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Directors Report Year End : Mar '14    « Mar 13
Dear Shareholders,
 
 The On behalf of the Board of Directors of your Company, I am delighted
 to present the 30 Annual Report of your Maharatna Company, along with
 Audited Financial Statements for the financial year 2013-14.
 
 YEAR UNDER RETROSPET
 
 During the year under review, your Company''s 1000 kms long
 Dabhol-Bengaluru Pipeline Project was awarded the coveted Platts Global
 Energy Awards 2013 as Premier Project in Large Construction Category.
 
 The year 2013-14 has been a year of venturing into new businesses and
 expanding the scale of operations in an effort to be a global energy
 player. Your Company entered into the elastomer business by approving
 the project for setting up 110 KTA capacity Poly Butadiene Rubber (PBR)
 Plant at a cost of Rs. 2,575 crore at Dahej in a joint venture with ONGC.
 
 Further, your Company and Shipping Corporation of India have entered
 into a MoU for cooperation in the LNG shipping business.
 
 Your Company has also signed an MoU with Paradip Port Trust Limited for
 setting up an LNG terminal at Paradip in Odisha.
 
 On the Exploration and Production (E&P) front, gas production from A-1
 and A-3 Blocks in Myanmar has started during the FY 2013-14. The total
 revenue from E&P business during FY 2013-14 was Rs. 244 crore.
 
 FINANCIAL HIGHLIGHTS
 
 Your Company has recorded sustained growth in all key financial
 parameters during the year 2013-14. The important financial highlights
 of the year are as under:
 
                                                       (Rs. in crore)
 
 
 Particulars                        2013-14                 2012-13
 
                            US $ Million   (Rs. in  
                                           crore)    US $
                                                   Million (Rs.in crore)
 
 Turnover (Net of ED)          9,445       57,245   8,608    47,333
 
 Other income                    192        1,162     173       954
 
 Cost of sales (excluding 
 interest and                  8,383       50,808   7,466    41,054
 depreciation and including 
 extraordinary items)
 
 Gross margin                  1,254        7,599   1,315     7,233
 
 Interest                         60          366      35       195
 
 Depreciation                    194        1,176     178       981
 
 Profit before tax              1056        6,402   1,102     6,058
 
 Provision for tax               334        2,027     370     2,036
 
 Profit after tax                722        4,375     731     4,022
 
 Appropriations
 
 Interim dividend                 94          571      92       507
 
 Proposed final dividend         123          748     129       710
 
 Corporate dividend tax           37          224      37       203
 
 Net transfer to/from bond 
 redemption reserve               (1)       (5.94)      0     (0.43)
 
 Transfer to CSR reserve           3        17.87       2     13.13
 
 Transfer to general reserve      72          438      73       402
 
 Net surplus after Appropriations393        2,382     398     2,187
 
 
 US $ in INR converted at the exchange rate 60.61 54.99 prevalent as
 on 31st March of the respective financial year
 
 DISINVESTMENT BY PRESIDENT OF INDIA CONTRIBUTION TO EXCHEQUER CREDIT
 RATING STRATEGIC INITIATIVES
 
 The Government of India (GoI) has disinvested th 15,672,024 shares on
 27 March, 2014 through CPSE ETF. After disinvestment, the President of
 India is holds 711,733,651 equity shares representing 56.11% of paid-up
 share capital of GAIL.
 
 DIVIDEND
 
 Your Company has a consistent track record of dividend payment. So far,
 it has disbursed dividend of over Rs. 11,900 crore to the shareholders.
 
 The Board of Directors of your Company had earlier approved payment of
 an interim dividend @ 45% on equity share of Rs. 10 each (Rs.4.5 per equity
 share) amounting to Rs. 571 crore, which was paid in February, 2014.
 Further, the Board has recommended the payment of final dividend @ 59%
 on the paid-up equity share capital of the Company of Rs. 10 each (Rs. 5.9
 per equity share) for FY 2013.
 
 With this, the total dividend payment for the fiscal year 2013-14 will
 be 104% on equity share of Rs. 10 each (Rs. 10.40/- per equity share)
 amounting to Rs. 1,319 crore on its paid-up equity capital of Rs. 1,268.48
 crore, which is the highest ever dividend paid by your Company. The
 total dividend pay out including dividend tax accounts for 35.28% of
 Profit after Tax (PAT).
 
 
 CONTRIBUTION TO EXCHEQUER
 
 Your Company has contributed over Rs. 6,993 crore in 2013-14 to the
 exchequer through dividend, duties, taxes and others, as compared to Rs.
 5,780 crore in 2012
 
 CREDIT RATING
 
 Your Company has been reaffirmed the highest domestic credit rating of
 AAA from ICRA, CARE and CRISIL. The international rating agency,
 Moody''s International, Hong Kong, has also reaffirmed the corporate
 issuer rating of Baa2, which is one notch higher than the sovereign
 rating. Further, Fitch Ratings has also assigned a long-term foreign
 currency issuer default rating of BBB with a negative outlook, which is
 equal to the sovereign rating.
 
 STRATEGIC INITIATIVES
 
 In order to grow sustainably, your Company has developed a strategy for
 the period 2011-2020.  This strategy is currently under execution and
 your Company is closely monitoring the progress on various strategic
 initiatives as well as analysing the dynamic environment to assess its
 impact on GAIL''s businesses. The top management of your Company has
 been playing a crucial role in achieving the strategic objectives and
 to make GAIL an integrated hydrocarbon major with significant upstream,
 midstream and downstream interests by 2020.
 
 In the upstream segment, your Company aspires to import substantial LNG
 through conventional route as well as through terminal capacity booking
 and also acquiring equity in producing assets/liquefaction facilities
 to source equity-linked LNG. Your Company has made remarkable progress
 in importing 25 LNG cargoes under various shortterm contracts with
 suppliers like GDF (France), GNF (Spain) and Excelerate Energy (USA) as
 well as on spot basis to meet the growing demand of the Indian market.
 Further, the US subsidiary of your Company has booked LNG capacity in
 Dominion Cove Point''s LNG liquefaction terminal in the US. In addition,
 your Company is pursuing LNG shipping business by charter hiring LNG
 ships to transport LNG from the US to India and other global markets.
 Your Company is also pursuing LNG trading business through its wholly
 owned subsidiary, GAIL Global Singapore Pte Limited.
 
 To facilitate increase in LNG volumes, your Company plans to set up LNG
 terminals/floating storage and regasification units and is also booking
 additional regasification capacities in existing and new terminals
 being set up by other companies. Your Company has also executed
 regasification agreement with Petronet LNG Limited for regasifying 2.5
 MMTPA LNG in the planned Dahej expansion LNG terminal in Gujarat to
 meet the ever increasing demand along its existing pipeline networks.
 
 To bridge the demand-supply gap of natural gas and address the energy
 security needs of the country, your Company is actively participating
 in the transnational pipeline project, the Turkmenistan-Afghanistan-
 Pakistan-India (TAPI) pipeline project. GSPA has already been signed to
 import 38 MMSCMD gas into the country through this pipeline.
 
 In the midstream segment, your Company aspires to retain its leadership
 position through continuous pan-India expansion of pipeline network.
 Your Company now has approximately 11,000 kms network of pipeline in
 the country. Various other pipeline projects are at different phases of
 execution which will take the network size to around 15,000 kms.
 
 On the retail side, your Company is targeting additional 40-50
 cities/Geographical Areas (GAs) through its subsidiary and joint
 ventures (JVs) for city gas distribution (CGD) in the coming few years.
 
 
 In the downstream segment, your Company aspires to be amongst the top
 petrochemical players in the country by expanding existing capacities,
 setting up new plants, acquiring equity stakes in upcoming projects,
 along with product off-take rights for marketing. Your Company is
 currently doubling existing petrochemical capacity at Pata and the
 project is under implementation. A green field petrochemical plant is
 also being setup in Assam through your Company''s subsidiary,
 Brahmaputra Cracker & Polymer Limited (BCPL). Another petrochemical
 plant at Dahej is being set up through a JV, ONGC Petro-additions
 Limited (OPaL). By 2015, your Company is expected to have 1.7 MMTPA
 polymers for marketing.
 
