MIRA INFORM REPORT

Report Date :

11.08.2011

IDENTIFICATION DETAILS

Name :	GUJARAT GAS COMPANY LIMITED
Registered Office :	2, Shantisadan Society, Near Parimal Garden, Ellisdridge, Ahmedabad-380006, Gujarat.
Country :	India
Financials (as on) :	31.12.2010
Date of Incorporation :	17.01.1980
Com. Reg. No.:	04-003623
Paid-Up Capital :	Rs. 400.500 Millions
CIN No.: [Company Identification No.]	L2320GJ1980PLC003623
Legal Form :	A Public Limited Liability Company. Company’s Shares Are Listed On Stock Exchange.
Line of Business :	Processing, Transmission and Distribution of Natural Gas.
No. of Employees :	Information not divulged by management

RATING & COMMENTS

MIRA’s Rating :

A (61)

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 33000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and a reputed company having fine track. Financial position of the company appears to be sound. Fundamentals are strong and healthy. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

INFORMATION DECLINED BY

Name :	Mr. Prashant
Designation :	Senior Finance Executive
Date :	10.08.2011

LOCATIONS

Registered / Corporate Office :	2, Shantisadan Society, Near Parimal Garden, Ellisdridge, Ahmedabad-380006, Gujarat, India.
Tel. No.:	91-79-26462980/26467876/26460095
Fax No.:	91-79-26466249
E-Mail :	rajeshwari.sharma@gujaratgas.com
Website :	www.gujaratgas.com
Factory :	SURAT: Adajan Gam, Post Box.No.915, P.O.Navyug College, Surat-395009, Gujarat, India CNG OFFICE(SURAT): CNG OFFICE, 3^RD Fllor, Swastik House, Kargil Chowk, Piplod, Surat – 395007, Gujarat, India ANKLESHWAR: Surati Bhagol, Umarwada Road, Via Piramal Naka, Ankleshwar – 393001, Gujarat, India BHARUCH: Anand Mangal Society, Son Talavadi, Bharuch – 392001, Gujarat, India VAPI: Chandralok Complex, Near Cinepark Multiplex, Selvas Vapi Main Road, Chanod, Vapi, Gujarat, India
Gas receiving location:	SACHIN: Block No.248, GIDC Sachin, Village- Unn, Magdalla-Sachin Road, Surat, Gujarat, India Rahadpore: Survey no.75/123, At and Post Rahadpore, Palej – Tankaria Road, Bharuch, Gujarat, India Mora (Surat) Survey no.150, Opposite Reliance Gate No 3-B, Surat – Hazira Road, Mora, Surat, Gujarat, India Amboli: Plot no.70-71, Amboli, Ankleshwar, District Bharuch, Gujarat, India Palsana: Survey no.168 and 168/p, Village – Lingad, Taluka – Palsana, District – Surat, Gujarat, India Surat: Plot no.87-88, Mayavanshi Mohallo, Adajan Gam, Surat, Gujarat, India Valia: Block no.192, Kosamdi Village, Taluka-Ankleshwar, District – Bharuch-392001, Gujarat, India Vadoli: Block No. 546/1, Village–Vadoli, Olpad – Kim State Highway, Taluka- Olpad, District – Surat, Gujarat, India Atodora: R.S. No. 64/1, and 64/2, Village-Atodara, Taluka-Olpad, District-Surat, Gujarat, India Jhagadia: Plot No-773/A and 773/B, GIDC Jhagadia, Ankleshwar, District-Bharuch, Gujarat, India Ankleshwar: Surati Bhagol, Umarwada Road, Near Piraman Naka, Ankleshwar, District, Bharuch, Gujarat, India Hazira Plot No : 364, Oppoiste GSPL Guest House, Hazira Village, Taluka: Choryas, District: Surat, Gujarat, India

DIRECTORS

As on 31.12.2010

Name :	Mr. Hasmukh Shah
Designation :	Chairman
Name :	Mr. Alan Derek Fisher
Designation :	Director
Name :	Mr. Rajeev Khanna
Designation :	Director (upto 22.07.2010)
Name :	Prof. Pradip Khandwalla
Designation :	Director
Name :	Mr.Jai Patel
Designation :	Director
Name :	Mr. Ajit Kapadia
Designation :	Director
Name :	Mr. Bikash.C.Bora
Designation :	Director
Name :	Mr. Shaleen Sharma
Designation :	Managing Director
Name :	Mr. Walter Simpson
Designation :	Director (w.e.f 22.07.2010)
Name :	Mr. William Adamson
Designation :	Director
Name :	Mr. Kapil Garg
Designation :	Director

KEY EXECUTIVES

Name :	Ms. Rajeshwari Sharma
Designation :	Company Secretary
Name :	Mr. David Brooks
Designation :	Director-Technical
Name :	Mr. Himanshu .K. Upadhyay
Designation :	Director-Policy and Corporate Affairs
Name :	Mr. Devendra Katiyar
Designation :	Director – HSSE
Name :	Ms. Priyaranjan Sekhon
Designation :	Legal Counsel
Name :	Manu Verma
Designation :	Director – Commercial
Name :	Mr. Sadhan Banerjee
Designation :	Director-Management Services
Name :	Mr. Sugata Sicar
Designation :	Director-Finance
Name :	Mr. Nakul Raheja
Designation :	General Manager- Regulations and New Business Development
Name :	Mr. Rajeev Singh
Designation :	Director – Human Resources

