On behalf of the Board of Directors of your Company, I am delighted to
present the 32nd Annual Report of your Maharatna Company, along with
Audited Financial Statements for the financial year 2015-16.
PARTNER INDIA''S GROWTH - NATURAL GAS LEADER
With a turnover of Rs.51,614 crores, your Company is India''s largest
natural gas Company and is ranked amongst the top gas utilities in
Asia. Your Company has presence across the entire gas value chain with
activities ranging from Gas Transmission and Marketing to Processing
(for fractionating LPG, Propane, SBP Solvent and Pentane), transmission
of LPG, and production and marketing of Petrochemicals like HDPE and
Your Company has extended its presence in LNG re-gasification, City Gas
Distribution, Exploration & Production through subsidiaries and joint
venture companies and also diversified into solar and wind power
Gas transmission is one of the core competencies of your Company and
draws its strength from about 11,000 km of natural gas pipeline network
and 2,038 km of LPG pipeline transmission network.
With a lean work force of 4321 employees, your Company plays a vital
role in the social and economic development of the country and makes a
substantial contribution towards its energy security.
The important financial highlights for the year 2015-16 are as under:
PARTICULARS 2015-16 2014-15
US $ Million (Rs. in
crores) US $ Million (Rs. in
Turnover (Net of ED) 7,715 51,614 8,952 56,569
Other income 173 1,158 173 1,096
Cost of sales
and depreciation and
including 7,122 47,646 8,236 52,046
Gross margin 766 5,126 879 5,557
Interest 96 640 57 361
Depreciation 196 1,313 154 974
Profit before tax 474 3,173 678 4,284
Provision for tax 131 874 197 1,245
Profit After Tax 344 2,299 481 3,039
Appropriations - - - -
Interim dividend 47 317 60 381
Proposed final dividend 57 381 60 381
Corporate dividend tax 21 142 24 154
Net transfer to/from
bond redemption reserve 5 35 6 37
Transfer to CSR reserve (0) (1) (5) (30)
Transfer to general
reserve 34 230 48 304
Net surplus after
Appropriations 179 1,196 287 1,814
1 US $ in INR converted at
the exchange rate as on
31st March of 66.90 - 63.19 -
the respective financial
Your Company has a consistent track-record of dividend payment. So far,
it has disbursed dividend of over Rs.13,741 Crores to its shareholders
including Rs.8,316 Crores disbursed as dividend to the Government of
The Board of Directors of your Company had earlier approved payment of
an interim dividend @ 25% on equity share of Rs.10 each (Rs.2.5 per
equity share) amounting to Rs.317.12 Crores, which was paid in
February, 2016. Further, the Board has recommended payment of final
dividend @ 30% on equity share of Rs.10 each (Rs.3.00 per equity share)
for FY 2015-16 amounting to Rs.380.54 crores.
With this, the total dividend payment for the fiscal year 2015-16 will
be 55 % on equity share of Rs.10 each (Rs.5.50/- per equity share)
amounting to Rs.697.66 Crores on its paid-up equity capital of
Rs.1,268.48 Crores and dividend distribution tax of I42.03 crores. The
total dividend pay-out including corporate dividend tax accounts for
35% of profit after tax.
CONTRIBUTION TO EXCHEQUER
Your Company has contributed over Rs.4,929 Crore in 2015-16 to the
exchequer through dividend, duties, taxes and others, as compared to
Rs.5,788 Crore in 2014-15.
- Domestic rating
Your Company has been reaffirmed the highest domestic credit rating of
AAA from ICRA, CARE and CRISIL, which is highest credit rating in India
and carries lower credit risk of the Company.
- International Rating
The International rating agency, Moody''s International, Hong Kong, has
also reaffirmed the corporate issuer rating of Baa2 with a negative
outlook, which is one notch higher than sovereign rating of India. The
Baa2 rating affirmation reflects GAILs dominant position in gas
transmission business. Further, Fitch Ratings has also assigned a
long-term foreign currency issuer default rating of BBB- with a
negative outlook, which is equal to sovereign rating of India.
In the last year and a half, the oil and gas sector witnessed
game-changing disruptions with oil prices crashing from 114 $/bbl to a
low of around 30 $/bbl and having profound implications on companies
across the sector.
The volatility in oil prices has caused downward shift in prices of
LNG, oil products, petrochemical products, etc. Further, domestic
production of natural gas has been on the decline over the past 5
years, from peak of 140 MMSCMD in 2010-11 to 86 MMSCMD in 2015-16.
Notwithstanding these challenges which have had physical and financial
implications on your Company, the management has taken it as an
opportunity and has initiated strategic steps to reinvent itself and
emerge out stronger than before.
In order to evolve, grow and excel, your Company continuously reviews
its strategy developed for the period 2011-2020 to make the necessary
course correction, in line with changes in the external business
environment and internal organizational requirements. Management of
your Company is taking steps to realize strategic objectives and ensure
that your Company is on course to become an integrated hydrocarbon
major with presence across the entire gas value chain.
- National Gas Grid
Your Company is the largest natural gas pipeline Company in India and
going forward, the focus will be on the development of National Gas
Grid which is one of the key priorities of the Government of India
(GoI). Your Company now has a total network of approximately 11,000 km
pipeline in the country. Additionally, it has commenced execution of
- Haldia pipeline project (Phase-1) which was inaugurated by the
Hon''ble Prime Minister of India in July, 2015. This project is also
referred to as Energy Highway of Eastern India and once completed, it
would help to revive closed fertilizer plants. This pipeline will
connect states of Eastern India to the rest of the gas network in the
country and pave the way for developing the National Gas Grid The
Board has also approved the 670 km Vijaipur-Auraiya-Phulpur pipeline.
With these projects and through continuous pan-India expansion of the
pipeline network, your Company will further strengthen its leadership
position in the natural gas transmission segment.
Your Company is also pursuing the transnational pipeline project, the
Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project. Gas
Sales & Purchase Agreement (GSPA) has already been signed to import 38
MMSCMD gas into the country through this pipeline. Further, TAPI
Pipeline Company has been incorporated as a Special Purpose Vehicle in
the Isle of Man with your Company holding 5% equity. Shareholder''s
Agreement and Investment Agreement of TAPI Pipeline Company have been
- LNG Marketing
One of the key strategic priorities of your Company today is the
marketing of LNG in domestic and international markets. Over the last
few years, your Company tied-up significant LNG volumes by concluding
several deals with suppliers, such as Sabine Pass Liquefaction LLC
(USA), Gazprom (Russia) etc. Further, your Company''s US subsidiary has
booked LNG capacity in Dominion Cove Point''s LNG liquefaction terminal
in the USA for which 20 year gas sourcing agreement has been entered
with WGL Midstream Inc. (USA). In line with its LNG import portfolio,
your Company is focusing it efforts on gas market development to
attract and retain more customers. The marketing tie-ups are being
explored for selling LNG in India and in the global markets. Your
Company''s subsidiary, GAIL Global (Singapore) Pte Limited is actively
pursuing LNG trading activities from Singapore.
To develop the gas sector in India and advance the country on the road
to a gas based economy, your Company has advocated the implementation
of the pooling mechanism. As a result, for the first time in the
country, large scale gas pooling was introduced where your Company is
acting as a pool operator to manage procurement and supply of R-LNG to
stranded gas based power plants in India. Your Company is also
supplying RLNG to fertilizer companies at competitive rate through
Your Company has tied-up additional regasification capacities at Dahej
LNG terminal and Dabhol LNG terminal to facilitate regasification of
additional LNG tied-up in recent years. Further tie -ups in upcoming
LNG regasification terminals shall also be pursued. Your Company plans
to own long term charter hire LNG ships to transport LNG volumes from
the USA to India and other global markets.
- City Gas Distribution (CGD)
In order to provide clean fuel for domestic, vehicular and commercial
use and to facilitate development of smart cities, your Company is
expanding its CGD network. Your Company''s wholly owned subsidiary, GAIL
Gas Limited, is implementing CGD projects in the cities of Kota, Dewas,
Meerut, Sonepat, Bengaluru and Taj Trapezium in addition to pursuing
the same in the state of Kerela, Karnataka, Andra Pradesh, Rajasthan,
Kota and Vadodara city etc. through its joint ventures. In line with
the GoI''s mission to accelerate the use of gas, your Company through
its CGD JVs has set an unprecedented record by providing 2.5 lakhs new
PNG connections during the year.
