The behalf of the Board of Directors of your Company, it is my pleasure
to present the 31st Annual Report of your Maharatna Company, along with
Audited Financial Statements for the financial year 2014-15.
PARTNER GROWTH WITH INDIA''S NATURAL GAS LEADER
With a turnover of Rs.56,569 Crores, GAIL (India) Limited, is India''s
largest natural gas Company and ranked among the top gas utilities in
Asia. Your Company has a presence across the entire gas value chain
with activities ranging from Gas Transmission and Marketing to
Processing (for fractionating LPG, Propane, 5BP Solvent and Pentane),
transmission of LPG, and production and marketing of Petrochemicals
like HDPE and LLDPE. Your Company has extended its presence in Power,
LNG re-gasification. City Gas Distribution and Exploration & Production
through equity and joint venture Participations and also diversified
into solar and wind power generation.
Gas transmission is one of the core competencies of GAIL and it draws
strength from about 11,000 km of natural gas pipeline network and 2,038
km of LPG pipeline transmission network.
With a lean workforce of 4,266 employees, your Company plays a
meaningful role in social and economic development of the country and
makes a substantial contribution towards its energy security.
Your Company''s key financial parameters during the year 2014-15 and
Important financial highlights are as under:
Particulars US $ [Rs. in US $ [Rs. in
Million Crores] Million Crores]
Turnover (Net of ED) 8,952 56,569 9,445 57,245
Other income (incl.
Exceptional Items) 173 1,096 249 1,506
Cost of sales (excluding
interest and depreciation) 8,236 52,045 8,383 50,806
Gross Margin (incl.
Exceptional Items) 889 5,620 1,311 7,945
Interest 57 361 60 366
Depreciation 154 975 195 1,177
Profit before tax 678 4,284 1,056 6,402
Provision for tax 197 1,245 334 2,027
Profit after tax 481 3,039 722 4,375
Interim dividend 60 381 94 571
Proposed final dividend 60 381 123 748
Corporate dividend tax 24 154 37 224
Net transfer to/from bond
redemption reserve 6 37 (1) (6)
Transfer to CSR reserve (5) (30) 3 18
Transfer to general reserve 48 304 72 438
Net surplus after Appropriations 287 1814 393 2,382
1 US $ in INR converted at the
exchange rate as on 31st March 63.19 60.61
of the respective financial year
DISINVESTMENT BY PRESIDENT OF INDIA
The Government of India (Gol) has disinvested 15,672,024 shares on 27th
March,2014 through CP5EETF. Further, Gol has disinvested 37,819 shares
on 8th April, 2015 through CP5E ETF as Bonus Units. After
disinvestment, the President of India holds 711,695,832 equity shares,
representing 56.11% of paid-up share capital of GAIL.
Your Company has a consistent track-record of dividend payment. So far,
your Company has disbursed dividend of over fl3,043 Crores to the
shareholders includingRs.7,925 crores disbursed as dividend to
Government of India.
The Board of Directors of your Company had earlier approved payment of
an interim dividend @ 30% (Rs.3 per equity share) on equity share of
Rs.10 each amounting to Rs.380.54 Crores, which was paid in March,
2015. Further, the Board has recommended payment of final dividend @
30% (Rs.3 per equity share) on equity share of Rs.10 each for2014-15
amounting to Rs.380.54Crores. With this, the total dividend payment
for the fiscal year 2014-15 will be 60% (Rs.6 per equity share) on
equity share of Rs.10 each amountingtoRs.76l.09 Crores on its paid-up
equity capital of Rs.1,268.48 Crores and dividend distribution tax of
Rs.153.56 Crores. The total dividend pay-out including corporate
dividend taxaccountsfor30.10%of Profit After Tax.
CONTRIBUTION TO EXCHEQUER
Your Company has contributed over Rs.5,788 Crores in 2014-15 to the
exchequer through dividend, duties, taxes and others, as compared to
Your Company has been reaffirmed the highest domestic credit rating of
AAA from ICRA, CARE, CRISIL and India Ratings, which carry the lowest
credit risk. The international rating agency, Moody''s International,
Hong Kong, has also reaffirmed the corporate issuer rating of Baa2,
which is one notch higher than sovereign rating. Further, Fitch Ratings
has also assigned a long-term foreign currency issuer default rating
of BBB- with a Stable outlook, which is equal to sovereign rating.
In order to make a quantum leap in its growth trajectory, your Company
has developed its corporate strategy for the period 2011-2020. This
strategy is currently under execution and the Company is closely
monitoring progress on various strategic initiatives as well as
continually assessing the macro environment to evaluate its impact on
GAIL''s businesses. The management of your Company has been playing a
crucial role to achieve the strategic objectives and to ensure that it
emerges as an integrated hydrocarbon major with significant upstream.
midstream and down stream interests by 2020.
In the upstream segment, your Company plans to increase LNG imports
through conventional route as well as through terminal capacity
booking. It also plans to acquire equity in producing
assets/liquefaction facilities to source equity-linked LNG. It has made
remarkable progress in sourcing LNG by finalising several long-term
deals with suppliers, like Sabine Pass Liquefaction LLC (USA), Gazprom
(Russia) and WGL Midstream Inc. (USA). GAIL Global (USA) LNG LLC, a
subsidiary of your Company in the United States of America (USA), has
booked LNG capacity in Dominion Cove Point''s LNG liquefaction terminal
in the state of Maryland. In addition, your Company is pursuing LNG
shipping business by charter hiring LNG ships to transport LNG from the
USA to India and other global markets. Your Company has also ventured
into 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
land based LNG terminals and Floating Storage and Regasification Units
(FSRUs). It is also booking additional regasification capacities in
existing and new terminals being set up by other companies. Your
Company has tied-up additional regasification capacities at Dahej LNG
terminal with Petronet LNG Limited (PLL). Further, in-line with the LNG
sourcing efforts, your Company has intensified its domestic gas market
development efforts in India to attract and retain more customers.
In order to bridge the demand-supply gap of natural gas as well as to
address the energy security needs of the country, your Company is
aggressively pursuing the transnational
Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project.
Bilateral GSPA with Turkmeng as has already been signed to import 38
MMSCMD gas into the country through this pipeline. Further, the TAPI
Pipeline Company Limited has been incorporated as a Special Purpose
Vehicle in the Isle of Man by the four TAPI entities.
In the midstream segment, your Company aspires to retain its leadership
position through a continuous pan-India expansion of pipeline networks
in synchronisation with customer readiness along the pipeline networks.
Your Company now has approximately 11,000 km network of natural gas
pipeline in the country. To further cater to the growing demand and to
increase its geographic reach, various pipeline projects are at
different phases of execution which will take the network size to
aroundl5,000 km. 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. It
has doubled existing petrochemical production capacity at Pata by
commissioning the second petrochemical unit Pata. A Greenfield
Petrochemical plant is also being setup in Assam through your Company''s
subsidiary, Brahmaputra Cracker & Polymer Limited (BC PL). Another
petrochemical plant at Dahej is being setup through a
JV.ONGC Petro-additions Limited (OPaL). By 2016, your Company is
expected to have MMTPA polymer volume for marketing. On the retail
side, your Company is targeting additional 40-50 Geographical Areas
(GAs) through its subsidiaries and J Vs for city gas distribution (CGD)
in the coming years. Your Company''s wholly owned subsidiary, GAIL Gas
Limited, is progressing on track with respect to CGD projects in the
cities of Kota, Dewas, Meerut and Sonepat. Further, GAIL Gas Limited
has won the authorization from Petroleum & Natural Gas Regulatory Board
(PNGRB) in 4th round of CGD bidding to develop CGD network for the city
of Bengaluru. Your Company aims to reduce its carbon footprint in a
phased manner and contribute positively towards a low carbon economy.
