DEAR SHAREHOLDERS,
The behalf of the Board of Directors of your Company, we are delighted to present the 33rd Annual Report of your Maharatna Company, along with Audited Financial Statements for the financial year 2016-17.
PARTNER IN INDIA’S GROWTH - NATURAL GAS LEADER
You will be glad to know that your Company, GAIL (India) Limited is today counted amongst the top Natural Gas (NG) companies in the world. It marks its presence in the entire gas value chain from exploration, processing of gas for value-added products such as LPG, Propane, Pentane, Naphtha, Marketing and Transmission as well as Petrochemicals.
Your Company has an extensive Pipeline network consisting of above 11,000 kms of NG pipeline and above 2000 kms of LPG pipeline. Besides, it has followed business opportunities beyond geographical frontiers to establish its presence globally. Your Company has an office in the USA for shale gas, LNG operations trading office in Singapore and City Gas Distribution (CGD) joint ventures (JVs) in Egypt and China to promote the use of natural gas. Further your Company is also sourcing gas through international Sale Purchase Agreement (SPAs).
Your Company’s environmental friendly business plays a vital role in the social and economic development of the country and makes substantial contribution towards its energy security.
Urja Ganga: Government of India (GoI) has entrusted your Company the task to execute the 2600 km long Jagdishpur Haldia & Bokaro-Dhamra Pipeline project connecting the eastern states of the country to the National Gas Grid. Five states, namely Uttar Pradesh, Bihar, Jharkhand, Odisha and West Bengal will benefit from gaining access to natural gas on affordable and equitable basis. Once completed, the project will help to revive fertilizer plants & CGD project activities in these states, thus giving momentum to their socioeconomic growth. Your Company has also been authorized with the task to develop the CGD infrastructure of seven cities namely Varanasi, Patna, Ranchi, Bhubaneswar, Cuttack, Jamshedpur and Kolkata to access to cleaner fuel i.e., natural gas as Piped Natural Gas (PNG) for household purposes and Compressed Natural Gas (CNG) for fuelling vehicles and transforming the quality of life.
FINANCIAL HIGHLIGHTS
Ministry of Corporate Affairs (MCA) vide notification dated 16 February 2015 notified the Companies (Indian Accounting Standards) Rules, 2015 laying down the roadmap for application of IFRS converged standards IND AS to Indian companies other than banking companies, insurance companies and nonbanking finance companies (NBFCs). As per the notification, all listed companies having net worth of Rs.500 crore or more shall mandatorily transit from 1st April 2016.
Your Company is covered under IND AS w.e.f 1st April 2016. In compliance to Companies (Indian Accounting Standards) Rules, 2015, your Company has prepared its financial statements for FY 2016-17 with comparative figures for FY 2015-16. The Company has adjusted the impact of transition from Indian General Acceptable Accounting Principal to IND AS in the opening reserve of 1st April 2015 and in the Statement of Profit & Loss for FY 2015-16. Further as per the provision of IND AS, the holding, subsidiaries, joint ventures, or associate companies of your Company need to also transit towards IND AS w.e.f. 1st April 2016.
The important financial highlights for the year 2016-17 are as under:
Particulars
|
2016-17
|
2015-16*
|
US $ Million
|
(Rs. in Crores)
|
US $ Million
|
(Rs. in Crores)
|
Gross sales
|
7,457
|
48,789
|
7,773
|
52,003
|
Other income (including other operating income)
|
194
|
1,271
|
162
|
1,084
|
Cost of sales (excluding interest and depreciation including extraordinary items)
|
6,491
|
42,474
|
7,162
|
47,915
|
Net Exceptional Items (Profit on Sale of Investments & Impairment of Assets)
|
(46)
|
(299)
|
-
|
-
|
Gross margin
|
1,114
|
7,287
|
773
|
5,172
|
Finance Cost
|
73
|
479
|
120
|
800
|
Depreciation
|
213
|
1,397
|
196
|
1,310
|
Profit Before Tax (PBT)
|
827
|
5,411
|
457
|
3,062
|
Provision for tax
|
292
|
1,908
|
125
|
836
|
Profit After Tax (PAT)
|
535
|
3,503
|
333
|
2,226
|
Appropriations
|
-
|
|
-
|
|
Final Dividend
|
58
|
381
|
57
|
381
|
Interim Dividend
|
165
|
1,078
|
47
|
317
|
Corporate Dividend Tax
|
45
|
295
|
21
|
142
|
Net transfer to/from Bond Redemption Reserve
|
15
|
98
|
5
|
35
|
Transfer to CSR Reserve
|
-
|
-
|
(0)
|
(1)
|
Transfer to General Reserve
|
54
|
350
|
34
|
230
|
Net surplus after Appropriations
|
199
|
1,301
|
168
|
1,122
|
1 US $ in INR converted at the exchange rate as on 31st March of the respective financial year
|
65.43
|
|
66.9
|
|
*IND-AS has been implemented in FY 2016-17, financial figures for FY 2015-16 reinstated as per IND-AS
DISINVESTMENT BY PRESIDENT OF INDIA
The government of India disinvested 1,53,15,380 shares on January 01, 2017 through CPSE ETF-II. After disinvestment, the President of India shareholding is 69,63,80,452 equity shares, representing 54.90% of paid-up share capital of GAIL.
Again GoI disinvested 78,55,657 shares during March, 2017 through CPSE ETF-III post-bonus allotment of shares. After disinvestment, the President of India shareholding as on date is 92,06,51,612 equity shares, representing 54.43% 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.15,120 Crores to its shareholders including Rs.9,120 Crores as dividend to the GoI.
The Board of Directors of your Company had earlier approved payment of an interim dividend @ 85% on equity share of Rs.10 each (Rs.8.50 per equity share) amounting to Rs.1078 crores on then paid-up equity share capital of the Company (Rs.1268.48 Crores), which was paid in February, 2017. Further, the Board has recommended payment of final dividend @ 27% on equity share of Rs.10 each (Rs.2.70 per equity share on expanded equity post issue of Bonus shares i.e. Rs.1691.30 Crores) for the FY 2016-17 amounting to Rs.457 Crores.
With this, the total dividend payment for the fiscal year 2016-17 shall be Rs.1,535 Crores on a paid-up equity capital of Rs.1691.30 Crores which is 43.81% of PAT and equals to 5% of opening net worth of Rs.30,699 Crores as per the Companies Act, 2013 and in compliance of Department of Investment & Public Asset Management (DIPAM) guidelines. In addition to the payment of dividend to the shareholders, your Company paid dividend distribution tax of Rs.295 Crores.
Capital expenditure to the tune of Rs.17,000 crore (net of capital subsidy) is planned for spending by your Company in next 2-3 years mainly on Pipelines (Urja Ganga Pipeline and others), CGDs and other business expansions through JV route etc. Accordingly, the company requires to plough back from the profits / internal resources to partly fund capex.
CONTRIBUTION TO EXCHEQUER
Your Company has contributed over Rs.5,909 crores in 2016-17 to the exchequer through dividend, duties, taxes and others, as compared to Rs.4,929 crores in 2015-16.
CREDIT RATING
- Domestic Rating
Your Company has been reaffirmed the highest domestic credit rating of AAA from ICRA, CARE and CRISIL and India Rating. This signifies highest credit rating in India, hence, carries lower credit risk of the Company.
- International Rating
The International rating agency, Moody’s International, Singapore, has also reaffirmed the corporate issuer rating of Baa3 with a positive outlook, which is equal to the sovereign rating of India. Further, Fitch Ratings has also assigned a long-term foreign currency issuer default rating of BBB- with a stable outlook, which is also equal to the sovereign rating of India. The international rating agencies, Moody’s and FITCH have rated your Company at par with India’s international rating. The agencies have indicated that your Company’s rating may be upgraded once sovereign rating of India improves.
BUSINESS STRATEGY
Your Company is aligned to the path of growth levers as identified in the master strategy envisioned for the decade spanning upto 2020. Although the strategy undergoes periodic reviews with requisite course corrections, GAIL has been progressing in expanding its foot-prints along the natural gas value chain very scrupulously.
- National Gas Grid
Your Company has been actively engaged in developing the natural gas pipeline network and working towards development of a National Gas Grid structure as a backbone for expanding the infrastructure reach across the country. Government of India is focused to accelerate the grid development for ushering maturity in the domestic gas market. In this endeavor your Company is working on multiple pipeline to its network of over 11,000 kms. Over 60% of the network addition is expected to be achieved from the Jagadishpur-Haldia-Bokaro-Dhamra Pipeline (JHBDPL) at an estimated project cost of Rs.12,940 crores. Project work is under progress as per phase-wise schedule. GoI has already approved 40% capital grant for this project and the first installment of the grant of Rs.450 crore was disbursed during FY 2016-17. Your Company is also working to execute the Vijaipur-Auraiya-Phulpur pipeline (VAPPL) of 672 Km to ensure feed gas supply to JHBDPL. Further, Kochi-Koottanad-Mangalore-Bangalore pipeline (KKMBPL) project of 873 Km is also under execution. With these projects, your Company shall further strengthen its leadership position in natural gas transmission segment.
- LNG Marketing
Gas consumption of the country for the year 2016-17 was around 139 MMSCMD with contribution from domestic producers about 68 MMSCMD. For the first time in India’s energy consumption, the last fiscal year holds significance as natural gas sales from domestic and imported sources was in equal proportion. Your Company, had a sales mix of domestic gas and RLNG in 60:40 ratio. GAIL as a leading player of the commodity holds a market share of about 60% in India.
Your Company tied-up significant LNG from international sources and 5.8 MMTPA of the volumes are expected to commence from Calender Year (CY) 2018 from Sabine Pass Liquefaction and Dominion Cove Point at USA. Over the last few quarters, your Company has concluded various deals towards de-risking the portfolio significantly and also executed swap structures to ensure competitive delivery based pricing at Indian terminals. Residual volumes too are expected to be tied-up based on the encouraging response received from the domestic and overseas market participants. Your Company’s subsidiary, GAIL Global Singapore Pte. Limited, is also pursuing LNG trading activities in international markets.
Your Company executed a non-binding tolling Term Sheet with Dhamra LNG Terminal Private Limited (DLTPL) for booking of 1.5 MMTPA regas capacity at the proposed LNG Terminal at Dhamra, Odisha. Further, your Company is also exploring the possibility of taking equity in DLTPL.
Your Company is in the process of tying up charter hiring LNG ships and also working on logistics optimization models to ensure efficient haulage of LNG from various sources especially USA.
- City Gas Distribution
In order to provide clean fuel for domestic, vehicular and commercial use and to facilitate development of smart cities, your Company plans to expand its city gas distribution network. GAIL Gas Limited, your Company’s wholly owned subsidiary, is implementing CGD projects in the cities of Kota, Dewas, Meerut, Sonepat, Bengaluru & Taj Trapezium and through its JVs in Haridwar, North Goa & Vadodara. Further, as a part of the Urja Ganga Project (Jagdishpur Haldia Bokaro Dhamra pipeline Project), your Company shall on its own or through its subsidiary also implement CGD in six new cities in eastern India. CGD in Kolkata shall be operated through our JV. Your company through its Subsidiary and JV companies over 63% of the CNG stations and 50% share of the domestic PNG connections.
- Petrochemicals
Your Company has a marketing portfolio of polyethylene and polypropylene products over 1 Million Tonnes per annum from the unit 810 KTA unit at Pata and 280 KTA plant operated by the subsidiary, Brahmaputra Cracker & Polymer Limited (BCPL). Your Company and its subsidiary have a combined production share of 25% of the High Density and Liner Low Density polyethylene market in the country.
Further, your company’s petrochemical joint venture namely ONGC Petro-Additions at Dahej was also commissioned during the year.
- Human Resource Development
Your Company realizes the criticality of aligning human resource development initiatives with strategic objectives to achieve organizational goals. Significant steps towards skill development and capability build-up, talent acquisition, development and retention strategies are continuously undertaken for being an employer of choice.
BUSINESS PERFORMANCE
During the year under review, the segment wise business performance of your Company is as under:
- Natural Gas Marketing
Natural gas trading constitutes 70% of the business turnover and continues to be your Company’s core business. During FY 2016-17, gas sales clocked 81.21 MMSCMD, compared to 73.67 MMSCMD in the previous financial year. Domestic gas availability remained stagnant at 48.5 MMSCMD while LongTerm imported volumes witnessed increased consumption vis-a-vis the previous financial year. Consumption of gas by CGD sector at 20 MMSCMD emerged to be the fastest growing segment.
- Transmission 0 Natural Gas
Your Company owns and operates a network of about 11000 kms of natural gas high pressure trunk pipeline with a pan-India capacity to handle volumes of around 206 MMSCMD. The average gas transmission during the year 2016-17 was 100.38 MMSCMD, compared to 92.09 MMSCMD in the previous financial year. The share of third party transmission was 22.18 MMSCMD.
- Fertilizer Sector
During FY 2016-17, your Company achieved total sales of Natural Gas (Domestic RLNG) in the Fertilizer Sector of 25.74 MMSCMD (including 12.09 MMSCMD of Domestic Gas). Your Company is in discussion with upcoming/ revived fertilizer units for supply of gas and it is expected that agreement for supplying gas shall be firmed up during CY 2017.
- Power Sector
During FY 2016-17, your Company achieved total sales of Natural Gas (Domestic RLNG) in the Power Sector of 23.81 MMSCMD (including 19 MMSCMD of Domestic gas). The PSDF Scheme of Ministry of Power for the gas based power sector continued during FY 16-17 and your Company as Pool Operator supplied around 4.0 MMSCMD of incremental RLNG to gas based power plants which is included in the total sales to the Power Sector. The Scheme discontinued on 31st March 2017 and your Company continues to explore opportunities for supply of natural gas to gas based power generation units at affordable prices.