Your Company aspires to be one of the leading players in India in this
segment by strengthening its petrochemical portfolio through expansion
of existing capacities, setting up new plants and acquiring equity
stakes in upcoming projects. Petrochemical plant was commissioned in
Assam through Brahmaputra Cracker & Polymer Limited (BCPL) a subsidiary
of your Company. This plant was dedicated to the nation by Hon''ble
Prime Minister of India in February, 2016. Further, a petrochemical
plant at Dahej is being set up by ONGC Petro-additions Limited (OPaL)
which is a joint venture (JV) of your Company,
As a responsible corporate citizen and in line with the GoI''s
commitment to reduce carbon emissions, your Company aims to decrease
its carbon footprint in a phased manner. It has installed 118 MW wind
energy capacity and has also set up a 5 MW solar project. Further, your
Company is a stakeholder in a Special Purpose Vehicle (SPV) created
under the aegis of Ministry of Petroleum & Natural Gas (MoP&NG) and
Ministry of New & Renewable Energy (MNRE) for pursuing the setting up
of Grid Connected Renewable Energy Power Projects.
- Human Resource Development
Your Company is committed to align its human resource development
initiatives with strategic business objectives to achieve its
organizational goals. The key areas under focus are skill development
and capability build-up, talent acquisition, development and retention.
During the year under review, the segment wise business performance of
your Company is as under:
- Natural Gas Marketing
Natural gas marketing continues to constitute your Company''s core
business. During 2015-16, gas sales clocked 73.67 MMSCMD, compared to
72.07 MMSCMD in the previous financial year. Major supplies of natural
gas include fuel to power plants, feedstock for gas-based fertilizer
plants, LPG extraction and City Gas Distribution. Your Company holds
around 71.24 % market share in India''s gas marketing.
Your Company has been designated by Ministry of Petroleum & Natural Gas
(MOP&NG) to raise invoices for non- submission of utilization
certificate, duly certified by Fertilizer Industries Coordination
Committee (FICC), by concerned fertilizer companies for use of APM gas
for production of urea. The Company is revenue neutral for such
Most of the customers disputed the debit notes raised by the Company
and matter was pending at Hon''ble High Court. Further, MoP&NG vide
letter dated 16th December, 2015 revised the earlier modalities for
deriving the quantity and price for issue of debit notes. The company
has taken the matter with Ministry of Fertilizer and FICC to provide
information / details.
Considering the pending court case, uncertainty in recovery of debit
notes, matter being under consideration of Government- MOP&NG, Ministry
of Fertilizer and FICC, The Company issued claim letter amounting to
Rs. 1651.18 crore for such type of cases, till the matter gets
- Natural Gas
Your Company owns and operates a network of about 11000 kms of natural
gas high pressure trunk pipeline with a pan-India capacity of around
206 MMSCMD of natural gas. The average gas transmission during the year
was 92.72 MMSCMD, compared to 92.10 MMSCMD in the previous financial
Your Company is the only Company in India, which owns and operates
exclusive pipelines for LPG transmission for third-party usage. It owns
and operates two LPG pipeline transmission systems with a total length
of 2,038 kms. Out of this, 1,415 kms of pipeline network transports LPG
from western to northern parts of India (Jamnagar - Loni pipeline) and
the balance 623 kms of pipeline network transports LPG in the country''s
southern part (Vizag-Secunderabad pipeline). The LPG transmission
system has a capacity to transport up to 3.8 MMTPA of LPG. In 2015-16,
the LPG transmission throughout achieved was about 2.82 Million MT.
During 2015-16, your Company produced 344.168 Thousand MT of polymers
and sold 333.5 Thousand MT of polymers.
- LPG and Other Liquid Hydrocarbon Production
Your Company has LPG plants at five locations in the country. In 2015-
16, total liquid hydrocarbon production was about 1.09 Million MT,
which mainly included 0.85 Million MT of LPG, 0.13 Million MT of
Propane, 0.02 Million MT of Pentane and 0.08 Million MT of Naphtha.
- Exploration and Production (E&P)
Your Company''s E&P business has continued self-sustainable production
of oil and gas for the second consecutive year from four blocks (two
overseas blocks in A-1 & A-3 block, Myanmar and 2 domestic blocks in
Revenue of approx. Rs. 751.51 Crores has been generated from sale of
hydrocarbon from 4 producing blocks namely A-1 & A-3, Myanmar and
CB-ONN-2000/1 and CB-ONN-2003/2 (Cambay onland) during the year
Further, Field Development Plan (FDP) has been approved by Directorate
General of Hydrocarbons (DGH) for the gas resource of 65 BCF in Tripura
As a result of continued portfolio optimisation, your Company now has
participating interest in 13 E&P blocks (excluding one GAIL Operated
Block CY-ONN-2005/1 in Cauvery basin which was relinquished in June
2016) of which 11 blocks are in India and 2 in Myanmar. Out of these,
your Company is Operator in one onland blocks viz. CB-ONN-2010/11 in
Cambay basin awarded during NELP-IX bidding round.
Drilling activities were initiated in 4 (out of 5) blocks obtained
during NELP-IX bidding round viz (i) CB-ONN-2010/11 (Lead Operator:
(ii) CB-ONN-2010/8 (Lead Operator: Bharat Petro Resources Limited)
(iii) GK-OSN-2010/1 (Operator: ONGC) (iv) GK-OSN-2010/2 (Operator:
ONGC). Gas discovery has been notified to Government in the block GK-
OSN-2010/1. Survey activities are planned in the remaining NELP-IX
block AA-ONN-2010/2 (Operator: OIL)
INITIATIVES FOR FUTURE GROWTH
* Global Initiatives
Your Company is constantly pursuing a leading role in the TAPI Pipeline
project to receive Natural Gas from the Galkynysh fields in
Turkmenistan. After incorporation of TAPI Pipeline Company Limited
(TPCL), Turkmengas has been endorsed as the consortium leader. TPCL has
a mandate to build, own and operate the proposed TAPI Pipeline. The
Shareholders Agreement (SHA) of TPCL was signed in December 2015 during
the ground breaking ceremony for laying of the Turkmen leg of the TAPI
pipeline. Investment Agreement (IA) relating to initial equity infusion
by the TAPI entities into TPCL was also signed in April, 2016.
Galkynysh Pipeline Company, the consortium leader group led by
Turkmengas, shall be taking 85% equity in TPCL, while your Company,
ISGS (Pakistan) and Afghan Gas Enterprise (AGE) shall be taking 5%
* Domestic Initiatives
The domestic business initiatives of your Company were as follows:
GAIL and Hindustan Petroleum Corporation Limited (''HPCL!) are exploring
the possibility of setting up a Greenfield petrochemical complex in the
east coast of India primarily based on imported ethane.
* LNG REGASIFICATION TERMINALS
Your Company is evaluating various opportunities for setting up/
booking LNG regasification capacity in the country
* LNG SHIPPING
In 2011, your Company contracted 3.5 MMTPA of LNG from Cheniere Energy,
USA on FOB basis for an initial period of 20 years. Further, in 2013
your Company subsidiary GAIL Global (USA) LNG LLC also signed a
Terminal Service Agreement (TSA) for booking 2.3 MMTPA of liquefaction
capacity in the Dominion Cove Point terminal for 20 years. The initial
supplies from both these contracts are expected to commence from early
2018. Currently, your Company is in the process of long term charter
hiring of LNG ships through the international competitive bidding
* NATURAL GAS PIPELINE PROJECTS
During the financial year, your Company has completed 27 number of
''Last Mile Connectivity'' to harness the commercial utilization of
various pipeline networks in the seven states of Karnataka , Gujarat,
Goa , Haryana, Rajasthan, Maharashtra & Punjab.
* NON-CONVENTIONAL ENERGY
Your Company has total installed capacity of 118 MW of Wind Energy
Generation Projects (WEG). Your Company began operations with a modest
capacity of 4.5 MW wind energy for captive use in Gujarat in 2009-10
and graduated to commercial production after commissioning 100 MW of
WEG projects in Tamil Nadu and Karnataka in 2011-12. It also made its
entry in the solar power sector by setting up 5 MW Solar Power Plant in
Rajasthan through bidding under the Jawaharlal Nehru National Solar
Your Company is setting up 5.76 MW grid connected roof top captive
solar power plant at Pata Petrochemical Complex, Uttar Pradesh.
* COAL GASIFICATION
Your Company is also entering into coal gasification by setting up
surface coal gasification based urea project at Talcher. The project is
envisaged for production of 2200 MTPD Ammonia and 3850 MTPD Urea and
the project cost is estimated to be around Rs.8,000 Crore. Joint
Venture Company Talcher Fertilizers Limited (formerly known as
Rashtriya Coal Gas Fertilizers Limited) was formed on 13th November,
2015 with consortium partners i.e. GAIL, CIL, RCF & FCIL.
