Professional Documents
Culture Documents
21
st
Annual Report
Board of D|reotors 4
D|reotors' Peport 6
F|ve Year Prof||e 47
Annua| Aooounts 51
Aooount|ng Po||o|es 88
Cash F|ow Statement 91
Ba|anoe Sheet Abstraot and Company's
Genera| Bus|ness Prof||e 93
Aud|tors' Peport to the Shareho|ders 95
Sohedu|e of F|xed Assets - Townsh|p 99
lnoome and Expend|ture - Townsh|p eto. 100
Comments and Pev|ew of Aooounts
by C&AG 101
Annua| Aooount of Subs|d|ary
GAl| G|oba| S|ngapore) Pte. ||m|ted 109
Conso||dated F|nano|a| Statement 125
3 We Stand for Pe||ab|||ty
21
st
Annual Report
Board of Directors
Shri Proshanto Banerjee
Chairman & Managing Director
Shri J.K. Jain
Director (Finance)
Shri S.P. Rao
Director (Projects)
Shri B.S. Negi
Director
(Business Development)
Shri M.R. Hingnikar
Director (HR)
Dr. U.D. Choubey
Director (Marketing)
Shri M.S. Srinivasan, IAS
Director
(From 28.01.2005)
Dr. Amit Mitra
Director
Dr. A. K. Kundra
Director
Shri B.C. Bora
Director
Shri P.K. Sinha, IAS
Director
(From 20.12.2004)
Shri Ajay Tyagi, IAS
Director
(From 20.04.2005)
5 We Stand for Pe||ab|||ty
21
st
Annual Report
Statutory Auditors
M/s. S. Mann & Co.
Branch Auditors
M/s. Nripendra & Co.
M/s. Chhajer & Co.
Company Secretary
Shri N. K. Nagpal
Stock Exchanges where Shares/ GDRs of
the Company are listed
DSE House, 3/1, Asaf A|| Poad
New De|h| - 110 002
Ph|roze Jeejeebhoy Towers
Da|a| Street, Mumba| - 400 001
'Exohange P|aza'
Bandra Kur|a Comp|ex
Bandra E), Mumba| - 400 051
10, Paternoster Square
|ondon - EC4M 7|S U.K.)
The Delhi Stock Exchange
Association Limited
The Stock Exchange, Mumbai
National Stock Exchange of
India Limited
London Stock Exchange
GDPs)
Chartered Aooountants
New De|h|
Chartered Aooountants
Kanpur
Chartered Aooountants
Bhopa|
Registrars and Share
Transfer Agent
MCS Limited
Bankers
State Bank of India
Bank of India
Bank of Baroda
Indian Overseas Bank
ICICI Bank Ltd.
HDFC Bank Ltd.
Registered Office
16, Bh|ka|j| Cama P|aoe, P. K. Puram, New De|h| - 110 066
Corporate Aooounts Group Branoh
Jawahar vyapar Bhavan,
11
th
& 12
th
F|oors,
To|stoy Marg,
New De|h| - 110 001
Overseas Branoh
v|jaya Bu||d|ng,
Barakhamba Poad,
New De|h| - 110 001
Bh|ka|j| Cama P|aoe,
P. K. Puram,
New De|h| - 110 066
Prakash Deep Bu||d|ng,
To|stoy Marg,
New De|h| - 110 001
9A, Phe|ps Bu||d|ng,
Connaught P|aoe,
New De|h| - 110 001
G-3/4, Surya K|ran Bu||d|ng
19, Kasturba Gandh| Marg,
New De|h| - 110 001
Sr| venkatesh Bhawan,
W - 40, Okh|a lndustr|a| Area
Phase-ll,
New De|h| - 110 020
Directors Report
To,
The Members
The D|reotors have p|easure |n present|ng the 21
st
Annua| Peport
of your "Navratna" Company together w|th Aud|ted Aooounts for
the year ended 31
st
Maroh, 2005.
Your Company has oomp|eted yet another suooessfu| year and
we are happy to present the performanoe of GAl| |n the past
year, wh|oh brought an overa|| growth |n f|nano|a| and phys|oa|
performanoes.
PHYSICAL PERFORMANCE
The phys|oa| performanoe of GAl| showed growth |n a|| |ts
bus|nesses as oompared w|th |ast year. The sa|e of Gas has
|noreased by 8.7% over the prev|ous year to 22.835 BCM from
21.013 BCM. S|m||ar|y, our ||qu|d Hydrooarbon Produot|on, wh|oh
oompr|ses of produots ||ke Pentane, Propane and SBP So|vents,
|noreased by the same marg|n of 8.7% to 298264 MT as oompared
to the |ast year's produot|on of 274473 MT. A|though our |PG
produot|on reg|stered a marg|na| 1% |norease over the prev|ous
year to 1094835 MT, Po|ymer produot|on reg|stered an |mpress|ve
13.3% growth from 263720 MT to 298787 MT and our |PG
Transm|ss|on bus|ness has so|d 16% more oapao|ty over the
prev|ous year.
2004-05 2003-04
Sa|e of Gas BCM) 22.835 21.013
|PG Produot|on MTs) 10,94,835 10,88,686
Pentane/Propane/SBP 2,98,264 2,74,473
So|vents Produot|on MTs)
Po|ymer Produot|on MTs) 2,98,787 2,63,720
|PG Transm|ss|on MTs) 21,37,504 18,40,538
BCM : Billion Cubic Meters; MT: Metric Tonnes
FINANCIAL PERFORMANCE
Dur|ng the year under rev|ew, the Turnover of your Company, wh|oh
|no|udes revenue generated from sa|e of produots and serv|oes,
has |noreased to Ps.12,412 Crores from Ps.10,826 Crores Net
of ED and exo|ud|ng |nterna| oonsumpt|on) thereby reg|ster|ng a
growth of 14.6% over the prev|ous year.
(Rs. in Crores)
Particulars 2004-05 2003-04
Turnover Net of ED and lnterna| oonsumpt|on) 12,412 10,826
Other lnoome 349 244
Cost of Sa|es Exo|ud|ng lnterest & Depreo|at|on) 8,811 7,456
Gross Marg|n EBlDTA) 3,950 3,614
lnterest 134 138
Depreo|at|on/Wr|te Off 945 662
Prof|t Before Tax 2,871 2,814
Prov|s|on for Tax |no|ud|ng Deferred Tax) 917 945
Prof|t After Tax 1,954 1,869
However, the Prof|t After Tax |s Ps.1,954 Crores as aga|nst
Ps.1,869 Crores of prev|ous year, a growth of 4.6%. Th|s growth
|n the prof|tab|||ty of your Company has been aoh|eved |n sp|te of
a s|gn|f|oant |norease |n the subs|dy burden of 166% from
Ps. 428 Crores |n 2003-04 to Ps. 1,137 Crores |n 2004-05, wh|oh
GAl| shared towards under reoover|es on Domest|o |PG and
PDS Kerosene as per Government of lnd|a d|reot|ves.
HIGHLIGHTS 2004-05
Numbers speak
Turnover up by 14.6%
4.6% |norease |n PAT desp|te 166% |norease |n subs|dy burden
Net Worth up by 15.5%
Book va|ue/share up by 15% to Ps. 101.22
Peserves up by 17.8% to Ps. 7780.46 Crores
Truly Gas & beyond
Gas d|soovery |n Mynamar
O|| d|soovery |n Cambay b|ook
GAIL Global
100 % subs|d|ary |n S|ngapore
15 % equ|ty stake |n Natgas, Egypt
8.5 % part|opat|ng |nterest |n Ch|na Gas Ho|d|ng Company
Anything for a blue sky
C|ty gas d|str|but|on |mp|emented |n 5 o|t|es
Jv's |n p|aoe for 4 more o|t|es
Energizing Maharashtra
GAl| to souroe |NG for Patnag|r| Gas and Power Pvt |td
Spreading Wings
Ethy|ene produot|on oapao|ty at Pata |noreased from 2,60,000 TPA
to 3,10,000 TPA
GAl|TE| oomp|etes Meerut-Hapur and Greater No|da f|ber |oop
South - Gujarat & Nar|manam - Kutha|am P|pe||ne Projeot oomp|eted
GAl| perm|tted to market |PG w.e.f. Apr|| '06
Kudos to HR & Project teams
'Best Emp|oyers |n lnd|a 2004' by Hew|tt Assoo|ates-CNBC
NPMP award for exoe||enoe |n Projeot Management
Healthy, Wealthy & Wise
Pated Best PSU by Department of Pub||o Enterpr|ses DPE)
12
th
amongst 30 lnd|an oompan|es |n the ||st of Forbes 2000 - the
wor|d's wea|th|est oompan|es '05
Techno-savvy GAIL
F|na| stage of |mp|ementat|on of Enterpr|se Pesouroe P|ann|ng
Suooessfu||y oomm|ss|oned the Gas Management System
7 We Stand for Pe||ab|||ty
21
st
Annual Report
Furthermore, the book va|ue of your Company has |noreased from
Ps. 88 per share to Ps. 101 per share and the EPS of your
Company |s Ps. 23.11 |n FY-05 as oompared to Ps. 22.11 |n the
prev|ous year. The Peturn on lnvested Cap|ta| POlC), a parameter
on wh|oh GAl| was rated as the No. 1 Company among g|oba|
gas ut|||ty oompan|es as per P|atts |n FY-03, has |noreased from
19.17% |n FY-04 to 19.75% |n FY-05 and |s h|gher than the oost
of oap|ta|, thereby ref|eot|ng the va|ue oreat|ng oapab|||t|es of the
Company.
Consolidation of Accounts
Dur| ng the year, your Company has | noorporated a 100%
subs|d|ary, GAl| G|oba| S|ngapore) Pte. |td. Therefore, due to
regu|atory requ|rement of ||st|ng Agreement w|th Stook Exohanges,
Company has to oonso||date the aooounts |noorporat|ng the
aooounts of Subs|d|ary, Jo|nt venture and Assoo|ate oompan|es.
Henoe, your Company has prepared the oonso||dated aooounts
dur|ng the year.
Tot a| l noome | s Ps. 14, 207 Crores and Net Prof | t | s
Ps. 2,039 Crores. Tota| Gross Assets |s Ps. 14,786 Crores and
Tota| Peserves and Surp|us |s Ps. 7,964 Crores.
Returns
On the overa|| va|uat|ons of your Company, the Net Worth has
gone up by 15.5% to Ps. 8,560 Crores |n FY -05, generat|ng a
Peturn on Net Worth PONW) of 22.83% and the Peturn on Cap|ta|
Emp|oyed POCE) of 27.87%, both of wh|oh |nd|oate hea|thy
returns |n the bus|ness.
The Company has tota| reserves worth Ps. 7,780 Crores as on
FY-05, wh|oh |s an add|t|on of Ps. 1,180 Crores, from the prev|ous
year. Wh| | e t he gross b| ook on asset s has gone up by
Ps. 637 Crores to Ps.14,222 Crores |n FY-05, wh||e the net b|ook
has oome down by Ps. 297 Crores due to h|gher depreo|at|on.
Dividend
ln add|t|on to an lnter|m D|v|dend @ Ps. 4 per share for the year
2004-05, the D|reotors now fee| pr|v||eged to reoommend for
approva| of the members, payment of f|na| d|v|dend @ Ps. 4 per
share at a d|v|dend payout rat|o of 39%. The tota| payout to
shareho|ders |n 2004-05 |s Ps. 676 Crores.
W|th th|s, the tota| d|v|dend payment for the year 2004-05 stands
at 80% of the pa| d up equ| ty oap| ta| , | .e. Ps. 8 per share,
ma|nta|n|ng the rate dur|ng the prev|ous year.
Policy and Regulatory Framework
Po||oy doouments re|evant to lnd|a's natura| gas seotor name|y
Natura| Gas P|pe||ne Po||oy and Petro|eum and Natura| Gas
Pegu|atory Board B|||, both of wh|oh a|m to stream||ne the growth
of the gas eoonomy |n lnd|a, are yet to be re|eased by Government
of lnd|a. Both the doouments are reported to be under f|na||zat|on
and expeoted to be o|eared for |mp|ementat|on soon. Need|ess
to ment|on that the new po||o|es w||| have s|gn|f|oant |mpaot on
bus|ness of your Company |n terms of grow|ng oompet|t|on,
emergenoe of new markets and more |mportant|y, to fo||ow
d|fferent bus|ness praot|oes. Your Company has a|ready taken
severa| pro-aot|ve aot|ons towards oomp||anoe of the poss|b|e
measures env|saged |n the po||o|es. The bus|ness deve|opment
aot| v| t| es, d| soussed be| ow wou| d ref| eot the Company' s
preparedness and growth fooused areas.
CORPORATE STRATEGY
The strateg|o d|reot|on of your Company foouses on |ntegrat|on
aoross the gas va|ue oha|n, wh|oh |no|udes, exp|orat|on and
produot|on and gas souro|ng |n the upstream segment, gas
trad| ng, gas transm| ss| on p| pe| | nes, gas prooess| ng and
petroohem| oa| s | n the m| d stream segment and reta| | gas
d|str|but|on |n the downstream segment.
Your Company |ntends to |ay s|gn|f|oant thrust |n natura| gas
p|pe||ne expans|on, exp|orat|on and produot|on, gas souro|ng and
gas market|ng. C|ty gas bus|ness |s a|so an |mportant area of
|nterest. Bes|des g|oba||zat|on |n var|ous bus|ness vert|oa|s wou|d
a|so |norease |everage and m|n|m|ze r|sks assoo|ated w|th va|ue
oha|n |ntegrat|on. Your Company a|so oons|ders petroohem|oa|s
bus|ness as a growth dr|ver and p|ans to |everage unoonvent|ona|
teohno|og|es to aoh|eve oompet|t|veness.
BUSINESS DEVELOPMENT INITIATIVES
Natural Gas
lnd|an gas market has a|ready entered the growth phase, pr|mar||y
dr|ven by oommenoement of |NG |mports |n the western part of
the oountry. The soenar| o | ooks br| ghter w| th the new and
enoourag|ng gas f|nds |n eastern offshore. As a market |eader |n
gas bus|ness, your Company has taken severa| |n|t|at|ves to steer
through the oompet|t|ve s|tuat|on |n future to reta|n |ts |eadersh|p
pos|t|on |n the bus|ness.
Exploration and Production (E&P)
E&P |s a key growth dr|ver for your Company. At present, your
Company has 11 b|ooks through un|noorporated Jo|nt ventures,
|n partnersh|ps w|th var|ous exp|orat|on operators w|th a tota|
aoreage of over 67,000 km
2
. Your Company has seven b|ooks |n
the east ooast of lnd|a, three b|ooks |n the west ooast of lnd|a
and one |n Myanmar. These b|ooks have been aoqu|red through
b|dd|ng and through the farm-|n route.
The E&P |n|t|at|ve of the Company has a|ready had |n|t|a| suooess
|n form of gas d|soovery |n Myanmar A-1 b|ook and O|| |n Cambay
b|ook. Exp|orat|on work programme |n E&P b|ooks dur|ng 2004-
05 oons|sted of 2D se|sm|o data reprooess|ng of 340 |km,
aoqu|s|t|on of 2,355 km
2
3D se|sm|o data, dr||||ng of two on|and
we||s and 4 offshore we||s and geo|og|oa| and geophys|oa|
|nterpretat|on of the ava||ab|e data.
Exp|orat|on, deve|opment and operat|ons of a|| the b|ooks wou|d
enta|| s|gn|f|oant oap|ta| expend|ture |n the future. Furthermore,
your Company a| so p| ans to g| oba| | ze | ts E&P ventures by
part|o|pat|ng |n opportun|t|es |n fore|gn oountr|es and growth |n
the E&P bus| ness wou| d be pursued both organ| oa| | y and
|norgan|oa||y.
Globalisation
The |norgan|o growth mode| of your Company has resu|ted |n a
number of aoqu|s|t|on aot|v|t|es. Dur|ng the year under rev|ew,
your Company, through |ts subs|d|ary GAl| G|oba| S|ngapore)
Pte. ||m|ted, aoqu|red 15% equ|ty stake |n Nat|ona| Gas Company
Natgas), one of the |argest |ooa| d|str|but|on oompan|es |n Egypt.
Go|ng forward, your Company's foot pr|nts made |ts way to Ch|na
by way of aoqu|s|t|on of about 8.5% part|o|pat|ng |nterest |n Ch|na
Gas Ho|d|ng Company, a fast grow|ng reta|| gas oompany |n Ch|na
hav|ng exo|us|ve oonoess|ons |n more than 40 o|t|es for P|ped
Natura| Gas supp|y to res|dent|a|, |ndustr|a| and oommero|a|
seotors. Your Company has agreed to form separate Jo|nt
ventures for undertak|ng CNG projeots |n oerta|n o|t|es/towns |n
Ch|na. Your Company v|sua||zes th|s as a s|gn|f|oant opportun|ty
to bu||d |ts CNG re|ated expert|se. The g|oba||zat|on of bus|ness
has beoome a d|st|not bus|ness strategy for your Company.
Retail Gas Business (City Gas and CNG)
The suooess stor|es of two Jo|nt venture oompan|es of GAl|,
v|z., Mahanagar Gas ||m|ted MG|) and lndraprastha Gas ||m|ted
lG|) |n Mumba| and De|h| respeot|ve|y, for o|ty gas d|str|but|on |n
domest|o and automot|ve seotors are we|| known to a|| of you. GAl|,
therefore, |s form|ng more Jo|nt ventures w|th O|| Market|ng Compan|es
OMCs) for supp|y of natura| gas to domest|o and oommero|a|
oonsumers and CNG to the transport seotor |n var|ous o|t|es ||ke
Kanpur, |uoknow, Bare|||y, Agra, Pune, Gwa||or, lndore eto.
Peta|| Gas bus|ness has un|que oomp|ex|t|es, d|fferent from those
of bu|k natura| gas bus|ness. W|th the reta|| gas segment expeoted
to grow at a very h|gh paoe |n the near future, severa| reta|| Gas
Compan|es, wh|oh w||| be promoted by GAl|, w||| be faoed w|th
the oha||enge of oreat|ng and operat|ng the o|ty gas bus|ness. To
address these needs, GAl| has promoted jo|nt venture oompan|es
and other reta| | gas oompan| es | n lnd| a and abroad. Your
Company has taken the |n|t|at|ve for deve|op|ng a reta|| gas
software so|ut|on w|th lnfosys Teohno|og|es |td., Banga|ore.
Power
ln add|t|on, the Government of lnd|a |s now |n the prooess of
rev|va| of Dabho| Power Company. You w||| be p|eased to note
that GAl| has been se|eoted as a partner w|th Nat|ona| Therma|
Power Corporat|on ||m|ted NTPC) and lnd|an F|nano|a| lnst|tut|ons
to form a projeot Speo|a| Purpose veh|o|e SPv) w|th equ|ty
part|o|pat|on. The SPv has been reg|stered as Patnag|r| Gas and
Power Pr|vate ||m|ted. The pr|mary respons|b|||ty of GAl| w||| be
to souroe |NG and to undertake the operat|on of the regas|f|oat|on
term|na|. Your Company v|sua||zes th|s |n|t|at|ve as an attraot|ve
opportun|ty w|th oons|derab|e growth potent|a| |n both natura|
gas trad|ng and transportat|on |n oom|ng years.
Petrochemicals
ln the Petroohem|oa|s bus|ness seotor, your Company has
performed remarkab|y we|| dur|ng the year under rev|ew by
|noreas|ng sa|es vo|ume by 20% over |ast year. De-bott|eneok|ng
of the downstream p|ants has resu|ted |n the produot|on oapao|ty
|norease of 19% from 2,60,000 TPA to 3,10,000 TPA. Your
Company now |s a|so |ook|ng to the opportun|t|es for further
expans|on |n the Petroohem|oa| seotor through organ|o and
|norgan|o routes. Wh||e the ethy|ene produot|on oapao|ty at Pata
P|ant |s further be|ng |noreased to a |eve| of 4,40,000 TPA,
poss|b|||t|es of sett|ng up petroohem|oa| p|ants |n Kooh| Kera|a),
Assam and lran are a|so be|ng exp|ored.
Signing of Agreement between GAIL and China Gas Holding Company
Joint Venture Agreement between GAIL and IOCL
9 We Stand for Pe||ab|||ty
21
st
Annual Report
LNG
|NG |s a rea||ty |n lnd|a today. Your Company oons|ders |NG as
an | mportant gas souro| ng opt| on and | s aot| ve| y pursu| ng
opportun|t|es abroad for souroe t|e-ups to oater to the demand
of the grow|ng lnd|an markets.
GAILTEL
GAl|TE| prov|des nat|ona| oommun|oat|on baokbone us|ng OFC
based t e| eoom syst em | nst a| | ed a| ong GAl |' s p| pe| | ne
|nfrastruoture and estab||shes redundant OFC based DWDM
oommun|oat|on network. Add|ng to prev|ous 8,500 Km of f|ber
oonneot|ng 83 o|t|es, GAl|TE| had oomp|eted the Meerut-Hapur
|oop |n order to br|ng h|gh|y popu|ated or|t|oa| De|h|-Meerut route
|n redundanoy. Further |n order to |norease the oatohment area
and |mprove serv|oe ava||ab|||ty, Greater No|da f|ber |oop had been
oomp|eted.
GAl|TE| prov|des both |nterna| te|eoommun|oat|on serv|oes and
oommero|a| bandw|dth serv|oes to oustomers. Th|s year, GAl|TE|
has p|ayed major ro|e |n ||nk|ng d|fferent GAl| off|oes for EPP
purpose.
LPG Marketing
Your Company had taken up the matter w|th MoP&NG regard|ng
grant of perm|ss|on to market |PG be|ng produoed by GAl|.
MoP&NG |n February 2005, has perm|tted GAl| to market |PG
w.e.f. Apr||, 2006. Aot|on has been |n|t|ated for deve|opment of
requ|red |nfrastruoture and d|str|but|on network to market |PG
to a|| oategor|es of oustomers suoh as domest|o, oommero|a| -
paoked and |n bu|k to |ndustr|a| oustomers.
SUBSIDIARY COMPANY
Dur|ng the year under rev|ew, your Company formed a who||y
owned overseas subs| d| ary oompany name| y, GAl| G| oba|
S|ngapore) Pte. ||m|ted w|th the objeot|ve of aot|ve|y souro|ng
overseas bus|ness. Th|s oompany, |n future, |s ||ke|y to funot|on
as a veh| o| e f or a| | g| oba| | zat | on | n| t | at | ves. A prof | t of
Ps. 2.27 Crores has been made by th|s oompany.
PERFORMANCE OF JOINT VENTURES
Mahanagar Gas Limited (MGL)
The Company, a Jo| nt venture w| th Br| t| sh Gas and the
Government of Maharashtra, was |noorporated |n May, 1995, to
supp| y gas to domest| o, oommero| a| and sma| | | ndustr| a|
oonsumers and CNG to the transport seotor |n Mumba|. Current|y,
MG| | s supp| y| ng p| ped gas to about 2,30,000 domest| o
oonsumers, 658 oommero|a| oonsumers, 45 |ndustr|a| oonsumers
and CNG to over 1.5 |akhs veh|o|es |n Mumba| and Thane through
108 CNG out|ets spread over the o|ty.
Indraprastha Gas Limited (IGL)
lG|, a Jo|nt venture w|th BPC| and Government of De|h|, was
formed |n Deoember, 1998 to supp|y gas to domest| o and
oommero|a| oonsumers and CNG to the transport seotor |n NCT
of De|h|. lG| supp||es p|ped gas to more than 25,000 domest|o
oonsumers, 177 oommero|a| oonsumers and CNG to over 93,000
veh|o|es |no|ud|ng DTC Buses through 134 CNG out|ets spread
over the o|ty. lG| |s ||sted at the Nat|ona| Stook Exohange of lnd|a
||m|ted and The Stook Exohange, Mumba| and the Company's
o|os|ng share pr|oe was Ps. 97.20 as on 31
st
Maroh, 2005.
Petronet LNG Limited (PLL)
The Company, a Jo|nt venture of lOC|, ONGC, BPC| and GAl|,
was formed for sett|ng up of |NG |mport and regas|f|oat|on fao|||t|es.
P|| has a |ong term |NG supp|y oontraot w|th Pas Gas, Qatar for
|mport of 7.5 MMTPA. The Dahej term|na| started operat|ons |n
Maroh, 2004. Your Company, as the pr|no|pa| marketer has
transported the ent|re quant|ty of P-|NG |mported at Dahej term|na|.
P|| |s ||sted at the Nat|ona| Stook Exohange of lnd|a ||m|ted and
The Stook Exohange, Mumba| and the Company's o|os|ng share
pr|oe was Ps. 42.30 as on 31
st
Maroh, 2005.
Bhagyanagar Gas Limited (BGL)
The Company, a Jo|nt venture w|th HPC| was |noorporated |n
August, 2003 for d|str|but|on and market|ng of Auto |PG and CNG
for veh|o|es, and natura| gas for domest|o, oommero|a| and sma||
| ndust r| a| oonsumers | n o| t | es of Andhra Pradesh. BG|
oomm|ss|oned |ts f|rst Auto-|PG stat|on at T|rupath| |n June, 2004
fo||owed by two more stat|ons. BG| has a|so put up a CNG Mother
Stat|on at v|jaywada.
Central UP Gas Limited (CUGL)
CUG| |s a Jo|nt venture w|th BPC| |noorporated |n February, 2005
for o|ty gas d|str|but|on |n Kanpur o|ty. Your Company has
oomp|eted the projeot of |uoknow-Kanpur Feeder p|pe||ne, wh|oh
w||| be the souroe of supp|y of gas to CUG|.
BGLs first Auto LPG station at Tirupathi
Tripura Natural Gas Company Limited (TNGCL)
TNGC| | s a Jo| nt venture Company of Tr| pura l ndustr| a|
Deve|opment Corporat|on TlDC), Assam Gas Company ||m|ted
AGC|) and GAl| for d|str|but|on of P|ped Natura| Gas |n the state
of Tr|pura. Your Company has a part|o|pat|ng equ|ty of 29%.
PROJECTS
Projects Commissioned
Two p|pe||ne projeots have been oomm|ss|oned dur|ng the year.
The South - Gujarat P|pe||ne Projeot, oomm|ss|oned |n May, 2004
for supp|y|ng re-gas|f|ed |NG to the oonsumers |n South - Gujarat
and the |uoknow & Kanpur Feeder P|pe||ne, oomm|ss|oned |n
Maroh, 2005 w||| oarry gas to the o|t|es of |uoknow and Kanpur
for o|ty gas d|str|but|on.
The Nar|manam - Kutha|am P|pe||ne Projeot was oomp|eted |n
June, 2005 for the supp|y of the gas from Cauvery bas|n to the
oonsumers |n Kutha|am reg|on |n Tam||nadu. ln add|t|on to above,
there were number of spur p|pe||nes oomp|eted dur|ng the year |n
KG/Cauvery reg|ons, Gujarat reg|on and NCP.
Projects Under Execution
Your Company |s ourrent|y engaged |n the exeout|on of severa|
proj eot s, wh| oh a| m t o expand t he nat ura| gas p| pe| | ne
|nfrastruoture and oapao|ty expans|on of the Petroohem|oa| p|ant
at Pata. Some of the major projeots |no|ude the Dahej Uran
Pipeline Project, oonneot|ng Gujarat and Maharashtra, the Thulendi
Phulpur Pipeline Project, the Vijaipur Kota Pipeline Project,
oonneot|ng MP and Pajasthan, the Jagoti Dewas Pithampur
Pipeline Project wou|d oater to the gas demand of lndore, Dewas,
Ujja|n and P|thampur, the Kelaras - Malanpur Pipeline Project and
the Petrochemical Expansion Project at Pata to br|ng up the p|ant
to a po|ymer oapao|ty of 4,40,000 TPA.
Bes|des, for supp|y of gas to lPPs lndependent Power Produoers)
|n KG reg|on, your Company has taken up |ay|ng of P|pe||nes for
supp|y of gas |n Kr|shna Godavar| bas|n |n Andhra Pradesh to
the power p|ants.
Presidential Directive
M|n|stry of Petro|eum & Natura| Gas v|de |ts |etter no. |-11011/
2/03-GP Part-lll) dated 28
th
Ootober, 2004 |ssued Pres|dent|a|
D|reot|ve |n terms of Art|o|e 127 of Art|o|es of Assoo|at|on to oanoe|
the tender for Dahej-Uran P|pe||ne DUP|) Projeot and |ssue a
fresh tender |noorporat|ng speo|f|oat|ons under |nternat|ona||y
aooepted oodes suoh as APl-5| and not to put restr|ot|ons |n
the tender on any speo|f|o type of ||ne p|pe. ln the meanwh||e,
GAl| may a|so f|rm up souroe of supp|y and oonsumer t|e up for
DUP| Projeot. Aooord|ng|y, the tender was re-f|oated and no
| mpaot on the f| nano| a| pos| t| on of the Company oan be
asoerta|ned.
QUALITY MANAGEMENT
To bu||d GAl| as an organ|zat|on wh|oh stands for Qua||ty and to
|nfuse a "Tota| Qua||ty" ou|ture |n the organ|zat|on, Qua||ty C|ro|e
movement has been |aunohed |n GAl|. ln order to fao|||tate the
|mp|ementat|on of Qua||ty C|ro|es QCs) at a|| work oentres of
GAl|, M/s. FAAAl Federat|on of AOTS A|umn| Assoo|at|on of
lnd|a), who propagate Japanese Qua||ty oonoepts |n lnd|a has
been appo|nted as the oonsu|tant.
158 QCs have been reg|stered, spread over 15 work oentres of
GAl| aoross the oountry. The Qua||ty C|ro|e movement brought
out outstand|ng aoh|evements by the emp|oyees at grass root
|eve|. The management aooorded h|gh pr|or|ty to the Qua||ty C|ro|e
movement and |no|uded |t as a part of MOU targets.
Dur|ng the f|nano|a| year 2004-05, out of a MOU target of 64
| mprovement proj eots, QCs a| one have oontr| buted to 42
|mprovement projeots t||| now. These have resu|ted |n tang|b|e
sav|ngs to the tune of Ps. 2 Crores apart from |nnumerab|e
|ntang|b|e benef|ts.
Your Company has ass| gned h| ghest pr| or| ty on Qua| | ty
Management through TQM approaoh, suoh as-S|x S|gma, Qua||ty
C|ro|e, Standard|zat|on and Benohmark|ng.
TECHNOLOGY ABSORPTION
Your Company be| | eves that a strong foous | n teohno| ogy
absorpt|on wou|d prov|de the oompet|t|ve edge and henoe fue| for
a susta|ned growth eng|ne. W|th a strateg|o |ntent towards
d|vers|f|oat|on aoross the energy va|ue oha|n, GAl| has been not
on|y exp|or|ng but a|so support|ng teohno|ogy deve|opments |n
the areas of gas p|pe||ne transportat|on, gas based petroohem|oa|
teohno|og|es, underground ooa| gas|f|oat|on, above ground ooa|
gas|f|oat|on, stranded gas transportat|on teohno|og|es suoh as
soa|ed down ||quefaot|on p|ants, |NG by truoks, CNG by truoks
Shri Mani Shankar Aiyar, Honble Minister of Petroleum & Natural Gas
during the inauguration of Narimanam-Kuthalam pipeline project
11 We Stand for Pe||ab|||ty
21
st
Annual Report
and bu|k gas transportat|on teohno|og|es suoh as CNG by sh|ps.
Bes|des, GAl| |s a|so promot|ng severa| researoh projeots |n the
areas of hydrogen fue| oe||s, fue|s from waste p|ast|os eto.
On the bus|ness prooess s|de, your Company |s a|so a|m|ng to
oonvert bu|k of |ts paper based transaot|ons |n |ts bus|ness
prooesses t o e| eot ron| o mode of operat | ons. The SAP
|mp|ementat|on aoross the Company |s |n the f|na| stage and your
Company p|ans to d|g|t|ze and transaot paper based doouments
|n e|eotron|o form |n oomp||anoe w|th the lnformat|on Teohno|ogy
Aot of lnd|a.
AWARDS & ACCOLADES
Dur|ng the year under rev|ew, your Company was oonferred upon
the fo||ow|ng honours.
The Glow of a Navratna
Pated Best PSU by Department of Public Enterprises
(DPE) for top soore of 1.00 |n MOU for the year 2003-04. A
soore of 1.00 |s the h|ghest poss|b|e soore and |nd|oates
exoe||ent rat|ng |n a|| parameters of eva|uat|on.