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.06.2011

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
(2) Foreign
Bodies Corporate	83,518,750	65.12
Sub Total	83,518,750	65.12
Total shareholding of Promoter and Promoter Group (A)	83,518,750	65.12
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	5,526,477	4.31
Financial Institutions / Banks	214,666	0.17
Insurance Companies	3,898,665	3.04
Foreign Institutional Investors	20,434,856	15.93
Sub Total	30,074,664	23.45
(2) Non-Institutions
Bodies Corporate	2,083,356	1.62
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	9,960,530	7.77
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	2,095,472	1.63
Any Others (Specify)	517,228	0.40
Trusts	11,100	0.01
Non Resident Indians	247,903	0.19
Foreign Mutual Fund	13,000	0.01
Hindu Undivided Families	179,507	0.14
Clearing Members	65,718	0.05
Sub Total	14,656,586	11.43
Total Public shareholding (B)	44,731,250	34.88
Total (A)+(B)	128,250,000	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	-	-
(1) Promoter and Promoter Group	-	-
(2) Public	-	-
Sub Total	-	-
Total (A)+(B)+(C)	128,250,000	-

"Promoter and Promoter Group"

Sl. No.	Name of the Shareholder	Total Shares held		Shares pledged or otherwise encumbered
		Number	As a % of grand total (A)+(B)+(C)	Number	% of Total shares held	As a % of grand total (A)+(B)+(C)
1	BG Asia Pacific Holdings Pte Limited	83,518,750	65.12	-	-	-
	Total	83,518,750	65.12	-	-	-

"Public" and holding more than 1% of the Total No.of Shares

Sl. No.	Name of the Shareholder	No. of Shares	Shares as % of Total No. of Shares
1	Aberdeen Asset Managers Limited A/c Aberdeen Global -Asian Smaller Companies Fund	3,211,526	2.50
2	Aberden Asset Managers Limited A/c Aberdeen International India Opportunities Fund (Mauritius)	12,256,000	9.56
3	Sugata Sircar	1,661,750	1.30
4	Bajaj Allianz Life Insurance Company Limited	1,618,853	1.26
	Total	18,748,129	14.62

Details of Locked-in Shares

Sl. No.	Name of the Shareholder	No. of Shares	Locked-in Shares as % of Total No. of Shares
1	Nil	0	0.00
	Total	0	0.00

Details of Depository Receipts (DRs)

Sl. No.	Type of Outstanding DR (ADRs, GDRs, SDRs, etc.)	No. of Outstanding DRs	No. of Shares Underlying Outstanding DRs	Shares Underlying Outstanding DRs as % of Total No. of Shares
1	Nil	0	0	0.00
	Total	0	0	0.00

Holding of Depository Receipts (DRs),
where Underlying Shares are in Excess of 1% of the Total No. of Shares

Sl. No.	Name of the DR Holder	Type of Outstanding DR (ADRs, GDRs, SDRs, etc.)	No. of Shares Underlying Outstanding DRs	Shares Underlying Outstanding DRs as a % of Total No. of Shares
1	Nil	Nil	0	0.00
	Total		0	0.00

BUSINESS DETAILS

Line of Business :

Processing, Transmission and Distribution of Natural Gas.

GENERAL INFORMATION

No. of Employees :	Information not divulged by management
Bankers :	HDFC Bank ICICI Bank Limited Kotak Mahindra Bank Limited State Bank of India
Facilities :	--

Banking Relations :	--
Auditors :
Name :	Price Waterhouse Chartered Accountants
Address :	Building 8,7^th and 8^th Floor, Tower B, DLF Cyber City, Gurgaon – 122022, Haryana, India
Subsidiaries :	· Gujaratgas Trading Company Limited (GTCL) · Gujarat Gas Financial Services Limited (GFSL)