 In order to achieve all the strategic goals, significant thrust is
 being given to strengthen and develop the human resource of your
 Company.  Accordingly, recruitment, training and development policies
 are being suitably aligned with strategic objectives to enable your
 Company implement and achieve its strategic goals by 2020.
 
 SEGMENT PERFORMANCE
 
 During the year under review, the segment wise business performance of
 your Company is as under:
 
 Natural Gas Marketing
 
 Natural gas continues to constitute your Company''s core business.
 During 2013-14, gas sales clocked 79.18 MMSCMD, compared to 81.44
 MMSCMD in the previous financial year. Major supplies of natural gas
 include fuel to power plants, feedstock for gas-based fertilizer plants
 and LPG extraction. Your Company holds around 67% market share in
 India''s gas marketing.
 
 Transmission
 
 Natural Gas
 
 Your Company owns and operates a network of about 11,000 kms of natural
 gas high pressure trunk pipeline with a pan-India capacity of around
 206 MMSCMD of natural gas. Average gas transmission during the year was
 96.22 MMSCMD, compared to 104.90 MMSCMD in the previous financial year
 mainly due to the decrease in gas from RIL''s KG D6 block.
 
 LPG
 
 Your Company is the only company in India, which owns and operates
 exclusive pipelines for LPG transmission for third-party usage. Your
 Company owns and operates two LPG pipeline transmission systems with a
 total length of 2038 kms. Out of this, 1415 km of pipeline network
 transports LPG from western to northern parts of India (Jamnagar – Loni
 LPG Pipeline) and the balance 623 kms of pipeline network transports
 LPG in the country''s southern part (Vizag-Secunderabad LPG Pipeline).
 The LPG transmission system has a capacity to transport up to 3.8 MMTPA
 of LPG. In 2013-14, the LPG transmission through put achieved was about
 3.15 MillionMT.
 
 Petrochemicals
 
 During 2013-14, your Company has produced 436 Thousand MT (TMT) of
 polymers and sold 445 TMT of polymers.
 
 LPG and Other Liquid Hydrocarbon Production
 
 Your Company has seven LPG plants in the country for production of LPG
 and other liquid hydrocarbons. In 2013-14, the total liquid hydrocarbon
 production was 1307 TMT, which included 1030 TMT of LPG, 135 TMT of
 Propane, 22 TMT of Pentane and 120 TMT of Naphta.
 
 Exploration and Production (E&P)
 
 The financial year 2013-14 has seen significant transformation of the
 E&P business of GAIL. The production of gas has started from overseas
 blocks A-1 and A-3, Myanmar.
 
 Your company has earned a revenue of Rs. 244 crore from E&P activities
 through the sale of gas in A-1 and A-3 in Myanmar and crude oil in
 Cambay Onland block CB-ONN-2000/1 during the year 2013-14.
 
 At present, GAIL has participating interest in 20 E&P blocks of which
 18 blocks are in India and 2 in Myanmar.
 
 GAIL is the Operator in three onland blocks viz. (i) RJ-ONN-2004/1 in
 Rajasthan basin awarded during NELP-VI bidding round, ii) CY-ONN-
 2005/1 in Cauvery basin awarded during NELP-VII bidding round and (iii)
 CB-ONN-2010/11 in Cambay basin awarded during NELP-IX bidding round.
 GAIL is the non-operating partner in the remaining 17 blocks. In
 Rajasthan onland block, one well has been drilled during FY 2013-14 and
 future course of action is being charted. Drilling of wells is planned
 during the year 2014-15 in Cauvery onland block. In Cambay onland
 block, the acquisition of 131 KM2 3D seismic data has been initiated.
 
 Declaration of Commerciality (DoC) for gas discovery has been submitted
 to the Government in Block MN-OSN-2000/2 (Mahanadi offshore Block,
 NELP-II) while DoC for gas discovery Kathalchari – 1 in Block
 AA-ONN-2002/1 (Tripura Onland Block, NELP-IV) has recently approved by
 the Government.
 
 BUSINESS ADVANCEMENT
 
 Global Initiatives
 
 In April 2013, GAIL Global (USA) LNG LLC, a US subsidiary of GAIL,
 signed a Terminal Service Agreement (TSA) with Dominion Cove Point LNG
 LP for booking 2.3 MMTPA liquefaction capacity in the Cove Point LNG
 liquefaction project located at Lusby in the State of Maryland in the
 US.
 
 Under this agreement, your Company through its US subsidiary has to
 procure its share of natural gas and deliver it to the Cove Point
 pipeline for liquefaction at the terminal. Your Company has already
 short-listed potential gas suppliers / transporters for supply of gas
 to the Cove Point LNG liquefaction project. Discussions are underway
 with the short-listed party(s) for finalising the terms and conditions.
 
 Your Company is pursuing Turkmenistan-Afghanistan-Pakistan-India (TAPI)
 natural gas pipeline project for import of gas to India.  Asian
 Development Bank has been appointed as the Transaction Advisor (TA) for
 the TAPI project. Incorporation of a company for implementing the
 project is underway. Your Company is playing a lead role in discussions
 on the project.
 
 Domestic Initiatives
 
 The domestic business initiatives of your Company are as follows:
 
 Poly Butadiene Rubber (PBR) Plant
 
 Your Company would be setting up a PBR plant of 110,000 tonnes per
 annum capacity at a cost of Rs. 2,575 crore at Dahej, Gujarat through a
 50:50 joint venture with ONGC. The necessary approval for setting up
 the project has been obtained. The project is scheduled for
 commissioning during 2017 and your Company would be playing a lead role
 in executing the project.
 
 Natural Gas Pipeline Projects
 
 During the financial year, your Company commissioned various pipeline
 networks and auxiliary systems, which include the following:
 
 Capacity Augmentation of Auraiya-Jagdishpur pipeline from Dibiyapur to
 SV-2 and from Sachendi to Kanpur Fertilizers & Cements Ltd.
 
 Karanapur-Moradabad-Kashipur pipeline has been further extended upto
 Rudrapur by commissioning of the Kashipur- Rudrapur pipeline.
 
 ˇCommissioning of the Kochi-Koottanad-Bengaluru / Mangalore Phase-I
 pipeline done in August 2013 after receipt of LNG from PLL Kochi.
 
 ˇLast Mile consumer connectivity (approximately:- 112 kms) extended to
 66 numbers of consumers for supplying of natural gas around 5.55
 MMSCMD.
 
 Non-Conventional Energy
 
 Your Company has installed wind energy projects of 118 MW capacity.
 Your Company had started with a modest capacity of 4.5 MW wind energy
 in the state of Gujarat in year 2009-10 for captive use. After the
 success of the wind project, additional Wind Energy Generation of 14.7
 MW was installed in the state of Gujarat for captive use in the year
 2011-12. Your Company graduated to commercial production after
 commissioning 100 MW of wind energy projects in the states of Tamil
 Nadu and Karnataka in the year 2011-12.
 
 In the year 2011–12, your Company entered into solar power generation
 by winning the bid to setup a 5 MW Solar Plant under the Jawaharlal
 Nehru National Solar Mission in Rajasthan. The project was commissioned
 in February 2013 and is generating 25000 – 28000 kWh per day.
 
 SUBSIDIARIES & JOINTVENTURES
 
 Your Company has formed subsidiaries and joint venture companies for
 City Gas Distribution (CGD), petrochemicals, LNG, gas trading, power
 generation and shale gas. Your Company is one of the pioneers in
 introducing city gas projects in India for natural gas supplies to
 households, commercial and transport sectors through its subsidiary and
 joint venture companies.
 