Accordingly your Company has set targets for renewable energy projects
and significant progress has been made so far. Your Company has 118 MW
installed capacity of wind energy. It has also established a 5 MW solar
power project. Further, your Company is a stakeholder in an SPV created
under the aegis of Ministry of Petroleum & Natural Gas (MoP&NG) &
Ministry of New and Renewable Energy (MNRE) for setting up of grid
connected Renewable Energy Power Projects.
In order to achieve the strategic goals efficiently and in a time bound
manner, a major thrust is being given to strengthen and enhance the
capabilities of human resource of your Company. Accordingly,
recruitment, training and development policies are being suitably
aligned with strategic objectives to enable your Company to implement
and achieve its strategic goals by 2020.
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 2014-15, gas sales clocked 72 MM5CMD, compared to 79 MMSCMD in
the previous financial year. Major supplies of natural gas are made as
fuel to power plants, as feed stock for gas-based fertilizer plants and
for LPG extraction. Your Company holds around 60% market share in
- Natural Gas
Your Company owns and operates a network of about 11,000 kms of high
pressure trunk pipelines with a pan-India capacity to transport around
206 MMSCMD of natural gas. Average gas transmission during the year was
92 MMSCMD compared to 96 MMSCMD in the previous financial year.
Your Company has the distinction of being the only company in India, to
own and operate exclusive pipelines for LPG transmission for
third-party usage. It owns and operates two LPG Pipeline transmission
systems with a total length of 2038 kms. Of this, 1415 km of pipeline
network transports LPG from western to northern parts of India
(Jamnagar - Loni LPG Pipeline) and the remaining 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. In2014- 15, the LPG
transmission throughput achieved was about 3.09 Million MT
During 2014-15, your Company has produced 447 Thousand MT of polymers
and sold 441 Thousand MT of polymers.
- LPG and Other Liquid Hydrocarbon Production
Your Company has seven LPG plants in the country. USAR LPG Plant is in
complete shutdown condition and is being kept under preservation mode.
In 2014-15, the total liquid hydrocarbon production was aboutl,276
Thousand MT, which mainly comprised of 1,039 Thousand MT of LPG,
115.8lThousand MT of Propane, 22.76Thousand MT of Pentane and 98.75
Thousand MT of Naphtha.
- Exploration and Production (E&P)
The E&P portfolio of your Company is as follows:
India Overseas Total
Onshore blocks 8 - 8
Shallow water blocks 3 2 5
Deep water blocks 2 - 2
Total 13 2 15
During the year 2014-15, E&P business has generated sufficient revenue
to be self-sustainable. Production of gas from its A-l &A-3 block in
Myanmar has reached peak production of 14 MMSCMD. In 2014-15, revenue
of approximately Rs.663.10 Crore has been generated from sale of
hydrocarbon from its 4 producing blocks namely A-l & A-3, Myanmar and
Cambay Onland blocks CB-ONN-2000/l (Ahmedabad) & CB-ONN-2003/2
(Ankleshwar) in Gujarat. The Field Development Plan (FDP) has been
submitted for gas resource of 71BCF in Tripura block.
Your Company is an Operator in three onland blocks viz. (I)
RJ-ONN-2004/l in Rajasthan basin (Ganganagar) awarded during NELP-VI
bidding round, ii) CY- ONN-2005/l in Cauvery basin, Tamil Nadu
(Thanjavur and Thiruvarur) awarded during NELP-VII bidding round and
(iii) CB-ONN-2010/n in Cambay basin, Gujarat (Anand and Ahmedabad)
awarded during NELP-IX bidding round. Your Company is non-operating
partner in remainingl2 blocks.
During the year 2014-15, preparation for drilling of exploratory wells
in block CY-ONN-2005/l was in progress. Actual drilling shall start
after land acquisition. In block CB-ONN-2010/11, during the year
2014-15, acquisition, processing and interpretation (API) of 131 KM2 3D
Seismic Data has been completed. Drilling of exploratory wells is
INITIATIVES FOR FUTURE GROWTH
- Global Initiatives
In November 2014, GAIL Global (USA) LNG LLC (GGULL), wholly-owned
subsidiary of your Company in the US, signed a 20 year gas sourcing
agreement with WGL Midstream Inc. (USA) for procuring natural gas
required to feed the 2.3 MMTPA Dominion Cove Point LNG Terminal.
Earlier in 2013, GGULL has signed 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.
Your Company is constantly pursuing a leading role in the TAPI Pipeline
project to receive Natural Gas from the Galkynysh fields in
Turkmenistan. The Pipeline Consortium Company TAPI Pipeline Company
Limited (TPCL) was incorporated on 11th November 2014 in ''Isle of Man'',
a British Crown dependency located in the Irish Sea. TAPI has a mandate
to build, own and operate the proposed TAPI Pipeline.
- Domestic initiatives
The domestic business initiatives of your Company were as follows: -
LNG Regasification Terminals
Your Company is planning to set up a Floating Storage & Re-
gasification Unit (FSRU)/ Re-gasification terminal on the East coast of
India. In this regard, discussions are on with Adani Ports and Special
Economic Zone Ltd. (AP5EZ) for equity participation and booking of
capacity in the proposed regasification terminal at Dhamra port in
- 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 has also signed a Terminal Service Agreement (TSA) for
booking of 2.3 MMTPA of liquefaction capacity in Dominion Cove Point
terminal for 20 years. The initial supplies from both these contracts
are expected to commence from December 2017. Currently, your Company is
in the process of long term Charter hiring of LNG ships through
international bidding route.
- Natural Gas Pipeline Projects
During the year, your Company has completed 36 number of ''Last Mile
Connectivities'' coveringl29 km approx. of pipeline to increase the
commercial utilization of various pipeline networks in 11 states- Uttar
Pradesh, Uttarakhand, Punjab, Haryana, Rajasthan, Madhya Pradesh,
Gujarat, Maharashtra, Karnataka, Andhra Pradesh and Kerala.
- Non-Conventional Energy
Your Company has a total installed capacity of 118 MW of Wind Energy
Generation Projects (WEG). Your Company had started with a modest
capacity of 4.5 MW wind energy in the state of Gujarat in March 2010
for captive use. After the success of the first WEG project, an
additional capacity of 14.7 MW of WEG was installed in January 2012 in
the state of Gujarat for captive use. Your Company graduated to
commercial production after commissioningg8.75 MW of WEG projects in
the states of Tamil Nadu and Karnataka in March 2012.
During the year, your Company also entered into generation of solar
power by setting up a 5 MW Solar Power Plant in the state of Rajasthan
under the Jawaharlal Nehru National Solar Mission, through bidding.
- Coal Gasification
Your Company is entering into a joint venture for Coal Gasification cum
Fertiliser production at Talcher, Odisha, with Rashtriya Chemicals and
Fertilizers Limited (RCF), Fertilizer Corporation of India Limited
(FCIL) and Coal India Limited (CIL). It is proposed to setup Coal
Gasification unit based on Coal supplied from a coal block allocated
for the plant.