CAPITAL STRUCTURE

As On 31.12.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
140,000,000	Equity Shares	Rs. 2 each	Rs.280.000 millions
17,000,000	7.5% Redeemable Cumulative Non Convertible Preference Shares	Rs.10 each	Rs.170.000 millions
	Total		Rs. 450.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
128,250,000	Equity Shares	Rs. 2 each	Rs.256.500 millions
	[Out of the above 83,518,750 (Previous year 83,518,750) equity shares are held by holding company BG Asia Pacific Holdings Pte. Limited , the ultimate holding company being BG Group plc.] [Out of the above during the Previous year 64,125,000 equity shares allotted as fully paid-up by way of bonus shares out of General Reserve]
14,400,000	7.5% Redeemable Cumulative Non Convertible Preference Shares	Rs. 10 each	Rs.144.00 millions
	[Redeemable at par at any time after five years from the date of allotment (18.05.2006) but prior to the expiry of twenty years from the date of such allotment; earliest possible date of redemption 18.05.2011]
	Total		Rs. 400.500 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2010	31.12.2009	31.12.2008
SHAREHOLDERS FUNDS
1] Share Capital		400.500	400.500	272.250
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		7911.610	7123.630	6709.630
4] (Accumulated Losses)		0.000	0.000	0.000
5] Stock Options Outstanding Account		37.960	21.290	2.880
NETWORTH		8350.070	7545.420	6984.760
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		0.000	0.000	0.000
DEFERRED TAX LIABILITIES		718.520	604.860	530.060
DEPOSITS		2073.500	1553.500	1273.690
TOTAL		11142.090	9703.780	8788.510
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		6339.890	5740.980	4714.880
Capital work-in-progress		780.230	865.730	812.660
Capital Inventory		517.680	489.960	531.440
INVESTMENT		5348.740	4121.540	3456.200
AMOUNT RECOVERABLE FROM ESOP TRUST		343.020	243.000	10.500
DEFERREX TAX ASSETS		0.000	0..000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	105.910	110.920	101.300
	Sundry Debtors	1411.170	1138.980	959.670
	Cash & Bank Balances	48.590	72.160	68.460
	Other Current Assets	72.970	99.450	139.240
	Loans & Advances	156.890	266.220	233.350
Total Current Assets		1795.530	1687.730	1502.020
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	1489.410	1546.860	1540.980
	Other Current Liabilities	587.260	569.790	355.780
	Provisions	1906.330	1329.400	346.990
Total Current Liabilities		3983.000	3446.050	2243.750
Net Current Assets		(2187.470)	(1758.320)	(741.730)
MISCELLANEOUS EXPENSES		0.000	0.890	4.560
TOTAL		11142.090	9703.780	8788.510

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.12.2010	31.12.2009	31.12.2008
	SALES
		Income	18460.340	14176.390	12964.670
		Other Income	216.600	253.200	393.040
		TOTAL (A)	18676.940	14429.590	13357.710
Less	EXPENSES
		Material Consumed / Processed	12866.440	10032.060	9337.840
		Personnel Expenses	495.230	447.970	409.820
		Operating and Other Expenses	968.010	910.350	883.060
		Deferred Revenue Expenditure Written Off	0.890	3.670	15.000
		TOTAL (B)	14330.570	11394.050	10645.720
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		4346.370	3035.540	2711.990
Less	FINANCIAL EXPENSES (D)		4.620	1.360	1.110
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		4341.750	3034.180	2710.880
Less/ Add	DEPRECIATION/ AMORTISATION (F)		530.660	460.630	404.360
	PROFIT BEFORE TAX (E-F) (G)		3811.090	2573.550	2306.520
Less	TAX (H)		1223.800	822.300	718.400
	PROFIT AFTER TAX (G-H) (I)		2587.290	1751.250	1588.120
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		5315.260	4949.010	3758.600
Less	APPROPRIATIONS
		Transfer to General Reserve	259.000	176.000	160.000
		Proposed Dividend
		- Preference Shares	10.800	10.800	10.800
		- Equity Shares	1539.000	1026.000	1923.800
		Corporate Dividend Tax	251.420	172.200	34.530
	BALANCE CARRIED TO THE B/S		5842.330	5315.260	4949.010
	IMPORTS
		Stores & Spares	21.690	21.190	15.920
		Capital Goods	28.340	19.800	16.940
	TOTAL IMPORTS		50.030	40.990	32.860
	Earnings Per Share (Rs.)		20.08	13.56	12.28

QUARTERLY RESULTS

PARTICULARS	31.03.2011
	1^st Quarter
Net Sales	5287.710
Total Expenditure	4202.310
PBIDT (Excl OI)	1085.400
Other Income	97.280
Operating Profit	1182.680
Interest	0.350
PBDT	1182.330
Depreciation	142.710
Profit Before Tax	1039.620
Tax	316.000
Profit After Tax	723.620
Net Profit	723.620

KEY RATIOS

PARTICULARS		31.12.2010	31.12.2009	31.12.2008
PAT / Total Income	(%)	13.85	12.13	11.88
Net Profit Margin (PBT/Sales)	(%)	20.64	18.15	17.79
Return on Total Assets (PBT/Total Assets}	(%)	46.85	40.84	37.10
Return on Investment (ROI) (PBT/Networth)		0.46	0.34	0.33
Debt Equity Ratio (Total Liability/Networth)		0.48	0.45	0.32
Current Ratio (Current Asset/Current Liability)		0.45	0.48	0.66

LOCAL AGENCY FURTHER INFORMATION

The Details of sundry creditors:

Rs. In Millions

Particulars	31.12.2010	31.12.2009	31.12.2008
Sundry Creditors
- Dues to micro and small enterprises	13.830	9.770	3.390
- Other Creditors	1475.580	1537.090	1537.590
Total	1489.410	1546.860	1540.980

MANAGEMENT ANALYSIS
 
Industry Structure and developments

Industry Structure and Developments Natural gas is fast gaining its place in India’s large and rapidly growing energy market. Due to the inherent environment friendly nature, ease of handling and greater efficiency, natural gas is proving its utility both as a fuel and feedstock. Natural gas currently constitutes about 11 % of India’s primary energy basket, but with additional availability, including that from the imported route, natural gas is expected to constitute ~23% of the primary energy basket by the year 2020 suggesting a significant growth potential for the natural gas business in India.