 The details of subsidiary and joint venture companies are mentioned
 hereunder:
 
 Natural Gas, LNG and Power
 
 GAIL Global (Singapore) Pte Limited (wholly owned subsidiary)
 
 GAIL Global (Singapore) Pte Limited, primarily started as an overseas i
 nvestment arm of your Company and wa s operationalized for LN trading
 in 2012. It comenced its busi nes operations by delivering its first
 cargo at Dahej in November, 2012.  The Company is also targeting
 third-party sal e, shi p chartering and risk mnagement activities al
 ong with suplying LNG cargoes to India. In the year 2013-14, GSPL
 suplied cargoes to GAI L.  The otal r venue of the Company for 2013-14
 wa s US $ 1 89. 3 Milio and PAT wa s US$ .16 Milion.
 
 - GAIL Global (USA) Inc (wholly owned subsidiary)
 
 GAIL Global (USA) Inc., a wholly owned subsidiary of your Company, was
 formed during 2011-12 with the main aim to acquire 20% working interest
 in an unincorporated joint venture with Carrizo Oil & Gas Inc. in the
 Eagle Ford shale acreage in the state of Texas. The subsidiary is
 operational at Houston and going forward, it would explore other
 business opportunities in the US.
 
 The total revenue of the Company for the year ended 31st December, 2013
 was US $ 38.03 Million and PAT was US $ 4.52 Million.
 
 - GAIL Global (USA) LNG LLC (wholly owned subsidiary of GGUI)
 
 GAIL Global (USA) LNG LLC, a wholly owned subsidiary of GAIL Global
 (USA) Inc., was formed in the state of Delaware, USA on 28th March,
 2013 for entering into contractual agreements with Dominion Cove Point
 LNG, LP for booking LNG tolling capacity of 2.3 MMTPA in its Dominion
 Cove Point LNG terminal located at Lusby in the state of Maryland and
 for booking capacity in associated Dominion Cove Point Pipeline.
 
 GAIL Global (USA) LNG LLC has adopted calendar year as its fiscal year,
 as such the first accounts of the Company has been prepared for the
 year ended 31st December, 2013.
 
 GAIL China Gas Global Energy Holdings Limited
 
 The joint venture company, GAIL China Gas Global Energy Holdings
 Limited, was formed with an objective to pursue gas sector
 opportunities, mainly in China. Potential gas sector projects are being
 identified for implementation by the company. Your Company has 50%
 equity stake along with China Gas Holdings Limited as equal partner as
 per the agreement.
 
 - Petronet LNG Limited (PLL)
 
 PLL, which was formed for setting up of LNG import and re-gasification
 facilities, currently owns and operates an LNG re-gasification terminal
 of 10 MMTPA capacity located at Dahej, Gujarat.  PLL has a long-term
 LNG supply contract with RasGas, Qatar for import of 7.5 MMTPA of LNG.
 
 PLL is undertaking capacity expansion to 15 MMTPA at Dahej for which
 pre-project activities are in progress. Further, PLL has also setup up
 an LNG re-gasification terminal at Kochi, Kerala with a capacity of 5
 MMTPA which was commissioned in August, 2013.  PLL has a long term LNG
 supply contract with Exxon Mobil''s Gorgon Project for supply of 1.44
 MMTPA of LNG for its Kochi terminal.
 
 Your Company has 12.5% equity stake along with BPCL, Oil and Natural
 Gas Corporation (ONGC) and Indian Oil Corporation Limited (IOCL) as
 equal partners.
 
 The total revenue of the Company for 2013-14 was Rs.37,747.58 crore 
 and PAT was Rs.711.92 crore.
 
 - Ratnagiri Gas and Power Pvt. Limited (RGPPL)
 
 RGPPL was formed in July, 2005 as a joint venture with NTPC for taking
 over 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.
 
 The power block has been revived and is under commercial operation
 since 19th May, 2009. The power block was operated at a Power Load
 Factor (PLF) of 8.74% with a generation loss of 12760 Million Units due
 to non-availability of domestic gas in FY 2013-14.
 
 The gas delivery to your Company''s pipeline network through high
 pressure delivery system was started in January, 2013 and commissioned
 with effect from 22nd May, 2013. Since the power generation is
 envisaged using the domestic gas entirely, the integrated LNG terminal
 shall be utilized for tolling purposes.  RGPPL has already entered into
 a long term agreement with GAIL for commercial utilization of LNG
 terminal and commenced tolling operations.
 
 As on 31st March, 2014, the paid up capital of the Company was 2,964.90
 crore and out of this, your Company''s share of contribution was 974.31
 crore.
 
 Your Company has 32.86% equity stake in RGPPL along with NTPC holding
 32.86%, MSEB Holding Company Limited 17.41% and Indian Financial
 institutions 16.87%.
 
 The Company''s total revenue for 2013-14 was  2,216.34 crore and profit
 was ~ 112.05 crore. However, the company is in financial crisis due to
 non-liquidation of high receivables from its beneficiaries leading to
 inability in meeting its debt servicing obligations for the year
 2013-14.
 
 City Gas Distribution (CGD)
 
 GAIL Gas Limited (wholly owned subsidiary)
 
 GAIL Gas was incorporated with the objective of focused implementation
 of City Gas Distribution (CGD) projects in the country. During the
 year, GAIL Gas laid 550 kms MDPE pipeline in the cities of Sonipat,
 Meerut, Dewas, Kota, Agra,
 
 Ferozabad & Bharatpur. New CNG stations were installed and are
 operational at Dibiyapur (Uttar Pradesh) & Kota (Rajasthan).
 Additional stations are planned at Firozabad, Bharatpur & Sonepat.
 During the year, GAIL Gas achieved conversion of 1,177 PNG Domestic
 customers progressively in the cities of Sonipat, Meerut, Dewas, Kota
 and Ferozabad and the total number of customers drawing gas went up
 from 4,427 in March 2013 to 5,604 in March 2014. The sales volume from
 industrial & commercial customers grew from 451.61 MMSCM in FY 2012-13
 to 519.66 MMSCM in FY 2013-14.
 
 The marketing activities of the Company are progressing well and it has
 tied-up over 844 industrial and 45 commercial consumers. To expand the
 business canvas, GAIL Gas formed a joint venture company with Vadodara
 Mahanagar Sewa Sadan (VMSS) to carry forward the ongoing City Gas
 Distribution business and augment the infrastructure for expanding CGD
 business in the city of Vadodara, and with Rajasthan State Petroleum
 Corporation Ltd. to form a joint venture company for implementation of
 CGD projects in the state of Rajasthan.
 
 The total revenue of the Company for FY 2013-14 was Rs. 991.11 crore and
 PAT was Rs. 11.44 crore.
 
 Aavantika Gas Limited (AGL)
 
 AGL was incorporated to implement CGD projects in Madhya Pradesh. As on
 31st March 2014, AGL operated 14 CNG stations including 7 daughter
 stations, 5 online stations and 2 mother stations.
 
 Further, as on 31st March 2014, AGL supplied PNG to around 1900
 domestic, 19 commercial and 31 industrial consumers in its authorized
 geographical regions. AGL is also catering to the fuel requirement of
 over 11,500 CNG vehicles operating in the region.  Your Company has
 22.5% stake, along with HPCL as an equal partner.
 
 The total revenue of the Company for 2013-14 was Rs. 115.26 crore and PAT
 was Rs. 0.50 crore.
 
 Bhagyanagar Gas Limited (BGL)
 
 BGL was incorporated to implement CGD projects in Andhra Pradesh. As on
 31st March, 2014, BGL operated 29 CNG stations including 24 daughter
 stations, 2 online stations and 3 mother stations.
 
 Further, as on 31st March 2014, BGL supplied PNG to over 2100 domestic,
 34 commercial and 2 industrial consumers in its authorized geographical
 regions. BGL is also catering to the fuel requirement of around 20,650
 CNG vehicles operating in the region. Your Company has 22.5% stake,
 along with HPCL as an equal partner.
 