The success of this project would pave the way for the production of
fertilizers from abundantly available domestic coal, thus resulting in
lesser dependency on their imports.
RELATED PARTIES - SUBSIDIARIES/ ASSOCIATES/ JOINT VENTURES
Your Company has formed subsidiaries/associates/joint venture companies
for CGD, petrochemicals, LNG, gas trading, power generation and shale
gas. It has played pioneering role in introducing city gas projects for
natural gas supplies to households, commercial, industrial and
transport sectors through its subsidiary and joint venture companies.
Contracts or arrangements/ transactions with related parties were on
arm''s length basis and in ordinary course of business.
Your Company''s subsidiaries/ associates/joint venture companies
contributed significantly in the business expansion activities of your
Company. A statement containing the salient feature of the financial
statements of your Company''s Subsidiaries, Associate Companies and
Joint Ventures as per first proviso of section 129(3) of the Companies
Act, 2013 including details of individual contribution of all
subsidiaries, associates and joint venture companies towards the
overall performance of Company during the period is also given under
Consolidated Financial Statements.
The details of subsidiaries/associates/joint venture companies are
NATURAL GAS, LNG AND POWER
- GAIL Global (Singapore) Pte. Limited (wholly owned subsidiary)
GAIL Global (Singapore) Pte. Ltd. (GGSPL), primarily started as an
overseas investment arm of your Company and was operationalized for LNG
trading in 2012. It commenced its business operations in May 2012.
GGSPL is now actively involved in business activities in the area of
LNG Trading. Until March 31, 2016, GGSPL has traded twenty one (21) LNG
cargoes out of which 13 were traded during the financial year 2015-16.
The turnover for 2015-16 was USD 307 million.
GGSPL has also been mandated by your Company to market part of the
Henry Hub linked LNG volume sourced from the USA, in the international
market. The supplies against the said volumes are expected to start
from the year 2018.
GGSPL is also in process of third-party trades and endeavouring ship
chartering and risk management activities along with supplying LNG
cargoes to GAIL.
- GAIL Global (USA) Inc (wholly owned subsidiary)
GAIL Global (USA) Inc.(GGUI), was incorporated as a wholly subsidiary
of GAIL to undertake investment in the Eagle Ford shale gas asset. The
primary objective behind this investment was to enter into the US shale
gas market and to bring shale gas technology to India. GGUI executed a
definitive agreement with M/s Carrizo Oil & Gas Inc., USA (Carrizo) on
September 28, 2011, to enter into an unincorporated JV in the Eagle
Ford Shale asset in Texas. GGUI acquired a 20% participating interest
in this JV. Carrizo, with the remaining 80% participating interest,
functions as the operator of the JV.
During the year, 20 wells came online, taking the total online wells to
99 as on December 31, 2015. The gross production volume of GGUI during
2015 was 853.1 Mboe.
- GAIL Global (USA) LNG LLC (wholly owned subsidiary of GGUI)
GAIL Global (USA) LNG LLC (GGULL) signed a contract with Dominion Cove
Point LNG, LP (DCP) to book LNG tolling capacity of 2.3 MMTPA in its
Cove Point terminal. It also signed Gas Sales & Purchase Agreement
(GSPA) with WGL Midstream, Inc. for sourcing of gas for liquefaction at
the Terminal. The construction activities at the terminal are on-track
and the terminal is expected to be in service by January 2018. GGULL
would be selling all LNG volumes from Cove Point to GAIL.
- GAIL China Gas Global Energy Holdings Limited
GAIL China Gas Global Energy Holdings Limited, was formed with an
objective to pursue gas sector opportunities, primarily in China. Your
Company has a 50% equity stake with China Gas Holdings Limited as an
- Petronet LNG Limited (PLL)
PLL was formed in 1998 to set up LNG import and re- gasification
facilities in India. It currently owns and operates a 10 MMTPA capacity
LNG re-gasification terminal at Dahej, Gujarat. The capacity is being
expanded to 15 MMTPA (expected to be completed by end of 2016). PLL has
also setup an LNG re-gasification terminal at Kochi, Kerala with a name
plate capacity of 5 MMTPA.
Your Company has 12.5% equity stake in PLL along with Bharat Petroleum
Corporation Ltd. (BPCL), Oil and Natural Gas Corporation (ONGC) and
Indian Oil Corporation Limited (IOCL) as equal partners.
- Ratnagiri Gas and Power Private Limited (RGPPL)
RGPPL was formed as a joint venture with NTPC for acquiring and
operating the erstwhile Dabhol Power Project assets consisting of
1967.08 MW gas- based combined cycle power block and 5 MMTPA LNG Block.
The assets were transferred to RGPPL in October, 2005. Your Company has
25.51% equity stake in RGPPL along with NTPC 25.51%, MSEB Holding
Company Limited 13.51% and Indian Financial institutions 35.47%.
The power block, was non-operational due to paucity of funds and non-
availability of domestic gas in FY 2014-15. Government of India has
floated a scheme for restart of the gas based Power Plant on Regasified
LNG, vide its OM dated 27.03.2015 support from Power System Development
Vund (PSDF Support Scheme of GoI), which provided for reverse auction.
RGPPL has participated in the GoI scheme with Indian Railways as the
buyer for the generation under PSDF Scheme. Ministry of Power has
allocated temporary 620 MW power out of allocation to Maharashtra to
Indian Railways under PSDF Support of GoI for the financial year
2015-16 & 2016-17.
Power Plant commenced operation under PSDF Support Scheme on November
26, 2015 & supplying around 500 MW Power to the Indian Railways in the
states of Maharashtra, Gujarat, Madhya Pradesh & Jharkhand. During the
Financial Year 2015-16, a total of 1197.08 BUs have been supplied to
RGPPL has already entered into a long-term frame work agreement with
GAIL for commercial utilization of LNG terminal and commenced tolling
operations for 25 years w.e.f February 2012. 45 cargos have been
successfully unloaded since commissioning. 22 cargos were unloaded
during FY 2015-16. The total revenue earned by LNG Terminal from
commissioning till 31st March 2016 is about Rs.700 Crores. The plant
now operates only in non monsoon period as there is no breakwater.
Demerger process of power plant & LNG terminal is going on. It is
envisaged that by 2020, the breakwater construction will be completed
and it will be able to operate round the year at full capacity.
The proposal for the demerger of the Power and LNG business is under
consideration of RGPPL and its shareholders. The purpose of the
demerger is (a) to enable restructuring of the loan in order to make
the two demerged entities independently viable and (b) to make
available the funds to complete the breakwater in order to achieve the
full potential of the LNG terminal.
CITY GAS DISTRIBUTION (CGD)
- GAIL Gas Limited (wholly owned subsidiary)
GAIL Gas was incorporated with the objective to implement City Gas
Distribution (CGD) projects in the country, GAIL Gas has been
authorized by Petroleum and Natural Gas Regulatory Board (PNGRB) to
implement CGD Projects in Dewas, Kota, Sonipat, Meerut, Taj Trapezium
Zone and Bengaluru. In addition, GAIL Gas is pursuing City Gas Business
in the state of Kerala, Andhra Pradesh, Karnataka, Rajasthan, Kota and
Vadodara City etc. through its joint ventures. It has also won the
authorization of Haridwar district and North Goa through a consortium
with Bharat Petroleum Corporation Limited by PNGRB.
Rajasthan State Gas Limited (RSGL) was incorporated by GAIL Gas Limited
and Rajasthan State Petroleum Corporation Limited (RSPCL) with the
objective to promote the CGD projects and take up activities of gas
distribution in the state of Rajasthan. GAIL Gas has transferred its
Kota CGD Assets to RSGL and matching contribution will be made by other
JV partner i.e. RSPCL
* Compressed Natural Gas (CNG)
During the year, GAIL Gas augmented its CNG distribution infrastructure
by enhancing the capacity of existing stations and adding two CNG
Station in Sonipat and one in Firozabad. CNG sales increased to 38
MMSCM in 2015-16.
* Piped Natural Gas (PNG)
In PNG business, GAIL Gas is progressively supplying PNG to domestic
customers in its authorized cities. Presently, the company is catering
to 11404 households.
GAIL Gas continue to maintain its focus on the PNG industrial and
commercial segment as one of the potential growth areas. With its
concentrated efforts in the year 2015-16, the total number of
commercial and industrial customers increased to 513 in 2015-16.
GAIL Gas has commissioned the steel networks in the geographical area
(GA) of Sonepat, Dewas, Kota, Meerut, Taj Trapezium Zone and Bengaluru.
