Annual Report - 2005-06 - GAIL (India)

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Available-for-sale Financial Assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless GAIL Global (Singapore) Pte Ltd intends to dispose of the assets within 12 months after the balance sheet date. Available-for-sale financial assets are recognised at fair value plus transaction cost and subsequently carried at fair value. Unrealised gains and losses arising from changes in the fair value of investments classified as available-for-sale are recognised in the fair value reserve within the equity. When investments classified as available-for-sale are sold or impaired, the accumulated fair value adjustments in the fair value reserve within equity are included in the income statement. (e) Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. (f) Deferred Taxation Deferred tax is provided in full, using liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Temporary differences are not recognised for goodwill not deductible for tax purposes and the initial recognition of assets or liabilities that affect neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. (g) Income Recognition Provided it is probable that the economic benefits will flow to the Company and the revenue and costs, if applicable, can be measured reliably, revenue is recognised in the profit and loss account as follows: (i) Dividend Income Dividend income from quoted investments is recognised when dividend has been declared and right to receive dividend has been established. (ii) Interest income Interest income is recognised on an accrual basis. (h) Related Parties (i) Foreign Currencies Translations (i) Measurement currency Items included in the financial statements of each entity in the Company are measured using currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity. The financial statements of the Company are presented in United States Dollars, which is the measurement currency of the Company. (ii) Foreign currency transaction Monetary assets and liabilities in foreign currencies are translated into United States Dollars at rates of exchange approximating to those ruling at the balance sheet date. Translations in foreign currencies are transacted at rates ruling on transaction dates. Transaction differences are included in the profit and loss statement. (j) Impairment The carrying amounts of the Company’s assets, other than inventories, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If such indication exists, the asset’s recoverable amount is estimated. For intangible assets that are not yet available for use, the recoverable amount is estimated at each balance sheet date. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognised in the profit and loss account. (i) Calculation of recoverable amount The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belong. (ii) An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. A reversal of an impairment loss in respect of land and buildings or investment property carried at revalued amount is recognised in the same way as a revaluation increase. All other reversals of impairment are recognised in the profit and loss account. (k) Employee Benefits Defined contribution plans Contributions to post employment benefits under defined contribution plans are recognised as an expense in the profit and loss account as incurred. 3. Available-for-sale Financial Assets Balance at beginning 2006 2005 US $ US $ - At cost 19,065,966 19,065,966 - Effect of adoption of FRS 39 on 1st January 2005 - - As restated 19,065,966 19,065,966 Additions - - Fair value gains transferred to equity - - Balance at end 19,065,966 19,065,966 Balance at beginning 2006 2005 Rs.in Crores Rs.in Crores - At cost 85.70 85.70 - Effect of adoption of FRS 39 on 1st January 2005 - - As restated 85.70 85.70 Additions - - Fair value gains transferred to equity - - Balance at end 85.70 85.70 Related parties are entities with common director, indirect shareholders and/or directors.Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. 146 Winning Momentum 147