 The total revenue of the Company for 2013-14 was Rs. 116.87 crore and PAT
 was Rs. 14.99 crore.
 
 Central U.P. Gas Limited (CUGL)
 
 CUGL was incorporated to implement CGD projects in Uttar Pradesh. As on
 31st March, 2014, CUGL operated 14 CNG stations including 2 mother
 stations, 11 online stations and 1 daughter booster station.
 
 Further, as on 31st March 2014, CUGL supplied PNG to around 4200
 domestic, 36 industrial and 77 commercial customers in its authorized
 geographical regions. CUGL is also catering to the fuel requirement of
 around 40,900 CNG vehicles operating in the region. Your Company has
 25% stake, along with BPCL as an equal partner.
 
 The total revenue of the Company for 2013-14 was Rs. 196.73 crore and PAT
 was Rs. 25.03 crore.
 
 Green Gas Limited (GGL)
 
 GGL was incorporated to implement CGD projects in Uttar Pradesh. As on
 31st March, 2014, GGL operated 14 CNG stations including 5 daughter
 stations, 5 online stations and 4 mother stations.
 
 Further, as on 31st March 2014, GGL supplied PNG to over 3600 domestic,
 3 industrial and 7 commercial customers in its authorized geographical
 regions. GGL is also catering to the fuel requirement of over 28600 CNG
 vehicles operating in the region.  Your Company has 22.5% stake, along
 with IOCL as an equal partner.
 
 The total revenue of the Company for 2013-14 was Rs. 162.01 crore and PAT
 was Rs. 22.62 crore.
 
 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, 2014, IGL operated 325 CNG stations including
 75 mother stations, 212 online stations and 38 daughter stations.
 
 Further, as on 31st March 2014, IGL supplied PNG to around 4.5 lacs
 domestic, 585 industrial and 1277 commercial customers in its
 authorized geographical regions. IGL is also catering to the fuel
 requirement of around 7.2 Lac CNG vehicles operating in the region,
 which includes the entire public transport of the national capital and
 also the world''s largest bus fleet on CNG. Your Company has 22.5%
 stake, along with BPCL as an equal partner.
 
 The total revenue of the Company for 2013-14 was Rs. 3,922.16 crore and
 PAT was Rs. 360.26 crore.
 
 Mahanagar Gas Limited (MGL)
 
 MGL was incorporated to implement CGD projects in Mumbai and adjoining
 areas. As on 31st March, 2014, MGL operated 169 CNG stations including
 19 mother stations, 130 online stations and 20 daughter stations.
 
 Further, as on 31st March 2014, MGL supplied PNG to over 7 lacs
 domestic, 53 industrial and 2289 commercial customers in its authorized
 geographical regions. MGL is also catering to the fuel requirement of
 around 3.6 Lac CNG vehicles operating in the region. Your Company has
 49.75% stake, along with British Gas as an equal partner.
 
 The total revenue of the Company for 2013-14 was Rs. 1,885.15 crore and
 PAT was Rs. 297.25 crore.
 
 Maharashtra Natural Gas Limited (MNGL)
 
 MNGL was formed for implementation of CGD projects in and around Pune.
 As on 31st March, 2014, MNGL operated 28 CNG stations including 5
 mother stations, 8 online stations and 15 daughter stations.
 
 Further, as on 31st March 2014, MNGL supplied PNG to over 12,300
 domestic, 83 industrial and 31 commercial customers in its authorized
 geographical regions. MNGL is also catering to the fuel requirement of
 around 60,200 CNG vehicles operating in the region. Your Company has
 22.5% stake, along with BPCL as an equal partner.
 
 The total revenue of the Company for 2013-14 was Rs. 344.08 crore and PAT
 was Rs. 56.66 crore.
 
 Tripura Natural Gas Company Limited (TNGCL)
 
 TNGCL was incorporated to implement CGD projects in Agartala. As on
 31st March, 2014, TNGCL operated CNG stations including 2 mother
 stations and daughter stations.
 
 Further, as on 31st March 2014, TNGCL supplied PNG to around 14,650
 domestic, 45 industrial and 254 commercial customers in its authorized
 geographical regions. TNGCL is also catering to the fuel requirement of
 around 6150 CNG vehicles operating in the region.  Your Company has 29%
 stake, in the joint venture.
 
 The total revenue of the Company for 2013-14 was Rs. 42.19 crore and PAT
 was Rs. 6.57 crore.
 
 Petrochemicals
 
 Brahmaputra Cracker and Polymer Limited (BCPL) (Subsidiary)
 
 BCPL is setting up a 2,80,000 TPA polymer plant and project execution
 is in progress. The total revised project cost, as approved by the
 Cabinet Committee for Economic Affairs (CCEA) in November 2011 is Rs.
 8,920 crore. The Company is now in the final phase of project execution
 and has achieved an overall physical progress of 93.6% and financial
 progress of 81.03 % till the end of the financial year.
 
 Your Company has 70% equity stake, with Oil India Limited (OIL),
 Numaligarh Refinery Limited (NRL) and the Government of Assam each
 having 10% equity share.
 
 ONGC Petro-additions Limited (OPAL)
 
 OPaL is implementing a green field petrochemical complex of 1.4 MMTPA
 Polymer capacity at Dahej, Gujarat. Your Company is a co-promoter of
 the project, with 15.50% equity stake while Oil and Natural Gas
 Corporation Limited (ONGC) and Gujarat State Petroleum Corporation
 Limited
 
 (GSPC) are the other promoters.
 
 Apart from above, your Company holds equity interest in China Gas
 Holdings Limited, Fayum Gas Company, South-East Asia Gas Pipeline
 Company Limited and Gujarat State Energy Generation Ltd. It also has
 the right to appoint a Director on the Board of these companies.
 
 During the year 2013-14, your Company disinvested 60 million shares of
 China Gas Holdings Limited and presently holds 150 million shares. The
 Company has a right to nominate a Director on the Board of the company.
 
 IT ADVANCEMENTS
 
 Your Company is an IT-savvy organization and is continually striving to
 provide the best of technology applications to its valued users. With
 newer interventions in the IT domain, we have not only endeavoured to
 attain seamless integration with GAIL''s business transactions,
 processes and systems, but also proactively sensitized the users with
 emerging paradigms in system usage and technology transformations.
 
 By adopting the latest and state-of-the-art IT solutions, which are
 keeping in pace with the fast changing industry and its way of working,
 we continually strive for efficiency enhancement of employees and have
 enabled access of required information to the right person, by the use
 of the latest IT security solutions.
 
 Your Company is in the forefront of leveraging IT to bring in systemic
 improvements. In the last few years, your Company has introduced many
 new functionalities and features in SAP platform, which has been a part
 of the functional upgrade for bringing improvement and transparency in
 business operations. Your Company has also adopted latest and state-
 of-the-art IT solutions like Document Management System, and Private
 Cloud platform with Disaster Recovery (DR) setup of IT infrastructure,
 in line with the industry''s latest technological advancements.  Going
 further, System''s manageability and availability have been enhanced
 substantially with this future-ready and DR-enabled cloud
 infrastructure.
 
 Your Company is in the process of rolling out Business Intelligence -
 Analytics and Dashboard for easy and dynamic analysis of business
 critical information and its easy visualization.
 
 Your Company is in the process of implementation of centralized
 enterprise-wide Geographic Information Systems (GIS)-based Pipeline
 Integrity Management System for its cross-country pipeline network,
 using industry standard assessment models in line with the
 national/international statutory codes. This will ensure seamless and
 consistent data flow from engineering to operations and also result in
 continuous updation of O&M data and aging of our pipelines.
 
 For strengthening information security and identifying the potential
 internal and external threats, your Company has carried out Information
 Systems Audit through an expert external audit agency. The IT
 operations of your company have been certified with ISO 9001:2008.
 Your company is also preparing for ISO 27001 certification for
 Information Security Management Framework (ISMS) and Crisis
 Management Plan (CMP) in line with CERT-In Guideline.
 
