CLEAN ENERGY GREEN FUTURE

Transcription

1 CUGL EVERYDAY EVERYWHERE 100% ENVIRONMENT RESPECT CLEAN ENERGY GREEN FUTURE CUGL (A joint venture of GAIL India and Bharat Petroleum) 7 Floor UPSIDC Complex, A-1/4, Lakhanpur, Kanpur Landline No. : Handphone : Website : CIN : U40200UP2005PLC ANNUAL REPORT

2 Sales MMSCMD INDEX Board of Directors Notice to Members 1 2 FINANCIAL HIGHLIGHTS Turnover Rs. 219 Crore PBT Rs. 75 Crore PAT Rs. 48 Crore EPS Rs Per Share Directors' Report 5 Auditors' Report 40 Balance Sheet 49 Statement of Profit and Loss 50 Cash Flow Statement 51 Notes 53 Comment of C&AG on e Financial Statements 84 Company Secretary : Shri Deepak Bhasin Bankers : HDFC Bank, AXIS Bank, Yes Bank, Union bank, State Bank of India & ICICI Bank Statutory Auditors : Prasad Gupta J & Co. Cost Auditors : R. M. Bansal & Co. Secretarial Auditors : S K Gupta & Co. RTA : Karvy Computershare Pvt. Ltd. Dividend 25%* Regd. Off. : Central UP Gas Limited, 7 Floor, UPSIDC Complex, A1/4 Lakhanpur, Kanpur CIN U40200UP2005PLC * Interim 8% and Proposed Final 17%

3 BOARD OF DIRECTORS NOTICE TO THE MEMBERS Notice is hereby given at e 12 Annual General Meeting (AGM) of e members of Central U.P. Gas Limited will be held on Tuesday, e 19 of September, 2017 at 10:00 a.m. at The Landmark Hotel, Landmark Towers,10, The Mall, Kanpur (U.P.) to transact e following business (es): A. Ordinary Business: Shri I S Rao Chairman 1) To receive, consider and adopt e Audited Financial Statement of e Company for e Financial Year ended 31st March, 2017 and e Report of e Board of Directors and e Statutory Auditors and e Comments of e Comptroller & Auditor General of India ereon. 2) To confirm e payments of Interim 8 % (Rs per Equity Share) and to declare Final 17 % (Rs per Equity Share) for e Financial Year ended 31st March, ) To appoint a Director in place of Shri V. Nagarajan (DIN ), who retires by rotation and being eligible, offers himself for re-appointment. 4) To auorize Board of Directors of e Company to fix remuneration of e Statutory Auditors of e Company in terms of provisions of Section 142 of e Companies Act, 2013 and oer applicable provisions, if any, and to pass, wi or wiout modification, e following Resolution as an Ordinary Resolution: Shri V K Shukla Managing Director Shri Rajiv Sikka Director (Commercial) RESOLVED THAT e Board of Directors of e Company be and is hereby auorized to decide and fix e remuneration of e Statutory Auditors of e Company appointed by Comptroller & Auditor General of India for e Financial Year , as may be deemed fit by e Board. B. SPECIAL BUSINESS: 5) Ratification of remuneration payable to e cost auditors for Financial Year To consider and, if ought fit, to pass e following resolution as an Ordinary Resolution: Shri Manoj Jain Director Shri V. Nagarajan Director Shri Rajesh Agrawal Director RESOLVED THAT pursuant to e provisions of section 148, oer applicable provisions of e Companies Act, 2013 read wi e Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment ereof, for e time being in force), e remuneration payable to Cost Auditor(s) appointed by e Board of Directors of e Company to conduct e audit of cost records of e Company for e Financial Year , amounting to Rs. 50,000/- plus applicable taxes be and is hereby ratified and confirmed. By Order of e Board of Directors Place: New Delhi (Deepak Bhasin) Date: 23rd August, 2017 Company Secretary Shri Manjeet Singh Director Shri Venkatraman Srinivasan Independent Director Shri Narendra Singh Independent Director Registered Office: 7 floor, UPSIDC Complex A 1/4 Lakhanpur, Kanpur CIN: U40200UP2005PLC029538, Website: dbhasin@cugl.co.in Tel No.: Fax No.:

4 NOTES: 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE ON A POLL INSTEAD OF HIMSELF/HERSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. A BLANK PROXY FORM IS ENCLOSED HEREWITH. 2. The instrument appointing proxy must be deposited at e registered office of e Company not less an 48 hours before e Commencement of e meeting. 3. An Explanatory Statement pursuant to Section 102 of e Companies Act, 2013, relating to Special Businesses to be transacted at e meeting is annexed hereto. 4. The dividend, if declared, will be paid wiin e statutory time limit of 30 days, to ose Members entitled ereto whose names appear in e Register of Members of e Company as on 19 September Members having query relating to is Annual report are requested to send eir questions to registered office of e Company at least 7 days before e date of Annual General Meeting. 6. All material documents referred to in e notice are open for inspection by e members on all working days during business hours at e registered office of e Company till e conclusion of e meeting. 7. Route map of e Venue for AGM: Explanatory Statement pursuant to Section 102 of e Companies Act, 2013 Item no 5: The Board on e recommendation of e Audit Committee has approved e appointment of M/s. R M Bansal & Co., Cost Accountants, Kanpur as e Cost Auditors of e Company for e Financial Year In accordance wi e provisions of Section 148 of e Act read wi e Companies (Audit and Auditors) Rules 2014, ratification for e remuneration payable to e Cost Auditors for e Financial Year by way of Ordinary Resolution is being sought from e members as set out at item no. 5 of e notice. The Board accordingly recommends e passing of e proposed Ordinary Resolution for approval by e Members. None of e Directors and Key Managerial personnel or relatives of em are interested in e above resolution. By Order of e Board of Directors Place: New Delhi (Deepak Bhasin) Date: 23rd August, 2017 Company Secretary Registered Office: 7 floor, UPSIDC Complex A 1/4 Lakhanpur, Kanpur CIN: U40200UP2005PLC029538, Website: dbhasin@cugl.co.in Tel No.: Fax No.:

5 DIRECTORS' REPORT 2. APPROPRIATIONS DIVIDEND Your Company has a consistent track-record of dividend payment. To, The Members, Your Directors take pleasure in presenting e Twelf Annual Report along wi e Audited Accounts of e Company for e year ended 31stMarch, 2017 togeer wi e Auditors' Report and Comments on e accounts by e Comptroller and Auditor General of India (C&AG). 1. FINANCIAL REVIEW Your Company has achieved better performance in terms of all parameters of financial performance during e FY The Financial results for e year ended March 31, 2017 are summarized below: (Rs. in Lacs) Items Net Sales and Oer Income Profit Before Depreciation & Tax Depreciation PBT Provision for Tax The Board of Directors of your Company had earlier approved payment of an interim 8 % on equity share of Rs. 10 each (Rs per equity share) amounting to Rs crores which was paid in January, Furer, e Board takes pleasure in recommending final 17 % on equity share of Rs. 10 each (Rs per equity share) for FY amounting to Rs crores. Wi is, e total dividend payment for e fiscal year will be 25 % on equity share of Rs.10 each (Rs.2.50/- per equity share) amounting to Rs crores on its paid-up equity capital of Rs Crores and dividend distribution tax of Rs crores. The total dividend pay-out including corporate dividend tax accounts for % of profit after tax. 3. TRANSFER TO RESERVES For e year , your Company has proposed to transfer Rs lacs to e General Reserve of e Company. 4. FIXED DEPOSITS We have not accepted any Deposits wiin e meaning and in excess of limits prescribed under Companies Act, 2013 read wi Companies acceptance of Deposits Rules, As such, no amount of principal or interest payment is outstanding as on e Balance Sheet date. 5. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The company has not given any loans or guarantees covered under e provisions of section 186 of e Companies Act, COMPANY PERFORMANCE PAT Profit/(loss) brought forward from previous year During e year, e Company recorded sales as under: (Figures in MMSCM) Profit/ (loss) available for appropriation Appropriations: Proposed Dividend Interim Dividend Corporate Dividend Tax Transfer to General Reserve Sr. No. Segment FY FY Grow 1 CNG % 2 PNG- Industrial % 3 PNG- Commercial % 4 PNG- Domestic % 5 Total PNG % Transfer to Accumulated Depreciation - - Adjustment in opening balance pursuant to adoption of Ind-AS - (20.16) Profit carried forward Earnings Per Share (Face value of Rs. 10/- each)

6 a. Compressed Natural Gas Business (CNG) During e year , CNG business has performed well. Your Company furer augmented its CNG distribution infrastructure by enhancing capacity of existing stations and adding a new CNG station taking e total number of CNG Stations to 18 at e end of e Financial Year. The cumulative compression capacity has increased to SCMH during from previous year's cumulative compression capacity of SCMH (14.40 % increase). b. Piped Natural Gas (PNG) Domestic Connections: During e year, your Company provided 6050 PNG connections and e total number of connections scaled up to as on 31st March c. PNG Industrial & Commercial Connection: The estimated number of vehicles running on CNG in Kanpur and Bareilly as on March 31, 2017 was around vehicles. Your Company has maintained its focus on e Industrial & Commercial segment as one of e potential grow areas in e forcoming years. In spite of stiff competition from alternate fuels prices, like Furnace oil (FO)/Diesel, e prices of which have come down drastically due to lower crude prices, ere was some marginal grow in sales in Commercial & Industrial segments in e financial year Wi concentrated efforts, however e total number of commercial customers increased from 148 in March 2016 to 177 in March 2017 and e industrial customers from 44 in March 2016 to 51 in March

7 7. PROGRESS ON THE PROJECTS UNDERTAKEN During e year, Your Company has laid a network of Kms MDPE pipeline and 1.20 Kms of Steel Pipeline. As on date, your Company has laid a network of Kms MDPE pipeline and Kms of Steel Pipeline to cater to Vehicular, Industrial, Commercial and Domestic Customers in e allocated Geographical areas. Your Company is currently servicing CNG vehicles rough 3 Daughter Booster Stations, 11 Online Stations and 4 Moer Stations in our allocated Geographical Areas. 8. FUTURE OUTLOOK Your Company has drawn out plans to furer consolidate its presence in Kanpur and Bareilly by investing Rs Crores during e financial year The principal business of your Company is distribution of natural gas in e form of PNG & CNG, which is a convenient and clean fuel and helps to reduce pollution levels. Your Company plans to make a significant investment in CGD infrastructure to expand its existing steel & PE pipeline network by an additional 100 Km steel and 1000 Km MDPE over e next 5 years. CUGL is intends to expand its CNG customer base by setting up 10 more CNG stations. This number is expected to reach above 28 by e end of FY Introduction of newer CNG variant models by different vehicle manufacturers & conversion of petrol driven private vehicles into CNG mode due to e price differential of CNG versus alternate liquid fuel will continue to add to CNG sales. The Company has innovative plans to expand its PNG customer base as a part of mission of expanding PNG launched by e Ministry of Petroleum & Natural Gas, Government of India. The Company is looking forward to expand its footprints in new cities rough participation in e bidding process of PNGRB 9. INFORMATION TECHNOLOGY The Company has implemented SAP B1 to streamline its operations. This has provided new and improved processes and functionalities. All e departments are very pro-active in leveraging SAP and suggesting new ways to provide up-to-date, real time and detailed data for analysis. 11. HEALTH, SAFETY AND ENVIRONMENT (HSE) Your Company is in e business of supplying Piped and Compressed Natural Gas at is environment friendly and safe. To facilitate is, your Company constructs and operates pipelines in e city of Kanpur and Bareilly and its adjoining areas. Whilst doing is, your Company adheres to high standards of Heal, Safety, Environment and Security and as e Company believes at Outstanding Business Performance requires Outstanding HSS&E Performance. Your Company complies wi all legal and statutory requirements applicable to its operations. Your Company is accredited to OHSAS 18001:2007 for Occupational Heal & Safety Management system, ISO for Environment Management System and ISO 9001:2008 for Quality Management System which are being audited regularly at par wi international requirements. Your Company is committed to e heal and safety of all its employees, e employees of our contractors and oer stakeholders who may be affected by e Company s operations. Your Company considers its contractors as business partners and expects em to adhere to e Company s HSSE standards. Coaching and assistance is provided to e business partners as and when required. Your Company also expects all of its employees and contractors to report near miss and hazards which are en investigated and lessons learnt are shared wi all concerned. Your Company also takes cognisance of e lessons learnt from oer oil and gas companies across e world. In line wi Company s HSE policy, regular Safety Audits and oer statutory compliances are carried out to ensure safety in all facets of CUGL s operations. Regular safety training is imparted to employees, contract staff and consumers of CNG and PNG. Frequently safety awareness training is provided at site. During e year man hours training was provided on safety aspects. The Environment is bo a brand image as well as a core area of focus for your Company. In addition to e processes and procedures, your Company has in place, to meet e requirements of ISO accreditation, every year your Company celebrates World Environment Day wherein e employees rededicate emselves to protect e environment and promote e benefits of natural gas to improve e environment rough public awareness campaigns. 10. HUMAN RESOURCES The streng of any Company lies in e competencies and skills of its employees. Your Company has been focusing on developing e capabilities of its employees to maximize eir productivity. Your Company has laid emphasis on improving work and performance management systems. The processes of e Company are continuously being aligned to meet overall organization objectives. The rust continues to be on improving employee productivity & engagement. Over e years, ere has been a paradigm shift in e approach towards e Employee Relations rough various initiatives in different capacities. We have achieved a sustainable grow in employee relationship. Your Company maintains momentum on building speed and simplification in ways of working and HR strategies are focused on developing ability and agility so at a pipeline of talents is created to support strategic objectives. The Company has revised its HR policies to make em more comprehensive and aligned wi best industry practices. (Oa taking ceremony during National Safety Week) 9 10

8 12. CORPORATE SOCIAL RESPONSIBILITY (CSR) Your Company believes at Corporate Social Responsibility (CSR) plays a major role in e development of any society. Therefore, it has made Corporate Social Responsibility (CSR) an integral part of its eos and culture. Following a Project-based approach towards all CSR interventions, as detailed in e CSR Policy, your Company has implemented CSR programmes primarily in e areas which are in close proximity to e major work centers/installations of your Company, as identified under Schedule VII of e Companies Act, The policy covers matters in e field of promoting gender equality, education, skill development, sanitation etc. The policy intends to strive for economic development at positively impacts society at large by way of optimum utilization of resources. (Seminar on Gas Cylinder rules wi CCoE, Officials) The Annual Report on CSR activities in accordance wi e companies (Corporate Social Responsibility) Rules, 2014, is appended as Annexure A to is report. 13. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information in accordance wi e provisions of Section 134(3)(m) of e Companies Act, 2013 read wi Rule (8)(3) of e Companies (Accounts) Rules, 2014 is appended as Annexure B 14. PARTICULARS OF EMPLOYEES No employee was in receipt of remuneration exceeding e limits set out under Section 197(12) of e Companies Act, 2013 read wi Rule 5(2) of e Companies (Appointment & Remuneration of Managerial Personnel) Rules, DIRECTORS RESPONSIBILITY STATEMENT As required under clause (c) of sub-section (3) of section 134 of Companies Act, 2013, e Directors, to e best of eir knowledge and belief state at: (Event organized on e occasion of e World Environment Day) A. In e preparation of Annual Accounts for e financial year ended March 31,2017, e applicable accounting standards have been followed; B. Accounting policies were selected and applied consistently except where oerwise stated in e Notes to Accounts and judgments and estimates made were reasonable and prudent so as to give a true and fair view of state of affairs of e Company at e end of e financial year and of e profit of e Company for e year under review. C. Proper and sufficient care for e maintenance of adequate accounting records in accordance wi e provisions of e Companies Act, 2013 for safeguarding e assets of e Company and for preventing and detecting fraud and oer irregularities was ensured; and D. Annual Accounts for e Financial Year ended 31st March, 2017 were prepared on a going concern basis. (Mock drill imparted at CNG station, Kanpur wi Administrative Auorities) E. The Company has laid down an established internal financial control framework including internal controls over financial reporting, operating controls and for e prevention and detection of fraud and errors. The framework is reviewed periodically by Management and tested by e internal auditors and statutory auditors. Based on e periodical testing e framework is strengened from time to time to ensure e adequacy and effectiveness of internal financial controls

9 F. The directors had devised proper systems to ensure compliance wi e provisions of all applicable laws and at such systems were adequate and operating effectively 16. CORPORATE GOVERNANCE Corporate governance is creation and enhancing long term sustainable value for e stakeholders rough eically driven business process. It is imperative at Company`s affairs are managed in a fair and transparent manner. Therefore at CUGL we follow e best practices of Corporate Governance. The Board of Directors is at e core of our Corporate Governance and oversees how e Management serves and protects e long term interest of e Stakeholders. 17. AUDITORS: Statutory Auditors & Audit Report The Statutory Auditors of your Company is appointed by e Comptroller & Auditor General of India (C&AG). M/s Prasad Gupta J & Co., Chartered Accountants (Firm Registration No C) were appointed as e Statutory Auditors for e Financial Year Petroleum and Natural Gas Regulatory Board (PNGRB) constituted under e Petroleum and Natural Gas Regulatory Board Act, 2006 has in terms of e provisions of Regulation 16(1)(c)(i) of PNGRB(Auorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations, 2008 invoked Performance Bank Guarantees aggregating to Rs Lacs for underperformance in respect to laying of infrastructure and providing PNG Domestic connection in Jhansi Geographical Area.The Company has preferred an appeal against e order of PNGRB before e Appellate Tribunal for Electricity, New Delhi. Explanation on observations made by secretarial auditor in seriatim is as under: Non availability of compatible gas in Jhansi, makes e laying of network commercially inviable as e Company will not be able to recover e return on e huge investment required for developing e CGD Network. The Company also filed appeal against e order of PNGRB before e Appellate Tribunal for Electricity. The Statutory Auditors were paid a remuneration of Rs Lacs towards audit fee. The above fees are exclusive of applicable tax and reimbursement of reasonable travelling and out of pocket expenses actually incurred. The Report given by e Statutory Auditors on e financial statements for FY and e Comments of Comptroller & Auditor General of India (C&AG) forms part of e Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by e Auditors in eir Report and no supplementary audit was conducted by C&AG pursuant to provisions of Companies Act, Notes on Accounts referred to in e Auditors Report are self-explanatory and erefore do not call for any furer comments. Cost Auditors During e year , M/s. R M Bansal & Co. Cost Accountants were appointed as e Cost Auditors to conduct Audit of cost accounting records maintained by e Company. As per Section 148 read wi Companies (Audit & Auditors) Rules, 2014 and oer applicable provisions, if any, of e Companies Act, The Board of Directors re-appointed M/s. R M Bansal & Co., as Cost Auditors for e financial year at e remuneration of Rs /- plus applicable tax. (Shri Rajiv Sikka, Director Commercial presenting e dividend cheque for F.Y to e Chairman and Managing Director, BPCL in e presence of Senior Officials of BPCL and CUGL) As required under e Companies Act, 2013, remuneration payable to e cost auditor is required to be placed before e members in a general meeting for eir ratification. Accordingly, a resolution seeking member s ratification for e remuneration payable to M/s. R M Bansal & Co., Cost Auditors is included in e Notice convening e Annual General Meeting. Secretarial Auditors Pursuant to Section 204 of e Companies Act, 2013,Your Company had appointed M/s S.K. Gupta & Co., Practicing Company Secretaries,, to conduct Secretarial Audit for e financial year The Secretarial Audit Report confirming compliance by Practicing Company Secretary to applicable provisions of e Companies Act 2013 and oer applicable laws forms part of is report as Annexure C to is Report. The observations made by secretarial auditor in eir audit report are as under: (Shri V.K. Shukla, Managing Director and Shri Rajiv Sikka, Director Commercial presenting e dividend cheque for F.Y to e Chairman and Managing Director, GAIL in e presence of Senior Officials of GAIL and CUGL) 13 14