- LPG
Your Company is unique in India to own and operate 2038 Kms of exclusive pipelines for LPG transmission for third-party usage across two major networks. Jamnager-Loni and the Vizag-Secunderabad pipeline networks achieved a throughput of 3.36 MMTPA during the year against 2.82 MMTPA in the previous fiscal year.
- Petrochemicals
The overall production of polymers in 2016-17 was 6.04 lakh MT while your Company marketed 5.77 lakh MT during this period. The total polymers marketed including polymer produced by your Company’s subsidiary, Brahmaputra Cracker & Polymer Limited (BCPL) stood at 6.65 lakh MT, which represents almost a 100% increase over FY 2015-16.
- LPG and Other Liquid Hydrocarbon Production
Your Company has LPG plants at five locations in the country having a production capacity of 1.3 million MT. In 2016-17, total liquid hydrocarbon production was about 1.11 Million MT, of which over 80% constitutes LPG and Propane.
- Exploration and Production (E&P)
As a result of continued portfolio optimization, your Company now has participating interest in 12 E&P blocks of which 10 blocks are in India and the remaining two blocks in Myanmar. Out of these, your Company is Operator in one onland block namely CB-ONN-2010/11 in Cambay basin awarded during the NELP-IX bidding round. Drilling activities continued in four (out of five) blocks. Hydrocarbon discoveries have been notified to the government in two blocks namely GK-OSN-2010/1 and CB-ONN-2010/8. Survey activities are in progress in the remaining NELP-IX block AA-ONN-2010/2.
The E&P business has continued to be revenue self-sustainable for the third consecutive year due to earnings from four blocks (two blocks each in Myanmar and Cambay basin). Your company earned revenues to the tune of Rs.615.28 crores from these blocks during the year.
INITIATIVES FOR FUTURE GROWTH 0 Petrochemicals
In order to establish your Company as a significant petrochemical player, especially in Asia, focus was given to develop export capability. GAIL exported 14,000 MT of polymers as a step in this direction. Your Company targets to continue exports based on opportunities in the region.
Your Company along with Hindustan Petroleum Corporation Limited (HPCL) is carrying out various studies for setting up a Greenfield Naphtha/ Ethane-based petrochemical complex in Andhra Pradesh.
- LNG Regasification Terminals
Your Company is evaluating various opportunities for setting-up/booking LNG Regasification capacity in the country. It has signed a non-binding Tolling Term Sheet with Dhamra LNG Terminal Private Limited (DLTPL) for booking of 1.5 MMTPA capacity in the proposed Dhamra LNG Terminal. This is over and above the capacity already booked at Dabhol and Dahej of 6.5 MMTPA.
- LNG Shipping
Currently, your Company is in the process of charter hiring of ocean carriers for evacuating FOB contracted LNG volumes from east coast of USA. Company has engaged the services of Shipping Corporation of India in this regard. Number of ships for hire shall be fixed based on the residual volume to be brought directly to India from USA after considering international sales and swap transactions.
- Natural Gas Pipeline Projects
During the financial year, your Company completed 14 pipeline projects including Last mile connectivity of approximately 437 kms, to harness the commercial utilization of various pipeline networks in the states of Karnataka, Gujarat, Goa, Haryana, Rajasthan, Maharashtra and Punjab. The pipeline revamp projects in KG and Cauvery Basin are completed over 90% and over 80% in Gujarat and are targeted for completion during the current year.
- Non-Conventional Energy
Your Company is committed to reduce the carbon emission and implement renewable energy projects. Your Company has a total installed capacity of 118 MW of Wind Energy Generation Projects (WEG) and has recorded 43% growth in the revenue from wind energy.
As part of its commitment towards sustainable development, your Company is also installing a 5.76 MW grid connected roof top solar power plant at its petrochemical complex at Pata, U.P. The power generated shall be consumed within the petrochemical complex and substitute the power drawn from the grid to generate significant cost reduction and also carbon footprint of GAIL.
- Coal Gasification
Your Company is also entering into coal gasification by setting up surface coal gasification based urea project at Talcher. The project, with an estimated cost of Rs.8000 crores is envisaged for the production of 2200 MTPD ammonia and 3850 MTPD urea. A joint venture company Talcher Fertilizers Limited was formed with consortium partners namely GAIL, Coal India Limited (CIL), Rashtriya Chemicals and Fertilizers (RCF) and Fertilizer Corporation of India Limited (FCIL). Pre-project activities are on full swing with M/s Shell being selected the Licensor. Approvals from CCEA /GoI are targeted to be completed to lay foundation for starting the project activities during the current fiscal year.
RELATED PARTIES - SUBSIDIARIES/ ASSOCIATES/ JOINT VENTURES
Your Company has formed subsidiaries/ associates/ joint venture companies for CGD, petrochemicals, LNG, gas trading, power generation and shale gas. It has played pioneering role in introducing city gas projects for natural gas supplies to households, commercial, industrial and transport sectors through its subsidiary and joint venture companies. Contracts or arrangements/ transactions with related parties were on arm’s length basis and in ordinary course of business.
Your Company’s subsidiaries/ associates/ joint venture companies contributed significantly to its business expansion activities. A statement containing the salient feature of the financial statements of your Company’s Subsidiaries, Associate Companies and Joint Ventures as per first proviso of section 129(3) of the Companies Act, 2013 including details of individual contribution of all subsidiaries, associates and joint venture companies towards the overall performance of the Company during the period is given under Consolidated Financial Statements.
The details of subsidiaries/ associates/ joint venture companies operations are provided as:
NATURAL GAS, LNG AND POWER
- GAIL Global (Singapore) Pte. Limited (wholly owned subsidiary)
GAIL Global (Singapore) Pte. Ltd. (GGSPL), primarily started as an overseas investment arm of your Company and was operationalized for LNG trading in 2012. It commenced its business operations in May 2012. GGSPL is now actively involved in business activities in the area of LNG Trading. Until March 31, 2017, GGSPL has traded 54 LNG cargoes so far out of which 23 were traded during the financial year 2016-17.The turnover for 2016-17 was USD 494 million.
GGSPL has also been mandated by your Company to market part of the Henry Hub linked LNG volume sourced from the USA, in the international market. It is making its best efforts to market such volumes in the international market. The supplies against the said volumes are expected to start from the year 2018.
- GAIL Global (USA) Inc (wholly owned subsidiary)
GAIL Global (USA) Inc.(GGUI), was incorporated as a wholly owned subsidiary of GAIL to undertake investment in the Eagle Ford shale gas asset with the objective to enter into the US shale gas market and bring shale gas technology to India. GGUI executed a definitive agreement with M/s Carrizo Oil & Gas Inc., USA (Carrizo) on September, 2011, to enter into an unincorporated JV in the Eagle Ford Shale asset inTexas. The subsidiary acquired a 20% participating interest in this JV. Carrizo, with the remaining 80% participating interest, functions as the operator of the JV.
During the year, seven wells came online, taking the total number of online wells to 106 as on December 31, 2016. The gross production volume of GGUI during calendar year 2016 was 669 million barrel of oil equivalent (Mboe).
- GAIL Global (USA) LNG LLC (wholly owned subsidiary of GGUI)
GAIL Global (USA) LNG LLC (GGULL) signed a contract with Dominion Cove Point LNG, LP (DCP) to book LNG tolling capacity of 2.3 MMTPA in its Cove Point terminal. It also signed Gas Sales & Purchase Agreement (GSPA) with WGL Midstream, Inc. for sourcing gas for liquefaction at the terminal. The construction activities at the terminal are on track and it is expected to be in service by December 2017.
- GAIL China Gas Global Energy Holdings Limited
GAIL China Gas Global Energy Holdings Limited was formed with an objective to pursue gas sector opportunities, primarily in China. Your Company has a 50% equity stake with China Gas Holdings Limited as an equal partner.
- Petronet LNG Limited (PLL)
PLL was formed in 1998 to set up LNG import and re-gasification facilities in India. It currently owns and operates a 15 MMTPA capacity LNG re-gasification terminal at Dahej, Gujarat. The capacity is being expanded to 17.50 MMTPA. PLL has also setup an LNG regasification terminal at Kochi, Kerala with a name plate capacity of 5 MMTPA.
Your Company has 12.5% equity stake in PLL along with Bharat Petroleum Corporation Ltd. (BPCL), Oil and Natural Gas Corporation (ONGC) and Indian Oil Corporation Limited (IOCL) as equal partners.
- Ratnagiri Gas and Power Private Limited (RGPPL)
RGPPL was formed as a joint venture with NTPC for taking over and operating the erstwhile Dabhol Power Project assets consisting of 1967.08 MW gas based combined cycle Power Block and 5MMTPA LNG Block. The assets were transferred to RGPPL in October, 2005.
Your Company currently has 25.51% equity stake in RGPPL along with NTPC holding 25.51%, MSEB Holding Company Limited holding 13.51% and Indian Financial institutions holding 35.47%.
The power block was revived and has been under commercial operation since May 19, 2009. However, it could not be operated in FY 2014-15 due to the non-availability of domestic gas.
With support of the GoI for stressed power plant under the Power System Development Fund (PSDF) scheme, RGPPL commenced power generation on November 26, 2015 for supply to the railways in the states of Maharashtra, Gujarat, Jharkhand and Madhya Pradesh to the tune of 500 MW. The PSDF scheme was available till March 31, 2017 only. During the financial Year 2016-17, a total of 4426 BUs were supplied to the Indian Railways using 857.4 MMSCM of natural gas. Total revenue earned from sale of energy in FY 16-17 was Rs.2105.67 Crores.
RGPPL signed a 5-year Power Purchase Agreement with railways for 500 MW and Gas Sales Agreement with GAIL for 5 years w.e.f April 01, 2017. As a result, the power plant is presently running and generating approximately 470 MW of power, which is being supplied to the railways.
The LNG Terminal commercial operations commenced in May, 2013. RGPPL entered into a framework agreement with GAIL as Commercial Operator for 25 years on tolling basis. A total of sixty three cargos have been successfully unloaded since it’s commissioning with fifteen being unloaded during FY 2016-17. The total revenue earned from the plant by LNG Terminal during 2016-17 was Rs.266.69 Crores and from commissioning till 31st March 2017 is about Rs.1007 crores. However, the terminal is still operating at partial capacity (about 1.5 MMTPA as against 5 MMTPA), due to the absence of breakwater facilities. The breakwater construction process has been initiated and the terminal is expected to become fully operational during2019-20.
The process of the demerger of the power and LNG blocks is also under progress under the revised RBI norms and to enable availability of funds for the construction of breakwater to achieve the full potential of the LNG terminal.
CITY GAS DISTRIBUTION (CGD)
- GAIL Gas Limited (wholly owned subsidiary)
GAIL Gas was incorporated in the year 2008 GAIL Gas has achieved a phenomenal growth of 82 % in volume on year on year basis. The Company achieved gas sales volume of 1356 MMSCM during FY 2016-17.
The Profit Before Tax (PBT) of the Company has increased by Rs.39 crores over the previous year while the sales revenue increased by Rs.1248 crores. The additional customer base of industrial, commercial and transport sectors have been expanded with rigorous marketing efforts. Company has entered into agreements with OMCs for setting up retail outlets of CNG to expand the reach and cater to the increasing demand and availability of CNG. GAIL Gas has set up additional 10 CNG stations at Sonepat, Meerut, Dewas & TTZ Geographical Areas in FY 2016-17 which will create enhanced availability of Green Fuel. The company has taken various marketing initiatives to reach out to prospective consumers for Domestic PNG Connections.
Company has also strengthened its various interfaces with Customers through development of digital platforms i.e (1) Online Registration for Domestic Customers (2) Online Payment Gateway (3) Mobile Application (4) Online Feedback submission (5) Online Industrial PNG Request System etc. The CNG sales of GAIL Gas has grown 30 % on year on year basis.
In Bengaluru GA, GAIL Gas has laid 42 KM of steel Pipeline and 245 KM of MDPE Pipeline network. 19,370 Domestic customers have been connected during the year. Company also commissioned 03 CNG station in Bengaluru and commercial operations has started at 01 CNG station. Further, 10 CNG stations are planned in FY 2017-18.
- Aavantika Gas Limited (AGL)
AGL was incorporated to implement CGD projects in Madhya Pradesh. As on March 31, 2017, AGL operated 22 CNG stations including 9 daughter stations, 9 online stations and 4 mother stations in Indore GA (including Ujjain) and Gwalior GA.
Further, as on March 31, 2017, AGL supplied PNG to around 12658 Domestic, 58 commercial & 75 industrial customers in its authorized geographical regions. AGL is also catering to the fuel requirement of around 22,190 CNG vehicles operating in the region. GAIL has 49.97% stake along with HPCL as an equal partner.
- Bhagyanagar Gas Limited (BGL)
BGL was incorporated to implement CGD projects in the united Andhra Pradesh. As on March 31, 2017, BGL operated 41 CNG stations including 33 daughter stations, 5 online stations and 3 mother stations.
Further, as on March 31, 2017, BGL supplied PNG to 6608 households, 59 commercial & 5 industrial customers in its authorized geographical regions. BGL is also catering to the fuel requirement of around 39246 CNG vehicles operating in the region. GAIL has 49.97% stake along with HPCL as an equal partner.
- Central UP Gas Limited(CUGL)
CUGL was incorporated to implement CGD projects in Uttar Pradesh. As on March 31, 2017, CUGL is operated 18 CNG stations including 3 daughter stations, 11 online stations and 4 mother stations.
Further, as on March 31, 2017, CUGL supplied PNG to 19333 domestic, 177 commercial & 51 industrial customers in its CUGL authorized geographical regions. CUGL is also catering to the fuel requirement of around 56599 CNG vehicles operating in the region. GAIL has 25% stake along with BPCL as an equal partner.