The project envisages production of 3,850 MT urea per day. The success
of this project shall pave the way forward for production of fertilizer
from the abundantly available domestic coal, resulting in lesser
dependency on import of fertilizers.
RELATED PARTIES-SUBSIDIARIES/ASSOCIATES/JOINT VENTURES
Your Company has formed subsidiaries and joint venture companies for
CGD, petrochemicals, LNG, gas trading, power generation and shale gas.
Your Company is one of the pioneers 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 these subsidiary and joint venture companies are mentioned
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. Till 31st March, 2015, GGSPL has traded eight LNG cargoes
out of which three have been traded duringthefinancialyear2014-15.
GGSPL has also been mandated by your Company to market upto 3 MMTPA of
its USA sourced LNG in the international market. GGSPL is already
marketing such volumes in the international markets. The supplies
against the said volumes are expected to start from the year 2018.
GGSPL is also targeting LNG third-party trades, 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 owned
subsidiary of your Company 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 the 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 Joint Venture (JV) in the Eagle Ford Shale asset
in Texas. GGUI acquired a 20% participating interest in this joint
venture. Carrizo, with the remaining 80% participating interest, is
functioning as the Operator for the J V.
During the year, 12 wells came online, taking total online wells to 79
as on December 31, 2014. In addition, 16 wells were under different
stages of Drilling & Completion as on that date. The gross production
volume of GGUI during 2014 was 978.5Mboe.
- GAIL Global (USA) LNG LLC (wholly owned subsidiary of GGUI)
GAIL Global (USA) LNG LLC (GGULL) was formed during March 2013 for
entering into contractual agreements with Dominion Cove Point LNG, LP
(DCP) for booking of LNG Tolling capacity of 2.3 MMTPA in its DCP LNG
terminal. GGULL has signed Gas Sales & Purchase Agreement (GSPA) on
November 30, 2014 with WGL Midstream, Inc. for sourcing of gas on
delivered basis at the inlet of Cove Point pipeline/terminal for a term
of 20 years to produce about 2.3 MMTPA of LNG at the Cove Point
Terminal. GGULL and DCP have satisfied all the Condition Precedents in
the Terminal Service Agreement (TSA) making the TSA effective with
effect from December!9,2014.
- 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 a 50%
equity stake with China Gas Holdings Limited as an equal partner.
- 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 of LNG re- gasification terminal to
15 MMTPA at Dahej which is expected to be completed by end of 2016. PLL
has also setup up an LNG re-gasification terminal at Kochi, Kerala with
a capacity of 5 MMTPA. PLL also 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 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 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 October2005.
The power block has been revived and is under commercial operation
since 19th May 2009. The power block was not operated due to non-
availability of domestic gas in 2014-15 and paucity of funds.
The gas delivery to LNG Terminal through high pressure delivery system
was started in January 2013 and commissioned with effect from 22nd May
2013. Since the power generation is envisaged to entirely use available
domestic gas, the integrated LNG terminal is also utilized for tolling
purposes. RGPPL has already entered into a long-term framework
agreement with GAIL for commercial utilization of LNG terminal and
commenced tolling operations. 25 cargos have been successfully unloaded
since commissioning.10 cargos were unloaded during2014-15.
RGPPL is in a difficult financial position due to non-liquidation of
high receivables from its beneficiaries and non-availability of
domestic gas for power generation leading to inability in meeting its
debt servicing obligations for the year2014-15.
To avoid being a Non Performing Asset, RGPPL has converted lenders''
outstanding dues into equity. As a result, your Company has 25.51%
equity stake in RGPPL with NTPC holding 25.51%, MSEB Holding Company
Limited holdingl3.51% and Indian Financial institutions holding 3547%.
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. GAIL Gas has
been authorized by Petroleum and Natural Gas Regulatory Board (PNGRB)
for implementing City Gas Distribution Projects in Dewas, Kota,
Sonipat, Meerut, Vadodara and Taj Trapezium Zone. In addition, GAIL Gas
is pursuing City Gas Business in the state of Kerala, Andhra Pradesh,
Karnataka, Rajasthan and West Bengal etc. through its joint ventures.
It has won authorization from PNGRB in 4th round of CGD bidding to
develop CGD network for the city of Bengaluru. It has signed MoU with
Bharat Petroleum Corporation Limited for joint participation under 5th
round of CGD bidding and have been authorized by PNGRB for the
implementation of City Gas Distribution in Haridwar District (GA).
Compressed Natural Gas (CNG)
During the year, GAIL Gas augmented its CNG distribution infrastructure
by enhancing the capacity of existing stations and adding new stations
at Sonipat.CNG sales increased to 31 MMSCM in2014-15.
Piped Natural Gas (PNG)
In PNG business, GAIL Gas is supplying PNG to domestic customers
progressively in its authorized cities. Presently, the company is
catering to 8,700 house holds.
GAIL Gas has maintained its focus on the PNG industrial and commercial
segment as one of the potential growth areas. With its concentrated
efforts in the year 2014-15, the total number of commercial and
industrial customers increased to 503 in 2014-15.
GAIL Gas has commissioned the steel networks in the geographical area
(GA) of Sonepat, Dewas, Kota and Meerut. Further, the steel network
augmentation is under progress in the Taj Trapezium Zone (TTZ). For
reaching more charge areas for domestic connections, the steel grid
network and MDPE pipeline network has been extended to 374.21 kms and
586.74 kms respectively in 2014-15 in the cities of Sonepat, Meerut,
Dewas, Kota and Taj Trapeziumzone.
During the year, the sales volume from industrial and commercial
customers grewto526 MMSCM.
- Aavantika Gas Limited (AGL)
I AGL was incorporated to implement CGD Projects in Madhya Pradesh. As
on 31st March 2015, AGL operated 18 CNG stations including 7 daughter
stations, 8 online stations and 3 mother stations.
Further, as on 31st March 2015, AGL supplied PNG to around 2500
Domestic, 32 Commercial and 52 Industrial customers in its authorized
geographical regions. AGL is also catering to the fuel requirement of
around 20,000 CNG vehicles operating in the region. Your Company has a
22.5%stake with HPCL as an equal partner.
- Bhagyanagar Gas Limited (BGL)
BGL was incorporated to implement CGD projects in Andhra Pradesh. As on
31st March 2015, BGL operated 32 CNG stations including 3 daughter
booster stations, 8 online stations and 7 mother stations
Further, as on 31st March 2015, BGL supplied PNG to over 3,100
Households, 46 Commercial & 3 Industrial customers in its authorized
geographical regions. BGL is also catering to the fuel requirement of
around 31,600 CNG vehicles operating in the region. Your Company has a
22.5% stake with HPCL as an equal partner.
- Central U.P. Gas Limited (CUGL)
CUGL was incorporated to implement CGD projects in Uttar Pradesh. As on
31st March 2015, CUGL operated 16 CNG stations including 4 mother
stations, 9 online stations and 3 daughter booster stations.
Further, as on 31st March 2015, CUGL supplied PNG to over 8300
domestic, 119 commercial & 39 Industrial customers in its authorized
geographical regions. CUGL is also catering to the fuel requirement of
around 46,600 CNG vehicles operating in the region. Your Company has a
25% stake with BPCL as an equal partner.
- Green Gas Limited (GGL)
GGL was incorporated to implement CGD projects in Uttar Pradesh. As on
31st March 2015, GGL operated 14 CNG stations including 5 daughter
stations, 5 online stations and 4 mother stations.