10 21. MANAGERIAL REMUNERATION: The Executive and Whole-time Directors of e company are paid remuneration as per eir respective contracts which are approved by e Board after taking into consideration e recommendations made by Nomination & Remuneration Committee. The Nomination & Remuneration Committee also recommends e sitting fees which are required to be paid to Non-Executive Directors of e company. The Independent Directors and Non- Executive Directors are paid sitting fees of Rs. 20,000/- per Board Meeting and Rs. 10,000/- per committee meeting for attending e meetings. 22. RISK MANAGEMENT POLICY Your Company has a Risk Management System including e Risk Policy & identification of e Risks which are reviewed periodically. Your Company has laid down a set of standards, processes and structure which enables it to implement internal financial control across e organization. Your company has put in place a critical risk management framework across e company. Your company keeps on reviewing various risks in e sphere of regulation, business, compliances etc. in a continuously changing business environment. In e management of Risk, e probability of risk assumption is estimated on e basis of available data and information and accordingly appropriate risk treatments have been worked out. Your company is making efforts to ensure strict adherence to policies, procedures, rules and regulations. (Shri V.K. Shukla, Managing Director and Shri Rajiv Sikka, Director Commercial presenting e dividend cheque for F.Y to e Managing Director, IGL in e presence of Senior Officials of IGL and CUGL) 18. EXTRACTS OF ANNUAL RETURN The details forming part of e extract of e Annual Return in form MGT-9 is annexed herewi as Annexure D. 19. RELATED PARTY TRANSACTIONS: The Company has formulated a Policy on materiality of Related Party Transactions and on dealing wi Related Party Transactions. There are no material related party transactions made by e company which may have potential conflict wi interest of e company at large. 20. NOMINATION AND REMUNERATION COMMITTEE AND COMPANYS POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:{Section 178 (3) and 178 (4)} The Company has duly established a Nomination and Remuneration Committee. The Committee has presented to e Board e policy wi respect to remuneration for e directors, key managerial personnel and oer employees. As per e provisions of Companies Act 2013, e policy includes criteria for determining qualification, positive attributes, independence of a director, remuneration to Directors, Key Managerial Personnel, oer employees. The policy also includes recognition of one level below Key Managerial personnel as decided by e Board. The contents of Risk Management Policy are available on e website of e Company VIGIL MECHANISM: The Company has a Whistle Blower Policy as part of e vigil mechanism, which provides a platform to e employees, directors, vendors and suppliers of e Company to come forward and raise eir genuine concerns wiout any fear of retaliation and victimization. The Company has engaged an independent ird party service provider to manage e operations of e whistle-blower hotline. The details of e Whistle Blower Policy are available on e website of e Company SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES COMPANIES Your Company does not have any subsidiaries, Joint venture and Associate companies as on 31st March, CREDIT RATING Your Company has been reaffirmed e domestic credit rating of A1 from CARE, which indicates strong degree of safety regarding timely payment of financial obligations. 26. DISCLOSURES: a. Board of Directors and compositions: The Company has nine Directors on its Board comprising two Executive Directors namely Managing Director and Director (Commercial), five Non-Executive Directors and two Non Executive Independent Directors. The composition and category of Directors along wi oer Directorships as on March 31, 2017 is as under: 15 16

11 Name of Directors Category Directorship in oer public company Shri I S Rao (Chairman) Name of Directors Shri I S Rao (DIN: ) Shri V Nagarajan (DIN: ) Shri Rajesh Agrawal (DIN: ) Shri Manjeet Singh (DIN: ) Shri E S Ranganaan^ (DIN: ) Shri Manoj Jain^^ (DIN: ) Shri.Venkatraman Srinivasan (DIN: ) Shri Narendra Singh (DIN: ) Shri V K Shukla (DIN: ) Shri Rajiv Sikka (DIN: ) Non-Executive During e year Directors attendance in e Board Meetings are given below: Executive/Non-Executive/ Independent Chairman & Non-Executive Director Meetings Held Meeting Attended 5 3 Non-Executive Director 5 5 Non-Executive Director 5 4 Non-Executive Director 5 3 Non-Executive Director 5 1 Non-Executive Director 5 3 Independent & Non Executive Director Independent & Non Executive Director Sabarmati Gas Ltd. GSPL India Transco Ltd. GSPL India Gasnet Ltd. Maharashtra Natural Gas Ltd. Goa Natural Gas Pvt. Ltd. Shri V Nagarajan Non-Executive Indraprasa Gas Ltd. (Director Commercial) Shri Rajesh Agrawal Non-Executive NIL Shri Manjeet Singh Non-Executive NIL Shri Venkatraman Srinivasan Shri Narendra Singh Independent & Non-Executive Independent & Non-Executive Shri E S Rangnaan^ Non-Executive NIL V. Sankar Aiyar & Co. (Partner) UTI Retirement Solutions Ltd. HDB Financial Services Ltd. Green Gas Ltd. Shri Manoj Jain^^ Non-Executive Indraprasa Gas Ltd. Shri V K Shukla (Managing Director) Shri Rajiv Sikka (Director Commercial) b. Board Meetings: Executive Executive NIL NIL Pursuant to e provisions of Section 173 of e Companies Act, 2013 and rules made ere under, every Company shall hold a minimum of four meeting of its Board of Directors every year in such manner at not more an one hundred and twenty days shall intervene between two consecutive meetings of e Board Executive Director 5 5 Executive Director 5 5 ^Shri E S Ranganaan ceased to be Director on 10 June, ^^Shri Manoj Jain was appointed as Director wi effect from 14 July, During e Financial Year , total five Board meetings were held. Details of ese meetings are given below: Sl. No. Date of Meeting Place of Meeting GAIL (India) Ltd. Corporate Office, GAIL Bhawan 16, Bhikaiji Cama Place, R.K. Puram New Delhi GAIL (India) Ltd. Corporate Office, GAIL Bhawan 16, Bhikaiji Cama Place, R.K. Puram New Delhi The Landmark Hotel, Landmark Towers 10, The Mall Kanpur c. General Meeting Bharat Petroleum Corp. Ltd., Bharat Bhavan III, Ballard Estate, Mumbai GAIL (India) Ltd. Corporate Office, GAIL Bhawan 16, Bhikaiji Cama Place, R.K. Puram New Delhi Details of Last ree Annual General Meetings held are as follows: Sl. No. No. of Meeting Date of Meeting Place of Meeting 1 9 AGM Hotel Landmark, The Mall Road, Kanpur 2 10 AGM e2015 Hotel Landmark, The Mall Road, Kanpur 3 11 AGM Hotel Landmark, The Mall Road, Kanpur Attendance of Directors in e last Annual General Meeting held on 16 September, 2016 is as under: Sl. No. Name of Directors Executive/Non-Executive/Independent Attendance at e Meeting 1 Shri I S Rao Chairman & Non-Executive Director Yes 2 Shri V. Nagarajan Non-Executive Director Yes 3 Shri Rajesh Agrawal Non-Executive Director Yes 4 Shri Manjeet Singh Non-Executive Director No 5 Shri V K Shukla Executive Director 6 Shri Rajiv Sikka Executive Director 7 Shri Venkatraman Srinivasan Independent & Non Executive Director Yes 8 Shri Narendra Singh Independent & Non Executive Director 9 Shri Manoj Jain Non-Executive Director Yes No Extraordinary General Meeting (EGM) was held during Financial Year Yes Yes Yes 17 18

12 e. Key Managerial Personnel Pursuant to Section 203 of Companies Act, 2013 read wi Rule 8 of e Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 following persons act as Key Managerial Personnel (KMP) of e Company: Shri Rajiv Sikka Director (Commercial) (DC), of e Company was appointed as Whole Time Director (WTD) as part of KMP wi effect from 16 June, Shri V K Shukla, Managing Director (MD) was appointed as KMP of e Company wi effect from 11 June, Shri Deepak Bhasin, Company Secretary was appointed as part of KMP wi effect from 16 June, Shri Asheesh Agrawal, Senior Manager (Finance & Accounts) of e Company was appointed as part of KMP wi effect from 18 March, f. Constitutions of Audit Committee, Nomination and Remuneration, Corporate Social Responsibility Committee. Your company has constituted e following committees as per e provision of Companies Act (11 Annual General Meeting held on 16 September, 2016) 1) AUDIT COMMITTEE The Audit Committee is headed by Shri Venkatraman Srinivasan, Non-Executive Independent Director. Composition of e Committee as on is given below: Sl. No. Members of Committee 1 Shri Venkatraman Srinivasan 2 Shri Narendra Singh Executive/Non-Executive/ Independent Independent & Non-Executive Director Independent & Non- Executive Director Position in e Committee Chairman Member 3 Shri Rajesh Agrawal Non-Executive Director Member During e year , five meetings of e Audit Committee were held. 2) NOMINATION & REMUNERATION COMMITTEE The Nomination & Remuneration Committee is headed by Shri Manoj Jain, Non-Executive Director. Composition of e Committee as on is given below: (Stakeholders and Directors of CUGL along wi Officials of CUGL at e 11 Annual General Meeting held on 16 September, 2016 at Kanpur) d. Declaration of Independence The Independent Directors have submitted eir disclosures to e Board at ey fulfill all e requirements as stipulated in Section 149(6) of e Companies Act, 2013 so as to qualify emselves to be appointed as Independent Directors under e provisions of e Companies Act, 2013 and e relevant rules. In compliance of above provisions, e Board received e declaration from e Independent Directors namely Shri Venkatraman Srinivasan and Shri Narendra Singh confirming at ey meet e criteria of independence as laid down under Section 149(6) of e Companies Act, Sl. No. Members of Committee Executive/Non-Executive/ Independent Position in e Committee 1 Shri Manoj Jain Non-Executive Director Chairman 2 Shri Venkatraman Srinivasan 3 Shri Narendra Singh Independent & Non-Executive Director Independent & Non- Executive Director Member Member 4 Shri I S Rao Non-Executive Director Member During e year , ree meetings of e Nomination and Remuneration Committee were held

13 3) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE The CSR Committee is headed by Shri V. Nagarajan, Non-Executive Director. Composition of e Committee as on is given below: Sl. No. 1 Name of Shareholders GAIL (India) Limited including shares held jointly wi its employees. No of Equity Shares Rs. 10/- each % of Shares held 1,50,00, % Sl.No. Members of Committee Executive/Non-Executive/ Independent Position in e Committee 1 Shri V. Nagarajan Non-Executive Director Chairman 2 Shri Narendra Singh Independent & Non- Executive Director Member 3 Shri V K Shukla Executive Director Member 5 Shri Rajiv Sikka Executive Director Member During e year , four meetings of e Corporate and Social Responsibility Committee were held. g. Formal Annual Evaluation: The Board of Directors carried out e evaluation of every Director, committees of Board and e Board as a whole based on e laid down criteria of performance evaluation. Furer Independent Directors also evaluated e performance of e Individual Director and e Board as a whole and found e performance of each and every Director satisfactory. 27. MANAGEMENT DISCUSSION AND ANALYSIS The Management Discussion and analysis forms part of is report at Annexure F. 28. GENERAL SIGNIFICANT AND MATERIAL ORDER There are no significant and material orders passed by e regulators or courts or tribunal impacting e going concern status and Company s operations in future except for revocation of Performance Bank Guarantees, by Petroleum and Natural Gas Regulatory Board (PNGRB) aggregating to Rs Lacs for underperformance in respect to laying of infrastructure and providing PNG Domestic connection in Jhansi Geographical Area The Company has filed an appeal against e order of PNGRB before e Appellate Tribunal for Electricity. 29. PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE As per e requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made ere under, your Company has constituted a Internal Complaints Committee. During e year, no complaint wi allegation of sexual harassment was received by e Company. 2 Bharat Petroleum Corporation Limited 1,49,99, % 3 Oers (Individuals of BPCL) 400 Negligible 4 Indraprasa Gas Limited 3,00,00, % 31. ACKNOWLEDGEMENT Your Directors express eir gratitude to e Ministry of Petroleum & Natural Gas, State Governments of Uttar Pradesh, Petroleum and Natural Gas Regulatory Board, and Promoter Companies (GAIL & BPCL) for eir continuous patronage & support roughout e year. The Directors also acknowledge e support of all Statutory & Local Auorities, Bankers, Media, Station Operators & eir employees, contractors, vendors and suppliers. The Directors place on record eir deep appreciation towards CUGL s valued customers for eir continued co-operation & support and look forward to e continuance of is relationship in future also. The Directors wish to express eir gratitude to CUGL s major stakeholder Indraprasa Gas Limited for eir continued trust and support. The Directors also sincerely acknowledge e contributions made by all e employees of CUGL for eir dedicated services to e Company. Total 6,00,00, % On behalf of e Board of Directors For Central U.P. Gas Limited Place: New Delhi (V K Shukla) (Rajiv Sikka) Date: 23rd August, 2017 Managing Director Director Commercial Registered Office: 7 floor, UPSIDC Complex A 1/4 Lakhanpur, Kanpur CIN: U40200UP2005PLC029538, Website: dbhasin@cugl.co.in, Tel No.: , Fax No.: SHAREHODING PATTERN AS ON 31ST MARCH, 2017 Shareholding Pattern of e Company as on 31st March, 2017 is as follows: 21 22

14 ANNEXURE- A ANNUAL REPORT ON CSR ACTIVITIES FOR THE FINANCIAL YEAR Corporate Social Responsibility (CSR) [Pursuant to clause (o) of sub-section (3) of section 134 of e Act and Rule 9 of e Companies (Corporate Social Responsibility) Rules, 2014] 1. A brief outline of e Company's CSR policy, including overview of projects or programs proposed to be undertaken and a reference to e web-link to e CSR policy and projects or programs:- Central U.P Gas Limited (CUGL) recognizes at its business activities have direct and indirect impact on e society. The Company strives to integrate its business values and operations in an eical and transparent manner to demonstrate its commitment to sustainable development and to meet e interest of its stakeholders. A responsible business is expected to not only take care of its stakeholders but also to engage and contribute meaningfully towards improving e quality of life of e communities and environment in which it operates. CUGL follows e Board approved CSR Policy which is in line wi requirements of Companies Act, The contents of CSR Policy of CUGL are displayed on CUGL's website at ww.cugl.co.in 2. The Composition of e CSR Committee:- Shri. V Nagarajan- Chairman Shri. Narendra Singh- Member Shri. V K Shukla-Member Shri. Rajiv Sikka- Member 3. Average profit (PBT) of e company for last ree financial years under Sec 198 of Companies Act, 2013:- Rs Lacs 4. Prescribed CSR Expenditure (two per cent of e amount as in item 3 above):- Rs Lacs 5. Details of CSR spent during e financial year:- (a) Total amount to be spent for e financial year- Rs Lacs (b) Amount unspent, if any- NIL (c) Manner in which e amount spent during e financial year is detailed below: Amount spent on Projects or e projects programs Amount or programs (1) Local area Cumulative outlay Sub or oer expenditure Sector in which (budget) heads: CSR project or activity (2) Specify e upto to e e project is project or (1) Direct identified State and reporting covered programs expenditure district where period wise (in on projects projects or (in Lacs) Lacs) or programs programs was (2) undertaken Overheads (in Lacs) Sl. No Distribution of educational equipments to e school for Visually Challenged Children. Creation of section of Braille Books in a Public Library for Visually Challenged persons. Distribution of "Deskit" ( Bag cum portable study table) to e economically deprived children. Promotion of Education differently abled children Promotion of Education Amount spent : Direct or rough implementing agency* Kanpur Direct Kanpur Direct Kanpur & Bareilly Direct District 4 General Awareness Activities. Kanpur Auorities Heal Check-up camp for Auto Kanpur & 5 drivers, Loaders & public at Direct Bareilly Kanpur & Bareilly Dental Check-up Camp - in School for economically deprived children. Services of Medical Consultants provided towards mobile medical unit for heal care of Senior citizen. Vocational training program for women (Stitching, Tailoring, Basic Computer etc.) Construction of Public Toilets at various locations and institutes. Installation of dustbins at various places at Kanpur. in order to provide safe drinking water to e economically deprived children and citizens - Installed RO & water cooler at School and Govt. Hospital. Promotion of Heal Care Empowering Women Sanitation Infrastructural Development - Safe Drinking water Kanpur Direct Kanpur NGO Kanpur NGO Kanpur Nagar Nigam/ Direct Kanpur Direct Kanpur Direct 12 Vocational training program. Skill Development Kanpur Direct 13 Operation & Maintenance cost of Amar Jawan Jyoti, at Kanpur. Art & Culture Kanpur Direct 14 Various activities organised to Environment promote Green Environment in Sustainability association wi IIT,Kanpur. Kanpur Direct 15 Sports promotion activities i.e. Promotion of camp etc in association wi Sports District Sports Officer Kanpur. Kanpur Direct 16 Contribution in Prime Minister's National Relief Fund Direct Total In case e Company has failed to spend e two per cent of e average net profit of e last ree financial years or any part ereof, e company shall provide e reasons for not spending e amount in its Board report: Requisite amount as per provisions of Companies Act, 2013 has been spent hence it is Not Applicable 7. CSR Committee Responsibility Statement The CSR Committee confirms at e implementation and monitoring of CSR Policy, is in compliance wi CSR objectives and Policy of e Company Place: New Delhi (V K Shukla) (V Nagarajan) Date: 23rd August, 2017 Managing Director Chairman 23 24