Others
Golden Peacock Award for Corporate Governanoe 2003-04).
ln a survey oonduoted by M/s. Hew|tt Assoo|ates-CNBC,
featured amongst the prest|g|ous Best Employers in India
2004.
National Merit Award (Public Sector) for Excellence in
Cost Management from the lnst|tute of Cost and Works
Aooountants of lnd|a.
HT Power Jobs Award for Organization with Innovative
HR Practices.
Best Overall Performance in Upstream Sector by PCPA
for energy eff|o|enoy/sav|ng measures.
NPMP Award for Exoe||enoe |n Projeot Management 2003-04).
Global Recognition
12
th
amongst 30 lnd|an oompan|es appear|ng |n the ||st of
Forbes 2000 - the wor|d's wea|th|est oompan|es 2005). The
g|oba| rank |s 1250.
INFORMATION TECHNOLOGY INITIATIVES
Your Company |s deep|y oomm|tted to "squeeze teohno|ogy to
|ts ||m|t". Dur|ng the year under rev|ew, var|ous lT |n|t|at|ves have
been taken up to ensure faster and eff|o|ent on-||ne serv|oes suoh
as e-bank| ng, e-tender| ng, e-| nvestments, e-performanoe
management system, eto. by way of estab||sh|ng oonneot|v|ty
amongst a|| stake ho|ders.
A oentra||zed state of the art data oentre has been set up for a||
lT serv|oes |no|ud|ng EPP to extend oompany w|de 24 X 7 support
for var| ous on| | ne bus| ness prooesses. l n order to further
strengthen the system, measures for data seour|ty and network
proteot|on, gateway of your Company's lT network have been
taken, us|ng mu|t|p|e f|rewa||s and oentra||zed ant|-v|rus so|ut|on.
v|deo-Confereno|ng fao|||ty |s |n p|aoe aoross a|| off|oes to fao|||tate
|nteraot|ve sess|ons between work oentres as a|so for oost-
eff|o|ent oonfereno|ng w|th fore|gn vendors and supp||ers to
d|souss key oommero|a| |ssues.
Implementation of ERP
Your Company |s at the f|na| stage of |mp|ementat|on of Enterpr|se
Pesouroe P|ann|ng EPP) |n a|| bus|ness segments of the Company
at a|| work oentres.
Implementation of Gas Management System
Your Company has suooessf u| | y oomm| ss| oned the Gas
Management System, wh|oh enab|es your Company to fao|||tate
Shri Proshanto Banerjee, CMD, GAIL, receiving the Best Employers Award
Shri Proshanto Banerjee, CMD and Shri S.P. Rao, Director (Projects) receiving
the NPMP Award
Natura| Gas bus|ness operat|ons more eff|o|ent|y and speed||y by
|ntegrat|ng a|| souroes of gas to the offtakers/oustomers under
d|fferent|a| gas pr|o|ng reg|me.
MANAGEMENT DISCUSSION AND ANALYSIS
The deta||ed Management D|souss|on and Ana|ys|s of the f|nano|a|
oond|t|on and resu|ts of operat|ons separate|y form part of th|s
report.
IMPLEMENTATION OF OFFICIAL LANGUAGE
Your Company makes v|gorous efforts for propagat|on and
|mp|ementat|on of the Off|o|a| |anguage Po||oy of the Un|on of
lnd|a.
W|th a v|ew to promote use of H|nd| for off|o|a| purposes, H|nd|
workshops were organ|zed at a|| the Company's work oentres.
M|orosoft Off|oe XP b|||ngua| software was prov|ded to a|| the
Company's off|oes and oomprehens|ve tra|n|ng programmes were
oonduoted for the users, to |mpart work|ng know|edge to them |n
the b|||ngua| software.
Go|ng forward, to en||st greater part|o|pat|on of the emp|oyees |n
aooept|ng and |mp|ement|ng the Off|o|a| |anguage |n |etter and |n
sp|r|t, |noent|ve sohemes were made more attraot|ve.
Dur|ng the year under rev|ew, |n add|t|on to H|nd| D|was program
and Annua| Paj bhasha Conf erenoe, new and | nt erest | ng
oompet|t|ons, ou|tura| aot|v|t|es, sem|nars, Kav| Samme|an, H|nd|
sk|ts and exh|b|t|on on H|nd| aot|v|t|es were organ|zed at d|fferent
projeots/reg|ona| off|oes wh|oh found w|de part|o|pat|on.
HRD INITIATIVES
Dur|ng the year under rev|ew, the Company's lndustr|a| Pe|at|ons
o||mate |n genera| rema|ned harmon|ous. No 'man days' or 'man
hours' were |ost on aooount of any |ndustr|a| oonf||ot.
Your Company oont|nues to str|ve for exoe||enoe |n the f|e|d of
Emp|oyee We|fare. Go|ng forward, fo||ow|ng |n|t|at|ves |n re|at|on
to Human Pesouroes Deve|opment were taken.
lntroduot| on of an E| eotron| o Performanoe Management
System e-PMS) wh|oh fao|||tates on||ne generat|on and f|ow
of se|f appra|sa| forms
E|eotron|o oaptur|ng of the Key Performanoe Areas KPAs) and
Key Performanoe lnd|oators KPls) for the exeout|ves
Training Initiatives
The Company's Tra|n|ng Po||oy target of prov|d|ng m|n|mum one
tra|n|ng to eaoh emp|oyee, every year was fu||y oomp||ed. Aga|nst
MOU target of 3500 under exoe||ent oategory, 4640 personne|
were tra|ned by GAl| Tra|n|ng lnst|tute GTl). lt |no|udes fore|gn
tra|n|ngs/programmes to 45 sen|or exeout|ves |n prem|er bus|ness
sohoo|s suoh as Ke||ogg, Harvard, Stanford Bus|ness Sohoo|s,
eto. and 33 teohn|oa| exeout|ves at Advant|oa, UK for Energy
Management Serv|oes and at Tokyo Gas for |NG Operat|on &
Ma|ntenanoe. Dur|ng the year under rev|ew, number of tra|n|ng
days |noreased by a|most 200% oompared to |ast year.
ln order to prov|de more oomprehens|ve v|ew on tra|n|ngs,
Steer|ng Comm|ttee has been reoonst|tuted w|th |no|us|on of a||
Exeout|ve D|reotors. Course types have been ohosen to make
tra|n|ng oa|endar a||gned w|th GAl|'s Corporate Strategy.
The tra|n|ng programs have been d|v|ded |n four broad oategor|es.
A. Strategy, |eadersh|p and Bus|ness Know|edge Programs
B. Management, Funot|ona| and Prooess Programs
C. Operat|ona|, Teohn|oa|, lT & Safety Programs
D. Behav|oura| Deve|opment Programs
Wh||e top management programs have been fooused on type A,
m| dd| e management most| y rema| ned on type B. |ower
management tra|n|ng programs fooused on sk||| and speo|a||zat|on
programs as ment|oned |n type C. Type D programs have been
speo|a||y des|gned for a|| GAl| emp|oyees.
Your Company |s oonso|ous of the need to prepare the young
exeout| ves to faoe the oha| | enges of the future. Under a
oomprehens|ve and ta||ored program t|t|ed 'Young GAl| Un||m|ted'
wh|oh has been des|gned |n partnersh|p w|th the lnd|an lnst|tute
of Management llM), Ko|kata, the young GAl| exeout|ves |n the
age group of 22-35 years, are g|ven an opportun|ty for 'boundary-
|ess th|nk|ng' and exposure to |atest bus|ness praot|oes.
ln order to |norease the sk||| |eve|s of a|| non-exeout|ves, a
ded|oated tra|n|ng |nst|tute, named 'Teohn|oa| Tra|n|ng Centre',
has been set up at Ja|pur w|th modern |nfrastruoture and fao|||t|es.
REPRESENTATION OF SC/ST/OBC AND MINORITIES
The manpower of the Company as on 31
st
Maroh, 2005 stood at
3349, of wh|oh, 15.7% be|ong to SC, 6.1% to ST, 14.9% to OBC,
7.64% to M|nor|t|es and 1.3 % to Phys|oa||y Hand|oapped. Your
Company |s oont|nu|ng w|th |ts efforts to further reduoe the
shortfa|| of SC/ST/OBC representat|on.
The representat|on of women emp|oyees |s 4.6%.
MATERIAL DEVELOPMENTS IN HUMAN RESOURCES &
INDUSTRIAL RELATIONS FRONT
The | ndustr| a| soenar| o dur| ng the year 2004-05 rema| ned
harmon|ous and oord|a|. There was no str|ke or |ook out dur|ng the
year and as suoh no man-days were |ost. As on 31
st
Maroh, 2005
there were 3,349 emp|oyees on the ro||s of the Company.
13 We Stand for Pe||ab|||ty
21
st
Annual Report
ENVIRONMENT, HEALTH AND SAFETY FOR CORPORATE
SUSTAINABILITY
Your Company's oomm|tment and respons|b|||ty towards the
env|ronment stems from |ts v|s|on, wh|oh enjo|ns upon your
Company to susta|n bus|ness growth w|th deep oomm|tment to
the env|ronment.
Corporate HSE Policy
As reported ear| | er, your Company has a we| | estab| | shed
Env|ronment, Hea|th and Safety EHS) Po||oy. The safety and hea|th
of |ts emp|oyees are embedded |n the oore organ|zat|ona| va|ues
of the Company. The po||oy, |nter a||a, a|ms to ensure safety of
pub||o, emp|oyees, p|ant and equ|pment, ensure oomp||anoe w|th
a|| statutory ru|es and regu|at|ons, |mpart tra|n|ng to |ts emp|oyees,
oarry out safety aud|ts of |ts fao|||t|es, oonduot regu|ar med|oa|
oheok up of |ts emp|oyees and promote eoo-fr|end|y aot|v|t|es.
New Certifications
As reported ear||er, |PG P|ants, petroohem|oa| p|ant and major
p|pe||ne systems have been oert|f|ed for Env|ronment Management
System lSO 14001).
Dur|ng the year 2004-05, major |nsta||at|ons of GAl| have a|so
been oert|f|ed for the Oooupat|ona| Hea|th and Safety Management
System OHSAS 18001). The OHSAS system a|ms to e||m|nate or
m|n|m|ze r|sk to emp|oyees and other |nterested part|es who may
be exposed to OH&S r|sks assoo|ated w|th |ts aot|v|t|es.
Ensuring Compliance
Your Company oont|nues to reoogn|ze the |mportanoe of a|| the
nat| ona| and | nternat| ona| regu| at| ons and ensures 100%
oomp| | anoe at a| | t| mes. GAl| fu| f| | s the requ| red statutory
requ|rements of Centra| and State Po||ut|on Contro| Boards. Major
env| ronmenta| parameters as requ| red are be| ng regu| ar| y
mon|tored and reported to the oonoerned/regu|atory bod|es, v|z.,
Centra| Po||ut|on Contro| Board, State Po||ut|on Contro| Board,
M| n| stry of Env| ronment and Forests. GAl|'s env| ronmenta|
performanoe | s we| | w| th| n the em| ss| on | | m| ts | n statutory
gu|de||nes for a|| operat|ons.
Environmental Initiatives
Greenbelt Development
Your Company oonstant|y endeavours to m|n|m|ze the d|reot and
|nd|reot env|ronmenta| |mpaot of |ts bus|ness operat|ons and
str|ves to enr|oh the env|ronment wherever poss|b|e.
The green oover of a|| the GAl| fao|||t|es |s about 600 Heotares
out of a tota| area of about 1,592 Heotares. Dur|ng the year
2004-05, more than 25,000 trees have been p|anted. Th|s green
oover together w|th |arge water bod|es |n the oomp|ex has oreated
an |deo|og|oa| hab|tat for b|rds and an|ma|s.
Water and Waste Water Management
To oonserve natura| resouroes, your Company oont|nues to make
efforts |n max|m|z|ng reoyo|e of treated wastewater and through
ra|n water harvest|ng. Treated wastewater |s used for hort|ou|ture
and f| rewater use and the soheme has been suooessfu| | y
|mp|emented |n Petroohem|oa| p|ant at Pata and |PG P|ant at
Gandhar resu|t|ng |n 'zero d|soharge' and |s under |mp|ementat|on
at other |ooat|ons.
Further, ra|nwater harvest|ng measures have been |mp|emented
at Pat a, Gandhar and Mansarampura, Ja| pur. At l PS
Mansarampura, Ja|pur ra|nwater harvest|ng |s |mp|emented to
prevent the dep|et|on of ground water and |norease the ground
water |eve| to a great extent as the average ra|nfa|| |n Ja|pur d|str|ot
|s |ess than nat|ona| |eve|.
Solid Waste Management
A|| un|ts of GAl| are oont|nua||y and d|||gent|y str|v|ng to m|n|m|ze
and reoyo|e a|| so||d wastes to reduoe and e||m|nate any res|dua|
|mpaot on the env|ronment.
Air Pollution Management
F|are Gas reoovery projeot |s oonoeptua||zed for reoovery of f|are
gas above des|gn f|ow to use as fue| gas |n the oomp|ex and the
same |s be|ng |mp|emented at GAl|, Pata to reduoe F|are |osses,
therma| po||ut|on and oonserve natura| resouroes.
W| th a v| ew to ensure that the operat| on of th| rd part| es
oontraotors, supp||ers eto.) |s not affeot|ng the env|ronment, PUC
oert|f|oat|on has been made mandatory for |oad|ng of tankers |n
|akwa P|ant.
Health & Safety
Safety Performance
GAl| oont|nues to str|ve for 'zero aoo|dents' |n a|| |ts un|ts. Dur|ng
the year 2004-05, the HSE lndex has |mproved from 95.4% to
96.31% |ead|ng to a deo||n|ng trend |n |no|dents and resu|t|ng |n
enhanoed produot|v|ty. The report|ng of 'near-m|ss' |no|dents has
a|so |mproved |n the |ast year wh|oh |nd|oates a strong safety
ou|ture throughout a|| |eve|s of the organ|zat|on.
Declining trend of incidents in GAIL
Safety Training
Dur|ng the year 2004-05, 100% of the emp|oyees were exposed
to safety tra|n|ng |n the form of regu|ar HSE br|ef|ngs, 2 SMS
workshops for personne| from a|| s|tes. Bes|des, de-stress|ng
workshop for sen|or exeout|ves and |eotures by renowned externa|
faou|ty were oarr|ed out.
External Safety Audits
Dur|ng the year 2004-05, your Company's safety praot|oes and
systems were aud|ted by g|oba||y renowned aud|tors, Br|t|sh
Safety Couno||-UK, German|soher ||oyd-Germany, Tebod|n-
Nether|ands and DNv-Norway.
Occupational Health Examination
GAl| oont|nued |ts oomm|tment to |mprove the we|| be|ng of |ts
emp| oyees. Dur| ng the year 2004-05, a| | emp| oyees of the
Company were med|oa||y exam|ned. Bes|des, oontraot workers,
ClSF personne|, v|||agers from nearby areas were a|so oovered |n
the program.
Environmental Awards
Greenteoh Env|ronment Exoe||enoe Award for 2003-04 deo|ared
|n 2004-05) was g|ven to |PG P|ants at Gandhar & vaghod|a,
Pata and Jamnagar-|on| |PG P|pe||ne by Greenteoh Foundat|on,
New De|h|. Th|s foundat|on |s supported by M|n|stry of Env|ronment
and Forests, Government of lnd|a and Centre for lnternat|ona|
Transfer of Env|ronmenta| Teohno|og|es, Germany. The award |s
| n reoogn| t| on of the oare for env| ronment adopted by the
Company.
|PG P|ant at Usar has reoe|ved the 'lnd|ra Gandh| Memor|a|
Nat|ona| Award' under the oategory 'Exoe||ent Po||ut|on Contro|
lmp|ementat|on Go|d Award'.
Safety Awards
F| ve star Hea| th & Safety Management System Aud| t was
oonduoted by Br|t|sh Safety Couno||, U.K. |PG Peoovery P|ants
at v|ja|pur & Gandhar and Jamnagar-|on| |PG P|pe||ne were
awarded w|th F|ve Star rat|ng. |PG Peoovery P|ant, Gandhar has
reoe|ved the prest|g|ous Sword of Honour from Br|t|sh Safety
Couno|| for |ts outstand|ng performanoe on HSE f|e|ds.
|PG P|ant at |akwa and Pata P|ant have reoe|ved the 'Prashansha
Patra' Award from Nat|ona| Safety Couno|| of lnd|a.
|PG P|ant at Usar reoe|ved 1
st
O|| lndustry Safety Awards |n the
oategory 'Other Prooess|ng P|ants' and HvJ P|pe||ne reoe|ved
1
st
Pr|ze under the oategory 'Cross oountry p|pe||ne' for the year
2004-05.
|PG P|ant Aura|ya has reoe|ved the 1
st
pr|ze for the year 2003-
04 under the oategory 'Other Prooess|ng P|ants'. Speo|a| Award
'W|thout |oss of ||fe' was reoe|ved from OlSD for 2002-03.
Greenteoh Go|d Awards for Env|ronment Safety reoe|ved from
Greenteoh Foundat|on to our Prooess P|ants at v|ja|pur, Gandhar,
Usar, Pata, |akwa and J|P| & vSP| p|pe||nes and Haz|ra
Compressor stat|on.
ENERGY MANAGEMENT SERVICES FOR CUSTOMER
CARE
Energy Management Serv|oes EMS) group, formed |n the year
2002, w|th an objeot|ve to promote measures for aooe|erat|ng
oonservat|on of Natura| Gas, to oreate awareness amongst the
|ndustr|es/users about the |mportanoe, benef|ts and methods of
enhano|ng energy eff|o|enoy, to promote teohn|oa| serv|oes to
aoh|eve eoonomy and eff|o|enoy of gas use by ex|st|ng and
potent|a| oustomers.
21 energy eff|o|enoy enhanoement stud|es have been undertaken
|n the past year for |mprov|ng the eff|o|enoy of p|ants and
prooesses. Many of the suggest|ons have been |mp|emented by
the oustomers y|e|d|ng energy sav|ng and |n turn monetary
benef|ts to the user |ndustr|es and revenue to GAl| for |ts serv|oes.
National Gas Conservation Programme
ln oont|nuat|on to the oonservat|on programme that was started
| n the year 2003, EMS group organ| zed the Nat| ona| Gas
Conservat| on Programme on 14
th
Deoember, 2004. The
programme a| med at enoourag| ng d| fferent | ndustr| es to
undertake energy sav|ngs measures.
The awards for Exoe||enoe |n Energy Conservat|on were g|ven to
d|fferent energy eff|o|ent |ndustr|es from d|fferent seotors ||ke
fert|||zer, power, petroohem|oa|s, sponge-|ron, g|ass, fraot|onat|on
un|ts and gas oompressor stat|ons. Tata Chem|oa|s |td., Babra|a,
NTPC, Far| dabad, l PC|, Gandhar, v| kram l spat, Pa| garh,
Shri Proshanto Banerjee, CMD, GAIL, speaking during the launch of
National Gas Conversation Programme
15 We Stand for Pe||ab|||ty
21
st
Annual Report
v|deooon Narmada G|ass, Bharuoh, GAl| P|ants at v|ja|pur &
Gandhar, Compressor Stat|on at GAl|, v|ja|pur were the w|nners
|n the|r respeot|ve seotors.
Technology Meets
GAl| organ|zed 17 teohno|ogy meets at Ch|ttorgarh, Hyderabad,
Mumba| and other |ooat|ons for oustomers. The meets ma|n|y
fooused upon |ssues perta|n|ng to methods for eff|o|ent ut|||zat|on
of natura| gas, the teohno|og|oa| ohanges and a|so the |ndustry-
w|de best praot|oes for |mprov|ng produot qua||ty and reduo|ng
natura| gas wastages.
Climate Change Initiatives
GAl| |s exp|or|ng opt|ons that |ead to reduot|on of green-house
gases as a part of C|ean Deve|opment Meohan|sm CDM) projeot
under Kyoto Protooo|. Th|s wou|d he|p your Company to earn
Carbon ored|ts apart from reduot|on of oarbond|ox|de. A projeot
for supp|y of CO
2,
from the Petroohem|oa| p|ant to fert|||zer and
other prospeot|ve |ndustr|es |s under aot|ve oons|derat|on.
CORPORATE SOCIAL RESPONSIBILITY
Helping people help themselves!
Your Company |s oomm|tted to the be||ef that |t ex|sts not just to
run bus|nesses and generate prof|ts, but a|so to fu|f||| |ts dut|es
as a respons|b|e oorporate o|t|zen. At GAl|, we def|ne Corporate
Soo|a| Pespons|b|||ty as continuing commitment for operating
the core business in a socially responsible way, complemented
by investment in communities to produce an overall positive
impact on society. As a oar|ng o|t|zen, we pa|nt var|ous v|brant
hues on the oanvas of ||fe, eaoh oo|our |n the pa|ette oom|ng a||ve
w|th the bo|d brush strokes of hope, harmony and happ|ness. ln
order to trans|ate th|s va|ue |nto aot|on we have made a oonso|ous
deo|s|on to spend one peroent of our Prof|t After Tax PAT) of the
prev|ous f|nano|a| year on CSP programmes.
The f oous areas of your Company' s CSP aot | v| t | es are.
Environment Protection & Horticulture, Infrastructure,
Drinking Water/Sanitation, Healthcare/Medical facilities,
Communi ty Devel opment and Li teracy enhancement/
Empowerment programmes.
A snapshot of your Company's attempt to extend a he|p|ng hand
to the soo|ety, |s as fo||ows -
Air Pollution Related Disease Diagnostic Centre
A projeot has been undertaken to set up Air Pollution Related
Disease Diagnostic Centres APPDC) |n 22 cities of the oountry
hav|ng a|arm|ng |eve|s of a|r po||ut|on and where|n your Company
has p|ans to set up CNG/PNG |nsta||at|on. These oenters are be|ng
equ|pped w|th modern d|agnost|o amen|t|es re|ated to resp|ratory
and oard|o-vasou|ar d|seases. More |mportant|y, these APPDC's
wou|d deve|op the base||ne data on ooourrenoe and preva|enoe of
a|r po||ut|on re|ated d|seases, before and after |nsta||at|on of CNG/
PNG fao|||t|es |n the |dent|f|ed o|t|es. Dur|ng the year under rev|ew,
out of the tota| 22 d|agnost|o oenters projeoted to oome up, 18
d|agnost|o oenters have a|ready been set up.
Mobile Health Clinics
To prov|de hea|th oare fao|||t|es to v|||agers, ambu|anoes were
prov|ded to operate Mobile Health Clinics |n the rura| areas around
the o| t| es of Agra, Ja| pur, Ko| kata and v| j a| pur. l n a nove|
partnersh|p w|th an NGO name|y GlDF, an extens|ve med|oa|
oommun|ty outreaoh program was undertaken at v|ja|pur.
Mother and Child Care Hospital
A 30-bed Mother and Child Care Hospital was set up for the
tr|ba| popu|at|on |n Jhabua, Madhya Pradesh.
Adoption of Senior Citizens
ln assoo|at|on w|th He|p Age lnd|a, about 100 dest|tute senior
citizens were adopted. Out of these, 72 persons were aff||oted
w|th |eprosy.
Merit Scholarships
Merit scholarships were awarded to more than 2,500 sohoo|
oh||dren drawn from over 40 sohoo|s. These oh||dren represent
the soo|o-eoonom|oa||y under pr|v||eged oategory of the soo|ety.
Computer literacy for school children
ln order to promote computer literacy amongst the sohoo| oh||dren,
PCs |oaded w|th oompat|b|e software paokages were prov|ded
to the v|||age sohoo|s |n Samakh|a||, Hyderabad & Pond|oherry,
sohoo| for deaf oh||dren |n v|shakhapatnam, Udavam Karanga|
Sohoo| |n Chenna| and the B||nd We|fare sohoo|s |n De|h| and
Gurgaon.
Ms. Alka Kumar, DGM, CSR, handing over a cheque of Rs. 20 lakhs
for APRDC, Rajahmundry
Women Empowerment
W| th the obj eot| ve to empower women to atta| n f| nano| a|
|ndependenoe, |n|t|at|ves were taken to promote ||teraoy, spread
|ega| awareness, |mpart adu|t eduoat|on and vooat|ona| tra|n|ng
|n ta||or|ng, food preservat|on, beaut|o|an oourses eto. The women
fo|k |n the surround|ng areas of Ja|pur, |akwa, Usar and Gurgaon
were benef|o|ar|es of these |n|t|at|ves.
Girls Hostel
A g|r|s' hoste| 'Matri Karuna Girls Chhatralaya' was oonstruoted
for the g|r| students and dest|tute women |n Pat|am, Madhya
Pradesh. Another girls hostel was oonstruoted at |eva Pate| Seva
Samaj |n Jamnagar, Gujarat.
Aanganwadi
Aaganwadi bu||d|ngs were oonstruoted |n v|ja|pur.
Village Adoption
Village adoption programs were oarr|ed out as an on-go|ng aot|v|ty
|n and around v|japur, Haz|ra and Gurgaon.
Plastic Waste Bins
Plastic waste bins were |nsta||ed at prom|nent pub||o p|aoes |n
the state of Uttaranoha| to promote o|ean||ness |n the h||| state.
Rainwater Harvesting
ln a measure to fao|||tate ra|n/storm water harvest|ng and he|p
the farmers to aooess better |rr|gat|on fao|||t|es, check dams were
oonstruoted |n v|||ages around Khera, v|ja|pur and vaghod|a.
Tsunami Relief
A sum of Ps. 4 Crores was spent for the tsunami affeoted persons
|n Tam|| Nadu and Pond|oherry.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION
Deta||s of oonservat|on of energy, teohno|ogy absorpt|on |n
aooordanoe w|th Compan|es D|so|osure of Part|ou|ars |n the
Peport of Board of D|reotors) Pu|es, 1988 are annexed.
FOREIGN EXCHANGE EARNINGS AND OUTGO
Dur|ng the year, Fore|gn Exohange Earn|ngs were Ps. 79 Crores
wh|oh was ma|n|y on aooount of export of Po|ymers.
Expend|ture |n Fore|gn Currenoy was Ps. 859 Crores wh|oh was
ma|n|y on projeot re|ated |mports.
PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A)
OF THE COMPANIES ACT, 1956
The part|ou|ars of emp|oyees u/s 2172A) of the Compan|es Aot,
1956, read w|th Compan|es Part|ou|ars of Emp|oyees) Pu|es,
1975 |s 'n||'.
EXPENDITURE ON ENTERTAINMENT, FOREIGN TOURS
AND PUBLICITY
Dur| ng the year the Company has | nourred expend| ture of
Ps. 462 |akhs on fore|gn tours, fore|gn tra|n|ng, sem|nars &
oonferenoes, Ps. 22 |akhs on enterta|nment and Ps. 2,362 |akhs
on advert|s|ng & pub||o|ty.
CORPORATE GOVERNANCE
Pursuant to C|ause 49 of the ||st|ng Agreement w|th the Stook
Exohanges, Corporate Governanoe Peport and Aud| tor' s
Cert|f|oate regard|ng oomp||anoe of oond|t|ons of Corporate
Governanoe forms part of the Annua| Peport.
Children getting computer education
Special education programme and vocational training for women
17 We Stand for Pe||ab|||ty
21
st
Annual Report
DIRECTORS
Dur|ng the year under rev|ew, Shr| M.S. Sr|n|vasan, Speo|a|
Seoretary, MoP&NG, Shr| P.K. S|nha, Jo|nt Seoretary & F|nano|a|
Adv|sor, MoP&NG and Shr| Ajay Tyag|, Jo|nt Seoretary, MoP&NG
were appo|nted as D|reotors on the Board of D|reotors of your
Company w. e. f . 28. 01. 2005, 20. 12. 2004 and 20. 04. 2005
respeot|ve|y.
Shr| M.S. Sr|n|vasan, an a|umn| of the lnd|an lnst|tute of Teohno|ogy
llT), Madras and Harvard Un|vers|ty, USA |s a member of the lnd|an
Adm|n|strat|ve Serv|oe lAS). ln a oareer spann|ng over 32 years,
he has r|oh and var|ed exper|enoe of ho|d|ng |mportant pos|t|ons
|n the State and Centra| Governments.
Shr| P.K. S|nha, a graduate |n Eoonom|os and M. Ph|| |n Soo|a|
So|enoes, |s a member of the lnd|an Adm|n|strat|ve Serv|oe lAS).
ln h|s serv|oe oareer of over 27 years, he has served w|th d|st|not|on
both |n the Centra| and State Governments.
Shr| Ajay Tyag|, a Post Graduate |n Computer So|enoe and ho|d|ng
Masters |n Pub||o Adm|n|strat|on from Harvard Un|vers|ty, |s a
member of the lnd|an Adm|n|strat|ve Serv|oe lAS). Dur|ng h|s oareer
spann|ng over two deoades, he has hand|ed major ass|gnments
both |n the State and Centra| Governments.
Dur|ng the year under rev|ew, Dr. P.K. Paohaur| and Shr| A.K.
Sr| vastava oeased to be D| reotors of the Company w.e.f.
26.10.2004 and 07.03.2005 respeot|ve|y.
BOARD MEETINGS AND GENERAL MEETING
Dur|ng the year under rev|ew, 15 meet|ngs of the Board of D|reotors
of the Company were he|d. The 20
th
Annua| Genera| Meet|ng of
the Members of the Company was he|d on 30
th
September, 2004.
DIRECTORS RESPONSIBILITY STATEMENT IN TERMS OF
SECTION 217(2AA) OF THE COMPANIES ACT, 1956
Pursuant to the requ|rement of Seot|on 2172AA) of the Compan|es
Aot, 1956, w|th respeot to D|reotors' Pespons|b|||ty Statement, |t
|s hereby oonf|rmed that .
1. |n the preparat|on of the annua| aooounts for the f|nano|a| year
ended 31
st
Maroh, 2005, the app||oab|e aooount|ng standards
had been fo||owed a|ong w|th proper exp|anat|on re|at|ng to
mater|a| departures,
2. the D|reotors had se|eoted suoh aooount|ng po||o|es and
app||ed them oons|stent|y and made judgments and est|mates
that are reasonab|e and prudent so as to g|ve a true and fa|r
v|ew of the state of affa|rs of the Company at the end of the
f|nano|a| year and of the prof|t of the Company for the year
under rev|ew,
3. the D|reotors had taken proper and suff|o|ent oare for the
ma|ntenanoe of adequate aooount|ng reoords |n aooordanoe
w| t h t he prov| s| ons of t he Compan| es Aot , 1956 f or
safeguard|ng the assets of the Company and for prevent|ng
and deteot|ng fraud and other |rregu|ar|t|es,
4. the D|reotors had prepared the annua| aooounts for the
f|nano|a| year ended 31
st
Maroh, 2005 on a go|ng oonoern
bas|s.
AUDITORS
Off|oe of The Comptro||er & Aud|tor Genera| of lnd|a v|de |ts |etter
no. CA. v/COY/CENTPA| GOvT. , GAl | 3) /370 dat ed 6
th
September, 2004, has appo|nted M/s S. Mann & Co., Chartered
Aooountants, New De|h| as Statutory Aud|tors of the Company,
M/s. Nr|pendra & Co., Chartered Aooountants, Kanpur as Branoh
Aud|tors for U.P. Petroohem|oa| Comp|ex at Pata and M/s. Chhajer
& Co., Chartered Aooountants, Bhopa| as Branoh Aud|tors for
|PG P|ant at v|ja|pur for the year 2004-05.
ACKNOWLEDGEMENT
The Board of D|reotors w|sh to p|aoe on reoord the|r s|noere
appreo|at|on for the va|uab|e serv|oes and ded|oated efforts of
t he emp| oyees of t he Company, who have ensured t he
aooomp||shment of exoe||ent resu|t and aoh|evement of the
Company. The Board a|so w|shes to thank the Government of
lnd|a, espeo|a||y the M|n|stry of Petro|eum and Natura| Gas and
var|ous State Governments for the|r va|uab|e gu|danoe and
support.
The Board of D|reotors w|shes to p|aoe on reoord |ts h|ghest
appreo|at|on of the s|gn|f|oant oontr|but|ons made by Dr. P.K.
Paohaur| and Shr| A.K. Sr|vastava dur|ng the|r tenure as D|reotor
on the Board of D|reotors of the Company.