For reaching more charge areas for domestic connections, the steel grid
network and MDPE pipeline network has been extended to 388.93 kms and
806.41 kms respectively in 2015-16 in the cities of Sonepat, Meerut,
Dewas, Kota, Taj Trapezium zone and Bengaluru.
During the year, the sales volume from industrial, commercial and
domestic customers grew to 702.80 MMSCM from 526 MMSCM during previous
- Aavantika Gas Limited (AGL)
AGL was incorporated to implement CGD Projects in Madhya Pradesh. As on
31st March, 2016, AGL operates 20 CNG stations including 9 daughter
stations, 7 online stations & 4 mother stations in Indore GA (including
Ujjain) and Gwalo GA.
Further, as on 31st March 2016, AGL supplied PNG to around 6430
Domestic, 37 commercial & 59 industrial consumers in its authorized
geographical regions. AGL is also catering to fuel requirement of
around 21,300 CNG vehicles operating in the region. Your Company along
with HPCL holds 22.50% stake as an equal partner.
- Bhagyanagar Gas Limited (BGL)
BGL was incorporated to implement CGD projects in the United Andhra
Pradesh. As on 31st March, 2016, BGL operated 33 CNG Stations including
25 daughter booster stations, 5 online stations & 3 mother stations.
Further, as on 31st March 2016, BGL supplied PNG to over 4270
households, 46 commercial & 3 industrial consumers in its authorized
geographical regions. BGL also fulfills the fuel requirement of around
37000 CNG vehicles operating in the region. Your Company has 22.50 %
stake along with HPCL as an equal partner.
- Central UP Gas Limited (CUGL)
CUGL was incorporated to implement CGD projects in Uttar Pradesh. As on
31st March, 2016, CUGL operated 17 CNG Stations including 4 mother
stations, 10 online stations & 03 daughter booster stations.
Further, as on 31st March 2016, CUGL supplied PNG to over 13283
domestic, 148 commercial & 44 Industrial customers in its authorized
geographical regions. CUGL is also catering to fuel requirement of
around 51865 CNG vehicles operating in the region. Your Company has 25%
stake along with BPCL as an equal partner.
- Green Gas Limited (GGL)
GGL was incorporated to implement CGD projects in Uttar Pradesh. As on
31st March, 2016, GGL operated 15 CNG Stations including 5 daughter
stations, 6 online stations & 4 mother stations.
Further, as on 31st March 2016, GGL supplied PNG to over 12100
domestic, 15 commercial & 5 industrial customers in its authorized
geographical regions. GGL is also catering to fuel requirement of
around 36966 CNG vehicles operating in the region. Your Company has
22.5% stake along with IOCL as an equal partner.
- Indraprastha Gas Limited (IGL)
IGL was incorporated to implement CGD projects in Delhi''s National
Capital Territory (NCT) and cities in adjoining National Capital Region
(NCR). As on 31st March, 2016, IGL operated 340 CNG Stations including
68 mother stations, 243 online stations & 29 daughter stations.
Further, as on 31st March 2016, IGL supplied PNG to over 6.36 Lac
Domestic, 1751 commercial & 821 industrial consumers in its authorized
geographical region, which includes the entire public transport of the
national capital and also the world''s largest bus fleet on CNG. IGL is
also catering to fuel requirement of around 8.4 Lac CNG vehicles in the
Delhi/NCR. Your Company has 22.5% stake along with BPCL as an equal
- Mahanagar Gas Limited (MGL)
MGL was incorporated to implement CGD projects in Mumbai & adjoining
areas. As on 31st March, 2016, MGL operated 188 CNG Stations, 19 mother
stations, 142 online stations & 27 daughter booster stations.
Further, as on 31st March 2016, MGL supplied PNG to over 8.62 Lac
Domestic, 2866 commercial & 60 industrial consumers in its authorized
geographical region. MGL is also catering to fuel requirement of around
4.7 Lac CNG vehicles operating in the region.
Your Company accorded approval to Mahanagar Gas Ltd.(MGL), to issue
fully paid up unsecured Compulsory Convertible Debentures(CCDs) at par
to Government of Maharashtra (GOM) due to which equity holding of GoM
increased to 10% of total paid-up equity capital. Further, your Company
also accorded approval to off-load the equity shares held by GAIL and
BGL each up to 12.5% of MGL equity through the Initial Public
Offering(IPO). MGL Issue was opened on 21st June, 2016 and closed on
23rd June, 2016. Shares were allotted to investors at Rs.421/- per
share. MGL equity shares were listed on NSE and BSE on 1st July, 2016 .
Your Company equity holding in MGL post-IPO is 32.5% along with BG Asia
Pacific Holdings Pte. Limited as an equal partner.
- Maharashtra Natural Gas Limited (MNGL)
MNGL was incorporated to implement CGD projects in and around Pune. As
on 31st March, 2016, MNGL operated 36 CNG Stations including 5 mother
stations, 14 online stations & 17 daughter stations.
Further, as on 31st March 2016, MNGL supplied PNG to over 30598
Domestic, 132 Commercial and 115 Industrial Consumers in its authorized
geographical region. MNGL is also catering to fuel requirement of
around 97307 CNG vehicles operating in the region. Your Company has
22.5% stake along with BPCL as an equal partner.
- Tripura Natural Gas Company Limited (TNGCL)
TNGCL was incorporated to implement CGD projects in Agartala. As on
March 31st, 2016, TNGCL operated 5 CNG stations including 3 mother
stations and 2 daughter stations in these areas.
Further, as on March 31st, 2016, TNGCL supplied PNG to over 22,615
domestic, 322 commercial and 47 Industrial customers in its authorized
geographical region. TNGCL also fulfils the fuel requirement of around
8,063 CNG vehicles operating in the region. Your Company has 29% stake
in this joint venture.
- Vadodara Gas Limited (VGL)
Shareholders approved transfer of your Company''s CNG stations and
associated pipeline laid in city for connecting CNG Station in Vadodara
to proposed Joint Venture Company of GAIL Gas Limited with Vadodara
Mahanagar Seva Sadan (VMSS) in year 2011.
Accordingly, VGL was incorporated as Joint Venture Company (JVC) of
GAIL Gas Limited and VMSS for supply of Compressed Natural Gas (CNG)
and Piped Natural Gas (PNG) in the city of Vadodara. Your Company has
signed the Business Transfer Agreement (BTA) with VGL and transferred
its assets to VGL. VGL is operating the CGD business we.f. 01.10.2014
in Vadodara. Consequent upon transfer of assets, your Company has
32.93% stake along with GAIL Gas Ltd. 17.07% stake and VMSS has 50%
stake in VGL.
VGL operates 9 CNG stations in Vadodara and dispensing more than 65,000
kg/day CNG, The CNG network in the City of Vadodara includes 3- Mother
Stations, 1- On-line Station and 5- Daughter Booster Stations and 13 Km
VGL also caters to the Piped Natural Gas (PNG) requirements of its
consumers in domestic and Commercial Sectors. VGL supplies PNG to
76,000 houses and 2,200 commercial in the city through a 750 km long PE
Pipeline Distribution Grid and 07 District Pressure Regulating System.
This network was originally built, owned and operated by VMSS. VGL
developed new MDPE network of 204 Km in outskirt area which catered
about 50000 houses and out of that @2400 connections regularised and
- Brahmaputra Cracker and Polymer Limited (BCPL) (Subsidiary)
Your Company has 70% equity stake in Brahmaputra Cracker and Polymer
Limited (BCPL), with Oil India Limited (OIL), Numaligarh Refinery
Limited (NRL) and the Government of Assam each having 10% equity share.
BCPL has set up 2,80,000 TPA polymer plants in Assam.
The petrochemical complex at Lepetkata was commissioned on January 02,
2016 and dedicated to the nation by Hon''ble Prime Minister, Narendra
Modi on February 05, 2016.
As on 31st March, 2016, BCPL has produced around 3200 MT of polymers
and 1000 MT of liquid hydrocarbons. Marketing Agreement was executed
with BCPL during the year.
- ONGC Petro-additions Limited (OPaL)
OPaL is implementing a Greenfield petrochemical complex of 1.4 MMTPA
Polymer capacity at Dahej, Gujarat. Your Company, with a 15.5% equity
stake and an investment of Rs.994.95 crores, is a co-promoter of OPaL.
Oil and Natural Gas Corporation Limited (ONGC) and Gujarat State
Petroleum Corporation Limited (GSPC) are co-promotors of OPaL. The
plant is likely to commence operations during FY 2016-17.