15 (Water Cooler and R.O purifier installation in Govt. Hospital) (Distribution of Educational Equipments in Blind School, Kanpur) (Vocational Training Programmes for Women) (Deskit Distribution at School) (Promotion of Heal Care) ( Dental Heal Awareness & Check up Camp) 25 26

16 ANNEXURE- B ANNEXURE- C A. CONSERVATION OF ENERGY CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO (i) Conservation of energy is an ongoing process in e Company s activities. Steps have been taken on proper tuning of pressure regulating valves to ensure smoo transfer of natural gas from e blow down vessel to e suction of CNG compressor wiout any venting of Gas to atmosphere. (ii) The steps taken by e company for utilizing alternate sources of energy: PV Solar Panels and LED Lights are to be installed as a pilot project in is financial year to reduce electrical power consumption from power distribution (iii) The capital investment on energy conservation equipments: Nil B. TECHNOLOGY ABSORPTION 1. The efforts made towards technology absorption- 2. The benefits derived like product improvement, cost reduction, product development or import substitution - 3. In case of imported technology (imported during e last ree years reckoned from e beginning of e financial year)- (a) e details of technology imported; (b) e year of import; (c) wheer e technology has been fully absorbed; (d) if not fully absorbed, areas where absorption has not taken place, and e reasons ereof - 4. The expenditure incurred on Research and Development - C. FOREIGN EXCHANGE EARNINGS AND OUTGO Continued indigenous development of various dispenser spares like high pressure filters. Overall reduction of cost of dispenser spares. There was no foreign exchange earnings and outgo during e year under review. NIL NIL FORM NO. MR-3 SECRETARIAL AUDIT REPORT For e Financial Year ended on 31st March, 2017 [Pursuant to Section 204(1) of e Companies Act, 2013 and Rule 9 of e Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] To, The Members, 7 Floor, UPSIDC Complex, A - 1/4, Lakhanpur, KANPUR We have conducted e Secretarial Audit of e compliance of applicable statutory provisions and e adherence to good corporate practices by (hereinafter called e Company ). Secretarial Audit was conducted in a manner at provided us a reasonable basis for evaluating e corporate conducts / statutory compliances and expressing our opinion ereon. Based on our verification of e Company s books, papers, minute books, forms and returns filed and oer records maintained by e Company and also e information provided by e Company, its Officers, Agents and Auorized Representatives during e conduct of Secretarial Audit, we hereby report at in our opinion, e Company has, during e Financial year ended on 31st March, 2017 ( Audit Period ) complied wi e statutory provisions listed hereunder and also at e Company has proper Board- processes and compliance-mechanism in place to e extent, in e manner and subject to e reporting made hereinafter: We have examined e books, papers, minute books, forms and returns filed and oer records maintained by e Company for e financial year ended on 31st March, 2016, according to e provisions of: (i) (ii) (iii) (iv) (v) The Companies Act, 2013 (e Act ) and e Rules made ere under; The Securities Contracts (Regulation) Act, 1956 ( SCRA ) and e Rules made ereunder; (not applicable to e Company during e Audit Period being an Unlisted Company) The Depositories Act, 1996 and e Regulations and Bye-laws framed ere under; Foreign Exchange Management Act, 1999 and e Rules and Regulations made ere under to e extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (not applicable to e Company during e Audit Period as e Company had no Foreign Direct Investment and Overseas Direct Investment and has not raised External Commercial Borrowings) The Securities and Exchange Board of India Act, 1992 ( SEBI Act ) and e Regulations and Guidelines prescribed ereunder; (not applicable to e Company during e Audit period being an Unlisted Company) (vi) We furer report at having regard to e compliance system prevailing in e Company and on examination of e relevant documents and records in pursuance ereof, on test-check basis, e Company has complied wi e following laws applicable specifically to e Company: (a) The Petroleum and Natural Gas Regulatory Board Act, 2006 (hereinafter called e PNGRB Act ) (b) The Explosives Act, 1884; and 27 28

17 (c) Gas Cylinders Rules, 2004 We have also examined compliance wi e applicable clauses of e following: (i Secretarial Standards issued by The Institute of Company Secretaries of India. (ii) The Listing Agreements entered into by e Company wi e Stock Exchange(s). (not applicable to e Company during e Audit period being an unlisted Company). During e period under review e Company has complied wi e provisions of e Act, Rules, Regulations, Guidelines, Standards etc. mentioned above subject to e following: Petroleum and Natural Gas Regulatory Board (PNGRB) constituted under e Petroleum and Natural Gas Regulatory Board Act, 2006 has in terms of e provisions of Regulation 16(1)(c)(i) of PNGRB(Auorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations, 2008 invoked Performance Bank Guarantees aggregating to Rs Lacs for underperformance in respect to laying of infrastructure and providing PNG Domestic connection in Jhansi Geographical Area.The Company has preferred an appeal against e order of PNGRB before e Appellate Tribunal for Electricity, New Delhi. We furer report at e Board of Directors of e Company is duly constituted wi proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in e composition of e Board of Directors at took place during e period under review were carried out in compliance wi e provisions of e Act. Adequate notice is given to all Directors to schedule e Board Meetings along wi agenda in advance and a system exists for seeking and obtaining furer information and clarifications on e agenda items before e meetings and for meaningful participation at e meeting. All decisions at Board Meetings and Committee Meetings are carried out unanimously as recorded in e Minutes of e Meetings of e Board of Directors or Committee of e Board, as e case may be. We furer report at based on e information provided by e Company, its Officers and Auorised Representatives during e conduct of Audit and review of periodical Compliance Reports by e Internal Auditor and respective Departmental Heads and taken on record by e Audit Committee / Board of Directors of e Company, in our opinion adequate systems and processes in e Company commensurate wi e size and operations of e Company exist in e Company to monitor and ensure compliance wi applicable laws, rules, regulations and guidelines. ANNEXURE- D Form No. MGT-9 EXTRACT OF ANNUAL RETURN (As on e financial year ended on 31st March, 2017) [Pursuant to Section 92(3) of e Companies Act, 2013 and Rule 12(1) of e Companies Management and Administration) Rules, 2014] I. REGISTRATION AND OTHER DETAILS: S. No. Facts (i) CIN U40200UP2005PLC (ii) Registration Date 25 February, 2005 (iii) Name of e Company Central U.P. Gas Limited (iv) (v) Category / Sub-Category of e Company Address of e Registered office and contact details (vi) Wheer Listed Company No (vii) Name, Address and Contact details of Registrar and Transfer Agent, if any Company Limited by Shares/ Indian Deemed Government Company 7 Floor, UPSIDC Complex, A-1/4, Lakhanpur, Kanpur, Uttar Pradesh Tel: Fax No: dbhasin@cugl.co.in website: Karvy Computershare Private Limited, Karvy House, 46, Avenue 4, Street No.1, Banjara Hills, Hyderabad , Tel / , einward.ris@karvy.com We furer report at during e Audit period ere were no specific events / actions in pursuance of e above referred Law, Rules, Regulations, Guidelines etc. having major bearing on Company s affairs. II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY: For S.K. Gupta & Co. Company Secretaries Sl.No. Name and Description of main products / services NIC Code of e Product/ service % to total turnover of e Company 1 Natural Gas (S.K. GUPTA) Managing Partner Place: Kanpur F.C.S Date: C P

18 (f) Any III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES : NIL IV. SHARE HOLDING PATTERN (Equity Share Capital breakup as percentage of total Equity) i) Category-wise Share Holding: Category of Shareholders (B) Public Shareholding No. of Shares held at e beginning of e year % of Demat Physical Total Total Shares No. of Shares held at e end of e year % of Demat Physical Total % of Total Shares Change during e Year Category of Shareholders No. of Shares held at e beginning of e year Demat Physical Total % of Total Shares No. of Shares held at e end of e year Demat Physical Total % of Total Shares % of Change during e Year (1) Institutions (a) Mutual Funds Nil Nil Nil Nil Nil Nil Nil Nil Nil (b) Banks/FI Nil Nil Nil Nil Nil Nil Nil Nil Nil (A) Promoters (c) Central Govt. Nil Nil Nil Nil Nil Nil Nil Nil Nil (1) Indian (d) State Govt.(s) Nil Nil Nil Nil Nil Nil Nil Nil Nil (a) Individual/HUF Nil (b) Central Govt. Nil Nil Nil Nil Nil Nil Nil Nil Nil (e) Venture Capital funds (f) Insurance Companies Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil (c) State Govt. (s) Nil Nil Nil Nil Nil Nil Nil Nil Nil (g) FIIs Nil Nil Nil Nil Nil Nil Nil Nil Nil (d) Bodies Corp. Nil Nil Nil (h) Foreign Venture Capital Funds Nil Nil Nil Nil Nil Nil Nil Nil Nil (e) Banks / FI Nil Nil Nil Nil Nil Nil Nil Nil Nil Oer. Nil Nil Nil Nil Nil Nil Nil Nil Nil Sub-Total (A) (1) Nil Nil 50 % Nil (i) Oers (Specify) Nil Nil Nil Nil Nil Nil Nil Nil Nil Sub-Total(B)(1) Nil Nil Nil Nil Nil Nil Nil Nil (2) Non- Institutions (a) Bodies Corp (1) Foreign i. Indian Nil Nil Nil (a) NRIs - ndividuals Nil Nil Nil Nil Nil Nil Nil Nil Nil ii. Overseas Nil Nil Nil Nil Nil Nil Nil Nil Nil (b) Oer -Individuals Nil Nil Nil Nil Nil Nil Nil Nil Nil (c) Bodies Corp. Nil Nil Nil Nil Nil Nil Nil Nil Nil (d) Banks / FI Nil Nil Nil Nil Nil Nil Nil Nil Nil (e) Any Oer. Nil Nil Nil Nil Nil Nil Nil Nil Nil Sub-Total (A) (2) Nil Nil Nil Nil Nil Nil Nil Nil Nil Total Shareholding of Promoter (A)= (A)(1)+(A)(2) Nil (b) individuals i. Individual shareholders holding nominal share capital up to 1 lakh ii. Individual shareholders holding nominal share capital in excess of 1 lakh (C) Oers (Specify) Sub-Total (B)(2) Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Total Public Shareholding Nil Nil Nil (B)=(B)(1)+(B)(2) C. Shares held by custodian for GDRs Nil Nil Nil Nil Nil Nil Nil Nil Nil & ADRs Grand Total (A+B+C) Nil Nil 31 32

19 ii) S.No iii) 1 2 Sl. No. Shareholding of Promoters: Shareholders Name GAIL (India) Limited (GAIL) including shares held jointly wi its employees. Bharat Petroleum Corporation Limited Total Shareholding at e beginning of e year Shareholding at e end of e year No. of Shares Change in Promoters' Shareholding (please specify, if ere is no change): Shareholders Name % of total Shares of e Company %of Shares Pledged / encumbered to total shares No. of Shares % of total Shares of e Company %of Shares Pledged / encumbered to total shares % of Change during e Year % 0.00% % 0.00% 0.00% % 0.00% % 0.00% 0.00% % 0.00% % 0.00% Shareholding at e beginning of e year No. of Shares % of total Shares of e Company Cumulative Shareholding during e year No. of Shares There are no changes in e Promoter s shareholdin g during e Financial Year % of total Shares of e Company iv) Sl. No Shareholding Pattern of top ten Shareholders (oer an Directors, Promoters and Holders of GDRs and ADRs) as on 31st March, 2017: For each of e Top 10 Shareholders 1. Shri N K Nagpal (Jointly wi GAIL) Shareholding at e beginning of e year % of total No. of shares shares of e Company Cumulative Shareholding during e year % of total No. of shares of e shares Company At e beginning of e Year % % Bought during e Year % % Sold/Transfer during e Year % % At e end of e Year % % 2. Shri Manoj Kumar Pawa (Jointly wi GAIL) At e beginning of e Year % % Bought during e Year % % Sold/Transfer during e Year % % At e end of e Year % % 3. Shri M. Ravindaran (Jointly wi GAIL) At e beginning of e Year % % Bought during e Year % % Sold/Transfer during e Year % % At e end of e Year % % 4. Shri Sumit Kishore (Jointly wi GAIL) At e beginning of e Year % % Bought during e Year % % Sold/Transfer during e Year % % At e end of e Year % % 5. Shri Satish Y Oke At e beginning of e Year % % Bought during e Year % % Sold/Transfer during e Year % % At e end of e Year % % 6. Shri A K Bansal At e beginning of e Year % % Bought during e Year % % Sold/Transfer during e Year % % At e end of e Year % % 7. Shri S. Krishnamurti At e beginning of e Year % % Bought during e Year % % Sold/Transfer during e Year % % At e end of e Year % % 8. Shri P. Balasubramanian At e beginning of e Year % % Bought during e Year % % Sold/Transfer during e Year % % At e end of e Year % % 9. Indraprasa Gas Limited At e beginning of e Year % % Bought during e Year % % Sold/Transfer during e Year % % At e end of e Year % % 33 34

20 v) Shareholding of Directors and Key Managerial Personnel as on 31st March, 2017: Directors and Key Managerial Personnel are holding nil equity shares in e Company as on March 31, V. INDEBTEDNESS: VI. Indebtedness of e Company including interest outstanding/accrued but not due for payment: NIL. REMUNERATION OF DIRECTORS AND KEY MANGERIAL PERSONNEL DURING THE FINANCIAL YEAR A. Remuneration to Managing Director, Whole-time Directors and/or Manager: S. No. of Remuneration Total Amount (Rs/Lacs) Name Shri V K Shukla Shri Rajiv Sikka Designation Managing Director Director Commercial 1 Gross salary (a) Salary as per provisions contained in section 17(1) of e Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 (c) Profits in lieu of salary under section 17(3) Income- tax Act, Stock Option Sweat Equity Commission as % of profit oers, specify Oers, please specify Total (A) Ceiling as per e Act* - * Remuneration is wiin ceiling prescribed under Companies Act, B) Remuneration to oer Directors: of Remuneration Independent Directors Fee for attending board/committee meetings Shri Narendra Singh Shri Venkatraman Srinivasan Name of Directors Total Amount (Rs/Lacs) Commission Oers, please specify (Separate Meeting) Total (1) Oer Non-Executive Directors Fee for attending board committee meetings Shri I S Rao* Shri E S Rangnaan Shri V Nagarajan* Shri Rajesh Agrawal* Shri Manjeet Singh* Shri Manoj Jain Commission C) Remuneration to Key Managerial Personnel oer an MD/Manager/WTD Sl. No. of Remuneration 1 Gross Salary (a) Salary as per provisions contained in section 17(1) of e Income Tax Act, Company Secretary CFO Total (b) Value of perquisites u/s 17(2) of e Income Tax Act, (c ) Profits in lieu of salary under section 17(3) of e Income Tax Act, Stock Option Sweat Equity Commission as % of profit oers, specify Oers, please specify Total D) Details of top ten employees in terms of remuneration drawn for e financial year is as under: Sr. No Name 1 Mr. Nirendra Na Talukdar 2 Mr. Siddiqui Mansoor Ali Designation Ch. Manager - O & M Ch.Manager - Projects Remuneration (Rs. In Lacs) Qualification M.B.A (Marketing) + P.G.D. in H.S.E (Dist.) Experience Joining Age Last employment Date (years) (years) Jun B.tech (Mechanical) May Mr. Shreebi las Mohapatra DGM - Technical B.tech (Mechanical) Apr Mr. Anurag Srivastava Ch. Manager- Marketing P.G.D in Management (Mktg) M/s. Mahanagar Gas Ld. M/s. Woodgroup Kenny India Pvt. Ltd. M/s. Woodgroup Kenny India Pvt. Ltd Nov M/s. KJS Cements 5 Mr. Asheesh Agarwal Sr. Manag er - F&A C.A Mar Mr. Saumya Swarup Sr. Manager -HR & A Mr. Prakash Jain In-Charge Bareilly Mr. Pankaj Raj Sr. Manager - Markeing M.S.W (IR & PM) + M.B.A (HR)+ L.L.B B.E. (Electronics & Communication) P.G.D in Business Management (Rural Marketing) M/s. Polaris Financial Technology Limited Dec M/s. Moer Dairy Feb Nov Mr. Krishna Kumar Gupta Manager- C& P 9.98 B.E (Electrical) Jul Mr. Abhisar Agarwal Manager-Projects 9.58 B.E (Mechanical) Jun VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: M/s. Haryana City Gas Distribution Ltd. M/s. Sun Pharmaceuticals Industries Limited. M/s. Maharastra Seamless Ltd. M/s. Tex Corp Limited There were no penalties/punishment/compounding of offences for breach of any Section of Companies Act against e Company or its Directors or oer officers in default, if any, during e financial year Oers, please specify Total (2) 0.70 NIL NIL Total (B)=(1+2) NIL Ceiling as per e Act** *Paid to respective parent organizations. ** Remuneration is wiin ceiling prescribed under Companies Act,