For and on beha|f of the Board
Proshanto Banerjee
Cha|rman & Manag|ng D|reotor
P|aoe. New De|h|
Dated. 14
th
August, 2005
Annexure to the Directors Report on Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings & Outgo as per Section 217(1)(e) of the
Companies Act, 1956 read with Companies (Disclosure of Particulars in the report
of Board of Directors) Rules, 1988
A. CONSERVATION OF ENERGY:-
(a) Energy conservation measures taken:
1. Energy Audit has been oarr|ed out at Pata by M/s. PCPA, New De|h| and at J|P|, Nas|rabad by M/s. EPDA and oerta|n
reoommendat|ons have a|ready been |mp|emented wh|oh has started y|e|d|ng sav|ngs amount|ng to Ps. 62 |akhs p.a. at
Pata and Ps. 6.43 |akhs p.a. at J|P|, Nas|rabad.
2. Benchmarking exercise for var|ous prooess un|ts of the Company have been oarr|ed out and be|ng o|ose|y mon|tored
to oontro| and reduoe speo|f|o energy oonsumpt|ons.
3. Variable Frequency Drive (VFD) system |mp|emented for jookey pump at Gandhar |PG P|ant has resu|ted |n energy
sav|ngs month|y/year|y @ 10800 KWH/129600 KWH and oost sav|ngs month|y/year|y @ Ps. 0.58 |akhs/ Ps. 7 |akhs. The
tota| sav|ngs dur|ng 2004-05 aoh|eved- Ps. 5.25 |akhs.
4. Modification done in lighting systems by |nsta||at|on of energy eff|o|ent ||ght|ng dev|oes at many of the work oenters
of HvJ,J|P| and Gandhar have resu|ted |n energy sav|ngs month|y/year|y @ 46297 KWH/555564 KWH and oost sav|ngs
month|y/year|y @ Ps. 2.3 |akhs/ Ps. 27.5 |akhs.
5. Installation of P.F. improvement equipments and maintaining P.F. in the range between 0.95 to 0.99 at var|ous
|ooat|ons of J|P| and HvJ- Jhabua and Gandhar have resu|ted |nto prevent|on of |osses of e|eotr|oa| energy. A substant|a|
month|y/year|y sav|ngs of Ps. 4.6 |akhs/Ps. 55.5 |akhs have a|so been made towards rebate from E|eotr|o|ty Board.
6. The awareness campaign to save energy and effort for optimal utilization of running of static and rotating
equipments at var|ous work oenters of HvJ, J|P|, Pata, Gandhar eto. have resu|ted |nto substant|a| energy sav|ngs
month|y/year|y @ 646808 KWH/7761696 KWH and oost sav|ngs month|y/year|y @ Ps. 34.4 |akhs/ Ps. 412.7 |akhs.
(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy:
1. Dur|ng 2005-06, Energy Aud|t has been p|anned to be oarr|ed out at HvJ-D|byapur and J|P| Mansarampura at an
est|mated oost of Ps. 4.5 |akhs and Ps. 0.75 |akhs respeot|ve|y and |ntroduot|on of EMS at Gandhar has been p|anned
at an est|mated oost of Ps. 8.7 |akhs.
2. Variable Speed Drive (VSD) system at var|ous |ooat|ons of Pata, Gandhar, Usar and HvJ-Jhabua have been taken up
for |mp|ementat|on dur|ng 2005-06 at an est|mated oost of Ps. 1.41 Crores. W|th the |mp|ementat|on of the projeots as
above, the month|y/year|y reduot|on |n oonsumpt|on of energy as est|mated wou|d be 89406 KWH/1072872 KWH and
oost reduot|on wou|d be Ps. 3.9 |akhs/Ps. 46.6 |akhs.
3. Lighting system modifications by |nsta||at|on of energy eff|o|ent ||ght|ng dev|oes are be|ng taken up at many of the
work oenters of J|P| and HvJ-Jhabua dur|ng 2005-06 at an |nvestment of Ps. 1 |akh wh|oh wou|d resu|t |n energy
sav|ngs of month|y/year|y @ 2500 KWH/ 30000 KWH and oost sav|ngs month|y/year|y @ Ps. 0.1 |akh/Ps. 1.2 |akhs.
4. Installation of P.F. improvement equipments for the E|eotr|oa| systems at var|ous |ooat|ons of J|P| has been p|anned
at an |nvestment of Ps. 11.6 |aos wh|oh wou|d resu|t |n oost sav|ngs of month|y/year|y @ Ps. 1.64 |akhs/Ps. 19.71 |akhs.
5. Solar power system has been p|anned for |mp|ementat|on at Gandhar at an approx|mate oost of Ps. 9.3 |akhs wh|oh
wou|d resu|t |n energy sav|ngs of month|y/year|y @ 3780 KWH/45360 KWH and oost sav|ngs month|y/year|y @
Ps. 0.202 |akhs/Ps. 2.43 |akhs.
19 We Stand for Pe||ab|||ty
21
st
Annual Report
Bes|des above, var|ous energy sav|ng measures have been p|anned and are be|ng |mp|emented to enhanoe operat|ona|
eff|o|enoy and thereby save oost as deta||ed be|ow.
|) Flare Gas Recovery Project: Th|s projeot at Pata env|sages reoover|ng the f|are gases go|ng through the f|are
system for u|t|mate use as fue| gas |n the ut|||ty bo||ers. The projeot oons|st|ng of gas oompress|on system and
assoo|ated p|p|ng eto. w||| be |mp|emented through an EPCM oonsu|tant, M/s. |urg| lnd|a. The est|mated expend|ture
of the projeot |s Ps. 10.72 Crores. lmp|ementat|on of the projeot wou|d resu|t |nto fue| sav|ngs to the tune of Ps. 6.5
Crores per year.
||) Installation of additional STG: lnsta||at|on of a 9 MW extraot|on type STG un|t has been approved for Pata. The
|nvestment wou|d be Ps. 18 Crores. The sett|ng up of extraot|on type STG wou|d enab|e eff|o|ent use of the vHP
steam to produoe HP steam and a|so |n power generat|on wh|oh w||| reduoe dependenoe on State Gr|d and make
sav|ngs of around Ps. 7 Crores p.a.
|||) Advance Process Control (APC): Th|s projeot |s under |mp|ementat|on for upstream un|ts GPU/ |PG/ GCU un|ts)
of Petroohem|oa| projeot. After |mp|ementat|on of the projeot, |t |s expeoted to reduoe the speo|f|o energy oonsumpt|on
to the tune of 3% |n these un|ts.
(c) Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on
the cost of production of goods:
Energy oonservat|on measures taken so far have resu|ted |n an |mprovement |n energy eff|o|enoy as deta||ed at a) and
b) above.
(d) Total energy consumption and energy consumption per unit of production:
Neoessary |nformat|on |n Form - A annexed.
B. TECHNOLOGY ABSORPTION:-
(e) Efforts made in technology absorption
Neoessary |nformat|on |n Form - B annexed.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:-
(f) Activities relating to exports; initiatives taken to increase exports; development of new export markets for
products and services; and export plans:
Dur| ng the year, the Company's exports, | no| ud| ng deemed exports, | noreased to Ps. 89.89 Crores from
Ps. 22.81 Crores |n the prev|ous year, reoord|ng an annua| growth of 294%. The tota| exports and deemed exports
dur|ng 2004-05 had been 18752 MTs and 2920 MTs respeot|ve|y. Th|s s|gn|f|oant |norease |n exports has estab||shed
the wor|d o|ass qua||ty of po|ymers be|ng produoed by the Company.
(g) Total foreign exchange used and earned:
Dur|ng the year, Fore|gn Exohange earn|ngs were Ps. 79 Crores wh|oh was ma|n|y on aooount of export of Po|ymers.
Expend|ture |n Fore|gn Currenoy was Ps. 859 Crores wh|oh was ma|n|y on projeot re|ated |mports.
Form - A
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
A. POWER & FUEL CONSUMPTION 2004-2005 2003-2004
1. Electricity
a. Purohased from State Gr|d)
Un|t KWH) 134081400 131206836
Tota| Amount Ps. |n |akhs) 6476.58 6321.11
Pate/Un|t Ps./KWH) 4.83 4.82
b. Own Generat|on
|) Through D|ese| Generator
Un|t KWH) 664809.6 567643
Un|ts per ||tre of D|ese| O|| KWH/||tres) 2.75 2.70
Cost/Un|t Ps./KWH) 9.6 8.55
||) Through Steam Turb|ne/Generator GTG/GEG/STG)
Un|ts KWH) 292848219 279434522
Un|ts per 1000 SCM of gas 2490.78 3157.52
Cost/Un|t Ps./KWH) 1.74 1.79
2. Coal NIL Nl|
3. Furnace Oil NIL Nl|
4. Others/Internal Generation NIL Nl|
B. CONSUMPTION PER UNIT OF PRODUCTION
ETHYLENE
Produot|on MT) 319290 275610
E|eotr|o|ty KWH/MT) 57.13 66.27
Furnaoe O|| NIL Nl|
Coa| NIL Nl|
Others - Fue| Gas MT/MT) 0.25 0.26
- Steam MT/MT) 1.19 1.37
HDPE
Produot|on MT) 109158 96670
E|eotr|o|ty KWH/MT) 290.04 327.48
Furnaoe O|| NIL Nl|
Coa| NIL Nl|
Others - Steam MT/MT) 0.83 0.92
LLDPE
Produot|on MT) 189586 167050
E|eotr|o|ty KWH/MT) 267.13 295.14
Furnaoe O|| NIL Nl|
Coa| NIL Nl|
Others - Fue| Gas MT/MT) 0.05 0.07
- Steam MT/MT) 0.59 0.66
21 We Stand for Pe||ab|||ty
21
st
Annual Report
Form - B
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO ABSORPTION
RESEARCH & DEVELOPMENT (R&D)
1. Specific areas in which R&D carried out by the Company
Deve|opment of teohno|ogy for separat|on of Paraff|ns and O|ef|ns by adsorpt|on w|th llT, Kanpur.
Study of effeot of ag|ng, eros|on and abras|on on |nterna| ooat|ngs used |n Natura| Gas p|pe||nes w|th lFP, Franoe.
Deve|opment of |eak deteot|on methods for Natura| Gas p|pe||nes w|th llT, Chenna|.
CNG mar|ne transportat|on teohno|ogy va||dat|on and feas|b|||ty study.
Part|o|pat|on |n TSA Agreement of CHT w|th UOP.
Up-Soa||ng of F|e|d App||ed Coat|ng Teohno|ogy.
Deve|opment of on||ne property pred|ot|on software paokage for ||DPE p|ant GAl|, Pata w|th llT-Kharagpur.
Deve|opment of teohno|ogy for |nh|b|t|on of ooke format|on |n gas oraoker furnaoes w|th llT, Kanpur.
Deve|opment of Prooess Eng|neered Fue|s from p|ast|o waste w|th SPl.
2. Benefits derived as a result of the above R&D
The teohno|ogy oan reduoe energy oosts for separat|on of ||ght hydrooarbon gas m|xture |n oompar|son to the
oonvent|ona| d|st|||at|on prooess. Projeot under progress.
lnterna||y ooated p|pes have smoother surfaoes. Th|s resu|ts |n |esser operat|on oosts and |noreased throughput.
Projeot under progress.
The |nd|genous |eak deteot|on software has been tested |n |ANCO p|pe||ne. lmprovement |s |n progress.
The teohno|ogy oan be |ow oost a|ternat|ve to transport of |NG, P|pe||nes.
UOP |s major teohno|ogy supp||er to Petro|eum ref|ner|es. Consu|tanoy w||| he|p |mprovement of prooesses.
|ow oost ooat|ngs teohno|ogy for app||oat|on |n f|e|d for we|d jo|nts, f|tt|ngs eto.
The Property pred|ot|on software paokage wou|d he|p |n deorease off-grade produot|on |n ||DPE p|ant. P|gorous
test|ng of software under progress.
The run |engths of gas oraoker furnaoes oan be |mproved three - fo|d resu|t|ng |n h|gher produot|on. Exper|ments are
|n progress at GAl|, Pata.
So||d fue|s from p|ast|o waste |n oomb|nat|on w|th paper waste, |eaf waste, ooa| eto. have been produoed and tested
|n two |ndustr|es. va||dat|on |s |n progress.
3. Future plan of action
To transfer teohno|ogy for Underground Coa| Gas|f|oat|on.
Sett|ng up P||ot/Demo un|t for oonvers|on of Methano| to Propy|ene.
To work on oonvers|on of Methane to O|ef|ns Teohno|og|es.
To work on sma|| soa|e |NG.
To work on Coa| gas|f|oat|on.
To work on CNG Transportat|on by Poad/Barge.
To work on |NG Transportat|on by Poad/Barge.
Part|o|pat|on |n Hydrogen Corpus Fund for deve|opment of Hydrogen based teohno|og|es.
To transfer teohno|ogy for p||ot soa|e manufaoture of b|o-degradab|e p|ast|os.
To transfer teohno|ogy for manufaoture of |ong |ast|ng |nseot|o|de net.
To work on deve|opment of storage and transportat|on of Natura| Gas |n |ts Hydrate form.
To work on generat|on of Methane from MSW as a new souroe of gas.
4. Expenditure on R&D:
(a) Capital . Nl|
(b) Recurring . Ps. 1.11 Crores
(c) Total . Ps. 1.11 Crores
(d) Total R&D expenditure as a percentage of total turnover . 0.009%
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
1. Efforts, in brief, made towards technology absorption, adaptation and innovation
NTGG Prooess teohno|ogy. A demonstrat|on p|ant was set up |n vaghod|a. The p|ant |s oont|nuous|y operat|ng
|n batoh mode from Ootober'04.
F|aker for |ow Po|ymer wax. The un|t has been set up |n GAl|, Pata and |s |n oont|nuous operat|on from
Apr||'04.
2. Benefits derived as a result of the above efforts, e.g., product improvement, cost reduction, product
development, import substitution, etc.
NG| otherw|se sp|ked oonverted to va|ue added produots |PG, MFO.
|PW f|akes are so|d at h|gher pr|oe than |umps.
3. In case of imported technology (imported during the last five years reckoned from the beginning of the financial
year), following information may be furnished:
(a) Technology imported . Nl|
(b) Year of import . Not app||oab|e
(c) Has technology been fully absorbed? . Not app||oab|e
(d) If not fully absorbed, areas where this has not taken . Not app||oab|e
place, reasons therefor and future plans of action
23 We Stand for Pe||ab|||ty
21
st
Annual Report
Report on Corporate Governance
I. CORPORATE GOVERNANCE AT GAIL
Corporate Governanoe has beoome forma||y app||oab|e |n lnd|a, from the year 1999-2000. The foundat|on of good
Corporate Governanoe |s based upon the pr|no|p|es of transparenoy, fa|rness, d|so|osure and aooountab|||ty.
Your oompany be||eves that effeot|ve Corporate Governanoe |s oharaoter|zed by the praot|oe of eaoh of the above. The
Board pursues |ts Corporate Governanoe objeot|ve by demonstrat|ng s|noer|ty |n dea||ng w|th management, fa|rness |n
dea||ng w|th emp|oyees, meet|ng the oomp||anoe requ|rements of the Government and praot|oe of eth|oa| oorporate
o|t|zensh|p |n the soo|ety.
Keep|ng the trad|t|on of be||ev|ng |n the h|ghest standard of Corporate Governanoe, your oompany has reoe|ved the
"Go|den Peaoook Award" for exoe||enoe |n Corporate Governanoe for the Year 2003-04.
II. BOARD OF DIRECTORS
Composition of Directors
GAl| lnd|a) ||m|ted be|ng a Government Company, a|| the D|reotors of the Company are appo|nted/nom|nated by the
Government. As per Art|o|es of Assoo|at|on, the number of D|reotors sha|| not be |ess than three and more than twenty.
As on 31
st
Maroh, 2005, there were e|even D|reotors on Board oompr|s|ng of s|x Who|e T|me D|reotors |no|ud|ng Cha|rman
& Manag|ng D|reotor and f|ve Non-off|o|a| Part-t|me D|reotors |no|ud|ng two off|o|a|s of Government of lnd|a.
Dur|ng the year 2004-05, none of the Non-off|o|a| Part-t|me D|reotors of GAl| had any peoun|ary or mater|a| re|at|onsh|p
or transaot|on w|th the Company.
None of the D|reotors were members |n more than ten Board Comm|ttees or Cha|rman of more than f|ve Comm|ttees as
speo|f|ed |n C|ause 49 of the ||st|ng Agreement) aoross a|| the oompan|es |n wh|oh they were D|reotors.
Board Meetings
Dur|ng the f|nano|a| year 2004-05, the Board met f|fteen t|mes on the fo||ow|ng dates.-
Sl. No. Date of Board Meeting
1 30.04.2004
2 31.05.2004
3 30.06.2004
4 30.07.2004
5 02.09.2004
6 04.09.2004
7 07.09.2004
8 27.10.2004
9 05.11.2004
10 20.12.2004
11 10.01.2005
12 17.01.2005
13 28.01.2005
14 11.02.2005
15 19.02.2005
Proper not|oes were g|ven |n respeot of these meet|ngs and the prooeed|ngs were proper|y reoorded and s|gned |no|ud|ng
o|rou|ar reso|ut|ons passed, |n the M|nutes Book ma|nta|ned for the purpose.
The part | ou| ars of D| reot ors | no| ud| ng t he| r at t endanoe at Board Meet | ng s) and Annua| Genera| Meet | ng
dur|ng the F|nano|a| Year 2004-05 |s deta||ed be|ow.
WHOLE-TIME FUNCTIONAL DIRECTORS:
Shri Proshanto Banerjee, 27.08.2001 15 Yes 2 - -
Chairman & Managing Director
Shri J.K. Jain, Director (Finance) 22.01.1996 13 Yes 1 1 -
Shri S.P. Rao, Director (Projects) 22.10.1999 15 Yes 1 - -
Shri B.S. Negi, Director (BD) 01.01.2003 15 Yes 3 2 -
Shri M.R. Hingnikar, Director (HR) 28.07.2003 14 Yes 1 1 -
Dr. U.D. Choubey, Director (Marketing) 06.05.2004 14 Yes 1 - -
NON OFFICIAL PARTTIME DIRECTORS (EX- OFFICIO) :
Shri M.S. Srinivasan 28.01.2005 1 NA 3 - 2
Shri Badal K. Das 30.06.2004) 1 NA 3 - -
Shri A.K. Srivastava 07.03.2005) 10 Yes 3 - -
Shri P.K. Sinha 20.12.2004 6 NA 3 3 -
NON OFFICIAL PARTTIME DIRECTORS (INDEPENDENT DIRECTORS) :
Dr. Amit Mitra 29.04.1999 8 No 3 1 -
Dr. R.K. Pachauri 26.10.2004) Nl| No 1 1 -
Dr. A. K. Kundra 18.08.2003 14 Yes 1 - -
Shri B.C. Bora 18.08.2003 13 No - - -
Names of Director(s) Date of
Appointment/
(Cessation)
No. of
Board
Meetings
attended
AGM held on
30.09.04
attended
(Yes/No)
Directorship(s)
in other
companies
Membership(s)
of Committees of
Boards of other
companies
Chairmanship(s)
of Committees of
Boards of other
companies
25 We Stand for Pe||ab|||ty
21
st
Annual Report
III. AUDIT COMMITTEE
Brief terms of reference of Audit Committee
The terms of referenoe of Aud|t Comm|ttee |no|ude, |nter-a||a, the fo||ow|ng.
a) Overs|ght of the Company's f|nano|a| report|ng prooess and d|so|osure of |ts f|nano|a| |nformat|on to ensure that the
f|nano|a| statement |s oorreot.
b) Pev|ew|ng w|th the management, the annua| f|nano|a| statements before subm|ss|on to the Board.
o) Pev|ew|ng w|th the management, the externa| and |nterna| aud|tor, the adequaoy of |nterna| oontro| systems.
d) Pev|ew|ng the adequaoy of |nterna| aud|t funot|ons.
e) D|souss|on w|th |nterna| aud|tors and any s|gn|f|oant f|nd|ngs and fo||ow up thereon.
f) Pev|ew|ng the f|nd|ngs of any |nterna| |nvest|gat|ons by the |nterna| aud|tors |nto the matter where there |s suspeoted
fraud or |rregu|ar|ty or a fa||ure of |nterna| oontro| system of mater|a| nature and report|ng the same to the Board.
g) Pev|ew|ng the Company's f|nano|a| and r|sk management po||o|es.
h) Peoommend|ng the f|xat|on of aud|t fee and approva| for payment for any other serv|oes.
Composition & Qualifications
The Aud|t Comm|ttee of the Company |s oonst|tuted |n aooordanoe w|th the prov|s|ons of the ||st|ng Agreement and the
Compan|es Aot, 1956. lt oompr|ses of four non-off|o|a| part-t|me D|reotors, v|z., Dr. A.K. Kundra Cha|rman), Shr|. P.K.
S|nha Member), Dr. Am|t M|tra Member) and Shr|. B.C. Bora Member).The quorum of the Aud|t Comm|ttee |s two
members or one-th|rd of the strength of the oomm|ttee, wh|ohever |s h|gher. The Cha|rman has adequate f|nano|a| and
aooount|ng know|edge.
D|reotor F|nanoe), Head of lnterna| Aud|t Department and the Statutory Aud|tors are permanent |nv|tees to the meet|ngs)
of the Comm|ttee. The Company Seoretary aots as Seoretary to the Aud|t Comm|ttee.
Audit Committee Meetings and attendance thereat
Dur|ng the f|nano|a| year 2004-05, ten Aud|t Comm|ttee Meet|ngs were he|d and attendanoe thereat of the members
was as fo||ows.
Date of Dr. A.K Kundra Shri A.K. Srivastava Shri P.K. Sinha Shri B.K Das Dr. Amit Mitra Shri B.C. Bora
Meeting (w.e.f. (w.e.f. (upto
27.10.2004 20.12.2004) 30.06.2004)
& upto
20.12.2004)
15.04.2004 Yes - - Yes No No
30.04.2004 Yes - - No Yes Yes
25.06.2004 Yes - - Yes No Yes
16.07.2004 Yes - - - No Yes
29.07.2004 Yes - - - No Yes
29.09.2004 Yes - - - Yes Yes
27.10.2004 Yes Yes - - No No
08.12.2004 Yes No - - No Yes
28.01.2005 Yes - Yes - Yes Yes
14.03.2005 Yes - No - Yes Yes
No. of 10 1 1 2 4 8
meet|ngs
attended
IV. REMUNERATION TO DIRECTORS
GAl |l nd| a) || m| ted, be| ng a Government Company, the remunerat| on of | ts Who| e-t| me D| reotors | s f| xed
by t he Government of l nd| a t hrough M| n| st ry of Pet ro| eum & Nat ura| Gas. The non-of f | o| a| part t | me
D| reot ors Ex-of f | o| o) do not reoe| ve any remunerat | on f rom t he Company. The non-of f | o| a| part -t | me
D|reotors lndependent) are not ent|t|ed to any remunerat|on exoept s|tt|ng fee of Ps.10,000/- for attend|ng
eaoh meet|ng of the Board of D|reotors and Comm|ttees) thereof and expenses |no|denta| thereto.
Details of remuneration paid to Whole Time Directors for the financial year 2004- 05:
(Rs. in Lakhs)
Names of Director(s) Salary & Contribution Other benefits Total
Allowances to Provident, and perquisites
Gratuity &
other Funds
Shr| Proshanto Banerjee 7.82 4.91 1.15 13.89
Chairman & Managing Director
Shr| J.K. Ja|n 7.14 1.61 0.66 9.41
Director (Finance)
Shr| S.P. Pao 7.28 1.96 0.77 10.01
Director (Projects)
Shr| B.S. Neg| 9.04 2.09 2.27 13.40
Director (Business Development)
Shr| M.P. H|ngn|kar 7.32 3.60 1.49 12.41
Director (HR)
Dr. U.D. Choubey 7.39 1.87 4.13 13.39
Director (Marketing)
The serv|oe oontraot |s for f|ve years wh|oh |s renewab|e for further s|m||ar per|ods. The not|oe per|od |s for three months.
The Company has not |ntroduoed any stook opt|ons soheme.
Details of sitting fees paid to the Non-Official Part-Time (Independent) Directors for attending the meetings
of the Board/Committees:
Names of Director(s) Amount (in Rs.)
Dr. Am|t M|tra 1, 30,000
Dr. P. K. Paohaur| -
upto 26.10.2004)
Dr. A. K. Kundra 2, 70,000
Shr| B.C. Bora 2,90,000
V. SHAREHOLDERS/ INVESTORS GRIEVANCE COMMITTEE
The Shareho| ders' /l nvest ors' Gr| evanoe Comm| t t ee oompr| ses of Shr| B. C. Bora, Cha| rman
w.e.f. 27.10.2004), Shr| S.P. Pao, D|reotor Projeots) and Shr| M.P. H|ngn|kar, D|reotor HP). The Comm|tee,
at | t s meet | ng he| d on 28. 01. 2005, rev| ewed t he serv| oes t o t he shareho| ders/| nvest ors | no| ud| ng
response to the|r oomp|a|nts/oommun|oat|ons. The Company Seoretary aots as the Comp||anoe Off|oer of the Company.
Dur| ng the year under rev| ew, 2081 oomp| a| nts were reoe| ved from the shareho| ders through SEBl /Stook
Exohanges perta| n| ng to non-reoe| pt of d| v| dend, Annua| Peport, non-a| | otment of shares, non-reoe| pt of
refund order, eto., out of wh|oh 1963 oomp|a|nts have been reso|ved. The Company has been tak|ng a|| steps to ensure
27 We Stand for Pe||ab|||ty
21
st
Annual Report
that shareho| ders re| ated aot| v| t| es are g| ven due pr| or| ty and the matters/| ssues ra| sed are reso| ved at
t he ear| | est . A| | t he va| | d share-t ransf er request s reoe| ved dur| ng t he year were du| y prooessed and
approved w|th|n st|pu|ated per|od of 30 days. There were no pend|ng oases of transfer of shares |n phys|oa|
form as on 31
st
Maroh, 2005.
VI. GENERAL BODY MEETINGS
Annual General Meeting:
The |ooat|on and t|me of |ast three Annua| Genera| Meet|ngs) are as fo||ows.
For the Year 2001-02 2002-03 2003-04
AGM 18
th
19
th
20
th
Date & T|me 24.9.2002 30.09.2003 30.09.2004
10.30 a.m. 4.00 p.m. 10.30 a.m.
venue FlCCl Go|den FlCCl Go|den S|r| Fort Cu|tura| Comp|ex,
Jub||ee Aud|tor|um Jub||ee Aud|tor|um Khe| Gaon Marg
Tansen Marg Tansen Marg S|r| Fort Poad
New De|h| New De|h| New De|h|
Dur|ng the year, no |tem warranted the posta| ba||ot and one |tem was passed through speo|a| reso|ut|on |n the Annua|
Genera| Meet|ng.
VII. DISCLOSURES
Disclosure on materially significant related party transactions
Dur| ng the year, there have been no s| gn| f| oant/mater| a| re| ated party transaot| ons w| th the Promoters,
D|reotors or the Management, the|r subs|d|ar|es or re|at|ves, eto., that may have potent|a| oonf||ot w|th the
| nterest of the Company at | arge. The deta| | s of 'Pe| ated Party D| so| osures' are be| ng d| so| osed | n Note
No.10 of Sohedu|e 14 to the Aooounts |n the Annua| Peport.
Details of non-compliance relating to Capital Market
The Company has oomp||ed w|th the requ|rements of the SEBl, Stook Exohanges and the regu|atory author|t|es on
oap|ta| market re|ated aot|v|t|es as app||oab|e from t|me to t|me. Dur|ng the |ast three years, there has been no
non-oomp||anoe of the prov|s|ons/requ|rements of SEBl, Stook Exohanges or any regu|atory author|ty re|ated to oap|ta|
market. The Company has a|so opted for vo|untary Seoretar|a| Aud|t from a praot|s|ng Company Seoretary.
VIII. MEANS OF COMMUNICATION
To prov|de |arge pub||o|ty and to reaoh the shareho|ders, ana|ysts, |nvest|ng pub||o, eto., the quarter|y and ha|f-year|y
f|nano|a| resu|ts were pub||shed |n |ead|ng newspapers hav|ng w|de o|rou|at|on, v|z., The Eoonom|os T|mes, The H|ndustan
T|mes Eng||sh & H|nd|). The "||m|ted Pev|ew" reports of the f|nano|a| resu|ts for the quarters ended on 30
th
June 2004,
30
th
September 2004 and 31
st
Deoember 2004 were obta|ned from the Statutory Aud|tors of the Company and f||ed w|th
the Stook Exohanges.
The Company's f|nano|a| resu|ts are d|sp|ayed on the Company's webs|te at www.gailonline.com and the same |s a|so
hosted on the EDlFAP SEBl webs|te).The press re|eases and ana|yst presentat|ons are a|so d|sp|ayed on the Company's
webs|te.
A deta||ed Management D|souss|on and Ana|ys|s Peport |s eno|osed w|th the D|reotors' Peport.
IX. GENERAL SHAREHOLDERS INFORMATION
Forthcoming AGM Date, Time and Venue
The 21
st
Annua| Genera| Meet|ng |s sohedu|ed for Wednesday, the 28
th
September, 2005 at 10.30 a.m., at S|r| Fort
Cu|tura| Comp|ex, Khe| Gaon Marg, S|r| Fort Poad, New De|h| - 110 016.
Financial Calendar
The Company's f|nano|a| year |s Apr|| 1
st
, 2004 to Maroh 31
st
, 2005.
Dividend Payment Date
An Interim Dividend @ 40% for the f|nano|a| year 2004-05 was approved by the Board and the same has been pa|d. The
Board has reoommended the payment of F|na| D|v|dend @ 40% for the f|nano|a| year 2004-05 for the oons|derat|on of
the shareho|ders at the ensu|ng Annua| Genera| Meet|ng. lf approved by the shareho|ders, the same w||| be transferred
w|th|n f|ve days from the date of deo|arat|on, as per the prov|s|ons of the Compan|es Aot 1956, and sha|| be pa|d w|th|n
30 days from the date of approva| |.e. 28
th
September, 2005.
Date of Book Closure
The Company had f|xed the Peoord Date of 28.12.2004 for the purpose of determ|n|ng the e||g|b|||ty of the members/
benef|o|a| owners of the Company for payment of Interim Dividend @ 40% for the f|nano|a| year 2004-05 a|ready pa|d).
The Peg|ster of Members sha|| rema|n o|osed from 16
th
September, 2005 to 28
th
September, 2005 both days |no|us|ve),
for the purpose of determ|n|ng the e||g|b|||ty of the members/benef|o|a| owners of the Company for payment of F|na|
D|v|dend @ 40% on equ|ty shares for the year ended 31
st
Maroh, 2005, |f approved by the shareho|ders.
Payment of Dividend through Electronic Clearing Service (ECS)
The oompany |s prov|d|ng E|eotron|o C|ear|ng Serv|oe ECS) fao|||ty for payment of d|v|dend |n se|eot o|t|es and for th|s
purpose the 9-d|g|t MlCP Code of the Banker as noted |n the reoords of the Depos|tory sha|| be used for the purpose of
rem|ttanoe of d|v|dend through ECS. lt |s therefore neoessary that the shareho|ders shou|d have oorreot bank deta||s,
9-d|g|t MlCP Code noted |n the reoords of the|r Depos|tory.
Members ho|d|ng shares |n e|eotron|o form are requested to get the ohange |n address/bank deta||s/ECS Mandate
|noorporated |n the reoords of the|r Depos|tory Part|o|pant DP). The P&TA/Company w||| not enterta|n any request for
ohange |n address/bank deta||s/ECS Mandate.
Transfer of Unclaimed Dividend Amount to Investor Education and Protection Fund (IEPF)
Members are requested to app|y for renewa|/|ssue of demand drafts for the D|v|dend for the f|nano|a| year 1997-98
before 27
th
September, 2005, after wh|oh any unpa|d d|v|dend amount for the year 1997-98 w||| be transferred by the
Company to lnvestor Eduoat|on and Proteot|on Fund lEPF) and no o|a|m sha|| ||e aga|nst the Company or lEPF after the
sa|d transfer.
