Gujarat Gas Ltd Directors Report

Jul 24, 2024|03:32:18 PM

Gujarat Gas Ltd Share Price directors Report

Dear Members,

Gujarat Gas Limited

Your Directors have pleasure in presenting the 11th Annual Report and the Audited Financial Statements for the Financial Year ended on 31st March 2023.

Financial Highlights

(Rs in Crores)

Particulars Standalone Financials Consolidated Financials
12 Months ended 31/03/2023 12 Months ended 31/03/2022 12 Months ended 31/03/2023 12 Months ended 31/03/2022
Revenue from Operations 17,306.16 16,787.35 17,306.16 16,787.35
Other income 101.27 90.74 101.33 90.87
Total income 17,407.43 16,878.09 17,407.49 16,878.22
Profit before interest, depreciation and tax 2,493.26 2,155.14 2,493.32 2,155.27
Less: Interest 40.35 56.82 40.35 56.82
Depreciation 428.26 384.91 428.26 384.91
Profit before tax 2,024.65 1,713.41 2,024.71 1,713.54
Share of Profit from equity accounted investee - - 2.86 1.62
Minority Interest - - - -
Profit/(Loss) Before Tax and share of profit of associate 2,024.65 1,713.41 2,027.57 1,715.16
Tax expenses 499.18 427.77 499.19 427.79
Net Profit after tax for the period 1,525.47 1,285.64 1,528.38 1,287.37
Other Comprehensive Income (after tax) (OCI)
- Equity Instruments through OCI 6.22 2.12 6.22 2.12
- Remeasurements of post-employment benefit obligation, net of tax 2.30 0.57 2.30 0.57
- Share of Other comprehensive income of equity accounted investee - - (0.16) (0.01)
Total Comprehensive Income 1,533.99 1,288.33 1,536.74 1,290.05
Profit carried to retained earnings 1,525.47 1,285.64 1,528.38 1,287.37
Other Comprehensive Income carried to retained earnings 2.30 0.57 2.14 0.56
Add: Undistributed profit /(loss) of earlier years 4,710.91 3,562.38 4,741.55 3,591.30
Balance available for Appropriation 6,238.68 4,848.59 6,272.07 4,879.23
Less: Appropriations:
Distribution of ESOP trust fund - - (1.04) -
Equity dividend (137.68) (137.68) (137.68) (137.68)
Surplus / (Deficit) retained 6,101.00 4,710.91 6,133.35 4,741.55
Earnings per Share (Face value of Rs. 2 each) (Basic & Diluted) 22.16 18.68 22.20 18.70


1. Gujarat Gas adjudged as the Star PSU of the Year at The Economic Times Energy Leadership Awards 2022.

2. GGL credit rating upgraded to AAA/Stable (highest rating level) from AA+/Positive by CRISIL and India Ratings & Research.

3. Prepayment of long-term loan of 447 crores during FY 2023 making GGL a debt free company.

4. Highest ever Profit after Tax of 1,525.47 Crores (19% higher than FY 22)

5. Highest ever CNG volumes at average 2.43 mmscmd in FY2023 on the back of growth in station infrastructure (22% higher than 1.99 mmscmd in FY 2022).

6. Highest ever 1.79 Lakh Domestic customers commissioned in FY 2023 (16% higher than 1.54 Lakh in FY 2022).

7. 102 new CNG stations in FY 2023; crossing milestone of 800 CNG stations.

8. Government of Gujarat has reduced VAT on Dom & CNG consumers to 5% from 15%, improving competitiveness vis-a-vis alternate fuel.

9. GOI has revised APM Gas pricing methodology; at 10% of the Indian Crude Basket Price subject to a floor of $4 and a ceiling of $6.5/mmbtu w.e.f. 8th April, 2023. From FY 2025-26, floor and ceiling to be increased by $0.25/mmbtu each year. Cost reduced from $8.57 to $6.50/mmbtu increasing competitiveness of Gas to alternate fuels at reduced prices.

10. Managed challenging scenario of unprecedented surge in spot prices by balancing the volumes and limiting price increases via continued engagement with customers / stakeholders.

11. Implemented Indias 1st Pilot Project for Green Hydrogen blending with PNG Domestic supplies at NTPC Kawas Township, GGL Surat & Hazira GA have successfully completed taking in 5% blended Hydrogen in DPNG network with supply to 150+ numbers of households.

12. Electrical Vehicles (EV) charging facility commissioned at company owned CNG station at Kevadia as a pilot project with Tata Power.