21 NATURAL GAS SCENARIO IN INDIA GAS DISTRIBUTION ANNEXURE- E MANAGEMENT DISCUSSION AND ANALYSIS Natural gas occupies a vital position in e world s energy basket. It is one of e cleanest, safest, and most useful among all energy sources. Natural gas is traditionally consumed in e residential, commercial, transport and in e industrial sector. The share of natural gas in India s primary energy mix is still at a nascent stage compared to oer developing/ developed economies of e world and is poised to grow wi increasing Pipeline infrastructure and City Gas Distribution (CGD) networks. Natural gas in India is currently supplied mainly from e nominated blocks, operated by e ONGC and OIL, private and joint venture fields like Panna-Mukta and Tapti (PMT) and from e fields awarded under NELP like RIL s KG D-6. However, natural gas production in India has been significantly lower, as compared to its demand, hence ere is a need to enhance e domestic natural gas production by developing new potential natural gas fields. To address e gap, e government has increased its impetus on expanding domestic production. The government has introduced a new Hydrocarbon Exploration and Licensing Policy (HELP) and a new fiscal model based on Revenue Sharing Contract. This is an upgraded version as compared to e previous New Exploration Licensing Policy (NELP) and Production Sharing Contract (PSC). It also addresses various industry concerns at contributed to a slowdown in upstream oil and gas investment over e last few years. Compressed Natural Gas (CNG) has emerged as a 'fuel of future' across e world over e years. CNG vehicles have been introduced in a wide variety of commercial applications, from light-duty Trucks and Sedans-like taxi cabs, to medium-duty vehicles - like delivery vans and postal vehicles, to heavy-duty vehicles like travel buses and school buses. CNG is an efficient fuel, emits lesser carbon dioxide, NOx, CO, PM an coal and oil, and is available in abundance worldwide. Natural Gas can replace traditional fossil fuels due to its environment friendliness and economic benefits. Wi rising concern over pollution in various Cities due to use of traditional fossil fuels, CNG gives remarkable advantage over e traditional fossil fuels like Petrol and Diesel. Your Company has been taking up proposals wi State Government Auorities for ensuring availability of land on a long term lease for construction of CNG stations. Proposals of Private Individuals/Institutions are also considered for construction of CNG stations subject to meeting PESO (Petroleum and Explosive Safety Organization) prerequisites and permissions of all concerned statutory auorities. More CNG stations will boost CNG consumption across Kanpur and Bareilly and help cities to become cleaner and greener. Bo CNG and PNG business have performed well during e year On an overall basis e sales volume (CNG & PNG) has shown a grow of 8.90 % over e previous year. CNG sales volume has increased from MMSCM in FY to MMSCM in FY and PNG sales volume has increased from MMSCM in FY to MMSCM in FY showing a grow of 7.44 % and % respectively. The Company has created a network of 18 CNG Stations in allocated geographical areas as on 31 March 2017 for supplying CNG to e customers. The total nos. of vehicles using CNG was in March, The Company has created wide pipeline network and is providing PNG connection to 6050 Domestic Customers, 29 Commercial Customers and 7 Industrial Customers as on 31st March, OUTLOOK ON OPPORTUNITIES Introduction of factory fitted CNG engines by leading car manufacturers & considerable increase in number of CNG stations has given a big boost to e CNG sector in e cities. The convenience associated wi PNG has already established it as e preferred fuel wi its demand growing exponentially in domestic, commercial as well as industrial segments. Due to strict enforcement of e norms by various statutory auorities deterring use of polluting fuels by industries due to environmental concerns, e usage of Natural Gas while utilizing e existing City Gas Distribution network is bound to grow. The Company has established itself strongly in Kanpur and Bareilly and surrounding areas, which have good potential for Natural gas in e coming years. Your Company has increased e infrastructure of CNG stations and Pipeline network to ensure easy availability of CNG and PNG to its customers. Your Company is definitely looking forward to expand its Geographical Area to oer feasible Cities rough e bidding process being conducted by PNGRB OUTLOOK ON THREATS, RISKS & CONCERNS AND MITIGATIONS Regulatory Regime The City Gas Distribution business is under Regulatory regime wherein e Regulatory Board (PNGRB) has framed various Regulations, which have ramifications on e day to day business operations of a CGD entity. The Company has e infrastructure exclusivity in Kanpur and Bareilly for anoer decade. Your Company has already established CGD infrastructure across all parts of e cities. Setting up of new CGD infrastructure would be a major challenge for any new entrant in e market as per e prevailing trends in e real estate market. The Petroleum and Natural Gas Regulatory Board (PNGRB) has been inviting bids from time to time for setting up CGD network in new geographical areas. Your Company intends to participate in e bidding for expanding its areas of operations. Gas Sourcing In e changing gas scenario, e assured supply of gas at competitive price will play an important role for future grow of your Company. MoP&NG, Government of India under its guidelines has directed GAIL to allocate supply of domestic gas at APM and PMT Prices to your Company based on actual requirement along wi a provision to draw 10% over and above e requested allocation. In order to cater to ebgrowing gas demand of industrial & commercial consumers, e Company is procuring R-LNG, bo on term & spot basis. Your company is constantly on e lookout for sourcing cheapest R-LNG supplies for its customers by signing agreements wi more suppliers. This helps in enrolling new customers and retaining old ones as e price of gas remains competitive in comparison to price of alternate fuels. In line wi is, besides having gas supply tie ups wi GAIL and BPCL, to strengen CUGL s gas sourcing portfolio, CUGL has also signed a framework gas supply agreement wi oer major R-LNG suppliers viz. Gujrat State Petroleum Corporation Limited (GSPCL), Gail Gas etc. The Company is actively looking at a variety of options to meet e expected gas demand in future. Gas Prices The availability of APM and PMT gases for CNG and PNG by Govt. of India, has helped your Company in maintaining gas selling prices bo in CNG and PNG-domestic segment competitive over alternate fuels. During e year ere was a continuous fall in e global price of crude which had eased e purchase price of natural gas

22 Your Company had accordingly corrected e selling price for its industrial and commercial customers and transparently passed e benefit to e end users VALUE CREATION THROUGH OPERATIONAL EXCELLENCE INDEPENDENT AUDITOR'S REPORT The endeavour of your Company is to create value for its customers and stakeholders. Your company has effectively utilized e tools like SAP in enhancing e operational efficiency in e processes wi cost optimization. INTERNAL CONTROL & THEIR ADEQUACY The Company has adequate Internal Control Procedures commensurate wi its size and nature of its business. The Company has appointed M/s S P Chopra & Co., Chartered Accountants as its Internal Auditors and e internal auditor s reports prepared by em are placed before e Audit Committee. ENVIRONMENT CONSCIOUSNESS Natural gas is fossil fuel and ough e global warming emissions from its combustion are much lower an ose from coal or oil it emits 50 to 60 percent less carbon dioxide. The increased reliance on natural gas can potentially reduce e emission of many of harmful pollutants. The Company is promoting use of natural gas among domestic consumers as well as commercial & industrial consumers rough sustained campaigns whereby all e users are made aware of e economic and environmental advantages of natural gas compared to oer fuels, apart from assurance of timely and uninterrupted supply of natural gas. The Company is continuing its efforts to reduce pollution in allocated GA s and its adjoining area. CAUTIONARY STATEMENT The Statement in is Management Discussion and Analysis Report describing e Company s objectives, projections, estimates, expectations or predictions may be forward looking statements wiin e meaning of applicable laws and regulations. Actual results might differ substantially or materially from ose expressed or implied. Important developments at could affect e Company s operations include demand-supply conditions, changes in Government and international regulations, tax regimes, economic developments wiin and outside India and oer factors such as litigation and labour relations. TO THE MEMBERS OF Report on e Financial Statements We have audited e accompanying Ind AS financial statements of ( e Company ), which comprise e Balance Sheet as at 31st March, 2017, e Statement of Profit and Loss (including oer comprehensive income), e statement of cash flows and e statement of changes in equity for e year en ended and a summary of e significant accounting policies and oer explanatory information. Management's Responsibility for e Financial Statements The Company's Board of Directors is responsible for e matters stated in Section 134(5) of e Companies Act, 2013 ( e Act ) wi respect to e preparation of ese Ind AS financial statements at give a true and fair view of e state of affairs (financial position), profit or loss (financial performance including oer comprehensive income), cash flows and changes in equity of e Company in accordance wi e accounting principles generally accepted in India, including e Indian Accounting Standards(Ind AS) specified under Section 133 of e Act. This responsibility also includes maintenance of adequate accounting records in accordance wi e provisions of e Act for safeguarding of e assets of e Company and for preventing and detecting frauds and oer irregularities; selection and application of appropriate accounting policies; making judgments and estimates at are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, at were operating effectively for ensuring e accuracy and completeness of e accounting records, relevant to e preparation and presentation of e Ind AS financial statements at give a true and fair view and are free from material misstatement, wheer due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on ese Ind AS financial statements based on our audit. We have taken into account e provisions of e Act, e accounting and auditing standards and matters which are required to be included in e audit report under e provisions of e Act and e Rules made ereunder. We conducted our audit in accordance wi e Standards on Auditing specified under Section 143(10) of e Act and oer applicable auoritative pronouncements issued by e Institute of Chartered Accountants of India. Those Standards and pronouncements require at we comply wi eical requirements and plan and perform e audit to obtain reasonable assurance about wheer e Ind AS financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about e amounts and e disclosures in e Ind AS financial statements. The procedures selected depend on e auditor's judgment, including e assessment of e risks of material misstatement of e Ind AS financial statements, wheer due to fraud or error. In making ose risk assessments, e auditor considers internal financial control relevant to e Company's preparation of e Ind AS financial statements at give a true and fair view, in order to design 39 40

23 audit procedures at are appropriate in e circumstances. An audit also includes evaluating e appropriateness of e accounting policies used and e reasonableness of e accounting estimates made by e Company's Directors, as well as evaluating e overall presentation of e Ind AS financial statements. Regarding Internal financial Controls over Financial Reporting we have relied on e Report of Independent reviewer. We believe at e audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on e financial statements. Opinion In our opinion and to e best of our information and according to e explanations given to us, e aforesaid Ind AS financial statements give e information required by e Act in e manner so required and give a true and fair view in conformity wi e accounting principles generally accepted in India including e Ind AS, of e state of affairs(financial position) of e Company as at 31st March, 2017 and its profit/loss (financial performance including oer comprehensive income), its cash flows and e changes in equity for e year ended on at date. Emphasis of Matter We draw attention to note no.36 regarding first time adoption of IND AS and reconciliation between previous GAAP and IND AS for transit period. Our opinion is not qualified in respect to true and fairness of e financial statements of e company. Report on Oer Legal and Regulatory Requirements 1. As required under section 143(5) of e Companies Act,2013 we give in e Annexure A a statement on directions issued by e Comptroller & Auditor General of India after complying e suggested meodology of audit, action taken ereon and its impact on e accounts and financial statements of e company. 2. As required by e Companies (Auditor's Report) Order, 2016 ( e Order ), issued by e Central Government of India in terms of sub-section(11) of Section 143 of e Act, and on e basis of such checks of e books and records of e Company as we considered appropriate and according to e information and explanation given to us, we give in e Annexure B a statement on e matters specified in paragraphs 3 and 4 of e Order, to e extent applicable. on record by e Board of Directors, none of e directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of e Act. (f) Wi respect to e adequacy of e internal financial controls over financial reporting of e company and e operating effectiveness of such controls, refer to our separate report in Annexure C. (g) Wi respect to e oer matters to be included in e Auditor's Report, in accordance wi Rule 11 of e Companies (Audit and Auditors) Rules, 2014, in our opinion and to e best of our information and according to e explanations given to us: i) The Company has disclosed e impact of pending litigations on its financial position in its financial statements Refer Note 24 to e financial statements. ii) The Company has made provision, as required under e applicable law or accounting standards, for material foreseeable losses, if any, e Company did not have any long-term contracts including derivative contracts for which ere were any material foreseeable losses. iii)there were no amounts which were required to be transferred, to e Investor Education and Protection Fund by e Company. iv)the Company has provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during e period from 8 November 2016 to 30 December 2016 and ese are in accordance wi e books of accounts maintained by e Company - Refer Note 32 to e financial statements. For Prasad Gupta J & Co. Chartered Accountants FR No C Amar Na Gupta Place : New Delhi Partner Date : 4 May, 2017 Membership No As required by Section 143 (3) of e Act, we report at: (a) We have sought and obtained all e information and explanations which to e best of our knowledge and belief were necessary for e purposes of our audit. (b) In our opinion, proper books of account as required by law have been kept by e Company so far as it appears from our examination of ose books. (c) The Balance Sheet, e Statement of Profit and Loss e statement of Cash Flows and e statement of changes in equity dealt wi by is Report are in agreement wi e books of account. (d) In our opinion, e aforesaid Ind AS financial statements comply wi e Indian Accounting Standards specified under Section 133 of e Act. (e) On e basis of e written representations received from e directors as on 31st March, 2017 taken 41 42

24 ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT Wheer e company has clear title/lease deeds for freehold and leasehold respectively? If not please state e area of freehold and leasehold land for which title / lease deeds are not available? Wheer ere are any cases of waiver/ write off of debts/loans/interest etc., if yes, e reasons ere for and e amount involved. Wheer proper records are maintained for inventories lying wi ird parties & assets received as gift/grants (s) from Govt. or oer auorities. CENTRAL U P GAS LIMITED (As referred to in paragraph 1 of Report on Legal and Regulatory Requirements of our report on e statement of Directions under section 143(5) of Companies Act 2013 issued by e Comptroller and Auditor General of India for e year ) Sr. No. A ) Directions Action taken As per records produced before we find at e ere is a clear title/lease deeds for freehold and leasehold land except Title deed of land for CNG station at Fazalganj of Rs lacs(previous year lacs) have not been executed till date. As certified by management and also during our audit we have not observed any case of waiver of debts/loans/interest etc. We have observed at during ordinary course of business, company issued materials to contractors by debiting e amount to work in progress. However ere is a regular procedure followed for verification of goods lying wi contractor. P r o p e r r e c o r d s h a v e b e e n maintained for such inventories. Furer as certified by e management no gifts/grants(s) have b e e n r e c e i v e d f r o m t h e Governments or oer auorities. Impact on Financial Statements Nil Nil Nil The annexure referred to in e auditor's report to e shareholder's of Central U.P. Gas Limited for e year ended March 31, We report at: i) In respect of its fixed assets: a) The company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets. b) According to e information and explanation given to us, ere is a regular programme of verification of fixed assets by e management, which in our opinion is reasonable having regard to e size of e company and e nature of its assets. Fixed assets have been physically verified by e management at e year end and as per e report, no material discrepancies were noticed on such verification. c) All e title deeds of e immovable properties are held in e name of e company except title deed of land for CNG station at Fazalganj of Rs lacs (Previous year Rs lacs) which have not yet been executed so far. ii) In respect of its inventory: iii) a) Inventory comprises gas, stores and spares. According to e information and explanation given to us, inventory of stores has been physically verified at reasonable intervals by e management. In our opinion, e frequency of verification of stores and spares is reasonable. According to information and explanation given to us, e stock of gas in pipeline cannot be physically verified and is estimated on volumetric basis. b) In our opinion and according to e information and explanation given to us, e procedure of physical verification of inventory followed by e management are reasonable and adequate in relation to e size of e company and nature of its business. c) According to e information and explanation given to us, no material discrepancies have been noticed on physical verification of inventories. According to e information and explanations given to us, e Company has not granted any loans to companies, firms,llp or oer parties covered in e Register maintained under Section 189 of e Companies Act, 2013, erefore paragraph (iii) of e Order is not applicable. For Prasad Gupta J & Co. Chartered Accountants FR No C Amar Na Gupta Place : New Delhi Partner Date : 4 May, 2017 Membership No iv) v) vi) The Company has not granted any loans or made any investments, or provided any guarantee or security to e parties covered under section 185 and 186 of e Companies Act Therefore, e provision of clause 3(iv) of e said order is not applicable to e Company. The Company has not accepted any deposits from e public wiin e meaning of section 73, 74, 75 and 76 of e Act read wi e Companies(Acceptance & Deposit) Rules 2014 and oer relevant provisions of e Act, to e extent notified. We have broadly reviewed e cost records maintained by e Company pursuant to e e Rules made by e Central Government under Section 148(1) of e Companies Act, 2013 and are of e opinion at 43 44

25 prima facie e prescribed cost records have been made and maintained. We have, however, not made a detailed examination of ese records wi a view to determining wheer ey are accurate or complete. vii) In respect of statutory dues: a) According to e records of e company and information and explanations given to us, e Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, employees state insurance (ESI), Income-tax, Tax deducted at sources (except 0.67 lacs TDS on property,previous year 0.67 lacs), Tax collected at source, Sales Tax, value added tax (VAT), Service Tax, Custom Duty, Excise Duty, Cess and any oer statutory dues applicable to it, wi e appropriate auorities. b) Details of dues of income tax, tax deducted at source and excise duty which have not been deposited as on 31 March, Name of statute Income Tax Act, 1961 Nature Short deduction of tax at source Amounts unpaid* (Rs.) Period to which e amount relates 3,553,050 Assessment Year and Forum where e dispute is pending Commissioner of Income Tax (Appeals) viii) ix) x) xi) xii) According to e information and explanations given to us, e Company has not taken any loans or borrowings from any financial institutions or banks or government or debenture holders as at e balance sheet date. Therefore e provisions of paragraph (viii) of e said order is not applicable to e company. The Company has not raised any moneys by way of initial public offer, furer public offer (including debt instruments) and term loans. Accordingly, e provision of paragraph(ix) of e Order is not applicable to e company. During e course of our examination of e books and records of e Company, carried out in accordance wi e generally accepted auditing practices in India, and according to e information and explanation given to us, we have neier come across any instance of material fraud by e Company or on e company by its officers or employees, noticed or reported during e year, nor have we been informed of any such case by e Management. The Company has paid/ provided for managerial remuneration in accordance wi e requisite approvals mandated by e provisions of section 197 read wi schedule V to e Act. As e Company is not a Nidhi company and e Nidhi Rules, 2014 are not applicable to it, e provision of Paragraph (xii) are not applicable to e Company. Income Tax Act, 1961 Income Tax Act, 1961 Income Tax Act, 1961 Income Tax Act, 1961 Income Tax Act, 1961 Central Excise Act Central Excise Act Central Excise Act Disallowance of claims made by e Company Disallowance of claims made by e Company Short deduction of tax at source Disallowance of claims made by e Company Disallowance of claims made by e Company Excise duty On discounts Excise duty On discounts Excise duty On discounts 1,362,700 Assessment Year ,163,440 Assessment Year Income Tax Appellate Tribunal, Lucknow Commissioner of Income Tax (Appeals) 1,878,954 Assessment Year Dy. Commissioner of 2010 to Income Tax (TDS) 2,52,790 Assessment Year Commissioner of Income Tax (Appeals) 6,53,200 Assessment Year Commissioner of Income Tax (Appeals) 3,074,603 Financial year to ,475,378 April, 2012 to November, 2013 CESTAT, Delhi Commissioner of Central Excise (Appeals) 1,103,391 Dec, 2013 to August, 2014 Commissioner of Central Excise (Appeals) xiii) The Company has entered into e transactions wi related parties in compliance wi e provision of section 177 and 188 of e companies Act The details of such related party transactions have been disclosed in e financial statements as required under Accounting Standard, Related Party Disclosure specified under section 133 of e Act, read wi rule 7 of The Companies (Accounts) Rules, xiv) xv) xvi) The Company has not made any preferential allotment or private placement of shares or fully or partly Convertible Debenture during e year under review. Accordingly, e provision of paragraph (xiv) of e Order is not applicable to e company. The Company has not entered into any non- cash transactions wi its directors or persons connected wi him. Accordingly, e provision of paragraph (xv) of e Order is not applicable to e company. The Company is not required to be registered under section 45-IA of e Reserve Bank of India Act, Accordingly, e provision of paragraph (xvi) of e Order is not applicable to e company. Central Excise Act Central Excise Act Income Tax Act 1961 Excise duty On value of exempted services Excise duty On discounts Disallowance of Claims made by e compamy 82,301,521 Financial year to CESTAT, Delhi 1,404,318 Sep, 2014 to August, 2015 Commissioner of Central Excise (Appeals) 1,141,150 Assessment year Commissioner of Income Tax (Appeals) For Prasad Gupta J & Co. Chartered Accountants FR No C Amar Na Gupta Place : New Delhi Partner Date : 4 May, 2017 Membership No

