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« Mar 13
Chairman's Speech (GAIL India) Year : Mar '14
Dear Shareholders,
 
 The Global macro environment in the Western economies have
 shown signs of moderate recovery during the fiscal period 2013-14,
 nevertheless fundamental and structural weakness persists. Their
 growth recovery is being watched keenly as the same has a
 transmittal impact on our economy. Asian growth story remained a
 mixed bag during the period with Far East Asia being the fastest
 growing regions of the world whereas the developing South Asian
 economies expanded at a slower pace. Inspite of the overall
 tapering effect, the Asian pack grew between 4 to 7.5 percent
 during the year. Spurt in underlying activities indicate positive
 traction to economic expansion and adjustments to this growth
 need to be made on account of the headwinds-tighter monetary &
 financial conditions, geo-political tensions in ME and European
 regions and volatility in commodity prices.
 
 Much along the projected lines, India''s GDP grew by 4.7% during the
 last fiscal year and the economy had been awaiting fiscal and
 structural measures to spur revival. There is a general hope and
 anticipation of key reforms and changes being taken up across
 various sectors accompanied with a return to fiscal responsibility
 and prudence. The current fiscal year is projected to grow at about
 5.5% and set the base for achieving higher rates of economic
 growth in the subsequent period. The citizens seek an all-round
 economic and social development. To provide wings to these
 aspirations, your company is geared up to meet the clean fuel
 challenges by expanding the markets and increasing penetration in
 the backdrop of rising energy demand. Your company plans to
 leverage the anticipated reforms and its global expertise to play a
 key role in mitigating energy scarcity of our country. Given the
 challenge of ensuring a stable growth coupled with sustaining the
 environment and ecology, Natural Gas shall be the preferred fuel of
 the century and GAIL shall be at the frontier of this change. The
 recent Budget for the fiscal saw a thrust in this direction with the
 announcement of laying of an additional 15,000 kilometers of
 natural gas pipelines across the country to complete the National
 Gas grid network to enable the reach across all the regions. Your
 Company plans to commence construction of the 4000 kms. of
 authorized pipeline networks in phases subject to firm tie-up of
 anchor load customers enroute.
 
 In the financial year that went by, you would be glad to know that
 your company showed a healthy growth rate in spite of odds. In FY
 2013-14, your Company registered a 21% increase in Net Revenue
 (Rs 57,245 Crore) over the previous year. Despite sharing the under-
 recoveries of Oil Marketing Companies (OMCs) to the tune of Rs
 1,900 Crores, the Profit after Tax increased by 9% to Rs 4,375 Crore
 during the year.
 
 Your company, has tied up with several international Oil and Gas
 majors, for securing gas supplies, to put in place a diversified long-
 term import portfolio of approximately 86 MMSCMD. In FY 2013-
 14, Your company imported 25 LNG cargoes (about 1.50 MMTPA)
 from various International sources, on short term as well as spot
 basis, to meet requirement of the domestic market. Your Company
 also recognizes the need for accelerated growth of LNG
 infrastructure. Towards this, a MoU with Paradip Port Trust Limited
 has been executed by Your Company for setting up a LNG terminal
 at Paradip Port, Odisha. In addition, you company is also working
 towards Marketing LNG to international off takers to leverage and
 de-risk the portfolio.
 
 Your Company''s E&P assets under A-1 and A-3 blocks in Myanmar
 have started producing gas , resulting into a net positive generation
 of cash flow from this business portfolio.
 
 Amidst a robust performance and an optimistic outlook, I convey
 with profound grief that there has been a pipeline blow-out along
 the Tatipaka-Kondapalli section in KG Basin network at Nagaram
 village, Andhra Pradesh, causing fatalities. GAIL as an abiding
 corporate citizen took immediate rescue, relief and rehabilitation
 measures to provide succor to the affected people. In the wake of
 the incident, a series of steps have been initiated on a
 precautionary note to reassess the health and integrity of the
 pipelines and other hydrocarbon assets. HSE department has
 launched an internal drive to sensitize the work force about
 ensuring safer operations, maintaining zero tolerance to
 deviations to Standard operating procedures and for addressing
 Safety related issues. Further, the process is underway to engage
 International Consultants to review the operational processes and
 recalibrate the same in line with benchmarks followed by Global
 majors in the business.
 
 The Strategic core of the Company shall continue to focus on
 ensuring operational Safety and efficiency of the hydrocarbon
 installations at World class standards. At the same time your
 company shall remain committed to leverage and deliver value
 across the entire gas value chain. Your Company will continue to
 strive for energy security for the country by tying up with Global
 players for gas/LNG sourcing through various sources. In the
 domestic market, the Company will play a focused role in LNG
 infrastructure development with regas capacity bookings, natural
 gas pipeline expansion with CGD infrastructure development and
 Petrochemicals portfolio enhancement. To develop domestic gas
 infrastructure, your Company is focusing at pipeline expansion and
 booking of re-gasification capacities. These strategic endeavors
 are aimed at strengthening India''s energy security and harnessing
 the Natural Gas value chain to ensure Your Company''s defining role
 and contribution towards the Nation''s socio-economic
 development.
 
 Your Company, received recognition for its work towards
 development of energy infrastructure in the nation. The 1000 Km
 long Dabhol-Bengaluru Pipeline Project connecting south India to
 national gas grid was awarded the coveted Platts Global Energy
 Awards 2013 as Premier Project in Large Construction Category.
 As the Company aspires to undertake pioneering initiates for
 Better Future, it is but imperative to continually acquire a Young,
 Capable and Motivated Human Capital into the ''GAIL Parivar''.
 During the last fiscal, 132 highly qualified individuals were inducted
 in the Company.
 
 Further, Environmental sustainability and community
 nterventions towards empowering marginalized groups have
 been the underlying ethos of your company''s operations and
 activities. As part of the CSR initiative, various activities for
 transforming and enriching community lives under the identified
 thrust areas were taken up with an investment of Rs. 91 crore
 (approx.). This reflects the Company''s deep seated philosophy of
 Care, Share and Grow for creating an all-round enduring impact
 around the business operations.
 
 On behalf of the Board of Directors and Team GAIL, I thank you for
 your continued support, which has enabled us to build a robust and
 sustainable business.
 
 B. C. Tripathi
 
 Chairman & Managing Director
Source : Dion Global Solutions Limited
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