Particulars of Directors appointed/re-appointed
The Not|oes) of the Annua| Genera| Meet|ngs) he|d on 30
th
September, 2004 for the year 2003-04 and sohedu|ed to be
he|d on 28
th
September, 2005 for the year 2004-05 oomp||es w|th th|s requ|rement.
29 We Stand for Pe||ab|||ty
21
st
Annual Report
Listing Details & Security Codes
Stock Exchanges Security Code
The Stock Exchange, Mumbai 532155
Ph|roze Jeejeebhoy Towers, Da|a| Street,
Mumba|-400001
The National Stock Exchange of India Limited* GAILEQ
Exohange P|aza,
Bandra-Kur|a Comp|ex, Bandra East),
Mumba|- 400051
The Delhi Stock Exchange Association Limited -
DSE House, 3/1 Asaf A|| Poad
New De|h|-110002
London Stock Exchange** GAID LI
10, Paternoster Square, |ondon EC4M 7|S U.K.) GAILY US
* The Bonds are ||sted at the WDM segment
** G|oba| Depos|tary Peoe|pts GDPs)
Listing Fees
The annua| ||st|ng fees for the year 2004-05, |n re|at|on to the ||sted Equ|ty Shares/Bonds of the Company has been pa|d
to the oonoerned Stook Exohanges on demand. The Company has a|so made the payment of Annua| Custody Fee for
the f|nano|a| year 2005-06 to the Nat|ona| Seour|t|es Depos|tory ||m|ted NSD|) and Centra| Depos|tory Serv|oes lnd|a)
||m|ted CDS|) based on the fo||o/lSlN pos|t|ons as on 31.03.2005.
MARKET PRICE DATA: HIGH, LOW AND VOLUME DURING EACH MONTH IN LAST FINANCIAL YEAR
MONTH(S) BSE NSE MARKET INDEX
2004-05 High Low Volume High Low Volume BSE Sensex Nifty
(in Rs.) (in Rs.) (in Rs.) (in Rs.)
APRIL 245.75 213.65 4,62,79,599 245.60 213.55 11,82,39,834 5979 1912.35
MAY 232.40 105.55 4,47,65,136 236.00 101.25 12,03,92,524 5773 1837.95
JUNE 181.25 155.00 2,23,20,323 181.35 153.00 7,10,75,905 5013 1566.50
JULY 201.25 165.10 2,15,10,659 201.30 164.80 6,29,40,491 5201 1638.70
AUGUST 195.50 170.30 1,06,05,718 195.10 170.15 3,40,49,580 5269 1658.90
SEPTEMBER 199.85 177.50 1,52,63,320 199.90 177.60 4,36,03,031 5639 1760.80
OCTOBER 206.80 189.05 1,13,26,209 215.00 189.00 3,24,60,654 5804 1829.45
NOVEMBER 218.80 195.90 76,33,368 239.00 198.00 2,55,65,734 6248 1963.80
DECEMBER 244.00 216.50 65,67,786 245.80 216.55 2,49,90,798 6617 2088.45
JANUARY 256.50 202.35 76,18,850 265.80 202.20 2,99,77,201 6696 2120.15
FEBRUARY 259.00 230.05 1,47,30,488 270.00 225.60 4,67,35,343 6721 2110.15
MARCH 256.00 203.10 92,04,196 256.00 200.00 3,79,39,131 6955 2183.45
REGISTRARS AND SHARE TRANSFER AGENT:
MCS ||m|ted
Sr| venkatesh Bhawan
W-40, Okh|a lndustr|a| Area, Phase-ll,
New De|h|-110020
Te| No- 91-11-26384909-11
Fax No-91-11-26384907
SHARE TRANSFER SYSTEM :
The shares of the Company are be|ng oompu|sor||y traded |n demater|a||zed form w.e.f. 15.02.1999. Shares reoe|ved |n
phys|oa| form are transferred w|th|n a per|od of 30 days from the date of |odgment of va||d share transfer deed a|ong
w|th share oert|f|oate. These requests are prooessed through the Peg|strar & Transfer Agent, |.e., MCS ||m|ted, a SEBl
approved Peg|strar & Transfer Agent, wh|oh has been appo|nted to effeot the transfer of shares and other re|ated jobs.
A Share Transfer Comm|ttee oompr|s|ng of a|| the Who|e-T|me D|reotors |no|ud|ng Cha|rman & Manag|ng D|reotor,
oons|ders the requests for transfer/transm|ss|on of shares, |ssue of dup||oate share oert|f|oates, re-mater|a||zat|on, eto.
Dur|ng the year, n|ne meet|ngs of the Share Transfer Comm|ttee were he|d. The deta||s of transfers are reported to the
Board of D|reotors at |ts ensu|ng meet|ng.
Dur|ng the year, a oert|f|oate on ha|f-year|y bas|s oonf|rm|ng due oomp||anoe of the share transfer forma||t|es by the
Company under C|ause 47o) of the ||st|ng Agreement), and a Seoretar|a| Aud|t Peport |under SEBl Depos|tor|es and
Part|o|pants) Pegu|at|ons, 1996| for reoono|||at|on of tota| adm|tted oap|ta| w|th both the depos|tor|es and the tota|
|ssued and ||sted oap|ta| were obta|ned from a Praot|o|ng Company Seoretary and have a|so been subm|tted to Stook
Exohanges w|th|n st|pu|ated t|me.
PERFORMANCE OF GAIL SHARE PRICE IN COMPARISON TO
BROAD BASED INDICES-BSE SENSEX AND NIFTY
31 We Stand for Pe||ab|||ty
21
st
Annual Report
SHAREHOLDING PATTERN AS ON 31.03.2005
Sl. Category No. of Shares % of
No. held holding
A Promoters holding :
1 Promoters
- lnd|an Promoter 48,49,36,417 57.345
- Fore|gn Promoter - -
2 Persons aot|ng |n oonoert 700 -
Sub-Total 48,49,37,117 57.345
B Non Promoters holding :
3 lnst|tut|ona| lnvestors
a) Mutua| Funds and UTl 89,82,866 1.062
b) Banks, F|nano|a| lnst|tut|ons, lnsuranoe Compan|es 4,92,35,327 5.822
Centra|/State Government lnst|tut|ons/Non-Government lnst|tut|ons)
o) Fore|gn lnst|tut|ona| lnvestors Flls) 12,50,67,908 14.790
Sub-Total 18,32,86,101 21.674
4 Others
a) Pr|vate Corporate Bod|es 77,00,786 0.911
b) lnd|an Pub||o 3,15,96,855 3.736
o) NPls/OCBs 6,80,821 0.081
d) Any Other - Government Company ONGC & lOC) 8,16,79,098 9.658
- GDPs 5,57,70,822 6.595
Sub-Total 17,74,28,382 20.981
GRAND TOTAL 84,56,51,600 100.00
DISTRIBUTION OF SHAREHOLDING
The d|str|but|on of shareho|d|ng of the oompany as on 31.03.2005 |s deta||ed be|ow.
No. of Share- % to Total Shareholding of No. of Shares Amount % to Total
holders nominal value of Rs. 10/- (in Rs.)
2,48,352 96.68 Upto 5000 2,09,96,040 20,99,60,400 2.48
4,820 1.88 5001 to 10000 37,33,461 3,73,34,610 0.44
2,035 0.79 10001 to 20000 29,97,744 2,99,77,440 0.35
572 0.22 20001 to 30000 14,69,658 1,46,96,580 0.17
256 0.10 30001 to 40000 9,24,933 92,49,330 0.11
196 0.08 40001 to 50000 9,24,035 92,40,350 0.11
273 0.11 50001 to 100000 20,09,027 2,00,90,270 0.24
381 0.15 100001 and above 81,25,96,702 8,12,59,67,020 96.09
2,56,885 100.00 TOTAL 84,56,51,600 8,45,65,16,000 100.00
DEMATERIALIZATION OF SHARES & LIQUIDITY
Shares of the Company are oompu|sor||y traded |n demater|a||zed form w.e.f. 15.2.99. As on 31
st
Maroh, 2005, out of the
shares he|d by the shareho|ders other than the Government), 99.33 % are he|d |n demater|a||zed form.
OUTSTANDING GDRs/ADRs/ WARRANTS OR ANY CONVERTIBLE INSTRUMENTS, CONVERSION DATES
AND LIKELY IMPACT ON EQUITY
The Government of lnd|a d|s|nvested 135 m||||on Equ|ty Shares out of |ts ho|d|ng |n the |nternat|ona| market through
GDP meohan|sm |n 1999-2000. A tota| number of 22.5 m||||on GDPs were |ssued, one GDP oompr|s|ng s|x Equ|ty
Shares. As on 31.03.2005, tota| number 92,95,137 GDPs were outstand|ng. The oonvers|on of GDPs |nto Equ|ty Shares
has no |mpaot on tota| equ|ty oap|ta|.
AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE
The Aud|tors' Cert|f|oate regard|ng oomp||anoe of oond|t|ons of Corporate Governanoe, as st|pu|ated |n C|ause 49 of the
||st|ng Agreement |s annexed herew|th.
MAJOR PLANT LOCATIONS
U P Petroohem|oa| Comp|ex, Pata
P.O. Pata-206241
D|stt. Aura|ya U.P)
|PG Peoovery P|ant, Usar
P.O. Ma|yan-402203
Ta|. A||bagh
D|stt. Pa|gad Maharashtra)
|PG Peoovery P|ant, v|ja|pur
GAl| Comp|ex
v|ja|pur-473112
D|stt. Guna M.P.)
|PG Peoovery P|ant, vaghod|a
GlDC lndustr|a| Estate
vaghod|a-391760
D|stt. Baroda Gujarat)
|PG Peoovery P|ant, |akwa,
S|vasagar-785688 Assam)
|PG Peoovery Projeot, Gandhar
v|||. Pozantankar|a,Ta|. Amod
D|stt. Bharuoh- 392140 Gujarat)
OUR ADDRESS FOR CORRESPONDENCE
GAl| lnd|a) ||m|ted
16, Bh|ka|j| Cama P|aoe, P.K. Puram
New De|h| - 110066
Te|. No. 91- 11-26172580, 26182955
Fax No. 91- 11-26185941
33 We Stand for Pe||ab|||ty
21
st
Annual Report
Auditors Certificate on Corporate Governance
To
The Shareho|ders of GAl| lnd|a) ||m|ted
We have read the report of the Board of D|reotors on Corporate Governanoe and have exam|ned the re|evant reoords re|at|ng
to the oomp||anoe of the oond|t|ons of Corporate Governanoe by GAl| lnd|a) ||m|ted for the year ended Maroh 31, 2005 as
st|pu|ated |n o|ause 49 of the ||st|ng Agreement of the sa|d Company w|th the Stook Exohanges.
The oomp||anoe of the oond|t|ons of the Corporate Governanoe |s the respons|b|||ty of the management. Our exam|nat|on
was ||m|ted to the prooedure and |mp|ementat|on thereof adopted by the Company for ensur|ng oomp||anoe w|th the oond|t|ons
of Corporate Governanoe. lt |s ne|ther an aud|t nor an express|on of op|n|on of the f|nano|a| statements of the Company.
ln our op|n|on and to the best of our |nformat|on and aooord|ng to the exp|anat|ons g|ven to us, the Company has oomp||ed
w|th the oond|t|ons of Corporate Governanoe as st|pu|ated |n o|ause 49 of the above ment|oned ||st|ng Agreement.
We state that no |nvestor gr|evanoes) |s/are pend|ng for a per|od exoeed|ng for one month exoept the gr|evanoe re|at|ng to
offer for sa|e of equ|ty shares upto 10% and/or oonstra|ned by |noomp|ete dooumentat|on and/or |ega| |mped|ments aga|nst
the Company as per the oert|f|oate of the Peg|strar & Transfer Agent of the Company.
We further state that suoh oomp||anoe |s ne|ther an assuranoe as to the future v|ab|||ty of the Company nor eff|o|enoy or the
effeot|veness w|th wh|oh the management has oonduoted the affa|rs of the Company.
For S Mann & Co.
Chartered Aooountants
Subhash Mann
New De|h|. Partner
June 21, 2005 Membersh|p No. 80500
INDUSTRIES STRUCTURE & DEVELOPMENTS
The O|| and Natura| Gas |ndustry had trad|t|ona||y been regu|ated
by the Government of lnd|a Gol). The M|n|stry of Petro|eum and
Natura| Gas MoP&NG) oversees the ent|re oha|n of aot|v|t|es from
exp|orat|on and produot|on of orude o|| and Natura| Gas, ref|n|ng,
d|str|but|on and market|ng of petro|eum produots and export and
|mport of orude o|| and petro|eum produots.
The natura| gas seotor, wh|oh |s a|ready open for part|o|pat|on |n
the areas of E&P, |NG | mports, Transm| ss| on P| pe| | nes,
D|str|but|on P|pe||nes, Market|ng and Prooess|ng, |s further mov|ng
to a oomp|ete|y market dr|ven one, as pr|oes and a||ooat|on of
domest|o gas by the state enterpr|ses |s a|so progress|ve|y
de-oontro||ed. The paoe of the dynam|oa| trans|t|on |s dr|ven by
var|ous faotors, |no|ud|ng steep growth |n the domest|o natura|
gas demand and |norease |n |ndustr|a| and eoonom|o growth of
lnd|a. The potent|a| of a grow|ng gas eoonomy has attraoted fore|gn
p|ayers that has not on|y resu|ted |n more oompet|t|on but a|so
a||gned the |ndustry to oo||aborate w|th one another.
At the nat|ona| perspeot|ve, major thrust has been g|ven towards
Energy Seour|ty of the nat|on by the Government of lnd|a. O||
d|p|omaoy, trans-oountry gas p|pe||nes, |mport of gas |n the form
of |NG and sett|ng up strateg|o petro|eum reserves are some of
the steps the Government has taken to ensure energy seour|ty of
the oountry.
The share of natura| gas |n tota| energy oonsumpt|on has been
|ow pr|mar||y due to ||m|ted ava||ab|||ty of domest|o gas. The
s|tuat|on |s ||ke|y to ohange beoause of |arge d|soover|es of gas
under the New Exp|orat|on and ||oens|ng Po||oy NE|P) |n the
eastern ooast, upoom|ng trans-oountry p|pe||nes ||ke lran-lnd|a,
Myanmar- lnd|a p|pe||nes and thrust be|ng |a|d on |NG souro|ng
from M|dd|e East, South East As|a and Austra||a.
PERSPECTIVE OF THE INDIAN GAS SECTOR
Demand and Supply
The lnd|an gas market has entered |n a new era w|th Natura| Gas
gradua||y beoom|ng the most |mportant oomponent of Pr|mary
Energy M|x |n the oountry. The tota| demand of Natura| Gas |n the
oountry |s expeoted to grow at a CAGP of 16% to over 300
MMSCMD by 2010-11 as aga|nst the ourrent demand of about
150 MMSCMD. Current|y natura| gas oontr|butes to the extent of
8% to the pr|mary energy basket and the share |s expeoted to
|norease to 14% by 2011-12.
The |ong |ast|ng supp|y oonstra|ned market |s now |ook|ng towards
the prospeots of oommenoement of oommero|a| produot|on from
the new d|soover|es of domest|o gas under the New Exp|orat|on
and ||oens|ng Po||oy NE|P). Ava||ab|||ty of gas from the East
Coast, |no|ud|ng the KG bas|n |n near future |s expeoted to prov|de
great opportun|t|es for growth of gas based |ndustr|es. Suooessfu|
sh|pment of gas through p|pe||nes from the Eastern offshore to
var|ous gas markets of the oountry w||| be a b|g boost to the
lnd|an energy seotor.
LNG
Ava||ab|||ty of substant|a| vo|ume of P|NG Pegas|f|ed ||quef|ed
Natura| Gas) |n the lnd|an Market dur|ng 2004-05 has resu|ted |n
an add|t|ona| vo|ume of more than 10% of Natura| Gas. The
oapao|ty of the |NG |mport and regas|f|oat|on term|na| at Dahej
|s be|ng fu||y ut|||zed for regas|f|oat|on of 5 m||||on tonnes per
annum mmtpa) from the beg|nn|ng of the FY-06. Your Company
has made a|| neoessary arrangements for transm|ss|on of tota|
vo|ume of P|NG ava||ab|e from the Dahej term|na| to var|ous
oustomers |ooated |n the states of Gujarat, MP, Pajasthan, De|h|,
Haryana and UP. The seoond |mport term|na| at Haz|ra has a|so
oome under operat|on dur|ng th|s FY-06. Aooeptanoe of the pr|oe
of |NG |s an |mportant deve|opment |n the lnd|an gas seotor.
Go|ng forward, |NG regas|f|oat|on oapao|t|es of 25 mmtpa are
be|ng p|anned |n the near term, wh|oh s|gna|s a trend of |noreas|ng
demand for |NG |n the oountry. Bes|des, the f|rm quant|t|es of
|NG oontraoted |s far |ess than the oapao|t|es env|saged for
oreat|on. Your Company, therefore, strong|y be||eves that souro|ng
of add|t|ona| vo|ume of |NG from |nternat|ona| souroes w||| be a
key dr|ver for growth |n the near term. |NG |s expeoted to beoome
a maj or gas souro| ng a| ternat| ve and th| s w| | | enta| | lnd| an
oompan|es part|o|pat|ng |n a|| parts of the |NG va|ue oha|n |.e.
|NG ||quefaot|on, |NG transportat|on and |NG regas|f|oat|on.
Natural Gas from other Sources
Hav|ng rea||zed the |mportanoe of Natura| Gas |n oountry's energy
soenar|o, Government of lnd|a |s aot|ve|y pursu|ng the var|ous
other poss|b|||t|es of souro|ng Natura| Gas through oross-border
p|pe||nes from oountr|es ||ke lran, Kazakhstan, Myanmar eto.
Deve|opmenta| projeots to obta|n gas from non-oonvent|ona|
souroes as Coa| Bed Methane CBM) and underground Coa|
Gas|f|oat|on are a|so be|ng pursued ser|ous|y. Your Company has
a|so put strong foous |n the area of teohno|ogy soann|ng and
absorpt|on through partnersh|ps w|th teohno|ogy prov|ders for
|mp|ementat|on of Coa| Gas|f|oat|on projeots |n lnd|a.
Transportation Technologies
Bes|des exp|or|ng non-oonvent|ona| souroes of energy, your
Company |s a|so aot|ve|y foous|ng on |nnovat|ve gas transportat|on
teohno|og|es to have |n |ts k|tty a basket of transportat|on opt|ons
for transport|ng gas from areas that do not a||ow eoonom|oa|
transportat|on through the oonvent|ona| route of p|pe||nes. Some
Management Discussion and Analysis
35 We Stand for Pe||ab|||ty
21
st
Annual Report
of the areas that we are |ook|ng at are CNG by sh|ps for bu|k
transportat| on and modu| ar |NG and CNG transportat| on
teohno|og|es by truoks from stranded souroes to gas oonsumers.
Natural Gas Markets
The maoro-eoonom|o po||o|es of Government of lnd|a, no doubt,
wou|d dr|ve the growth of Natura| Gas |n oom|ng years part|ou|ar|y
aga|nst the demand from power seotor as we|| as from other
|ndustr|a| seotors. |arger appet|te of gas w||| be there from ex|st|ng
|ndustr|es, wh|oh wou|d be w||||ng to sh|ft from ||qu|d fue| souroes
for the reason of h|gher and vo|at||e pr|oe and from so||d fue|s on
the ground of env|ronmenta| oost.
Natura| gas |s a|so expeoted to oommand a s|gn|f|oant share |n
the reta|| market suoh as Compressed Natura| Gas CNG) |n the
automot|ve seotor and P|ped Natura| Gas PNG) |n domest|o
househo| ds | n v| ew of advantages over oompet| ng fue| s.
Consequent|y, CNG and PNG d|str|but|on |nfrastruoture wou|d be
oreated more o|t|es w||| be keen to use CNG) as auto fue| and
P|ped Natura| Gas PNG) |n domest|o seotor to oontro| |eve| of
po||ut|on.
Reaching out through the Gas Grid
Wh||e the efforts are taken to souroe more natura| gas to add |n
the energy basket, s|mu|taneous efforts are be|ng made to oreate
add|t|ona| p|pe||ne |nfrastruoture oapao|t|es to de||ver gas to
oonsumers. Your Company, be|ng the market |eader |n gas
transm|ss|on bus|ness, has a|ready oonoeptua||zed the b|ue pr|nt
of a Nat|ona| Gas Gr|d to prov|de oonneot|v|ty to var|ous gas
souroes and geograph|oa||y d|spersed markets. The Gr|d has been
oonoeptua||zed to enab|e gas sh|ppers to pump gas at any po|nt
|n the ma|n Gr|d and take de||very from any po|nt |n the Gr|d,
thereby prov|d|ng an opt|ma| and eoonom|oa| so|ut|on for oross
oountry transportat|on |n lnd|a. ln th|s regard, your Company has
made progress by oover|ng POU aoqu|s|t|on, prepar|ng feas|b|||ty
reports, estab||sh|ng Gas Management Systems for var|ous
segments of gas gr|d and |dent|fy|ng the potent|a| markets |n
d|fferent states.
OPPORTUNITIES, THREATS, RISKS & CONCERNS
Natura| gas w||| p|ay an |noreas|ng|y |mportant ro|e |n the grow|ng
lnd|an Energy market. Supp|y oonstra|nts and |noreas|ng pr|oes
of oonvent|ona| fue|s w||| enoourage a sh|ft to natura| gas. Grow|ng
env|ronmenta| oonoern w||| further enhanoe the natura| gas
propos|t|on. Power seotor |s expeoted to be the key growth dr|ver
for natura| gas demand. The demand w||| a|so be sens|t|ve to the
ohanges |n pr|oe of gas and the re|at|ve pr|oe of gas and oompet|ng
fue|s.
Demand for LNG
Ava||ab|||ty of |NG |n the oountry has oommenoed dur|ng the |ast
f|nano|a| year at Dahej and Haz|ra |NG regas|f|oat|on term|na|s.
Dabho| |NG fao|||t|es, wh|oh w||| now be operated by the new|y
formed oompany Patnag|r| Gas and Power Pr|vate ||m|ted, are
||ke|y to beoome operat|ona| dur|ng the FY-07. The feas|b|||ty of
transnat|ona| p|pe||nes from the west as we|| as the east |s
prov|d|ng add|t|ona| opportun|ty for gas seotor |n lnd|a. ln order
to evaouate add|t|ona| ava||ab|||ty of gas, deve|opment of p|pe||ne
|nfrastruoture |s ||ke|y to be a major thrust area |n the near future.
Your Company has p|ans to |ay |nter-state p|pe||ne |nfrastruoture
to oonneot var|ous souroes of gas to the markets.
Government Policy
Keep|ng |n v|ew the |ong term demand and supp|y requ|rements,
the Government of lnd|a has been work|ng on two |mportant po||oy
doouments name|y, Gas P|pe||ne Po||oy and Petro|eum and
Natura| Gas Pegu|atory Board B|||. These po||oy doouments are
under f|na||zat|on and wou|d profound|y |nf|uenoe the bus|ness
strategy of your Company |n oom|ng years. The Petro|eum
Pegu|atory B||| seeks to regu|ate the bus|ness of natura| gas
transm| ss| on, ref| n| ng, prooess| ng, storage, transportat| on,
d|str|but|on and market|ng. The po||oy for deve|opment of natura|
gas p|pe||nes network seeks to appo|nt a regu|ator to oversee
and promote deve| opment of natura| gas seotor and a| so
env|sages an arms |ength re|at|onsh|p between transm|ss|on ent|ty
and market|ng/exp|orat|on aot|v|ty.
Price of Gas and Petrochemicals
The Government of lnd|a |s the major shareho|der and ho|ds
57.35% of share oap|ta| of the Company. The major deo|s|ons
||ke f|xat|on of pr|oe of natura| gas and f|xat|on of tar|ff for HvJ
p|pe||ne are taken by Government of lnd|a. The Government of
lnd|a has reoent|y announoed upward rev|s|on of natura| gas pr|oes
|n |ts rev|sed Gas Pr|o|ng Order, |mpaot|ng the oost of produot|on
of ||qu|d hydrooarbon ||ke |PG, petroohem|oa| and transm|ss|on
bus|ness. Furthermore, the petroohem|oa| and |PG pr|oes are
|nf|uenoed by g|oba| demand supp|y pos|t|ons and vary w|th t|me.
Domestic Gas Sourcing
Your Company souroes most of the gas |t se||s from O|| and
Natura| Gas Corporat|on ||m|ted ONGC) under a Memorandum
of Understand|ng between the two oompan|es. The Gas Sa|e
Agreement between ONGC and GAl| |s under f|na||zat|on.
Sharing of Under-Recoveries on LPG and Kerosene
The meohan|sm for shar|ng |PG under reoovery of the O||
Market|ng Compan|es |n the year 2004-05 affeoted Prof|t Before
Tax to the extent of Ps.1,137 Crores |n 2004-05 as oompared to
Ps. 428 Crores |n the prev|ous year. ln th|s meohan|sm, your
Company has been shar|ng under reoover|es on aooount of
domest|o |PG and PDS Kerosene, whereas your Company ne|ther
produoes nor se||s Kerosene. Your Company has taken up the
matter w|th the M|n|stry of Petro|eum and Natura| Gas for rev|ew|ng
the meohan|sm for shar|ng under reoover|es on these produots.
Contingent Liabilities
The oont|ngent ||ab|||t|es ma|n|y ar|se from revenue author|t|es.
These o|a|ms have been d|sputed and |ega| prooeed|ngs are
pend|ng at d|fferent |eve|s of adjud|oat|on. However, |n May 2005,
the Sa|es Tax Tr|buna| has uphe|d your Company's pos|t|on on a
o|a|m by the Sa|es Tax author|t|es, resu|t|ng |n a reduot|on of
oont|ngent ||ab|||ty of Ps. 4,962 Crores, wh|oh |s 51% of the
oont|ngent ||ab|||ty as on 31
st
Maroh, 2005.
Transmission Tariffs
The Government of lnd|a has reoent|y announoed a rev|sed Gas
Pr|o|ng Order and aooord|ng|y, the transm|ss|on tar|ffs for the HvJ
and DvP| p|pe||ne systems |s due for rev|ew. The Government
has referred the rev|ew of HvJ and DvP| transm|ss|on tar|ffs to
the Tar|ff oomm|ss|on.
Risk Minimization
Your Company has taken severa| |n|t|at|ves to m|n|m|ze the r|sks,
wh|oh |no|ude.
R-LNG Your Company |s seour|ng ava||ab|||ty of natura| gas
through |mport. A Gas Sa|e Purohase Agreement has been s|gned
for |mport of |NG from lran to the extent of 5 MMTPA. The supp|y
from Dahej term|na| has |noreased to 5 MMTPA from 2.5 MMTPA
and the oapao|ty of the term|na| wou|d be further doub|ed to
10 MMTPA. ln order to m|n|m|ze the r|sk of supp|y of r|oh gas for
|ts |PG and petroohem|oa| p|ants, GAl| wou|d souroe r|oh |NG
for regas|f|oat|on at Dahej. GAl| |s a|so part|o|pat|ng |n the efforts
for growth |n |NG |mports through Dabho|, Kooh| and Ennore
term|na|s.
Expl orati on & Producti on Your Company has been
part|o|pat|ng |n exp|orat|on b|ooks |n oonsort|um w|th other E&P
Compan|es for seour|ng gas supp|y. Dur|ng the exp|orat|on
aot|v|t|es, two hydrooarbon d|soover|es have been made, one gas
d|soovery |n b|ook A1 |n Myanmar and another o|| d|soovery |n
Cambay bas|n.
City Gas Distribution Your Company has formed Jo|nt
ventures w| th other o| | market| ng oompan| es for o| ty gas
d|str|but|on. Centra| UP Gas ||m|ted CUG|) has been formed for
o|ty gas d|str|but|on |n Kanpur a|ongw|th BPC|. A Jo|nt venture
oompany w|th lOC| |s be|ng formed for o|ty gas d|str|but|on |n
|uoknow and Agra. The Company has p|an to go ahead w|th the
C|ty Gas D|str|but|on System |n 10 other o|t|es. Beyond the lnd|an
sub-oont| nent, GAl | | s p| ann| ng to set up Jo| nt venture
partnersh|ps w|th Ch|nese oompan|es for CNG and o|ty gas
d|str|but|on projeots |n ma|n|and Ch|na.
Gas Pipeline System ln order to prov|de natura| gas to a||
parts of the oountry, |nfrastruoture needs to be oreated for ||nk|ng
souroes of supp|y and demand oentres. Your Company has taken
severa| steps |n th|s d|reot|on and has oonoeptua||zed a p|an,
wh|oh w||| requ|re s|gn|f|oant |nvestment. The var|ous p|pe||ne
projeots wh|oh are under var|ous stages of exeout|on are Dahej -
Uran P|pe||ne, Thu|end| - Phu|pur P|pe||ne, v|jaypur - Kota P|pe||ne,
Jagot| - Dewas - P|thampur P|pe||ne, Ke|aras - Ma|anpur P|pe||ne.
Pr|or|t|zed |n|t|at|ve for other |nterstate p|pe||nes are Jagd|shpur-
Ha| d| a P| pe| | ne, v| j a| pur - Aura| ya - Jagd| shpur P| pe| | ne
augmentat|on), Dadr| - Nanga| P|pe||ne, DvP| augmentat|on,
v|ja|pur - Dadr| p|pe||ne augmentat|on), Kooh| - Manga|ore
p|pe||ne, Dabho| - Banga|ore - Chenna| P|pe||ne, Kak|nada -
Panve| P|pe||ne.
Petrochemical Complex The ethy|ene produot|on oapao|ty of
UP Petroohem|oa| Comp|ex at Pata |s be|ng |noreased from
3,10,000 TPA to 4,40,000 TPA by |noreas|ng the number of oraoker
furnaoe. Th|s w||| he|p |n aoh|ev|ng eoonom|es of soa|e. GAl| has
a|so taken |n|t|at|ve for estab||sh|ng Petroohem|oa| p|ants at Assam
GAIL gas pipeline system
Petrochemical plant at Pata
37 We Stand for Pe||ab|||ty
21
st
Annual Report
depreo| at| on and a 19% | norease | n mater| a| oonsumed.
H|stor|oa||y the oost of sa|es has been grow|ng at a CAGP of 8%
|n the |ast 5 years, both of wh|oh are |ower than the oorrespond|ng
growth rates of |noome.
The |norease |n depreo|at|on |s pr|mar||y due to oap|ta||zat|on of
v|zag - Seounderabad |PG p|pe||ne, wh|oh aooounted for 67%
of the tota| oap|ta||zed assets and the fu|| year depreo|at|on on
the Dahej-v|ja|pur P|pe||ne wh|oh aooounted for the 19% |norease
|n mater|a| oonsumed, wh|oh oontr|butes, 77% of the tota| oost
of sa|es, |s due to |norease |n feedstook oonsumpt|on and a|so
due to h|gher purohase oost towards P|NG.
Profitability and Returns
S|noe |noome has been grow|ng at a rate, h|gher than that of
oost of sa| es, the prof| ts generated from your Company's
bus|ness have been grow|ng at a faster CAGP of 18% |n the |ast
5 years than the |noome.
Consequent|y, the Peturn on lnvested Cap|ta| POlC) from GAl|'s
bus|ness has been susta|ned at 19.63% |n 2000-01 to 19.75%
|n 2004-05.
The Earn|ngs Before lnterest Depreo|at|on and Taxes EBlDTA)
has |noreased by 9% to Ps. 3,950 Crores |n 2004-05 and a Prof|t
After Tax PAT) of Ps. 1,954 Crores. 24% of the EBlDTA has
oontr|buted towards depreo|at|on th|s year as aga|nst 18% |ast
year, wh||e the oontr|but|on of EBlDTA towards f|nano|a| oharges
has been 3% |n 2004-05 as oompared to 4% |n the |ast year.
Contr|but|on towards taxat|on has reduoed from 26% of EBlDTA
|n 2003-04 to 23% |n 2004-05.
Shareholders Fund
The reserves and surp| us of your Company st and at
Ps. 7,780 Crores. There are two d|st|not growth phases |n the
|ast ten years. ln the f|rst phase, |.e., 1995-96 to 2000-01, the
bus|ness has added to the reserves at an average rate of Ps.
636 Crores per annum, wh||e |n the seoond phase, |.e., 2001-02
to 2004-05, the rate of |nf|ow to the reserves poo| has been at
an average rate of Ps. 786 Crores, an |norease of 24% over the
f|rst phase. Th|s has trans|ated |n a 5 year CAGP of 15%.