- Green Gas Limited(GGL)
GGL was incorporated to implement CGD projects in Uttar Pradesh. As on March 31, 2017, GGL operated 19 CNG stations including 7 ‘v daughter stations, 6 online stations & 6 mother stations.
Further, as on March 31, 2017, GGL supplied PNG to around 16200 domestic, 23 commercial & 8 industrial customers in its authorized geographical regions. GGL is also catering to the fuel requirement of around 41318 CNG vehicles operating in the region. GAIL has 49.97% stake along with IOCL as an equal partner.
- Indraprastha Gas Limited (IGL)
IGL was incorporated to implement CGD projects in Delhi’s the National Capital Territory (NCT) and cities in adjoining National Capital Region (NCR). As on March 31, 2017, IGL operated 421 CNG Stations including 45 daughter stations, 306 online stations & 70 mother stations.
Further, as on March 31, 2017, IGL supplied PNG to 742206 domestic, 1816 commercial & 932 industrial customers in its authorized geographical region. IGL is also catering to fuel requirement of 892319 CNG vehicles operating in the region. GAIL has 22.5% stake along with BPCL as an equal partner.
- Mahanagar Gas Limited (MGL)
MGL was incorporated to implement CGD projects in Mumbai & adjoining areas. As on March 31, 2017, MGL operated 203 CNG stations including 32 daughter stations, 151 online stations & 20 mother stations.
MAHANAGAR
Further, as on March 31, 2017, MGL supplied PNG to 9,48,892 domestic, 3220 commercial & 62 industrial customers in its authorized geographical region. MGL is also catering to the fuel requirement of 5,45,505 CNG vehicles operating in the region.
Your Company accorded approval to Mahanagar Gas Ltd.(MGL), to issue fully paid up unsecured Compulsory Convertible Debentures(CCDs) at par to the Government of Maharashtra (GoM) due to which equity holding of GoM increased to 10% of the total paid-up equity capital. Further, your Company also accorded approval to off-load the equity shares held by it and BG Asia Pacific Holdings Pte. Limited (BGAPH) each upto 12.5% of MGL equity through the Initial Public Offering (IPO). MGL equity shares were listed on NSE and BSE. Your Company’s equity holding in MGL post-IPO is 32.5% along with BGAPH as an equal partner.
- Maharashtra Natural Gas Limited (MNGL)
MNGL was incorporated to implement CGD projects in and around Pune. As on March 31, 2017, MNGL operated 42 CNG Stations including 17 daughter stations, 20 online stations & 5 mother stations.
Further, as on March 31, 2017, MNGL supplied PNG to 5,08,51 mngl domestic, 169 commercial and 129 industrial consumers in its authorized geographical region. MNGL is also catering to the fuel requirement of 1,40,378 CNG vehicles operating in the region. GAIL has 22.5% stake along with BPCL as an equal partner.
- Tripura Natural Gas Company Limited (TNGCL)
TNGCL was incorporated to implement CGD projects in Agartala. As on March 31, 2017, TNGCL operated 6 CNG stations including 3 daughter stations and 3 mother stations.
Further, as on March 31, 2017, TNGCL supplied PNG to 28669 Domestic, 354 commercial & 50 industrial customers in its authorized geographical region. TNGCL is also catering to the fuel requirement of 9103 CNG vehicles operating in the region. GAIL has 48.98% stake in TNGCL.
- Vadodara Gas Limited (VGL)
Your Company holds 32.93% stake in VGL in lieu of transfer of CNG stations associated pipeline laid in the city for connecting CNG station at market value on Slump Sale basis against the issue of shares at par along with GAIL Gas Ltd. and VMSS holding ‘ Rs.17.07% and 50% stake respectively. VGL operates 9 CNG stations in Vadodara with compression capacity more than 98,550 kg/day.
VGL also caters to the Piped Natural Gas (PNG) requirements of its consumers in domestic and commercial sectors. It supplies PNG to 84,432 houses and 2,456 commercial sectors in the city through a 940 km long PE pipeline distribution grid and 3 district pressure regulating system. It is also developing a new MDPE network in and around the city of Vadodara to cater to the PNG requirements of the domestic and commercial sectors.
PETROCHEMICALS
- Brahmaputra Cracker and Polymer Limited (BCPL)
BCPL was incorporated in the year 2007. Your Company has 70% equity stake ry-Y’T- in Brahmaputra Cracker and Polymer Limited (BCPL), with Oil India Limited (OIL), Numaligarh Refinery Limited (NRL) and the | ‘ ; Government of Assam each having 10% equity share. BCPL has set up 2, 80,000 TPA polymer plant in Assam.
During the FY-2016-17, 99540 MT polymer and 14129 MT liquid hydrocarbons have been produced. The polymers produced by BCPL are marketed by GAIL under Marketing Agreement.
- ONGC Petro-additions Limited (OPaL)
ONGC Petro-additions Limited (OPaL), a joint venture company promoted by GAIL, ONGC and GSPC has commissioned a green field petrochemical project at Dahej, Gujarat with a capacity to produce 1.4 MMTPA of polymers (Polyethylene-PE and Polypropylene-PP) as the final products. Hon’ble Prime Minister, Shri Narendra Modi dedicated the plant in service to the nation on March 07, 2017. Your Company has made an investment of Rs.994945 Crores in OPaL.
OTHERS
- TAPI Pipeline Company Limited (TPCL)
Your Company is pursuing the Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline project to receive natural gas supply from the Galkynysh fields of Turkmenistan. Gas Sale Purchase Agreement (GSPA) to import 38 MMSCMD gas into the country has already been signed. TPCL was incorporated in ‘Isle of Man’, to build, own and operate the proposed TAPI pipeline. It has engaged a consultant for providing Project Management and FEED Consultancy Services for the Afghanistan - Pakistan section of the pipeline. Your Company holds 5% equity in TPCL. The Shareholder’s Agreement and Investment Agreement have also been signed. The project execution is subject to certain condition precedents.
- South-East Asia Gas Pipeline Company Limited (SEAGP)
SEAGP was formed in the year 2010 to transport natural gas from A1/A3 blocks in Myanmar to the Myanmar-China border. During 2016-17, this pipeline transported an average of 14 MMSCMD of natural gas. Your Company has a 4.17% equity stake in SEAGP.
- Talcher Fertilizers Limited
A consortium comprising of your Company, CIL, RCF and FCIL was formed in 2015 to revive the FCIL Talcher fertilizer unit in the Angul district of Odisha. The MoU was signed by the consortium partners on September 05, 2013. Subsequently, the joint venture company, Rashtriya Coal Gas Fertilizers Limited, was incorporated on November 13, 2015. The company was renamed as “Talcher Fertilizers Limited” in May 31, 2016. Your Company holds 29.67% in this JVC. In principle approval of allocation of North Arkhapal Coal Mine (50%) has been received.
PARTICULARS OF LOANS, INVESTMENTS AND CORPORATE GUARANTEES
Details of investments, loans and guarantees covered under Section 186 of the Companies Act, 2013 forms part of financial statements, as a separate section in the Annual Report FY 2016-17.
IT ADVANCEMENTS & FUNCTIONAL EXCELLENCE
Your Company has started ‘Digital GAIL’ initiative with a vision to leverage the benefits of state-of-the-art Analytics, Mobility and Collaboration Platforms to support different business functions of GAIL including Plant Operations & Maintenance by integrating IT Systems with Plant & Pipeline Systems.
To align Your Company’s ERP system for Regulatory and Statutory Compliance, successful migration to the latest tax procedure was done as a pre-requisite for Goods and Services Tax (GST) readiness.
Your company has successfully implemented GST at all locations from 1st July 2017. The other business segments of the company such as Gas Transmission, Petrochemical, and LPG/LHC etc. are covered under GST. Your company has organised GST awareness workshops at different work centres for vendors & customers with a view to spread awareness among the stakeholders for GST.
Your Company has implemented next generation unified communications & collaboration platform with audio-video capability for enhanced employee collaboration.
After successful implementation of latest ISO 27001 Information Security Management System framework, a Security Operations Centre (SOC) was established along with Advanced Persistent Threat mitigation system to alleviate new types of cyber-security risks. Your Company has also implemented state-of-the-art Private Cloud infrastructure and initiated several new projects for improving network connectivity and information security.
A Project Monitoring System has been developed in your Company to digitize monitoring and control of the pipeline projects. This system will help the management to have better insight into the projects on a real-time basis through charts and reports and will facilitate decision making and early resolution of issues.
Your Company is in the process of implementing the SAP Treasury and Risk management (TRM) module which will help in mapping various treasury functions that are being operated centrally from Corporate Office. Apart from the above, the TRM will also include the implementation and management of provident fund & pension related investments.
In line with the ‘Digi-Dhan’ campaign of the Government of India, Your Company has taken an initiative to bring awareness on digital payments and cashless transactions among the employees, contract workers etc. at various GAIL locations.
- Pipeline Intrusion Detection System (PIDS):
In order to ensure real time surveillance of pipelines, GAIL has installed Pipeline Intrusion Detection System (PIDS) on trial basis at Piyala to Loni, 72 km. section and about 175 kms along Vizag to Secunderabad LPG pipeline netwroks. The detection system works on Distributed Acoustic sensing Technology utilizing the optical fiber cable (OFC) along the pipeline. Various events like manual excavation using hand tools, machine excavation, vehicle movements, agricultural activities, valve operation detection, fiber break, scrapper pig location etc. are identified automatically and alarm generated accordingly on the operators HMI graphics screen.
- Integrated Security Command and Control Center:
To enhance the safety and security of GAS/LPG pipelines in the densely populated NCR and across other north Indian states, an Integrated Security Command and Control Center has been established at Infohub, Noida. Round-the-clock monitoring of functions such as Pipeline ROU surveillance, live CCTV footage of pipeline facilities, critical pipeline maintenance activities etc. are being undertaken along 2000 kms of gas & LPG pipeline operating in the northern region.
HEALTH, SAFETY AND ENVIRONMENT (HSE) MANAGEMENT
- Corporate HSE Policy:
The HSE Best Practices in your Company are primarily driven through a Corporate HSE Policy which is a statement of commitment of the management of your Company. Your Company is committed to giving highest priority to Occupational Health, Safety of Plants and Pipelines & Personnel in a serene environment. Uniform well-designed HSE Management System is in place to support our commitment. Your Company conducts its business in harmony with nature and promotes sustainable development. Employees and contract workers are encouraged to adopt safe working habits and behavior to ensure an effective implementation of the HSE Policy and empowered to notify and stop any unsafe work / act, as may so arise.
- Safety Performance
Safety performance is measured in your Company through the “HSE Score” which is evaluated on the basis of important HSE Management System elements. Your Company achieved the HSE Score of 92.94% as against the MoU target of 90%.
- Safety Training
Training is a key to the safety of people and premises. Your Company imparts regular and structured HSE training including Behavior Based Safety training to its employees to upgrade their skills, knowledge and competence, in order to perform their HSE functions effectively and developing an effective safety culture. Regular training is also imparted to contract workers, tanker drivers and others to create awareness of the probable hazards in their work area so as to avoid and safeguard against unsafe actions.
- Safety Audits
Safety audits are regularly conducted to ensure the implementation of the HSE Management System Guidelines and Emergency Preparedness. These audits are performed by both external safety auditors and experienced in-house auditors.
- Occupational Health
Your Company has implemented occupational hygiene measures and medical surveillance programs to monitor and control the occupational health of its employees, based on defined guidelines. All employees at various work centers undertake periodic medical examination as per these guidelines. The Corporate Occupational Health Committee meets on a quarterly basis to monitor the occupational health program in your Company and the effectiveness is evaluated based on the outcome of the Health Audit undertaken through in-house multi-disciplinary teams.
SUSTAINABILITY INITIATIVES
This year your Company published its seventh Sustainability Report -’Rejuvenate. Resonate. Redefine’ for FY 16-17 based on the Global Reporting Initiative (GRI) G4 Guidelines. Sustainability reporting has helped in measuring and monitoring your Company’s performance and move beyond the mandatory requirements to ingrain sustainability culture within the organization. It has served as an important management tool, helping us to revisit our systems, policies and procedures. Your Company’s Sustainable Development Committee, comprising of Functional Directors and an Independent Director as the Chairman, regularly monitors performance under sustainability initiatives.
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. Your Company has collaborated in the study on “Climate Change Risks: Preparedness for Oil and Gas Sector” undertaken by the Federation of Indian Petroleum Industry (FIPI) and The Energy and Resources Institute (TERI).
In line with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 requirements, Business Responsibility Report (BRR) 201617 is contained in a separate section of the Annual Report.
VIGILANCE
Corporate Vigilance department of your Company is ISO-9001:2008 certified for having adopted Quality Management System in compliance with the requirements of ISO. Various initiatives such as Bill Watch System, e-tendering, e-payments etc. have already been implemented in the past for the benefit of vendors and suppliers to bring transparency in its systems and processes. A number of system improvements were affected in your company during the year for effective utilization of its resources, which in turn would help to prevent corruption and ensure all round good governance. Some of these improvements are:
- Implementation of the system for pegging percentage fee payable to the Architect / Consultant on the original contract value.
- Timely appointment of Third Party Inspection Agency (TPIA) before award of the jobs / works as required.
- Implementation of several smart-phone enabled applications related to business transactions of the Company for increasing organizational efficiency.
The Vigilance Awareness Week-2016 was observed on the theme “Public participation in promoting integrity and eradicating corruption” at the corporate office and at all the work centers from October 31 to November, 05, 2016. In order to create better awareness on corruption and its effects amongst the youth and college students, various competitions such as debates, elocution, panel discussion were organized in colleges/schools at Kolkata, Chennai, Guna, Bengaluru, Jhabua, Jaipur, Noida, Dibiyapur and Vadodara. Topics on corruption and its ill effects, importance of morals and values, honesty and integrity, ethics, transparency in governance, ways in which the youth can participate in the fight against corruption and such related issues were the subject of debate in these competitions. In order to create awareness among GAIL employees and the related work force, various competitions including essay writing, slogan writing, poster paintings, online quiz and debates were held during the week. Other events including banners/ posters/ painting display, and marches and rallies were also organized at various work centers.