India’s gas production has seen a sharp growth during last two years with the commencement of supplies from the D6 fields in the Krishna Godavari basin offshore the Indian east coast. This resulted in balanced demand supply for a brief period but the second half of the year 2010 saw significant deficit in supplies mainly because

of an unexpected reduction in D6 supplies.

The Ministry of Petroleum and Natural Gas (MoPNG), Government of India, under the aegis of the EGOM (Empowered Group of Ministers) allocates gas from the D6 fields as per the Gas Utilisation Policy. Under this policy, preferential allotment is made to units in the core sectors of fertiliser and power. Given that supply from indigenous fields would not be adequate to meet demand over the medium to long term, the country will have to rely significantly on importing Liquefied Natural Gas (LNG). The consumption of regasified LNG (RLNG) in Indian markets increased through the year, primarily due to the availability of spot cargoes.

Over the medium to long term, Indian gas demand is projected to continue to be far in excess of the availability of gas from indigenous sources, confirming a clear market preference for this environmentally friendly source of energy. While the predominant consumers continued to be the power and fertiliser units, the demand from City Gas Distribution (CGD) customers viz. smaller industrial units, natural gas vehicles, households and commercial establishments, continued to grow. Sectoral gas demand has remained largely consistent over the years, with almost 46% being consumed by power sector followed by the fertiliser sector with a share of 25%. The sectorwise

gas demand projections as in the XI – XII Five-Year Plans, together with the projections for all India gas demand in the near to medium term

Opportunities and Challenges

The robust projection for growth in the demand for natural gas in the CGD market offers significant opportunities to the Company. Natural gas is used in various applications and replaces different alternate fuels. There is opportunity to focus on high value markets and further increase penetration in them. This would not only help in increasing value but will also help in mitigating the increasing cost of gas in the Company’s portfolio.

Compressed Natural Gas (CNG) remains a high value segment in the Company’s markets and is a significant driver for growth. The Company is focused on expanding the infrastructure of CNG stations in its operational areas to sustain the growth momentum in this business.

Opportunity exists to expand in new geographical areas. The Company is assessing all such opportunities and has bid for a new geographical area in Gujarat under the third round of bidding launched by the Petroleum and Natural Gas Regulatory Board (PNGRB).

The strong industrial growth in the state of Gujarat, and the conducive business, social and political environment

attract large investments to the state. Recent announcements indicate plans for huge additional investments in industrial and urban facilities. It is expected that these investments will create an even stronger demand for natural gas in the state.

The shortfall in the supply of indigenous gas will continue to pose a challenge in the way of business growth. The

supply shortfall will largely have to be met with RLNG. As the BG Group is a major global player in LNG and is a

marketer of RLNG in India, the Company is expected to have a better access to RLNG supplies.

The Company is aware of the challenges by way of competition in obtaining licenses for new areas, in running

its operations at a high level of safety and integrity and in retaining its key talent. Mitigation plans are in place to

address these challenges.

Operations and Market Performance

The Company maintained its status as the largest CGD company in India by volumes, despite the ongoing gas supply deficit situation in the country.

The Company met the challenges of gas sourcing through the year. Whilst 0.60 mmscmd of D6 gas was allocated on a “fall-back” basis by the MoPNG to the Company, no contract could be signed with the suppliers due to inadequate gas production from the D6 fields during the year. However, the Company was successful in procuring RLNG at competitive prices through medium and short term contracts with various suppliers to meet the gas requirements of its customers, and will continue to make concerted efforts to secure such supplies so as to maintain an efficient balance of medium and short term RLNG in its gas sourcing portfolio. This will ensure supply security for the Company’s customers and generate flexibility in managing the variations in gas requirements of there various market segments.

The Company was able to grow gas sales volumes by 17% over the previous year. About 30,000 new household customers were connected on natural gas during the year, taking the total number of domestic customers of the Company to over 295,000. More than 130,000 vehicles now ply in the Company’s operating areas on CNG. The Company has around 300,000 customers, including industrial units. Sales volumes grew by 20% in the Industrial segment and 16% in the CNG segment.

The average cost of gas for the Company’s portfolio increased over the previous year, primarily due to higher proportion of RLNG in the portfolio which made it necessary to align the gas sales prices in the latter part of the year.

 
Future outlook

Demand for natural gas is expected to grow as has been outlined above. It will be critical for the Company to expand its network and CNG station infrastructure in order to meet the growth in demand. The Company plans to continue extending its network to areas adjacent to its current operations. Opportunities for expansion to new geographical areas will continue to be assessed. Growth in new areas will be through the bidding process set out by the PNGRB.