Moreover, wh||e the reserves have grown oons|stent|y, the
d| v| dend payout to the shareho| ders has a| so | noreased
oons|stent|y. Your Company has reduoed the retent|on rat|o from
84% |n 1995-96 to 61% |n 2004-05 through an |norease |n
d|v|dend payment from 10% |n 1995-96 to 80% |n 2004-05. The
reta|ned money pumped baok to the reserves |s |nvested |n the
bus|ness, wh|oh has been generat|ng returns of over 20% |n the
|ast f|ve years.
and Kera|a. ln|t|at|ves have a|so been taken to br|ng Ethy|ene -
Propy|ene C2-C3) from v|ja|pur. Furthermore, GAl| |s a|so exp|or|ng
sett|ng up a gas based Petroohem|oa| oomp|ex |n lran.
COMMENTARY ON FINANCIAL PERFORMANCE WITH
RESPECT TO OPERATIONAL PERFORMANCE
Operational Performance
Dur|ng the year under rev|ew, gas sa|es were up 9% to 22.835
BCM as aga|nst 21.013 BCM |n the |ast f|nano|a| year. The natura|
gas bus|ness generated 71% revenue for the Company.
|PG produot|on dur|ng the year was 10.95 |akh MTs oompared
to 10.89 |akh MTs |n |ast year, a marg|na| |norease of 1% YoY.
The oapao|ty ut|||zat|on of the |PG p|ants stands at 94%, pr|mar||y
oaused due to non-ava||ab|||ty of feedstook gas of adequate
quant|ty and r|ohness at the Usar P|ant as a|so non ava||ab|||ty of
adequate feed gas at |akwa P|ant.
Other | | qu| d hydrooarbon produot| on, oompr| s| ng Propane,
Pentane, SBP So|vent and other produots was 2.98 |akh MTs as
aga|nst 2.74 |akh MTs |n |ast year, an |norease of 9% YoY.
Po|ymer produot|on, wh|oh |no|udes ||DPE and HDPE, dur|ng the
year under rev|ew was 2.99 |akh MTs as aga|nst 2.64 |akh MTs
|ast year, an |norease of 13% YoY. The |norease |s pr|mar||y
attr|buted to the |norease |n po|ymer produot|on oapao|ty due to
de-bott|eneok|ng of the p|ant from 2.6 |akh MT to 3.1 |akh MT.
|PG transm|ss|on was 21.38 |akh MTs oompared to 18.41 |akh MTs
|n |ast year, an |norease of 16% over the prev|ous year. Th|s |s due to
the |noreased oapao|ty ut|||zat|on of the Jamnager-|on| |PG p|pe||ne
and due to the oomm|ss|on|ng of the v|zag-Seounderabad |PG
p|pe||ne.
Overall Financials
Income
The t urnover net of ED and | nt erna| oonsumpt | on) was
Ps. 12,412 Crores as oompared to Ps. 10,826 Crores |n the
prev|ous year. The other |noome was Ps. 349 Crores as aga|nst
Ps. 244 Cores |n the |ast year thereby |noreas|ng the tota| |noome
by 15% to Ps. 12,761 Crores.
The tota| |noome of your Company has been grow|ng at a CAGP
of 11% |n the |ast 5 years.
Cost of Sales
The oost of sa|es, |no|ud|ng depreo|at|on and |nterest, |noreased
by 20% YoY, oontr|buted ma|n|y by a sharp |norease of 43% |n
Impact of Subsidy Sharing on Overall Financials
Your Company has shared under reoover| es on sens| t| ve
pet ro| eum produot s of Ps. 428 Crores | n 2003-04 and
Ps. 1,137 Crores |n 2004-05. GAl| shared the subs|dy burden on
domest|o |PG and PDS Kerosene as per the d|reot|ves of the
Government of lnd|a.
The shar|ng of subs|dy has d|reot|y reduoed the operat|ng |noome
and the ensu|ng prof|tab|||ty. W|thout the subs|dy |mpaot, your
Company wou|d have reoorded h|gher returns and |noome.
Debt and Equity
Your Company as on 31.03.2005 has net borrow|ngs of Ps. 1,997
Crores wh|oh |s 0.23 t|mes the tota| equ|ty Net worth) of the
Company of Ps. 8,560 Crores. Consequent|y, your Company has
a h|gh ab|||ty to ra|se debt to fund for |ts future oap|ta| expend|ture
p|ans.
Sources of Funds vs. Application of Funds
The souroe of funds oompr|s|ng Equ|ty, |oan funds and Deferred
Tax ||ab|||ty |s Ps. 11,878 Crores as oompared to Ps. 10,806 Crores
|n the prev|ous year. The Equ|ty Share oap|ta| has not undergone
any ohange | n the | ast seven years and stands at
Ps. 845.65 Crores, oontr|but|ng 7% of the tota| souroe poo|. On the
other hand, the reserves and surp|us aooount for 65% of the poo|.
As on 31.03.2005, the net va|ue of F|xed Assets, oreated w|th a
tota| gross b|ook of Ps. 14,222 Crores, stands at Ps. 7,846 Crores
and aooounts for 2/3rd of the tota| funds. Bes|des 25% of the
funds |s ava||ab|e towards ||qu|d assets, wh|oh |s ava||ab|e to meet
future oap|ta| expend|ture requ|rements. The ba|anoe funds have
been parked |n lnvestments and Cap|ta| Work-|n-Progress.
Stock Market Performance
Your Company's stook has performed exoeed|ng|y we|| |n the |ast
two years. The market oap|ta||zat|on of GAl| stands at Ps. 17,945
Crores as on 31
st
Maroh, 2005 at a Pr|oe to Earn|ngs rat|o of 9.18.
The average da||y turnover at the Nat|ona| Stook Exohange NSE)
|n the |ast two years, |.e., 2003-05 has |noreased by 5096% to
Ps. 62.14 Crores per day from Ps. 1.19 Crores |n the prev|ous
two years, |.e., 2001-03. Correspond|ng|y, the average da||y traded
quant|ty at NSE has |noreased by 1866% from 1,58,326 shares
per day to 31,12,954 shares per day.
Shareholder Value Creation
Your Company be||eves |n bus|ness as a foroe for good. Over the
years, your Company has oons|stent|y oreated va|ue for the
shareho|ders. Our be||ef |s that shareho|der va|ue from bus|ness
|s oreated when the returns generated from the bus|ness, |.e., net
operat|ng prof|t after taxes |s h|gher that the oost of oap|ta|.
Furthermore, our foous on va|ue oreat|on a|ms to generate a h|gher
rate of |norease of Prof|t After Tax PAT) than the rate of |nvestment
|n f|xed asset oreat|on. ln the year 2004-05, the net operat|ng
Prof|t After Tax exo|ud|ng other |noome, net of tax) |s h|gher than
the oost of oap|ta| by Ps. 651 Crores.
The average |norementa| PAT generated from the bus|ness |n the
|ast f|ve years has been Ps. 218 Crores aga|nst an average rate
of f|xed asset oreat|on gross b|ook) of Ps. 1,140 Crores |n the
same per|od, |nd|oat|ng a 19% returns.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has deve| oped | nt erna| oont ro| syst ems
oommensurate to |ts s|ze and bus|ness. The Company a|so has
an |n-house lnterna| Aud|t Department, wh|oh ensures adequaoy
of |nterna| oontro| systems and reports to the Aud|t Comm|ttee,
wh|oh further rev|ews the adequaoy of |nterna| oontro| systems.
CONCLUSION
ln ||ght of the deve|opments that have happened |n the past year
your Company has shown that not on|y |t has been oreat|ng va|ue
for |ts shareho|ders but a|so oreat|ng va|ue for other stakeho|ders
as we||. The |n|t|at|ves taken by your Company foouses on
oompet|t|veness both |nterna||y and externa||y.
lnterna| oapab|||ty bu||d|ng to outperform oompet|tors |n the near
and |ong terms |s be|ng gradua||y enhanoed through severa|
|n|t|at|ves suoh as the e-|n|t|at|ves for |noreas|ng the bus|ness
prooess ef f | o| enoy and tra| n| ng f or | noreas| ng emp| oyee
oompeteno|es. On the externa| front your Company |s now po|sed
to strengthen |ts base |n the |nternat|ona| markets v|a |ts g|oba|
bus|nesses |n the oom|ng years.
The oha||enges |n the O|| & Gas |ndustry are many. lnorease |n
orude o|| pr|oes threaten oompet|t|veness and pose market|ng
oha||enges. Bes|des, the lnd|an Natura| Gas market |s matur|ng
and |s expeoted to grow rap|d|y, br|ng|ng newer opportun|t|es.
New regu|at|ons wou|d govern the new parad|gm of the domest|o
gas |ndustry. Be|ng the market |eader, your Company |s better
prepared f|nano|a||y and |nte||eotua||y to dr|ve on the grow|ng
lnd|an gas eoonomy.
CAUTIONARY STATEMENT
St at ement s i n t he Di rect ors Report and Management
Discussion & Analysis, describing the Companys objectives,
projections, estimates, expectations, predictions etc. may be
forward looking statements within the meaning of applicable
l aws and regul at i ons. Act ual resul t s, perf ormances or
achievements may vary materially from those expressed or
implied, depending upon economic conditions, Government
policies and other incidental factors.
39 We Stand for Pe||ab|||ty
21
st
Annual Report
Five Year Trends
41 We Stand for Pe||ab|||ty
21
st
Annual Report
Financial Performance
43 We Stand for Pe||ab|||ty
21
st
Annual Report
45 We Stand for Pe||ab|||ty
21
st
Annual Report
47
21
st
Annual Report
We Stand for Pe||ab|||ty
Sources and Application of Funds
as at 31
ST
March 2005
SOURCES
11878
APPLICATIONS
11878
|OAN FUNDS
1997
SHAPEHO|DEP'S
FUNDS
8626
DEFEPPED TAX
|lABl|lTY
1255
EQUlTY SHAPE
CAPlTA|
846
PESEPvES
7780
GPOSS B|OCK
14222
DEPPEClATlON
6377
NET B|OCK
7845
CAPlTA| WOPK lN
PPOGPESS
309
lNvESTMENTS
784
CUPPENT ASSETS,
|OAN ADvANCES
6414
CUPPENT |lABl|lTlES
AND PPOvlSlONS
3474
WOPKlNG
2940
Ps. |n Crores)
49
21
st
Annual Report
We Stand for Pe||ab|||ty
Five Year Profile
(A) FINANCIAL
Ps. |n Crores)
2000 - 2001 2001-02 2002-03 2003-04 2004-05
PAlD-UP CAPlTA| 845.65 845.65 845.65 845.65 845.65
PESEPvES & SUPP|US 4,634.40 4,489.79 5,493.48 6,599.50 7,780.46
SECUPED |OANS 661.17 397.63 163.95 1,655.52 1,600.00
UNSECUPED |OANS 2,049.72 2,027.18 1,883.17 477.96 397.40
DEFEPPED TAX |lABl|lTY NET) - 1,090.74 1,119.75 1,227.58 1,255.23
8,190.94 8,850.99 9,506.00 10,806.21 11,878.74
REPRESENTED BY :
GPOSS B|OCK 10,037.91 10,701.94 11,048.71 13,584.73 14,222.35
|ESS . DEPPEClATlON 3,568.87 4,167.06 4,786.61 5,441.85 6,376.47
NET FlXED ASSETS 6,469.04 6,534.88 6,262.10 8,142.88 7,845.88
CAPlTA| WOPK-lN-PPOGPESS 632.23 425.70 688.14 814.47 309.08
lNvESTMENTS 661.45 688.21 687.94 771.99 783.95
NET CUPPENT ASSETS 427.88 1,201.98 1,867.71 1,076.87 2,939.83
MlSCE||ANEOUS EXPENDlTUPE 0.34 0.22 0.11 - -
8,190.94 8,850.99 9,506.00 10,806.21 11,878.74
GPOSS SA|ES 9,197.44 9,567.50 10,641.99 11,295.67 12,927.07
GPOSS MAPGlN 2,349.98 2,622.05 3,348.31 3,614.10 3,950.37
DEPPEClATlON 600.52 593.16 643.54 661.60 944.89
PPE|lMlNAPY/DEFEPPED PEvENUE
EXPENSES WPlTTEN-OFF 0.11 0.11 0.11 0.11 -
lNTEPEST 197.14 226.88 186.37 137.97 134.09
PPOFlT/|OSS) BEFOPE TAX 1,552.21 1,801.90 2,518.29 2,814.42 2,871.39
PPOFlT/|OSS) AFTEP TAX 1,126.17 1,185.84 1,639.11 1,869.34 1,953.91
DlvlDEND lNC|. lNTEPlM DlvlDEND 338.26 380.54 591.96 676.52 676.52
COPPOPATE DlvlDEND TAX 34.50 - 43.34 86.68 92.51
lNTEPNA| GENEPATlON 1,726.80 1,779.11 2,282.76 2,531.05 2,898.80
NET WOPTH 5,468.61 5,332.65 6,336.57 7,410.70 8,559.65
CAPlTA| EMP|OYED 6,896.92 7,736.86 8,129.81 9,219.75 10,785.71
(B) GAS THROUGHPUT/PRODUCTION
2000 - 2001 2001-02 2002-03 2003-04 2004-05
NATURAL GAS ( MMSCMD ) 61.75 61.60 63.40 62.84 71.56
LPG ( M / T ) 7,84,591.28 9,98,235.65 11,14,423.41 10,88,686.04 10,94,835.00
SBP SOLVENT ( M / T ) 31,269.83 23,453.94 34,507.83 65,298.28 58,875.59
PENTANE ( M / T ) 10,494.90 24,253.44 33,466.30 51,872.15 57,524.74
PROPANE ( M / T ) 79,415.82 87,434.69 1,20,187.81 1,57,303.26 1,81,863.47
ETHYLENE ( M / T) 2,13,716.00 2,72,048.30 3,11,995.00 2,75,610.00 3,19,289.86
HDPE/LLDPE ( M/T) 1,94,587.16 2,50,287.94 2,91,828.51 2,63,719.91 2,98,787.35
(C) FINANCIAL RATIOS
2000 - 2001 2001 - 2002 2002-03 2003-04 2004-05
NET WORTH PER RUPEE OF 6.47 6.31 7.49 8.76 10.12
PAID-UP CAPITAL (RS.)
BORROWINGS TO NET WORTH (RS.) 0.50 0.45 0.32 0.29 0.23
PROFIT BEFORE TAX TO CAPITAL 22.51 23.29 30.98 30.53 26.62
EMPLOYED ( % )
PROFIT BEFORE TAX TO NET WORTH ( % ) 28.38 33.79 39.74 37.98 33.55
PROFIT BEFORE TAX TO GROSS SALES ( %) 16.88 18.83 23.66 24.92 24.92
PROFIT BEFORE TAX TO GROSS 15.46 16.84 22.79 20.72 20.19
FIXED ASSETS ( % )
GROSS SALES TO CAPITAL EMPLOYED (%) 133.36 123.66 130.90 122.52 122.52
EARNING PER SHARE (RS.) 13.32 14.02 19.38 22.11 23.11
DIVIDEND PER SHARE (RS.) 4.00 4.50 7.00 8.00 8.00
DIVIDEND PAYOUT RATIO (%) 33.10 32.09 38.76 40.83 39.36
51
21
st
Annual Report
We Stand for Pe||ab|||ty
Balance Sheet as at 31
st
March, 2005
Ps. |n Crores)
SCHEDULE AS AT AS AT
NO. 31
ST
MARCH, 2005 31
ST
MAPCH, 2004
SOURCES OF FUNDS
Shareholders Funds
Cap|ta| 1 845.65 845.65
Peserves and Surp|us 2 7,780.46 8,626.11 6,599.50 7,445.15
Loan Funds 3
Seoured |oans 1,600.00 1,655.52
Unseoured |oans 397.40 1,997.40 477.96 2,133.48
Deferred Tax Liability (Net) 1,255.23 1,227.58
11,878.74 10,806.21
APPLICATIONS OF FUNDS
Fixed Assets 4
Gross B|ook 14,222.35 13,584.73
|ess . Depreo|at|on 6,376.47 5,441.85
Net B|ook 7,845.88 8,142.88
Cap|ta| Work |n Progress 5 309.08 8,154.96 814.47 8,957.35
Investments 6 783.95 771.99
Carried Forward 8,938.91 9,729.34
53
21
st
Annual Report
We Stand for Pe||ab|||ty
Balance Sheet as at 31
st
March, 2005
Ps. |n Crores)
SCHEDULE AS AT AS AT
NO. 31
ST
MARCH, 2005 31
ST
MAPCH, 2004
Brought Forward 8,938.91 9,729.34
Current Assets, Loans and Advances 7
lnventor|es 481.44 474.91
Sundry Debtors 822.86 720.69
Cash and Bank Ba|anoes 3,446.84 1,567.95
Other Current Assets 26.98 3.28
|oans and Advanoes 1,635.86 1,340.25
6,413.98 4,107.08
Less : Current Liabilities and Provisions 8
Current ||ab|||t|es 2,716.13 2,296.25
Prov|s|ons 758.02 733.96
3,474.15 3,030.21
Net Current Assets 2,939.83 1,076.87
TOTAL 11,878.74 10,806.21
Contingent Liabilities not provided for (Refer Schedule 14)
Notes on Accounts 14
Sohedu|es 1 to 14 and Aooount|ng Po||o|es form part of Aooounts
N. K. Nagpa| J. K. Ja|n B. S. Neg| Proshanto Banerjee As per our separate Peport of even date
Seoretary D|reotorF|nanoe) D|reotorBD) Cha|rman & Manag|ng D|reotor For M/S S. MANN & COMPANY
Chartered Aooountants
Subhash Mann
Partner)
P|aoe . New De|h| Membersh|p No. 80500
Dated. June 21, 2005
Profit & Loss Account for the Year Ended 31
st
March, 2005
Ps. |n Crores)
SCHEDULE YEAR ENDED YEAP ENDED
NO. 31
ST
MARCH, 2005 31
ST
MAPCH, 2004
INCOME
Sa|es 12,552.16 11,011.01
|ess . Exo|se Duty 514.87 469.18
12,037.29 10,541.83
|PG Transm|ss|on /
P|NG Sh|ppers Charges 356.49 264.38
lnoome from Te|eoom 18.42 20.24
12,412.20` 10,826.45
Add . Aooret|on to Stook
C|os|ng Stook 104.59 131.45
|ess . Open|ng Stook 131.45 (26.86) 92.84 38.61
12,385.34 10,865.06
lnterna| oonsumpt|on 1,179.18 1,118.73
Other lnoome 9 349.05 244.03
TOTAL 13,913.57 12,227.82
EXPENDITURE
Purohases 7,853.23 6,703.58
Manufaotur|ng, Transm|ss|on,
Adm|n|strat|on
Se|||ng & D|str|but|on and
Other Expenses 10 2,108.26 1,926.45
Depreo|at|on 4 946.65 663.97
3,054.91 2,590.42
|ess . lno|denta| Expend|ture
dur|ng oonstruot|on
transferred to Cap|ta|
Work-|n-Progress 11 0.93 3,053.98 16.09 2,574.33
Deferred Pevenue
Expend|ture wr|tten off - 0.11
TOTAL 10,907.21 9,278.02
Prof|t before lnterest and
F|nanoe Charges 3,006.36 2,949.80
lnterest and F|nanoe Charges 12 134.09 157.32
|ess . lnterest and F|nanoe
Charges transferred
to Cap|ta| Work-|n-Progress 11 - 134.09 19.35 137.97
Profit for the year Carried Forward 2,872.27 2,811.83
55
21
st
Annual Report
We Stand for Pe||ab|||ty
Ps. |n Crores)
SCHEDULE YEAR ENDED YEAP ENDED
NO. 31
ST
MARCH, 2005 31
ST
MAPCH, 2004
Brought Forward 2,872.27 2,811.83
|ess . Pr|or Per|od Adjustments Net) 13 0.88 2.59)
Profit before Tax 2,871.39 2,814.42
Prov|s|on for Taxat|on - Current 889.83 837.25
- Deferred 27.65 917.48 107.83 945.08
Profit after Tax 1,953.91 1,869.34
Amount available for appropriation 1,953.91 1,869.34
APPROPRIATIONS
lnter|m D|v|dend 338.26 338.26
Proposed F|na| D|v|dend 338.26 338.26
Corporate D|v|dend Tax 92.51 86.68
Bond Pedempt|on Peserve 32.13 32.12
Genera| Peserve 195.39 186.93
Balance Carried to Balance Sheet 957.36 887.09
TOTAL 1,953.91 1,869.34
Details of Earning Per Share
A. Prof|t after tax 1,953.91 1,869.34
B. We|ghted Average No. of Equ|ty Shares 845,651,600 845,651,600
C. Nom|na| va|ue per Equ|ty Share Ps.) 10/- 10/-
D. Bas|o and D||uted Earn|ng Per Share Ps.) 23.11 22.11
Notes on Accounts 14
Sohedu|es 1 to 14 and Aooount|ng Po||o|es form part of Aooounts
N.K.Nagpa| J.K.Ja|n B. S. Neg| Proshanto Banerjee As per our separate Peport of even date
Seoretary D|reotor F|nanoe) D|reotor BD) Cha|rman & Manag|ng D|reotor For M/S S. MANN & COMPANY
Chartered Aooountants
P|aoe . New De|h| Subhash Mann
Dated . June 21, 2005 Partner)
Membersh|p No. 80500
Schedule 1 - Share Capital
Ps. |n Crores)
AS AT AS AT
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
AUTHORISED
100,00,00,000 Equ|ty Shares of Ps. 10/- eaoh 1,000.00 1,000.00
ISSUED, SUBSCRIBED AND PAID-UP
84,56,51,600 Prev|ous Year . 84,56,51,600) 845.65 845.65
Equ|ty Shares of Ps.10/- eaoh fu||y pa|d up
TOTAL 845.65 845.65
57
21
st
Annual Report
We Stand for Pe||ab|||ty
Schedule 2 - Reserves and Surplus
Ps. |n Crores)
AS AT AS AT
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
Capital Reserve
Grant Peoe|ved from Dan|sh Govt. for oonstruot|on of
Gas Teohno|ogy lnst|tute at No|da)
As per |ast Aooount 2.33 2.45
|ess . Transferred to Prof|t & |oss Aooount 0.12 2.21 0.12 2.33
Share Premium Account 0.26 0.26
Investment Allowance (Utilised) Reserve 266.61 266.61
Bonds Redemption Reserves
As per |ast Aooount 32.12 -
Add . Transferred from Prof|t & |oss Aooount 32.13 32.12
64.25 32.12
Foreign Currency Translation Reserves (3.80) -
General Reserve
As per |ast Aooount 967.79 780.86
Add . Transferred from Prof|t & |oss Aooount 195.39 186.93
1163.18 967.79
Profit and Loss Account
As per |ast Aooount 5,330.39 4,443.30
Add . Transferred from Prof|t & |oss Aooount 957.36 887.09
6287.75 5330.39
TOTAL 7,780.46 6,599.50
Schedule 3 - Loan Funds
Ps. |n Crores)
AS AT AS AT
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
SECURED LOANS
Loan from ICICI Bank Ltd. - 43.33
Seoured by a par| passu oharge w|th ADB |oan drawn for
|PG P|pe||ne projeot by way of hypotheoat|on of
movab|es |no|ud|ng movab|e Maoh|nery, Maoh|nery spares,
too|s & aooessor|es present & future of
Jamnagar - Kand|a - |on| |PG P/| projeot
|no|ud|ng Ps..Nl| Prev|ous Year . Ps. 40.00)
due for payment w|th|n one year)
Loan from Bank of India,Tokyo - 12.19
Seoured by hypotheoat|on of
Steam Turb|ne Craoked Gas, Ethy|ene and
Propy|ene oompressors prooured from
M/s EBAPA, Tokyo and |nsta||ed at Pata.
|no|ud|ng Ps.Nl| Prev|ous Year . Ps.12.19)
due for payment w|th|n one year)
Loan from Bank of India 500.00 500.00
Seoured by hypotheoat|on by way of
f|rst oharge on par| passu bas|s of
movab|e p|ant & maoh|nery, maoh|nery spares,
equ|pment, too|s & aooessor|es &
other moveab|es, both present & future,
whether |nsta||ed or not & |y|ng |oose or
|n stores of Dahej v|ja|pur P|pe||ne projeot)
|no|ud|ng Ps.Nl| Prev|ous Year . Ps.Nl|)
due for payment w|th|n one year)
Bonds Series - I 500.00 500.00
6.10% Seoured Non-oonvert|b|e redeemab|e
Bonds -Ser|es - l are redeemab|e
|n 5 equa| |nsta||ment oommeno|ng from
the end of the 8th year upto the end of
the 12
th
year from the deemed date of
a||otment August 22, 2003. Bonds
are seoured by oharge on |mmovab|e
res|dent|a| bu||d|ng and movab|e p|ant
& maoh|nery s|tuated at Haz|ra, vaghod|a,
Gandhar and vadodara |n Gujarat.)
Carried Forward 1000.00 1055.52
59
21
st
Annual Report
We Stand for Pe||ab|||ty
Brought Forward 1000.00 1055.52
Bonds Series - II 600.00 600.00
5.85% Seoured Non-oonvert|b|e redeemab|e
Bonds -Ser|es - ll are redeemab|e
|n 5 equa| |nsta||ment oommeno|ng from
the end of the 6
th
year upto the end
of the 10th year from the deemed date of
a||otment Maroh 25, 2004. Bonds are
seoured by oharge on |mmovab|e
res|dent|a| bu||d|ng & movab|e p|ant & maoh|nery
s|tuated at Haz|ra,vaghod|a,Gandhar,
vadodara & DvP| Projeot |n Gujarat.)
UNSECURED LOANS
Other Loans and Advances
From Banks :
- State Bank of India, London 34.28 49.09
|no|ud|ng Ps. 13.71 Prev|ous Year . Ps. 14.13)
due for payment w|th|n one year)
From others
- Oil Industry Development Board
|no|ud|ng Ps. 65.75 Prev|ous Year . Ps. 65.75)
due for payment w|th|n one year) 363.12 428.87
TOTAL 1,997.40 2,133.48
Ps. |n Crores)
AS AT AS AT
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
Schedule 4 - Fixed Assets (Tangible/Intangible Assets)
DESCRIPTION GROSS BLOCK (AT COST)
As at Additions/ Sales/ As at
1.4.2004 Adjustments Adjustments 31.03.2005
during the year during the year
Tangible Assets (A)
Land: Freeho|d 59.13 0.20 - 59.33
|easeho|d 69.63 1.88 - 71.51
Building:
Off|oe/Others 363.99 4.82 - 368.81
Pes|dent|a| 253.12 0.30 - 253.42
Bunk Houses 1.62 - - 1.62
P|ant and Maoh|nery 12,489.07 575.45 0.08 13,064.44
Pa||way ||nes & S|d|ngs 5.47 - - 5.47
E|eotr|oa| Equ|pments 120.39 3.81 0.19 124.01
Furn|ture, F|xtures and 201.88 34.26 8.43 227.71
Other Equ|pments
Transport Equ|pments 2.41 0.14 0.33 2.22
TOTA| A) 13,566.71 620.86 9.03 14,178.54
Intangible Assets (B)
P|ght of Use 17.42 0.04) - 17.38
Softwares/||oenoes 0.60 25.83 - 26.43
TOTA| B) 18.02 25.79 - 43.81
TOTAL (A+B) 13,584.73 646.65 9.03 14,222.35
Prev|ous Year 11.048.71 2,543.80 7.78 13,584.73
61
21
st
Annual Report
We Stand for Pe||ab|||ty
Ps. |n Crores)
DEPRECIATION NET BLOCK
Upto For the Year Adjustments As at As at As at
31.03.2004 during the year 31.03.2005 31.03.2005 31.03.2004
- - - - 59.33 59.13
4.60 0.61 0.03) 5.18 66.33 65.03
61.51 9.77 - 71.28 297.53 302.48
32.40 4.91 - 37.31 216.11 220.72
1.58 0.04 - 1.62 - 0.04
5,227.50 904.86 4.16) 6,128.20 6,936.24 7,261.57
3.44 0.27 - 3.71 1.76 2.03
29.00 5.89 0.05) 34.84 89.17 91.39
80.32 18.42 7.61) 91.13 136.58 121.56
1.41 0.15 0.18) 1.38 0.84 1.00
5,441.76 944.92 12.03) 6,374.65 7,803.89 8,124.95
- - - - 17.38 17.42
0.09 1.73 - 1.82 24.61 0.51
0.09 1.73 - 1.82 41.99 17.93
5,441.85 946.65 (12.03) 6,376.47 7,845.88 8,142.88
4,786.61 663.97 8.73) 5,441.85 8,142.88 6,262.10
Schedule 5 - Capital Work-in-Progress
Ps. |n Crores)
AS AT AS AT
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
||nep|pe Construot|on and re|ated fao|||t|es |no|ud|ng Cathod|o Proteot|on 81.08 57.98
Compressor Stat|ons - 156.82
Te|eoom/Te|esuperv|sory System 5.71 33.02
|PG P|pe||ne Projeot 2.02 362.72
|PG Projeots 0.89 1.17
Petroohem|oa|s 46.55 56.23
Te|eoom Projeots 1.07 13.36
Others 29.30 32.59
Exp|oratory We|| |n Progress 42.99 19.51
Bu||d|ngs 7.83 4.16
|ess . Prov|s|on for abandonment of Work |n Progress 2.64 5.19 1.77 2.39
||nep|pes, Cap|ta| ltems |n Stook/Trans|t
|no|ud|ng mater|a|s w|th Contraotors. Ps. 0.27 Prev|ous Year. Ps. 0.44) 93.13 76.00
|ess . Prov|s|on for |osses/obso|esoenoe 1.24 91.89 1.47 74.53
Advanoe for Cap|ta| Expend|ture
Unseoured - Cons|dered Good) 2.39 4.15
Unseoured - Cons|dered Doubtfu|) 1.39 1.39
3.78 5.54
|ess . Prov|s|on for Doubtfu| Advanoes 1.39 2.39 1.39 4.15
TOTAL 309.08 814.47
63
21
st
Annual Report
We Stand for Pe||ab|||ty
Schedule 6 - Investments
Ps. |n Crores)
AS AT AS AT
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
LONG-TERM INVESTMENTS
A. Trade Investments
Quoted * -
570,600 Prev|ous Year . 570,600) Equ|ty Shares of Ps.10/-eaoh fu||y 0.86 0.86
Pa|d-up |n Gujarat lndustr|es Power Co. |td.|no|udes 1,90,200 Equ|ty
Shares aoqu|red dur|ng the year 1996-97 at a prem|um of Ps.15/- per share)
3,42,66,845 Prev|ous Year . 3,42,66,845) Equ|ty Shares of 556.29 556.29
Ps.10/- eaoh fu||y pa|d up |n ONGC |td. Aoqu|red dur|ng
1999-2000 at a pr|oe of Ps.162.34 per Share)
6.96 % O|| Compan|es GOl Speo|a| Bonds 2009 6.00 6.00
A||oted |n ||eu of o|a|ms pend|ng w|th O|| Co-ord|nat|on Comm|ttee)
3,15,00,000 Prev|ous Year . 3,15,00,000) Equ|ty Shares of Ps. 10/- 31.50 31.50
eaoh fu||y pa|d-up |n lndraprastha Gas |td. a Jo|nt venture Company)
9,37,50,000 Prev|ous Year . 9,37,50,000) Equ|ty Shares of Ps.10/- 98.75 98.75
eaoh fu||y pa|d up |n Petronet |NG |td. a Jo|nt venture Company)
|no|udes 1,00,00,000 equ|ty shares a||oted at a prem|um of Ps. 5/- per share
* Aggregat|ng market va|ue of the above ment|oned quoted
seour|t|es Ps. 3736.27 Prev|ous Year . Ps. 3151.24)
Unquoted - At cost
4,44,49,960 Prev|ous Year . 4,44,49,960) Equ|ty shares of Ps. 10/- 44.45 44.45
eaoh fu||y pa|d up |n Mahanagar Gas |td. a Jo|nt venture Company)
12,497 Prev|ous Year . 12,497) Equ|ty shares of Ps. 10/- eaoh fu||y 0.01 0.01
pa|d up |n Bhagyanagar Gas |td. a Jo|nt venture Company)
Advanoe aga|nst a||otment of Equ|ty Shares of Bhagyanagar Gas |td. 4.98 4.99 4.98 4.99
Advanoe aga|nst a||otment of Equ|ty shares of Tr|pura Natura| Gas |td. 0.83 -
a Jo|nt venture Company)
Carried Forward 743.67 742.84
Ps. |n Crores)
AS AT AS AT
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
Brought Forward 743.67 742.84
Advanoe aga|nst a||otment of Equ|ty shares of Centra| UP Gas |td. 0.03 -
a Jo|nt venture Company)
2,07,60,000 Prev|ous Year . 2,07,60,000) Equ|ty Shares of 20.76 20.76
Ps.10/- eaoh fu||y pa|d-up |n Gujrat State E|eotr|o|ty Generat|on |td.