Further, as on 31st March 2015, GGL supplied PNG to over 7,800
Domestic, 9 Commercial &4 Industrial customers in its authorized
geographical regions. GGL is also catering to the fuel requirement of
around 33,400 CNG vehicles operating in the region. Your Company has a
22.5% stake 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, 2015, IGL operated 326 CNG stations including68
mother stations,228 online stations and 30 daughter stations.
Further, as on 31st March 2015, IGL supplied PNG to over 5.6 Lac
Domestic, 1,560 Commercial and 717 Industrial customers 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 the fuel requirement of around
7.6 lac CNG vehicles in the Delhi/NC R. Your Company has a 22.5% stake
with BPC L as an equal partner.
- Mahanagar Gas Limited (MGL)
MGL was incorporated to implement CGD projects in Mumbai and its
adjoining areas. As on 31st March 2015, MGL operated 180 CNG stations
including 19 mother stations, 137 onlinestationsand24daughter stations.
Further, as on 31st March 2015, MGL supplied PNG to over 8 Lac
Domestic, 2607 Commercial and 57 Industrial customers in its authorized
geographical region. MGL is also catering to the fuel requirement of
around 4.2 lac CNG vehicles operating in the region. Your Company has
a 35% stake with British Gas as an equal partner.
- Maharashtra Natural Gas Limited (MNGL)
MNGL was incorporated to implement CGD projects in and around Pune. As
on 31st March 2015, MNGL operated 30 CNG stations including 5 mother
stations, 11 online stations and 14 daughter stations.
Further, as on 31st March 2015, MNGL supplied PNG to over 16147
Domestic, 47 Commercial and 97 Industrial customers in its authorized
geographical region. MNGL is also catering to the fuel requirement of
around79,400 CNG vehicles operating in the region. Your Company has a
22.5% stake with BPC L as an equal partner.
- Tripura Natural Gas Company Limited (TNGCL)
TNGCL was incorporated to implement CGD projects in Agartala. As on
31st March 2015, TNGCL operated 5 CNG stations including 3 mother
stations and 2 daughter stations.
Further, as on 31st March 2015, TNGCL supplied PNG to over 18000
Domestic, 294Commercialand47lndustrial customers in its authorized
geographical region. TNGCL is also catering to fuel requirement of
around 6986 CNG vehicles operating in the region. Your Company has
29% stake in the joint venture.
- Vadodara Gas Limited (VGL)
Shareholders approved the transfer of your Company''s CNG stations and
associated pipeline in Vadodara to the proposed joint venture company
of GAIL Gas Limited with Vadodara Municipal Sewa Sadan in the year
Accordingly, VGL was incorporated as joint venture company (JVC) of
GAIL Gas Limited and Vadodara Mahanagar Seva Sadan (VMSS) for the
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. 1st January 2014 in Vadodara.
Consequent upon transfer of assets to VGL, your Company has a 32.93%
stake, GAIL Gas Ltd. Holding 17.07% stake and VMSS holding 50% stake.
VGL operates nine CNG stations in Vadodara and is dispensing more than
65,000 kg/day CNG. The CNG network in the city of Vadodara includes 2
mother stations, 1 on-line station and 6 daughter booster stations as
well asl3km steel pipelines.
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 2,800 commercial in the city through a 750 km long PE
Pipeline Distribution Grid and 07 District Pressure Regulating System.
- Brahmaputra Cracker and Polymer Limited (BCPL) (Subsidiary)
BCPL is setting up a 2,80,000 TPA polymer plants in Dibrugarh, Assam.
The Company is now in the final phase of project execution and has
achieved an overall physical progress of 99.6% and financial progress
of 96 % till the end of the financial year. The commissioning of the
project is expected in the near future.
Your Company has a 70% equity stake in Brahmaputra Cracker and Polymer
Limited (BCPL).with Oil India Limited (OIL), Numaligarh Refinery
Limited (NRL) and the Government of Assam having 10% equity share each.
- ONGC Petro-additions Limited (OPaL)
OPaL is implementing a Greenfield petrochemical complex of 1.4 MMTPA
Polymer capacity at Dahej, Gujarat. Your Company is a co-promoter of
OPaL, having a 15.5% equity stake, with an investment of Rs.994.95
crore. Oil and Natural Gas Corporation Limited (ONGC) and Gujarat
State Petroleum Corporation Limited (G5PC) are the other promoters of
- TAPI Pipeline Company Limited
Your Company is pursuing the Turkmenistan- Afghanistan-Pakistan-India
(TAPI) Pipeline project to receive Natural Gas supply from the
Galkynysh fields of Turkmenistan. The Pipeline Consortium Company
(TPCL) was incorporated on 11th November 2014 in ''Isle of Man'', to
build, own and operate the proposed TAPI Pipeline. Presently it is
formed with equal participation by the four nominated entities (GAIL,
I5G5, AGE, and Turkmengaz) of India, Pakistan, Afghanistan and
Turkmenistan respectively. A Consortium Leader shall be inducted in due
- South-East Asia Gas Pipeline Company Limited (SEAGP)
5EAGP was formed to transport natural gas from A1/A3 blocks in Myanmar
to Myanmar-China border. This pipeline is currently transporting nearly
15 MM5CMD of natural gas. Your Company has a 4.17%equity stake in
LOAN, INVESTMENTS AND CORPORATE GUARANTEE
A statement containing the salient feature of the financial statement
of your Company''s Subsidiaries, Associate Companies and Joint Ventures
as per first proviso of section 129(3) of the Companies Act, 2013 is
included in the consolidated financial statement. Further, details of
Loans and Investments covered under the provisions of Section 186 of
the Companies Act, 2013 forms part of financial statement, a separate
section in the Annual Report FY 2014-15.
Your Company has given corporate guarantees to its subsidiaries only,
for availing loan, as per provisions of sectionl86 of the Companies
Act, 2013, the details of the same are asunder:
- Rs.50434 Crores given to Oil Industrial Development Board on behalf
of Brahmaputra Cracker and Polymer Limited.
- Rs.118 Crores given to Oil Industrial Development Board on behalf of
GAIL Gas Limited.
- USD 114.1 million given to State Bank of India, New York Branch on
behalf of GAIL Global (USA) Inc.
- USD 100 million given to Mizuho Bank Ltd. on behalf of GAIL Global
(Singapore) Pte. Ltd.
Your Company has been very IT-savvy and has always been at the
forefront in leveraging various technologies for transparent, efficient
and effective execution of businesses and underlying operations. With a
young workforce, faster technology curve adoption is but natural to
your Company. Today, your Company''s transactional engagements with
customers, vendors, employees, business associates and partners remain
on electronic platform through various ERP modules.
Some of the initiatives such as e-tendering, e-auction/reverse auction,
e- recruitment. Bill Watch System, e-payments were adopted by your
Company quite some time back thus facilitating transparent dealings
with the stake- holders concerned. By adopting the latest and
state-of-the-art IT solutions,
strives continually for efficiency enhancement of employees and has
enabled access of required information to the right person, using the
latest IT security solutions.
All the three data centres of your Company have been certified for ISO
27001:2013 for Information Security Management Framework (ISMS). This
certification shall provide recognition to your Company data centres as
secured data centres in the industry. The IS027001 ISMS Frame work
ensures highest security levels for information assets available in the
data centres of your Company. The implementation of ISO 27001 based
ISMS framework has also helped in implementing Crisis Management Plan
for countering Cyber Attacks and Cyber Terrorism.