A magazine “JAGROOK” containing CVC circulars, vigilance related puzzles, cartoons, articles and case studies was also published. Customer interactive meet across business segments were organized at NCR Zonal office and Mangalore for their active engagement on related matters.
CAPABILITY BUILDING - Human Capital
Your Company invests dedicated resources in order to be the preferred employer to attract and retain requisite talent. The Company’s Intellectual Capital is carefully nurtured and channelized to cater to its business plans for maximising value. Value Added per Employee reflects our emphasis to make the optimal & productive use of the available resources and business opportunities. For the year under review, Value Added per Employee was Rs.218.38 lacs.
- Leadership Development Program
Your Company gives priority to develop its Leadership capability. As part of the Leadership Development Program, we continued to undertake the Senior Management Development Centre (SMDC) exercise with great emphasis on the developmental aspects of individual executive. Your Company believes that capability building and enhancing competency of employees is the key to the successful execution of strategic plans. As on date, almost all the senior executives in E-6 Grade and above have been covered under the program.
To percolate the benefit of the SMDC Program, your Company has extended the same to executives in E-5 grades as well. In an initial spell during the year, over 300 executives were covered.
- Capability Development
The GAIL Training Institute (GTI) organizes systematic and structured programs for capability building across all levels within the organization on a continuous basis. In recognition of the initiatives taken, GTI was conferred with the prestigious Golden Peacock National Training Award - 2016.
Your Company is also playing a proactive role to support the National Skill
Development Mission through active participation in the creation of Hydrocarbon Sector Skill Council (HSSC) and providing skill based training to create a pool of skilled manpower for City Gas Distribution network and midstream hydrocarbon industry.
- Representation of Priority Section
Your Company has been complying with the Presidential Directives and other instructions/guidelines issued from time to time pertaining to Policies and Procedures of Government of India in regard to reservation, relaxations, concessions etc. for Scheduled Castes (SCs), Scheduled Tribes (STs), Other Backward Classes (OBCs) and Persons with Disabilities (PWDs) in Direct Recruitment.
Details with regard to group-wise total number of employees and the representation of Scheduled Castes, Scheduled Tribes, and Other Backward Classes amongst them in your Company as on March 31, 2017 have been given in Table below:
Group
|
Employees on Roll
|
SC
|
ST
|
OBC
|
PWD
|
A
|
3149
|
497
|
202
|
579
|
46
|
B
|
537
|
102
|
61
|
108
|
11
|
C
|
603
|
102
|
22
|
188
|
35
|
D
|
61
|
17
|
06
|
16
|
01
|
C&MD DIRECTORS & CVO
|
05
|
-
|
-
|
-
|
-
|
Total
|
4355
|
718
|
291
|
891
|
93
|
A total of 121 new employees joined your Company during the FY 2016-17, taking the total manpower as on March 31, 2017 to 4355 (including Whole-time Directors & CVO) with 16.48 % of its employees belonging to SC category, 6.68 % to ST category, 20.45% to the OBC category, 7.99 % to minorities and 2.13% to the PWDs category. Your Company’s workforce comprised of 257 women employees as on March 31, 2017.
- Official Language
The Official Language implementation Committees at the Corporate and Work Centre level meets on a quarterly basis to monitor and review the progress of achievement of targets fixed in the Annual Program issued by the Govt. of India.
Hindi workshops/trainings are organized on regular basis at GTI, Jaipur and Noida and at other work centres. Hindi computer training sessions are integral part of these programmes. During the year 2016-17, 1897 employees were provided formal training through 101 workshops.
Hindi Fortnight was celebrated from September 14 to 28, 2016 to promote the use of the official language. Your Company now uses special software to generate administrative orders in both Hindi and English. You will be glad to know that we are one of the few PSUs to implement this facility.
The 17th ‘Rajbhasha Sammelan’ was organized on November, 26 and 27, 2016 to promote the use of Hindi and review the progress made on the implementation of the official language in the Company.
The First Sub-Committee of Committee of Parliament on Official Language inspected the Pata, Bengaluru, Haridwar, Kochi and Mumbai offices to review the steps undertaken to promote the official language and were appreciative of our efforts undertaken.
A meeting of Hindi Salahkar Samiti was organized on April 22, 2017 at Srinagar (J&K) by the MoP&NG under the chairmanship of Minister of State for Petroleum & Natural Gas (I/C). Your Company also participated in this meeting and received Petroleum Rajbhasha Award (Consolation) for the year 2015-16.
- Sexual Harassment of Women at Workplace
Your Company has in place a Policy on Prevention, Prohibition and Redressal of Sexual Harassment ofWomen at workplace in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.The Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment.
During the year 2016-17, 3 (three) sexual harassment complaints were received and the same were disposed of.
INNOVATION, RESEARCH AND DEVELOPMENT (R&D)
To inculcate and encourage innovation and creativity in the organization, your Company has established a Suggestion Scheme to elicit ideas and process modification proposals from employees. The suggestions are evaluated by a committee and implemented based upon their feasibility. The best suggestion is awarded with the CMD trophy. Incremental innovations are also pursued through Quality Circle initiatives.
Your Company is committed to spend over 1% of its PAT on Research and Development (R&D) efforts to address the important industry challenges of maintaining the safety and integrity of the gas processing & petrochemical plants, transmission and distribution systems, controlling costs and enhancing productivity, and maintaining environmental stewardship.
Currently your Company has engaged in greater R&D collaboration with various Engineering Institutes and CSIR laboratories to pursue a judicious portfolio of basic, applied and pilot R&D projects in the identified thrust areas. Various developmental projects are also undertaken at sites to improve safety and efficiency of existing installations.
The major research initiatives undertaken in FY 2016-17 include, the application of high resolution satellite imagery for pipeline monitoring, development of Robot for Health Monitoring of Pipeline, pilot testing of wireless sensor network for pipeline data transfer, setting-up of a Pilot plant for conversion of waste plastic to diesel, development of novel adsorbent materials for low pressure storage of natural gas, and testing of a 5 KW PEM fuel cell and projects on CO2 conversion and utilization.
Your Company is also focused on augmenting the gas supply through new sources. Apart from carrying out bench-scale work on methane recovery from marine gas hydrates, your Company is also associated with the National Gas Hydrate Program. It has also become an industrial partner in the Indo-US strategic research initiative under the Solar Energy Research Institute for India and USA (SERIIUS) program.
Further, your Company is planning to invest in start-ups as they have the potential to improve existing businesses, create new business and increase manufacturing base. Given the government policies are also increasingly in favor of start-ups. Your Company has allocated a corpus of Rs.50 Crores for taking up investments in this sector to give a fillip to the government’s efforts and to reap benefits from the start-ups portfolios. The start-up initiatives are in the process of roll-out during the current calendar year.
TOTAL QUALITY MANAGEMENT
Your Company is committed to enhancing customer satisfaction and standarzing business processes through the implementation of a Quality Management System. We achieved a customer satisfaction level of 92% during FY 2016-17 and committed to further improve our rank. Your Company endeavors for continual and sustainable improvement through the implementation of effective quality practices, innovation and standardization. Management System and Energy Management System along various pipelines & process units and the Quality Management System at corporate and marketing offices has been implemented. Your Company undertakes Quality Circle projects with engagement of its employees resulting in high employee morale and increased productivity.
PROCUREMENT FROM MICRO AND SMALL ENTERPRISES (MSEs)
The Government of India has notified a Public Procurement Policy for Micro and Small Enterprises (MSEs), Order 2012.
In terms of said policy, out of the total eligible value of annual procurement of approximately, total procurement made from MSEs was Rs.811.63 crores constituting 25.85%.
MOU PERFORMANCE
A Memorandum of Understanding (MoU) is signed every year between your Company and its administrative ministry i.e. MoP&NG, through which performance targets for the year are set. The thrust while fixing MoU targets was on improving performance of the critical aspects of the Company including key financial parameters, gas marketing, gas transmission, project implementation, capital expenditure & polymer production etc. MoU for the year 2016-17 was signed between Chairman & Managing Director and Secretary (P&NG), Government of India on August 05, 2016.
Your Company achieved ‘Very Good’ MoU rating for the financial year 2015-16. The evaluation of MoU 2016-17 is under progress and the final evaluated MoU score and rating is expected to be announced during December 2017.
LAURELS - Corporate
- Dun & Bradstreet’s ‘India’s Top PSUs & PSU Awards 2016’ in the category ‘Manufacturing: Gas - Processing, Transmission and Marketing’
- SCOPE Meritorious Awards 2014 - 15 in the category ‘RTI Act - 2005 Compliance’
- ASSOCHAM 2nd Corporate Governance Summit cum Excellence Award 2015-16 as a winner under Listed Public Sector Category
- GAIL conferred with the “Economic Times 2 Good CSR Rating”- Only PSU to be feted in ‘All Round Excellence’ category
- Health, Safety & Environment (HSE)
With its continued focus on HSE across its installations, your Company has won the following awards during the year 2016-17
- Prestigious OISD awards for the Year 2014-15 from the Honorable Minister of State (IC),P&NG, Sh. Dharmendra Pradhan for the following categories:
- Pata under category “Other Processing Plant”
- Vijapur under category “Other Processing Plant”
- Hazira- Vijaipur- Jagdishpur Natural Gas Pipeline under category “Cross Country Pipeline - LPG & Gas Pipeline”
- Most Consistent Safety Performer - Gas Processing Unit, Gandhar Gas Processing Plant”
- GAIL Vaghodia GPU and Compressor Station, Vaghodia- 4th Level Award: PRASHANSA PATRA, from the National Safety Council of India
- HVJ Compressor Station, Vijaipur- 2nd Level Award: SHRESHTHA SURAKSHA PURUSKAR (Silver Trophy), from the National Safety council of India
- GPU Gandhar Suraksha Puraskar (Bronze Trophy) from the National Safety council Mumbai for the year-2015 0 GPU Vijaypur received 14th National Award for Excellence in Cost Management-2016
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 CPIO/ACPIOs/ Appellate Authorities at its units/offices across the country to provide information to citizens under the provisions of RTI Act.
Your Company has hosted RTI Guidelines and related information on its site and these may be accessed at http://www.gailonline.com/final_site/RTI.html. Besides, MIS Report on RTI Applications, Record Retention Schedule and latest RTI Audit Report had also been hosted under the same link.
Further, your Company has been made ‘LIVE’ on the GoI’s Online RTI Portal from July, 2016 and ever since we are providing information online, apar
DEAR SHAREHOLDERS,
On behalf of the Board of Directors of your Company, I am delighted to
present the 32nd Annual Report of your Maharatna Company, along with
Audited Financial Statements for the financial year 2015-16.
PARTNER INDIA''''S GROWTH - NATURAL GAS LEADER
With a turnover of Rs.51,614 crores, your Company is India''''s largest
natural gas Company and is ranked amongst the top gas utilities in
Asia. Your Company has presence across the entire gas value chain with
activities ranging from Gas Transmission and Marketing to Processing
(for fractionating LPG, Propane, SBP Solvent and Pentane), transmission
of LPG, and production and marketing of Petrochemicals like HDPE and
LLDPE.
Your Company has extended its presence in LNG re-gasification, City Gas
Distribution, Exploration & Production through subsidiaries and joint
venture companies and also diversified into solar and wind power
generation.
Gas transmission is one of the core competencies of your Company and
draws its strength from about 11,000 km of natural gas pipeline network
and 2,038 km of LPG pipeline transmission network.
With a lean work force of 4321 employees, your Company plays a vital
role in the social and economic development of the country and makes a
substantial contribution towards its energy security.
FINANCIAL HIGHLIGHTS
The important financial highlights for the year 2015-16 are as under:
PARTICULARS 2015-16 2014-15
US $ Million (Rs. in
crores) US $ Million (Rs. in
crores)
Turnover (Net of ED) 7,715 51,614 8,952 56,569
Other income 173 1,158 173 1,096
Cost of sales
(excluding interest
and depreciation and
including 7,122 47,646 8,236 52,046
extraordinary items)
Gross margin 766 5,126 879 5,557
Interest 96 640 57 361
Depreciation 196 1,313 154 974
Profit before tax 474 3,173 678 4,284
Provision for tax 131 874 197 1,245
Profit After Tax 344 2,299 481 3,039
Appropriations - - - -
Interim dividend 47 317 60 381
Proposed final dividend 57 381 60 381
Corporate dividend tax 21 142 24 154
Net transfer to/from
bond redemption reserve 5 35 6 37
Transfer to CSR reserve (0) (1) (5) (30)
Transfer to general
reserve 34 230 48 304
Net surplus after
Appropriations 179 1,196 287 1,814
1 US $ in INR converted at
the exchange rate as on
31st March of 66.90 - 63.19 -
the respective financial
year
DIVIDEND
Your Company has a consistent track-record of dividend payment. So far,
it has disbursed dividend of over Rs.13,741 Crores to its shareholders
including Rs.8,316 Crores disbursed as dividend to the Government of
India (GOI).
The Board of Directors of your Company had earlier approved payment of
an interim dividend @ 25% on equity share of Rs.10 each (Rs.2.5 per
equity share) amounting to Rs.317.12 Crores, which was paid in
February, 2016. Further, the Board has recommended payment of final
dividend @ 30% on equity share of Rs.10 each (Rs.3.00 per equity share)
for FY 2015-16 amounting to Rs.380.54 crores.