Your Directors recommend for consideration of the shareholders at the 11th Annual General Meeting, the Dividend of 6.65/- per fully paid up equity share of 2/- each (332.5%) on 68,83,90,125 equity shares for the Financial Year 2022-23. This is 232.5% higher than FY 22 wherein dividend payout was 2 per share. During this year, Dividend Distribution Policy has been amended by the Board to include Government Guidelines as one of the factors for making dividend recommendation and the same has been considered for recommending proposed dividend for the Financial Year 2022-23. The weblink for Dividend Distribution Policy is available at


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-5.


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 AS. The Audited Consolidated Financial Statements are provided in the Annual Report.


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, if any 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

(Rs in Crores)

Name of Related Party Relationship Nature of Transactions & Balances For Year ended 31st March 2023 For Year ended 31st March 2022
Gujarat State Petronet Limited - GSPL Holding Company Gas Transmission Expense 451.68 542.13
Purchase of Natural Gas - 2.23
Right of Way Expense (ROW) 0.52 0.10
Connectivity Charges 1.69 -
Business Transfer- CGD Business of Amritsar & Bhatinda from GSPL to GGL - 153.86
Reimbursement of Expenses 0.34 0.28
Dividend Paid 74.57 74.57
Rent Expense 2.85 2.27
Recharge of Salary - Expense 0.04 0.04
Compression Charges - 2.87
Reimbursement of Deposit Receivable from Authorities 0.28 -
O&M Charges - Income 0.05 0.04
Rent - Income 0.03 0.03
Reimbursement of Expenses - Income 0.01 10.01
Recharge of Salary - Income 1.08 1.03
Sale of Material - Income - 0.23
Deposit Given - Paid / (Refund) [Other than Connectivity] 0.44 (0.02)
Deposit Given - Paid / (Refund) [For Connectivity] 12.00 4.00
Supervision Charges -Income - 0.01
Interest on Late Payment - 0.01
Asset Purchase 8.05 -
Balance at the period end
Amount Receivable/(Payable) (23.36) (19.36)
Deposits Asset / (Liability) - Net [Other than Connectivity] 2.47 2.03
Deposit (For Connectivity) 51.32 39.32
Bank Guarantee by GGL to GSPL 52.92 52.92
Letter of Credit by GGL to GSPL 0.10 0.10

All transactions amount disclosed above are inclusive of tax.


Your Directors hereby confirm that during the year, the Company has been compliant with the applicable mandatory 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 and Companies (CSR Policy) Amendment Rules, 2021. 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 and Companies (CSR Policy) Amendment Rules, 2021 is enclosed herewith as Annexure - 2 to this Report. Further as required by Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014, Executive Summary of Impact Assessment Report for eligible CSR Project issued by Independent Agency had been placed before the Board of Directors at its meeting held on 10th May, 2023 and is being also attached to the Annual Report at Annexure-2-A.


Appointment and Resignation of Directors

Shri Raj Kumar, IAS had been appointed as Director with effect from 21st July, 2022 and his appointment was regularized in 10th AGM held on 29th August, 2022. Subsequently, Shri Raj Kumar, IAS, Chief Secretary, Government of Gujarat had been appointed as Chairman with effect from 21st February, 2023.

Shri Pankaj Kumar, IAS (Retd.) has ceased to be the Director and Chairman of the Company with effect from 1st February, 2023, upon superannuation. Your Directors wish to place on record, appreciation for the services rendered by him as the Chairman of the Company.

Shri Balwant Singh, IAS (Retd.) had been appointed as Independent Director and Dr. Rekha Jain had been appointed as Independent Woman Director with effect from 20th April, 2022 for the first tenure of 5 years. In the opinion of the Board, the Independent Directors fulfill the conditions specified in SEBI (LODR) 2015 and are independent of management. The Shareholders have approved appointment of Shri Balwant Singh, IAS (Retd.) as Independent Director and Dr. Rekha Jain as Independent Woman Director by postal ballot in July, 2022 (with majority of 99.9968% and 99.9973%, respectively). The Board of Directors of the Company had appointed CS Manoj Hurkat, as the Scrutinizer for conducting Postal Ballot through E-voting process.

Shri Milind Torawane, IAS ceased to be Director of the Company with effect from 30th December, 2022 on account of his transfer. Subsequently, Shri Milind Torawane, IAS has been appointed as Additional Director and Managing Director of your Company with effect from 13th April, 2023. It is proposed to appoint Shri Milind Torawane, IAS in the ensuing 11th Annual General Meeting. Shri Sanjeev Kumar, IAS has ceased to be Managing Director with effect from 1st April, 2023 on account of his transfer and appointment as Principal Secretary to Government, Forests & Environment Department, Sachivalaya, Gandhinagar. Your Directors wish to place on record, appreciation for the services rendered by him as the Managing Director of the Company.