Your Company has implemented centralized Pipeline Integrity Management
System for its cross-country pipeline network to ensure continuous
updation of O&M data and elimination of aging effect on pipelines. Your
Company has also implemented an automated GPS based system for
monitoring of pipe line patrolling.
Your Company has implemented Biometric based Access Control system to
prevent unauthorized access to plant premises and office buildings at
Petrochemical and LPG Plants, Compressor Stations and Pumping Stations.
Your Company is implementing Manufacturing Integration & Intelligence
to integrate plant systems with enterprise application for generating
alarms and root cause analysis along with the latest version of
Environment Health & Safety Management for monitoring various
processes. Your Company is also implementing a mobility solution for
its field engineers to run plant maintenance application on mobile
Your Company is implementing Enterprise Analytics for the Top
Management to provide the latest business metrics or key performance
indicators accessible anytime, anywhere on any device. Your Company is
also upgrading its SAP systems for mitigating any risk and maintaining
readiness for innovation.
MOVING TOWARDS EXCELLENCE
Your Company as a continually improving organization, believes in
raising the bars of performance levels in steps to achieve functional
excellence. With this objective, your Company has taken various in
litiatives during 2014-15.
Your Company has taken an initiative to integrate all departments and
its employees with digital services with an objective to reduce
paperwork. Your Company has been at the forefront of leveraging
information technology for running its business process. With 2020
vision in sight, your Company needed robust processes, structure and
most importantly prompt decision making to act as the key enablers and
As part of e-enablement, your Company is planning to deploy cell phone
application for its pipeline maintenance personnel, so that the
information related to safety, procedures, spares etc. is readily
available even when in the field. Globally, the worlds of IT and
Operational Technology are converging and hence, your Company intends
to improve the overall asset management and safety across the
organization by leveraging these technologies and has initiated
integration of IT with Plant systems, which will deliver enhanced
information for better decisions, reduced costs, lower risks etc.
With the rapid urbanization throughout the country. Integrity
Management of Cross Country Pipelines is not just a maintenance
activity anymore and requires focus on various other elements as they
have direct impact on the integrity Management and your company focus
on multiple requirements of the present day Integrity Management i.e.
Safety, Operations, Maintenance, Environment, Stakeholders, Technology
All the activities executed in your Company are being monitored and
controlled for timely completion. Improvement Audits are being
conducted by team members to identify the lapses / deviations, if any,
for taking corrective actions.
Your Company views suppliers/contractors/consultants as critical
partners in growth. A symbiotic relationship with these key
Stakeholders not only ensures economic gains, higher quality, improved
planning and timeliness of project but also ensures greater long term
support and value. Your Company developed an effective Stakeholder
Management Mechanism wherein regular meetings are held with key
Suppliers/Contractors/Consultants to understand their issues / concerns
and address them appropriately in time- bound manner. Further, your
Company is currently in the process of developing a pre-dispute
resolution mechanism, through which post closure legal
disputes/arbitrations are targeted to be minimized to a large extent.
HEALTH, SAFETY AND ENVIRONMENT
Your Company''s HSE policy is to conduct business with a robust and
integrated Health, Safety and Environment (HSE) Management System
focused on improving harmony with the environment through sustainable
development. Safety and Health of its people is of paramount importance
for your Company and these attributes are embedded in the core
organizational values of your Company. Employees and Contract Workers
in your Company are strongly encouraged to adopt safe working culture
and behaviour to ensure effective implementation of the HSE Policy.
Your Company identifies all the Health, Safety and Environment hazards,
evaluates the associated risks and manages these through effective and
appropriate control programs and deployment of latest technology
Your Company primarily operates in the hydrocarbon sector which is
inherently very hazardous. Your Company regularly identifies the
hazards and evaluates their risk potential in various areas of its
operations. While on the one hand, your Company takes adequate
preventive measures to minimise risks during design, construction,
operations & maintenance activities, on the other hand, your Company
takes measures to mitigate the consequences in case of any undesirable
incident. Your Company employs best-in-class technologies and
supplements safety through a robust HSE Management System. Stringent
SOPs (Standard Operating Procedures), Work Permit Systems, Process
Safety Management, Safety Audits are some key elements of HSE
Management System which are monitored rigorously and regularly, and
reviewed at the highest level in your Company. This year, your Company
reviewed SOPs of all locations and standardised the SOPs through
international experts in safety and process licensors. Your Company
has adopted the practice of observing 10th of every month as Monthly
Safety Day when the Officer-in-charge at all locations devote
half-a-day to review safety issues. Exceptions noted are brought to the
immediate notice of top management.
A massive exercise has been taken up to develop systems, procedures
&S0P for each activity that is taken up on regular basis and which
being vetted by internationally reputed consultants to align with
global best practices. Parallelly, web/online portals have been
developed for various new Application for ease in data access and data
Sustainable Development (SD) Committee of Board of Directors is the
apex body in your Company to review HSE performance and emergency
preparedness and met 3 times during the year.
Your Company has an Emergency Response and Disaster Management Plan
(ERDMP) in place for all of its installations, which has been
accredited by Petroleum and Natural Gas Regulatory Board (PNGRB)
approved third party accreditation agencies and submitted to PNGRB
after approval from your Company''s Board. Your Company has also
prepared a Disaster Management Plan (DMP)as per instruction of the
Ministry to deal with disasters.
Your Company has implemented a Behaviour Based Safety (BBS) Program at
all locations to foster the culture of safety amongst all the
stakeholders. Lead trainers have been developed and various monitoring
committees have been formed at all locations to ensure that the BBS
culture is nurtured on sustainable basis.
Safety audits were carried out in your Company during the year by
various authorities, reputed third parties and in-house safety audit
teams to evaluate implementation of safety systems. Timely compliance
of recommendations of the safety audits are monitored and reviewed at
various levels including by the top management of your Company.
Safety Training and unit specific training through well-structured
modules is imparted to all employees in your Company at the time of
induction as well as transfer to a new location as per job profile. In
addition, periodic refresher training and specialised training related
to specific work area are also provided.
The Safety performance in your Company is measured through HSE Index
which is evaluated on the basis of important HSE Management System
elements. To make the safety performance evaluation more objective, HSE
Index system was reviewed by a senior level committee and has been made
more comprehensive and stringent by including additional elements of
HSE Management System in the evaluation system. The revised parameter,
named the HSE Score has been implemented since September 2014.
Corporate level Occupational Health Committee in your Company met on
quarterly basis during the year to monitor the implementation of
occupational health and hygiene program. Occupational Health Audit of
two process plants at Usar and Gandhar were carried out this year by
members of the corporate occupational health committee. Occupational
Health check- ups of employees and contract workers were carried out in
your Company to assess the occupational health parameters and take
Your Company published its fifth Sustainability Report - ''Fostering
Responsible Growth'' for 2014-15 based on the Global Reporting
Initiative (GRI) Guidelines. Sustainability reporting has helped us in
measuring and monitoring our 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 re-look at our Company''s systems. policies
Taking a step ahead, from measuring to taking concrete actions in the
right direction is also important. Your Company has been among the very
few companies to have set voluntary targets through Sustainability
Aspirations 2020 and transparently disclose it 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.