The company will endeavour to grow value by identifying and accessing high value market segments.

The Company will continue to invest in human resources and in systems and processes which strengthen the integrity and safety of the Company’s assets. This will be the bedrock for the sustenance and growth of the Company’s business.

 
SUBSIDIARIES
 
Gujaratgas Trading Company Limited (GTCL)

Gujaratgas Trading Company Limited (GTCL), a wholly-owned subsidiary of the Company is engaged in the business of selling natural gas. During the year, GTCL achieved sales of Rs. 1730.320 millions as against Rs. 679.510 millions during the previous year. Total income for the year was Rs. 1736.640 millions including other income of Rs. 6.330 millions as against total income of Rs. 687.570 millions including other income of Rs. 8.060 millions in the previous year.

Profit before tax (PBT) was Rs. 7.010 millions during the year as against Rs. 8.030 millions in the previous year.

Gujarat Gas Financial Services Limited (GFSL)

Gujarat Gas Financial Services Limited (GFSL), another subsidiary of the Company, carried out the job of installing gas connections for domestic and commercial customers of the Company. While GFSL had the status of a certified Non Banking Financial Company, it has stopped providing lease finance since April 2007. As it no longer meets the norms prescribed by the Reserve Bank of India (RBI) for Non-Banking Financial Companies, the Company has applied to the RBI for surrender of the RBI Certificate of Registration as NBFC.

During the year, the income was Rs. 73.590 millions. as compared to Rs. 50.660 millions. in the year 2009 and the profit after tax was Rs. 42.140 millions. as compared to Rs. 28.390 millions. for the previous year.

 
FINANCE

The net cash profits of the Company continued to be strong. A portion of the same was invested in the extension and reinforcement of the Company’s pipeline network, expansion of the CNG infrastructure and strengthening of the Information Management systems. Appropriate provisions have been made in the accounts wherever necessary for contingencies, bad debts and diminution in value of investments. During the year, the Company has not invited any fixed deposits within the meaning of Section 58A of the Companies Act, 1956.

Subject Employee Stock Option Plan 2008 (“the ESOP 2008”)

The Company formed the Subject Employee Welfare Stock Option Trust (“the Trust”) in November 2008, which administers the ESOP of the Company. The Director - Finance and Director - Human Resource are the Trustees of the Trust. Under the ESOP, Options are granted, which provide the benefit or right but not the obligation for exercising at a future date, equivalent number of equity shares each of the face value of Rs. 2/- each of Subject against the Options that have vested under the ESOP. The ESOP provides for graded vesting of Options granted over a period of 4 years from the date of grant.

The Options are to be exercised within a maximum period of 2 years from the date of Vesting. Within the Exercise

Period, the Option holder has the option to either purchase the shares from the Trust at the Exercise Price or to give a Mandate of Sale of the shares (“the Mandate”) to the Trust in accordance with the terms and conditions of the ESOP.

As per the terms and conditions of the ESOP, the Trust purchases out of the funds advanced by the Company, shares from the open market at ruling prices, at different points of time, equivalent to the number of options granted to the employees. These shares purchased by the Trustees are held in their capacity as the Trustees till the Options are exercised upon Vesting by the Option holders as per the terms of ESOP. The Trust had purchased from the secondary market 19,48,000 equity shares of Rs. 2/- each, as of 31.12.2010 and the same are being held jointly by the trustees of the Trust.

Under the ESOP, these Equity Shares are subsequently to be sold following the Mandate from the Option holders

or are to be transferred to the Option holders, as the case may be, at the time of the Exercise of the Options upon Vesting. The Trustees are authorized to execute the purchase and sale of shares of the Company, on behalf of the Option holders, in accordance with the ESOP.

The first date of grant was 01.11.2008, on which 13,55,000 Options were granted to the eligible employees. 25% of these Options granted being 3,38,750 in number, Vested on the expiry of two years from the Grant Date i.e. 30.10.2010. The First Vesting Date for these 3,38,750 Options was 01.11.2010 and accordingly, 2,80,000 Options have been exercised and 58,750 Option remain unexercised which can be Exercised within two years. As per the ESOP, the Options holders had given the Mandate, whereby the Trustees had to sell 2,70,000 equity shares in December 2010, through open market and the difference between the sale price and the Exercise Price, net of charges and taxes were given to the Option holders as per the ESOP.

Also, as per the ESOP, one of the Option holders, upon Vesting, had exercised his right by opting to have 10,000 shares transferred in his name instead of giving the Mandate to sell the shares. Therefore, the Trustees had transferred to the concerned Option holder, these 10,000 equity shares at the pre-determined Exercise Price of Rs. 95.00 per share.

The Company has not passed any resolution for buyback of shares.

 
 
Contingent Liabilities: 

(a) Claims against the company not acknowledged as debts Rs.13.570 million (Previous year Rs.11.150 million).

(b) Claims of Rs. 27.920 million (Previous year Rs. 25.860 million) against the Company have been disputed by the Company. The Company is, however, indemnified by an insurance policy.