Smt. Mamta Verma, IAS, Principal Secretary, Energy & Petrochemicals Department (EPD), Government of Gujarat had been appointed as Additional Director with effect from 1st May, 2023. It is proposed to appoint Smt. Mamta Verma, IAS at the ensuing 11th Annual General Meeting.

Shri. J.P. Gupta, IAS, Additional Chief Secretary, Finance Department (FD), Government of Gujarat, had been appointed as Additional Director with effect from 9th August, 2023. It is proposed to appoint Shri. J.P. Gupta, IAS at the ensuing 11th Annual General Meeting. Dr. Rajiv Kumar Gupta, IAS has ceased to be Director of the Company with effect from 8th June, 2022, on account of his superannuation as Additional Chief Secretary Industries & Mines Department, Government of Gujarat. Your Directors wish to place on record, appreciation for the services rendered by him as Director of the Company.

Smt. Mona Khandhar, IAS, Principal Secretary (EA) Finance Department, Government of Gujarat had been appointed as Additional Director with effect from 20th February, 2023 and subsequently has ceased to be Director of the Company with effect from 9th August, 2023, on account of her transfer to Panchayats, Rural Housing & Rural Development Department, Government of Gujarat. Your Directors wish to place on record, appreciation for the services rendered by her as Director of the Company.

Shri Raj Kumar, IAS, Chairman will retire by rotation and it is proposed to reappoint him as the Director and Chairman of the Company in the ensuing 11th Annual General Meeting.

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 along with other statutory details will be given in the Explanatory Statement forming part of the Notice of the 11th Annual General Meeting.


Pursuant to the applicable 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 applicable provisions 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, Committees and individual Directors for FY 2022-23 was carried out as per the terms and conditions of their appointment based on 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, 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 from 1st April, 2022 to 31st March, 2023, 4 (Four) 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 and SEBI (LODR) Regulations, 2015.


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. Manubhai & Shah LLP, Chartered Accountants as the Statutory Auditors of the Company for the Financial Year 2022-23. Auditors Report for FY 2022-23 of M/s. Manubhai & Shah LLP, Chartered Accountants are self-explanatory in nature and form part of financial statements of the Company.

C&AG has carried out supplementary audit of the Financial Statements of your Company for the Financial Year 2022-23 pursuant to provisions of Section 143 (6) (a) of the Companies Act, 2013. The C&AG has issued Nil Comment Report on Financial Statements of the Company for the FY 2022-23 which forms part of financial statements of the Company.


The Audit Committee at its Meeting held on 10th May, 2023, approved the Financial Statements for the Financial Year ended on 31st March, 2023 and recommended the same for approval of the Board. The same have been subsequently approved by the Board of Directors at its meeting held on 10th May, 2023.


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. Dhawal Chavda & Associates, Practicing Company Secretaries to conduct the Secretarial Audit of the Company for the Financial Year 2022-23. The Report of Secretarial Auditor on Companys Secretarial Audit for the Financial Year 2022-23 is enclosed herewith as Annexure-3 to this Report. The Secretarial Audit Report is self explanatory in nature.


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.

Your Company had appointed M/s Ashish Bhavsar & Associates, Cost Accountants as Cost Auditors for the FY 2022-23. Accordingly, Cost Audit has been carried out for the Financial Year 2022-23. The Cost Audit Report for FY 2022-23 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, resolution seeking Members ratification for the remuneration payable to the Cost Auditors for FY 2023-24 will be included in the Notice convening the 11th Annual General Meeting.


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 regularly 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 Vigil Mechanism to report genuine concerns, details of which have been given in the Corporate Governance Report forming part of this Boards Report. Though there was no compliant under Vigil Mechanism, however Company has identified fraud, summary of which is captured below:

There were gas Pilferage and manipulation of metering data identified in two Industrial Units in Dadra Nagar Haveli Geographical Area (GA) in January, 2023. The cross functional team (CFT) constituted to investigate the same concluded that contract employee of Gujarat Gas Limited was involved in malpractice, in collusion with the customers, which resulted in monetary loss to Company. The CFT also recommended preventive measures for such cases which are being implemented.


Health, Safety and Environment (HSE) is a core value in GGL. GGL believes that outstanding business performance requires outstanding HSE performance. GGL aims to protect the health and safety of its employees, contractors & their staff, customers and general public in our operation area, to minimize the environmental impact associated with our business processes and to assure the integrity and safe operation of our assets.