26 ANNEXURE C TO THE INDEPENDENT AUDITOR'S REPORT Report on e Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of e Act 1. We have audited e internal financial controls over financial reporting of Central U.P. Gas Limited ( e Company ) as of March 31st, 2017 in conjunction wi our audit of e Ind AS financial statements of e Company for e year ended on at date. Management's Responsibility for Internal Financial Controls 2. The Company's management is responsible for establishing and maintaining internal financial controls based on internal control over financial reporting criteria established by e company considering e essential components of e internal control stated in e Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by The Institute of Chartered Accountants of India (ICAI). Theses responsibility include e design, implementation and maintenance of adequate internal financial controls at were operating effectively for ensuring e orderly and efficient conduct of its business, including adherence to Company's policies, e safeguarding of its assets, e prevention and detection of fraud and errors, e accuracy and completeness of e accounting records, and e timely preparation of reliable financial information as required under e Act. Auditor's Responsibility (1) pertain to e maintenance of records at, in reasonable detail, accurately and fairly reflect e transactions and dispositions of e assets of e Company;(2) provide reasonable assurance at transactions are recorded as necessary to permit preparation of Ind AS financial statements in accordance wi generally accepted accounting principles and at receipts and expenditure of e company are being made only in accordance of auorizations of management and directors of e company; and (3)provide reasonable assurance regarding prevention or timely detection of unauorized acquisitions, use, or dispositions of e company's assets at could have a material effect on Ind AS financial statements. Inherent Limitations of Internal Financial Controls over Financial Reporting 7. Because of inherent limitations of internal financial controls over financial reporting, including e possibility of collusion or improper management over ride of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of internal financial controls over financial reporting to future periods are subject to e risk at e internal financial controls over financial reporting may become inadequate because of changes in conditions, or at e degree of compliance wi e policies or procedures may deteriorate. Opinion 8. In our opinion, e company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on e internal control over financial reporting criteria established by e Company considering e essential components of internal control stated in e Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by e Institute of Chartered Accountants of India. 3. Our responsibility is to express an opinion on e Company's internal financial control over financial reporting based on our audit. We conducted our audit in accordance wi e Guidance Note on Audit of Internal Financial Controls over Financial Reporting ( e Guidance Note ) and e standards on auditing deemed to be prescribed under Section 143(10) of e Act to e extent applicable to an audit of internal financial controls, bo applicable to an audit of internal financial controls and bo issued by e ICAI. Those standards and e Guidance Note require at we comply wi e eical requirements and plan and perform e audit to obtain reasonable assurance about wheer adequate Internal Financial Controls over Financial Reporting was established and maintained and if such controls operated effectively in all material respects. 4. Our audit involves performing procedures to obtain audit evidence about e adequacy internal financial controls system over financial reporting and eir operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing e risk at a material weakness exists, and testing and evaluating e design and operating effectiveness based on e assessed risk. The procedures selected depend on e auditor's judgment, including e assessment of e risks of material misstatement of e financial statement, wheer due to fraud or error. For Prasad Gupta J & Co. Chartered Accountants FR No C Amar Na Gupta Place : New Delhi Partner Date : 4 May, 2017 Membership No We believe at e audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on e Company's internal financial controls system over financial reporting. Meaning of Internal Financial Controls over Financial Reporting 6. A Company's internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding e reliability of financial reporting and e preparation of financial statements for external purposes in accordance wi generally accepted accounting principles. A Company's internal financial controls over financial reporting includes ose policies and procedures at 47 48

27 BALANCE SHEET AS AT 31 MARCH, 2017 STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2017 Note No. March 31, 2017 March 31, 2016 April 1, 2015 Assets ( in Lakhs) ( in Lakhs) ( in Lakhs) Non-current assets a) Property, plant and equipment 4 12, , , b) Capital work in progress 5 2, , , c) Oer intangible assets d) Financial assets -Loans 7(b) Oer 7(e) e) Oer non current assets 9(b) Total non-current assets 15, , , Current assets a) Inventories b) Financial assets -Trade receivables 7(a) Cash and cash equivalents 7(c) 8, , , Bank balances oer an above 7(d) Oer 7(e) c) Oer current assets 9(a) Total current assets 10, , , Total Assets 25, , , Equity and liabilities Equity a) Equity share capital 10 6, , , b) Oer equity -Reserves and surplus 11 14, , , Total equity 20, , , Liabilties Non-current liabilities a) Deferred tax liabilities 12 1, , Total non-current liabilities 1, , Current liabilities a) Financial liabilities -Trade payables 13(a) Oers 13(b) 2, , , b) Short Term Provisions c) Current tax liabilities d) Oer current liabilities Total current liabilities 3, , , Total liabilities 4, , , Total equity and liabilities 25, , , See accompanying notes forming part of e financial statements In terms of our report attached Notes March 31, 2017 March 31, 2016 ( in Lakhs) ( in Lakhs) Income Revenue from operations 17 24, , Oer income Total income 24, , Expenses Purchases 19 11, , Changes in inventories of finished goods 20 (1.30) (1.14) Excise duty 2, , Employee benefit expenses Depreciation and amortisation expense CSR Expenses Oer expenses 23 2, , Total Expenses 17, , Profit Before Exceptional Items and Tax 7, , Exceptional items - Profit Before Tax 7, , Income Tax Expense Current tax 2, , Deferred tax Profit for e Period 4, , Oer Comprehensive Income Items at will not be reclassified to profit or loss Remeasurement of post employment benefit obligations (17.90) Income tax relating to ese items 6.19 (6.59) Oer Comprehensive Income for e Period, Net of Tax (11.71) Total comprehensive Income for e Period 4, , Earnings per equity share Basic and Diluted earnings per share See accompanying notes forming part of e financial statements In terms of our report attached For Prasad Gupta J & Co, Chartered Accountants Firm Registration No:000236C Place: New Delhi Date: 4 May, 2017 For Prasad Gupta J & Co, Chartered Accountants Firm Registration No:000236C Place: New Delhi Date: 4 May, 2017 Amar Na Gupta Partner Membership No: For and on behalf of e Board of Directors Vinay Kumar Shukla Rajiv Sikka Managing Director Director (Commercial) Deepak Bhasin Asheesh Agarwal Company Secretary Chief Financial Officer Amar Na Gupta Partner Membership No: For and on behalf of e Board of Directors Vinay Kumar Shukla Rajiv Sikka Managing Director Director (Commercial) Deepak Bhasin Asheesh Agarwal Company Secretary Chief Financial Officer 49 50

28 CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2017 STATEMENT OF CHANGES IN EQUITY CASH FLOW FROM OPERATING ACTIVITIES: Profit before tax Adjustments for: Depreciation and amortisation expense Loss on sale of assets Provision for employee benefits Finance costs Oer comprehensive income Interest income Operating profit before working capital changes Adjustments for movement in working capital: (Increase)/decrease in inventories (Increase)/decrease in trade receivables (Increase)/decrease in oer financial Assets (Increase)/decrease in oer current assets Increase/(decrease) in trade payables Increase/(decrease) in oer current liabilities Cash generated from/(used in) operations Net income taxes (paid)/refund Net cash flow from/(used in) operating activities CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets (including capital work-in-progress) Sale of fixed assets Interest received (Increase)/decrease in bank balances not considered as Cash and cash equivalents Net cash flow from/(used in) investing activities CASH FLOW FROM FINANCING ACTIVITIES Dividend paid Dividend distribution tax paid Net cash flow from/(used in) financing activities Net increase/(decrease) in Cash and cash equivalents Cash and cash equivalents as at e beginning of e year Cash and cash equivalents as at end of e period Reconciliation of Cash and cash equivalents wi e Balance Sheet: Cash and bank balances as per Balance Sheet (refer note 07) Less: Bank deposits under lien not considered as Cash and cash equivalents Cash and cash equivalents as per Cash Flow Statement Cash and cash equivalents at e end of e period (a) Cash on hand (b) Balances wi banks in current accounts (c) Balance wi banks in deposit accounts Year ended Year ended 31 March, March, 2016 ( in Lakhs) ( in Lakhs) 7, , (17.90) (556.27) (422.59) 7, , (1.30) (1.14) (151.48) (114.77) (5.09) (7.15) (49.74) (39.62) , , (2,482.11) (1,385.53) 5, , (2,368.50) (1,643.84) (6.91) (0.00) (1,834.28) (1,317.35) (1,320.00) (840.00) (268.73) (171.01) (1,588.73) (1,011.01) 2, , , , , , , , , , , , , , I) Equity Share Capital Notes Amounts ( in Lakhs) Balance as at April 1, , Changes in equity share capital during e year Balance as at March 31, , Changes in equity share capital during e year Balance as at March 31, , II) Oer equity General Reserve Reserves and surplus Retained earnings Notes ( in Lakhs) ( in Lakhs) ( in Lakhs) Balance as at April 1, , , Profit for e period - 3, , Oer comprehensive income Remeasurement gains/(loss) on Defined Benefit Plan Transfer to General Reserve from Profit & Loss during e year (68.80) - Dividends including Dividend Distribution Tax (1,011.01) (1,011.01) - Adjustment in opening balance pursuant to adoption of Ind AS Balance as at March 31, , , Profit for e period 4, , Oer comprehensive income - - Remeasurement gains/(loss) on Defined Benefit Plan (11.71) (11.71) Transfer to General Reserve from Profit & Loss during e year (81.54) - Dividends including Dividend Distribution Tax (1,588.73) (1,588.73) Balance as at March 31, , , In terms of our report attached Total See accompanying notes forming part of e financial statements In terms of our report attached For Prasad Gupta J & Co, Chartered Accountants Firm Registration No:000236C Place: New Delhi Date: 4 May, 2017 For Prasad Gupta J & Co, Chartered Accountants Firm Registration No:000236C Place: New Delhi Date: 4 May, 2017 Amar Na Gupta Partner Membership No: For and on behalf of e Board of Directors Vinay Kumar Shukla Rajiv Sikka Managing Director Director (Commercial) Deepak Bhasin Asheesh Agarwal Company Secretary Chief Financial Officer Amar Na Gupta Partner Membership No: For and on behalf of e Board of Directors Vinay Kumar Shukla Rajiv Sikka Managing Director Director (Commercial) Deepak Bhasin Asheesh Agarwal Company Secretary Chief Financial Officer 51 52

29 1 COMPANY OVERVIEW Central U.P. Gas Limited (e 'Company') was incorporated on 25 February 2005 under e Companies Act, The Company is a joint venture between GAIL (India) Limited and Bharat Petroleum Corporation LimitedThe Company is a joint venture between GAIL (India) Limited and Bharat Petroleum Corporation Limited. The Company's business comprises manufacturing of Compressed Natural Gas (CNG) and sale of Piped Natural Gas (PNG) and Compressed Natural Gas (CNG). The registered office is located at 7 Floor, UPSIDC Complex, A 1/4 Lakhanpur, Kanpur The financial statements of e Company for e year ended 31st March, 2017 are approved for issue by e Company's Board of Directors on May 04, SIGNIFICANT ACCOUNTING POLICIES 2.1 Basis of accounting and preparation of financial statements Ministry of Corporate Affairs notified roadmap to implement Indian Accounting Standards ('Ind AS') under e Companies (Indian Accounting Standards) Rules, 2015 as amended by e Companies (Indian Accounting Standards) (Amendment) Rules, As per e said roadmap, e Company is required to apply Ind AS starting from financial year beginning on or after 1st April, Accordingly, e financial statements of e Company have been prepared in accordance wi e Ind AS. For all periods up to and including e year ended 31st March, 2016, e Company prepared its financial statements in accordance wi e Accounting Standards notified under e Section 133 of e Companies Act 2013, read togeer wi Companies (Accounts) Rules 2014 (Indian GAAP). These financial statements for e year ended 31st March, 2017 are e first e Company has prepared in accordance wi Ind AS (Refer Note 36 for information on how e Company has adopted Ind AS). The financial statements have been prepared on a historical cost basis, except for e following assets and liabilities which have been measured at fair value: Define benefit plan- Plan assets measured at fair value. The financial statements are presented in Indian Rupees ('INR') and all values are rounded to e nearest lakhs, except oerwise indicated. 2.2 Inventories i. Stocks of CNG in cascades, Natural Gas in pipeline and Mak Lubes are valued at lower of cost or net realizable value. Cost is ascertained on First in First out (FIFO) basis and includes all charges in bringing e goods to e point of sale, including royalty, VAT/trade tax, transmission charges, oer taxes and excise duty paid/payable on e same. ii. NOTES FORMING PART OF THE FINANCIAL STATEMENTS Closing stock of Natural Gas in pipelines and cascades is estimated on a volumetric basis. 2.3 Cash and cash equivalents (for purposes of presentation in Cash Flow Statement) Cash comprises cash on hand and demand deposits wi banks. Cash equivalents are short-term (wi original maturity of ree mons or less from e date of acquisition), highly liquid investments at are readily convertible into known amounts of cash and which are subject to an insignificant risk of change in value. 2.4 Cash flow statement Cash flows are reported using e indirect meod, whereby profit / (loss) and tax is adjusted for e effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of e Company are segregated based on e available information. 2.5 Depreciation and amortisation Depreciation is charged on a pro-rata basis on e straight line meod at rates prescribed in Schedule II to e Companies Act, 2013, except for e following assets where depreciation is charged on pro-rata basis over e estimated useful life of e assets based on technical advice taking into account e nature of e asset, e estimated usage of e asset, e operating conditions of e asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support etc.: Asset class Depreciation Tangible Property, Plant and Equipment - Moer Compressors, Online Compressors and Booster Compressors 10 years (Forming part of plant and equipment) Oer Plant and Machinery (Dispenser, Cascade, Meter & Regulator, DRS, MRS and Fittings) 15 years - Pipeline (Forming part of plant and equipment) 25 Years - Desktops, Laptops 3 years Right to use of land is amortised over a period of 90 years Asset class Amortisation Intangible Assets - Computer Software & Licenses 5 years 2.6 Revenue recognition i. Revenue on sale of natural gas is recognised on transfer of significant risks and rewards of ownership to e buyer. Revenue includes excise duty but excludes central sales tax and value added tax. It is measured at fair value of consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. ii. Income from bank deposits is recognised on a time proportion basis. Interest from customer on account of delayed payment is recognized on accrual basis. 2.7 (a) Property, Plant and Equipment i. Property, Plant and Equipment are stated at cost less accumulated depreciation and impairment losses, if any. ii. Property, Plant and Equipment are stated at eir original cost including freight, duties, taxes and oer incidental expenses relating to acquisition and installation. iii. Gas distribution systems are commissioned when ready for commencement of supply of gas to consumer In e case of commissioned assets where final payment to e contractors is pending, capitalisation is made on an estimated basis pending receipt of final bills from e contractors and subject to adjustment in cost and depreciation in e year of final settlement