(c) Income tax related exposures Rs. 200.970 million (Previous year Rs. 196.240 million)

(i) Includes income tax demand of Rs. 53.460 million (Previous year Rs. 53.460 million) relating to Assessment Years 1998-99, 1999-00 and 2000-01 due to disallowance of interest on debentures issued for the Hazira Ankleshwar pipeline and incurred during its construction, claimed as revenue expenditure. The amount of Rs. 53.460 million (Previous year Rs. 53.460 million) has been paid under protest.

CIT (Appeals) has ruled in favour of the company and deleted the demand of Rs.6.870 million pertaining to A.Y. 2000-01. The Income-tax department has preferred an appeal in ITAT against the said order of CIT (Appeals) but ITAT allowed the claim for A.Y. 2000-2001. The appeal for the other two years is pending with the ITAT.

(ii) Includes income tax demand of Rs.123.410 million (Previous year Rs. 122.380 million) including interest on tax, relating to Assessment Years 1995-96 to 2007-08 due to disallowance of depreciation claimed on leased assets. The total amount paid by company / adjusted by tax authorities on account of above demand aggregates to Rs.122.410 million (Previous year Rs.121.670 million). The total tax exposure (though actually paid), net of interest on tax, on account of the above for all the years aggregates to Rs.115.320 million (Previous year Rs. 115.040 million). The company’s appeals against the above demands are pending with ITAT for Assessment years 1996 97, 1997-98, 1998-99, 1999-00, 2001-02 and 2002-03. The company’s appeal for A.Y. 2005-06, 2006-07 and 2007-08 is pending with CIT (A). For A.Y. 2000-01, 2003-04 and 2004-05 the matter has been decided in the company’s favour by the ITAT. The High Court of Gujarat has allowed the company’s claim on the same issue for A.Y. 1995-96 and this is likely to have a positive consequential effect on all the subsequent years.

(iii) Includes income tax demand for Rs.11.680 million (Previous year Rs.7.990 million) for disallowances under Section 14A on account of expenditure incurred for earning exempt income for A.Y. 2004-05, 2005-06, 2006-07 and 2007-08. The total amount paid by company / adjusted by tax authorities on account of above demand aggregates to Rs.7.990 million (Previous Year Rs.1.390 million). The Appeal for A.Y. 2005-06, 2006-07 and 2007-08 is pending with CIT (A) and for A.Y 2004-05 with ITAT.

For A.Y. 2000-01 the Tribunal has disallowed the similar expenses under Section14A and has asked the Assessing Officer to re-examine the tax levy as per Rule 8D of the Income Tax Rules, 1962 and hence the amount can not be quantified at this stage. The Company has preferred an appeal with the High Court against the above order of the Tribunal.

(iv) Includes income tax demand for Rs.12.420 million (Previous year Rs.12.420 million) for certain disallowances for A.Y. 2003-04 to 2006-07. The demand is towards disallowances on account of bad debts written off, inventory written off, deposits written off and treatment of Cenvat credit balance as income. The total amount paid by company / adjusted by tax authorities on account of above demand aggregates to Rs. 8.670 million (Previous year Rs. 8.670 million). The appeal for A.Y. 2005-06 and 2006-07 is pending with CIT (A) and for A.Y. 2003-04 and 2004-05 with ITAT.

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED ON 31.03.2011

Rs. In Millions

Particulars	3 months ended on 31.03.2011 (Unaudited)
Gross Sales	5288.260
Excise duty on sales	85.230
Net Sales	52030.30
Other Operating Income	84.680
Income from Operations	5287.710
Total Expenditure including	4345.020
(a) Consumption of Raw Materials	3799.250
(b) Staff Cost	139.940
(c) Depreciation	142.710
(d) Other Expenditure	263.120
Profit / (Loss) From Operations before other Income Interest & Exceptional Items	942.690
Other Income	97.280
Profit/(Loss) before Interest and Exceptional items	1039.970
Interest	0.350
Profit / (Loss) after interest before Exceptional items	1039.620
Exceptional Items	-
Profit / (Loss) From Ordinary activities before Tax	1039.620
Provision for Taxation
- Current	320.000
- Differed	(4.000)
- Fringe benefit Tax	-
Net Profit/(Loss) From Ordinary activities after Tax	723.620
Extraordinary Items	-
Net Profit/(Loss) for the period	723.620
Preference Share Capital and Dividend Tax	-
Paid Up Share Capital
Preference share capital (Face value Rs. 10 each)	144.000
Equity Share Capital ( Face Value of the share Rs.2/- each )	256.500
Reserves (Excluding Revaluation Reserves)
Basic and Diluted Earning Per Share (Rs.)	5.62
Aggregate of Public Share Holding
- Number of Shares	44731250
- Percentage of shareholding	34.88%
Promoters and Promoter group share holding
a) Pledged / Encumbered
- Number of Shares	-
- Percentage of share (as a % of the total shareholding of promoter and promoter group)	-
- Percentage of shares(as a % of the total share capital of the company)	-
b) Non-encumbered
- Number of Shares	83518750
- Percentage of Share (as a % of the total shareholding of promoter and promoter group)	100%
- Percentage of Share (as a % of the total share capital of the company)	65.12%