19,000 Prev|ous Year . 15,200) Equ|ty shares of |E 100/- eaoh 8.09 8.09
fu||y pa|d up |n Fayum Gas Company reg|stered |n Egypt.
Dur|ng the year 2004-05, Fayum Gas Company
has restruotured the equ|ty oap|ta|)
2,20,000 Prev|ous Year . Nl|) Equ|ty Shares of |E 10/- eaoh 1.61 -
fu||y pa|d up |n She|| Compressed Natura| Gas Company,
Egypt reg|stered |n Egypt.
21,00,000 Prev|ous Year . Nl|) Equ|ty Shares of USD 1 eaoh fu||y 9.64 -
pa|d up |n GAl| G|oba| S|ngapore Pte.) |td., |noorporated |n
S|ngapore 100% subs|d|ary oompany)
3 Prev|ous Year . 3) 12% 2006, GEB Bonds of 0.15 0.30
Ps. 10,00,000/- eaoh. Transferred by GlPCO |n ||eu of
redempt|on of 1/3rd 18% redeemab|e
Non - Convert|b|e Debenture. 50% |s pa|d dur|ng the FY 2004-05.)
B. Non Trade Investments - Others
Unquoted - At cost
a) |). 30 Shares of Ps.50 eaoh fu||y pa|d up |n Darpan
Co-operat|ve Hous|ng Soo|ety |td., vadodara - -
||). 50 Shares of Ps.50 eaoh fu||y pa|d up |n Ashoka
Apartments Co-operat|ve Hous|ng Soo|ety |td., vadodara - -
|||). 30 Shares of Ps.50 eaoh fu||y pa|d up |n Panohvat|
Apartments Co-operat|ve Hous|ng Soo|ety |td., Surat - -
|v). 400 Shares of Ps.10 eaoh fu||y pa|d up |n Sanand
Members Assoo|at|on,Ahmedabad. - -
v). 35 Shares of Ps.50/-eaoh fu||y pa|d up |n Green
F|e|dsB) Cooperat|ve Hous|ng Soo|ety |td, Mumba| - -
TOTAL 783.95 771.99
65
21
st
Annual Report
We Stand for Pe||ab|||ty
Schedule 7 - Current Assets, Loans and Advances
Ps. |n Crores)
AS AT AS AT
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
A. CURRENT ASSETS
INVENTORIES
As Cert|f|ed by the Management)
Stores and Spares |no|. Construot|on Surp|us* 416.30 377.93
|ess . Prov|s|on for |osses/Obso|esoenoe 39.45 34.47
376.85 343.46
Stook of Gas**/Po|ymers/|PG and Other Produots 104.59 481.44 131.45 474.91
SUNDRY DEBTORS
Debts outstand|ng for a per|od exoeed|ng s|x months
- Unseoured, Cons|dered Good 221.69 101.15
- Unseoured, Cons|dered Doubtfu| 120.25 341.94 124.44 225.59
Other Debts
- Unseoured, Cons|dered Good 601.17 619.54
- Unseoured, Cons|dered Doubtfu| - 601.17 0.81 620.35
943.11 845.94
|ess . Prov|s|on for Doubtfu| debts 120.25 822.86 125.25 720.69
CASH AND BANK BALANCES
Cash |n hand 0.09 0.11
Cheques/Stamps |n hand 0.02 8.92
Pem|ttanoe |n trans|t 11.49 11.60 0.42 9.45
BANK BALANCES(SCHEDULED BANKS)
On Current Aooount |no|udes Corporate ||qu|d Term 82.50 364.25
Depos|t Ps. 17.79 Prev|ous Year . Ps. 180.91) )
On Current Aooount -Gas Poo| Money 0.01 -
On Current Aooount -Jv Consort|um 0.01 -
On Short Term Depos|t 2,426.21 534.09
On Short Term Depos|t -Gas Poo| Money |no|udes |nterest 566.89 377.71
aoorued but not due Ps.1.77Prev|ous Year . Ps. 1.23)
On Short Term Depos|t -Jv Consort|um |no|udes |nterest 359.62 3,435.24 3,446.84 282.45 1,558.50 1,567.95
aoorued but not due Ps. 3.52 Prev|ous Year . Ps. 3.56)
OTHER CURRENT ASSETS
lnterest aoorued but not due on Depos|ts 26.98 3.28
Carried Forward 4,778.12 2,766.83
Ps. |n Crores)
AS AT AS AT
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
Brought Forward 4,778.12 2,766.83
B. LOANS AND ADVANCES
Loans/Advances to Subsidiaries 76.94 -
GAl| G|oba| S|ngapore Pte.) |td.,
100% subs|d|ary oompany |noorporated |n S|ngapore)
Loans to Employees
- Seoured, Cons|dered Good 136.83 101.15
- Unseoured, Cons|dered Good 16.18 23.73
|no|ud|ng dues from D|reotors Ps.0.14 Prev|ous Year .
Ps.0.07) Max|mum amount due at any t|me dur|ng the year
. Ps. 0.20) Prev|ous Year . Ps. 0.11)
Others 4.29 157.30 4.18 129.06
Unseoured, Cons|dered Good)
Advances recoverable in cash or in
kind or for value to be received
- Unseoured, Cons|dered Good 1,334.03 1,167.55
|no|udes Ps. 1024.52 Prev|ous Year . 915.13) pa|d/adjusted
aga|nst lnoome tax demand under protest. |no|udes Ps. 3.11
Prev|ous Year .Ps.3.36) on aooount of d|s|nvestment of Govt.
Equ|ty by way of GDP/Domest|o Tranohe/ offer for sa|e)
- Unseoured, Cons|dered Doubtfu| 1.08 1.15
1,335.11 1,168.70
|ess . Prov|s|on for Doubtfu| Advanoes 1.08 1,334.03 1.15 1,167.55
Claims Recoverable
- Unseoured, Cons|dered Good 36.92 8.92
- Unseoured, Cons|dered Doubtfu| 0.42 0.12
37.34 9.04
|ess . Prov|s|on for doubtfu| o|a|ms 0.42 36.92 0.12 8.92
Deposits with Customs, Port Trust and Others
- Unseoured, Cons|dered Good 30.67 34.72
- Unseoured, Cons|dered Doubtfu| 0.31 0.31
30.98 35.03
|ess . Prov|s|on for doubtfu| o|a|ms 0.31 30.67 1,635.86 0.31 34.72 1,340.25
TOTAL 6,413.98 4,107.08
* includes Rs. 60.78 (Previous Year : Rs. 20.51) in transit.
**after adjustment of calorific value
67
21
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We Stand for Pe||ab|||ty
Schedule 8 - Current Liabilities and Provisions
Ps. |n Crores)
AS AT AS AT
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
A. CURRENT LIABILITIES
Sundry Cred|tors 1,360.26 1,268.76
lno|udes due to Sma|| Soa|e
Undertak|ngs . Ps. N||
Prev|ous Year . Ps. N||))
Depos|ts/Petent|on Money from 136.40 184.36
Contraotors and others
Other ||ab|||t|es 463.83 276.11
Other ||ab|||t|es -
Gas Poo| Money 723.18 534.51
- Uno|a|med D|v|dend 1.28 0.86
Amount due for ored|t to
lnvestor Eduoat|on Fund |s
Ps. N|| Prev|ous Year . N||))
lnterest aoorued but not
due on |oans 31.18 2,716.13 31.65 2,296.25
B. PROVISIONS
Prov|s|on for taxat|on 4,394.08 3,504.26
|ess. Advanoe Tax 4,487.32 3,585.02
|ess. Adjustment of Pefunds 433.16 4,054.16 339.92 390.41 3,194.61 309.65
Prov|s|on for Proposed
D|v|dend 338.26 338.26
Prov|s|on for Corporate
D|v|dend Tax 47.44 43.34
Prov|s|on for Gratu|ty - 22.39
Prov|s|on for |eave
Enoashment and 32.40 20.32
Post Pet|rement Med|oa| Benef|ts 758.02 733.96
TOTAL 3,474.15 3,030.21
Schedule 9 - Other Income
Ps. |n Crores)
YEAR ENDED YEAP ENDED
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
Dividend 119.34 104.32
lnterest on .
- Bonds/Debentures 0.45 0.50
- Depos|ts w|th Banks 100.50 56.66
- Others 45.05 9.53
146.00 66.69
Tax deduoted at souroe. Ps. 16.16 Prev|ous Year. Ps.10.93)
|ess . Transferred to lno|denta| Expend|ture
dur|ng oonstruot|on Sohedu|e 11) - 146.00 2.39 64.30
Export Incentives 3.92 8.02
M|soe||aneous lnoome 79.79 67.64
Tax deduoted at souroe . Ps. 0.01 Prev|ous Year . Ps. 0.10)
|ess . Transferred to lno|denta| Expend|ture
dur|ng oonstruot|on Sohedu|e 11) - 79.79 0.25 67.39
TOTAL 349.05 244.03
69
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Annual Report
We Stand for Pe||ab|||ty
Schedule 10 - Manufacturing, Transmission, Administration, Selling &
Distribution and other Expenses
Ps. |n Crores)
YEAR ENDED YEAP ENDED
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
Paw Mater|a| oonsumed 899.15 819.60
Employees Remuneration and Benefits*
Sa|ar|es, Wages and A||owanoes 140.85 130.08
Contr|but|on to Prov|dent and Other Funds 20.64 16.33
We|fare Expenses 44.29 205.78 27.77 174.18
Power, Fue| and Water Charges 399.25 381.90
Stores and Spares oonsumed 145.31 174.96
Pent 14.10 13.12
Pates and Taxes 3.28 5.17
||oenoe Fees - Te|eoom 1.56 3.04
Bandw|dth Consumpt|on 1.03 2.76
Repairs and Maintenance
P|ant and Maoh|nery 117.61 98.84
Bu||d|ngs 12.10 11.43
Others 12.17 141.88 12.15 122.42
lnsuranoe 22.59 21.32
Commun|oat|on Expenses 8.06 7.39
Pr|nt|ng and Stat|onery 3.64 2.84
Trave|||ng Expenses 29.16 30.87
Books and Per|od|oa|s 0.60 0.72
Advert|sement and Pub||o|ty 23.62 26.65
Carried Forward 1,899.01 1,786.94
Ps. |n Crores)
YEAR ENDED YEAP ENDED
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
Brought Forward 1,899.01 1,786.94
Payment to Auditors
Aud|t Fees 0.16 0.08
Management Serv|oes 0.04 0.08
Out of Pooket Expenses 0.04 0.24 0.07 0.23
Enterta|nment Expenses 0.22 0.18
Peoru|tment and Tra|n|ng Expenses 10.28 8.24
veh|o|e H|re and Punn|ng Expenses 14.49 13.00
Survey Expenses 26.88 14.06
Consu|tanoy Charges 15.53 12.54
Data Prooess|ng Expenses 2.86 1.17
Donat|on 5.25 0.57
Pesearoh and Deve|opment Expenses 0.40 0.34
|oss on sa|e / wr|tten off of assetsnet) 2.10 1.62
Bad Debts/C|a|ms/Advanoes/Stores wr|tten off 1.26 1.02
Dry We|| Expenses wr|tten off 11.98 -
Prov|s|on for Doubtfu| Debts, Advanoes, C|a|ms, Depos|ts and 3.00 2.40
obso|esoenoe of Stores and Cap|ta| ltems
Exo|se Duty on Stook net) (10.21) 2.65
Expenses on Enab||ng Fao|||t|es 3.04 4.81
Se|||ng & D|str|but|on Expenses 9.28 7.13
D|soount on Sa|es 9.46 7.59
Comm|ss|on on Sa|es 11.59 10.07
Seour|ty Expenses 25.14 22.61
Other Expenses 66.46 29.28
TOTAL 2,108.26 1,926.45
*lno|udes .
1) Ps. 12.08 Prev|ous Year . Ps. 5.32) on aooount of ret|rement benef|ts v|z. |eave enoashment and Med|oa|.
71
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We Stand for Pe||ab|||ty
Schedule 11 - Incidental Expenditure During Construction
Ps. |n Crores)
YEAR ENDED YEAP ENDED
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
Employees Remuneration and Benefits
Sa|ar|es, Wages and A||owanoes 0.49 4.11
Contr|but|on to Prov|dent and Other Funds - 0.28
We|fare Expenses 0.08 0.57 0.53 4.92
Power, Fue| and Water Charges 0.02 1.34
Stores and Spares oonsumed - 0.58
Pent 0.04 0.80
Pates and Taxes - 0.18
Repairs and Maintenance
P|ant and Maoh|nery 0.02 0.20
Bu||d|ngs - 0.18
Others - 0.02 0.29 0.67
lnsuranoe 0.02 0.28
Commun|oat|on Expenses 0.04 0.20
Pr|nt|ng and Stat|onery - 0.08
Trave|||ng Expenses - 1.38
Advert|sement and Pub||o|ty - 0.08
Peoru|tment and Tra|n|ng Expenses - 0.01
veh|o|e H|re and Punn|ng Expenses 0.02 0.96
lnterest and F|nanoe Charges - 19.35
Survey Expenses - 0.12
Consu|tanoy Charges - 0.03
Other Expenses 0.09 1.54
Depreo|at|on 0.11 2.92
0.93 35.44
|ess .
- lnterest lnoome - 2.39
- M|so. lnoome - - 0.25 2.64
Net Expend|ture 0.93 32.80
|ess .Transferred to Cap|ta| Work-|n-progress
a) Mfg., Transm|ss|on, Admn., Se|||ng & D|str|but|on and Other Expenses 0.93 16.09
b) lnterest & f|nanoe Charges - 19.35
o) Other lnoome - 0.93 2.64) 32.80
Balance Carried over to Balance Sheet NIL Nl|
Schedule 13 - Prior Period Adjustments
Ps. |n Crores)
YEAR ENDED YEAP ENDED
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
Purohase of Gas - 24.77)
Sa|ar|es, Wages and A||owanoes (0.12) 0.14
Power, Fue| and Water Charges 0.66 0.96)
Stores and Spares oonsumed 0.03 1.98)
Pent (0.69) 2.22
Depreo|at|onNet) (1.65) 0.55
Pepa|rs and Ma|ntenanoe 0.21 1.15
veh|o|e h|re and Punn|ng Expenses - 0.04
lnterest - 0.17
Consu|tanoy Charges 0.71 -
Data Prooess|ng - 0.03)
Other Expenses 0.92 0.68
TOTAL 0.07 22.79)
|ess .
- Sa|es (0.03) 20.11)
- lnterest lnoome (0.14) 0.06)
- M|soe||aneous lnoome (0.64) (0.81) 0.03) 20.20)
TOTAL (NET) 0.88 2.59)
Schedule 12 - Interest and Finance Charges
Ps. |n Crores)
YEAR ENDED YEAP ENDED
31
ST
MARCH, 2005 31
ST
MAPCH, 2004
Interest on Term Loans
Fore|gn Currenoy |oans 0.73 61.30
Other |oans 133.14 133.87 80.28 141.58
Comm|tment and other F|nanoe Charges 0.22 15.74
TOTAL 134.09 157.32
73
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Schedule 14 - Notes on Accounts
1. Est|mated amount of Contraots rema|n|ng to be exeouted on Cap|ta| Aooount and not prov|ded for .
|) For Jo|nt ventures. N|| Prev|ous Year. N||).
||) Share |n Cap|ta| Comm|tment of Jo|nt ventures based on the|r aud|ted/unaud|ted statement of aooounts. Ps. 92.08
Crores Prev|ous Year. Ps. 106.93 Crores).
|||) Company's own unexeouted oap|ta| oomm|tment. Ps. 265.60 Crores Prev|ous Year. Ps. 167.54 Crores).
2. Cont|ngent ||ab|||t|es .
l. C|a|ms aga|nst the Company not aoknow|edged as debts. Ps. 9225.29 Crores Prev|ous Year. Ps. 8058.93 Crores),
wh|oh ma|n|y |no|ude.
a) C|a|ms of ONGC| for Ps. 248.46 Crores Prev|ous Year. Ps. 375.84 Crores) on aooount of |nterest for de|ayed
payment and MGO eto. Out of these MGO o|a|ms of Ps. 49.23 Crores Prev|ous Year. Ps. 56.08 Crores) are
reooverab|e on baok-to-baok bas|s.
b) lnoome Tax demand of Ps.1,026.81 Crores Prev|ous year. Ps. 915.58 Crores re|at|ng to the assessment years
1996-97 to 2001-02) re|at|ng to assessment years 1996-97 to 2002-03. The lnoome tax assessment of the
oompany has been oomp|eted up to the assessment year 2002-03. Aga|nst the tota| demand, the oompany has
pa|d/adjusted Ps. 1024.52 orores Prev|ous Year. Ps. 915.13 Crores) under protest. Based upon the deo|s|on of
the appe||ate author|t|es and the |nterpretat|on of the prov|s|ons of the lnoome Tax Aot, the oompany has been
|ega||y adv|sed that the demand |s ||ke|y to be e|ther de|eted or |t may be substant|a||y reduoed. The oompany
has f||ed an appea| aga|nst the demand for the assessment years 1996-97 to 1999-2000 w|th lTAT. Aga|nst the
demands for assessment year 2000-01 to 2002-03 appea|s of the Company are pend|ng before Comm|ss|oner
of lnoome Tax Appea|s).
o) Sa|es Tax demand of Ps. 3,449.18 Crores Prev|ous Year. Ps. 2,349.60 Crores) and |nterest thereon Ps. 1,513.04
Crores Prev|ous Year. Ps. 995.24 Crores) for Haz|ra un|t |n Gujarat State. Sa|es Tax Author|t|es, Ahmedabad
have treated the transfer of Natura| Gas by the oompany from the state of Gujarat to other states dur|ng the
per|od Apr||, 1994 to Maroh, 2001 as |nter-state sa|es under Seot|on 3a) of the Centra| Sa|es Tax Aot. The
oompany has been pay|ng sa|es tax under seot|on 12 of the Gujarat Sa|es Tax Aot aga|nst Form 17 s|noe
|noept|on 1987) and aooord|ng|y the sa|es tax assessments have been oomp|eted. Based on the |nterpretat|on
of the prov|s|ons of the Sa|es Tax Aot and |ega| adv|oe from the experts, the oompany had f||ed wr|t pet|t|on and
speo|a| |eave pet|t|on |n the Supreme Court of lnd|a. ln February, 2005 the oase was transferred by Hon'b|e
Supreme Court to Gujarat Sa|es Tax Tr|buna| for deo|s|on. The Tr|buna| has g|ven |ts judgment on 16.05.2005
aooept|ng the oontent|on of the oompany for |nterstate transportat|on of Natura| Gas as branoh transfer and not
the |nterstate sa|e and set as|de the demand under seot|on 41-B of the Gujarat Sa|es Tax Aot. The Hon'b|e
Tr|buna| has g|ven further |nstruot|on to the Assess|ng Author|ty to assess Company and deo|de tax ||ab|||ty |n
aooordanoe w|th the |aw for the per|od 1998-99 to 2000-01 oons|der|ng |nterstate transfer of natura| gas as
branoh transfer.
d) Comm|ss|oner of Customs, Ahmedabad has |ssued show oause not|oes where |n a sum of Ps 581.22 Crores
Prev|ous year. Ps. 581.22 Crores) for the per|od 22.06.97 to 10.02.2002 has been demanded, by treat|ng GAl|
as |mporter under Seot|on 226) of the Customs Aot, 1962 on aooount of purohase of gas from Tapt| and Panna-
Mukta f|e|ds from Jo|nt venture of Br|t|sh Gas Exp|orat|on and Produot|on l) ||m|ted, Pl| and ONGC| JvCs).
The Company |s of the v|ew that as |t |s purohas|ng gas from JvCs at Haz|ra at the downstream f|ange of
ONGC|'s gas prooess|ng fao|||t|es a|ong w|th other natura| gas oom|ng from South Bas|n, |t |s not ||ab|e to
Customs Duty. The rep||es to Show oause not|oe have a|ready been sent to the Comm|ss|oner of Customs |n
oonsu|tat|on w|th the Consu|tants on 14.06.2002. No further response has been reoe|ved.
e) Customs duty demand of Ps. 305.53 Crores Prev|ous year. Ps 305.53 Crores). Custom Author|t|es, Mumba|
have ra|sed d|fferent|a| duty demand aga|nst Projeot lmports for Pata P|ant on aooount of non-subm|ss|on of
reoono|||at|on statement as requ|red under Projeot lmport Pegu|at|ons, 1986. An appea| was f||ed before CESTAT
on the ground that demand |s premature as the |ast oons|gnment |s yet to be reoe|ved and as per the Projeot
lmport Pegu|at|ons, the reoono|||at|on statement has to be subm|tted w|th|n three months from the date of
o|earanoe of |ast oons|gnment of goods. CESTAT has remanded the matter to DC Customs) for readjud|oat|on.
75
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f) Exo|se duty demand of Ps. 123.63 Crores Prev|ous year. Ps. 1491.54 Crores). Exo|se Author|t|es have ra|sed
demands at v|ja|pur, Usar and vaghod|a by treat|ng |ean gas as gaseous hydrooarbon and deny|ng exempt|on
ava||ab|e to |ean gas, wh|oh has a|| a|ong been treated as an exempted produot. The Company has obta|ned
favourab|e orders aga|nst past demands. However, one oase |s pend|ng at CESTAT.
ll. Bonds exeouted, |etters of Cred|t and Guarantees/Counter Guarantees. Ps. 13.40 Crores Prev|ous Year.
Ps. 109.46 Crores).
lll. The Company a|ong w|th three other promoters has |ssued Corporate Guarantees |n favour of banks and f|nano|a|
|nst|tut|ons for short term |oan taken by Petronet |NG ||m|ted from suoh banks and f|nano|a| |nst|tut|ons. The
Company share |n the Guarantee |s Ps. 350 Crores Prev|ous year. Ps. 350 Crores), be|ng one fourth share of
tota| guarantees of Ps. 1,400 Crores Prev|ous year. Ps. 1,400 Crores) |ssued as on 31.03.2005. The short term
|oan outstand|ng |n the books of Petronet |NG ||m|ted as on 31
st
Maroh, 2005 |s Ps. 1,259.89 Crores Prev|ous
year. Ps. 1,024.04 Crores).
lv. Share |n Cont|ngent ||ab|||t|es of Jo|nt ventures based on the|r aud|ted / unaud|ted statement of aooounts.
Ps. 83.03 Crores Prev|ous Year. Ps. 57.19 Crores).
3. a) Freeho|d |and aoqu|red for Jhans| Ma|ntenanoe Base and Seot|ona||s|ng va|ves |n Jamnagar - |on| P|pe||ne
Ps. 0.93 Crores Prev|ous Year. Ps. 1.05 Crores) and |easeho|d |and aoqu|red for |akwa projeot Ps. 7.82
Crores Prev|ous Year. Ps. 7.84 Crores) are va|ued / oap|ta||zed on prov|s|ona| bas|s.
b) T|t|e deeds for freeho|d |and, va|u|ng Ps. 1.52 Crores Prev|ous Year. Ps. 2.16 Crores) and |easeho|d |and va|u|ng
Ps. 26.76 Crores Prev|ous year. Ps. 26.63 Crores) are pend|ng exeout|on.
o) T|t|e Deeds |n respeot of ten res|dent|a| f|ats at As|ad v|||age, New De|h|, va|u|ng Ps. 1.17 Crores Prev|ous Year.
Ps. 1.17 Crores) are st||| |n the name of ONGC|. Conoerned author|t|es are be|ng pursued for gett|ng the same
transferred |n the name of the Company.
d) The oost of r|ght of use POU) amount|ng to Ps. 17.38 Crores as on 31.03.2005 Prev|ous year Ps. 17.42 Crores)
has been oap|t|||sed as |ntang|b|e asset. The Company has perpetua| P|ght of Use but has no ownersh|p of |and.
4. a) ||ab|||ty under Gas Poo| Aooount |no|udes gas poo| money for January-Maroh 2005 quarter amount|ng to
Ps. 61.64 Crores Prev|ous Year. Ps. 62.16 Crores) wh|oh sha|| beoome due for depos|t |n suooeed|ng quarter.
b) Depos|t |n Gas Poo| Money Aooount |s exo|us|ve of o|a|m amount|ng to Ps. 94.63 Crores Prev|ous Year.
Ps. 94.63 Crores) for oompensat|on for h|gher oost of gas purohased from Jv Compan|es from Pavva and Tapt|
f|e|ds from Apr||,1997 to September, 1997. MOP&NG v|de |ts |etter No |-12015/1/94-GP vlll) dated 04.07.1997
stated that GAl| w||| not be put to any |oss on aooount of oompensat|on towards h|gher pr|oe of Jv gas.
Aooord|ng|y, Gas Poo| money was transferred to separate bank aooount after reta|n|ng Ps. 94.63 orores wh|oh
|s be|ng oommun|oated to MOP&NG regu|ar|y. Aooord|ng|y, no |nterest ||ab|||ty has been prov|ded.
o) Purohase of gas |no|udes Ps 250 Crores Prev|ous year. Ps. 250 Crores) on aooount of Gas Poo| Aooount.
d) ||ab|||t|es on aooount of Gas Poo| Money amount|ng to Ps. 723.18 Crores Prev|ous year. Ps. 534.51 Crores)
and 10% retent|on from Jv oonsort|um amount|ng to Ps. 359.63 Crores Prev|ous year. Ps. 282.45 Crores)
|no|udes |nterest net of TDS) amount|ng to Ps. 32.30 Crores Prev|ous year. Ps. 25.15 Crores) on Short term
depos|ts for the year. Th|s |nterest |noome does not be|ong to the oompany henoe not aooounted as |noome.
5. Cost of F|xed Assets |no|ud|ng oap|ta| work |n progress) has been deoreased by an amount of Ps. 0.74 Crores Prev|ous
Year. Ps. 38.97 Crores) due to exohange rate var|at|on. An amount of Ps. 0.07 Crores Prev|ous Year. Ps. 0.87 Crores)
has been ored|ted to Prof|t & |oss aooount due to exohange rate var|at|on.
6. MOP&NG had |ssued soheme for meohan|sm of shar|ng the under reoover|es of O|| market|ng Compan|es on aooount of
non-rev|s|on |n se|||ng pr|oe of PDS Kerosene and domest|o |PG. Dur|ng the year, the Company has g|ven d|soounts to
O|| market|ng Compan|es amount|ng to Ps. 1,137 Crores Prev|ous Year. Ps. 428 Crores) on d|spatohes to them for
shar|ng subs|d|es.
7. a) Pr|oes of Natura| gas for the per|od Apr|| 1, 2000 to Maroh 31, 2005 |s under rev|ew by MOP&NG. Pend|ng f|na||sat|on
of suoh pr|oes, payments/aoorua|s of purohase of gas are be|ng made based on the rate speo|f|ed |n the MOP&NG
|etter dated September 18, 1997. Add|t|ona| ||ab|||ty or |ts effeot on prof|ts |f any, ar|s|ng out of the aforesa|d rev|s|on
w||| be reoogn|zed when the pr|oes are f|na||zed. However, the management does not expeot the pr|oe |norease to be
retrospeot|ve.
b) The Company |s ra|s|ng prov|s|ona| |nvo|oes for sa|e of P-|NG as the supp||er P|| |s a|so ra|s|ng prov|s|ona| |nvo|oes
on the Company s|noe oustoms duty on |mport of |NG by P|| has been assessed on prov|s|ona| bas|s.
8. W|th effeot from Apr|| 1, 2002, ||quef|ed Petro|eum Gas pr|oes has been deregu|ated and |s now based on the |mport
par|ty pr|oes f|xed by the O|| Compan|es. However, the pr|o|ng meohan|sm |s prov|s|ona| and |s pend|ng f|na||sat|on.
Add|t|ona| asset/||ab|||ty or |mpaot on prof|ts, |f any, ar|s|ng due to suoh ohange, w||| be reoogn|zed on f|na||zat|on of
pr|o|ng meohan|sm.
9. ln oomp||anoe of Aooount|ng Standard 17 on "Segment Peport|ng" |ssued by lnst|tute of Chartered Aooountants of
lnd|a, the requ|red |nformat|on |s g|ven as per Annexure - A to th|s sohedu|e. The Company has adopted Bus|ness
segments as |ts reportab|e segment. Upto prev|ous year, the bus|ness segments has been |dent|f|ed as Gas Prooess|ng
& Sa|es, |PG Transm|ss|on and Te|eoom.
Dur|ng the year, the bus|ness segments have been reo|ass|f|ed as
|) Transm|ss|on Serv|oes
a) Natura| Gas
b) |PG
||) Natura| Gas Trad|ng
|||) Petroohem|oa|s
|v) |PG and other ||qu|d Hydrooarbons
v) GAl|TE|
v|) Una||ooated
Assets of GAl|TE| segment has been rat|ona||zed dur|ng the f|nano|a| year 2004-05. Th|s has resu|ted |n deorease of
depreo|at|on by Ps. 20.83 Crores under GAl|TE| segment. There are no geograph|oa| segments.
10. ln oomp||anoe of Aooount|ng Standard 18 on "Pe|ated party D|so|osures" |ssued by lnst|tute of Chartered Aooountants
of lnd|a, the name of re|ated part|es, nature of re|at|onsh|p and deta||s of transaot|on entered therew|th are g|ven |n
Annexure - B.
11. ln oomp||anoe of Aooount|ng Standard 22 on "Aooount|ng for taxes on lnoome" |ssued by lnst|tute of Chartered
Aooountants of lnd|a, the Company has prov|ded aooumu|ated net deferred tax ||ab|||ty |n respeot of t|m|ng d|fferenoe as
on 31
st
Maroh, 2005 amount|ng to Ps. 1,255.23 Crores Prev|ous year. Ps. 1,227.58 Crores). Net Deferred tax expense
for the year of Ps. 27.65 orores Prev|ous year. Ps. 107.83 Crores) has been oharged to Prof|t & |oss Aooount. The |tem-
w|se deta||s of deferred tax ||ab|||ty are as under.
Ps. |n Crores)
As on 31
st
March, 2005 As on 31
st
Maroh, 2004
Deferred tax ||ab|||ty.
a) Depreo|at|on 1,375.16 1,298.16
|ess. Deferred Tax Assets.
a) Prov|s|on for Gratu|ty and Pet|rement Benef|ts 15.93 13.93
b) Prov|s|on for Doubtfu| Debts/C|a|ms/Advanoes 60.65 56.65
o) Others 43.35 -
Deferred tax ||ab|||ty net) 1,255.23 1,227.58
77
21
st
Annual Report
We Stand for Pe||ab|||ty
12. ln Comp||anoe of Aooount|ng Standard 27 on "F|nano|a| Peport|ng of lnterests |n Jo|nt ventures" |ssued by lnst|tute of
Chartered Aooountants of lnd|a, br|ef desor|pt|on of Jo|nt ventures of the Company are.
(a). Mahanagar Gas Limited: A Jo|nt venture w|th Br|t|sh Gas P|o. to supp|y gas to domest|o, oommero|a| and sma||
|ndustr|a| oonsumers and CNG for transport seotor |n Mumba|. The Company has |nvested Ps. 44.45 Crores for
aoqu|r|ng 444,49,960 equ|ty shares of Ps. 10 eaoh of the Company, present|y be|ng 49.75% of the pa|d up oap|ta|.
(b). Indraprastha Gas Limited: A Jo|nt venture w|th BPC| and Government of Nat|ona| Cap|ta| terr|tory NCT) of De|h|
to supp|y gas to domest|o, oommero|a| un|ts and CNG for transport seotor |n De|h|. The Company has |nvested
Ps. 31.50 Crores for aoqu|r|ng 315,00, 000 equ|ty shares of Ps. 10 eaoh of the Company, present|y be|ng 22.50% of
the pa|d up oap|ta|.