- TAPI Pipeline Company Limited (TPCL)
Your Company is pursuing the Turkmenistan-Afghanistan-Pakistan-India
(TAPI) Pipeline project to receive natural gas supply from the
Galkynysh fields of Turkmenistan. TPCL was incorporated in November
2014 in ''Isle of Man, to build, own and operate the proposed TAPI
pipeline. In August 2015, Turkmengaz was endorsed as the Consortium
Leader of the project by the TAPI entities. The Shareholders Agreement
of TPCL was signed among the shareholders on December 13, 2015 while
the Investment Agreement was signed on April 07, 2016. Your Company
holds 5% equity in TPCL.
- South-East Asia Gas Pipeline Company Limited (SEAGP)
SEAGP was formed to transport natural gas from A1/A3 blocks in Myanmar
to Myanmar-China border. As of January 2016, this pipeline is
transporting nearly 16 MMSCMD of natural gas. Your Company has a 4.17%
equity stake in SEAGP
- Talcher Fertilizers Limited (Earlier known as Rashtriya Coal Gas
A consortium comprising of your Company, CIL, RCF and FCIL was formed
to revive FCIL, Talcher fertilizer unit in the Angul district of
Orissa. The MoU was signed by the consortium partners on September 05,
2013. Subsequently, the joint venture company, Rashtriya Coal Gas
Fertilizers Limited, was formed on November 13, 2015. Your Company
holds 29.67% in this JVC.
PARTICULARS OF LOANS, INVESTMENTS AND CORPORATE GUARANTEES
Details of investments, loan and guarantee covered under Section 186 of
the Companies Act, 2013 forms part of financial statement, as a
separate section in the Annual Report FY 2015-16.
IT ADVANCEMENTS AND FUNCTIONAL EXCELLENCE
Digital technology is now a new disruptive force to reckon with in all
realms of businesses. Your Company has aligned with the GoI''s Digital
India initiative to launch Digital GAIL to integrate all processes and
stakeholders with digital services. Digital GAIL aims to ensure that
the Company''s services are made available electronically, efficiently,
in shorter delivery time, while reducing paperwork.
All SAP systems in your Company have been upgraded and so the Company
is all set for the implementation of asset depreciation as per the IT
Act, linear asset management, risk management, incident management,
worker safety management, change management, and mobile apps for HR &
Your Company has implemented Analytics Dashboards for the top
management, using the latest SAP HANA-based Business Information
Warehouse. These user-friendly dashboards provide drill-down facilities
for analysing data and facilitate faster decision making. Your Company
has also introduced mobile apps to provide anytime and anywhere access
GAIL has also implemented the enhanced EHSM Module for incident and
risk management. This ensures that any deviation in operational process
is recorded and automated for proper monitoring. Accordingly,
preventive actions for mitigation of risks are taken.
Your company has also implemented a system for bilingual (Hindi and
English) conversion of selective SAP output.
To provide recognition to your Company data centres as secured data
centres in the industry, these have been certified by international
certification agency based on ISO 27001:2013 Information Security
Management System (ISMS) Framework. Your company has successfully
conducted Surveillance Audit in November 2015 through M/s BSI and
retained the ISO 27001 certification for ensuring security of
information and physical assets.
Continuing journey towards functional excellence, your Company has
taken various new initiatives during FY 2015-16 in the fields of
Competence building, Asset Integrity Management, Standardization,
Digital Applications / Processes, Employee Engagement, Knowledge
Leverage, Archiving of Documents, Stakeholder Management etc. Further,
moving ahead in the endeavor to nurture symbiotic relationship with
Vendors / Contractors / Suppliers, Vendor Coaching, Pre-Dispute
Resolution Mechanism & health monitoring of Contracts have been
implemented with an objective to minimize disputes during contract
execution as well as to minimize post contract closure legal disputes /
HEALTH, SAFETY AND ENVIRONMENT (HSE) MANAGEMENT
- Corporate HSE Policy
The HSE practices are primarily driven through a Corporate HSE policy,
which is a statement of commitment of the management of your Company.
The Company is committed to conduct business with a robust and
integrated HSE management system with a focus on improving harmony with
the environment through sustainable development. The safety and health
of all our employees is of paramount importance to the management, and
find mention in the core organisational values of GAIL. Employees and
contract workers are strongly encouraged to adopt a safe working
culture and behaviour to ensure effective implementation of the HSE
policy. Complying with applicable HSE rules and regulations and going
beyond in setting internal targets are important elements of the HSE
management policy of your Company.
- Safety Performance
Safety performance is measured through HSE Score which is evaluated
on the basis of performance of sites against important HSE Management
System elements. Your Company achieved the HSE Score of 93% as against
the MoU target of 90%.
- Safety Training
Your Company imparts regular and structured HSE training to its
employees to upgrade their skills, knowledge and competence. It also
conducts regular training sessions for contract workers, hydrocarbon
tanker drivers and other workers to create awareness of the probable
hazards in their work area and suggest safe work practices. Your
Company also understands the importance of good health, and as a step
in this direction, it organized the HSE workshop on Occupational
Health for business heads and heads of fire and safety & medical
services. Faculties from prestigious institutions are also invited
regularly to share their insights on health-related issues. Your
Company also holds technical seminars regularly, as a case point, it
organized a seminar on Safe Operation of Cross-Country Pipeline for
Oil and Gas Industry in Mumbai, in association with National Safety
- Safety Culture Transformation Through Behaviour Based Safety (BBS)
Your Company introduced and implemented the Behaviour-Based Safety
(BBS) Concept to enhance safety of people and its installations. The
implementation of this concept has helped to minimize at-risk behaviour
at all work sites. In order to educate the employees on this concept,
behaviour- based safety cum safety leadership workshops were organized
at various sites of your Company during the year.
- Safety Audits
Your Company undertakes various safety audits to ensure implementation
of the HSE Management System Guidelines and Emergency Preparedness.
These audits are conducted by in-house teams and external safety
- Occupational Health
Your Company has implemented occupational hygiene measures and medical
surveillance programmes to monitor and control the occupational health
of its employees. It has also prepared guidelines on occupational
health management. The Corporate Occupational Health Committee met four
times during the year to monitor the occupational health programmes in
your Company. To evaluate effectiveness of these programmes, a
multi-disciplinary internal team conducted occupational health audit of
process plants on all its work sites. The Company also conducts
periodic medical examination of its employees at its various work
centres, based on defined guidelines.
Your Company is in the process of publishing its sixth Sustainability
Report for 2015-16 based on the Global Reporting Initiative (GRI) G4
Guidelines. Sustainability reporting has helped in measuring and
monitoring your Company''s performance and moving beyond the mandatory
requirements to ingrain sustainability within the organization in
letter and spirit. It has served as an important management tool
helping us to re-look at your Company''s systems, policies and
Since inception, your Company has been guided by the principles of
accountability and transparency. In 2011, your Company formally began
its sustainability journey, taking small yet steady steps at a time.
The Company''s Sustainable Development Committee, comprising the
Functional Directors as its members and an independent director as the
Chairman, regularly monitors these sustainability initiatives and their
The management of your Company understands that taking concrete actions
in the right direction is equally important. GAIL is among the very few
companies to have set voluntary targets through Sustainability
Aspirations 2020 and transparently disclosed them in the public domain.
Your Company has disclosed additional targets through the revised
Sustainability Aspirations 2020 in the Sustainability Report. The
targets are in the area of Specific Energy Reduction, Specific GHG
Emission Reduction, Specific Fresh Water Consumption Reduction and Zero
Waste Water Discharge.
Your Company has strengthened its data management systems to capture
credible and authentic data and information from its various sites. For
the second time in a row, your Company has been acknowledged among
CDP''s India Leaders 2015 and featured in the Climate Disclosure
Leadership Index (CDLI). Your Company has emerged the highest ranking
Company among the country''s Public Sector Undertakings, and third
overall, in the CDLI 2016.
Your Company believes that it is important to collaborate with industry
leaders, associations and peers to address national and global
sustainability challenges and work towards a common goal. Its focus has
remained on collaborating with various external stakeholders such as
TERI, CII, GRI, UNGC, FICCI and CDP among others, to gain from their
knowledge and experience in the area of sustainability. Your Company
conducted workshops in collaboration with organizations such GRI Focal
Point India and CDP during the year.
In line with the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 requirements, Business Responsibility Report (BRR)
2015-16 is contained in a separate section in the Annual Report.
Corporate Vigilance department of your Company is ISO-9001:2008
certified for having adopted Quality Management System in compliance
with the requirements of ISO. Various initiatives such as Bill Watch
System, e-tendering, e-payments etc. have already been implemented in
the past for the benefit of vendors and suppliers to bring transparency
in your Company''s systems and processes. A number of system
improvements were effected in your Company during the year for
effective utilization of its resources, which in turn would also help
in preventing corruption and ensure all round good governance like:
- Test check measurement by senior officers during bill payment »
Constitution of Estimate Review Committee for tenders to improve
- Roll out of On-line Price bidding for service requisitions in
- Management (SRM) e-tendering system.