With this, the total dividend payment for the fiscal year 2015-16 will
be 55 % on equity share of Rs.10 each (Rs.5.50/- per equity share)
amounting to Rs.697.66 Crores on its paid-up equity capital of
Rs.1,268.48 Crores and dividend distribution tax of I42.03 crores. The
total dividend pay-out including corporate dividend tax accounts for
35% of profit after tax.
CONTRIBUTION TO EXCHEQUER
Your Company has contributed over Rs.4,929 Crore in 2015-16 to the
exchequer through dividend, duties, taxes and others, as compared to
Rs.5,788 Crore in 2014-15.
CREDIT RATING
- Domestic rating
Your Company has been reaffirmed the highest domestic credit rating of
AAA from ICRA, CARE and CRISIL, which is highest credit rating in India
and carries lower credit risk of the Company.
- International Rating
The International rating agency, Moody''''s International, Hong Kong, has
also reaffirmed the corporate issuer rating of Baa2 with a negative
outlook, which is one notch higher than sovereign rating of India. The
Baa2 rating affirmation reflects GAILs dominant position in gas
transmission business. Further, Fitch Ratings has also assigned a
long-term foreign currency issuer default rating of BBB- with a
negative outlook, which is equal to sovereign rating of India.
BUSINESS STRATEGY
In the last year and a half, the oil and gas sector witnessed
game-changing disruptions with oil prices crashing from 114 $/bbl to a
low of around 30 $/bbl and having profound implications on companies
across the sector.
The volatility in oil prices has caused downward shift in prices of
LNG, oil products, petrochemical products, etc. Further, domestic
production of natural gas has been on the decline over the past 5
years, from peak of 140 MMSCMD in 2010-11 to 86 MMSCMD in 2015-16.
Notwithstanding these challenges which have had physical and financial
implications on your Company, the management has taken it as an
opportunity and has initiated strategic steps to reinvent itself and
emerge out stronger than before.
In order to evolve, grow and excel, your Company continuously reviews
its strategy developed for the period 2011-2020 to make the necessary
course correction, in line with changes in the external business
environment and internal organizational requirements. Management of
your Company is taking steps to realize strategic objectives and ensure
that your Company is on course to become an integrated hydrocarbon
major with presence across the entire gas value chain.
- National Gas Grid
Your Company is the largest natural gas pipeline Company in India and
going forward, the focus will be on the development of National Gas
Grid which is one of the key priorities of the Government of India
(GoI). Your Company now has a total network of approximately 11,000 km
pipeline in the country. Additionally, it has commenced execution of
the Phulphur
- Haldia pipeline project (Phase-1) which was inaugurated by the
Hon''''ble Prime Minister of India in July, 2015. This project is also
referred to as "Energy Highway of Eastern India" and once completed, it
would help to revive closed fertilizer plants. This pipeline will
connect states of Eastern India to the rest of the gas network in the
country and pave the way for developing the "National Gas Grid" The
Board has also approved the 670 km Vijaipur-Auraiya-Phulpur pipeline.
With these projects and through continuous pan-India expansion of the
pipeline network, your Company will further strengthen its leadership
position in the natural gas transmission segment.
Your Company is also pursuing the transnational pipeline project, the
Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project. Gas
Sales & Purchase Agreement (GSPA) has already been signed to import 38
MMSCMD gas into the country through this pipeline. Further, TAPI
Pipeline Company has been incorporated as a Special Purpose Vehicle in
the Isle of Man with your Company holding 5% equity. Shareholder''''s
Agreement and Investment Agreement of TAPI Pipeline Company have been
signed.
- LNG Marketing
One of the key strategic priorities of your Company today is the
marketing of LNG in domestic and international markets. Over the last
few years, your Company tied-up significant LNG volumes by concluding
several deals with suppliers, such as Sabine Pass Liquefaction LLC
(USA), Gazprom (Russia) etc. Further, your Company''''s US subsidiary has
booked LNG capacity in Dominion Cove Point''''s LNG liquefaction terminal
in the USA for which 20 year gas sourcing agreement has been entered
with WGL Midstream Inc. (USA). In line with its LNG import portfolio,
your Company is focusing it efforts on gas market development to
attract and retain more customers. The marketing tie-ups are being
explored for selling LNG in India and in the global markets. Your
Company''''s subsidiary, GAIL Global (Singapore) Pte Limited is actively
pursuing LNG trading activities from Singapore.
To develop the gas sector in India and advance the country on the road
to a gas based economy, your Company has advocated the implementation
of the pooling mechanism. As a result, for the first time in the
country, large scale gas pooling was introduced where your Company is
acting as a pool operator to manage procurement and supply of R-LNG to
stranded gas based power plants in India. Your Company is also
supplying RLNG to fertilizer companies at competitive rate through
bidding process.
Your Company has tied-up additional regasification capacities at Dahej
LNG terminal and Dabhol LNG terminal to facilitate regasification of
additional LNG tied-up in recent years. Further tie -ups in upcoming
LNG regasification terminals shall also be pursued. Your Company plans
to own long term charter hire LNG ships to transport LNG volumes from
the USA to India and other global markets.
- City Gas Distribution (CGD)
In order to provide clean fuel for domestic, vehicular and commercial
use and to facilitate development of smart cities, your Company is
expanding its CGD network. Your Company''''s wholly owned subsidiary, GAIL
Gas Limited, is implementing CGD projects in the cities of Kota, Dewas,
Meerut, Sonepat, Bengaluru and Taj Trapezium in addition to pursuing
the same in the state of Kerela, Karnataka, Andra Pradesh, Rajasthan,
Kota and Vadodara city etc. through its joint ventures. In line with
the GoI''''s mission to accelerate the use of gas, your Company through
its CGD JVs has set an unprecedented record by providing 2.5 lakhs new
PNG connections during the year.
- Petrochemicals
Your Company aspires to be one of the leading players in India in this
segment by strengthening its petrochemical portfolio through expansion
of existing capacities, setting up new plants and acquiring equity
stakes in upcoming projects. Petrochemical plant was commissioned in
Assam through Brahmaputra Cracker & Polymer Limited (BCPL) a subsidiary
of your Company. This plant was dedicated to the nation by Hon''''ble
Prime Minister of India in February, 2016. Further, a petrochemical
plant at Dahej is being set up by ONGC Petro-additions Limited (OPaL)
which is a joint venture (JV) of your Company,
- Renewables
As a responsible corporate citizen and in line with the GoI''''s
commitment to reduce carbon emissions, your Company aims to decrease
its carbon footprint in a phased manner. It has installed 118 MW wind
energy capacity and has also set up a 5 MW solar project. Further, your
Company is a stakeholder in a Special Purpose Vehicle (SPV) created
under the aegis of Ministry of Petroleum & Natural Gas (MoP&NG) and
Ministry of New & Renewable Energy (MNRE) for pursuing the setting up
of Grid Connected Renewable Energy Power Projects.
- Human Resource Development
Your Company is committed to align its human resource development
initiatives with strategic business objectives to achieve its
organizational goals. The key areas under focus are skill development
and capability build-up, talent acquisition, development and retention.
BUSINESS PERFORMANCE
During the year under review, the segment wise business performance of
your Company is as under:
- Natural Gas Marketing
Natural gas marketing continues to constitute your Company''''s core
business. During 2015-16, gas sales clocked 73.67 MMSCMD, compared to
72.07 MMSCMD in the previous financial year. Major supplies of natural
gas include fuel to power plants, feedstock for gas-based fertilizer
plants, LPG extraction and City Gas Distribution. Your Company holds
around 71.24 % market share in India''''s gas marketing.
Your Company has been designated by Ministry of Petroleum & Natural Gas
(MOP&NG) to raise invoices for non- submission of utilization
certificate, duly certified by Fertilizer Industries Coordination
Committee (FICC), by concerned fertilizer companies for use of APM gas
for production of urea. The Company is revenue neutral for such
transaction.
Most of the customers disputed the debit notes raised by the Company
and matter was pending at Hon''''ble High Court. Further, MoP&NG vide
letter dated 16th December, 2015 revised the earlier modalities for
deriving the quantity and price for issue of debit notes. The company
has taken the matter with Ministry of Fertilizer and FICC to provide
information / details.
Considering the pending court case, uncertainty in recovery of debit
notes, matter being under consideration of Government- MOP&NG, Ministry
of Fertilizer and FICC, The Company issued claim letter amounting to
Rs. 1651.18 crore for such type of cases, till the matter gets
settled.
- Transmission
- Natural Gas
Your Company owns and operates a network of about 11000 kms of natural
gas high pressure trunk pipeline with a pan-India capacity of around
206 MMSCMD of natural gas. The average gas transmission during the year
was 92.72 MMSCMD, compared to 92.10 MMSCMD in the previous financial
year.
- LPG
Your Company is the only Company in India, which owns and operates
exclusive pipelines for LPG transmission for third-party usage. It owns
and operates two LPG pipeline transmission systems with a total length
of 2,038 kms. Out of this, 1,415 kms of pipeline network transports LPG
from western to northern parts of India (Jamnagar - Loni pipeline) and
the balance 623 kms of pipeline network transports LPG in the country''''s
southern part (Vizag-Secunderabad pipeline). The LPG transmission
system has a capacity to transport up to 3.8 MMTPA of LPG. In 2015-16,
the LPG transmission throughout achieved was about 2.82 Million MT.
- Petrochemicals
During 2015-16, your Company produced 344.168 Thousand MT of polymers
and sold 333.5 Thousand MT of polymers.
- LPG and Other Liquid Hydrocarbon Production
Your Company has LPG plants at five locations in the country. In 2015-
16, total liquid hydrocarbon production was about 1.09 Million MT,
which mainly included 0.85 Million MT of LPG, 0.13 Million MT of
Propane, 0.02 Million MT of Pentane and 0.08 Million MT of Naphtha.
- Exploration and Production (E&P)
Your Company''''s E&P business has continued self-sustainable production
of oil and gas for the second consecutive year from four blocks (two
overseas blocks in A-1 & A-3 block, Myanmar and 2 domestic blocks in
Cambay basin).
Revenue of approx. Rs. 751.51 Crores has been generated from sale of
hydrocarbon from 4 producing blocks namely A-1 & A-3, Myanmar and
CB-ONN-2000/1 and CB-ONN-2003/2 (Cambay onland) during the year
2015-16.
Further, Field Development Plan (FDP) has been approved by Directorate
General of Hydrocarbons (DGH) for the gas resource of 65 BCF in Tripura
block (AA-ONN-2002/1).
As a result of continued portfolio optimisation, your Company now has
participating interest in 13 E&P blocks (excluding one GAIL Operated
Block CY-ONN-2005/1 in Cauvery basin which was relinquished in June
2016) of which 11 blocks are in India and 2 in Myanmar. Out of these,
your Company is Operator in one onland blocks viz. CB-ONN-2010/11 in
Cambay basin awarded during NELP-IX bidding round.
Drilling activities were initiated in 4 (out of 5) blocks obtained
during NELP-IX bidding round viz (i) CB-ONN-2010/11 (Lead Operator:
GAIL),
(ii) CB-ONN-2010/8 (Lead Operator: Bharat Petro Resources Limited)
(iii) GK-OSN-2010/1 (Operator: ONGC) (iv) GK-OSN-2010/2 (Operator:
ONGC). Gas discovery has been notified to Government in the block GK-
OSN-2010/1. Survey activities are planned in the remaining NELP-IX
block AA-ONN-2010/2 (Operator: OIL)
INITIATIVES FOR FUTURE GROWTH
* Global Initiatives
Your Company is constantly pursuing a leading role in the TAPI Pipeline
project to receive Natural Gas from the Galkynysh fields in
Turkmenistan. After incorporation of TAPI Pipeline Company Limited
(TPCL), Turkmengas has been endorsed as the consortium leader. TPCL has
a mandate to build, own and operate the proposed TAPI Pipeline. The
Shareholders Agreement (SHA) of TPCL was signed in December 2015 during
the ground breaking ceremony for laying of the Turkmen leg of the TAPI
pipeline. Investment Agreement (IA) relating to initial equity infusion
by the TAPI entities into TPCL was also signed in April, 2016.
Galkynysh Pipeline Company, the consortium leader group led by
Turkmengas, shall be taking 85% equity in TPCL, while your Company,
ISGS (Pakistan) and Afghan Gas Enterprise (AGE) shall be taking 5%
equity each.
* Domestic Initiatives
The domestic business initiatives of your Company were as follows:
* Petrochemicals
GAIL and Hindustan Petroleum Corporation Limited (''''HPCL!) are exploring
the possibility of setting up a Greenfield petrochemical complex in the
east coast of India primarily based on imported ethane.
* LNG REGASIFICATION TERMINALS
Your Company is evaluating various opportunities for setting up/
booking LNG regasification capacity in the country
* LNG SHIPPING
In 2011, your Company contracted 3.5 MMTPA of LNG from Cheniere Energy,
USA on FOB basis for an initial period of 20 years. Further, in 2013
your Company subsidiary GAIL Global (USA) LNG LLC also signed a
Terminal Service Agreement (TSA) for booking 2.3 MMTPA of liquefaction
capacity in the Dominion Cove Point terminal for 20 years. The initial
supplies from both these contracts are expected to commence from early
2018. Currently, your Company is in the process of long term charter
hiring of LNG ships through the international competitive bidding
route.
* NATURAL GAS PIPELINE PROJECTS
During the financial year, your Company has completed 27 number of
''''Last Mile Connectivity'''' to harness the commercial utilization of
various pipeline networks in the seven states of Karnataka , Gujarat,
Goa , Haryana, Rajasthan, Maharashtra & Punjab.
* NON-CONVENTIONAL ENERGY
Your Company has total installed capacity of 118 MW of Wind Energy
Generation Projects (WEG). Your Company began operations with a modest
capacity of 4.5 MW wind energy for captive use in Gujarat in 2009-10
and graduated to commercial production after commissioning 100 MW of
WEG projects in Tamil Nadu and Karnataka in 2011-12. It also made its
entry in the solar power sector by setting up 5 MW Solar Power Plant in
Rajasthan through bidding under the Jawaharlal Nehru National Solar
Mission.
