crude oil prices are expected to rise in the short term till alternate supply is made available. India being one of the customers for Iranian oil supply; this shall have a negative impact and may lead to increase in Indias crude oil basket.

Growth of Indias share in the global energy market is expected to increase in the coming years. India has been mainly dependant of high polluting fuels viz. coal, Furnace Oil to meet its ever growing energy needs. Government of India; realising the importance of protecting the environment has announced; one of its important initiatives for a more sustainable future; an aggressive target to increase the share of Natural Gas in the overall energy consumption mix to 15 percent from the current levels of 6 percent.

Historically the Natural Gas usage in India has seen a slowdown with power sector shifting back to coal from Natural Gas due to lower availability of cheap domestic gas and increased dependency on costly R-LNG.

The City Gas Distribution ("CGD") business in India is expected to take centre stage as a priority sector, with several programs and initiatives being announced to bolster city gas demand. The expected growth in consumption under this category is around 10 percent between FY 2018 and FY 2030. The sector regulator Petroleum and Natural Gas Regulatory Board during the year launched 9th CGD Bidding Round on 12th April, 2018 for 86 Geographical Areas (GAs) covering 174 districts (156 complete and 18 part) in 22 states/ union territories, 24% of Indias geographical area and 29% of its population. Further, PNGRB also launched the 10th CGD Bidding Round on 8th November, 2018 for 50 Geographical Areas (GAs) covering 124 districts (112 complete and 12 part) in 14 states, 18% of Indias geographical area and 24% of its population.


The Government is promoting the usages of clean and green fuel, i.e. Piped Natural Gas ("PNG") and Compressed Natural Gas ("CNG") by expanding the coverage of CGD network in the country. In order to promote the natural gas usage in the country, the Government has issued guidelines for making available domestic gas to the CGD entities for meeting the entire requirement of CNG for transport segments and PNG for Domestic.

For expansion of CGD networks; PNGRB has come up with the 9th and 10th CGD Bid Round in which your company has won 7 new Geographical Areas and shall be now be able to expand its network in the state of Rajasthan, Punjab, Haryana and Madhya Pradesh.

Similar to any other business, the Company faces challenges in the form of stiff competition from other conventional fossil fuels due to the abundance, accessibility and availability. The fuel also faces threat in the form of disparity in the tax structure compared to alternate fuels as PNG and CNG are still out of GST ambit. Notwithstanding these your Company shall continue to focus placing environmentally clean Natural Gas to affordable markets for sustainable growth.


Your Company has total 25 CGD licenses spread across 41 districts and six states and one Union territory which accounts to c. 11% of total CGD licenses and c. 10% total Authorized areas issued by PNGRB in India and 1 transportation pipeline license. Your Company has an expanse of around 1,69,500 square kilometres of licensed area under its umbrella and continues to hold the leadership position of being the largest CGD Company in terms of market share with catering to more than 13.5 lakh residential consumers, over 12,300 commercial customers, dispensing CNG from 344 CNG stations for vehicular consumers and providing clean energy solutions to over 3,500 industrial units through its wide spread operations with around 23,200 kilometres of Natural Gas pipeline network.

Despite the dynamic business environment and intensely competitive energy market; Your Company has been resilient to connect around 300 new industrial units during the year. Your company has recorded a robust growth of around 3% in Industry volume compared to previous year. The volume in commercial segment has also grown by around 9% during the fiscal. Your Company has continued its focused efforts for developing and growing PNG (Domestic) and CNG business. GGL added more than 1,00,000 residential customers and erected / commissioned 63 new CNG stations during the year. Your Company has been able to sustain the volumes with growth of around 6% in the residential sector and around 10% in CNG (transport) sector. Your company is aggressively planning for penetration in PNG (domestic), PNG (commercial) and CNG (transport) sector which is comparatively less volatile.


The year 2018 was marked by a number of key structural initiatives to build strength across macro-economic parameters for sustainable growth in the future. The growth in the first half of the year suffered despite global tailwinds. However, the weakness seen at the end of 2018 seems to have bottomed out as 2019 sets in. Indias economic outlook is expected to remain promising and would strengthen further in FY19-20.

Indias Natural Gas supply and demand outlook is changing. The Government of India (GoI) wants to make India a gas-based economy by boosting domestic production and buying cheap LNG. India has set a target to raise the share of gas in its primary energy mix to 15% by 2022. To improve the share of Natural Gas and promote a gas-based and clean fuel economy, the GoI has adopted a systematic approach to focus on all aspects of the gas sector viz upstream, midstream and downstream including CGD network development.

Your Company has been continuously growing and expanding its horizon by venturing into new geographic areas and is committed to reach every possible Natural Gas user across its licensed expanse of around 1,69,500 square kilometres through its ever growing pipeline network spread across 41 districts and six states and one UT. Your Company shall continue to focus on growing the penetration in the current operating areas by increasing the PNG connections and additional CNG stations while tapping the untapped potential by expeditious rollout of distribution network in the newly acquired geographic areas as well. With this focused endeavour GGL shall continue its efforts in providing clean fuel solutions across all operational area to augment an energetic top-line and bottom-line in coming years.