 HEALTH, SAFETY AND ENVIRONMENT MANAGEMENT
 
 Health, Safety and Environment (HSE) management is a key driver of
 operational excellence in your Company. GAIL has an elaborate HSE
 Management System in place to ensure the health and safety of its
 employees and protect environment for a sustainable development. Your
 Company believes in prevention of all health, safety and environment
 hazards. HSE performance of various installations of your Company is
 monitored on a regular basis through monthly HSE reports, audits and
 Surprise Safety Checks by senior officials. HSE sub-committee of Board
 of Directors, which is the apex body for matters related to HSE, met
 three times during the year to review your Company''s performance and
 emergency preparedness in this regard.
 
 On 27th June, 2014, an unfortunate mishap occurred on the Tatipaka-
 Kondapalli gas pipeline segment of your Company leading to the loss of
 civilian lives and causing damage to the property in the vicinity. As a
 responsible Company, all efforts were undertaken for rescue. Your
 Company has also initiated steps towards relief and rehabilitation of the
 affected people. Further, your Company has decided to adopt the
 Nagaram Village and will endeavour to transform it into a model village.
 
 Your Company has taken a number of measures to reassess and address
 safety related issues. M/s Engineers India Limited has been engaged to
 reassess the health, safety and integrity of various natural gas pipeline
 systems including KG Basin and the LPG pipeline networks. In addition, a
 reputed international consultant is being engaged to review and compare
 the Standard Operating Procedures (SOPs) and safety measures across
 GAIL''s hydrocarbon assets with that of the international majors and reset
 benchmarks. Further, your Company''s Internal Audit group has initiated
 fresh technical audits of the various pipeline systems. Further, the
 Company''s Crisis Management Plan of 2012 is being overhauled including
 the measures taken to ensure swift reporting of incidents across the
 Company and external bodies. The framework of the HSE department is
 being further strengthened to ensure ZERO Tolerance to deviation from
 SOPs, increase safety awareness and enhance emergency response
 systems.
 
 Your Company has taken a new initiative to implement Behavioural
 Based Safety (BBS) programme in its installations in a phased manner
 from this year as a part of continuous improvement of safety culture in
 the organization. This year, the BBS program was rolled out in the
 Company''s process plants at Vijaipur, Vaghodia, Gandhar and Usar. Your
 Company identified common life threating causes of accidents and
 launched a Life Saver Scheme for employees and workers. Your
 Company has prepared a Corporate Film on Health, Safety and
 Environment in GAIL to inform and educate our business partners and
 other stake holders.
 
 Corporate HSE Policy
 
 Your 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 everyone who works for your Company is of
 paramount importance and these attributes are embedded within the
 core organizational values of GAIL. Our 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 is one the important elements of
 the HSE Management in your Company.
 
 8Safety Performance
 
 Safety performance is measured in your Company through HSE
 index which is evaluated on the basis of important HSE Management
 System elements. Your Company achieved the HSE index of 99.06%
 as against the MoU target of 98%.
 
 Safety Training
 
 Your Company imparts regular and structured HSE training to its
 employees to upgrade their skills, knowledge and competence to
 carry out HSE-critical functions effectively. Regular training is also
 imparted to contract workers, tanker drivers and others to make
 them aware of the probable hazards in their work area and avoid
 unsafe acts.
 
 Keeping in view the challenge posed by one of fastest growing waste
 stream i.e. e-wastes, your Company organized a two-day HSE
 workshop on the theme E–Waste Management for its business
 heads, fire and safety heads and environment engineers. Faculty from
 the Ministry of Environment & Forests and prestigious institutions
 imparted valuable insights about the e-waste management and the
 applicable rules and regulations.
 
 Safety Audits
 
 Safety Audits are carried out in your Company to ensure
 implementation of the HSE Management system guidelines and
 emergency preparedness. Safety audits are carried out by external
 safety auditors and experienced in-house auditors.
 
 Occupational Health
 
 Your Company has implemented occupational hygiene measures and
 medical surveillance programmes to monitor and control the
 occupational health of its employees. Your Company has prepared
 guidelines on occupational health management in the organization to
 manage the occupational health of its employees and workers.
 
 The Corporate Occupational Health Committee met four times during
 the year to monitor the occupational health programme in your
 Company. As a measure of a broader coverage of occupational health
 programme, your Company formed eleven new local level
 occupational health committees at its compressors and pumping
 stations in addition to the existing six local level occupational health
 committees at its process plants. All employees of your Company at
 various work centres undertake periodic medical examination as per
 guidelines.
 
 SUSTAINABILITY INITIATIVES
 
 Your Company published its fourth Sustainability Report – ''Care Share
 and Grow'' for FY 2013-14. The stakeholder centric report focuses on a
 growth that creates value for all our stakeholders. The report highlights
 the various initiatives taken in the economic, environmental and social
 dimensions to secure the long term interests of our stakeholders. ''Care
 Share and Grow'' is in line with the global sustainability reporting
 standards of GRI (Global Reporting Initiative) G3.1 guidelines on
 Sustainability Reporting and the Oil & Gas Sector Supplement (OGSS).
 The report is externally assured in line with Assurance Standard
 AA1000AS with application level A . It is a Type 2 Moderate level assured
 report including data verification at different sites of GAIL. The report is
 available on the GAIL website (www.gailonline.com).
 
 Your Company has a defined Sustainability Governance Structure
 following a top-down approach that spans across various critical
 functions to effectively manage organizational complexities. The
 Sustainable Development Committee, sub-committee of the Board is
 headed by an Independent Director with all the Functional Directors as
 members except Chairman & Managing Director, supported by the
 Sustainable Development Steering Committee, headed by the Director
 (Business Development) to provide impetus and direction to achieve
 sustainability goals, meet targets and monitor on-ground
 implementation of the various initiatives. At sites, we have the multi-
 disciplinary Sustainability Committee and Sustainability Team at the
 corporate level.
 
 One of the Gas Processing Units at Gandhar was certified for Energy
 Management System ISO 50001:2011, which enable a systematic
 approach in achieving continual improvement of energy performance,
 
 including energy efficiency, energy use and consumption. Your Company
 has also taken up the implementation of SA 8000 across its operation
 with pilot site as Hazira Compressor Station. With this, it is aimed to
 ensure meeting the voluntary requirements in the workplace that will
 protect and empower personnel within a company''s scope of control and
 influence.
 
 This year, your Company participated in the Carbon Disclosure Project
 (CDP) for the first time. CDP is an international, not-for-profit
 organization providing the only global system for companies and cities to
 measure, disclose, manage and share vital environmental information.
 Your Company is the highest scoring public sector company among the
 Indian CDP responders in 2013.
 
 Your Company is the only PSU in Oil and Gas sector to become the
 founding member of the GRI Focal Point India Sustainability and
 Transparency Consortium. The Consortium provides a platform to share
 and engage with various organizations to discuss issues related to
 sustainability reporting. Your Company also hosted the launch of the GRI
 G4 Guidelines in India at GAIL Corporate Office in Delhi. In addition,
 senior official''s of your Company had a fruitful interaction with senior
 executives from GRI, sharing industry perspective in the field of
 sustainability.
 
 Your Company also became the founding member of the India Green
 House Gas (GHG) Program along with various other major companies.
 The programme is a voluntary initiative launched by World Resources
 Institute (WRI) India, the Confederation of Indian Industry and The
 Energy and Resources Institute on GHG accounting, standardize
 measurement and management of GHG emissions in India. The
 programme promotes a more competitive, profitable and sustainable
 business environment, broadening engagement between policymakers
 and the business sector in supporting the overall advancement of
 national goals.
 
 Going beyond the mandatory requirements, your Company has set clear
 targets through Sustainability Aspirations 2020, with respect to the
 management of Green House Gas (GHG) emissions, water consumption,
 energy efficiency and training / awareness on sustainability. This
 initiative has been highly appreciated at various national and
 international forums. The details of the progress are presented in our
 Sustainability Report FY 2013-14. All these initiatives are aimed at
 building the social and environmental capital of your Company to make it
 a truly sustainable company.
 