Your Company is setting up 5.76 MW grid connected roof top captive
solar power plant at Pata Petrochemical Complex, Uttar Pradesh.
* COAL GASIFICATION
Your Company is also entering into coal gasification by setting up
surface coal gasification based urea project at Talcher. The project is
envisaged for production of 2200 MTPD Ammonia and 3850 MTPD Urea and
the project cost is estimated to be around Rs.8,000 Crore. Joint
Venture Company Talcher Fertilizers Limited (formerly known as
Rashtriya Coal Gas Fertilizers Limited) was formed on 13th November,
2015 with consortium partners i.e. GAIL, CIL, RCF & FCIL.
The success of this project would pave the way for the production of
fertilizers from abundantly available domestic coal, thus resulting in
lesser dependency on their imports.
RELATED PARTIES - SUBSIDIARIES/ ASSOCIATES/ JOINT VENTURES
Your Company has formed subsidiaries/associates/joint venture companies
for CGD, petrochemicals, LNG, gas trading, power generation and shale
gas. It has played pioneering role in introducing city gas projects for
natural gas supplies to households, commercial, industrial and
transport sectors through its subsidiary and joint venture companies.
Contracts or arrangements/ transactions with related parties were on
arm''''s length basis and in ordinary course of business.
Your Company''''s subsidiaries/ associates/joint venture companies
contributed significantly in the business expansion activities of your
Company. A statement containing the salient feature of the financial
statements of your Company''''s Subsidiaries, Associate Companies and
Joint Ventures as per first proviso of section 129(3) of the Companies
Act, 2013 including details of individual contribution of all
subsidiaries, associates and joint venture companies towards the
overall performance of Company during the period is also given under
Consolidated Financial Statements.
The details of subsidiaries/associates/joint venture companies are
mentioned below:
NATURAL GAS, LNG AND POWER
- GAIL Global (Singapore) Pte. Limited (wholly owned subsidiary)
GAIL Global (Singapore) Pte. Ltd. (GGSPL), primarily started as an
overseas investment arm of your Company and was operationalized for LNG
trading in 2012. It commenced its business operations in May 2012.
GGSPL is now actively involved in business activities in the area of
LNG Trading. Until March 31, 2016, GGSPL has traded twenty one (21) LNG
cargoes out of which 13 were traded during the financial year 2015-16.
The turnover for 2015-16 was USD 307 million.
GGSPL has also been mandated by your Company to market part of the
Henry Hub linked LNG volume sourced from the USA, in the international
market. The supplies against the said volumes are expected to start
from the year 2018.
GGSPL is also in process of third-party trades and endeavouring ship
chartering and risk management activities along with supplying LNG
cargoes to GAIL.
- GAIL Global (USA) Inc (wholly owned subsidiary)
GAIL Global (USA) Inc.(GGUI), was incorporated as a wholly subsidiary
of GAIL to undertake investment in the Eagle Ford shale gas asset. The
primary objective behind this investment was to enter into the US shale
gas market and to bring shale gas technology to India. GGUI executed a
definitive agreement with M/s Carrizo Oil & Gas Inc., USA (Carrizo) on
September 28, 2011, to enter into an unincorporated JV in the Eagle
Ford Shale asset in Texas. GGUI acquired a 20% participating interest
in this JV. Carrizo, with the remaining 80% participating interest,
functions as the operator of the JV.
During the year, 20 wells came online, taking the total online wells to
99 as on December 31, 2015. The gross production volume of GGUI during
2015 was 853.1 Mboe.
- GAIL Global (USA) LNG LLC (wholly owned subsidiary of GGUI)
GAIL Global (USA) LNG LLC (GGULL) signed a contract with Dominion Cove
Point LNG, LP (DCP) to book LNG tolling capacity of 2.3 MMTPA in its
Cove Point terminal. It also signed Gas Sales & Purchase Agreement
(GSPA) with WGL Midstream, Inc. for sourcing of gas for liquefaction at
the Terminal. The construction activities at the terminal are on-track
and the terminal is expected to be in service by January 2018. GGULL
would be selling all LNG volumes from Cove Point to GAIL.
- GAIL China Gas Global Energy Holdings Limited
GAIL China Gas Global Energy Holdings Limited, was formed with an
objective to pursue gas sector opportunities, primarily in China. Your
Company has a 50% equity stake with China Gas Holdings Limited as an
equal partner.
- Petronet LNG Limited (PLL)
PLL was formed in 1998 to set up LNG import and re- gasification
facilities in India. It currently owns and operates a 10 MMTPA capacity
LNG re-gasification terminal at Dahej, Gujarat. The capacity is being
expanded to 15 MMTPA (expected to be completed by end of 2016). PLL has
also setup an LNG re-gasification terminal at Kochi, Kerala with a name
plate capacity of 5 MMTPA.
Your Company has 12.5% equity stake in PLL along with Bharat Petroleum
Corporation Ltd. (BPCL), Oil and Natural Gas Corporation (ONGC) and
Indian Oil Corporation Limited (IOCL) as equal partners.
- Ratnagiri Gas and Power Private Limited (RGPPL)
RGPPL was formed as a joint venture with NTPC for acquiring and
operating the erstwhile Dabhol Power Project assets consisting of
1967.08 MW gas- based combined cycle power block and 5 MMTPA LNG Block.
The assets were transferred to RGPPL in October, 2005. Your Company has
25.51% equity stake in RGPPL along with NTPC 25.51%, MSEB Holding
Company Limited 13.51% and Indian Financial institutions 35.47%.
The power block, was non-operational due to paucity of funds and non-
availability of domestic gas in FY 2014-15. Government of India has
floated a scheme for restart of the gas based Power Plant on Regasified
LNG, vide its OM dated 27.03.2015 support from Power System Development
Vund (PSDF Support Scheme of GoI), which provided for reverse auction.
RGPPL has participated in the GoI scheme with Indian Railways as the
buyer for the generation under PSDF Scheme. Ministry of Power has
allocated temporary 620 MW power out of allocation to Maharashtra to
Indian Railways under PSDF Support of GoI for the financial year
2015-16 & 2016-17.
Power Plant commenced operation under PSDF Support Scheme on November
26, 2015 & supplying around 500 MW Power to the Indian Railways in the
states of Maharashtra, Gujarat, Madhya Pradesh & Jharkhand. During the
Financial Year 2015-16, a total of 1197.08 BUs have been supplied to
Indian Railways.
RGPPL has already entered into a long-term frame work agreement with
GAIL for commercial utilization of LNG terminal and commenced tolling
operations for 25 years w.e.f February 2012. 45 cargos have been
successfully unloaded since commissioning. 22 cargos were unloaded
during FY 2015-16. The total revenue earned by LNG Terminal from
commissioning till 31st March 2016 is about Rs.700 Crores. The plant
now operates only in non monsoon period as there is no breakwater.
Demerger process of power plant & LNG terminal is going on. It is
envisaged that by 2020, the breakwater construction will be completed
and it will be able to operate round the year at full capacity.
The proposal for the demerger of the Power and LNG business is under
consideration of RGPPL and its shareholders. The purpose of the
demerger is (a) to enable restructuring of the loan in order to make
the two demerged entities independently viable and (b) to make
available the funds to complete the breakwater in order to achieve the
full potential of the LNG terminal.
CITY GAS DISTRIBUTION (CGD)
- GAIL Gas Limited (wholly owned subsidiary)
GAIL Gas was incorporated with the objective to implement City Gas
Distribution (CGD) projects in the country, GAIL Gas has been
authorized by Petroleum and Natural Gas Regulatory Board (PNGRB) to
implement CGD Projects in Dewas, Kota, Sonipat, Meerut, Taj Trapezium
Zone and Bengaluru. In addition, GAIL Gas is pursuing City Gas Business
in the state of Kerala, Andhra Pradesh, Karnataka, Rajasthan, Kota and
Vadodara City etc. through its joint ventures. It has also won the
authorization of Haridwar district and North Goa through a consortium
with Bharat Petroleum Corporation Limited by PNGRB.
Rajasthan State Gas Limited (RSGL) was incorporated by GAIL Gas Limited
and Rajasthan State Petroleum Corporation Limited (RSPCL) with the
objective to promote the CGD projects and take up activities of gas
distribution in the state of Rajasthan. GAIL Gas has transferred its
Kota CGD Assets to RSGL and matching contribution will be made by other
JV partner i.e. RSPCL
* Compressed Natural Gas (CNG)
During the year, GAIL Gas augmented its CNG distribution infrastructure
by enhancing the capacity of existing stations and adding two CNG
Station in Sonipat and one in Firozabad. CNG sales increased to 38
MMSCM in 2015-16.
* Piped Natural Gas (PNG)
In PNG business, GAIL Gas is progressively supplying PNG to domestic
customers in its authorized cities. Presently, the company is catering
to 11404 households.
GAIL Gas continue to maintain its focus on the PNG industrial and
commercial segment as one of the potential growth areas. With its
concentrated efforts in the year 2015-16, the total number of
commercial and industrial customers increased to 513 in 2015-16.
GAIL Gas has commissioned the steel networks in the geographical area
(GA) of Sonepat, Dewas, Kota, Meerut, Taj Trapezium Zone and Bengaluru.
For reaching more charge areas for domestic connections, the steel grid
network and MDPE pipeline network has been extended to 388.93 kms and
806.41 kms respectively in 2015-16 in the cities of Sonepat, Meerut,
Dewas, Kota, Taj Trapezium zone and Bengaluru.
During the year, the sales volume from industrial, commercial and
domestic customers grew to 702.80 MMSCM from 526 MMSCM during previous
year.
- Aavantika Gas Limited (AGL)
AGL was incorporated to implement CGD Projects in Madhya Pradesh. As on
31st March, 2016, AGL operates 20 CNG stations including 9 daughter
stations, 7 online stations & 4 mother stations in Indore GA (including
Ujjain) and Gwalo GA.
Further, as on 31st March 2016, AGL supplied PNG to around 6430
Domestic, 37 commercial & 59 industrial consumers in its authorized
geographical regions. AGL is also catering to fuel requirement of
around 21,300 CNG vehicles operating in the region. Your Company along
with HPCL holds 22.50% stake as an equal partner.
- Bhagyanagar Gas Limited (BGL)
BGL was incorporated to implement CGD projects in the United Andhra
Pradesh. As on 31st March, 2016, BGL operated 33 CNG Stations including
25 daughter booster stations, 5 online stations & 3 mother stations.
Further, as on 31st March 2016, BGL supplied PNG to over 4270
households, 46 commercial & 3 industrial consumers in its authorized
geographical regions. BGL also fulfills the fuel requirement of around
37000 CNG vehicles operating in the region. Your Company has 22.50 %
stake along with HPCL as an equal partner.
- Central UP Gas Limited (CUGL)
CUGL was incorporated to implement CGD projects in Uttar Pradesh. As on
31st March, 2016, CUGL operated 17 CNG Stations including 4 mother
stations, 10 online stations & 03 daughter booster stations.
Further, as on 31st March 2016, CUGL supplied PNG to over 13283
domestic, 148 commercial & 44 Industrial customers in its authorized
geographical regions. CUGL is also catering to fuel requirement of
around 51865 CNG vehicles operating in the region. Your Company has 25%
stake along with BPCL as an equal partner.
- Green Gas Limited (GGL)
GGL was incorporated to implement CGD projects in Uttar Pradesh. As on
31st March, 2016, GGL operated 15 CNG Stations including 5 daughter
stations, 6 online stations & 4 mother stations.
Further, as on 31st March 2016, GGL supplied PNG to over 12100
domestic, 15 commercial & 5 industrial customers in its authorized
geographical regions. GGL is also catering to fuel requirement of
around 36966 CNG vehicles operating in the region. Your Company has
22.5% stake along with IOCL as an equal partner.
- Indraprastha Gas Limited (IGL)
IGL was incorporated to implement CGD projects in Delhi''''s National
Capital Territory (NCT) and cities in adjoining National Capital Region
(NCR). As on 31st March, 2016, IGL operated 340 CNG Stations including
68 mother stations, 243 online stations & 29 daughter stations.
Further, as on 31st March 2016, IGL supplied PNG to over 6.36 Lac
Domestic, 1751 commercial & 821 industrial consumers in its authorized
geographical region, which includes the entire public transport of the
national capital and also the world''''s largest bus fleet on CNG. IGL is
also catering to fuel requirement of around 8.4 Lac CNG vehicles in the
Delhi/NCR. Your Company has 22.5% stake along with BPCL as an equal
partner.
- Mahanagar Gas Limited (MGL)
MGL was incorporated to implement CGD projects in Mumbai & adjoining
areas. As on 31st March, 2016, MGL operated 188 CNG Stations, 19 mother
stations, 142 online stations & 27 daughter booster stations.
Further, as on 31st March 2016, MGL supplied PNG to over 8.62 Lac
Domestic, 2866 commercial & 60 industrial consumers in its authorized
geographical region. MGL is also catering to fuel requirement of around
4.7 Lac CNG vehicles operating in the region.
Your Company accorded approval to Mahanagar Gas Ltd.(MGL), to issue
fully paid up unsecured Compulsory Convertible Debentures(CCDs) at par
to Government of Maharashtra (GOM) due to which equity holding of GoM
increased to 10% of total paid-up equity capital. Further, your Company
also accorded approval to off-load the equity shares held by GAIL and
BGL each up to 12.5% of MGL equity through the Initial Public
Offering(IPO). MGL Issue was opened on 21st June, 2016 and closed on
23rd June, 2016. Shares were allotted to investors at Rs.421/- per
share. MGL equity shares were listed on NSE and BSE on 1st July, 2016 .