Since inception, your Company has been guided by the principles of
accountability and transparency. In 2011, your Company formally began
its sustainability journey. Your Company believed that although it was
a few steps behind, taking small yet strategic steps in right direction
was more important. Your Company has a Sustainable Development
Committee comprising the Functional Directors as members to regularly
monitor it sustainability initiatives and performance. Your Company has
strengthened its data management systems to capture credible and
authentic data and information from its various sites.
For the first time, your Company has been acknowledged among CDP''s
India Leaders2014andfeatured in the Climate Disclosure Leadership Index
(CDLI). Your Company is the only Company in Utilities category
featuring in the top 22 India Leaders.
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
asTERI.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 Listing Agreement requirements. Business
Responsibility Report (BRR)2014-15 is contained in a separate section
in the Annual Report. Your Company was placed at 2nd position in the
Environmental Social and Governance (ESG) Score of India Inc. Study
(2014) based on the BRR of 2013- 14 conducted by Sustainable Business
The Vigilance department of your Company is ISO-9001:2008 certified for
having adopted Quality Management System in compliance with the
requirements of ISO. Various e-initiatives and system improvements were
implemented in your Company for effective utilization of systems, which
helps in preventing corruption and ensures all round good governance.
Some of these improvements are:
- Introduction of Percentage Mark-up Model for O&M, ARC and Civil
contracts works tenders.
- Monitoring timely release of retention money of contractors by
Implementing automatic MIS Alert to the respective OICs of all the
- Fraud Prevention Policy hosted on your Company''s website.
- Standardization of procedure for the generation of Minimum Guaranteed
Off take (MGO) invoice through SAP in GAIL Gas Ltd.
- All Vigilance and CVC Circulars uploaded on Intranet portal for
Awareness of employees.
The Vigilance Awareness Week-2014 was observed on the theme Combating
Corruption - Technology as an enabler at the Corporate Office and also
at all work centers of your Company from 27th October to 1st November
2014. It encompassed various activities to spread anti-corruption
drive, brainstorming sessions for interweaving enabling technologies
and applications for creating a transactional backbone. This is a step
towards increasing transparent and efficient decision making and
improving process performance.
A magazine JAGROOK, containing CVC circulars, articles and case
studies on corruption was also published. To evaluate our systems and
procedures, a Customer Interactive Meet was organized. Customers were
also apprised about e - initiatives taken by your Company to make the
system transparent with minimum human intervention. Customers have
shared their experience with your Company, put forward their feedback,
suggestions and grievances. Vendor Interactive meets were organized at
your Company''s petrochemical Plant at Pata.
- Human Capital
Your Company lays strong emphasis on attracting and acquiring best
talent and also on efficient deployment of manpower on right jobs as
per business requirements of the Company. Value Added per Employee
gives an account of efforts of your Company''s emphasis to make the best
and most productive use of the resources and business opportunities
available. For the year under review, value added per employee
was Rs.17373 Lacs.
- Leadership Development Program
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
part of the Leadership Development Program, Senior Management
Development Centre (SMDC) exercise has been undertaken. SMDC has been
conducted for senior executives in Chief Manager and above grades and
as of now around 670 senior executives have been covered under this
exercise. During the year under review, more than 95% of the executives
who got promoted to the level of Chief Manager were covered under the
In order to fill in the developmental gaps of such executives
identified through 5MDC exercise, a comprehensive Individual
Development Plan (IDP) has been drawn up for all the participants of
5MDC 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 employees and the
representation of SCs, STs, OBCs and PWDs amongst them in your Company
as on 31st, March 2015 are given in the table below:
GROUP EMPLOYEES SC ST OBC PWD
ON ROLL (NCL)
A 3081 478 191 557 40
B 576 117 68 100 12
C 551 97 22 165 35
D 52 17 5 14 2
Directors &CVO 6 - - - -
TOTAL 4266 709 286 836 89
During the year under review, total of 314 new employees joined your
Company. The total manpower of your Company as on 31st March 2015 stood
at 4266 (including CMD, Whole-time Directors and CVO) with 16.62% of
Company''s employees belonging to SC category, 6.70% to ST category,
19.60% to OBC (NCL) category, 8% to Minorities and 2.09% to PWDs
category. Your Company''s workforce comprised of 5.98% women
employees as on 31st,March 2015.
- 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 has
been the key focus area for your Company.
The GAIL Training Institute (GTI) is organizing systematic and
structured programs for capability building across all levels within
the organization. In recognition of the initiatives taken by it, GTI
has received the prestigious Golden Peacock National Training Award -
2014. GTI has maintained the track record of excellent MOU performance
in all the parameters in the MoU signed with the administrative
Some of the salient achievements/initiatives for talent development are
- Various certification Training Programme from NACE, ASME, OEMs and
technology licensors for gaining state-of-the-art expertise for its
technical human resources.
- Specialized Training Programme on new business areas in line with
Company''s strategy 2020 such as Shale Gas, Energy Trading Hedging And
Risk Management etc. were organized.
- For executives of the level Chief Manager and above. Individual
Development Plan(IDP) based on the SMDC exercise were executed. The
IDP comprised distribution of competency based books, access to
e-learning modules from Harvard Manage Mentor(HMM) and Customised
Management Development Programmes through MM Bengaluru and Kolkata.
- Customised Management Development Courses from leading management
institutes specifically for executives from HR discipline.
- Mentorship programme established for all new joining executives.
- Training mandays per employee more than 5 for the year under review.
- Healing with nutrition programme organised for employees for Staying
fit &reducing stress.
- Awareness programs on sustainable development organised for Employees
- Knowledge sharing seminar for motivating employees to share best
practices across shall sites.
- For creating knowledge based and competitive environment, in- house
business quizzes and business simulations organized to keep the
employees updated with latest developments in the business areas.
In its pursuit of offering training programs to external organizations
and to convert itself into a revenue generating centre, GTI has
successfully organized training programs for participants from several
organizations like RGPPL, HPCL.BCPL, IGL, MGL, MNGL, GSPL, HMEL etc.
Further, in collaboration with American Society of Mechanical Engineers
(ASME), U.S.A., GTI is successfully running certificate courses in ASME
B31.8 for Various external organizations.
Your Company is also playing an active role in formation of hydrocarbon
skill council to carry forward of skill building in hydrocarbon sector
to support the National Skill Development Mission.
- Official Language
Your Company is continuously endeavouring 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 issued by the Government of India.
Hindi Workshops/Trainings are being organized on regular basis at GTI,
Jaipur and Noida as well as the other work-centres. Hindi Computer
Training sessions are integral part of these programmes. During the
year2014-15, a total of 65 workshops were organized where 865 employees
were given training. All the computers of the Company are equipped with
the Unicode Hindi fonts with transliteration key-board typing facility
With a view to create greater awareness and consciousness among
employees, hindi Fortnight was celebrated from 15-29 September, 2014
across the Company. Every Monday/first working day of the month is
being observed as Hindi Diwas across the Company.
A unique initiative has been taken to implement the special software to
generate Pay Slip, CPF Card, Pension Card, Promotion Order, Transfer
Order, Reliving Order etc. in bi-lingual version from SAP. Your Company
is one of the few PSUs to implement this facility.
As a unique initiative, names of all employees of your Company in
official e-mail IDs are being displayed in hindi also. The terminology
being used across your Company has been standardized and circulated.