GGL recognizes that the protection of the health and safety of all those involved in its operation and public along with protection of the environment is the prime responsibility of company and its management at every level.

GGL operations are driven by the goal of zero injuries and seek to encourage a culture of excellence and drive forward for continual improvement in HSE performance.

QHSE commitment & Certification

GGL ensures that all its management decisions reflect its Quality, Health, Safety & Environment (QHSE) intentions. GGL is committed that its QHSE management system complies with all applicable legal requirements including acts, regulations, standards, guidelines and code of practices for Health Safety & Environment (including directives issued by legal, statutory or regulatory bodies) and follows best industrial practices. GGL aims to continue as an industry leader in City Gas Distribution business through its QHSE performance. GGL has established its Quality, Occupational Health, Safety & Environment (QHSE) management system with reference to international standards ISO 9001:2015, ISO 14001:2015 & ISO 45001:2018 and successfully completed its recertification audit as per mentioned ISO standards. The certifications demonstrate sustenance and companys continued commitment to quality, health, safety and environment management and customer satisfaction which is the key to sustainable business performance. GGL has 160 Standard Operating Procedures and Guidelines for seamless and safe functioning of various aspects of business. In FY 2022-23 GGL has revised around 25 of its existing SOP & Guidelines to adapt to the changing business dynamics, operational requirements with respect to implementation at site and to increase the quality, safety & operational efficiency with an aim of continual improvement of the management systems at GGL.

Projects with highest level of Safety & Risk levels at ALARP

GGL in last few years has embarked into new areas in terms of geography with inclusion of new Geographical Areas in the states of Punjab, Haryana, Madhya Pradesh & Rajasthan and into new business areas in terms of faster reaching customers in our operational areas by supplying of Natural Gas using regasification of LNG, decompression of CNG for areas where pipeline laying project may take significant time. GGL takes extra HSE precautions for all such new areas of geography and business. Risk assessment through safety engineering studies has been at the fore-front of all such projects where we conduct studies like Hazard Operability (HAZOP), Quantitative Risk assessment (QRA), Escape Muster Evacuation & Rescue Analysis (EMERA) and Hazardous Area Classification (HAC) for all types of Gas installations at the planning stage itself and compliance to recommendations of these studies so that risks can be mitigated. GGL assets have been designed, constructed, commissioned, operated and maintained, such that the risks to personnel & public / society are reduced to as low as reasonably practicable (ALARP).

GGL had in past carried out Environmental impact assessment for pipeline projects passing through environmental/ecological sensitive areas/zones in Palghar district & Thane Rural GA to determine the potential environmental, social effects of the proposed project. The results of these study along with mitigation plan were presented to authorities. GGL has received Environmental Clearance from Ministry of Environment, Forest & Climate Change for two such projects in Palghar district & Thane rural GA in FY 2022-23.

GGL this year also continued special focus on safety aspects at projects especially at new Geographical areas with implementation of HSE management system at new GA relevant to project requirement, trainings, visits & meetings by management team members focusing on safety requirements.

HSE Compliance Assurance & Audits

GGL conducts its business in a safe and responsible manner and ensures compliance with the all legal and regulatory requirements. Compliance assurance is confirmed through audits / inspections with respect to all applicable PNGRB regulations and other standards covering all geographical areas of GGL every year including this financial year.

GGL has successfully conducted compliance audits & applicable recertification audits with respect to below listed PNGRB regulations through PNGRB empaneled Third Party Inspection Agency (TPIA) for Geographical Areas.

• First ERDMP Certification Audits: Successfully completed for Eight (8) new Geographical Areas - Narmada GA, Ahmedabad Rural GA, Jalore-Sirohi GA, Ujjain-Dewas-Indore GA, Jhabua-Banswara-Ratlam-Dungarpur GA, Ferozepur-Faridkot-Sri Muktsar Sahib GA, Hoshiarpur-Gurdaspur GA and Sirsa-Fatehabad-Mansa GA in line with PNGRB Codes of Practices for Emergency Response and Disaster Management Plan, Regulations in FY 2022-23.

• First T4S & IMS Certification Audits: Successfully completed for Seven (7) new Geographical Areas - Narmada GA, Ahmedabad Rural GA, Jalore-Sirohi GA, Ujjain-Dewas-Indore GA, Jhabua-Banswara-Ratlam-Dungarpur GA, Ferozepur- Faridkot-Sri Muktsar Sahib GA and Hoshiarpur-Gurdaspur GA in line with PNGRB Technical Standards and Specifications including Safety Standards (T4S), regulations & PNGRB Integrity Management System (IMS), Regulations in FY 2022-23.