(c). Petronet LNG Limited: A Jo|nt venture w|th BPC|, lOC| and ONGC| for sett|ng up |NG |mports fao||t|es. The
Company has |nvested Ps. 98.75 Crores for aoqu|r|ng 937,50,000 equ|ty shares of Ps. 10 eaoh of the Company,
present|y be|ng 12.50% of the pa|d up oap|ta|. The sa|e of 5 m||||on tonnes per annum of |NG wh|oh wou|d be
|mported by P|| over a per|od of 25 years under Sa|e and Purohase agreement w|th PasGas, has been fu||y t|ed up
through Gas Sa|es and Purohase Agreement w|th three off takers GAl| lnd|a) ||m|ted, lOC| and BPC|.
(d). Bhagyanagar Gas Limited: A Jo|nt venture Company w|th HPC| for d|str|but|on and market|ng of CNG, Auto |PG,
Natura| Gas and other gaseous fue|s |n Andhra Pradesh. The Company has been a||otted 12,497 equ|ty shares of
Ps. 10 eaoh eaoh of the Company, present|y be|ng 22.50% of the pa|d up oap|ta|. The Company has further pa|d
Ps. 4.98 Crores as advanoe aga|nst a||otment of equ|ty shares.
(e). Tripura Natural Gas Company Limited: A Jo|nt venture Company w|th Assam Gas Company ||m|ted and Tr|pura
lndustr|a| Deve|opment Corporat|on for transportat|on and d|str|but|on of natura| gas through p|pe||nes |n Tr|pura.
The Company has pa|d Ps. 0.83 Crores as advanoe aga|nst a||otment of equ|ty shares.
(f). Central UP Gas Limited: A Jo|nt venture Company w|th BPC| for C|ty gas d|str|but|on |n Kanpur, Uttar Pradesh.
The Company has pa|d Ps. 0.03 Crores as an advanoe aga|nst a||otment of equ|ty shares.
The Company share of assets and ||ab|||t|es as at 31
st
Maroh, 2005 and the lnoome and expend|ture for the year |n
respeot of above Jo|nt ventures based on aud|ted / unaud|ted statements of aooounts as furn|shed by them |s as
fo||ows.
Ps. |n Crores)
200405 2003-04
A. Assets
|ong Term Assets 563.80 276.28
Current Assets 179.81 153.48
B. Current ||ab|||t|es & Prov|s|ons 173.15 122.05
C. lnoome 539.09 242.98
D. Expend|ture 425.65 149.14
E. Cont|ngent ||ab|||ty 83.03 57.19
13. The Company has part|o|pated |n jo|nt b|dd|ng under the Government of lnd|a New Exp|orat|on ||oens|ng Po||oy and had
been a||otted 10 B|ooks for wh|oh the Company has entered |nto Produot|on Shar|ng Contraot w|th Government of lnd|a
a|ong w|th other partners for Exp|orat|on & Produot|on of O|| and Gas. As per the Produot|on Shar|ng Contraot, the
Company has a m|n|mum work program oomm|tment of Ps. 137.18 Crores Prev|ous Year. Ps. 138.63 Crores). The
Company |s aot|ng as non-operator and wou|d have to share |n Expense/lnoome/Assets/||ab|||t|es based upon |ts
peroentage |n produot|on shar|ng oontraot. Dur|ng the year, part|o|pat|ng |nterest of 15% |n B|ook KK-DWN-2000/2 has
been re||nqu|shed to Government of lnd|a. The part|o|pat|ng |nterest |n the fo||ow|ng n|ne NE|P - B|ooks as on 31
st
Maroh, 2005 |s as under.
Joint Venture under NELP Blocks Participating Interest
1) MN-OSN-97/3 15%
2) NEC-OSN-97/1 50%
3) MN-OSN-2000/2 20%
4) GS-DWN-2000/2 15%
5) MB-DWN-2000/2 15%
6) CB-ONN-2000/1 40%
7) MN-ONN-2000/1 20%
8) CY-ONN-2002/1 50%
9) AA-ONN-2002/1 80%
ln add|t|on, the Company has farm-|n as non - operator w|th m|n|mum work program oomm|tment of Ps. 11.24 Crores
Prev|ous Year. 11.30 Crores) |n the fo||ow|ng b|ooks.
Blocks Participating Interest
1) A-1, Myanmar 10%
2) CY-OS/2 25%
The Company's share of assets and ||ab|||t|es as at 31
st
Maroh 2005 and the lnoome and the expend|ture for the year |n
respeot of jo|nt operat|ons projeot b|ooks has been |noorporated |n the Company f|nano|a| statements based upon
unaud|ted statement of aooounts subm|tted by the operators as fo||ows.
Ps. |n Crore)
2004-05 2003-04
lnoome - -
Expenses 37.79 14.29
F|xed Assets 1.05 0.36
Other Assets 45.25 21.14
Current ||ab|||t|es 33.53 16.51
14. ln oomp||anoe w|th amended C|ause 32 of the ||st|ng Agreement w|th Stook Exohanges, the requ|red |nformat|on are
g|ven |n Annexure - C.
15. Due to ohange |n Aooount|ng po||oy.
a) Dur|ng the year, the oompany has ohanged |ts aooount|ng po||oy of d|so|osure of P|ght of Use POU) under tang|b|e
assets to |ntang|b|e assets |n oomp||anoe to Aooount|ng Standard 26 on lntang|b|e Assets. Due to th|s, |ntang|b|e
assets have |noreased by Ps. 17.38 Crores w|th oonsequent deorease |n tang|b|e assets. Th|s ohange has no |mpaot
on Prof|t & |oss Aooount for the year.
b) Dur|ng the year, the oompany has ohanged |ts aooount|ng po||oy of oharg|ng off we||s |n progress the status of wh|oh
rema|ns undeo|ded for more than f|ve years to Prof|t and |oss aooount to oharg|ng off we||s |n progress the status of
wh|oh rema|ns undeo|ded for more than two years to Prof|t and |oss Aooount. Th|s ohange has no |mpaot on Prof|t
& |oss Aooount for the year.
o) Dur|ng the year, the oompany has ohanged |ts aooount|ng po||oy for prov|s|on for gratu|ty on the bas|s of aotuar|a|
va|uat|on at the end of f|nano|a| year to prov|d|ng ||ab|||ty towards Gratu|ty by payment to a fund ma|nta|ned by the
oompany and adm|n|stered through a separate trust set up by the oompany. D|fferenoe between the fund ba|anoe
w|th the trust and the aoorued ||ab|||ty as at the end of the year as per aotuar|a| va|uat|on |s oharged to Prof|t and
|oss Aooount. Th|s ohange has no |mpaot on Prof|t & |oss Aooount for the year.
79
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16. An amount of Ps. 4.95 Crores Prev|ous Year. Ps. 9.22 Crores) has been o|a|med on aooount of the adjustment for
CENvAT |n respeot of GAl|TE|, Pata, |PG P|ants at Usar, v|ja|pur, vaghod|a, Gandhar and |akwa. Suoh o|a|ms are
adjustab|e out of exo|se duty/serv|oe tax payab|e on goods and serv|oes.
17. No amount Prev|ous Year. N||) |s outstand|ng for more than 30 days |n respeot of SSl un|ts as on 31.03.2005.
18. a) The pr|oe of Gas purohased from Jo|nt venture Consort|um JvC) lnd|an and Fore|gn Partners) from Pavva / Pavva
Sate|||te, Tapt| and Panna-Mukta f|e|ds are denom|nated |n USD per MMBTU. The ||ab|||ty |n USD has been oonverted
at B|||s Buy|ng rate, TT se|||ng rate and TT buy|ng rate, preva|||ng as on 31.03.2005 or on the date of payment, as the
oase may be.
b) lmports have been aooounted for at the exohange rate preva|ent as on the date of ret|rement of doouments be|ng
the date of transaot|on.
19. Fo||ow|ng Government of lnd|a's approva|, the shareho|ders of the Company |n the Annua| Genera| Meet|ng he|d on 15
th
September, 1997 approved the transfer of a|| the assets |no|ud|ng P|ant and Maoh|nery, aooessor|es and other re|ated
assets wh|oh are part of |akwa Projeot va|ued at Ps. 246.91 Crores as on 31.03.2005 Prev|ous Year. Ps. 246.92
Crores) to Assam Gas Craoker Comp|ex at a pr|oe to be determ|ned by an |ndependent Agenoy and on terms and
st|pu|at|ons as the Board may |n |ts d|soret|on deem f|t. However, Assam Gas Craoker Comp|ex has not oome up as per
p|an and |PG |akwa Projeot has not been transferred to |t. Therefore, a fresh proposa| has been put up to Govt of lnd|a
to estab||sh Assam Gas Craoker projeot by GAl| and |PG |akwa Projeot w||| be part of that Assam Gas Craoker projeot.
20. Pend|ng |ssue of su|tab|e not|f|oat|on by the Government of lnd|a speo|fy|ng the per|od and app||oab|e rate at wh|oh oess
on turnover |s payab|e under seot|on 441A of Compan|es Aot, 1956 the Company has not prov|ded for the same.
21. Depos|ts made w|th the oonoerned author|t|es for ra||way oross|ngs, forest oross|ngs, remova| and |ay|ng of e|eotr|o/
te|ephone po|es and ||nes have been aooounted for under Cap|ta| Work-|n-Progress on the bas|s of work done/
oonf|rmat|on from the oonoerned department.
22. Ba|anoes grouped under Mater|a| w|th Contraotors, Sundry Debtors, |oans and Advanoes, Depos|ts and Sundry Cred|tors,
eto. are subjeot to oonf|rmat|on.
23. a) The Company has |nourred an expend|ture of Ps.7.26 orores on aooount of C|ty gas projeots wh|oh |s aooounted
under oap|ta| Work |n progress. Th|s amount wou|d be reooverab|e from the proposed Jo|nt ventures to be formed
for o|ty gas d|str|but|on projeots |n lnd|a.
b) The va|ue of p|pe||nes and re|ated fao|||t|es taken over |n Southern and North-eastern reg|on |n February 1992 and
Western Peg|on |n May 1992 |s prov|s|ona|, based on |nt|mat|on from ONGC|. Adjustments, |f any, for taxes, dut|es,
POU and other o|a|ms wou|d be made as and when asoerta|ned. Depreo|at|on on the assets taken over from ONGC|
has been prov|ded for as per the aooount|ng po||oy of the Company on the transfer va|ue of suoh assets. Pend|ng
|nsta||at|on of oustody transfer meters, the purohase of Gas |s aooounted for on the bas|s of meter|ng done at the
oonsumer's end.
24. The Prof|t & |oss Aooount |no|udes.-
a) Expend|ture on Pub||o Pe|at|ons amount|ng to Ps. 23.62 Crores Prev|ous Year. Ps. 26.65 Crores). The rat|o of
annua| expend|ture on Pub||o Pe|at|ons and Pub||o|ty to the annua| turnover |s 0.002.1 Prev|ous Year. 0.002.1).
b) Pesearoh and Deve|opment Expenses Ps. 0.40 Crores Prev|ous Year. Ps. 0.34 Crores).
o) Enterta|nment Expenses Ps. 0.22 Crores Prev|ous Year. Ps. 0.18 Crores).
25. Prev|ous year's oomparat|ve f|gures have been regrouped and reoast to the extent praot|oab|e, wherever neoessary.
F|gures |n braokets |nd|oate deduot|ons.
26. Information required as per Schedule VI of the companies Act, 1956
I. Quantitative Information
Ps. |n Crores)
OPENING STOCK PURCHASES@ SALES@ INTERNAL CLOSING STOCK
CONSUMPTION
QTY VALUE QTY VALUE QTY VALUE QTY VALUE QTY VALUE
Natural Gas including
RLNG (MMSCM) *
Year Ended 31.03.2005 91.58 47.30 25,895.79 7,828.35 22,835.45 8,878.80 2,021.99 1,167.87 115.21 57.31
Year Ended 31.03.2004 67.54 17.88 23,030.49 6,626.40 21,012.55 7,450.63 1,988.67 1,118.25 91.58 47.30
LPG (M/T)
Year Ended 31.03.2005 8,167.58 7.04 - - 10,89,066.16 1,093.55 - - 14,007.67 8.65
Year Ended 31.03.2004 8,086.31 6.92 - - 10,88,675.54 1,774.49 - - 8,167.58 7.04
Pentane (M/T)
Year Ended 31.03.2005 317.60 0.44 - - 57,177.88 129.50 - - 676.26 0.88
Year Ended 31.03.2004 502.82 0.40 - - 52,038.03 87.01 - - 317.60 0.44
Propane (M/T)
Year Ended 31.03.2005 855.49 0.83 - - 1,80,159.12 453.86 - - 2,572.05 2.64
Year Ended 31.03.2004 4,582.25 4.49 - - 1,60,909.62 321.84 - - 855.49 0.83
SBP Solvent (M/T)
Year Ended 31.03.2005 453.41 0.70 - - 58,854.09 158.95 - - 493.20 0.86
Year Ended 31.03.2004 552.88 0.68 - - 65,478.12 126.34 - - 453.41 0.70
Polymers (M/T)
Year Ended 31.03.2005 24,671.32 65.05 4,362.90 24.88 3,18,613.91 1,774.17 459.73 0.31 8,747.93 22.73
Year Ended 31.03.2004 20,028.76 48.06 14,475.48 77.18 2,65,475.85 1,179.36 8,067.97 0.44 24,671.32 65.05
C2/C3 (M/T)
Year Ended 31.03.2005 1,648.00 1.09 - - - - - - 3,811.69 2.44
Year Ended 31.03.2004 3,955.00 2.55 - - - - - - 1,648.00 1.09
Ethylene (M/T)
Year Ended 31.03.2005 1,910.00 2.35 - - - - - - 991.01 1.09
Year Ended 31.03.2004 7,483.00 7.94 - - - - - - 1,910.00 2.35
Butene-1 (M/T)
Year Ended 31.03.2005 133.00 0.37 - - 205.87 1.19 - - 307.86 0.70
Year Ended 31.03.2004 475.00 0.92 - - 1,346.14 6.40 - - 133.00 0.37
Other Products (M/T)
Year Ended 31.03.2005 5,618.19 6.28 - - 28,444.45 62.14 7,379.00 10.66 6,463.11 7.29
Year Ended 31.03.2004 2,581.03 3.00 - - 20,168.58 64.94 - - 5,618.19 6.28
Note. |) D|fferenoe |n reoono|||at|on of open|ng stook,purohases,sa|es and o|os|ng stook of Gas Quant|ty |s on aooount of measurement to|eranoe.
||) Ps. 54.38 CroresPrev|ous Year. 52.40 Crores) has been deduoted at Souroe u/s 194C of the lnoome Tax Aot from the Gas sa|es
|nvo|oes ra|sed dur|ng the year.
|||) lnterna| oonsumpt|on of Po|ymes |no|uded 294.40 MT for manufaoture of Other Produots.
|v) @Exo|ud|ng Pr|or Per|od adjustments.
* lno|udes gas after prooess|ng.
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We Stand for Pe||ab|||ty
(Rs. in Crores)
2004-05 2003-04
II. CIF Value of Imports
l) Cap|ta| Goods 38.18 86.63
||) Spare Parts & Components 58.63 121.16
|||) Paw mater|a|s Po|ymers) 1.16 -
III. a) Expenditure in Foreign Currency
l) lnterest/Comm|tment Charges 0.81 60.94
||) Teohn|oa|/Consu|tanoy/||oense Fee/Eng|neer|ng 21.41 15.62
|||) Others 836.79 1641.53
b) Earnings in Foreign Currency
l) Sa|es 76.95 19.03
||) Others lno|ud|ng Tender fee) 1.92 2.68
IV. Remuneration paid/payable to whole time Directors including
Chairman & Managing Director:
Sa|ar|es & A||owanoes 0.49 0.54
Contr|but|on to Prov|dent, Gratu|ty and Other Funds 0.16 0.15
Other Benef|ts and Perqu|s|tes 0.08 0.03
0.73 0.72
ln add|t|on to above remunerat|on, Who|e t|me D|reotors are a||owed the use of Staff oars |no|ud|ng for pr|vate journeys upto a oe|||ng
of 1000 Kms. per month on payment |n aooordanoe w|th the Bureau of Pub||o Enterpr|ses C|rou|ar.
V. Licensed Capacity, Installed Capacity and Actual Production
CURRENT YEAR PPEvlOUS YEAP
2004-05 2003-04
Licensed Installed Gas Production ||oensed lnsta||ed Gas Produot|on
Capacity Capacity Throughput Capao|ty Capao|ty Throughput
l) Natura| Gas |no|ud|ng
P|NG MMSCMD)
a) HvJ 33.40 33.40 31.75 - 33.40 33.40 32.23 -
b) Others - - 36.35 - - - 30.61 -
o) P|NG Sh|pper - - 3.46 - - - - -
||) |PG M /T) 11,68,844 11,68,844 - 10,94,835.00 11,68,844 11,68,844 - 10,88,686.04
|||) Propane M/T) 2,01,085 2,01,085 - 1,81,863.47 2,01,085 2,01,085 - 1,57,303.26
|v) Ethy|ene M/T) 3,00,000 3,00,000 - 3,19,289.86 3,00,000 3,00,000 - 2,75,610.00
v) HDPE/||DPE M/T) 3,10,000 3,10,000 - 2,98,787.35 2,60,000 2,60,000 - 2,63,719.91
Notes. 1. Produot|on of Pentane 57,524.74 MTs Prev|ous year . 51,872.15 MTs). SBP So|vent 58,875.59 MTs Prev|ous Year. 65,298.28
MTs).
2. ||oensed and lnsta||ed Capao|ty of C2/C3 4,00,000 MTsPrev|ous Year. 4,00,000 MTs) and aotua| Produot|on 4,26,994.01
MTs Prev|ous Year. 3,66,418.50 MTs).
3. ||oensed and lnsta||ed Capao|ty of Butene-1 10,000 MTs Prev|ous Year . 10,000 MTs) and aotua| Produot|on 7,989.27 MTs
Prev|ous Year. 7,036.42 MTs).
VI. Value of Raw Materials, Stores/Spares and Components consumed during the year.
CURRENT YEAR PREVIOUS YEAR
2004-05 2003-04
Qty. Rs. in crores % Qty. Ps |n orores %
i) Raw Material Consumed:
a) Gas (MMSCM)
- lnd|geneous 1150.72 888.49 100.00 1091.45 819.60 100.00
- lmported - - - - - -
b) Propylene (MT)
- lnd|geneous 147.60 0.43 100.00 - - -
- lmported - - - - - -
c) C4 Mix (MT)
- lnd|geneous 5170.77 10.23 100.00 - - -
- lmported - - - - - -
Sub total 6469.09 899.15 1091.45 819.60
ii) Stores, Spares Components
Consumed
- lnd|geneous - 71.05 48.90 - 75.83 43.34
- lmported - 74.26 51.10 - 99.13 56.66
Sub total 145.31 100.00 - 174.96 100.00
Total 1044.46 994.56
N. K. Nagpa| J.K.Ja|n B.S. Neg| Proshanto Banerjee As per our separate
Seoretary D|reotor F|nanoe) D|reotor BD) Cha|rman & Manag|ng D|reotor Peport of even date
For S MANN & COMPANY
P|aoe. New De|h| Subhash Mann
Dated. June 21, 2005 Partner)
Membersh|p No. 80500
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Information About Business Segments for Financial Year 2004-05
(Annexure - A)
Ps. |n Crores)
Sl. Segments Transmission Services Natural Gas Petro LPG & Liquid Gailtel Unallocated Consolidated
No. Trading Chemicals Hydrocarbons Total
Natural LPG
Gas
1. Revenue
Externa| Sa|es 1923.80 301.84 7130.16 1842.05 1837.48 18.42 222.37 13276.12
lntersegment sa|es - - - - - - - -
Total revenue 1923.80 301.84 7130.16 1842.05 1837.48 18.42 222.37 13276.12
2. Results
Segment Pesu|t
Prof|t before lnterest &Tax) 1193.54 89.54 210.80 804.24 609.00 1.07) 2906.05
Una||ooated expenses - - - - - - 165.91 165.91
Operat|ng Prof|t 1193.54 89.54 210.80 804.24 609.00 1.07) 165.91) 2740.14
lnterest Expenses - - - - - - 134.09 134.09
lnterest/ D|v|dend lnoome - - - - - - 265.34 265.34
Prov|s|on for Taxat|on - - - - - - 917.48 917.48
Prof|t/|oss) from Ord|nary
Aot|v|t|es 1193.54 89.54 210.80 804.24 609.00 1.07) 952.14) 1953.91
Extraord|nary |tems - - - - - - - -
Net Profit/(Loss) 1193.54 89.54 210.80 804.24 609.00 (1.07) (952.14) 1953.91
3 Other Information
Segment Assets 4626.47 1209.44 57.31 2120.58 1466.32 57.98 - 9538.10
Una||ooated Assets - - - - - - 4721.76 4721.76
Total Assets 4626.47 1209.44 57.31 2120.58 1466.32 57.98 4721.76 14259.86
Segment ||ab|||t|es 1891.95 38.73 16.49 96.36 123.98 26.48 - 2193.99
Una||ooated ||ab|||t|es - - - - - - 1280.16 1280.16
Total Liabilities 1891.95 38.73 16.49 96.36 123.98 26.48 1280.16 3474.15
Cost to aoqu|re
f|xed assets** 303.00 436.52 - 57.59 0.50 197.33) 46.37 646.65
Depreo|at|on* 560.44 140.41 - 136.80 95.08 7.67 6.25 946.65
Non Cash expenses
other than Depreo|at|on* 4.76 0.20) - 0.06 1.74 - 11.98 18.34
* Exo|ud|ng Pr|or per|od adjustments
** Assets of GAl|TE| has been rat|ona||sed dur|ng the year
Information About Business Segments for Financial Year 2003-04
(Annexure - A Contd.)
(Rs. in Crores)
Sl. Segments Transmission Services Natural Gas Petro LPG & Liquid Gailtel Unallocated Consolidated
No. Trading Chemicals Hydrocarbons Total
Natural LPG
Gas
1. Revenue
Externa| Sa|es 1726.17 266.65 5783.66 1265.31 2313.65 20.47 163.75 11539.66
lntersegment sa|es - - - - - - - -
Total revenue 1726.17 266.65 5783.66 1265.31 2313.65 20.47 163.75 11539.66
2. Results
Segment Pesu|t Prof|t
before lnterest &Tax) 1339.39 119.76 43.72 362.29 1048.58 8.79) - 2904.95
Una||ooated expenses - - - - - - 123.57 123.57
Operat|ng Prof|t 1339.39 119.76 43.72 362.29 1048.58 8.79) 123.57) 2781.38
lnterest Expenses - - - - - - 137.97 137.97
lnterest/D|v|dend lnoome - - - - - - 171.01 171.01
Prov|s|on for Taxat|on - - - - - 945.08 945.08
Prof|t/|oss) from
Ord|nary Aot|v|t|es 1339.39 119.76 43.72 362.29 1048.58 8.79) 1035.61) 1869.34
Extraord|nary |tems - - - - - - - -
Net Profit/(Loss) 1339.39 119.76 43.72 362.29 1048.58 (8.79) (1035.61) 1869.34
3. Other Informations
Segment Assets 4877.57 898.25 47.30 2216.47 1458.32 256.76 - 9754.67
Una||ooated Assets - - - - - - 2495.29 2495.29
Total Assets 4877.57 898.25 47.30 2216.47 1458.32 256.76 2495.29 12249.96
Segment ||ab|||t|es 1403.07 41.97 16.49 74.76 58.80 32.25 - 1627.34
Una||ooated ||ab|||t|es - - - - - - 1402.87 1402.87
Total Liabilities 1403.07 41.97 16.49 74.76 58.80 32.25 1402.87 3030.21
Cost to aoqu|re
f|xed assets 2269.63 96.90 - 6.95 13.32 150.63 6.37 2543.80
Depreo|at|on* 320.56 97.74 - 156.51 72.04 10.61 3.60 661.06
Non Cash expenses
other than Depreo|at|on* 3.46 - - 0.76) 2.34 - - 5.04
* Exo|ud|ng Pr|or per|od adjustments
85
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We Stand for Pe||ab|||ty
Related Party Disclosures
(Annexure - B)
I) Relationship
A) Joint Venture Companies:
1) Mahanagar Gas ||m|ted
2) lndraprastha Gas ||m|ted
3) Petronet |NG ||m|ted
4) Bhagyanagar Gas ||m|ted
5) Tr|pura Natura| Gas Corporat|on ||m|ted
6) Centra| UP Gas ||m|ted
B) Whole time Directors:
1) Shr| Proshanto Banerjee, Cha|rman and Manag|ng D|reotor
2) Shr| J. K. Ja|n
3) Shr| S. P. Pao
4) Shr| B.S. Neg|
5) Shr| M. P. H|ngn|kar
6) Dr U. D. Choubey
C) Unincorporated Joint venture for Exploration & Production Activities:
1) NEC - OSN - 97/1 Non-operator w|th part|o|pat|ng |nterest. 50%)
2) CB - ONN - 2000/1 Non-operator w|th part|o|pat|ng |nterest. 40%)
3) A-1, Myanmar Non-operator w|th part|o|pat|ng |nterest. 10%)
4) CY-OS/2 Non-operator w|th part|o|pat|ng |nterest. 25%)
5) AA-ONN-2002/1 Non-operator w|th part|o|pat|ng |nterest. 80%)
6) CY-ONN-2002/1 Non-operator w|th part|o|pat|ng |nterest. 50%)
II) The following transactions were carried out with the related parties in the ordinary course of business:
(Rs. in Crores)
A) Details relating to parties referred to in item no. I (A) above:
2004-05 2003-04
1) Sa|es 293.14 270.95
2) Amount reoe|vab|e as at Ba|anoe Sheet Date for 1) above 14.60 16.63
3) Purohases 1187.71 23.15
4) Amount payab|e as at Ba|anoe Sheet Date for 3) above 66.65 15.32
5) Pe|mbursement for other expend|ture reoe|ved/reoe|vab|e 1.23 3.52
6) Amount reoe|vab|e as at Ba|anoe Sheet Date for 5) above 1.17 3.71
B) Details relating to parties referred to in item no. I (B) above:
2004-05 2003-04
1) Pemunerat|on* 0.73 0.72
2) lnterest bear|ng outstand|ng |oans reoe|vab|e 0.14 0.06
3) lnterest aoorued on |oans g|ven 0.09 0.07
*Pemunerat | on | no| udes Bas| o, A| | owanoes, re| mbursement s, oont r| but | on t o PF and perqu| s| t es.
ln add|t|on, Who|e t|me D|reotors are a||owed the use of Staff oars |no|ud|ng for pr|vate journeys upto a oe|||ng of
1000 Kms. per month on payment |n aooordanoe w|th the Bureau of Enterpr|ses C|rou|ar.
C) Details relating to parties referred to in item no. I (C) above:
2004-05 2003-04
1) M|n|mum work program oomm|tment 94.39 94.90
2) Survey and other expenses 22.07 7.55
3) Other assets 46.13 21.38
4) Amount outstand|ng on Ba|anoe Sheet date 17.32 9.38
5) Amount wr|tten Off- Dry we|| expend|ture 2.22 -
Disclosure as Required by Clause 32 of the Listing Agreement
(Annexure - C)
Ps. |n orores)
Amount as on Max|mum amount
31.03.2005 outstand|ng dur|ng the
year ended 31.03.2005
1 |oans and advanoes |n the nature of |oans.
a To subs|d|ary Company. GAl| G|oba|
S|ngapore Pte) ||m|ted 76.94 76.94
b To Compan|es |n wh|oh D|reotors are |nterested N|| N||
o Where there |s no repayment sohedu|e or Pepayment of |oan
repayment beyond seven years or no |nterest wou|d be f|ve years from
or |nterest be|ow Seot|on 372 A of Compan|es Aot the date of draw| |.e
24/9/2004. Pate of
|nterest on |oan |s 6
months |lBOP +
100 bas|s po|nts
2 lnvestment by the Subs|d|ary Company
|n the shares of GAl| lnd|a) ||m|ted and |ts subs|d|ar|es N|| N||
87
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Annual Report
We Stand for Pe||ab|||ty
Statement Pursuant to Section 212(1)(e) of the Companies Act,1956 Relating to
Companys Interest in the Subsidiary Company
Name of the Subsidiary Company GAIL Global (Singapore) Pte Limited
1 The f|nano|a| year of the subs|d|ary Company ended on 31.03.2005
2 Date from wh|oh |t beoame subs|d|ary Company 14.09.2004
3 a) Number of Shares he|d by GAl| lnd|a) ||m|ted a|ongw|th 2,100,000 equ|ty shares of USD 1 per share
|ts nom|nees |n the subs|d|ary at the end of f|nano|a| year
of the subs|d|ary oompany
b) Extent of Shareho|d|ng 100%
4 The net aggregate amount of Subs|d|ary Company prof|t so
far |t oonoerns the members of Ho|d|ng Company.
a) Not dea|t w|th|n the Ho|d|ng Company Aooounts.
|) for the f|nano|a| year ended 31.03.2005 Ps. |n Crores) 2.26
||) for prev|ous f|nano|a| years of the subs|d|ary oompany s|noe Not App||oab|e
|t beoame the ho|d|ng oompany subs|d|ary
b) Dea|t w|th|n the Ho|d|ng Company Aooounts.
|) for the f|nano|a| year ended 31.03.2005 N||
||) for prev|ous f|nano|a| years of the subs|d|ary oompany s|noe |t
beoame the ho|d|ng oompany subs|d|ary N||
N. K. Nagpa| J.K.Ja|n B.S.Neg| Proshanto Banerjee
Seoretary D|reotor F|nanoe) D|reotor BD) Cha|rman & Manag|ng D|reotor
P|aoe . New De|h|
Dated . June 21, 2005
Accounting Policies
A. BALANCE SHEET
1. Fixed Assets
F|xed Assets are va|ued at h|stor|oa| oost on oons|stent bas|s. ln the oase of oomm|ss|oned assets where f|na| payment
to the Contraotors |s pend|ng, oap|ta||zat|on |s made on prov|s|ona| bas|s, |no|ud|ng prov|s|ona| ||ab|||ty pend|ng approva|
of Competent Author|ty, subjeot to neoessary adjustment |n oost and depreo|at|on |n the year of sett|ement.
2. Intangible Assets
lntang|b|e assets ||ke software, ||oenses and r|ght-of-use of |and |no|ud|ng shar|ng of POU w|th other ent|t|es wh|oh are
expeoted to prov|de future endur|ng eoonom|o benef|ts are oap|ta||zed as lntang|b|e Assets.
3. Capital Work in Progress
a). Crop oompensat|on |s aooounted for under Cap|ta| Work-|n-Progress on the bas|s of aotua| payments/est|mated
||ab|||ty, as and when work oommenoes where POU |s aoqu|red.
b). The Cap|ta| Work-|n-Progress |no|udes va|ue of mater|a|s/equ|pments, eto. reoe|ved at s|te for use |n the Projeots.
4. Borrowing Cost
Borrow|ng oost of the funds speo|f|oa||y borrowed for the purpose of obta|n|ng qua||fy|ng assets and e||g|b|e for
oap|ta||zat|on a|ong w|th the oost of the assets, |s oap|ta||zed upto the date when the asset |s ready for use after nett|ng
off any |noome earned on temporary |nvestment of suoh funds.
5. Expenses Incurred During Construction Period
A|| revenue expend|ture |nourred dur|ng the year, wh|oh |s exo|us|ve|y attr|butab|e to aoqu|s|t|on / oonstruot|on of f|xed
assets, |s oap|ta||zed at the t|me of oomm|ss|on|ng of suoh assets.