30 iv. Insurance spares are capitalised wi e cost of plant and machinery and depreciated over e useful life of e principal item of e relevant Property, Plant and Equipment. v. The carrying amount of assets, including ose assets at are not yet available for use, are reviewed at each balance sheet date to determine wheer ere is any indication of impairment. If any such indication exists, recoverable amount of asset is determined. An impairment loss is recognised in e statement of profit and loss whenever e carrying amount of an asset exceeds its recoverable amount. An impairment loss is reversed only to e extent at e carrying amount of asset does not exceed e net book value at would have been determined if no impairment loss had been recognised. vi. Spares which meet e definition of Property, Plant & Equipment are capitalised wi e cost of plant and machinery and are fully depreciated when issued for consumption. vii. Major Overhauling cost is recognised as separate part of e asset and cost incurred on overhauling is charged proportionately till e next overhauling is due. Remaining carrying amount of e cost of e previous overhaul, if any, will be derecognised at e time of e overhauling. (b) Intangible Assets Intangible assets like software, licenses and right-of-use of land wi oer entities which are expected to provide future enduring economic benefits are capitalized as Intangible Assets. (c) Capital Work in Progress Expenditure incurred during e period of construction, including all direct and indirect expenses, incidental and related to construction, is carried forward and on completion, e costs are allocated to e respective Property, Plant and Equipment. Capital Work in Progress includes capital inventory. (d)on transition to IND AS, e corporation has elected to continue wi e carrying value of e assets existing as at 1st April 2015 as per previous GAAP and use at as its deemed cost. 2.8 Employee benefits Employee benefits include provident fund, employee state insurance, pension fund, gratuity fund and compensated absences. Defined contribution plans The Company's contribution to provident fund and pension fund is considered as defined contribution plan and is charged as an expense as ey fall due based on e amount of contribution required to be made and when services are rendered by e employees. Defined benefit plans For defined benefit plans in e form of gratuity, e cost of providing benefits is determined using 'e Projected Unit Credit meod', wi actuarial valuations being carried out at each Balance Sheet date. Remeasurements, comprising of actuarial gains and losses, e effect of e asset ceiling, excluding amounts included in net interest on e net defined benefit liability and e return on plan assets (excluding amounts included in net interest on e net defined benefit liability), are recognised immediately in e balance sheet wi a corresponding debit or credit to retained earnings rough oer comprehensive income in e period in which ey occur. Remeasurements are not reclassified to e statement of profit and loss in subsequent periods. The retirement benefit obligation recognised in e Balance Sheet represents e present value of e defined benefit obligation as adjusted for unrecognised past service cost. Short-term employee benefits The undiscounted amount of short-term employee benefits expected to be paid in exchange for e services rendered by employees are recognised during e year when e employees render e service. These benefits include performance incentive and compensated absences which are expected to occur wiin twelve mons after e end of e period in which e employee renders e related service. The cost of such compensated absences is accounted as under: (a) in case of accumulated compensated absences, when employees render e services at increase eir entitlement of future compensated absences; and (b) in case of non-accumulating compensated absences, when e absences occur. Long-term employee benefits Compensated absences which are not expected to occur wiin twelve mons after e end of e period in which e employee renders e related service are recognised as a liability at e present value of e defined benefit obligation as at e Balance Sheet date less e fair value of e plan assets out of which e obligations are expected to be settled. 2.9 Leases Leases arrangements where e risks and rewards incidental to ownership of an asset substantially vest wi e lessor are recognised as operating lease and recognised in e statement of Profit and loss on straight line basis over e lease term unless e payments to e lessor are structured to increase in line wi expected general inflation. Leases of property, plant and equipment where e company, as lessee, has substantially all e risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at e lease's inception at e fair value of e leased property or, if lower, e present value of e minimum lease payments Earnings per share Basic earning per share is computed by dividing e profit after tax by weighted average number of equity shares outstanding during e year. Diluted earning per share is computed by dividing e profit after tax by weighted average number of equity and dilutive equity equivalent shares outstanding during e year, except where e results would be anti dilutive Taxes on income Income tax expense comprises current tax and deferred tax. Current Tax is amount of tax for e period determined in accordance wi e Income-tax Act, Deferred tax is provided using e balance sheet approach on temporary differences at e reporting date between e tax bases of assets and liabilities and eir carrying amounts for financial reporting purposes at e reporting date. Deferred tax assets and liabilities are measured at e tax rates at are expected to apply in e year when e asset is realised or e liability is settled, based on tax rates (and tax laws) at have been enacted or substantively enacted at e reporting date. Deferred tax assets are recognised to e extent at it has become probable at future taxable profits will allow e deferred tax asset to be recovered. Such assets are reviewed at each balance sheet date to reassess realisation. Deferred tax relating to items recognised outside e statement of profit and loss is recognised outside e statement of profit and loss. Deferred tax items are recognised in correlation to e underlying transaction eier in oer comprehensive income or directly in equity. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and e deferred taxes relate to e same taxable entity and e same taxation auority.income tax expense comprises current tax and deferred tax. Current Tax is amount of tax for e period determined in accordance wi e Income-tax Act, Impairment of non - financial assets 55 56

31 The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, e recoverable amount of such assets is estimated and impairment is recognised, if e carrying amount of ese assets exceeds eir recoverable amount. The recoverable amount is e greater of e net selling price and eir value in use. Value in use is arrived at by discounting e future cash flows to eir present value based on an appropriate discount factor. When ere is indication at an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in e Statement of Profit and Loss Provisions and contingencies A provision is recognised in e financial statements where ere exists a present obligation as a result of a past event, e amount of which can be reliably estimated, and it is probable at an outflow of resources would be necessitated in order to settle e obligation. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle e obligations at e balance sheet date. Provisions are reviewed at each balance sheet date and adjusted to reflect e current best estimates. Contingent liabilities are not recognised but are disclosed in e notes. Contingent assets are neier recognised nor disclosed in e financial statements Segment reporting Operating segments are reported in a manner consistent wi e internal reporting provided to e chief operating decision maker. The company operates in a single segment of natural gas business in e National Capital Region and erefore disclosure requirements as per Ind AS 108 "Operating Segments" is not applicable to e company Operating Cycle Based on e nature of products/activities of e Company and e normal time between purchase of natural gas and eir realisation in cash or cash equivalents, e company has determined its operation cycle as 12 mons for e purpose of classification of its assets and liabilities as current and non-current Financial Instruments Financial assets A financial instrument is any contract at gives rise to a financial asset of one entity and a financial liability or equity instrument of anoer entity. Financial assets are classified, at initial recognition, as financial assets measured at fair value or as financial assets measured at amortised cost. Financial assets are recognized initially at fair value. Financial assets which are not recorded at fair value rough profit or loss are recognised at fair value plus transaction cost attributable to e acquisition of e financial asset. For all subsequent measurements financial assets are classified in following categories: Debt instruments There are ree measurement categories into which e company classifies its debt instruments: - Amortized cost: Assets at are held for collection of contractual cash flows where ose cash flows represent solely payments of principal and interest are measured at Amortized cost. Interest Income from ese financial Assets is included in Finance Income using e effective interest rate (EIR) meod. - Fair Value rough oer comprehensive income (FVOCI): Assets at are held for collection of contractual cash flows and for selling e financial assets, where e asset's cash flows represent solely payments of principal and interest, are measured at fair value rough oer comprehensive income (FVOCI). Movements in e carrying amount are taken rough OCI, except for e recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in profit and loss. When e financial asset is derecognized, e cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in oer gains/ (losses). Interest income from ese financial assets is included in oer income using e effective interest rate meod. Impairment of financial assets The company assesses on forward looking basis e expected credit losses associated wi its assets carried at amortized cost and FVOCI debt instruments. The impairment meodology applied depends on wheer ere has been a significant increase in credit risk. Note 34 details how company determines wheer ere has been significant increase in credit risk. Derecognition of financial assets A financial asset is derecognized only when: - The company transfers e rights to receive cash flows from e financial asset or - The company retains contractual rights to receive e cash flows of e financial asset, but assumes a contractual obligation to pay e cash flows to one more recipients. Where e entity has transferred an asset, e company evaluates wheer it has transferred substantially all risks and rewards of ownership of e financial asset. In such cases, e financial asset is derecognized. Where e entity has not transferred substantially all risks and rewards of ownership of e financial asset, e financial asset is not derecognized. Where e entity has neier transferred a financial asset nor retains substantially all risks and rewards if ownership of e financial asset, e financial asset is derecognized if e company has not retained control of e financial asset. Where e company retains control of e financial asset, e asset is continued to be recognized to e extent of continuing involvement in e financial asset. Financial liabilities All financial liabilities are initially recognized at fair value. The Company's financial liabilities include trade and oer payables, loans and borrowings including bank overdraft. Subsequent measurement of financial liabilities depends on eir classification as fair value rough Profit and loss (FVTPL) or at amortized cost. All changes in fair value of financial liabilities classified as FVTPL is recognized in e Statement of Profit and Loss. Amortized cost category is applicable to loans and borrowings, trade and oer payables. After initial recognition e financial liabilities are measured at amortized cost using e EIR meod. Gains and losses are recognized in profit and loss when e liabilities are derecognized as well as rough e EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or cost at are integral part on EIR. The EIR amortization is included as finance cost in e Statement of Profit and Loss. Derecognition A financial liability is derecognized when e obligation under e liability is discharged or cancelled or expires. When an existing financial liability is replaced by anoer from e same lender on substantially different terms, or e terms of an existing liability are substantially modified, such an exchange or modification is treated as e de recognition of e original liability and e recognition of e new liability. The difference in e respective carrying amounts is recognized in e Statement of profit or loss. Offsetting of financial instruments Financial assets and financial liabilities are offset and e net amount is reported in e balance sheet if 57 58

32 ere is a currently enforceable legal right to offset e recognised amounts and ere is an intention to settle on a net basis, to realise e assets and settle e liabilities simultaneously. 3 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS The preparation of e Company's financial statements requires management to make judgments, estimates and assumptions at affect e reported amounts of revenues, expenses, assets and liabilities, and e accompanying disclosures, and e disclosure of contingent liabilities. Uncertainty about ese assumptions and estimates could result in outcomes at require a material adjustment to e carrying amount of assets or liabilities affected in future periods. Estimates and assumptions The key assumptions concerning e future and oer key sources of estimation uncertainty at e reporting date, at have a significant risk of causing a material adjustment to e carrying amounts of assets and liabilities wiin e next financial year, are described below. The Company based its assumptions and estimates on parameters available when e financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising at are beyond e control of e Company. Such changes are reflected in e assumptions when ey occur. 3.1 Estimation of defined benefit obligation The cost of e defined benefit plan and oer post-employment benefits and e present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions at may differ from actual developments in e future. These include e determination of e discount rate, future salary increases, mortality rates and attrition rate. Due to e complexities involved in e valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in ese assumptions. All assumptions are reviewed at each reporting date. 3.2 Impairment of trade receivables Trade receivables do not carry any interest and are stated at eir normal value as reduced by appropriate allowances for estimated irrecoverable amounts. Individual trade receivables are written off when management deems em not to be collectible. Impairment is recognised based on e expected credit losses, which are e present value of e cash shortfall over e expected life of e financial assets. 3.3 Estimation of current tax and deferred tax Management judgment is required for e calculation of provision for income taxes and deferred tax assets and liabilities. The Company reviews at each balance sheet date e carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to adjustment to e amounts reported in e financial statements. Note 4 - Property, Plant And Equipment As at 31 March 2017 ( lakhs) Net Carrying Amount Gross Carrying Amount Accumulated Depreciation As at Additions Sales/ As at As at For e On sales/ As at As at for e year Adjustments year adjustments Freehold land Leasehold land (Refer Note 4.1) - Buildings Plant and equipment 10, , , , , Office Equipment Furniture and fixtures Computers Total 11, , , , , Buildings As Plant at and 31 March equipment , , , , , ( lakhs) Office Equipment Gross Carrying Amount Accumulated Depreciation Net Carrying Furniture and fixtures Amount Computers As at Additions 2.64 Sales/ - As at As at 5.94 For e On sales/ As at As at Total , for e 2, year Adjustments , year adjustments , , Freehold land Leasehold land (Refer Note 4.1) - Buildings Plant and equipment 8, , , , Office Equipment Furniture and fixtures Computers Total 10, , , , Title deeds of land for CNG station at Fazalganz to Rs Lakhs (previous Year Rs Lakhs) have not been excuted till date. Computers Furniture and fixtures Office Equipment Plant and equipment Freehold land Leasehold land Buildings * Calculation of deemed cost , , Gross block as per previous GAAP Less: Accumulated depreciation as per previous GAAP , Net carrying amount as per previous GAAP 59 60

33 Note 5 - Capital Work In Progress As at 31 March 2017 Total As at 31 March 2016 Total ( lakhs) As at Additions Transfers during As at for e year e year , , , , , , , , ( lakhs) As at Additions Transfers during As at for e year e year , , , , , , , , Note 7 - Financial assets (a) Trade receivables March 31, 2017 March 31, 2016 April 1, 2015 ( in Lakhs) ( in Lakhs) ( in Lakhs) Trade receivables Less: Allowance for doubtful debts Total receivables Current portion Non-current portion Break-up of security details March 31, 2017 March 31, 2016 April 1, 2015 ( in Lakhs) ( in Lakhs) ( in Lakhs) Secured, considered good Unsecured, considered good Doubtful Total Allowance for doubtful debts Total trade receivables Note 6 - Oer Intangible Assets As at 31 March 2017 Gross Carrying Amount Accumulated Depreciation ( lakhs) Net Carrying Amount As at Additions Sales/ As at As at For e On sales/ As at As at for e year Adjustments year adjustments Computer software/license Right to use Total As at 31 March 2016 Gross Carrying Amount Accumulated Depreciation ( lakhs) Net Carrying Amount *Deemed Cost Additions Sales/ As at As at For e On sales/ As at As at As at for e year Adjustments year adjustments Computer software/license Right to use Total * Calculation of deemed cost Gross block as per previous GAAP Less: Accumulated depreciation as per previous GAAP Net carrying amount as per previous GAAP Computer software/license Right to use (b) Loans Unsecured, considered good Loans and advances to employees Total loans (c) Cash and cash equivalents March 31, 2017 March 31, 2016 April 1, 2015 ( in Lakhs) ( in Lakhs) ( in Lakhs) Balances wi banks - in current accounts in deposits 8, , , Cash on hand Total cash and cash equivalents 8, , , There are no repatriation restrictions wi regard to cash and cash equivalents as at e end of e reporting period and prior periods. (d) Oer Bank Balances In Deposit held as security or margin against guarantees (Refer Note (ii) below) March 31, 2017 March 31, 2016 April 1, 2015 ( in Lakhs) ( in Lakhs) ( in Lakhs) Current Non-current Current Non-current Current Non-current March 31, 2017 March 31, 2016 April 1, 2015 ( in Lakhs) ( in Lakhs) ( in Lakhs) Total Oer Bank balances Of e above, e balances at meet e definition of cash and cash equivalents as per AS 3 Cash Flow Statement 8, , , Notes: (i) Balance in deposit accounts wi bank includes deposits amounting to Rs. 8, lakhs (previous year Rs. 6, lakhs) and margin money amounting to Rs lakhs (previous year Rs lakhs) which have an original maturity of more an twelve mons. (ii) Deposits includes Rs lakhs (previous year Rs lakhs) which have been pledged wi various auorities. (e) Oer financial assets March 31, 2017 March 31, 2016 April 1, 2015 ( in Lakhs) ( in Lakhs) ( in Lakhs) Current Non-current Current Non-current Current Non-current Security deposits Interest accrued on Term deposits Insurance Claim Receivable Unbilled Revenue Interest accrued on Security Total oer financial assets

34 Note 8 - Inventories Finished goods Total inventories Note 9 (a) Oer Current Assets Excise duty under protest Prepaid expenses Balances wi government auorities (i) CENVAT credit receivable (ii) Service Tax credit receivable (iii) PLA Oers - (i) Advances (ii) Net Grautity Assets Income tax Refundable Total oer current assets (b) Oer Non Current Assets March 31, 2017 March 31, 2016 April 1, 2015 ( in Lakhs) ( in Lakhs) ( in Lakhs) March 31, 2017 March 31, 2016 April 1, 2015 ( in Lakhs) ( in Lakhs) ( in Lakhs) March 31, 2017 March 31, 2016 April 1, 2015 ( in Lakhs) ( in Lakhs) ( in Lakhs) Advance for Land Total oer non current assets Note 10 - Share Capital (a) (b) As at As at As at Number of ( in lakhs) Number of ( in lakhs) Number of ( in lakhs) shares shares shares Auorised Equity Shares of 10/- each 60,000,000 6,000 60,000,000 6,000 60,000,000 6,000 Issued, Subscribed and Fully Paid up Equity Shares of 10/- each 60,000,000 6,000 60,000,000 6,000 60,000,000 6, Reconciliation of e number of shares outstanding at e beginning and at e end of e year: Number of ( in lakhs) Number of ( in lakhs) Number of ( in lakhs) shares shares shares Equity shares: Shares outstanding at e beginning of e year 60,000,000 6,000 60,000,000 6,000 60,000,000 6,000 Shares issued during e year Shares bought back during e year Shares outstanding at e end of e year 60,000,000 6,000 60,000,000 6,000 60,000,000 6, Details of shares held by each shareholder holding more an 5% shares: Indraprasa Gas Limited Bharat Petroleum Corporation Limited GAIL (India) Limited* * Including joint holder wi GAIL (India) Limited Note 11 - Reserves and surplus For e year ended For e year ended For e year ended March 31, 2017 March 31, 2016 April 1, 2015 Number of shares (in lakhs) % holding Number of shares (in lakhs) % holding Number of shares (in lakhs) % holding % % % % % % % % % At At At ( in Lakhs) ( in Lakhs) ( in Lakhs) (a) General reserve: Opening balance Less: Adjustment in opening balance Balance Add: Transferred from surplus in Statement of Profit and Loss Closing balance (b) Surplus in Statement of Profit and Loss: Opening balance 11, , , Add: Profit for e year 4, , Less: - Dividends proposed to be distributed to equity shareholders ( 1.40 per share (Previous year 1.40 per share)) Dividends proposed to be distributed to equity shareholders ( 0.80 per share (Previous year 1.40 per share)) Corporate dividend tax on proposed dividend Transfer to General reserve Adjustment in opening balance pursuant to adoption of Ind AS - (20.16) - Closing balance 14, , , Total reserves and surplus 14, , , The Company has one class of equity shares having a par value of 10 each. Each shareholder is eligible for one vote per share held. The dividend proposed by e Board of Directors is subject to e approval of e shareholders in e ensuing Annual General Meeting. In e event of liquidation, e equity shareholders are eligible to receive e remaining assets of e Company after distribution of all preferential amounts, in proportion to eir shareholding

35 Note 12 - Deferred Tax Liabilities (NET) The balance comprises temporary differences attributable to: March 31, 2017 March 31, 2016 April 1, 2015 ( in Lakhs) ( in Lakhs) ( in Lakhs) Difference between book balance and tax balance of Fixed Assets 1, , Provision for Employee Benefit (2.94) (2.36) (2.12) Total Deferred Tax Liabilities 1, , Note 14 - Provisions March 31, 2017 March 31, 2016 April 1, 2015 ( in Lakhs) ( in Lakhs) ( in Lakhs) Current Non-current Current Non-current Current Non-current Provision for employee benefits For compensed absences Total Net deferred Tax Liabilities 1, , Movement in Deferred Tax Liabilities Difference between book balance and tax balance of Fixed Assets Provision for Employee Benefit Total ( in Lakhs) ( in Lakhs) ( in Lakhs) At April 1, (2.12) (Charged)/credited: - to profit or loss to oer comprehensive income - (0.24) (0.24) At March 31, , (2.36) 1, (Charged)/credited: - to profit or loss to oer comprehensive income - (0.58) (0.58) At March 31, , (2.94) 1, Note 13 (a) Trade Payables March 31, 2017 March 31, 2016 April 1, 2015 ( in Lakhs) ( in Lakhs) ( in Lakhs) Current Trade payables Total trade payables (b) Oer financial liabilities March 31, 2017 March 31, 2016 April 1, 2015 ( in Lakhs) ( in Lakhs) ( in Lakhs) (i) Payables on purchase of fixed assets (ii) Trade/security deposits received 1, , Total oer current liabilities 2, , , Note 15 - Current tax liabilities March 31, 2017 March 31, 2016 April 1, 2015 ( in Lakhs) ( in Lakhs) ( in Lakhs) Opening balance Add: Current tax payable for e year 2, , , Less: Taxes paid 2, , , Closing balance Note 16 - Oer current liabilities March 31, 2017 March 31, 2016 April 1, 2015 ( in Lakhs) ( in Lakhs) ( in Lakhs) Oer payables (i) Statutory dues Total oer current liabilities Note 17 - Revenue from operations March 31, 2017 March 31, 2016 ( in Lakhs) ( in Lakhs) Sale of products (including excise duty) 24, , Oer operating revenue Total revenue 24, , Note: Sale of products comprises Compressed Natural Gas (CNG) 17, , Piped Natural Gas (PNG) 6, , Mak Lubes Total 24, ,