Quoted shares as at 31st March, 2006 have been reclassified into “available-for-sale financial assets” so as to conform to the presentation adopted in 2005. Availablefor-sale financial assets are measured in accordance with accounting policy as set out in Note 2 (e) only with effect from 1st January, 2005. Available-for-sale financial assets include the following: 2006 2005 US $ US $ US $ At fair At fair value value At cost Quoted equity shares 19,065,966 19,065,966 19,065,966 2006 2005 Rs. in Crores Rs. in Crores Rs. in Crores At Fair At Fair At Cost Value Value Quoted equity shares 85.70 85.70 85.70 Shares are quoted on the Cairo & Alexandria Stock Exchanges. 4. Trade Receivable 2006 2006 2005 2005 US$ Rs. in Crores US$ Rs. in Crores Dividend receivable 1,316,250 5.92 1,038,062 4.55 The carrying amount of trade receivable approximates its fair value. 5. Amounts Due To A Holding Company (Non-Trade) 1,316,250 5.92 1,038,062 4.55 These amounts are unsecured, interest-free and have no fixed term of repayments. 6. Loan From Holding Company (Secured) 2006 2005 US$ US$ Long term loan 16,588,275 17,200,000 2006 2005 Rs. in Crores Rs. in Crores Long term loan 77.18 76.94 The interest bearing bank loan bears interest of 6-months LIBOR as per Telerate page plus one hundred basis points (bps). During the year, the interest is charged at 4.71% (2005: 1.68%). The repayment period is 5 years. These loan are secured by 15% paid up capital in National Gas Company S.A.E Egypt (Natgas) with investment cost of $19,065,966 as at 31st March, 2005 (Note 3). Carrying amounts Fair values 2006 2005 US$ US$ Long term loan 17,200,000 15,825,267 Carrying amounts Fair values 2006 2005 Rs.in Crores Rs.in Crores Long term loan 76.94 70.79 The fair values are determined from the discounted cash flow analysis, using a discounted rate based upon the 6-months LIBOR as per Telerate page plus one hundred basis points (bps) as at the balance sheet date. The loan amount is denominated in United States Dollar. 7. Share Capital Authorised: 2006 2005 US$ US$ At beginning and end of year 20,000,000 ordinary shares 20,000,000 20,000,000 Issued and paid-up capital: At beginning and end of year - 2,100,000 ordinary shares of US$ 1 each 2,100,000 2,100,000 2006 2005 Rs. in Crores Rs. in Crores Issued and paid-up capital: At beginning and end of year - 2,100,000 ordinary shares of Rs.10/- each 9.64 9.64 8. Revenue 2006 2005 US$ US$ Dividend income 1,316,250 1,038,062 2006 2005 Rs. in Crores Rs. in Crores Dividend income 5.84 4.62 9. Other Income 2006 2005 US$ US$ Call deposit interest income 848 8,892 2006 2005 Rs. in Crores Rs. in Crores Call deposit interest income - 0.04 148 Winning Momentum 149
Page 3 and 4:
CONTENTS Chairman’s Message 4 Hig
Page 5 and 6:
“ Winning takes talent but it tak
Page 7 and 8:
“A Winning Combination” Shri S.
Page 9 and 10:
Statutory Auditors M/s S. Mann & Co
Page 11 and 12:
LPG MARKETING PIPELINE INTEGRITY MA
Page 13 and 14:
GREEN GAS LIMITED (GGL): MAHANAGAR
Page 15 and 16:
SAFE PERFORMANCE OF THE COMPANY Dur
Page 17 and 18:
• GREENTECH Safety Gold Award for
Page 19 and 20:
ANNEXURE TO THE DIRECTORS’ REPORT
Page 21 and 22:
HDPE Production (MT) 111305 109158
Page 23 and 24:
INDIAN GAS SECTOR - PERSPECTIVE OF
Page 25 and 26: Polyethylene market in India is dom
Page 27 and 28: GAIL has borne a subsidy of Rs.428
Page 29 and 30: LPG TRANSMISSION Your Company owns
Page 31 and 32: The other income represents a very
Page 33 and 34: SUNDRY DEBTORS The debtors (net of
Page 35 and 36: ii. Attendance of each Director at
Page 37 and 38: The payment made to Whole-time Dire
Page 39 and 40: GAIL Stock place at BSE (Rs./Share)
Page 41 and 42: Economic Approach Model The Economi
Page 43 and 44: Five Year Profile (B) GAS THROUGHPU
Page 45 and 46: (b) As per the information given to
Page 47 and 48: Profit & Loss Account for the Year
Page 49 and 50: Schedule 3 - Loan Funds (Rs.in Cror
Page 51 and 52: Schedule 5 - Capital Work-in-Progre
Page 53 and 54: Schedule 7 - Current Assets, Loans
Page 55 and 56: Schedule 10 - Manufacturing, Transm
Page 57 and 58: Cash Flow Statement for the Financi
Page 59 and 60: 20. Contingent Liabilities and Capi
Page 61 and 62: and the Income and the expenditure
Page 63 and 64: Sl. Segments Natural LPG No. Gas 1.
Page 65 and 66: Disclosure as required by Clause 32
Page 67 and 68: Schedule of Fixed Assets (Township)
Page 69 and 70: Review of the Accounts of GAIL (Ind
Page 71 and 72: Annual Report for the year ended 31
Page 73 and 74: Nexia Tan & Sitoh Certified Public
Page 75: Cash Flow Statement for the year en
Page 79 and 80: Holding Company GAIL (India) Limite
Page 81 and 82: Auditor’s Report To The Board Of
Page 83 and 84: Schedule 1 - Share Capital Schedule
Page 85 and 86: Schedule 5 - Capital Work-in-Progre
Page 87 and 88: Schedule 7 - Current Assets, Loans
Page 89 and 90: (Rs.in Crores) Year Ended Year Ende
Page 91 and 92: III. Investment other than in Subsi
Page 93 and 94: ) During the year, the Company has
Page 95 and 96: Information About Business Segments
Page 97 and 98: Share of GAIL in assets, liabilitie
Page 99: Gas Industry specific terminologies
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Annual Report - 2005-06 - GAIL (India)

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