• Periodic IMS Certification Audits: Successfully completed for Fourteen (14) Geographical Areas - Surat Ankleshwar Bharuch GA, Hazira GA, Dahej GA, Navsari GA, Valsad GA, Bhavnagar GA, Gandhinagar GA, Nadiad GA, Jamnagar GA, Rajkot (including Morbi) GA, Surendranagar GA, Kutch GA, Amreli GA, Dahod GA as per the defined periodicity of TPIA audits, in line with PNGRB Integrity Management System (IMS), Regulations in FY 2022-23.

• Periodic T4S Audit: Successfully completed for Two (2) Geographical Areas - Amreli GA and Dahod GA as per the defined periodicity of TPIA audits, in line with PNGRB Technical Standards and Specifications including Safety Standards (T4S), Regulations in FY 2022-23.

No major non-compliances were observed during above mentioned audits, most of the observations arising out of these audits are being addressed on priority basis.

Key Safety Index

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.

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 0.309 for the FY 2022-23.

• Total man-hours of GGL in FY 2022-23 is 29.09 Million.


GGL has a well-developed and certified Emergency Response and Disaster Management Plan through PNGRB approved Third Party Inspection agency (TPIA) for each of its operational Geographical Areas. GGL conducts mock-drills at defined intervals to check adequacy of preparedness against various anticipated emergency scenarios across all locations.

In FY 2022-23, GGL carried out

• Level-1 Mock-drills - 112 numbers

• Level-2 Mock-drills involving local emergency services/mutual aid partners - 54 numbers

• Level-3 Mock-drills including participation in the offsite mock drills organized by District authorities - 23 numbers

GGL Lifesaver Rules & Compliances

GGL has well defined Lifesavers rules for work related to safety critical areas such as Safe Systems of Work, Excavation-HDD-Boring, Working at Height, Lifting, Confined Space Entry, Driving, Gas Escape Handling, Electrical, CNG Handling & LNG Handling.

All critical activities are covered under these defined 10 lifesaver areas which are monitored throughout the year using Lifesaver compliance / Work place inspection checklists defined based on lifesaver rules. In FY 2022-23, GGL has achieved ~ 93% compliance to lifesavers rules.

HSE Initiatives

To improve HSE performance, various HSE initiatives and programs are implemented as part of HSE improvement plan such as Safety tours by Management, awareness sessions with frontline workers and supervisors on various aspects of Safety, Utility coordination, Safety awareness workshops at local schools across operational areas, campaign activities related to lifesaver areas, Hazard hunt activities, special drives to check compliance in defined focus areas etc. In FY 2022-23, GGL has achieved more than 97% compliance to its HSE improvement plan.

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, work place inspections, various campaigns and celebration of HSE events and numerous safety awareness programs.

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

HSE Awareness & Trainings

GGL always ensures that safety training programs are conducted periodically for employees and contractor staff. GGL also organizes various safety awareness programs including awareness regarding Natural Gas related safety for its customers, general public, employees, contractors and other stakeholders such as third-party utility in FY 2022-23:

• 627 numbers of Natural Gas safety awareness program have been conducted for general public, customers and other utility companies.

• 1970 numbers of Safety & Technical Competency Training programs have been conducted which includes Basic Safety, Practical Fire-fighting, First Aid Treatment, Defensive Driving, Working at height and other Technical Competency trainings in various areas such as GI Plumbing, CNG filling, Welding, CGD O&M, LCNG O&M etc.

• 1231 numbers of Safety Awareness Programs have been conducted for employees and contractors.

GGL also educates and influences various third-party utility companies and their contractors who undertake digging/excavation/drilling activities on or near the underground, GGL gas pipeline network. This is done to focus 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 while digging/excavation/drilling operations. The third parties are urged to dial in to GGL to confirm the pipeline location prior to starting any digging/excavation/drilling activities so that damage to Natural gas pipeline network can be prevented.

Celebrating HSE Events at GGL

GGL, being a prudent organization, celebrates various HSE related events like National Safety Week, Road Safety Week and World Environment Day.

GGL celebrated National Safety Week in March 2023. Focusing on this years theme "OUR AIM - ZERO HARM", below mentioned special activities were accomplished across all locations of GGL

• Display of custom National Safety Week banners and Health & Safety Pledge ceremony at all offices & various sites involving employees and contractor staff

• Natural Gas Safety Awareness session for School / College students

• Essay Writing Competition on topics of HSE for employees

• Story Writing Competition with a message on Safety for children of employees

• Contractor Engagement session at Site - NSW Awareness, Safety pledge, Safety reporting, Hazard hunt etc.