The bilingual website of your Company is regularly updated with latest
news and press releases. Intranet of your Company is also available in
Your Company has published an issue of hindi magazine ''Rajbhasha
Sahyog for propagation of hindi among the employees. In order to
cultivate the habit of reading in hindi, motivational and inspirational
books were distributed to the employees of your Company and their
During the year 2014-15, the 1st Sub-Committee of Parliament on
Official Language inspected the Bengaluru and Noida off ices of your
Company to review the progress of Official Language. The Sub-Committee
appreciated the efforts and sincerity of your Company to implement the
Official Language. MoP & NG has also recognized the efforts of your
Company for effective and wide implementation, and propagation of hindi
among Oil PSUs and awarded your Company under Rajbhasha Shield Yojana.
- Sexual Harassment of Women at Workplace
The Company has in place a 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. All concerned persons as per the Act are
covered under this policy.
The following is a summary of sexual harassment complaints received and
disposed off during the year 2014-15:
- No of complaints received: Nil
- No of complaints disposed off: Nil
INNOVATION, RESEARCH AND DEVELOPMENT
Your Company is committed to address the challenges of ever changing
business scenario through innovation. Your Company has made enduring
efforts to encourage innovation and creativity of employees through its
Suggestion Scheme. The Suggestion Scheme helps to promote organization-
wide idea generation for incremental innovation. All employees of your
Company are motivated to suggest improvements in their respective areas
of work. The suggestions are evaluated in a timely manner for
implementation and the best suggestion is awarded with the CMD trophy.
Your Company is also the co-ordinator for mid-stream sector of Oil &
Gas industry for promoting industry-wide innovation in the sector.
Innovation workshops were held as part of this initiative where the
Best and innovative practices adopted by various departments are shared
for due recognition and further propagation.
Your Company has set-up a Pilot Land Fill Gas (LFG) Project at Ghazipur
in Delhi to reduce the GHG emissions. A further initiative is being
taken-up to utilize the low quality LFG to produce power. A 30 KW micro
turbine based power plant is being installed to generate power with LFG
after its partial upgradation. The successful fruition of this
endeavour shall demonstrate the use of LFG as a source of renewable
energy. This also demonstrates the commitment of your Company towards
sustainable utilization of waste energy and reduction of its carbon
Your Company is aggressively pursuing many R&D projects in its
identified thrust areas with a focus on developing high-impact
innovative technologies to conduct the existing businesses in a more
optimal and sustainable manner. Your Company has a judicious mix of
various basic, applied and 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 Underground Coal Gasification,
Fuel Cells, Hydrogen and Gas Hydrates. These R&D projects are being
pursued in association with reputed research organizations /
institutes. Your Company has also implemented many developmental
projects to improve efficiency of existing operations and to conserve
the Environment by utilizing better technologies.
TOTAL QUALITY MANAGEMENT
Your Company continues to focus on continual and sustainable
improvement in the process, system and functional areas. Customer
satisfaction is the top priority of your Company and is being
continuously monitored through regular interactions. Major achievements
of your Company in TQM are as under:-
- Customer Satisfaction Index achieved during 2014-15 is 8g.72%.
- 105 Nos. of quality circle projects were undertaken by your Company
during FY 2014-15 at various work centres resulting in tangible
benefits of Rs.278.65 lakhs in addition to the recurring intangible
- Gas Processing Unit, Vaghodia of your Company has been recommended
for certification of Energy Management System (EMS) 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 the said
policy, the total eligible value of annual procurement of goods
produced and services rendered by MSEs (including MSEs owned by SC/ST
entrepreneurs) during the year 2014-15 is about Rs.138 crore of which
the total procurement made from MSEs (including SC/ST entrepreneurs)
directly or indirectly isRs.26 crore which is approximately 9% of
A Memorandum of Understanding (MoU) is signed every year between your
Company and its administrative ministry i.e. MoP&NG, to enhance the
performance level of the Company through the targets set therein. The
MoU for the year 2014-15 was signed between the Chairman & Managing
Director and the Secretary (P&NG), Government of India on215t
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 etc. Significant thrust has also been
given on Corporate Social Responsibility, Research & Development
Projects and Human Resource Management.
Your Company has been consistently achieving excellent MoLI rating
since the inception of MoLI system i.e. from 1989-90 to 2013-14. In
spite of the economic slowdown and relatively unfavourable business
environment compared to preceding years, your Company achieved MoLI
composite score of 1.288for theyear2013-14 which is considered as
Excellent MoLI rating.
In the financial year 2014-15, there is a gap between MoLI targets and
actual achievement primarily due to fall in domestic gas availability,
decrease in Spot/ RLNG prices, decrease in petrochemical and LHC prices
and sharp decline in crude oil prices. The final evaluated MoLI score
and rating for FY 2014-15is expected to be announced in December2015.
The MoLI for the year 2015-16 was signed between the Chairman &
Managing Director and the Secretary (P&NG), Government of India on
31st, March, 2015.
- Your Company featured amongst India''s 100 Best Companies to Work For
2014 Study conducted by Great Place to Work Institute for the third
- Sustainability Report for FY 2013-14, received the coveted ''A
Application Level'' statement by international organization Global
- Company of the Year'' in the Project Management category for its
Dabhol- Bengaluru natural gas pipeline project at the Petroleum
Federation of India (PetroFed) Oil & Gas Industry Awards 2013
- International Safety Award - 2014 from the British Safety Council, UK
to GAIL Pata and GAIL NCR.
- International Safety Award-2015 by the British Safety Council, UK to
HVJ Compressor Station, Vijaipur.
- Suraksha Puraskar (Bronze Trophy)-2013by the National Safety Council
of India, Mumbai to LPG Recovery Plant, Vijaipur.
- Prashansa Patra (Certificate) Safety Award-2013by the National
Safety Council of India, Mumbai to HVJ Compressor Station, Vijaipur
- Shreshtha Suraksha Puraskar (Second Level-Silver trophy) for year
2014 from the National Safety Council, Mumbai to GPU, Vijaipur.
- Suraksha Puraskar (Third level - Bronze trophy) for year 2014 from
National Safety Council. Mumbai to HVJ Compressor Station, Vijaipur.
- Golden Peacock Environment Management Award 2014 by the Institute of
Directors, New Delhi to GAIL, Vijaipur.
- Golden Peacock Occupational Health & Safety Award 2014 by the
Institute of Directors, New Delhi to GAIL NCR.
- Safety Innovation Award-2014 by the Institution of Engineers (India),
Delhi State Centre to Maharashtra region pipe line system.
- National Safety AwardfromDGFASLIforyear2012to GAIL Pata.
- NSC Safety Award-2013 as Sarvashreshta from NSC MP-Chapter to GAIL
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.
MANAGEMENT DISCUSSION AND ANALYSIS
The detailed Management 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 its stakeholders. Pursuant to the revised clause 49 of the
Listing Agreement with the Stock Exchanges 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 remuneration etc. and other matters, details
of establishment of whistle blower mechanism etc. forming part of
report on Corporate Governance.
There is 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 revised
clause 49 of the Listing Agreement and DPE guidelines on Corporate
Governance. The certificate forms 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 S.K. Mittal & Co, Chartered Accountants,
New Delhi appointed as Joint Statutory Auditors of your
Review and Comments of CAG on the Company''s Financial Statement for the
financial year ending 31st March, 2015 by CAG, if any, forms part of
Financial Statement. Notes on Financial Statement referred to in the
Auditors'' Report are self-explanatory and, therefore, does not call for
any Further comment.