The Vigilance Awareness Week-2015 was observed on the theme Preventive
Vigilance as a tool of Good Governance at the Corporate Office and at
all the work centres of your Company from 26th to 31st October, 2015.
In order to create better awareness about corruption and its effects
amongst the youth and college students, various competitions were
organized. In order to spread awareness among your Company employees
and related work force, various competitions involving Essay Writing,
Slogan Writing, Poster Paintings, Online Quiz and debates were held
during the week. Other events including banners/posters/painting
display, March and rallies with NGOs were also organized at various
work centres. A magazine JAGROOK containing CVC circulars, articles
and case studies related to vigilance was also published.
- Human Capital
Your Company invests considerable time, efforts and resources to be the
employer of choice and attract and retain the best available talent.
GAIL carefully nurtures its intellectual capital and channelizes its
resources to generate value. The Company''s Value Added per Employee
initiative reflects its commitment to make optimal and productive use
of the available resources and business opportunities. For the year
under review, Value Added per Employee was Rs.167.74 lacs.
- Leadership Development Program
Building organizational and leadership capabilities is one of the top
priorities of your Company. Under the Company''s Leadership Development
Programme, the Senior Management Development Centre (SMDC) exercise was
initiated for capability building of the senior level employees. As on
date, the following employees were trained under this programme: Almost
all the senior executives in the Chief Manager (E-6 Grade) and above;
more than 95% executives who were promoted to the level of chief
managers in APE 2015; and 316 senior managers (E-5 Grade). Plans are
underway to train more senior managers (E-5 Grade) in the near future.
Development gaps of the participants were identified and a
comprehensive Individual Development Plan (IDP) was drawn to fill this
gap. Under this programme, customized training would be provided to the
employees at premier business schools, and through e-learning courses
- Representation of Priority Section
Your Company has been complying with the Presidential Directives and
other instructions/guidelines issued from time to time pertaining to
Policies and Procedures of Government of India in regard to
reservation, relaxations, concessions etc. for Scheduled Castes (SCs),
Scheduled Tribes (STs), Other Backward Classes (OBCs) and Persons with
Disabilities (PWDs) in Direct Recruitment.
Details with regard to Group-wise total number of employees and the
representation of Scheduled Castes, Scheduled Tribes, and Other
Backward Classes amongst them in your Company as on 31st March, 2016
have been given in Table below:
Group Employees on Roll SC ST OBC PWD
A 3102 485 197 563 41
B 558 110 63 104 11
C 598 103 23 185 35
D 58 17 6 14 1
DIRECTORS & W 05 - - - -
Total 4321 715 289 866 88
A total of 136 new employees joined your Company during the 2015-16.
Total Manpower of the Company as on 31st March, 2016 stood at 4321
(including Whole-time Directors & CVO) with 16.54% of its employees
belonging to SC category, 6.68% to ST category, 20.04% to OBC category,
7.96% to Minorities and 2.03% to PWDs category Your Company''s workforce
comprised of 251 women employees as on 31st March, 2016.
- Capability Development
Your Company believes that its human resource is one of the most vital
assets for achieving its vision, mission and objectives. Therefore,
capability building and talent development of its human resources have
been its key focus areas.
GAIL Training Institute (GTI) organizes systematic and structured
programmes for capability building across all levels within the
organization. In recognition of its initiatives, GTI has been conferred
with the prestigious Golden Peacock National Training Award for the
GTI organised the following programmes and initiatives during the
period under review:
- More than four man-days of training on average per employee.
- Certification Training Programmes from NACE, ASME, OEMs and
technology licensors for technical human resources to empower them with
state-of-the-art expertise in the core areas of their function.
- Specialised training programmes on new business areas, in-line with
the Company''s Strategy 2020, including Business Modelling, Energy
Trading, Hedging and Risk Management.
- Individual Development Plan (IDP) for chief managers and above, based
on the developement areas identified during the SMDC exercise.
- The participants of this IDP plan were provided competency-based
books and e-learning modules prepared by Harvard Manage Mentor (HMM).
They also undertook customised management development programmes
through IIM Bengaluru and Kolkata.
- Leading external management experts were invited to provide
customised functional development programmes for senior employees.
- Mentorship programme for all new executives » Healing with nutrition
programme to provide health tips and reduce stress levels.
- Awareness programmes on Sustainable Development on all sites.
More than 60% of employees have already participated in these
- Knowledge sharing seminar to motivate employees to share their
experiences/ expertize with other employees.
- In-house business quizzes and business simulations to update
employees with the latest developments in their core business areas.
» One year access to executives of E&P Department to International
Petroleum Industry Multimedia System (IPIMS) e-learning module
developed by International Human Resource Development Corporation
As part of its commitment to develop skills and capabilities across the
hydrocarbon industry, GTI also successfully organised training
programmes for employees of several other organisations including
RGPPL, HPCL, BCPL, IGL, MGL, MNGL, GSPL, and HMEL.
Your Company also plays a proactive role to support the National Skill
Development Mission. It is the founder member of Hydrocarbon Sector
Skill Council (HSSC) and provides skill-based training to create a pool
of skilled manpower for CGD network and mid-stream hydrocarbon
- Official Language
Your Company goes the extra mile to propagate and implement the
Official Language Policy of the Union of India.
The Official Language Implementation Committees at the corporate and
work centre level held quarterly meetings to monitor and review the
progress of achieving the targets fixed in the Annual Programme issued
by the Govt. of India.
Hindi workshops/trainings are organized on regular basis at GTI, Jaipur
and Noida and at other work centres. Hindi computer training sessions
are integral part of these programmes. During the year 2015-16, 1,335
employees were provided formal training through 67 workshops. All
computers in the Company have Unicode Hindi fonts with transliteration
key-board typing facility
Hindi Fortnight was celebrated from September 14 to 28, 2015 to promote
the official language.
Every Monday/first working day of the month is observed as Hindi Diwas
wherein all employees are encouraged to express themselves in the
Your Company now uses a special software to generate all formal
communication including pay slips, CPF card, pension card, promotion
order, transfer order, reliving order in both Hindi and English. GAIL
is one of the few PSUs to implement this facility
Names of all employees in official e-mail IDs are both in English and
Hindi. The Company terminology has been standardized and the list has
been circulated amongst all employees. GAILs web site and Intranet also
follow the bilingual format.
Your Company also publishes the Hindi magazine Rajbhasha Sahyog to
promote the language. Motivational and inspirational books in Hindi
were distributed on the occasion of World Hindi Day,
The 16th Rajbhasha Sammelan was organised on January 21 and 22, 2016 to
promote the use of Hindi and review the progress made in the
implementation of the official language in the Company.
The First Sub-Committee of Committee of Parliament on Official Language
inspected the Jamnagar, Agartala and Ramgarh offices to review the
steps undertaken to promote the official language and were appreciative
of our efforts.
A meeting of Hindi Salahkar Samiti was organised on February 8, 2016 in
Puri by the MoP&NG under the Chairmanship of Minister of State for
Petroleum & Natural Gas (I/C). GAIL too participated and highlighted
its efforts to promote the language.
- Sexual Harassment of Women at Workplace
Your Company has in place ''Policy on Prevention, Prohibition and
Redressal of Sexual Harassment of Women at Workplace'' in line with the
requirements of the Sexual Harassment of Women at the Workplace
(Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints
Committee (ICC) has been set up to redress complaints received
regarding sexual harassment
During the year 2015-16, two sexual harassment complaints received and
the same were disposed off.
INNOVATION, RESEARCH AND DEVELOPMENT (R&D)
Your Company is committed to address the challenges of ever changing
business scenario through Innovation. In this regard efforts are made
to encourage Innovation and creativity of employees through a
Suggestion Scheme. This Scheme helps to promote organization-wide idea
generation for incremental innovation. The employees are motivated to
suggest improvements in their respective areas of work. The suggestions
so received are evaluated in a time bound manner for implementation and
CMD trophy is awarded to the best Suggestion.
Your Company is aggressively pursuing many R&D projects in its
identified thrust areas with a focus on developing high-impact
innovative technologies to help pursue the existing business in a more
optimum and sustainable manner. To improve the pipeline maintenance
practices a R&D project to utilize Satellite imagery for monitoring
Pipeline RoU was conceptualized. This project involved geo-mapping of
the Pipeline route and finalizing the sequencing of taking Satellite
images to meet the requirement of monthly monitoring. A change
detection software was also developed to identify encroachments through
analysis of sequential images. A Bhuvan-GAIL Portal was launched for
monitoring the RoU of 610 Km stretch of Dahej-Vijaipur pipeline through
this technology. Success of this pilot Project shall enable scaling-up
of this technology to cover the entire Pipeline network besides
developing additional functionalities to monitor activities like
Project execution of new Pipeline projects.