• Demonstration of PPEs and session on use of PPEs & its importance across all GA & corporate offices

• Spot quiz on Safety with employees and contractor staff

GGL celebrated Road Safety Week in January 2023. Below mentioned activities were done across all locations of GGL

• Display of custom Road Safety Week banners & Group gathering at GGL Offices & Road Safety message to employees by Management

• Poster competition on Road safety for children of employees

• Special drive on Vehicle inspection covering CNG MCVs and LNG Tankers

• Awareness Session on Driving Safety for MCV/LNG tanker/Hired vehicle drivers

• Eye check-up camp for CNG/LNG/Hired vehicle drivers

• Meeting with CNG/LNG Transport Agency owners to reinforce safety culture and compliance requirements among drivers GGL in its contribution under the theme Actions@75 of the government led initiative Azadi Ka Amrit Mahotsav through various initiatives/actions along with commitments to collectively create a better tomorrow by contributing in the field of Environment Protection. GGL celebrated World Environment Day (WED) to encourage awareness and implement actions for the protection of our environment. Below mentioned activities were carried out across all locations of GGL

• Display of custom Environment Day/ Week banners & Group gathering at GGL Offices

• Spot quiz on environment protection for GGL employees

• Sapling - Distribution & Plantation across all locations of GGL

• Poster competition on Only one Earth for children of GGL employees

• Poster competition on Azadi Ka Amrit Mahotsav for GGL employees focusing on GGL contribution to Environment Protection

• Awareness session on Environment Social Governance system

• Engagement with Contractors supervisors on Waste management (collection, handling and disposal)

All of these activities were done with an aim to involve employees, contractors, society at large and enhance their awareness regarding importance of Health Safety & Environment and related best practices.

HSE Rewards & Recognition at GGL

With an intention to motivate and foster a positive HSE culture and step-up HSE-AI compliance and performance, GGL has put in place HSE reward and recognition scheme to acknowledge significant HSE contribution of employees and contractor staff and to boost their confidence. Under this scheme:

• HSE contributor of the month among employees and contractor staff are identified on monthly basis at each geographical area and are rewarded during monthly HSE committee meeting.

• Monthly Best Hazard & Best Near miss carefully selected based on quality and safety criticality and rewarded

• Best HSE Performer amongst all employees in every quarter for each operations area

• Best HSE Performer amongst all employees for Financial year for each operations area

GGL also conducted monthly online HSE Quiz based on HSE focus area to raise awareness amongst employees across GGL & winners of this quiz result are awarded each month.

Step up with Environmental, Social and Governance - ESG system

ESG is a system to measure the sustainability of a company or investment in three specific categories: environmental, social and governance. With intentions to grow & reduce costs in the long run and forge a sense of trust amongst consumers & stakeholders, GGL has decided to step up its HSE scorecard to align with ESG requirements. In that line, GGL Board of Directors have constituted Business Responsibility and Sustainability Report (BRSR) Committee to oversee all activities pertaining to GGL ESG-BRSR reporting. The Committee has responsibility to review & approve business policies, process, practices and adoption of other necessary matters including decision-making, risk management, target setting for material issues & opportunities relevant to the organization. GGL has identified policies related to HSE, Human Resources, Information Security, Customer & Community grievance redressal etc. which have been prepared or modified in line with ESG requirement. Also additional performance indicators have been identified to comply with ESG requirements and data has been recorded against the same. GGL has worked towards improvising systems and process with the resolve to implement all essential & identified leadership indicators relevant to GGL business & operations. GGL is publishing its BRSR report for FY 2022-23 as a part of Annual Report.


The Management Discussion & Analysis is as under:


Natural Gas is the cleanest and most efficient of the fossil fuels. Natural Gas is used as a feedstock in several industries like fertilizers, plastics and other commercially important organic chemicals and used as a fuel for electricity generation, heating purpose in industrial and commercial units. Natural gas is also used for cooking in domestic households and as a transportation fuel for vehicles. The global energy crisis triggered by the Russian invasion of Ukraine had put gas supply security and market stability at the center of policy interventions in 2022. During 2022 natural gas prices reached all-time high levels in Asian and European markets amid tight market conditions. Record high price levels were accompanied by excessive volatility and short term price variability.