- Cost Auditors
Your Company has appointed M/s Rohit & Associates for Pondicherry
Rajamundry & Bangalore unit(s); M/s R Nanabhoy & Co. for Hazira,
Vaghodia, Vadodra, Jhabua, Khera, Vijaipur, Auraiya, Agra, Kailaras,
Chiansa & Noida (NCR) unit(s); M/s M Goyal & Co. for Mumbai & Vadodra
unit(s); M/s Dhananjay V Joshi& Associates for VSPL& J LPLunit(s) and
M/s DGM & Associates for Agartala & Lakwa unit(s) as cost auditors for
FY2014-15.M/s Chandra Wadhwa & Co. is the lead cost auditor.
The due date for filing Cost Audit Reports for the financial year ended
31st March, 2014 was 27th September, 2014 and the same were filed to
Registrar of Companies on 26th September,2014.
- 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 5. & Associates as secretarial
auditors for 2014-15. Secretarial Audit Report confirming compliance by
Practicing Company Secretary to the applicable provisions of the
Companies Act, 2013, Listing Agreement and other applicable laws, forms
Part of this Report at Annexure-D.
The observations made by secretarial auditor in his Audit report are
i. Proviso to Sectionl49(l) read with Rule3 of the Companies
(Appointment and Qualification of Directors) Rules,2014 i.e.
Appointment of at least one woman Director.
ii. Section 149(4) of Companies Act, 2013, Clause 49(II)(A) of the
Listing Agreement and Clause 3.1.4 of the Guidelines on Corporate
Governance for Central Public Sector Enterprises i.e. Optimum
Combination of Executive and non-Executive Directors.
iii. Sections 135(1), 177(2) and Section 178(1) of the Companies Act,
2013 and Rule 6 of the Companies (Meetings of Board and its Powers)
Rules, 2014, regarding composition of CSR Committee, Audit Committee
and Nomination and Remuneration Committee.
iv. Section 149(8) read with Schedule IV (VIII) and Section 178(2) of
Companies Act, 2013, w.r.t. performance evaluation of Independent
Explanation on observations made by secretarial auditor in seriatim are
a) As on 31st March, 2015, your Company''s Board comprised of five
whole-time Directors including CMD and one Government Nominee Director.
GAIL does not have any woman Director. The term of Independent
Director(s) on your Company''s Board including woman Director expired on
28th February, 2015. Subsequently with the appointment of a woman
Director, Smt. Anuradha Sharma Chagti as Government Nominee Director by
MoPNG on the Board w.e.f. 21st May, 2015the requirements of
Sectionl49(l) has been fulfilled.
b) Your Company is a Government Company, appointment/nomination of all
the Directors is being done by the President of India, through the
Ministry of Petroleum & Natural Gas (MoP & NG). Your Company is
continuously pursuing with MoP & NG for appointment of requisite number
of Independent Directors on the Board of the Company.
c) Your Company was in compliance of composition of CSR Committee,
Audit Committee and Nomination and Remuneration Committee till
28.02.2015. However, after cessation of Independent Directors w.e.f.
28.02.2015, the Company was not in compliance with the aforementioned
provisions of the Companies Act, 2013, as stated at b) above.
d) 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
The Compliance to observations of the secretarial auditor ats. no. ii)
and iii) as stated above shall be met once the requisite numbers of
Independent Directors are appointed by Government of India on your
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
Corporate Social Responsibility (CSR) an integral part of its ethos and
culture. Annual Report on CSR activities as required under Rule 8 of
the Companies (Corporate Social Responsibility Policy) Rules, 2014 read
with sectionl34(3)andl35(2)of the Companies Act, 2013 is placed at
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION
Details of conservation of energy and technology absorption in
accordance with section 134(3) of the Companies Act, 2013 read with
Companies (Accounts) Rules,2014 forms a part of this report at
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
As per requirement of 134 (3) of the Companies Act, 2013 read with Rule
8 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 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 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 not issued equity shares with differential rights as
to dividend, voting or other wise and issue of shares (including sweat
equity shares) to employees of the Company under any scheme.
Your Company has not accepted any fixed deposits and, as such. no
amount of principal or interest was outstanding as of the Balance Sheet
FOREIGN EXCHANGE EARNINGS AND OUTGO
During the year, foreign exchange earnings were Rs.64449 Crores and
foreign currency outgo was Rs.8088.49 Crores.
During the year under review, there was an outgo of Rs.2.20 Crores on
foreign Tours and training.
KEY MANAGERIAL PERSONNEL AND DIRECTORS
During the year, the following ceased to be Key Managerial Personnel on
the Board of your Company:
- Shri S. Venkatraman, Director (BD) w.e.f. 30th September, 2014 upon
at training the age of superannuation.
- Shri P.K.Jain, Director (Finance) w.e.f. 30th April, 2015 upon at
training the age Of superannuation.
During the year, the following ceased to be Directors on the Board of
- Shri RK. Singh, Government Nominee Director w.e.f. 26th September,
2014 upon ceasing to official of MoPNG.
- Shri Rajive Kumar, Government Nominee Director w.e.f.15th December,
2014 upon ceasing to of facial of MoPNG.
- Smt. Shyamala Gopinath and Dr. A.K. Khandelwal, Independent
Director(s) w.e.f.28th February,2015 consequent upon completion of
tenure for 3years.
The Board placed on record its deep appreciation for the valuable
services rendered by outgoing Directors during their association with
Shri Ashutosh Jindal was appointed as Part-time Director (Government
Nominee) on the Board of your Company w.e.f. 24th February 2015. Shri
Subir Purkayastha was appointed as Director (Finance) and Chief
Financial Officer by the Board of your Company w.e.f. 1st May, 2015.
Smt. Anuradha Sharma Chagti was appointed as Government Nominee
Director by the Board of your Company w.e.f.215,May,2015.
The tenure of Shri Prabhat Singh as Director (Marketing) was extended
for a period of beyond 24.02.2015 till 30.11.2016 i.e. the date of his
superannuation, or until further orders, whichever is earlier by
Government of India.
Further, Shri M. Ravindran, Director (HR) and Dr. Ashutosh Karnatak,
Director (Projects) are retiring by rotation and being eligible have
offered themselves for re-appointment.
None of the Director is in receipt of any commission from any
subsidiary Company of your Company.
As per provisions of sectionl34(3)(p) of the Companies Act,2013 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
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 clause 49 of Listing Agreement,
evaluation criteria for the Board is being formulated.
CODE OF CONDUCT
Pursuant to the requirements of clause 49 of Listing Agreement, the
Board Members and Senior Management Personnel, have affirmed compliance
with the Code of Conduct for the financial year ending315,March,2015.
DIRECTORS RESPONSIBILITY STATEMENT
Yours Directors confirmed that:
i) In the preparation of the annual accounts for the financial year
ending 315t March, 2015, the applicable accounting standards have been
followed, Along with proper explanation relating to material
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 ending315t
March, 2015 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 continuance guidance and
support by the Government of India, especially the Ministry of
Petroleum and Natural Gas, various state governments, and regulatory
and statutory authorities.
Your Directors acknowledge the wise counsel received from Statutory
Auditors, Secretarial Auditor and CAG 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 their deep
sense of appreciation for the committed services by the Company''s
executives, staff and workers.
Your Directors and employees look forward to the future with confidence
and stand committed to create a prosperous future for all stakeholders.
For and on behalf of the Board
Chairman & Managing Director
Place: New Delhi
Dated: 5th August, 2015