Your Company had successfully demonstrated the capture of Land Fill Gas
(LFG) site in an open and active landfill site at Ghazipur in Delhi. A
part of this low-quality LFG is now being partially upgraded and
utilized to generate Power through a 30 KW Micro Turbine. This Project
demonstrates our commitment towards sustainable utilization of waste
energy and climate risk mitigation through reduction of carbon
The Wireless Sensor Network (WSN) technology is known for its
resilience and is more reliable than conventional wired networks.
Wireless Sensors were developed for continuous monitoring of Pipeline
parametres and are presently being pilot tested for transmitting and
logging data of few customers at Bhiwadi terminal. Various new
applications of polymer grades such as anti-microbial sutures for
healthcare applications; Nano- clay based additives to enhance polymer
properties etc. are also being developed.
The other important area for Research is hydrogen which is an ultra-
clean fuel. A Novel carbon nano-composite material was developed that
could store up to 6.7 wt% of hydrogen exceeding the 6% target set by
Department of Energy (DoE), USA. Further evaluation is underway to
utilize this material in a compact storage device to provide Hydrogen
to a Polymer Electrolyte Membrane (PEM) Fuel Cell.
Your Company has a judicious mix of various Basic/Applied/Pilot
projects encompassing the Natural Gas value chain in its R&D portfolio.
In addition, few projects are also being pursued in upcoming areas like
Solar, Fuel Cells, Gas Hydrates etc. These R&D projects are being
pursued in association with reputed research organizations /
institutes. Few Developmental Projects to improve efficiency and safety
of existing operations and to conserve the resources by utilizing
better technologies are also being implemented at process plants.
TOTAL QUALITY MANAGEMENT
Your Company endeavors for continual and sustainable improvement
through implementation of quality practices, innovation and
standardization. Your Company continues to implement various Quality
Circle projects through engagement of Company employees, resulting into
innovation in work places and leading to enhancement in productivity.
Your Company has achieved a Customer Satisfaction level of 90% and
committed to improve it. Your Company works for the satisfaction of
customers and stakeholders. Your Company has implemented Integrated
Management System and Energy Management System in various pipeline
system and process units. Your Company is committed to sustainable
PROCUREMENT FROM MICRO AND SMALL ENTERPRISES (MSEs)
The Government of India has notified a Public Procurement Policy for
MSEs, Order 2012. In terms of said policy, out of the total eligible
value of annual procurement of approx. Rs.2,016 Crores towards goods
produced and services rendered by MSEs (including MSEs owned by SC/ST
Entrepreneur) during the FY 2015-16, the value of total procurement
made from MSEs is Rs.435.34 Crores which is approx. 21.59%. of 2,016
A Memorandum of Understanding (MoU) is signed every year between your
Company and its administrative ministry i.e. MoP&NG, through which
performance targets for the year are set. MoU for the year 2015-16 was
signed between Chairman & Managing Director and Secretary (P&NG),
Government of India on 31st March, 2015.
The thrust while fixing MoU targets was more towards improving
performance on critical aspects of the Company which include Key
Financial parameters, Gas Marketing, Gas Transmission, Project
Implementation, Capital Expenditure, Liquid Hydrocarbon & Polymer
Production etc. Significant thrust has also been given on Research &
Development Projects and Operating Efficiency parameters.
Your Company has been consistently achieving ''Excellent'' MoU rating
since the inception of MoU system i.e. from 1989-90 to 2013-14.
However, because of unprecedented fall in crude oil prices from $ 140 /
barrel to ~ $ 30 - 40 in 2014-15 leading to fall in LHC & Polymer
prices, negative price differentials between Spot and long term
contracted R-LNG prices etc., there were gaps between MoU targets and
actual performance of your Company in FY 2014-15. As a result, your
Company achieved ''Very Good'' MoU rating for the year 2014-15.
Evaluation of MoU 2015-16 is under progress and the final evaluated MoU
score and rating is expected to be announced in December 2016.
- Emerged as the highest ranking PSU in Carbon Disclosure Leadership
Index securing 98 out of maximum 100, an increase of 12 points in one
- Released its fifth Sustainability Report becoming the first PSU to
avail Content Index certification by GRI, Amsterdam.
- Dun & Bradstreet Award 2015 in the category Gas - Processing,
Transmission and Marketing.
- Achieved the 5th rank in the Platts Top 250 Companies in the Asia-
Pacific in the Gas Utilities category » Environmental Sustainability
- Company of the year for 2015. The special commendation award has
been conferred to GAIL for special efforts towards Environmental
Sustainability and Climate Change.
- Health, Safety & Environment (HSE)
With its contu iued focus on HSE across its installations, your Company
has won following awards during the year 2015-16:
- OISD awards for Cross Country Pipeline-LPG & Gas Pipeline: GAIL- HVJ
Pipeline and Most Consistent Safety Performer-gas processing Plant:
GAIL GPU, Gandhar » Maharashtra region Pipeline system, Mumbai
received Safety Innovation Award 2015 from the institution of
Engineers India, New Delhi.
- NCR received British Safety Council International Safety award, U.K
- GPU Gandhar plant won Gujarat State Safety award 2014 from the
Gujarat Safety Council of India » GPU Gandhar plant won Suraksha
Puraskar (Bronze Trophy)-2015 from National Safety Council of India.
- GPU Usar received Certificate of Appreciation for National Safety
- GAIL Vaghodia received Golden Peacock Occupational Health & Safety
Award, 2015, by the Institute of Directors, New Delhi.
- GPU Gandhar received British Safety Council International Safety
award, U.K .
- HVJ Compressor Station, Vijaipur (M.P) awarded prestigious SURAKSHA
PURASKAR by National Safety Council, under Group A in manufacturing
RIGHT TO INFORMATION (RTI)
In order to promote transparency and accountability, an appropriate
mechanism has been set up across the Company in line with the Right to
Information Act, 2005. Your Company has nominated ACPIOs/CPIO/
Appellate Authorities at its units/offices across the country to
provide information to citizens under the provisions of RTI Act.
MANAGEMENT DISCUSSION AND ANALYSIS
In terms of the Regulation 34 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the detailed Management''s
Discussion and Analysis forms a part of this report at Annexure- A.
Your Company believes that good corporate governance is critical in
establishing a positive organizational culture. It is evident by
responsibility, accountability, consistency, fairness and transparency
towards our stakeholders. Pursuant to the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and DPE guidelines on
Corporate Governance, a report on Corporate Governance forms part of
this Report at Annexure- B.
The details of the meetings of the Board, Company''s policy on
Directors'' appointment and their remuneration, details of establishment
of whistle blower mechanism and other matters, etc. forms part of
report on Corporate Governance.
There are no significant and material orders passed by the regulators
or Courts or tribunals impacting the going concern status and Company''s
operations in future.
The statutory auditors of the Company have examined and certified your
Company''s compliance with respect to conditions enumerated in SEBI
(LODR) Regulations, 2015 and DPE guidelines on Corporate Governance.
The certificate forms a part of this Report at Annexure- C.
- Statutory Auditors
The statutory auditor of your Company is appointed by Comptroller &
Auditor General of India (CAG). M/s G.S. Mathur & Co., Chartered
Accountants, New Delhi and M/s O P Bagla & Co., Chartered Accountants,
New Delhi were appointed as Joint Statutory Auditors of your Company
for the FY 2015-16.
Review and Comments of CAG, if any, on the Company''s Financial
Statements for the financial year ending 31st March 2016, forms part of
Financial Statement. Notes on Financial Statement referred to in the
Auditors'' Report are self-explanatory and, therefore, do not call for
any further comment.
- Cost Auditors
Your Company has appointed M/s Ramanath Iyer & Co., New Delhi for
Northern Region , M/s Bandyopadhyaya Bhaumik & Co., Kolkata for
Northern and Eastern Region , M/s A C Dutta & Co., Kolkata for Southern
Region, M/s Musib & Company, Mumbai for Western Region Part-I, M/s N.D
Birla & Co., Ahmedabad for Western Region Part-II, M/s Sanjay Gupta &
Associates, New Delhi for Central Region as cost auditors for FY
2015-16. M/s Ramanath Iyer & Co. is the lead cost auditor.
Cost audit reports for the financial year ended 31st March, 2015 was
filed to Registrar of Companies on 14th October, 2015.