During FY 2022-23, Natural Gas consumption has declined from 64.5 BCM (billion cubic meters) to 60.3 BCM (billion cubic meters) i.e. a decline of 6.5% as compared to previous year. Consumption of Natural Gas (NG) was driven by the fertilizer (33%) followed by CGD (20%), Power (14%) Refinery (7%), Petrochemicals (3%) and others (23%).1

Indias natural gas consumption has declined by nearly 6.5% during the year as compared to the previous year as high prices squeezed gas demand for fertilizer (down 25% y-o-y), refining (down 50% y-o-y) and the petrochemicals sector (down 65% y-o-y) in particular. City gas demand was broadly flat with an increase of 4%, while consumption in the power segment increased steeply by 45% and other segment (which include glass, metal, ceramic and other small scale industries) also saw sharp increase of 95% during the year. Indias LNG imports dropped by approximately 16.5% while there was a 3.2% increase in domestic production.

Crude Oil prices have always been at the base of all energy prices including Natural Gas. The crude oil prices increased drastically during the 1st half of FY 2022-23. The Crude Oil prices crossed $100/bbl in the first quarter of the Financial Year.


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 sector and PNG for Domestic. However, owing to significant increase in demand for CNG and PNG (Domestic) categories, the Domestic Gas allocated is insufficient to meet the demand. The shortfall was being filled by sourcing gas at market rates. However, the auction guidelines for Domestic Gas has been altered wherein the CGDs can source gas from Domestic Gas field (viz. HPHT fields). While the above factors did lead to increase in prices in CNG & PNG (Domestic) categories; however the impact on demand in these categories was limited as prices of alternate fuels has also increased significantly.

Recently the Government of India has approved the Kirit Parikh Committee Report for Natural Gas Pricing Reforms based on which the Domestic Gas Pricing Guidelines, 2014 has been amended. Based on the amended guidelines, the new Domestic Natural Gas Price (APM price) shall be 10% of the Indian Crude Basket Price as defined by Petroleum Planning and Analysis Cell (PPAC) from time to time. The APM price shall be subject to a floor and a ceiling. The initial floor and ceiling prices shall be $4/MMBTU and $6.5/MMBTU respectively. The ceiling would be maintained for the next two years (FY 2023-24 and 2024-25) and then increased by $0.25/MMBTU each year. CGD companies, including your Company reciprocated by reducing CNG and PNG (Domestic) prices. This policy change shall impact CGD businesses positively by way of reduced Domestic gas purchase price leading to higher new conversions in CNG and PNG (Domestic) category.

Similar to any other business, the Company faces challenges in the form of stiff competition from other fuels due to 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.

The Company has completed the Minimum Work Program (MWP) targets as applicable viz. PNG (Domestic) connections, Pipeline Inch- km laid, Compression Capacity and CNG Stations in the Geographical Areas of Surat-Bharuch-Ankleshwar, Valsad, UT of DNH, Dahej, Anand, Panchmahal and Amritsar GAs.

Further, the sector regulator has also notified Unified Tariff regulation for natural gas pipelines with a mission of "One Nation, One Grid and One tariff". This reform will specially benefit the consumers located in the far-flung areas where currently the additive tariff is applicable and facilitate development of gas markets and vision of government to increase the gas utilisation in the country.


Your Company as on date has total 27 CGD licenses and operates in 44 districts across six states and one Union territory which accounts to c. 9% of total CGD licenses and c. 6% of total area authorised by PNGRB in India and also has one transportation pipeline license.

Your Company has an expanse of around 1,75,700 square kilometres of licensed area under its umbrella and continues to hold the position among the largest CGD Company in Country. Your company supplies natural gas to more than 19.28 lakh residential consumers, over 14,390 commercial customer and has erected / commissioned 808 CNG stations for vehicular consumers and provides clean energy solutions to over 4,360 industrial units through its wide spread operations with more than 35,650 kilometres of Natural Gas pipeline network.

Your company has achieved a growth of 22% and 15% in CNG and commercial sales respectively compared to previous year. Your Company has continued its focused efforts for developing and growing PNG (Domestic) and CNG business. Your Company has connected more than 2,22,000 residential customers and commercialized more than 179000 residential customers, erected / commissioned 102 new CNG stations during the year.


The future outlook for natural gas in India depends on the growth in demand, the evolution of the pricing regime and the pace of gas infrastructure expansion. The demand will steadily rise with opening of the economy after the pandemic.

Your company has already adopted digitization of its critical processes and going forward also, your company shall leverage its endeavors for more digitization and aims to set benchmark in the CGD industry for complete E-Office, benefiting all the stakeholders viz. consumers, vendors, suppliers and employees.

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. India has set a target to raise the share of gas in its primary energy mix to 15% by 2030 from about current level of 6%. 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 1,75,700 square kilometres through its ever growing pipeline network spread across 44 districts in 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 its operating Areas. With this focused endeavour, your Company 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.