 
Notes:
1. The above results were approved by the board of directors in its meeting held on 28.04.2011 at Ahmedabad. 
2. the proportionate dividend on 7.5% Redeemable cumulative non-convertible preference shares (RCNPS) amounting to Rs. 3.100 million for the quarter ended 31.03.2011 (Rs. 3.110 millions for the quarter ended 31.03.2010), has been considered in determining EPS. 
3. The company is primarily in the business of distribution of natural gas. The other activity of the company comprises leasing of natural gas fired cogeneration units, the income from which is not material in financial terms. Accordingly, disclosures relating to primary business segments under the accounting standard on segment reporting (AS-17) notified pursuant to companies (accounting standards) rules 2006 as per section 211 (3C) of the companies act, 1956 are not relevant to the company. 
4. The company is procuring natural gas from one of the suppliers on the basis of a term sheet agreed with the supplier effective 01.04.2008. Under the terms of the agreement with the supplier, the term sheet will be superseded by a gas sales and transmission contract (GSTC) as and when the same is finalized. The GSTC would be effective from 01.04.2008. Pending the finalization of the GSTC, the gas procurement cost is being recorded in the books of account on the basis of the terms provided in the term sheet. 
5. Details of number of investor complaints for the quarter ended 31.03.2011. 
Beginning – Nil, Received – 19, Disposed off – 19 and Pending – Nil. 
6. The Statutory auditors have carried out a limited review of the financial results for the quarter ended 31.03.2011. 
7. Previous period figures have been reclassified / regrouped wherever considered necessary to conform to the current period figures. 

FIXED ASSETS:

· Land

· Buildings

· Plant and machinery

· Furniture, fixtures and fittings

· Vehicles

· Software/License

BUSINESS DESCRIPTION

Subject is engaged in the natural gas transmission and distribution business. It is in the business of distribution of natural gas through pipelines from sources of supply to centers of demand and to the end customers. The Company also builds pipelines required to make the gas available to the end customer. Other activity of the Company consists of leasing of natural gas fired cogeneration units. It is a city gas distribution (CGD) company. It has a network of underground pipelines of approximately 3,300 kilometers. These consist of mild steel and polyethylene. During the year ended 31.12.2010, about 30,000 new household customers were connected on natural gas taking the total number of domestic customers of the Company to over 295,000. The Company has around 300,000 customers, including industrial units. The Company’s subsidiaries include Gujaratgas Trading Company Limited (GTCL) and Gujarat Gas Financial Services Limited (GFSL). It is part of the BG Group. For the three months ended 31.03.2011, Gujarat Gas Company Limited's revenues increased 30% to RS5.39B. Net income applicable to common stock increased 17% to RS717.7M. Revenues reflect an increase in income from operations. Net income was partially offset by an increase in consumption of raw material, higher staff expenses, a rise in depreciation expenses, a hike in other expenditure and higher interest expenses.

PRESS RELEASE:

Accord Fintech (India)

30.04.2011

India, April 30 -- Gujarat Gas Company Limited has informed BSE that, as authorized by the Compensation Committee, the Company has granted 84,000 stock Options to its employees of its group, w.e.f. 28.04.2011, which gives entitlement in future to equivalent number of existing equity share of the Company in accordance with the Gujarat Gas Company Limited Employee Stock Option Plan 2008 ("the ESOP 2008").The applicable exercise price is Rs. 337.00 per equivalent equity share, being calculated at the discount of 10% of the closing price of Rs. 374.00 on National Stock Exchange Limited and Mumbai Stock Exchange on April 27, 2011.Further the Company has informed that the equity shares of the Company to be allocated to the grantees of options under the ESOP 2008, will be purchased on behalf of the Grantees by the designated Trustees from the secondary / open market at the ruling market price. Therefore no fresh issue of equity share is involved under the ESOP 2008. Published by HT Syndication with permission from Accord Fintech Bse.

Accord Fintech (India)

29.04.2011

India, April 29 -- Gujarat Gas Company has announced the financial results for the period ended 31.03.2011.The company has reported an increase of 17% in its net profit at Rs 720.700 millions for the quarter ended 31.03.2011 against Rs 616.800 millions for the quarter ended 31.03.2010. The company has reported net sales / income from operations of Rs 5203.000 millions for the quarter against Rs 4014.000 millions for the corresponding previous quarter. The company has reported an EPS of Rs 5.60 for the quarter ended 31.03.2011 as compared to Rs 4.79 for the quarter ended 31.03.2010.Gujarat Gas Company, which is engaged in supply of gas to industrial, auto and house-hold consumers in Gujarat, gets nearly 75% of its requirements from the PMT fields through GAIL India. Published by HT Syndication with permission from Accord Fintech.