6. Depreciation/Amortisation
l. Depreo|at|on on F|xed Assets other than those ment|oned be|ow |s prov|ded |n aooordanoe w|th the rates as speo|f|ed
|n Sohedu|e Xlv of the Compan|es Aot, 1956, on stra|ght ||ne method on pro-rata bas|s month|y pro-rata for bought
out assets).
a). Assets oost|ng upto Ps.5,000/- are depreo|ated fu||y |n the year of oap|ta||sat|on.
b). Bunk Houses are amort|sed on assumpt|on of f|ve years ||fe.
o). Computers at the res|denoe of the emp|oyees are depreo|ated at the rate of 23.75 peroent.
d). Cost of the |easeho|d |and not exoeed|ng 99 years |s amort|sed over the |ease per|od.
e). Depreo|at|on due to pr|oe adjustment on aooount of fore|gn exohange rate var|at|ons or otherw|se |n the or|g|na| oost
of f|xed assets |s oharged prospeot|ve|y.
f). Cap|ta| expend|ture on the assets enab||ng fao|||t|es), the ownersh|p of wh|oh |s not w|th the Company, |s oharged
off to Pevenue.
g). Software / ||oenoes are amort|sed |n 5 years on stra|ght ||ne method.
h). No depreo|at|on |s be|ng oharged on POU be|ng perpetua| |n nature.
|). After |mpa|rment of assets, |f any, depreo|at|on |s prov|ded on the rev|sed oarry|ng amount of the assets over |ts
rema|n|ng usefu| ||fe
ll. Cap|ta| assets |nsta||ed at the oonsumers prem|ses on the |and whose ownersh|p |s not w|th the oompany, has been
depreo|ated on S|M bas|s |n aooordanoe w|th the rates as speo|f|ed |n Sohedu|e Xlv of the Company's Aot, 1956.
7. Foreign Currency Translation
a). |oans/other ||ab|||t|es |nvo|v|ng fore|gn ourrenoy are trans|ated at the rate of exohange BC Se|||ng) preva|||ng at the
year end . A|| exohange d|fferenoe |n respeot of fore|gn ourrenoy transaot|on are dea|t w|th |n the Prof|t and |oss
Aooount exoept those re|at|ng to aoqu|s|t|on of f|xed assets, wh|oh are adjusted |n the oost of the assets.
b). Depos|ts |n Fore|gn Currenoy are va|ued at the rate of exohange ( TT Buying) preva|||ng at the year end.
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8. Investments
a). Quoted |nvestments are va|ued at oost or market va|ue, wh|ohever |s |ower.
b). Unquoted |nvestments are va|ued at oost.
o). |ong term |nvestments are va|ued at oost. Prov|s|on |s made to reoogn|se a deo||ne, other than temporary, |n the
va|ue of |nvestments.
9. Inventories
a). Paw mater|a|s are va|ued at oost or net rea||sab|e va|ue, wh|ohever |s |ower.
b). F|n|shed produots are va|ued at oost or net rea||sab|e va|ue, wh|ohever |s |ower.
o). Stook |n prooess |s va|ued at oost or net rea||sab|e va|ue, wh|ohever |s |ower. lt |s va|ued at oost where the f|n|shed
produots |n wh|oh these are to be |noorporated are expeoted to be so|d at or above oost.
d). Stores and spares and other mater|a| for use |n produot|on of |nventor|es are va|ued at we|ghted average oost or net
rea||sab|e va|ue, wh|ohever |s |ower. lt |s va|ued at we|ghted average oost where the f|n|shed produots |n wh|oh they
w||| be |noorporated are expeoted to be so|d at/or above oost.
e). Surp|us / Obso|ete Stores and Spares are va|ued at oost or net rea||sab|e va|ue, wh|oh ever |s |ower.
f). Surp|us / Obso|ete Cap|ta| Stores, other than he|d for use |n oonstruot|on of a oap|ta| assets, are va|ued at
|ower of oost or net rea||sab|e va|ue.
10. Maoh|nery spares, wh|oh oan be used on|y |n oonneot|on w|th an |tem of f|xed asset and the|r use |s expeoted to be
|rregu|ar, are oap|ta||sed w|th the oost of that f|xed asset and are depreo|ated dur|ng the rema|n|ng usefu| ||fe of that
asset.
11. Grants
ln oase of depreo|ab|e assets, the oost of the assets |s shown at gross va|ue and grant thereon |s taken to Cap|ta|
Peserve wh|oh |s reoogn|sed as |noome |n the Prof|t and |oss Aooount over the usefu| ||fe per|od of the asset.
B. PROFIT & LOSS ACCOUNT
12. Sa|e prooeeds are aooounted for based on the oonsumer pr|oe |no|us|ve of Statutory |ev|es and oharges upto the p|aoe
where ownersh|p of goods |s transferred.
13. The |nterest a||ooab|e to operat|ons |n respeot of assets oomm|ss|oned dur|ng the year |s worked out by adopt|ng the
average of debt equ|ty rat|os at the beg|nn|ng and o|os|ng of that year and app|y|ng the average rat|o of debt thus
worked out to the oap|ta||sed oost.
14. Pre-projeot expend|ture re|at|ng to Projeots wh|oh are oons|dered unv|ab|e / o|osed, |s oharged off to Pevenue over a
per|od of f|ve years.
15. Retirement Benefits
a). ||ab|||ty towards Gratu|ty |s pa|d to a fund ma|nta|ned by the oompany wh|oh |s adm|n|stered through a separate
trust set up by the oompany. D|fferenoe between the fund ba|anoe w|th the trust and the aoorued ||ab|||ty as at the
end of the year as per aotuar|a| va|uat|on |s oharged to Prof|t and |oss Aooount.
b). ||ab|||ty towards |eave enoashment and post ret|rement med|oa| benef|ts to emp|oyees as at the end of the year |s
assessed on the bas|s of aotuar|a| va|uat|on and prov|ded for.
o). Contr|but|on to Prov|dent Fund as per the ru|es of the Company |s aooounted for on aoorua| bas|s.
16. Taxes on Income
Current tax represents the amount of tax payab|e |n respeot of taxab|e |noome for the per|od. Deferred tax ||ab|||ty
represents the tax be|ng d|fferenoe between taxab|e and aooount|ng |noome wh|oh or|g|nate |n one per|od and are
oapab|e of reversa| |n one or more subsequent per|ods.
17. R&D Expenditure
A|| expend|ture, other than on oap|ta| aooount, on researoh and deve|opment are oharged to Prof|t and |oss Aooount.
18. Year|y reoono|||at|on of Natura| Gas |s made w|th|n a ||m|t of +1%. ln oase of var|at|on beyond +1% va|ue of exoess
quant|ty |s kept |n a separate Aooount "To|eranoe F|uotuat|on Adjustment Aooount" for adjustments |n future.
19. Exploration and Development Costs :-
Suooessfu| Efforts Method |s be|ng fo||owed for aooount|ng of O|| & Gas exp|orat|on and produot|on aot|v|t|es wh|oh
|no|udes -
a). Survey Costs are expensed |n the year |n wh|oh these are |nourred.
b). Cost of exp|oratory we||s |s oarr|ed as 'Exp|oratory we||s |n progresses. Suoh exp|oratory we||s |n progress are
oap|ta||zed |n the year |n wh|oh the produo|ng property |s oreated or |s expensed |n the year when determ|ned to be
dry / abandoned.
o). A|| we||s appear|ng as "exp|oratory we||s |n progress" wh|oh are more than two years o|d from the date of oomp|et|on
of dr||||ng are oharged to Prof|ts and |oss Aooount exoept those we||s wh|oh have proved reserves and the deve|opment
of the f|e|ds |n wh|oh the we||s are |ooated has been p|anned. Suoh we||s, |f any are wr|tten baok on oommenoement
of oommero|a| produot|on.
20. Contingent Liabilities and Capital Commitments
a). Cont|ngent ||ab|||t|es are d|so|osed |n eaoh oase above Ps. 5 |akhs.
b). Est|mated amount of oontraots rema|n|ng to be exeouted on oap|ta| aooounts are d|so|osed |n eaoh oase above
Ps. 5 |akhs.
21. Impairment
The oarry|ng amounts of assets are rev|ewed at eaoh Ba|anoe Sheet date |f there |s any |nd|oat|on of |mpa|rment based
on lnterna| / Externa| faotors, an lmpa|rment |oss |s reoogn|zed wherever the oarry|ng amount of an asset exoeeds |ts
reooverab|e amount.
GENERAL
22. Prepa|d expenses and pr|or per|od expenses/|noome upto Ps.1,00,000/- |n eaoh oase are oharged to re|evant heads of
aooount of the ourrent year.
23. ||qu|dated Damages, |f any, are aooounted for as and when reoovery |s effeoted and the matter |s oons|dered sett|ed by
the Management. ||qu|dated damages, |f sett|ed, after oap|ta||zat|on of assets are oharged to revenue, |f be|ow Ps.50
|akhs |n eaoh oase otherw|se adjusted |n the oost of re|evant assets.
24. lnsuranoe o|a|ms are aooounted for on the bas|s of o|a|ms adm|tted by the |nsurers.
25. a). Custom Duty and other o|a|ms |no|ud|ng |nterest on de|ayed payments) are aooounted for on aooeptanoe |n pr|no|p|e.
b). ||ab|||ty |n respeot of MGO of Natura| gas |s not prov|ded for where the same |s seoured by MGO reooverab|e from
oustomers. Payments/reoe|pts dur|ng the year on aooount of MGO are adjusted on reoe|pt bas|s.
o). M|n|mum oharges re|at|ng to transportat|on of |PG are aooounted for on reoe|pt bas|s.
As per our separate report of even date
N. K. Nagpa| J. K. Ja|n B. S. Neg| Proshanto Banerjee For M/s S. MANN & COMPANY
Seoretary D|reotor F|nanoe) D|reotor BD) Cha|rman & Manag|ng D|reotor Chartered Accountants
D|reotor
Subhash Mann
P|aoe . New De|h| Partner)
Dated . 21.06.2005 Membersh|p No. 80500
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Cash Flow Statement for the Financial Year Ended 31
ST
March, 2005
Ps. |n Crores)
2004-05 2003-04
A. CASH FLOW FROM OPERATING ACTIVITIES
1 NET PPOFlT BEFOPE TAX AND EXTPAOPDlNAPY lTEMS 2,871.39 2,814.42
2 ADD .
DEPPEClATlON 944.89 661.60
DEFEPPED PEvENUE EXPENDlTUPE - 0.11
CAPlTA| PESEPvE (0.12) 0.12)
EXCHANGE PATE vAPlATlON (0.07) 0.87)
lNTEPEST EXPENDlTUPE 134.09 137.97
DlvlDEND lNCOME ON lNvESTMENTS (119.34) 104.32)
lNTEPEST lNCOME (146.00) 64.30)
PPOFlT/|OSS ON SA|E OF ASSETS NET) 0.52 1.61
813.97 631.68
3 OPEPATlNG PPOFlT BEFOPE WOPKlNG CAPlTA|
CHANGES 1+2) 3,685.36 3446.10
4 CHANGES lN WOPKlNG CAPlTA| EXC|UDlNG
CASH & BANK BA|ANCES)
TPADE AND OTHEP PECElvAB|ES (397.78) 196.96)
lNvENTOPlES (6.53) 56.32)
TPADE AND OTHEP PAYAB|ES 409.24 311.26
4.93 57.98
5 CASH GENEPATED FPOM OPEPATlONS 3+4) 3,690.29 3,504.08
6 DlPECT TAXES PAlD 859.56) 896.21)
NET CASH FROM OPERATING ACTIVITIES (5+6) 2,830.73 2,607.87
BALANCE CARRIED FORWARD 2,830.73 2,607.87
Ps. |n Crores)
2004-05 2003-04
BALANCE BROUGHT FORWARD 2,830.73 2,607.87
B. CASH FLOW FROM INVESTING ACTIVITIES
PUPCHASE OF FlXED ASSETS 147.15) 2,692.35)
SA|E OF FlXED ASSETS 0.63 0.59
PEDEMPTlON OF BONDS/DEBENTUPES 0.15 0.28
lNvESTMENT lN OTHEP COMPANlES 12.11) 84.33)
lNTEPEST PECElvED 122.30 78.23
DlvlDEND PECElvED 119.34 104.32
NET CASH FROM INVESTING ACTIVITIES 83.16 2,593.26)
C CASH FLOW FROM FINANCING ACTIVITIES
PPOCEEDS FPOM |ONG TEPM BOPPOWlNGS - 1,600.00
PEPAYMENT OF |ONG TEPM BOPPOWlNGS 135.51) 1,475.24)
lNTEPEST PAlD 134.56) 154.49)
DlvlDEND PAlD 764.93) 763.20)
NET CASH FROM FINANCING ACTIVITIES (1,035.00) 792.93)
NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) 1,878.89 (778.32)
1567.95 2,346.27
CASH AND CASH EQUIVALENTS AS AT 01.04.2004
(OPENING BALANCE)
CASH AND CASH EQUIVALENTS AS AT 31.03.2005 3,446.84 1,567.95
(CLOSING BALANCE)
N.K.Nagpa| J.K. Ja|n Proshanto Banerjee As per our separate Peport of even date
Seoretary D|reotor F|nanoe) Cha|rman & Manag|ng D|reotor For S MANN & COMPANY
Chartered Aooountants
P|aoe . New De|h| Subhash Mann
Dated . June 21, 2005 Partner)
Membersh|p No. 80500
Cash Flow Statement for the Financial Year Ended 31
ST
March, 2005
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Balance Sheet Abstract and Companys General Business Profile
I. Registration Details
Peg|strat|on No. 0 1 8 9 7 6 State Code 5 5
Ba|anoe Sheet 3 1 0 3 2 0 0 5
Date Date Month Year
II. Capital raised during the year (Rs. in Lakhs)
Public Issue Right Issue
Nl| Nl|
Bonus Issue Private Placement
Nl| Nl|
III. Position of Mobilisation and Deployment of Funds: (Rs. in Lakhs)
Total Liabilities Total Assets
1 1 8 7 8 7 4 - - 1 1 8 7 8 7 4
Sources of Funds :
Paid up Capital Reserves and Surplus
- - - - 8 4 5 6 5 - - - 7 7 8 0 4 6
Secured Loans Unsecured Loans
- - - 1 6 0 0 0 0 - - - - 3 9 7 4 0
Deferred Tax Liability
- - - 1 2 5 5 2 3
Application of Funds :
Net Fixed Assets Investments
- - - 8 1 5 4 9 6 - - - - 7 8 3 9 5
Net Current Assets Misc. Expenditure
- - - 2 9 3 9 8 3 N l |
Accumulated losses
N l |
IV. Performance of the Company (Rs. in Lakhs)
Turnover (Net of ED) Total Expenditure
- - 1 2 7 3 4 3 9 - - - 9 8 6 3 0 0
Profit/Loss before Tax Profit/Loss after Tax
+) -) +) -)
+) - - - 2 8 7 1 3 9 +) - - - 1 9 5 3 9 1
Earning per share in Rs. Dividend
Ps. P.
2 3 1 1 8 0 %
V. Generic Names of the Principal Products/Services of Company (as per monetary terms)
ltem Code No. 2 7 1 1 2 1 0 0
lTC Code)
Produot Desor|pt|on N A T U P A | G A S
ltem Code No.
lTC Code) 2 7 1 1 1 9 0 0
Produot Desor|pt|on | P G
ltem Code No..
lTC Code) 3 9 0 1 2 0
Produot Desor|pt|on P O | Y E T H E | E N E
ltem Code No..
lTC Code) 2 7 1 1 2 0 0
Produot Desor|pt|on P P O P A N E
N.K. Nagpa| J.K.Ja|n B.S.Neg| Proshanto Banerjee As per our separate Peport of
Seoretary D|reotor F|nanoe) D|reotor BD) Cha|rman & Manag|ng D|reotor even date
For S MANN & COMPANY
Chartered Aooountants
P|aoe. New De|h| Subhash Mann)
Dated . June 21, 2005 Partner
Membersh|p No. 80500
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Auditors Report to the Shareholders
We have aud|ted the attaohed Ba|anoe Sheet of GAl| lnd|a) ||m|ted as at 31
st
Maroh, 2005, the Prof|t and |oss Aooount and
Cash F|ow Statement of the oompany for the year ended on that date annexed thereto |n wh|oh are |noorporated the
aooounts of two un|ts aud|ted by branoh aud|tors. These f|nano|a| statements are the respons|b|||ty of the Company's
management. Our respons|b|||ty |s to express an op|n|on on these f|nano|a| statements based on our aud|t.
We have oonduoted our aud|t |n aooordanoe w|th aud|t|ng standards genera||y aooepted |n lnd|a. These Standards requ|re
that we p|an and perform the aud|t to obta|n reasonab|e assuranoe about whether the f|nano|a| statements are free of
mater|a| m|sstatement. An aud|t |no|udes exam|n|ng, on a test bas|s, ev|denoe support|ng the amounts and d|so|osures |n the
f|nano|a| statements. An aud|t a|so |no|udes assess|ng the aooount|ng pr|no|p|es used and s|gn|f|oant est|mates made by
management, as we|| as eva|uat|ng the overa|| f|nano|a| statement presentat|on. We be||eve that our aud|t prov|des a reasonab|e
bas|s for our op|n|on.
As requ|red by the statement on the Compan|es Aud|tor's Peport) order,2003 |ssued by the Centra| Government of lnd|a |n
terms of sub-seot|on 4A) of Seot|on 227 of the Compan|es Aot, 1956, we eno|ose |n the Annexure a statement on the
matters speo|f|ed |n paragraphs 4 and 5 of the sa|d Order.
Further to our oomments |n the Annexure referred to above, we report that .
a. We have obta|ned a|| the |nformat|on and exp|anat|ons, wh|oh to the best of our know|edge and be||ef were neoessary
for the purposes of our aud|t,
b. The a||ooat|on of work amongst the aud|tors has been fo||owed as per the d|reot|ons oonta|ned |n |etter addressed to
GAl| lnd|a) |td. by the off|oe of the Comptro||er & Aud|tor Genera| of lnd|a, New De|h|.
o. ln our op|n|on, proper books of aooount as requ|red by |aw have been kept by the Company so far as appears from our
exam|nat|on of those books. The Branoh Aud|tor's Peport have been forwarded to us and have been appropr|ate|y
dea|t w|th,
d. The Ba|anoe Sheet and Prof|t & |oss Aooount and the Cash F|ow Statement dea|t w|th by th|s report are |n agreement
w|th the books of aooount,
e. ln our op|n|on, the Ba|anoe Sheet, Prof|t and |oss Aooount and the Cash F|ow Statement dea|t w|th by th|s report
oomp|y w|th the Aooount|ng Standards referred to |n sub-seot|on 3C) of Seot|on 211 of the Compan|es Aot, 1956,
f. On the bas|s of wr|tten deo|arat|on reoe|ved from the D|reotors, as on 31
st
Maroh, 2005, and taken on reoord by the
Board of D|reotors, we report that none of the d|reotors |s d|squa||f|ed as on 31
st
Maroh, 2005 from be|ng appo|nted as
a d|reotor |n terms of o|ause g) of sub-seot|on 1) of seot|on 274 of the Compan|es Aot, 1956,
g. ln our op|n|on and to the best of our |nformat|on and aooord|ng to the exp|anat|ons g|ven to us, the sa|d f|nano|a|
statements read together w|th the s|gn|f|oant aooount|ng po||o|es and notes thereon g|ve the |nformat|on requ|red by
the Compan|es Aot, 1956, |n the manner so requ|red and g|ve a true and fa|r v|ew |n oonform|ty w|th the aooount|ng
pr|no|p|es genera||y aooepted |n lnd|a.
|) |n the oase of the Ba|anoe Sheet, of the state of affa|rs of the Company as at 31
st
Maroh, 2005,
||) |n the oase of the Prof|t & |oss Aooount, of the prof|t for the year ended on that date and
|||) |n the oase of the Cash F|ow Statement, of the oash f|ow of the oompany for the year ended on that date.
For S. Mann & Co.
Chartered Aooountants
Subhash Mann
P|aoe . New De|h| Partner
Dated . June 21, 2005 Membersh|p No. 80500
Annexure to the Auditors Report
The Annexure referred to |n the aud|tor's report to the shareho|ders of GAl| lnd|a) ||m|ted for the year ended Maroh 31,
2005. We report that .
l) a) The oompany has genera||y ma|nta|ned proper reoords show|ng fu|| part|ou|ars |no|ud|ng quant|tat|ve deta||s and
s|tuat|on of f|xed assets.
b) Aooord|ng to the |nformat|on and exp|anat|on g|ven to us, there |s a regu|ar programme of ver|f|oat|on of f|xed assets
wh|oh, |n our op|n|on, |s reasonab|e hav|ng regard to the s|ze of the oompany and the nature of |ts assets. F|xed
assets have been phys|oa||y ver|f|ed by the management dur|ng the year and no mater|a| d|sorepano|es were not|oed
on suoh ver|f|oat|on.
ln our op|n|on, there was no substant|a| d|sposa| of f|xed assets dur|ng the year.
ll) Aooord|ng to the |nformat|on and exp|anat|ons g|ven to us, the |nventory of stores and spares were phys|oa||y ver|f|ed by
the Management, exoept those |y|ng w|th Eng|neers lnd|a |td. and other oontraotors at the end of the year. We have
been exp|a|ned that the stook of gas at the end of the year has been taken w|th referenoe to read|ng of Turb|ne F|ow
Meter/Gas Chromatograph |nsta||ed at Term|na|s, Stook of |PG/Pentane/SBP So|vent are determ|ned w|th referenoe to
Tank |eve| Gauge measurement wh|oh are oonverted |nto tonnage by measurement of dens|ty and app|y|ng oorreot|on
faotor for temperature. |PG vapour vo|ume |s oonverted to tonnage by standard formu|ae.
ln our op|n|on and aooord|ng to the |nformat|on and exp|anat|ons g|ven to us, the prooedures of phys|oa| ver|f|oat|on of
|nventory fo||owed by the Management are reasonab|e and adequate |n re|at|on to the s|ze of the Company and nature
of |ts bus|ness.
Aooord|ng to the |nformat|on and exp|anat|ons g|ven to us, no mater|a| d|sorepano|es have been not|oed on phys|oa|
ver|f|oat|on of stook of stores and spares as oompared to the books and reoords.
lll) The Company has ne|ther granted nor taken any |oans seoured or unseoured, to or from oompan|es, f|rms or other
part|es oovered |n the reg|ster ma|nta|ned under Seot|on 301 of the Compan|es Aot, 1956.
lv) ln our op|n|on, and aooord|ng to |nformat|on and exp|anat|ons g|ven to us, there are adequate |ntera| oontro| prooedure
oommensurate w|th the s|ze of the oompany and the nature of |ts bus|ness for the purohase of |nventory and f|xed
assets and for the sa|e of goods. Dur|ng the oourse of our aud|t no major weakness has been not|oed |n the |nterna|
oontro|s.
v) On the bas|s of our exam|nat|on of the books of aooounts, the oompany has not made any transao|ons |n respeot of any
party dur|ng the f|nano|a| year that needs to be entered |n the reg|ster pursuant to the seot|on 301 of the oompan|es
Aot, 1956.
The oompany has not aooepted any depos|ts from the pub||o dur|ng the year and oonsequent|y, the d|reot|ve |ssued by
the Peserve Bank of lnd|a and the prov|s|ons of seot|on 58A and 58AA of the Compan|es Aot, 1956, and the ru|es
framed there under are not app||oab|e.
vl) ln our op|n|on, the oompany's |nterna| aud|t system |s oommensurate w|th |ts s|ze and nature of |ts aot|v|t|es. However,
|t requ|res further strengthen|ng due to |norease |n the aot|v|t|es of the oompany |n reoent past.
vll) As oert|f|ed by the management and |ndependent Cost Aooountants, |n our op|n|on, the oompany |s ma|nta|n|ng the
presor|bed oost aooounts and reoords pursuant to the ru|es made by the Centra| Government for the ma|ntenanoe of
oost reoords under o|ause d) of sub-seot|on 1) of seot|on 209 of the Compan|es Aot, 1956.
vlll) Aooord|ng to the reoords of the oompany, the oompany |s genera||y regu|ar |n depos|t|ng und|sputed statutory dues
|no|ud|ng Prov|dent fund, lnvestor Eduoat|on and Proteot|on Fund, lnoome tax, Sa|es tax, Wea|th tax, Custom duty,
Exo|se duty, oess and any other statutory dues w|th the appropr|ate author|t|es. Aooord|ng to the |nformat|on and
exp|anat|on g|ven to us, no und|sputed amounts payab|e |n respeot of lnoome tax, Sa|es tax, Custom duty, Exo|se duty
and other statutory dues were outstand|ng at the year end for a per|od of more than s|x months from the date they
beoome payab|e.
As per the |nformat|on g|ven to us, the dues of Exo|se Duty, Custom Duty, Entry Tax, Sa|es Tax and Other Taxes wh|oh
have not been depos|ted on aooount of d|sputes and the forum where the d|spute |s pend|ng , are g|ven be|ow, requ|s|te
97
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We Stand for Pe||ab|||ty
d|so|osure |s be|ng made under the head Cont|ngent ||ab|||ty.-
Ps. |n Crores)
Sl. No. Issue Subject matter of dispute Amt. Status - Forum
1. Entry Tax Entry Tax on market va|ue 82.77 A||ahabad H|gh Court
of natura| gas |nstead of |ts
purohase pr|oe
Entry tax - Pata 0.08 Jt. Comm|ss|oner A)
2. Sa|es Tax 1. Non aooeptanoe of 2.83 Dy. Comm|ss|oner
deo|arat|on form for Appea|s), Surat
oonoess|ona| sa|es tax
2. CST on transm|ss|on 7.06 Tr|buna|, Chenna|
oharges
3. Demand aga|nst adjust- 0.74 Dy. Comm|ss|oner
ment of past per|od tax Appea|s), Gwa||or
4. Demand aga|nst rev|sed 0.13 CTO, Pajahmundry
assessment order
5. Sa|es Tax Demand 4966.22 Pefer Note on 2 o)
of Sohedu|e 14.
3. Customs 1. Projeot |mport - Pata 305.52 Dy. Comm|ss|oner
of Customs, Mumba|
2. Demand of duty on Panna- 581.22 Comm|ss|oner of
Mukta Gas Customs, Ahmedabad
4. Exo|se 1. Duty on |ean Gas 123.63 CESTAT
2. Duty on |ean Gas - 57CC 333.77 Supreme Court
3. D|sputed Modvat of Pata 4.67 Dy.Comm|ss|oner, Agra
4. Duty on |ean Gas - 57CC 55.44 Comm|ss|oner of
Centra| Exo|se, Pa|gad
5. Pentane reo|ass|f|oat|on 2.43 Asstt. Comm. Gwa||or
6. Pentane reo|ass|f|oat|on 1.63 Comm|ss|oner, Kanpur
7. Modvat on Comp - Pata 10.83 Comm|ss|oner A)
5. Other taxes Not|f|ed area tax on rev|sed 1.59 Ahmedabad H|gh Court
va|ue
lX) The oompany has no aooumu| ated | osses at the end of the f| nano| a| year and | t has not | nourred any
oash |osses |n the ourrent and |mmed|ate|y preoed|ng f|nano|a| year.
X) Based on our aud| t prooedure and on the | nf ormat| on and exp| anat| ons g| ven by the management,
we are of t he op| n| on t hat t he oompany has not def au| t ed | n repayment of dues t o a f | nano| a|
lnst|tut|on, bank and debenture ho|ders.
Xl) l n our op| n| on, the oompany has not granted | oans and advanoes on the bas| s of seour| ty by way of
p| edge of shares, debentures and other seour| t| es other than to | ts emp| oyees. l n our op| n| on, the
oompany has ma|nta|ned adequate doouments and reoords |n respeot of suoh |oans.
Xll) The oompany | s not a oh| t fund, n| dh| , mutua| benef| t fund or a soo| ety. Aooord| ng| y, o| ause 4x| | | ) of
the order not app||oab|e.
Xlll) Aooord| ng to the | nformat| on and exp| anat| on g| ven to us, the oompany | s not dea| | ng or trad| ng | n
shares, seour| t| es, debentures and other | nvestments. Aooord| ng| y, o| ause 4 x| v) of the order | s not
app||oab|e.
Xlv) The oompany a| ong w| t h ot her promot ers has | ssued oorporat e guarant ee | n f avour of banks and
f| nano| a| | nst| tut| on for short term | oan taken by Petronet |NG || m| ted from suoh banks and f| nano| a|
|nst|tut|ons, the terms and oond|t|ons whereof are not prejud|o|a| to the |nterest of the oompany.
Xv) Aooord| ng t o t he | nf ormat | on & exp| anat | on g| ves t o us, t he t erm | oans have been app| | ed f or t he
purpose for wh|oh these were obta|ned.
Xvl) We have been | nformed by the management that the funds ra| sed on short term bas| s have not been
used for |ong term |nvestment and v|oe-versa.
Xvll) The oompany has not made any preferent| a| a| | otment of shares to part| es or oompan| es oovered | n
the reg|ster ma|nta|ned under seot|on 301 of the Compan|es Aot, 1956.
Xvlll) The oompany has not |ssued any debentures dur|ng the year.
XlX) Dur|ng the year no money has been ra|sed by pub||o |ssues.
XX) Aooord| ng to the | nformat| on and exp| anat| ons g| ven to us, no fraud on or by the Company has been
not|oed or reported dur|ng the year.
For S. Mann & Co.
Chartered Accountants
P|aoe . New De|h| Subhash Mann
Dated . June 21, 2005 Partner
Membersh|p No. 80500
99
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Schedule of Fixed Assets (Township)
Ps. |n |akhs)
DESCRIPTION GROSS BLOCK ( AT COST) DEPRECIATION NET BLOCK
As at Add|t|ons/ Sa|es/ As at Up to For the Adjustments As at As at As at
01.04.2004 Adjustments Adjustments 31.03.2005 31.03.2004 Year dur|ng the 31.03.2005 31.03.2005 31.03.2004
dur|ng the dur|ng the Year
Year Year
|AND. FPEEHO|D 2,960.20 1.60) 108.59) 2,850.01 84.88 10.55 4.59) 90.84 2,759.17 2,875.32
|AND. |EASEHO|D 345.84 1.60 - 347.44 25.02 3.77 0.00 28.79 318.65 320.82
BUl|DlNG, 24,714.07 52.32) 169.63) 24,492.12 3,189.78 475.92 10.70) 3,655.00 20,837.12 21,524.29
POADS ETC.
DPAlNAGE, 1,108.85 60.61 - 1,169.46 426.99 61.91 2.42 491.32 678.14 681.86
SEWAGE & WATEP
SUPP|Y SYS. ETC.
FUPNlTUPE, 1,304.13 121.69 80.67) 1,345.15 545.77 95.73 80.84) 560.66 784.49 758.36
FlXTUPES &
OTHEP EQP.
TPANSPOPT
EQUlPMENTS 3.64 - 3.06) 0.58 1.55 0.08 1.49) 0.14 0.44 2.09
TOTAL 30,436.73 129.98 361.95) 30,204.76 4,273.99 647.96 95.20) 4,826.75 25,378.01 26,162.74
Income and Expenditure Account
Income and Expenditure Account for the year ended 31
st
March, 2005 on Provisions of Township,
Education, Medical and Other Facilities
Ps. |n |akhs)
S. Particulars Year Ended Year Ended
No. 31
st
March, 31
st
March,
2005 2004
Income
1 Peoovery of House Pent 54.68 49.55
2 Peoovery of Ut|||t|es 34.09 59.34
3 Other Peoover|es 8.77 6.72
4 Exoess of Expend|ture over lnoome 2,548.62 2,326.87
TOTAL 2,646.16 2,442.47
Expenditure
1 Sa|ar|es, Wages & PF Contr|but|on 328.23 257.73
2 Consumab|es, Stores & Med|o|nes 32.66 34.21
3 Subs|d|es for Soo|a| & Cu|tura| Aot|v|t|es 157.25 98.81
4 Pepa|rs & Ma|ntenanoe 505.92 469.49
5 Depreo|at|on 655.60 626.42
6 Ut|||t|es. Power, Gas & Water 360.08 429.99
7 |and Pent 9.14 9.05
8 We|fare - Sohoo| 99.09 116.17
9 Bus H|re Charges 204.95 153.07
10 C|ub & Peoreat|on 7.05 2.86
11 M|so Expenses - Taxes, ||oense Fees, lns eto. 146.10 127.31
12 Hortou|ture Expenses 140.11 117.35
TOTAL 2,646.16 2,442.47
101
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Annual Report
We Stand for Pe||ab|||ty
Addendum to the Directors Report
Management Replies to the Comments of the Comptroller and Auditor General of India under Section 619(4) of the
Companies Act, 1956 on the Accounts of GAIL (India) Limited for the year ended March 31, 2005.
PARA NO. COMMENTS OF THE COMPTROLLER AND
AUDITOR GENERAL OF INDIA
BALANCE SHEET