- Internal Auditor
Your Company has an in-house Internal Audit Department, which is headed
by Executive Director.
- Secretarial Auditor
Your Company has appointed M/s Agarwal S. & Associates as secretarial
auditors for 2015-16. Secretarial Audit Report confirming compliance by
Practicing Company Secretary to the applicable provisions of the
Companies Act, 2013, SEBI (LODR) Regulations, 2015 and other applicable
laws, forms part of this Report at Annexure- D.
The observations made by Secretarial Auditor in his Audit report are as
(a) Proviso to Section 149(1) read with Rule 3 of the Companies
(Appointment and Qualification of Directors) Rules, 2014 w.r.t.
appointment of at least one woman Director on the Board of the Company.
(b) Regulation 17 (1) of Securities Exchange Board of India (Listing
Obligation & Disclosure Requirements) Regulations, 2015 (erstwhile
Clause 49 (II) (A) & (B) of the Listing Agreement) and Clause 3.1.4 of
the DPE Guidelines on Corporate Governance for Central Public Sector
Enterprises w.r.t. composition of the Board of Directors of the
(c) Non-compliance of Section 149(8) read with Schedule IV (VIII) of
Companies Act, 2013 and Regulation 17 (10) & 25 (4) of SEBI (Listing
Obligations & Disclosure Requirements) Regulations, 2015, the Company
has not been carried out the performance evaluation of the directors.
Explanations on observations made by Secretarial Auditor in seriatim
are as under:
(a) As on 31st March 2016, there was no woman Director on the Board of
the Company However, during the year, there was a Woman Director on the
Board of the Company from 21st May, 2015 to 2nd January, 2016.
(b) As on 31st March 2016, your Company''s Board comprised of four
whole-time Directors including CMD, two Government nominee Directors
and three Independent Directors.
Your Company is a Government Company under the administrative control
of the Ministry of Petroleum and Natural Gas, Government of India, the
Directors are nominated/appointed by the Government of India. The
Company is continuously pursuing with the Government of India for the
appointment of requisite number of Independent Directors on their Board
in order to comply with the provisions of the SEBI (Listing Obligations
& Disclosure Requirements) Regulations, 2015, DPE Guidelines & the
Companies Act, 2013.
(c) Your Company is a Government Company, appointment/ nomination of
all the Directors is being done by the President of India, through the
MoP&NG and performance evaluation of individual Directors including
Independent Directors is to be done by Government of India being
CORPORATE SOCIAL RESPONSIBILITY
Your Company believes that Corporate Social Responsibility (CSR) plays
a major role in the development of any country. Therefore, it has made
CSR an integral part of its ethos and culture. To amplify our outreach
efforts, GAIL has incurred an expenditure of 2.3% of the average net
profit of the preceding three years on CSR projects/activities of
2015-16 (I18.64 crores) against the stipulated 2% spend (Rs.102.34
crores). The overall spends (Rs.160.56 crores) amount to 3.14% of the
average net profit of the preceding three financial years.
Annual Report on CSR activities as required under Rule 8 of the
Companies (Corporate Social Responsibility Policy) Rules, 2014 read
with section 134(3) and 135(2) of the Companies Act, 2013 is placed at
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION
As per requirement of 134 (3)(m) of the Companies Act, 2013 read with
Ru le 8(2) of the Companies (Accounts) Rules, 2014, details of
conservation of energy and technology absorption forms part of this
report at Annexure- F.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
As per requirement of 134 (3) (h) of the Companies Act, 2013 read with
Rule 8(2) of the Companies (Accounts) Rules, 2014 particulars of
contracts or arrangements with related parties as referred in section
188(1) of the Companies Act, 2013 in the prescribed form AOC-2 is
placed at Annexure-G.
Your Company has formulated the policy on dealing with Related Party
Transactions and the same is hosted on your Company''s website at
PARTICULARS OF EMPLOYEES
As per the provisions of section 197(12) of the Companies Act, 2013
read with the Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, every listed Company is required to
disclose the ratio of the remuneration of each director to the median
employee''s remuneration etc. in the Directors'' Report.
However, as per notification dated 5th June, 2015 issued by the
Ministry of Corporate Affairs, Government of India, Government
Companies are exempted from complying with provisions of section 197 of
the Companies Act, 2013. Your Company is a Government Company,
therefore, such particulars have not been included as part of
EXTRACT OF ANNUAL RETURN
Extract of Annual Return forms part of this Report at Annexure-H.
ISSUE OF SHARES AND FIXED DEPOSITS
Your Company has neither issued any shares nor accepted any fixed
deposits during the financial year 2015-16 and, as such, no amount of
principal or interest was outstanding as of the balance sheet date.
FOREIGN EXCHANGE EARNINGS AND OUTGO
During the year, foreign exchange earnings were Rs.866.54 crores and
foreign currency outgo was Rs.2,558.71 crores.
KEY MANAGERIAL PERSONNEL AND DIRECTORS
During the period, the following ceased to be Key Managerial Personnel
(KMP) on the Board of your Company:
- Shri Prabhat Singh, Director (Marketing) resigned w.e.f. 14th
September, 2015 » Shri N.K. Nagpal, Company Secretary w.e.f. 26th May,
Shri A.K. Jha has been appointed as Company Secretary of the Company
w.e.f. 26th May, 2016.
During the period, the following ceased to be Directors on the Board of
- Smt. Anuradha Sharma Chagti, Government Nominee Director w.e.f. 2nd
The following were appointed on the Board of your Company as Director:
- Shri S.K. Srivastava, Independent Director w.e.f. 20th November, 2015
» Shri D.J. Pandian, Independent Director w.e.f. 20th November, 2015
and resigned from the Company w.e.f. 31st March, 2016 » Shri Anupam
Kulshreshtha , Independent Director w.e.f. 28th November, 2015 (from
the date of obtaining DIN)
- Shri Sanjay Tandon , Independent Director w.e.f. 20th November, 2015
- Shri Anant Kumar Singh, Government Nominee Director w.e.f. 2nd
The Board placed on record its deep appreciation for the valuable
services rendered by outgoing Directors/KMP during their association
with your Company,
CODE OF CONDUCT
Pursuant to the requirements of SEBI (LODR) Regulations, 2015 the Board
Members and Senior Management Personnel have affirmed compliance with
the Code of Conduct for the financial year ending 31st March, 2016.
As per the provisions of section 134(3)(p) of the Companies Act, 2013
for every listed Company, a statement indicating the manner in which
formal annual evaluation has been made by the Board of its own
performance and that of its committees and individual directors should
form part of the Directors'' Report.
However, as per notification dated 5th June, 2015 issued by the
Ministry of Corporate Affairs, Government of India, Government
Companies are exempted from complying with provisions of section
134(3)(p) of the Companies Act, 2013. Your Company is a Government
Company and the appointment, tenure, performance evaluation etc. of
Directors is done by Government of India, therefore, such particulars
have not been included as part of Directors'' Report. Remuneration of
CMD, Whole-time Directors and its employees is determined by Government
of India. As per requirement of SEBI (LODR) Regulations, 2015, an
evaluation criterion for the Board is being formulated.
DIRECTORS RESPONSIBILITY STATEMENT
Yours Directors confirm that:
i) In the preparation of the annual accounts for the financial year
ending 31st March, 2016, the applicable accounting standards have been
followed, alongwith proper explanation relating to material departures;
ii) selected such accounting policies and applied them consistently and
made judgments and estimates that are reasonable and prudent to give a
true and fair view of the state of affairs of the Company at the end of
the financial year and of the profit of the Company for the year under
iii) taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies
Act, 2013, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) prepared the annual accounts for the financial year ending 31st
March, 2016 on a going concern basis;
v) had devised proper systems to ensure compliance with the provisions
of all applicable laws and such systems were adequate and operating
vi) laid down internal financial controls to be followed by the Company
and that such internal financial controls are adequate and were
Your Directors express their gratitude for help, guidance and support
received from the Government of India, especially the Ministry of
Petroleum and Natural Gas, various state governments, regulatory and
Your Directors acknowledge wise counsel received from Statutory
Auditors and CAG and are grateful for their consistent support and
Your Directors also wish to thank all the shareowners, business
partners and members of GAIL family for reposing their faith, trust and
confidence in your Company,
On behalf of your Directors, I would like to place on record our deep
appreciation for the hard work, dedication, commitment and solidarity
of your Company''s employees.
Your Directors and employees look forward to the future with confidence
and stand committed to creating a bright future for all stakeholders.
For and on behalf of the Board
Chairman & Managing Director
Place: New Delhi
Dated: August 19, 2016