36 Note 18 - Oer income Note 19 - Purchases Natural Gas 11, , Mak Lubes Total Purchases 11, , Note 20 - Changes in inventories of finished goods Opening balance Finished goods Total opening balance Closing balance Finished goods Total closing balance Total changes in inventories of finished goods, Stock-in -Trade and work-in-progress Note 21 - Employee Benefit Expense (1.30) (1.14) Salaries and wages Contribution to provident fund and oer fund Secondment Expense Staff welfare expenses Total employee benefit expense Note 22 - Depreciation and Amortisation Expense March 31, 2017 March 31, 2016 ( in Lakhs) ( in Lakhs) Interest income from financial assets Interest from customers Interest on Employee Loan Oer Non Operating Income Total oer income March 31, 2017 March 31, 2016 ( in Lakhs) ( in Lakhs) March 31, 2017 March 31, 2016 ( in Lakhs) ( in Lakhs) March 31, 2017 March 31, 2016 ( in Lakhs) ( in Lakhs) March 31, 2017 March 31, 2016 ( in Lakhs) ( in Lakhs) Depreciation of property, plant and equipment Amortisation of intangible assets Total depreciation and amortisation expense Note 23 - Oer Expenses Operation and maintenance of CNG Stations Power, fuel and water charges Advertisement and publicity Rent Repair and maintenance (i) Building (ii) Computers (iii) Plant and machinery (iv) Oers Vehicle hiring and running expenses Rates and taxes Bank charges Communication expenses Insurance expenses Legal and professional charges Loss on sale of fixed assets Meeting, seminar and training expenses Office Administration Charges Printing and stationery Recruitment expenses Security expenses Director's sitting fee Travelling expenses Interest on Income Tax BG Revocation Take or Pay Exp Public Relation Miscellaneous expenses Oer Expenses 2, , Note: Legal and Professional charges includes auditor's (i) remuneration Under: March 31, 2017 March 31, 2016 ( in Lakhs) ( in Lakhs) March 31, 2017 March 31, 2016 ( in Lakhs) ( in Lakhs) Statutory audit fees Tax audit fees Reimbursement of expenses Service Tax on above Total Note 24 - CONTINGENT LIABILITIES a. Outstanding Bank Guarantee Rs. 1, Lakhs (Previous Year Rs. 1, Lakhs). b. In respect of A.Y judgment has been made by Allahabad High Court in which e company has been accepted as a producer hence, additional depreciation has been allowed on machinery capitalized during e year under consideration as in case of production u/s 32(1)(iia) of Income Tax Act. Hence, e same will be applicable in e below (c, d, e, f and g) mentioned cases. c. In respect of Assessment Year , Income Tax department has disallowed certain claims made by e Company and has made tax demand of Rs Lakhs (Previous year Rs Lakhs). The Company has filed appeal against e same which is pending wi Income Tax Appellate Tribunal, Lucknow

37 d. In respect of Assessment Year , Income Tax department has disallowed certain claims made by e Company and has made tax demand of Rs Lakhs (Previous year Rs Lakhs). The Company has filed appeal against e same which is pending wi Commissioner (Appeals). e. In respect of Assessment Year , Income Tax department has disallowed certain claims made by e Company and has made tax demand of Rs Lakhs (Previous year Rs Lakhs). The Company has filed appeal against e same which is pending wi Commissioner (Appeals). f. In respect of Assessment Year , Income Tax department has disallowed certain claims made by e Company and has made tax demand of Rs Lakhs (Previous year Rs. 2.53).The case is pending wi Commissioner of Income Tax (Appeals). g. In respect of Assessment Year , Income Tax department has disallowed certain claims made by e Company and has made tax demand of Rs Lakhs (Previous year Rs. Nil).The case is pending wi Commissioner of Income Tax (Appeals). h. In respect of Assessment Year and , e Income Tax department has raised demand of Rs Lakhs (Previous year Rs Lakhs) for short deduction of tax at source. The Company has filed appeal against e same which is pending wi Commissioner (Appeals). i. In respect of Assessment Year , and , e Income Tax department has raised demand of Rs Lakhs (Previous year Rs Lakhs) for short deduction of tax at source. The case is pending wi Dy. Commissioner of Income Tax (TDS). j. During e financial year , e Company had received a demand of Rs Lakhs from Gail India Limited (GAIL) towards revision in spur line transmission tariff on purchase of natural gas for e period 1 April, 2007 to 20 November, The Company is disputing e demand made by GAIL, since e amount is not payable as per e terms of e gas purchase agreement dated 17 December, Hence no provision has been made in e books of account for is amount. Furer, e Company has paid Rs Lakhs towards spur line charges for e period April, 2010 to June, 2010 which were not payable as per e new tariff regulations promulgated by PNG Regulatory Board (PNGRB). Accordingly, e Company has shown e above said amount as recoverable from GAIL. The total impact of is demand, if becomes payable, would be Rs Lakhs. k. In respect of Year , , and , e Office of e Commissioner(Appeals), Customs and Central Excise has confirm a demand of Rs Lakhs (Previous year Rs Lakhs) for Excise duty on bulk discount given to retail outlets (BPCL and HPCL) on sales of CNG. The Company has filed appeal against e same which is pending wi Honorable CESTAT, Delhi. l. In respect of Year April 2012 to Feb 2013 e Office of e Additional Commissioner, Customs and Central Excise has raised a demand of Rs Lakhs (Previous year Rs Lakhs) a demand of Rs Lakhs (Previous year Rs Lakhs) in respect of period March 2013 to Nov 2013 for Excise duty on bulk discount given to retail outlets (BPCL and HPCL) on sales of CNG. The Company has filed appeal against e same which is pending wi Commissioner (Appeals). m. In respect of Year Dec 2013 to Aug 2014 e Office of e Additional Commissioner, Customs and Central Excise has raised a demand of Rs Lakhs (Previous year Rs Lakhs) for Excise duty on bulk discount given to retail outlets (BPCL and HPCL) on sales of CNG. The Company has filed appeal against e same which is pending wi Commissioner (Appeals). n. During e year, e Office of e Additional Commissioner, Customs and Central Excise has raised a demand of Rs Lakhs (Previous year Rs NIL ) in respect of period Sep 2014 to Aug 2015 for Excise duty on bulk discount given to retail outlets (BPCL and HPCL) on sales of CNG. The Company has filed appeal against e same which is pending wi Commissioner (Appeals). o. In respect of Year , , , and e Office of e Commissioner, Customs and Central Excise has confirm a demand of Rs Lakhs (Previous year Rs Lakhs) for value of exempted services under Rule 6(3)(i) of Cenvat Credit Rules,2004. The Company has filed appeal against e same which is pending wi Honorable CESTAT, Delhi. Note 25 - Capital commitments Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 3, Lakhs (Previous year Rs. 1, Lakhs). Note 26 - During e year , e company was required to spend a gross amount of lakhs (Previous year lakhs) for CSR activity specified under e provision of Companies Act Against e same, e company has spent lakhs (Previous year lakhs) on CSR expenditure during e year for purpose oer an construction/acquisition of any asset. Note 27 -The company does not have any dues to suppliers registered under Micro, Small and Medium Enterprises Development Act,2006('MSMED Act') Note 28 - Petroleum and Natural Gas Regulatory Board has charged Rs Lakhs by invoking Performance Bank Guarantee for underperformance in respect to laying of infrastructure and PNG Domestic Connection in Jhansi during e Year and previous Year Rs lakhs were charged for Kanpur and Bareilly GA. The Company has filed appeal against e same which is pending wi Appellate Tribunal for Electricity (APTEL), Delhi. Note 29 - Current Year amount deposited under protest of Rs Lakhs (Previous year Rs Lakhs) to Excise department as matter under litigation wi e auorities erefore impact of tax has not been taken in books of accounts. Note 30 - Employee benefit obligations Gratuity Total employee benefit obligations (i) Gratuity (ii) Current 31 March, March, April, 2015 Total Current Total Current Noncurrent Noncurrent Noncurrent ( Lakhs) ( Lakhs) ( Lakhs) Total (6.18) - (6.18) (25.60) - (25.60) (11.51) - (11.51) (6.18) - (6.18) (25.60) - (25.60) (11.51) - (11.51) The Company provides for gratuity for employees in India as per e Payment of Gratuity Act, Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is e employees last drawn basic salary per mon computed proportionately for 15 days salary multiplied for e number of years of service. The Company has purchased an insurance policy to provide for payment of gratuity of employees. Every year, e insurance company carries out a funding valuation based on e latest employee data provided by e Company. Any deficit in e assets arising as a result of such valuation is funded by e Company. Defined contribution plans The Company also has a defined contribution plan. Contributions are made to provident fund in India for employees at e rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by e government. The obligation of e Company is limited to e amount contributed and it has no furer contractual nor any constructive obligation. The expense recognised during e period towards defined contribution plan is INR lakhs (31 March 2016: INR lakhs 1 April, 2015: INR lakhs)

38 (iii) Compensated absences Gratuity The leave obligations cover e Company s liability for leaves cashable on termination of employment. The leave obligation plan is a unfunded plan. The amount of e provision of Rs lakhs (31 March, 2016 Rs lakhs and 1 April 2015 Rs lakhs) is presented as current, since e company does not have an unconditional right to defer settlement for any of ese obligations. However, based on past experience, e company does not expect all employees to take e full amount of accrued leave or require payment wiin e next 12 mons. The obligation towards compensated leaves which are expected to be availed or encashed beyond 12 mons from e end of e year is determined by e actuary using e Projected Unit Credit Meod (PUC) at e end of each year. The following amounts reflect leave at is expected to be taken or paid wiin e next 12 mons. Present value of obligation ( Lakhs) Fair value of plan assets ( Lakhs) Net amount ( Lakhs) 1 April, (11.51) Current service cost Interest expense/(income) (0.92) Total amount recognised in profit or loss Remeasurements Return on plan assets, excluding amounts included in interest (0.37) expense/(income) (Gain)/loss from change in demographic assumptions (Gain)/loss from change in financial assumptions (18.67) - (18.67) Experience (gains)/losses Total amount recognised in oer (18.67) 0.37 (19.04) comprehensive income Employer contributions (0.07) Benefit payments (1.13) (1.13) - 31 March, (25.60) April 1, (25.60) Current service cost Interest expense/(income) (2.05) Total amount recognised in profit or loss Remeasurements Return on plan assets, excluding amounts included in interest - (0.33) 0.33 expense/(income) (Gain)/loss from change in demographic assumptions (Gain)/loss from change in financial assumptions Experience (gains)/losses Total amount recognised in oer comprehensive income Employer contributions (0.33) Benefit payments (2.58) (2.58) - March 31, (6.18) * As liability towards leave obligations(compensated absence) is a oer long-term defined benefit plan not post employment benefit plan, remeasurements gain/(losses) are recognised in profit & loss. The net asset disclosed above relates to funded and unfunded plans are as follows: 31 March, March, April, 2015 ( Lakhs) ( Lakhs) ( Lakhs) Present value of funded obligations (37.1) (17.2) (28.8) Fair value of plan assets (43.3) (42.8) (40.3) Surplus/(Deficit) of funded plan (80.4) (60.0) (69.1) Unfunded plans Effect of asset ceiling Based on Company's gratuity trust's arrangement wi LIC of India, e benefit relating to net defined benefit asset shall be available to e Company in full in form of reduction in future contributions. (iv) Post-Employment benefits and oer long-term employee benefits Significant estimates: actuarial assumptions and sensitivity The significant actuarial assumptions were as follows: Gratuity 31 March, March, April, 2015 Discount rate 8.00% 8.00% 8.00% Salary grow rate 10.00% 6.00% 10.00% Remaining working life Widrawal rate based on age: (per annum) Up to 30 years 3.00% 3.00% 3.00% years 2.00% 2.00% 2.00% Above 44 years 1.00% 1.00% 1.00% Mortality Table standard table Indian Assured Lives Mortality ( ) (iii) Sensitivity analysis Gratuity standard table Indian Assured Lives Mortality ( ) standard table Indian Assured Lives Mortality ( ) The sensitivity of e defined benefit obligation to changes in e weighted principal assumptions is: Change in assumption 31 March, March, 2016 Impact on defined benefit obligation Increase in assumption Decrease in assumption 31 March, March, March, March, 2016 Discount rate (- / + 1%) (- / + 1%) % % 19.90% 18.60% Salary grow rate (- / + 1%) (- / + 1%) 8.40% 18.80% % % Attrition Rate Mortality 50% of e Attrition assumption 10% of e Mortality assumption 50% of e Attrition assumption 10% of e Mortality assumption 1.50% 3.10% -1.40% -3.50% 0.00% 0.10% 0.00% -0.10% The above sensitivity analyses are based on a change in an assumption while holding all oer assumptions constant. In practice, is is unlikely to occur, and changes in some of e assumptions may be correlated. When calculating e sensitivity of e defined benefit obligation to significant actuarial assumptions e same meod (present value of e defined benefit obligation calculated wi e projected unit credit meod at e end of e reporting period) has been applied as when calculating e defined benefit liability recognised in e balance sheet. The meod and types of assumption used in preparing e sensitivity analysis did not changed compared to prior period. Surplus/(Deficit) before asset ceiling (80.4) (60.0) (69.1) 71 72

39 (iv) The major categories of plans assets are as follows: 31 March, March, 2016 April 1, 2015 Amount ( Lakhs) in % Amount ( Lakhs) in % Amount ( Lakhs) Fund managed by insurer % % % Total % % % (v) Risk exposure Through its defined benefit plans, e company is exposed to a number of risks, e most significant of which are detailed below: Interest rate risk: The plan exposes e Company to e risk off all in interest rates. A fall in interest rates will result in an increase in e ultimate cost of providing e above benefit and will us result in an increase in e value of e liability (as shown in financial statements). Salary escalation risk: The present value of e defined benefit plan is calculated wi e assumption of salary increase rate of plan participants in future. Deviation in e rate of increase of salary in future for plan participants from e rate of increase in salary used to determine e present value of obligation will have a bearing on e plan's liability. Demographic risk: The Company has used certain mortality and attrition assumptions in valuation of e liability. The Company is exposed to e risk of actual experience turning out to be worse compared to e assumption. Expected contributions to post-employment benefit plans for e year ending 31 March 2018 are INR lakhs The weighted average duration of e defined benefit obligation is 2017 years - 20 years. The expected maturity analysis of gratuity and oer long-term employment benefits (Leave obligation) is as follows: 31 March, year 2-5 years 6-10 years More an 10 years in % ( Lakhs) Total Defined benefit obligation (Gratuity) Total March, 2016 Defined benefit obligation (Gratuity) Total Note 31 - Related party transactions a. List of related parties Company having significant influence Indraprasa Gas Limited Promoter Venturer GAIL (India) Limited Bharat Petroleum Corporation Limited Key Management Personnel (KMP) Mr. V K Shukla - Managing Director Mr. Rajiv Sikka - Director Commercial Mr. Asheesh Agarwal - Chief Financial Officer Mr. Deepak Bhasin - Company Secretary b. Transactions/ balances outstanding wi related parties: S.No. Nature of transactions 1 GAIL (India) Limited (Rs. in Lakhs) (Rs. in Lakhs) Secondment charges Purchase of Natural Gas 9, , Take or Pay Expenses Expenses recoverable Dividend Paid Interest Income Balance receivable/(payable) (293.00) (239.31) 2 Bharat Petroleum Corporation Limited Secondment charges Purchase of RLNG Purchase of Mak Lubes (Including VAT) Sale of CNG (Including Excise Duty & VAT) 2, , Sitting Fees Dividend Paid Interest Charge Balance receivable/(payable) Indraprasa Gas Limited Sitting Fees Dividend Paid Key Managerial Personnel-Remuneration# Mr. V. K. Shukla Mr. Rajiv Sikka Mr. Asheesh Agarwal Mr. R.S. Koari Mr. Deepak Bhasin #Excluding Service Tax Note 32 - During e year, e Company had specified bank notes or oer denomination note as defined in e MCA notification G.S.R. 308(E) dated March 31, 2017 on e details of Specified Bank Notes (SBN) held and transacted during e period from November 8, 2016 to December, , e denomination wise SBNs and oer notes as per e notification is given below: Nature of transactions SBNs* Oer denomination notes Total Closing cash in hand as on November 08, (+) Permitted receipts , (-) Permitted payments (-) Amount deposited in Banks , Closing cash in hand as on December 30, * For e purposes of is clause, e term Specified Bank Notes shall have e same meaning provided in e notification of e Government of India, in e Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated e 8 November, Total 73 74