Your Company equity holding in MGL post-IPO is 32.5% along with BG Asia
Pacific Holdings Pte. Limited as an equal partner.
- Maharashtra Natural Gas Limited (MNGL)
MNGL was incorporated to implement CGD projects in and around Pune. As
on 31st March, 2016, MNGL operated 36 CNG Stations including 5 mother
stations, 14 online stations & 17 daughter stations.
Further, as on 31st March 2016, MNGL supplied PNG to over 30598
Domestic, 132 Commercial and 115 Industrial Consumers in its authorized
geographical region. MNGL is also catering to fuel requirement of
around 97307 CNG vehicles operating in the region. Your Company has
22.5% stake along with BPCL as an equal partner.
- Tripura Natural Gas Company Limited (TNGCL)
TNGCL was incorporated to implement CGD projects in Agartala. As on
March 31st, 2016, TNGCL operated 5 CNG stations including 3 mother
stations and 2 daughter stations in these areas.
Further, as on March 31st, 2016, TNGCL supplied PNG to over 22,615
domestic, 322 commercial and 47 Industrial customers in its authorized
geographical region. TNGCL also fulfils the fuel requirement of around
8,063 CNG vehicles operating in the region. Your Company has 29% stake
in this joint venture.
- Vadodara Gas Limited (VGL)
Shareholders approved transfer of your Company''''s CNG stations and
associated pipeline laid in city for connecting CNG Station in Vadodara
to proposed Joint Venture Company of GAIL Gas Limited with Vadodara
Mahanagar Seva Sadan (VMSS) in year 2011.
Accordingly, VGL was incorporated as Joint Venture Company (JVC) of
GAIL Gas Limited and VMSS for supply of Compressed Natural Gas ("CNG")
and Piped Natural Gas ("PNG") in the city of Vadodara. Your Company has
signed the Business Transfer Agreement (BTA) with VGL and transferred
its assets to VGL. VGL is operating the CGD business we.f. 01.10.2014
in Vadodara. Consequent upon transfer of assets, your Company has
32.93% stake along with GAIL Gas Ltd. 17.07% stake and VMSS has 50%
stake in VGL.
VGL operates 9 CNG stations in Vadodara and dispensing more than 65,000
kg/day CNG, The CNG network in the City of Vadodara includes 3- Mother
Stations, 1- On-line Station and 5- Daughter Booster Stations and 13 Km
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 2,200 commercial in the city through a 750 km long PE
Pipeline Distribution Grid and 07 District Pressure Regulating System.
This network was originally built, owned and operated by VMSS. VGL
developed new MDPE network of 204 Km in outskirt area which catered
about 50000 houses and out of that @2400 connections regularised and
others ongoing.
PETROCHEMICALS
- Brahmaputra Cracker and Polymer Limited (BCPL) (Subsidiary)
Your Company has 70% equity stake in Brahmaputra Cracker and Polymer
Limited (BCPL), with Oil India Limited (OIL), Numaligarh Refinery
Limited (NRL) and the Government of Assam each having 10% equity share.
BCPL has set up 2,80,000 TPA polymer plants in Assam.
The petrochemical complex at Lepetkata was commissioned on January 02,
2016 and dedicated to the nation by Hon''''ble Prime Minister, Narendra
Modi on February 05, 2016.
As on 31st March, 2016, BCPL has produced around 3200 MT of polymers
and 1000 MT of liquid hydrocarbons. Marketing Agreement was executed
with BCPL during the year.
- ONGC Petro-additions Limited (OPaL)
OPaL is implementing a Greenfield petrochemical complex of 1.4 MMTPA
Polymer capacity at Dahej, Gujarat. Your Company, with a 15.5% equity
stake and an investment of Rs.994.95 crores, is a co-promoter of OPaL.
Oil and Natural Gas Corporation Limited (ONGC) and Gujarat State
Petroleum Corporation Limited (GSPC) are co-promotors of OPaL. The
plant is likely to commence operations during FY 2016-17.
OTHERS
- TAPI Pipeline Company Limited (TPCL)
Your Company is pursuing the Turkmenistan-Afghanistan-Pakistan-India
(TAPI) Pipeline project to receive natural gas supply from the
Galkynysh fields of Turkmenistan. TPCL was incorporated in November
2014 in ''''Isle of Man, to build, own and operate the proposed TAPI
pipeline. In August 2015, Turkmengaz was endorsed as the Consortium
Leader of the project by the TAPI entities. The Shareholders Agreement
of TPCL was signed among the shareholders on December 13, 2015 while
the Investment Agreement was signed on April 07, 2016. Your Company
holds 5% equity in TPCL.
- South-East Asia Gas Pipeline Company Limited (SEAGP)
SEAGP was formed to transport natural gas from A1/A3 blocks in Myanmar
to Myanmar-China border. As of January 2016, this pipeline is
transporting nearly 16 MMSCMD of natural gas. Your Company has a 4.17%
equity stake in SEAGP
- Talcher Fertilizers Limited (Earlier known as Rashtriya Coal Gas
Fertilizers Limited)
A consortium comprising of your Company, CIL, RCF and FCIL was formed
to revive FCIL, Talcher fertilizer unit in the Angul district of
Orissa. The MoU was signed by the consortium partners on September 05,
2013. Subsequently, the joint venture company, Rashtriya Coal Gas
Fertilizers Limited, was formed on November 13, 2015. Your Company
holds 29.67% in this JVC.
PARTICULARS OF LOANS, INVESTMENTS AND CORPORATE GUARANTEES
Details of investments, loan and guarantee covered under Section 186 of
the Companies Act, 2013 forms part of financial statement, as a
separate section in the Annual Report FY 2015-16.
IT ADVANCEMENTS AND FUNCTIONAL EXCELLENCE
Digital technology is now a new disruptive force to reckon with in all
realms of businesses. Your Company has aligned with the GoI''''s "Digital
India" initiative to launch Digital GAIL to integrate all processes and
stakeholders with digital services. Digital GAIL aims to ensure that
the Company''''s services are made available electronically, efficiently,
in shorter delivery time, while reducing paperwork.
All SAP systems in your Company have been upgraded and so the Company
is all set for the implementation of asset depreciation as per the IT
Act, linear asset management, risk management, incident management,
worker safety management, change management, and mobile apps for HR &
Sales.
Your Company has implemented Analytics Dashboards for the top
management, using the latest SAP HANA-based Business Information
Warehouse. These user-friendly dashboards provide drill-down facilities
for analysing data and facilitate faster decision making. Your Company
has also introduced mobile apps to provide anytime and anywhere access
to employees.
GAIL has also implemented the enhanced EHSM Module for incident and
risk management. This ensures that any deviation in operational process
is recorded and automated for proper monitoring. Accordingly,
preventive actions for mitigation of risks are taken.
Your company has also implemented a system for bilingual (Hindi and
English) conversion of selective SAP output.
To provide recognition to your Company data centres as secured data
centres in the industry, these have been certified by international
certification agency based on ISO 27001:2013 Information Security
Management System (ISMS) Framework. Your company has successfully
conducted Surveillance Audit in November 2015 through M/s BSI and
retained the ISO 27001 certification for ensuring security of
information and physical assets.
Continuing journey towards functional excellence, your Company has
taken various new initiatives during FY 2015-16 in the fields of
Competence building, Asset Integrity Management, Standardization,
Digital Applications / Processes, Employee Engagement, Knowledge
Leverage, Archiving of Documents, Stakeholder Management etc. Further,
moving ahead in the endeavor to nurture symbiotic relationship with
Vendors / Contractors / Suppliers, Vendor Coaching, Pre-Dispute
Resolution Mechanism & health monitoring of Contracts have been
implemented with an objective to minimize disputes during contract
execution as well as to minimize post contract closure legal disputes /
arbitrations.
HEALTH, SAFETY AND ENVIRONMENT (HSE) MANAGEMENT
- Corporate HSE Policy
The HSE practices are primarily driven through a Corporate HSE policy,
which is a statement of commitment of the management of your Company.
The Company is committed to conduct business with a robust and
integrated HSE management system with a focus on improving harmony with
the environment through sustainable development. The safety and health
of all our employees is of paramount importance to the management, and
find mention in the core organisational values of GAIL. Employees and
contract workers are strongly encouraged to adopt a safe working
culture and behaviour to ensure effective implementation of the HSE
policy. Complying with applicable HSE rules and regulations and going
beyond in setting internal targets are important elements of the HSE
management policy of your Company.
- Safety Performance
Safety performance is measured through "HSE Score" which is evaluated
on the basis of performance of sites against important HSE Management
System elements. Your Company achieved the HSE Score of 93% as against
the MoU target of 90%.
- Safety Training
Your Company imparts regular and structured HSE training to its
employees to upgrade their skills, knowledge and competence. It also
conducts regular training sessions for contract workers, hydrocarbon
tanker drivers and other workers to create awareness of the probable
hazards in their work area and suggest safe work practices. Your
Company also understands the importance of good health, and as a step
in this direction, it organized the HSE workshop on "Occupational
Health" for business heads and heads of fire and safety & medical
services. Faculties from prestigious institutions are also invited
regularly to share their insights on health-related issues. Your
Company also holds technical seminars regularly, as a case point, it
organized a seminar on "Safe Operation of Cross-Country Pipeline" for
Oil and Gas Industry in Mumbai, in association with National Safety
Council, Mumbai.
- Safety Culture Transformation Through Behaviour Based Safety (BBS)
Concept
Your Company introduced and implemented the Behaviour-Based Safety
(BBS) Concept to enhance safety of people and its installations. The
implementation of this concept has helped to minimize at-risk behaviour
at all work sites. In order to educate the employees on this concept,
behaviour- based safety cum safety leadership workshops were organized
at various sites of your Company during the year.
- Safety Audits
Your Company undertakes various safety audits to ensure implementation
of the HSE Management System Guidelines and Emergency Preparedness.
These audits are conducted by in-house teams and external safety
auditors.
- Occupational Health
Your Company has implemented occupational hygiene measures and medical
surveillance programmes to monitor and control the occupational health
of its employees. It has also prepared guidelines on occupational
health management. The Corporate Occupational Health Committee met four
times during the year to monitor the occupational health programmes in
your Company. To evaluate effectiveness of these programmes, a
multi-disciplinary internal team conducted occupational health audit of
process plants on all its work sites. The Company also conducts
periodic medical examination of its employees at its various work
centres, based on defined guidelines.
SUSTAINABILITY INITIATIVES
Your Company is in the process of publishing its sixth Sustainability
Report for 2015-16 based on the Global Reporting Initiative (GRI) G4
Guidelines. Sustainability reporting has helped in measuring and
monitoring your Company''''s performance and moving beyond the mandatory
requirements to ingrain sustainability within the organization in
letter and spirit. It has served as an important management tool
helping us to re-look at your Company''''s systems, policies and
procedures.
Since inception, your Company has been guided by the principles of
accountability and transparency. In 2011, your Company formally began
its sustainability journey, taking small yet steady steps at a time.
The Company''''s Sustainable Development Committee, comprising the
Functional Directors as its members and an independent director as the
Chairman, regularly monitors these sustainability initiatives and their
performance.
The management of your Company understands that taking concrete actions
in the right direction is equally important. GAIL is among the very few
companies to have set voluntary targets through Sustainability
Aspirations 2020 and transparently disclosed them in the public domain.
Your Company has disclosed additional targets through the revised
Sustainability Aspirations 2020 in the Sustainability Report. The
targets are in the area of Specific Energy Reduction, Specific GHG
Emission Reduction, Specific Fresh Water Consumption Reduction and Zero
Waste Water Discharge.
Your Company has strengthened its data management systems to capture
credible and authentic data and information from its various sites. For
the second time in a row, your Company has been acknowledged among
CDP''''s India Leaders 2015 and featured in the Climate Disclosure
Leadership Index (CDLI). Your Company has emerged the highest ranking
Company among the country''''s Public Sector Undertakings, and third
overall, in the CDLI 2016.
Your Company believes that it is important to collaborate with industry
leaders, associations and peers to address national and global
sustainability challenges and work towards a common goal. Its focus has
remained on collaborating with various external stakeholders such as
TERI, CII, GRI, UNGC, FICCI and CDP among others, to gain from their
knowledge and experience in the area of sustainability. Your Company
conducted workshops in collaboration with organizations such GRI Focal
Point India and CDP during the year.
In line with the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 requirements, Business Responsibility Report (BRR)
2015-16 is contained in a separate section in the Annual Report.
VIGILANCE
Corporate Vigilance department of your Company is ISO-9001:2008
certified for having adopted Quality Management System in compliance
with the requirements of ISO. Various initiatives such as Bill Watch
System, e-tendering, e-payments etc. have already been implemented in
the past for the benefit of vendors and suppliers to bring transparency
in your Company''''s systems and processes. A number of system
improvements were effected in your Company during the year for
effective utilization of its resources, which in turn would also help
in preventing corruption and ensure all round good governance like:
- Test check measurement by senior officers during bill payment ?
Constitution of Estimate Review Committee for tenders to improve
estimation process.
- Roll out of On-line Price bidding for service requisitions in
Supplier Relationship
- Management (SRM) e-tendering system.
The Vigilance Awareness Week-2015 was observed on the theme "Preventive
Vigilance as a tool of Good Governance" at the Corporate Office and at
all the work centres of your Company from 26th to 31st October, 2015.
In order to create better awareness about corruption and its effects
amongst the youth and college students, various competitions were
organized. In order to spread awareness among your Company employees
and related work force, various competitions involving Essay Writing,
Slogan Writing, Poster Paintings, Online Quiz and debates were held
during the week. Other events including banners/posters/painting
display, March and rallies with NGOs were also organized at various
work centres. A magazine "JAGROOK" containing CVC circulars, articles
and case studies related to vigilance was also published.
CAPABILITY BUILDING
- Human Capital
Your Company invests considerable time, efforts and resources to be the
employer of choice and attract and retain the best available talent.