 In line with the SEBI requirements, your Company provides a complete
 disclosure on the Company''s performance on the 9 Principles of National
 Voluntary Guideline and Core Elements. The BRR FY 2013-14 is contained
 in a separate section in the Annual Report FY 2013-14.
 
 INCLUSIVE GROWTH- INITIATIVES FOR SOCIAL GROWTH
 
 Your Company believes that CSR plays a major role in developing a
 nation. Therefore, your Company has made Corporate Social
 Responsibility (CSR) an integral part of its ethos and culture. Your
 Company has a dedicated team operating within the framework of a well-
 structured CSR policy, which mandates 2% contribution of the
 Company''s PAT to CSR activities. Further, your Company has constituted
 a CSR Committee of the Board to deliberate and decide on the CSR
 proposals. The details of the same are contained in the report on
 Corporate Governance.
 
 Following the project-based approach as put-forth by the DPE and as
 detailed in your Company''s CSR policy, your Company has implemented
 
 CSR programmes primarily in and around the rural areas adjoining major
 work centres/installations of your Company. These programmes are
 taken up under the seven thrust areas identified by your Company -
 education /literacy enhancement, skill development/ empowerment,
 community development, drinking water/ sanitation, environment
 protection/ horticulture, infrastructure and healthcare/ medical facility.
 Major initiatives undertaken by your Company under these thrust areas
 are detailed in Management Discussion & Analysis.
 
 VIGILANCE
 
 Various improvements were introduced in systems and processes by
 your company for achieving better e-governance. Some of these
 significant improvements are:
 
 - Complaint Monitoring System (CMS) to process all complaints which
 are received in various work centres and departments centrally.
 
 - E-Tendering threshold limit has been reduced from Rs. 50 lacs to
 Rs. 25 lacs.
 
 - Renewal of ISO Certification of Corporate Vigilance Department.
 
 - Quarterly automatic alerts to respective Officer In-charge for taking
 suitable action to resolve instances of outstanding retention money
 of the vendors.
 
 - Improvements have been made in Tender Monitoring System to
 generate more customized reports.
 
 Vigilance Awareness Week-2013 was observed from 28th October, 2013 to
 2nd November, 2013 under the aegis of the Central Vigilance Commission
 (CVC), at the Corporate Office, New Delhi and at all your Company work
 centres. Shri Pratyush Sinha, former Central Vigilance Commissioner
 graced the inaugural ceremony as the Chief Guest and administered
 Vigilance Pledge to the employees. On this occasion, a magazine
 JAGROOK published by the Corporate Vigilance Department,
 containing CVC circulars and articles on the subject of Good Governance
 including case studies was released. The theme of the Vigilance
 Awareness Week this year was Promoting Good Governance Positive
 Contribution of Vigilance. In order to spread awareness of the theme,
 various competitions such as online quiz, essay writing (Hindi & English),
 slogan writing (Hindi & English) and poster painting were organized
 across different centers of your Company. A customer interactive meet
 and a vendor interactive meet were organized at Jaipur and Noida
 respectively. Customers from various segments such as Natural Gas,
 Liquid Hydrocarbon and Petrochemical as well as vendors providing
 project related services/supplies to your Company actively participated
 in the two meets.
 
 CAPABILITY BUILDING
 
 Your Company lays a strong emphasis on attracting, acquiring and
 deploying the best talent across all its business functions. A highly
 engaged and dynamic workforce has led to a continuous rise in the value
 added per employee in the last 5 years. Value added per employee gives
 an account of efforts of the Company''s employees to make the best and
 most productive use of the resources available to them.
 
 Training
 
 Your Company lays great emphasis on the development of human resources
 in the existing and new areas of its business. 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 received the prestigious national award for
 Innovative Training Practices from the Indian Society for Training and
 Development (ISTD) and the Golden Peacock National Training Award -
 2014.
 
 GTI, Noida and Jaipur have maintained the track record of excellent
 MoU performance in all the parameters in the MoU signed with the
 administrative ministry. The key achievement are as under:
 
 Percentage actualization of training plan has been more than
 100% for the financial year ending 31st March, 2014. A total 224
 training programmes were organized during the period under
 review. 17910 man-days of training were organized by GTI, Noida &
 Jaipur in the above period. Training days per employee is 4.51.
 
 The development plan of the executives is directly linked with the
 Performance Management System.
 
 Training budget as percentage of employee cost for FY 2013-14 is
 4.71%.
 
 A mentorship programme has been established for the new joining
 executives and all mentees have been assigned their respective
 mentors.
 
 Yoga classes are organized at GTI and at various sites to reduce
 stress. Eleven programmes/sessions were organized during FY
 2013-14.
 
 6 man-days of training on awareness of sucession planning have been
 organized.
 
 6 man-days of training have been imparted on Risk Management to GAIL
 employees.
 
 216 man-days of training have been imparted on Project Management to
 GAIL employees.
 
 With the objective to share and manage knowledge within the
 organization, Technical Knowledge Sharing Seminar and sessions are
 organized every year.
 
 5 company wide business quizzes were organized to keep the GAIL
 employees updated with the latest developments in the business areas of
 GAIL.
 
 In its pursuit of offering training programmes to external
 organizations and to convert itself into a revenue generating centre,
 GTI has successfully organized training programmes for participants
 from other organizations like RGPPL, HPCL, BCPL, IGL, MGL, MNGL, GSPL,
 HMEL etc. Further, in collaboration with the American Society of
 Mechanical Engineers (ASME), USA, GTI is successfully running
 certificate courses in ASME B31.8, B 31.8S and B 31Q for various
 external organizations.
 
 Development Programme for Senior Management
 
 Your Company realizes that it is critical to continually strive to
 develop and enhance the capability and competence of its senior level
 executives in order to prepare them for future leadership positions. As
 an effort towards the same, the Senior Management Development Centre
 (SMDC) exercise has been undertaken as part of the Leadership
 Development Program. SMDC has been conducted for senior executives in
 the Chief Manager and above grades and as of now around 600 senior
 executives have been covered under this exercise.
 
 In order to fill in the developmental gaps of such executives
 identified through the SMDC exercise, a comprehensive Individual
 Development Plan (IDP) has been drawn up for all the participants of
 SMDC exercise. The IDP consists of customized training programmes at
 premier business schools, e-learning courses and distribution of books.
 
 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 SCs, STs and OBCs amongst them in your Company as on
 31st March, 2014 are given in the table below:
 
 GROUP      EMPLOYEES      SC      ST       OBC        PWD
            ON ROLL                        (NCL)
 
 A            2947         454    180       513        38
 
 B             592         123     72        99        12
 
 C             424          77     14       126        33
 
 D              52          17      5        14         2
 
 TOTAL        4015         671    271       752        85
 
 A total of 132 new employees joined the Company during the FY 2013-14.
 The total manpower of the Company as on 31st March, 2014 stood at 4022
 (including Whole-Time Directors & CVO) with 16.71% the Company''s
 employees belonging to the SC category; 6.75 % to the ST category;
 18.73 % to the OBC (NCL) category; 8.02 % to minorities and 2.12 % to
 PWDs category. Your Company''s workforce comprised of 244 women
 employees as on 31st March, 2014.
 
 Official Language
 
 Your Company is continuously making vigorous efforts for the
 propagation and successful implementation of the Official Language
 Policy of the Union. The Official Language Implementation Committees at
 Corporate as well as work centre level held their quarterly meetings
 regularly to monitor and review the progress made in achieving the
 targets fixed in the Annual Programme.
 
 In an endeavour to familiarize the new entrants in the company with the
 Official Language Act and various OL rules, training to ETs and GETs is
 being imparted at the induction level. To inculcate the knowledge of
 the Official Language among the newly promoted employees from S7 to E1
 and E2 grades, special 2-days'' training programmes have been designed
 and implemented at the corporate level besides other regular workshops
 at all the work centres.
 