The world runs on energy. Conventional fuels such as petrol and diesel have been in use for transportation for decades. But the current demand-supply gap in energy, depletion of oil-based fuels and environmental constraints have created a necessity for alternate energy resources which are cleaner and environment friendly. Natural gas is being considered as the fuel for today and is being looked as transportation as well as a domestic fuel. CGD is a growing business sector and it aims to provide uninterrupted supply of gas to domestic, commercial and industrial customers in the form of PNG and CNG. Natural Gas Distribution or CGD system is a pipeline system for transport of gas and their distribution among consumers. The distribution system includes gas distribution mains and service lines. The pressure is regulated in the system and is usually designed as closed ring or loop systems, in order to ensure uninterrupted gas supply. The sector has attracted many engineers, managers, and practitioners. The CGD sector has seen a tremendous growth over the past few decades but as the sector is still in the development stage, especially in India, many challenges are being faced by all the stakeholders of the CGD sector. Challenges and issues are now discussed in many forums and corrective actions are being taken. In CGD sector most of the issues are complex and the mechanism for combating the same are jointly worked out by the government and CGD entities.

CGD business like any other business is also exposed to inherent business risks due to internal and/ or external factors. To name a few, the risks could vary from continuous availability of economic gas supplies, pipeline connectivity for expansion in unconnected areas, abundant availability of economical alternate fuels, global economic downturn, crude market volatility, delay in permissions from various statutory bodies for laying the infrastructure etc. While some of these risks may be beyond the mitigation capability of any company or industry, as a prudent and responsible Company all possible measures are being taken to safe guard the interest of the Company from being impacted due to the above listed risks and concerns. Your Company has adequate internal control procedure for assessing various business risks, which, the Company is likely to face in near to mid-term future and also prepares mitigation measures.


The Company has a proper and adequate system of Internal Controls commensurate with its size of operations and nature of business. The Companys Internal Control Systems are further supplemented by extensive programs of audits, i.e. Internal Audit, Proprietary Audit by the Comptroller & Auditor General of India (C&AG) and Statutory Audit by Statutory Auditors appointed by the C&AG. The Internal Control System is designed to ensure that all financial and other records are reliable for preparing financial statements and other data and for maintaining accountability of assets and compliance with statutory requirements. The Company has mapped a number of business processes on to SAP system, thereby leading to significantly improved controls & transparency. Your Company also continues to invest in Information Technology to support various business processes.


The stand-alone net profit after tax (Total comprehensive income) for the current financial year 2018-19 increased to Rs 414.97 Crores from Rs 251.24 Crores in the previous year. The Company had healthy net cash inflows from operations of Rs 956.13 Crores during the financial year 2018-19.

Investments were made in extension of pipeline network to reach new areas and in reinforcements and upgradation of existing network as required. Investments were also made to connect residential customers and augmenting the CNG infrastructure. Investments were also made to upgrade the IT infrastructure and integrate SAP to enhance reliability and enable scalability. Appropriate provisions have been made in the accounts wherever necessary for contingencies, bad debts and diminution in value of investments. No amount has been transferred to the General Reserve during the year.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore, including :

Particulars FY 2018-2019 FY 2017-2018 Remarks
Debtors Turnover 17.65 17.15 Revenue From Operation / Average Trade Receivable
Inventory turnover Not relevant from company prospective
Interest Coverage Ratio 4.82 4.13 (EBITDA-current tax)/ Interest Cost
Current Ratio 1.22 0.90 Current assets / Current liabilities net of customer deposit
Debt Equity 1.01 1.26 Total Borrowing / Total Equity
Operating Profit Margin (%) 12.40% 14.14% Operating income / Revenue from operations
Net Profit Margin (%) 5.24% 4.60% PAT / Revenue from operations
Return on Net Worth 20% 16% PAT / Average net worth

Current ratio of company has significantly change from 0.90 to 1.22 in FY 18-19 on account of increase in Bank and other balances.


Your Company employed 1084 employees as on 31st March 2019. Your Company has a focus on building capabilities and developing competencies of its employees. The Company believes that training and development is of vital importance to create a climate where people maximize their technical skills and inner potential which can help the Company in capitalizing the emerging business opportunities through their involvement. During the year, employees were sent for various training programs and seminars to enhance their skills/knowledge. Your Company has in place an attractive policy of performance linked incentive to encourage and reward employee performance.

There was no strike or lock-out during the year under review.


The Company believes that good governance can deliver continuous good business performance. The particulars on Corporate Governance as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is incorporated as a part of this Boards Report at Annexure - 1.


The Annual Return of the Company in the Form MGT-7 is available on the website of the Company at


The details about conservation of energy, technology absorption, foreign exchange earnings and outgo is attached at Annexure - 5.

Foreign Exchange Earnings and Outgo -

The Company has incurred expenditure in Foreign Exchange to the extent of Rs. 1.48 Crores during FY 2018-19 (Previous year FY 2017-18 Rs. 0.60 Crores) and the Foreign Exchange Earnings during FY 2018-19 were Rs. NIL (Previous year FY 2017-18 Rs. NIL)


There are no significant material orders passed by the Regulators / Courts during the year, which would impact the going concern status of the Company.


To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013 :

a. that in the preparation of the annual accounts, financial statements for the year ended 31st March, 2019, the applicable accounting standards have been followed and no material departures have been made from the same;

b. that accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2019 and of the profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken 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;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.


The Directors place on record their deep appreciation to employees of the Company at all levels for their hard work, dedication and commitment. The Directors are extremely grateful for all the support given by the Government of Gujarat at all levels. The Directors place on record their sincere thanks to the Promoters, Shareholders, Suppliers, Lenders and Customers for their valuable support, trust and confidence reposed in the Company.

For and on behalf of the Board of Directors
Date : 29th May, 2019 Dr. J. N. Singh, IAS
Place : Gandhinagar Chairman