Accord Fintech (India)

28.04.2011

India, April 28 -- Gujarat Gas Company Limited has informed BSE that 31st Annual General Meeting (AGM) of the Company was held on 28.04.2011. Published by HT Syndication with permission from ACCORD FINTECH BSE.

Mint
11.04.2011

New Delhi, April 11 -- The ripple effects of the natural disaster that struck Japan in March are being felt in India, as prices of imported liquefied natural gas (LNG) are rising steeply, hurting local companies that use it as fuel. The earthquake and subsequent tsunami that devastated parts of Japan also led to a shutdown of some of the country's nuclear power plants amid threats of radiation leaking into the atmosphere. "We expect Japan to use LNG to increase power generation at its gas-based power plants to make up for lost generation capacity at Fukushima nuclear plant," said a 24 March Kotak Institutional Equities report. This may lead to higher prices of LNG due to additional imports, the report stated. Japan has a gas-based power generation capacity of around 64,000 megawatt (MW), and a nuclear power capacity of 9,100MW, according to the Kotak report. A sharp increase in prices of imported LNG in India are already visible. Between 11 March (the day a quake hit Japan) and 7 April, imported LNG prices have risen 23% to $11.47 per million British thermal unit (mBtu). This is more than double the $4.75 per mBtu price of imported natural gas a year ago. It is in sharp contrast with the movement of Henry Hub prices of natural gas, which rose a mere 0.98% to $4.13 per mBtu in the past year till 7 April. "Since Japan's consumption is high, increase in gas usage can have an impact on LNG prices.

It is likely that the situation will correct itself in the medium term," said Akhil Sambhar, associate director in oil and gas practice at international audit and consulting firm Ernst and Young. "In our view, high-priced spot LNG may not find acceptance in the price-sensitive fertilizer and power sectors without a major regulatory and pricing overhaul of the consuming sectors. We are less sure about spot LNG's ability to replace domestic gas at about a 120-150% premium to domestic gas," the Kotak report said. Kotak's observations are substantiated by companies that consume LNG.

"Last month, in order to boost power generation, the Andhra Pradesh government had offered LNG to states' power plants, which are suffering deficit of natural gas for optimum generation," said a GMR group executive. He did not want to be identified. "These are all temporary solutions to tide over the crisis. We are passing the extra cost of LNG to the state. But this will not work out in the long term." GMR Infrastructure Limited operates a gas-based power plant in Vemagiri, Andhra Pradesh. The steep rise in prices of LNG comes at a time when India is facing a less-than-estimated domestic gas supply.

Mint had reported on 19 March that Reliance Industries Limited had rationed gas supply to consumers from its D6 gas block in the Krishna-Godavari (KG) basin off the eastern coast of India by 8-10% to compensate for declining gas production. Supply from KG-D6 at present is around 52 million standard cubic metres per day (mscmd), against the targeted production of 60 mscmd. Also, India's largest company by market capitalization had notified the Directorate General of Hydrocarbons that production could further fall to around 47 mscmd in 2012-13. The country's gas supply and price situation is taking its toll not only on large corporations, but on small and medium enterprises as well.

Gujarat Gas Co. Limited (GGCL), which distributes natural gas to around 450,000 domestic, commercial and industrial users in the Surat-Bharuch-Ankleshwar region in Gujarat, has had to raise prices charged to industrial consumers. In a statement issued on Thursday, GGCL said it was important to look at the price rise in conjunction with "the changing dynamics on gas availability and the emerging gas pricing trends in the country". The firm primarily sources gas from the Panna-Mukta and Tapti (PMT) field operated jointly by the BG Group, Reliance Industries and state-run Oil and Natural Gas Corp. Limited, and imports the rest. The company said gas supply from the field had declined by 50% since the start of 2008 till date, and the distributor's dependence on imported gas was rising.

"LNG will constitute close to 50% of GGCL's supply portfolio in comparison to less than 15% in 2009," it said. The company observed that LNG prices could rise by "another 25% by the end of the year, based on projected increase in demand and high oil prices scenario". GGCL's act has sparked off protests among members of the South Gujarat Textile Processors Association (SGTPA). SGTPA, which has 415 processing units as members, has also made a representation to oil minister Jaipal Reddy for easing their woes.

"The price at which we get gas has risen 55% in the last three months, and the situation is turning unviable for small and medium units like ours," said Pramod Chaudhary, president of SGPTA. Chaudhary pegged the revenue loss suffered by textile processors on account of higher fuel cost at '150 crore. A report on the oil and gas sector by Mumbai-based brokerage Centrum Broking Private Limited dated 22 March states that the demand for natural gas in the country was likely to grow 12% every year to reach around 350 mscmd, while India's LNG imports were also likely to grow to 80 mscmd in the same period. "The demand-supply gap would continue to remain even after all incremental supplies come on-stream, including LNG imports," the report said. Published by HT Syndication with permission from MINT.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.21
UK Pound	1	Rs.73.51
Euro	1	Rs.64.76

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	6
--RESERVES	1~10	7
--CREDIT LINES	1~10	6
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		61

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.