 With a view to create greater awareness and consciousness among
 employees, Hindi Fortnight was celebrated from 14th to 28th September,
 2013 across the Company. During the fortnight innovative and
 interesting competitions, cultural activities, Kavi Sammelan, seminars
 on Hindi activities etc. were conducted. Every Monday/first working day
 of the month is being observed as Hindi Diwas across the Company.
 
 Bilingual software with Unicode fonts were made available across the
 Company. To impart working knowledge of Hindi as well as computer
 training to employees in bilingual software, a comprehensive and time
 bound programme was prepared and implemented during the year.
 
 As an innovative initiative, names of all employees of your Company in
 official e-mail IDs are being displayed in Hindi also. The terminology
 being used across GAIL has been standardized and circulated.
 
 Training in translation is being provided to all nodal officers on
 quarterly basis through the Central Translation Bureau, Ministry of
 Home Affairs.
 
 In order to provide a larger platform to discuss the problems and
 difficulties in implementation of the Official Language, an annual
 conference was organized on 22nd February, 2014 wherein senior
 officials from corporate office and work centres participated and
 shared their valuable thoughts.
 
 The bilingual website of GAIL was launched on 22nd February, 2014 by
 Director (HR).
 
 In order to cultivate the habit of reading Hindi books among employees
 of GAIL and their family members, two books Anger Management and
 Time Life Management in Hindi were distributed to all employees on
 the occasion of Vishwa Hindi Diwas .
 
 Women Empowerment
 
 To encourage and recognize the role of women employees in your
 Company''s success story, GAIL Women Employees Award Scheme has been
 instituted since 2009. Since then, every year awards to Women
 employee(s) based on their performance in their functional area are
 conferred on the International Women''s Day.
 
 INNOVATION, RESEARCH & DEVELOPMENT
 
 Your Company firmly believes that innovation can lead to multiple
 benefits for the organization. Accordingly, the Company makes constant
 efforts to create a culture that supports innovation in all its
 business verticals. Your Company has a Suggestion Scheme for the
 employees to promote organization-wide idea generation for incremental
 innovation.  The suggestions are evaluated in a time bound manner for
 implementation and the best suggestion is awarded with the CMD trophy.
 
 As part of the activities of Sectoral Innovation Council by MOPNG, your
 Company has been nominated as the coordinator for mid-stream sector of
 Oil & Gas industries and aims to promote industry-wide innovation in
 the sector.
 
 Your Company has further intensified its thrust on Research &
 Development (R&D) activities and put in place a R&D Policy and Manual
 that streamlines the Selection, Award and Monitoring of R&D projects.
 Your Company is pursuing various R&D projects in identified thrust
 areas with a focus on developing high-impact innovative technologies
 that unlock new energy sources, improve efficiency of existing
 operations, and add value to the products. In addition, few projects
 are also being pursued on CO2 utilization to reduce carbon footprint.
 
 Your Company has successfully completed a pilot project for Land Fill
 Gas (LFG) recovery at Ghazipur Landfill site, Delhi. This is the first
 project of its kind in India to be implemented on an active landfill
 site. It is also the first project of your Company to have been
 successfully validated and registered with UNFCCC for availing carbon
 credits. This project show cases your Company''s efforts towards
 sustainable utilization of resources.
 
 Your Company has a judicious mix of R&D portfolio comprising of various
 Basic/Applied/Pilot & Technology development projects encompassing the
 natural gas value chain. In addition, few projects are also being
 pursued in upcoming areas like Underground Coal Gasification, Fuel
 Cells, Hydrogen, and Gas Hydrates in line with the Company''s aspiration
 to emerge as an integrated hydrocarbon major by 2020. These projects
 are being pursued in association with reputed research organizations /
 institutes.
 
 TOTAL QUALITY MANAGEMENT (TQM)
 
 Your Company continues to focus on continual and sustainable
 improvement in the process, system and functional areas. Customer
 satisfaction is the top agenda of your Company and is being
 continuously monitored through regular interactions. Preliminary steps
 have been under taken by the department to initiate Deming Prize
 related works for one of its units. Major achievements of your Company
 in TQM are as under:
 
 - Customer Satisfaction Index achieved during FY 2013-14 is 92%.
 
 - Your Company has undertaken 137 number of QC Projects at various work
 centres of GAIL which have resulted in financial savings of Rs. 826.49
 lacs (tangible gains) from these projects for the FY 2013-14, which has
 led towards continual improvement (intangible gains) as well as
 tangible gains.
 
 - LPG Gandhar plant received Energy Management system certificate of ISO
 : 50001-2011
 
 PROCUREMENT FROM MSES
 
 The Government of India has notified a Public Procurement Policy for
 Micro and Small Enterprises (MSEs), Order 2012. In terms of this
 policy, the total procurement made from MSEs (including MSEs owned by
 SC/ST Entrepreneurs) during the year 2013-2014 for goods & services is
 about Rs.18,000 lacs which is approximately 8.64% of the total
 procurement of goods & services of about Rs. 2,08,000 lacs.
 
 MOU PERFORMANCE
 
 A Memorandum of Understanding (MoU) is signed every year between your
 Company and its administrative ministry i.e. MoPNG, with the aim to
 enhance the performance level of the Company through the targets set
 therein. The MoU for the year 2013-14 was signed between the Chairman &
 Managing Director and the Secretary (P&NG), Government of India on 25th
 March, 2013.
 
 The thrust while fixing MoU targets was more towards improving
 performance on critical aspects of the Company which include gas
 marketing, gas transmission, project implementation, Capital
 expenditure, New Business Areas, Quality Management and Safety among
 others. Significant thrust has been given on Corporate Social
 Responsibility, R&D, Sustainability, Human Resources and Corporate
 Governance.
 
 Your Company has been consistently achieving an excellent MoU rating
 from the inception of MoU system i.e. from 1989-90 to 2012-13. For the
 year 2013-14, inspite of the economic slowdown and relatively
 unfavourable conditions compared to preceding years, GAIL is hopeful in
 achieving an excellent performance. The final ratings of your Company
 on MoU 2013-14 shall be declared in August 2014.
 
 LAURELS
 
 - CorCoorpore
 
 -  Greentech Gold Award for outstanding achievement in Corporate Social
 Responsibility (CSR) in Gold Category.
 
 - Global HR Excellence Award for Talent Management 2014 and Best
 Employer 2013-14 award for Best HR Strategy in Line with Business, by
 World HRD Congress.
 
 -  Sustainability Performance Award by Indian Chamber of Commerce at
 4th Corporate Governance and Sustainability Vision Summit & Awards
 2014.
 
 - HSE
 
 -  International Safety Award-2014 with merit from British Safety
 Council, UK to GPU, Vijaipur/GAIL Khera.
 
 -  International Safety Award-2014 from British Safety Council, UK to
 GAIL Vaghodia (4th time in a row)/Gandhar/NCR/Rajamundry
 
 -  Golden Peacock Environment Excellence Award-2013 to GAIL Gandhar
 from Institute of Directors, New Delhi.
 
 -  Golden Peacock Occupational Health and Safety Award-2013 to GAIL
 Lakwa from Institute of Directors, New Delhi.
 
 -  National Safety Council of India (NSCI) Suraksha Puraskar (Bronze
 Trophy)- 2012 to LPG Plant, Vijaipur.
 
 -  National Safety Council of India (NSCI) Suraksha Puraskar (Bronze
 Trophy)- 2012 to HVJ Compressor Station, Vijaipur.
 
 -  National Safety Council of India (NSCI) Prashansa Patra-2012 to
 GAIL, Vaghodia.
 
 - Safety Innovation Award-2013 from Institution of Engineers (India)
 to GAIL Usar/Vaghodia/ Mumbai/Mansarampura/Abu Road.
 