As per EIA Short-Term Energy Outlook (STEO) April 2023 report, the Brent crude oil spot price forecast averages $85 per barrel (b) in 2023, up $2/b from last months forecast. The higher price forecast reflects a forecast for less global production in 2023 and a relatively unchanged outlook for global oil consumption. Despite of higher price forecast, recent issues raise the potential that economic and oil demand growth will be lower than the forecast, which has the potential to result in lower oil prices.

Based on the data represented below it can be inferred that the Brent Crude Oil Spot average price is expected to be around $85/ bbl in 2023 and is expected to further reduce to around $81/ bbl in 2024 which may result in lower purchase cost of spot volumes required for meeting the shortfall volumes by your company for serving the various customer segments.

2022 2023 2024 Avg for the Year
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2022 2023 2024
Brent Spot Average (dollars per barrel) 101.17 113.84 100.53 88.44 81.04 86.00 87.00 86.00 85.00 82.00 80.00 78.00 100.94 85.01 81.21


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 and automating controls.


The stand-alone net profit after tax (Total comprehensive income) for the current financial year 2022-23 increased to Rs 1,533.99 Crores from Rs 1,288.33 Crores in the previous year. The Company had a healthy net cash inflows from operations of Rs. 2,377.96 Crores during the financial year 2022-23. During the year, the Company has fully prepaid outstanding long term loan from internal accruals and there is no outstanding loan as on 31st March 2023.

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. 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 2022-2023 FY 2021-2022 Remarks Reason for significant changes
Debtors Turnover 16.47 18.66 Net Credit Sales / Average Trade Receivable NA
Inventory turnover 781.48 924.77 Cost of goods sold or sales /Average Inventory (Natural Gas) NA
Interest Coverage Ratio 48.57 Earning for Debt Service / Interest for borrowing [Earning for Debt Service = Net Profit after taxes + Non-cash expenses/adjustment + Interest -Lease payments] Interest Coverage Ratio is improved due to prepayments/ repayment of Borrowings during the year. There is no outstanding debt as on 31st March 2023.
Current Ratio 1.40 1.17 Current assets / Current liabilities net of customer deposit NA
Debt Equity 0.00 0.09 Total Borrowing / Total Equity Debt Equity ratio has improved due to prepayments/ repayment of Borrowings during the year and increase in total equity due to current year profits. There is no outstanding debt as on 31st March 2023.
Operating Profit Margin (%) 14.30% 12.76% Operating income / Revenue from operations NA
Net Profit Margin (%) 8.81% 7.66% PAT / Revenue from operations NA
Return on Net Worth 23.83% 25.05% PAT / Average net worth NA

Previous years ratios have been reclassified wherever necessary to confirm to the current periods presentation.


Your Company employed 1028 employees as on 31st March 2023. 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 - 6.

Foreign Exchange Earnings and Outgo-

The Company has incurred expenditure in Foreign Exchange to the extent of Rs. Nil during FY 2022-23 (Previous year FY 2021-22 Rs. 0.62 Crores) and the Foreign Exchange Earnings during FY 2022-23 were Rs. Nil (Previous year FY 2021-22 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.


Gujarat Gas Limited is dedicated towards fostering an atmosphere of transparency and accountability by working in partnership and empowering our stakeholders. To protect and for the benefit of all our stakeholders, we strive to promote sustainable development. GGL considers its responsibility towards sustainable development as an opportunity to succeed by taking actions which are beneficial for society as a whole.

We applaud SEBIs introduction of the "Business Responsibility and Sustainability Reporting" ("BRSR") reporting structure, which includes comprehensive Environmental, Social, and Governance ("ESG") disclosures.

The first edition of our Business Responsibility and Sustainability Report (BRSR) forms part of the Annual Report, in which we attempted to provide all non-financial disclosures in accordance with clause (f) of sub-regulation (2) of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The report provides all our stakeholders with a comprehensive view and insight into our Companys contribution to the economy, the environment and society, which can be utilized to showcase GGLs dedication towards long-term growth. In order to meet the expectations of our investors and other stakeholders, we are improving the transparency of our report, as well as our strategic approaches to create value for our stakeholders while minimizing risk in the external environment. Statement on ESG is attached at Annexure-7 of the Boards Report.


In view of requirements of SEBI Circular bearing No SEBI/HO/DDHS/CIR/P/2018/144 dated 26th November, 2018, disclosures made in terms of para 4.1 of the said circular forms part of Audited Annual Financial Results of the Company. No funds have been raised by your Company during FY 2022-23.


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, 2023, 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, 2023 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: 18 th August, 2023 Raj Kumar, IAS
Place : Gandhinagar Chairman

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