GAIL carefully nurtures its intellectual capital and channelizes its
resources to generate value. The Company''''s Value Added per Employee
initiative reflects its commitment to make optimal and productive use
of the available resources and business opportunities. For the year
under review, Value Added per Employee was Rs.167.74 lacs.
- Leadership Development Program
Building organizational and leadership capabilities is one of the top
priorities of your Company. Under the Company''''s Leadership Development
Programme, the Senior Management Development Centre (SMDC) exercise was
initiated for capability building of the senior level employees. As on
date, the following employees were trained under this programme: Almost
all the senior executives in the Chief Manager (E-6 Grade) and above;
more than 95% executives who were promoted to the level of chief
managers in APE 2015; and 316 senior managers (E-5 Grade). Plans are
underway to train more senior managers (E-5 Grade) in the near future.
Development gaps of the participants were identified and a
comprehensive Individual Development Plan (IDP) was drawn to fill this
gap. Under this programme, customized training would be provided to the
employees at premier business schools, and through e-learning courses
and 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 Scheduled Castes, Scheduled Tribes, and Other
Backward Classes amongst them in your Company as on 31st March, 2016
have been given in Table below:
Group Employees on Roll SC ST OBC PWD
A 3102 485 197 563 41
B 558 110 63 104 11
C 598 103 23 185 35
D 58 17 6 14 1
C&MD
DIRECTORS & W 05 - - - -
CVO
Total 4321 715 289 866 88
A total of 136 new employees joined your Company during the 2015-16.
Total Manpower of the Company as on 31st March, 2016 stood at 4321
(including Whole-time Directors & CVO) with 16.54% of its employees
belonging to SC category, 6.68% to ST category, 20.04% to OBC category,
7.96% to Minorities and 2.03% to PWDs category Your Company''''s workforce
comprised of 251 women employees as on 31st March, 2016.
- Capability Development
Your Company believes that its human resource is one of the most vital
assets for achieving its vision, mission and objectives. Therefore,
capability building and talent development of its human resources have
been its key focus areas.
GAIL Training Institute (GTI) organizes systematic and structured
programmes for capability building across all levels within the
organization. In recognition of its initiatives, GTI has been conferred
with the prestigious Golden Peacock National Training Award for the
year 2016.
GTI organised the following programmes and initiatives during the
period under review:
- More than four man-days of training on average per employee.
- Certification Training Programmes from NACE, ASME, OEMs and
technology licensors for technical human resources to empower them with
state-of-the-art expertise in the core areas of their function.
- Specialised training programmes on new business areas, in-line with
the Company''''s Strategy 2020, including Business Modelling, Energy
Trading, Hedging and Risk Management.
- Individual Development Plan (IDP) for chief managers and above, based
on the developement areas identified during the SMDC exercise.
- The participants of this IDP plan were provided competency-based
books and e-learning modules prepared by Harvard Manage Mentor (HMM).
They also undertook customised management development programmes
through IIM Bengaluru and Kolkata.
- Leading external management experts were invited to provide
customised functional development programmes for senior employees.
- Mentorship programme for all new executives ? Healing with nutrition
programme to provide health tips and reduce stress levels.
- Awareness programmes on Sustainable Development on all sites.
More than 60% of employees have already participated in these
programmes.
- Knowledge sharing seminar to motivate employees to share their
experiences/ expertize with other employees.
- In-house business quizzes and business simulations to update
employees with the latest developments in their core business areas.
? One year access to executives of E&P Department to International
Petroleum Industry Multimedia System (IPIMS) e-learning module
developed by International Human Resource Development Corporation
(IHRDC).
As part of its commitment to develop skills and capabilities across the
hydrocarbon industry, GTI also successfully organised training
programmes for employees of several other organisations including
RGPPL, HPCL, BCPL, IGL, MGL, MNGL, GSPL, and HMEL.
Your Company also plays a proactive role to support the National Skill
Development Mission. It is the founder member of Hydrocarbon Sector
Skill Council (HSSC) and provides skill-based training to create a pool
of skilled manpower for CGD network and mid-stream hydrocarbon
industry.
- Official Language
Your Company goes the extra mile to propagate and implement the
Official Language Policy of the Union of India.
The Official Language Implementation Committees at the corporate and
work centre level held quarterly meetings to monitor and review the
progress of achieving the targets fixed in the Annual Programme issued
by the Govt. of India.
Hindi workshops/trainings are organized on regular basis at GTI, Jaipur
and Noida and at other work centres. Hindi computer training sessions
are integral part of these programmes. During the year 2015-16, 1,335
employees were provided formal training through 67 workshops. All
computers in the Company have Unicode Hindi fonts with transliteration
key-board typing facility
Hindi Fortnight was celebrated from September 14 to 28, 2015 to promote
the official language.
Every Monday/first working day of the month is observed as Hindi Diwas
wherein all employees are encouraged to express themselves in the
language.
Your Company now uses a special software to generate all formal
communication including pay slips, CPF card, pension card, promotion
order, transfer order, reliving order in both Hindi and English. GAIL
is one of the few PSUs to implement this facility
Names of all employees in official e-mail IDs are both in English and
Hindi. The Company terminology has been standardized and the list has
been circulated amongst all employees. GAILs web site and Intranet also
follow the bilingual format.
Your Company also publishes the Hindi magazine "Rajbhasha Sahyog" to
promote the language. Motivational and inspirational books in Hindi
were distributed on the occasion of World Hindi Day,
The 16th Rajbhasha Sammelan was organised on January 21 and 22, 2016 to
promote the use of Hindi and review the progress made in the
implementation of the official language in the Company.
The First Sub-Committee of Committee of Parliament on Official Language
inspected the Jamnagar, Agartala and Ramgarh offices to review the
steps undertaken to promote the official language and were appreciative
of our efforts.
A meeting of Hindi Salahkar Samiti was organised on February 8, 2016 in
Puri by the MoP&NG under the Chairmanship of Minister of State for
Petroleum & Natural Gas (I/C). GAIL too participated and highlighted
its efforts to promote the language.
- Sexual Harassment of Women at Workplace
Your Company has in place ''''Policy on Prevention, Prohibition and
Redressal of Sexual Harassment of Women at Workplace'''' in line with the
requirements of the Sexual Harassment of Women at the Workplace
(Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints
Committee (ICC) has been set up to redress complaints received
regarding sexual harassment
During the year 2015-16, two sexual harassment complaints received and
the same were disposed off.
INNOVATION, RESEARCH AND DEVELOPMENT (R&D)
Your Company is committed to address the challenges of ever changing
business scenario through Innovation. In this regard efforts are made
to encourage Innovation and creativity of employees through a
Suggestion Scheme. This Scheme helps to promote organization-wide idea
generation for incremental innovation. The employees are motivated to
suggest improvements in their respective areas of work. The suggestions
so received are evaluated in a time bound manner for implementation and
CMD trophy is awarded to the best Suggestion.
Your Company is aggressively pursuing many R&D projects in its
identified thrust areas with a focus on developing high-impact
innovative technologies to help pursue the existing business in a more
optimum and sustainable manner. To improve the pipeline maintenance
practices a R&D project to utilize Satellite imagery for monitoring
Pipeline RoU was conceptualized. This project involved geo-mapping of
the Pipeline route and finalizing the sequencing of taking Satellite
images to meet the requirement of monthly monitoring. A change
detection software was also developed to identify encroachments through
analysis of sequential images. A "Bhuvan-GAIL Portal" was launched for
monitoring the RoU of 610 Km stretch of Dahej-Vijaipur pipeline through
this technology. Success of this pilot Project shall enable scaling-up
of this technology to cover the entire Pipeline network besides
developing additional functionalities to monitor activities like
Project execution of new Pipeline projects.
Your Company had successfully demonstrated the capture of Land Fill Gas
(LFG) site in an open and active landfill site at Ghazipur in Delhi. A
part of this low-quality LFG is now being partially upgraded and
utilized to generate Power through a 30 KW Micro Turbine. This Project
demonstrates our commitment towards sustainable utilization of waste
energy and climate risk mitigation through reduction of carbon
footprint.
The Wireless Sensor Network (WSN) technology is known for its
resilience and is more reliable than conventional wired networks.
Wireless Sensors were developed for continuous monitoring of Pipeline
parametres and are presently being pilot tested for transmitting and
logging data of few customers at Bhiwadi terminal. Various new
applications of polymer grades such as anti-microbial sutures for
healthcare applications; Nano- clay based additives to enhance polymer
properties etc. are also being developed.
The other important area for Research is hydrogen which is an ultra-
clean fuel. A Novel carbon nano-composite material was developed that
could store up to 6.7 wt% of hydrogen exceeding the 6% target set by
Department of Energy (DoE), USA. Further evaluation is underway to
utilize this material in a compact storage device to provide Hydrogen
to a Polymer Electrolyte Membrane (PEM) Fuel Cell.
Your Company has a judicious mix of various Basic/Applied/Pilot
projects encompassing the Natural Gas value chain in its R&D portfolio.
In addition, few projects are also being pursued in upcoming areas like
Solar, Fuel Cells, Gas Hydrates etc. These R&D projects are being
pursued in association with reputed research organizations /
institutes. Few Developmental Projects to improve efficiency and safety
of existing operations and to conserve the resources by utilizing
better technologies are also being implemented at process plants.
TOTAL QUALITY MANAGEMENT
Your Company endeavors for continual and sustainable improvement
through implementation of quality practices, innovation and
standardization. Your Company continues to implement various Quality
Circle projects through engagement of Company employees, resulting into
innovation in work places and leading to enhancement in productivity.
Your Company has achieved a Customer Satisfaction level of 90% and
committed to improve it. Your Company works for the satisfaction of
customers and stakeholders. Your Company has implemented Integrated
Management System and Energy Management System in various pipeline
system and process units. Your Company is committed to sustainable
development.
PROCUREMENT FROM MICRO AND SMALL ENTERPRISES (MSEs)
The Government of India has notified a Public Procurement Policy for
MSEs, Order 2012. In terms of said policy, out of the total eligible
value of annual procurement of approx. Rs.2,016 Crores towards goods
produced and services rendered by MSEs (including MSEs owned by SC/ST
Entrepreneur) during the FY 2015-16, the value of total procurement
made from MSEs is Rs.435.34 Crores which is approx. 21.59%. of 2,016
Crores
MOU PERFORMANCE
A Memorandum of Understanding (MoU) is signed every year between your
Company and its administrative ministry i.e. MoP&NG, through which
performance targets for the year are set. MoU for the year 2015-16 was
signed between Chairman & Managing Director and Secretary (P&NG),
Government of India on 31st March, 2015.
The thrust while fixing MoU targets was more towards improving
performance on critical aspects of the Company which include Key
Financial parameters, Gas Marketing, Gas Transmission, Project
Implementation, Capital Expenditure, Liquid Hydrocarbon & Polymer
Production etc. Significant thrust has also been given on Research &
Development Projects and Operating Efficiency parameters.
Your Company has been consistently achieving ''''Excellent'''' MoU rating
since the inception of MoU system i.e. from 1989-90 to 2013-14.
However, because of unprecedented fall in crude oil prices from $ 140 /
barrel to ~ $ 30 - 40 in 2014-15 leading to fall in LHC & Polymer
prices, negative price differentials between Spot and long term
contracted R-LNG prices etc., there were gaps between MoU targets and
actual performance of your Company in FY 2014-15. As a result, your
Company achieved ''''Very Good'''' MoU rating for the year 2014-15.
Evaluation of MoU 2015-16 is under progress and the final evaluated MoU
score and rating is expected to be announced in December 2016.
LAURELS
- Corporate
- Emerged as the highest ranking PSU in Carbon Disclosure Leadership
Index securing 98 out of maximum 100, an increase of 12 points in one
year.
- Released its fifth Sustainability Report becoming the first PSU to
avail Content Index certification by GRI, Amsterdam.
- Dun & Bradstreet Award 2015 in the category Gas - Processing,
Transmission and Marketing.
- Achieved the 5th rank in the Platts Top 250 Companies in the Asia-
Pacific in the Gas Utilities category ? "Environmental Sustainability
- Company of the year" for 2015. The special commendation award has
been conferred to GAIL for special efforts towards Environmen
DEAR SHAREOWNERS,
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.
FINANCIAL HIGHLIGHTS
Your Company''s key financial parameters during the year 2014-15 and
Important financial highlights are as under:
2014-15 2013-14
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
Appropriations
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.
DIVIDEND
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
Rs.6,993 Croresin2013-14.
CREDIT RATING
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.
CORPORATE STRATEGY
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.
BUSINESS 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 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
India.
- Transmission
- 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.
- LPG
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
- Petrochemicals
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
planned during2015-l6.
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
Odisha.
- 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
hereunder:
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
2011.
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.
PETROCHEMICALS
- 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
OPaL.
OTHERS
- 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
course.
- 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
SEAGP.
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.
IT ADVANCEMENTS
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,
yourCompanyiskeepingpacewiththefastchangingindustryenvironment.lt
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
device.
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
accelerators.
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
and Education.
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
archiving.
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
corrective measures.
SUSTAINABILITY INITIATIVES
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
and procedures.
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
Leadership Forum.
VIGILANCE
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
units.
- 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.
CAPABILITY BUILDING
- 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
SMDC Exercise.
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
CMD, Whole-Time
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
ministry.
Some of the salient achievements/initiatives for talent development are
asunder:
- 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
at sites.
- 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
bilingual format.
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
family members.
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
foot print.
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
benefits.
- 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
Rs.138crore.
MOU PERFORMANCE
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
March,2014.
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.
LAURELS
Corporate
- Your Company featured amongst "India''s 100 Best Companies to Work For
2014 Study" conducted by Great Place to Work Institute for the third
Consecutive year.
- Sustainability Report