 -  Gujarat State Safety Award-2012 (Shield) to GAIL, Vaghodia.
 
 -  Gujarat Safety Council Appreciation Certificate for Safety to
 RPNHQ, Vadodara region for the year of 2012.
 
 RIGHT TO INFORMATION
 
 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.
 
 SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
 
 As per Section 212 of the Companies Act, 1956, documents in respect of
 subsidiary companies viz. Directors'' Report, Auditor''s Report, Balance
 Sheet and Profit & Loss Account are required to be attached to the
 Balance Sheet of the holding Company. The Ministry of Corporate Affairs
 vide circular dated 8th February, 2011, has granted exemption under
 section 212 of the Companies Act, 1956 to companies from attaching the
 aforesaid documents of subsidiary companies with the Annual Report,
 subject to compliance of the conditions mentioned in the said circular.
 
 Your Company has five subsidiary companies as on 31st March, 2014. Your
 Board has accorded the necessary approval for not attaching Directors''
 Report, Balance Sheet, Profit & Loss Account, Auditor''s Report and
 other statutory data/ documents of subsidiary companies viz. GAIL Gas
 Limited, Brahmaputra Cracker & Polymer Limited, GAIL Global (Singapore)
 Pte Limited, GAIL Global (USA) Inc. and GAIL Global (USA) LNG LLC with
 the Balance Sheet of your Company. All the conditions mentioned in the
 circular are being complied to by your Company. The Annual Report of
 the said subsidiary companies is available on your Company''s website
 www.gailonline.com. Besides, a physical copy will be made available to
 the shareholders on request in writing.
 
 Consolidated Financial Statements, as per applicable Accounting
 Standards and statement containing brief financial details of your
 Company''s subsidiaries for the financial year ended 31st March, 2014
 form part of the Annual Report. Annual accounts of subsidiaries and the
 related detailed information are open for inspection by any member at
 the registered office of the Company and of the respective subsidiary
 companies during working days.
 
 MANAGEMENT DISCUSSION AND ANALYSIS
 
 The detailed Management Discussion and Analysis forms a part of this
 report at Annexure- A.
 
 CORPORATE GOVERNANCE
 
 Your Company believes that good corporate governance is critical in
 establishing a positive organizational culture and it is evident by
 responsibility, accountability, consistency, fairness and transparency
 towards its stakeholders. Pursuant to clause 49 of the Listing
 Agreement and DPE guidelines on Corporate Governance, a report on
 Corporate Governance forms part of this Report at Annexure- B.
 
 The statutory auditors of the Company have examined and certified your
 Company''s compliance with respect to conditions enumerated in clause 49
 of the Listing Agreement and DPE guidelines on Corporate Governance.
 The certificate forms part of this Report at Annexure- C.
 
 Secretarial Compliance Report confirming compliance by Practicing
 Company Secretary to the applicable provisions of the Companies Act,
 1956, Listing Agreement, DPE guidelines on Corporate Governance, SEBI
 Guidelines, forms part of this Report at Annexure- D.
 
 ENERGY CONSERVATION, TECHNOLOGY ABSORPTION The details of conservation
 of energy and technology absorption in accordance with Companies
 (Disclosure of Particulars in the Report of Board of Directors) Rules,
 1988 forms a part of this report at Anexure-E.
 
 PARTICULARS OF EMPLOYEES
 
 As per provisions of section 217(2A) of the Companies Act, 1956 read
 with the Companies (Particulars of Employees) Rules, 1975, every
 company is required to provide particular of employees in the
 Directors'' Report exceeding the stipulated remuneration limit(s).
 
 However, as per notification dated 31st March, 2011 issued by the
 Ministry of Corporate Affairs, amending provisions of said rules, has
 exempted Government companies for not including such particular in the
 Directors'' Report. As your Company is a Government Company, such
 particulars have not been included as part of Directors'' Report. Any
 member desirous of obtaining such particulars may write to the Company
 and the same will be provided.
 
 FIXED DEPOSITS
 
 Your Company has not accepted any fixed deposits 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. 210.01 crore and
 foreign currency outgo was Rs. 9,229.22 crore.
 
 During the year under review, there was an outgo of Rs. 3.97 crore on
 foreign tours and training and Rs. 1.35 crore on advertising and
 publicity.
 
 DIRECTORS
 
 During the year, the following ceased to be Directors on the Board of
 your Company:
 
 ?Shri Arun Agarwal, Independent Director w.e.f. 23rd February, 2014
 consequent upon completion of tenure for 3 years.  ?Shri R.D. Goyal,
 Director (Projects) w.e.f. 28th February, 2014 upon attaining the age
 of superannuation.
 
 Dr. Ashutosh Karnatak, Director (Projects) was appointed on the Board
 of your Company as Additional Director w.e.f. 1st March, 2014.
 
 The tenure of Shri B.C. Tripathi as Chairman & Managing Director was
 extended for a period of five years beyond 31.07.2014 by Government of
 India
 
 Further, Shri Prabhat Singh, Director (Marketing) and Shri P. K. Singh,
 part-time (Govt. Nominee) Director are retiring by rotation and being
 eligible have offered themselves for re-appointment.
 
 The Board placed on record its deep appreciation for the valuable
 services rendered by outgoing Directors during their association with
 your Company.
 
 CODE OF CONDUCT
 
 Pursuant to the requirements of clause 49 of the Listing Agreement and
 DPE guidelines on Corporate Governance, the Board Members and Senior
 Management Personnel have affirmed compliance with the Code of Conduct
 for the financial year ending 31st March, 2014.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Yours Directors confirmed that:
 
 i) in the preparation of the annual accounts for the financial year
 ending 31st March, 2014, the applicable accounting standards have been
 followed, along with 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
 review;
 
 iii) taken proper and sufficient care for the maintenance of adequate
 accounting records in accordance with the provisions of the Companies
 Act, 1956, 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, 2014 on a going concern basis;
 
 v) have devised proper systems to ensure compliance with the provisions
 of all applicable laws and such systems were adequate and operating
 effectively and
 
 vi) laid down internal financial controls to be followed by the Company
 and that such internal financial controls are adequate and were
 operating effectively.
 
 AUDITORS
 
 - StaSutouty ory Audito
 
 The statutory auditor of your Company is appointed by Comptroller &
 Auditor General of India (CAG). M/s M. L Puri, Chartered Accountants,
 New Delhi and M/s G.S. Mathur & Co., were appointed as Joint Statutory
 Auditors of your Company for 2013-14.
 
 The review of your Company''s Annual Accounts for the financial year
 ending 31st March, 2014 by CAG forms part of this report. Notes on
 accounts referred in the Auditors'' Report are self-explanatory and
 therefore, does not call for any further comment.
 
 -  CosCost udAudito
 
 Your Company has appointed M/s Rohit & Associates, Vadodara; M/s R
 Nanabhoy & Co., Mumbai; M/s Chandra Wadhwa & Co., New Delhi; M/s M
 Goyal & Co., Jaipur; M/s Dhananjay V. Joshi & Associates, Pune; M/s DGM
 & Associates, Guwahati; M/s Mani & Co., Kolkata and M/s K.L. Jaisingh &
 Co., Noida as cost auditors for 2013-14.
 
 The due date for filing cost audit reports for the financial year ended
 31st March, 2013 was 27th September, 2013 and the same were filed to
 Registrar of Companies on 24th September, 2013.
 
 ACKNOWLEDGMENT
 
 Your Directors express their gratitude for help, guidance and support
 received by the Government of India, especially the Ministry of
 Petroleum and Natural Gas, various state governments, and regulatory
 and statutory authorities.
 
 Your Directors acknowledge wise counsel received from Statutory
 Auditors and CAG and are grateful for their consistent support and
 cooperation.
 
 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
 
 B.C. Tripathi 
 Chairman & Managing Director
 
 Place : New Delhi
 Dated : 04.08.2014
 
 
 
Source : Dion Global Solutions Limited
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