40 Note 33 - Fair value measurements Financial Instruments by Category Financial assets FVPL FVOCI Amortised Cost (INR in lakhs) FVPL FVOCI Amortised Cost FVPL FVOCI Amortised Cost Trade receivable Cash and cash equivalents - - 8, , , Unbilled revenue Interest accrued on fixed deposits Security deposits Interest accrued on Security deposits Insurance claim receivable Employee Loans Total financial assets - - 9, , , Financial liabilities Trade payables Capital creditors Security deposits from customers 1, , Total financial liabilities - - 3, , , (i) Fair value of financial assets and liabilities measured at amortised cost Financial Assets Carrying Fair Carrying Fair Carrying Fair Value amount Value amount Value amount Trade r eceivable Cash and cash equivalents 8, , , , , , Unbilled revenue Interest accrued on fixed deposits Security deposits Insurance claim receivable Oers Total financial assets 9, , , , , , Financial liabilities (INR in lakhs) Trade payables Capital creditors Security deposits from customers 1, , , , Total financial liabilities 3, , , , , , The carrying amounts of trade receivables, trade payables, capital creditors, unbilled revenue, insurance claim, security deposits from customers, retention money and cash and cash equivalents are considered to be e same as eir fair values, due to eir short-term nature. Note 34 - Financial risk management The Company's financial risk management is an integral part of how to plan and execute its business strategies. The Company's financial risk management policy is governed by Financial Guidelines which are approved by e Board of Directors and ensure compliances jointly rough Managing Director and Director Commercial. The company considers e probability of default upon initial recognition of asset and wheer ere has been a significant increase in credit risk on an ongoing basis roughout each reporting period. (i) Credit risk Credit risk arises from e possibility at counter party may not be able to settle eir obligations as agreed. To manage is, e Company obtains security deposits from various types of PNG credit customers including domestic, Industrial and Commercial. Furer, in case of Industrial Customers, e company secures e credit risk by getting Bank Guarantee/LC equivalent to e value of 47 days of average sales. Apart from is, company periodically assesses e reliability of customers, taking into account e financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. In case of CNG sales, e company operates in retail sales on cash & carry basis and credit sales to retail outlets operated by Public Sector Oil Marketing Companies namely, BPCL, HPCL and IOCL wi agreement to pay wiin 7 days of receipt of invoices. The company considers e probability of default upon initial recognition of asset and wheer ere has been a significant increase in credit risk on an ongoing basis roughout each reporting period. Financial assets are written off when ere is no reasonable expectation of recovery, such as debtor failing to engage in a repayment plan wi e company. The company has not encountered any such loss till e year ended March 31, Exposure to credit risk As at As at As at INR in lakhs INR in lakhs INR in lakhs Financial assets for which loss allowance is measured using 12 mons Expected Credit Losses Trade receivables (gross) Less: Loss allowances Trade receivables (net) The ageing analysis of e receivables (gross of provision) has been considered from e date e invoice falls due. Security deposit received from customers has not been netted off from exposure to credit rish. Ageing analysis As at INR in lakhs As at As at INR in lakhs INR in lakhs Upto 6 mons More an 6 mons (ii) Liquidity risk Liquidity risk is defined as e risk at e company will not be able to settle or meet its obligations on time or at a reasonable basis. Company has sufficient liquidity and expected cash flow to meet such obligations at present, however processes and policies related to such risks are overseen by senior management at regular interval. Company management monitors e company's net liquidity position rough daily funds position and rolling forecasts on e basis of expected cash flows. Maturity profile of financial liabilities The table below provides details regarding e remaining contractual maturities of financial liabilities at e reporting date based on contractual undiscounted payments: As at Less an 1 year More an 1 year Total INR in lakhs INR in lakhs INR in lakhs Trade payables Security deposits from customers 1, , Capital creditors , ,

41 As at Less an 1 year More an 1 year Total INR in lakhs INR in lakhs INR in lakhs Trade payables Security deposits from customers 1, , Capital creditors Retention money from contractors and oers - As at , , Less an 1 year More an 1 year Total INR in lakhs INR in lakhs INR in lakhs Trade payables Security deposits from customers Capital creditors Retention money from contractors and oers - Capital management (a) (b) Risk management The company s objectives when managing capital are to 2, , safeguard eir ability to continue as a going concern, so at ey can continue to provide returns for shareholders and benefits for oer stakeholders, and maintain an optimal capital structure to reduce e cost of capital. In order to maintain or adjust e capital structure, e company may adjust e amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. Dividends (i) Equity shares Final dividend for e year ended 31 March 2016 of 1.4 (31 March ) per fully paid share Interim dividend for e year ended 31 March 2017 of 0.8 (31 March 2016 Nil) per fully paid share (ii) Dividends not recognised at e end of e reporting period As at As at INR in lakhs INR in lakhs In addition to e above dividends, since year end e directors have recommended e payment of a final dividend of 1.70 per fully paid equity share (31 March per share). This proposed dividend is subject to e approval of shareholders in e ensuing annual general meeting. Note 35 - Earnings per share Units Year ended Year ended Net profit attributable to Shareholders Crores Weighted average number of equity shares No. Crores Nominal value per share Basic earning per share of 10 each The Company does not have any outstanding dilutive potential equity shares. Consequently, e basic and diluted earnings per share of e Company remain e same. Note 36 - First-time adoption of Ind AS Transition to Ind AS These are e company's first financial statements prepared in accordance wi Ind AS. The accounting policies set out in note no 2 have been applied in preparing e financial statements for e year ended 31 March,2017, e comparative information presented in ese financial statements for e year ended 31 March,2016 and in e preparation of opening Ind AS balance sheet as at 01 April, 2015 (e Company's date of transition). In preparing its opening Ind AS balance sheet, e company has adjusted e amounts reported previously in financial statements prepared in accordance wi e accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and oer relevant provisions of e Act (previous GAAP or Indian GAAP). An explanation of how e transition from previous GAAP to Ind AS has affected e company's financial position, financial performance and cash flows is set out in e following tables and notes. A. Exemptions and exceptions availed Set out below are e applicable Ind AS 101 optional exemptions and mandatory exceptions applied in e transition from previous GAAP to Ind AS. A.1 Ind AS optional exemptions: A1.1 Deemed Cost Ind AS 101 permits a first-time adopter to elect to continue wi e carrying value for all of its property, plant and equipment as recognised in e financial statements as at e date of transition to Ind AS, measured as per e previous GAAP and use at as its deemed cost as at e date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 Investment Properties. Accordingly, e company has elected to measure all of its property, plant and equipment and intangible assets at eir previous GAAP carrying value. A1.2 Leases Appendix C to Ind AS 17 requires an entity to assess wheer a contract or arrangement contains a lease. In accordance wi Ind AS 17, is assessment should be carried out at e inception of e contract or arrangement. Ind AS 101 provides an option to make is assessment on e basis of facts and circumstances existing at e date of transition to Ind AS, except where e effect is expected to be not material. The company has elected to apply is exemption for such contracts/arrangements. A.2 Ind AS mandatory exceptions: A2.1 Estimates An entity's estimates in accordance wi Ind AS at e date of transition to Ind AS shall be consistent wi estimates made for e same date in accordance wi previous GAAP (after adjustments to reflect any difference in accounting policies), unless ere is objective evidence at ose estimates were in error. Ind AS estimates as at 1 April 2015 are consistent wi e estimates as at e same date made in conformity wi previous GAAP. A2.2 De-recognition of financial assets and liabilities Ind AS 101 requires a first-time adopter to apply e de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after e date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply e de-recognition requirements in Ind AS 109 retrospectively from a date of e entity's choosing, provided at e information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at e time of initially accounting for ose transactions. The company has elected to apply e de-recognition provisions of Ind AS 109 prospectively from e date of transition to Ind AS. A2.3 Classification and measurement of financial assets Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt 77 78

42 instruments) on e basis of e facts and circumstances at exist at e date of transition to Ind AS. The company has classified e financial assets in accordance wi Ind AS 109 on e basis of facts and circumstances at exist at e date of transition to Ind AS. A2.4 As per management, materiality level has been fixed at Rs.20000/-. Hence, e effect of transactions having lower value as per Ind AS have been ignored. B. Reconciliation between previous GAAP and Ind AS Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent e reconciliations from previous GAAP to Ind AS. B.1 Reconciliation of equity as at date of transition ( ) Sr. No Notes to first time adoption Previous GAAP* Adjustments Amount under Ind-AS A Assets (Rs. In Lakhs) (Rs. In Lakhs) (Rs. In Lakhs) 1 Non-current assets a) Property, plant and equipment 10, , b) Capital work in progress 2, , c) Oer intangible assets d) Financial assets -Loans Oer e) Oer noncurrent assets (199.27) Total non-current assets 12, (92.14) 12, Current assets a) Inventories (85.61) b) Financial assets -Trade receivables Cash and cash equivalents 4, (17.15) 4, Bank balances oer an above Loans (93.17) - -Oer c) Oer current assets Total current assets 5, , Total Assets 18, , B Equity and liabilities 1 Equity a) Equity share capital 6, , b) Oer equity -Reserves and surplus 8, , , Total equity 14, , , Liabilties Non-current liabilities a) Deferred tax liabilities Total non-current liabilities Current liabilities a) Financial liabilities -Trade payables Oers 1, (0.00) 1, b) Short Term Provisions 1, (1,011.01) 6.25 c) Current tax liabilities d) Oer current liabilities Total current liabilities 3, (1,011.01) 2, Total liabilities 4, (1,011.01) 3, Total equity and liabilities 18, , B.2 Reconciliation of equity as at date of transition ( ) Sr. No Notes to first time adoption A Assets 1 Non-current assets Previous GAAP* Adjustments Amount under Ind-AS (Rs. In Lakhs) (Rs. In Lakhs) (Rs. In Lakhs) a) Property, plant and equipment 10, , b) Capital work in progress 2, , c) Oer intangible assets d) Financial assets - -Loans Oer e) Oer noncurrent assets (121.60) Total non-current assets 13, (30.99) 13, Current assets B a) Inventories (32.35) b) Financial assets -Trade receivables Cash and cash equivalents 6, (17.15) 6, Bank balances oer an above Loans Oer c) Oer current assets Total current assets 7, , Total Assets 21, , Equity and liabilities 1 Equity a) Equity share capital 6, , b) Oer equity -Reserves and surplus 10, , , Total equity 16, , , Liabilties Non-current liabilities a) Deferred tax liabilities 1, , b) Financial liabilities -Oers Total non-current liabilities 1, , Current liabilities a) Financial liabilities -Trade payables Oers 1, , b) Short Term Provisions 1, (1,011.01) 6.84 c) Current tax liabilities d) Oer current liabilities Total current liabilities 3, (1,011.01) 2, Total liabilities 4, (1,011.01) 3, Total equity and liabilities 21, ,

43 B.3 Reconciliation of total comprehensive income for e year ended Income Notes to first time adoption * The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for e purpose of is note. Reconciliation of total equity as at March 31,2016 and April 01,2015 Lakhs Previous GAAP* Adjustments Amount under Ind-AS (Rs. In Lakhs) (Rs. In Lakhs) (Rs. In Lakhs) Revenue from operations 22, , Less-Excise Duty (2,068.81) 2, , , , Oer income Total income 20, , , Expenses Purchases 11, , Changes in inventories of finished goods (1.14) - (1.14) Excise duty - 2, , Employee benefit expenses Depreciation and amortisation expense CSR Expenses Oer expenses 2, (190.02) 2, Total Expenses 15, , , Profit Before Exceptional Items and Tax 5, , Exceptional items Profit Before Tax 5, , Income Tax Expense Current tax 1, (6.59) 1, Deferred tax Total Tax 1, , Oer Comprehensive Income Items at will not be reclassified to profit or loss Remeasurement of post employment benefit obligations Income tax relating to ese items - (6.59) (6.59) Oer Comprehensive Income for e Period, Net of Tax Total comprehensive Income for e Period 3, , Notes to first time adoption 31st March, 2016 April 01,2015 Total equity (shareholder's fund) as per previous GAAP 16, , Adjustments: Proposed Dividend 1 1, , Oer Adjustment -Capitalisation of Overhauling Cost (Net of Amortisation) Tax Effect on above Adjustment in opening balance pursuant to adoption of Ind AS Total Adjustments 1, , Total equity as per Ind AS 17, , Impact of Ind AS adoption on e statements of cash flows for e year ended March 31,2016 Notes to first time adoption Previous GAAP Adjustments Lakhs Ind AS Net cash flow from operating activities 4, , Net cash flow from investing activities (1,180.61) (136.74) (1,317.35) Net cash flow from financial activities (1,011.01) - (1,011.01) Net increase/(decrease) in cash and cash 1, , Cash and cash equivalents as at April 01,2015 4, , Effects of exchange rate changes on cash and cash Cash and cash equivalents as at March 31,2016 6, , Cash and cash equivalents as per previous GAAP 6, , Bank overdrafts Cash and cash equivalents for e purpose of statement of cash flows C. Notes to first time adoption: Note 1: Proposed Dividend 6, , Under e previous GAAP, dividends proposed by e board of directors after e balance sheet date but before e approval of e financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when e same is approved by e shareholders in e general meeting. Accordingly, e liability for proposed dividend (along wi dividend distribution tax) of Lakhs as at 31 March 2016 (1 April lakhs) included under provisions has been reversed wi corresponding adjustment to retained earnings. Consequently, e total equity increased by an equivalent amount. Note 2: Excise Duty Under e previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on e face of e statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for e year ended 31 March 2016 by Rs. 2, lakhs. There is no impact on e total equity and profit. Note 3: Re-measurements of post-employment benefit obligations Under Ind AS, re-measurements i.e. actuarial gains and losses and e return on plan assets, excluding amounts included in e net interest expense on e net defined benefit liability are recognised in oer comprehensive income instead of profit or loss. Under e previous GAAP, ese re-measurements were forming part of e profit or loss for e year. As a result of is change, e profit for e year ended March 31, 2016 increased by lakhs. There is no impact on e total equity as at March 31, Note 4: Stores & Spares As per Ind AS 16 - PPE -Spare parts, stand-by equipment and servicing equipment are recognised as Property, Plant & Equipment (PP&E) when ey meet e definition of PP&E. This has resulted in increase in PPE by lakhs wi equivalent decrease in inventory as on March 31, There is no impact on profit & loss account and total equity. Note 5: Overhauling As per Ind AS 16 - PPE - The cost of major overhauling needs to be identified and recognised as part of e carrying amount of e item of property, plant and equipment as a replacement if it meets e asset 81 82

44 recognition criteria. This inspection/overhaul cost is en depreciated over e period to e next overhaul. This has resulted in increase in PPE by lakhs wi corresponding equivalent impact on profit & loss. Note 6: Retained Earnings Retained earnings as at April 1, 2015 has been adjusted consequent to e above Ind AS transition adjustments. Note 7: Oer Comprehensive Income Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for e period, unless a standard requires or permits oerwise. Items of income and expense at are not recognised in profit or loss but are shown in e statement of profit and loss as 'oer comprehensive income' includes re-measurements of defined benefit plans. The concept of oer comprehensive income did not exist under previous GAAP. Note 37 - Previous year's figures have been regrouped / reclassified wherever necessary to correspond wi e current year's classifications. COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6Xb) OF THE COMPANIES ACT, 2OI3 ON THE FINANCIAL STATEMENTS OF CENTRAL U.P GAS LIMITED FOR THE YEAR ENDED 31 MARCH The preparation of financial statements of Central U.P Gas Limited for e year ended 31 March 2017 in accordance wi e financial reporting framework prescribed under e Companies Act, 2013 (Act) is e responsibility of e management of e company. The statutory auditor appointed by e Comptroller and Auditor General of India under section 139(5) of e Act is responsible for expressing opinion on e financial statements under section 143 of e Act based on independent audit in accordance wi e standards on auditing prescribed under section 143 (10) of e Act. This is stated to have been done by em vide eir Audit Report dated 4 May I, on behalf of e Comptroller and Auditor General of India, have decided not to conduct e supplementary audit of e financial statements of Central U.P Gas Limited for e year ended 31 March 2017 under section 143(6)(a) of e Act. For and on behalf of Board of Directors For and on e behalf of e Comptroller & Auditor General of India For Prasad Gupta J & Co, Vinay Kumar Shukla Rajiv Sikka C hartered Accountants Managing Director Director (Commercial) Amar Na Gupta Asheesh Agarwal Deepak Bhasin Partner Chief Financial Officer Company Secretary Membership No: Place: New Delhi Date: 04 May 2017 Place: New Delhi Date: Sd\- (Neelesh Kumar Sah) Principal Director of Commercial Audit & Ex-officio Member. Audit Board - II New Delhi 83 84

45 (A Joint Venture of GAIL (India) Limited & BPCL) Registered Office: 7 Floor, UPSIDC Complex, A 1/4 Lakhanpur, Kanpur , Uttar Pradesh CIN: U40200UP2005PLC029538, Website: dbhasin@cugl.co.in, Tel No.: , Fax No.: [Pursuant to section 105(6) of e Companies Act, 2013 and rule 19(3) of e Companies (Management and Administration) Rules, 2014] Name of e Member(s):... Registered Address:... Id:... Folio No.: DP ID:.... I/We, being e member (s) of shares of e above mentioned company, hereby appoint 1.Name: Id: Address: Signature: Or failing him/her 2.Name: Id: Address: Signature: Or failing him/her PROXY FORM- MGT-11 3.Name: Id: Address: Signature: (CUGL observed International Yoga Day on 21st June 2017) as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at e 12 Annual general meeting of e Company, to be held on e 19 day of September, 2017 at 10:00 a.m. at Landmark Hotel, Landmark Towers 10, The Mall Kanpur: (U.P.) and at any adjournment ereof in respect of such resolutions as are indicated below: Resolution Resolutions No. 1. To receive, consider and adopt e Audited Financial Statement of e Company for e financial year ended 31st March, 2017 and e Report of e Board of Directors and e Statutory Auditors and e Comments of e Comptroller & Auditor General of India ereon. 2. To confirm e payments of Interim 8 % (Rs per Equity Share) and to declare Final 17 % (Rs per Equity Share) for e Financial Year ended 31st March, To appoint a Director in place of Shri V. Nagarajan (DIN ), who retires by rotation and being eligible, offers himself for re-appointment. 4. To auorize Board of Director s of e Company to fix remuneration of e Statutory Auditors of e Company in terms of provisions of Section 142 of e Companies Act, 2013 and oer applicable provisions. 5. Ratification of remuneration payable to e Cost Auditors for Financial Ye ar Signed is.. Day of, 2017 Signature of Shareholder(s) Affix Revenue Stamp Rs Signature of Proxy Holder(s) Notes: (12 Foundation Day Celebration) This form of proxy in order be effective should be duly completed, signed and deposited at e Registered Office of e Company, not less an 48 hours before e commencement of e Meeting