MIRA
INFORM REPORT
|
Report Date : |
08.12.2007 |
IDENTIFICATION
DETAILS
|
Name : |
GAIL
[INDIA] LIMITED |
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Registered Office : |
16, Bhikaji Cama Place, R. K. Puram, Ring Road, New Delhi
- 110066 |
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Country : |
India
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
16.08.1984 |
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Com. Reg. No.: |
55-18976 |
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CIN No.: [Company Identification No.] |
L40200DL1984PLC018976 |
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TAN No.: [Tax Deduction & Collection Account No.] |
DELG00179E |
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PAN No.: [Permanent Account No.] |
AAACG1209J |
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Legal Form : |
Subject
is a public limited liability company.
The company's shares are listed on the Stock Exchanges. Subject
is owned by Government of India. |
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Line of Business : |
Subject
is engaged in the following areas of business. v
Gas
Distribution & Marketing v
Trunk
Transmission & Distribution v
Regional
Transmission & Distribution v
Gas
Retailing v
LPG v
Petrochemicals v
Joint
Ventures |
RATING & COMMENTS
|
MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 300000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company of Government of
India. Available information
indicates high financial responsibility of the company, as it is Government
of India Company. Their trade
relations are reported as fair.
Payments are usually correct and as per commitments. Your proposed business dealings can be considered against normal trade
terms and conditions. |
LOCATIONS
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Registered Office : |
16, Bhikaji, Cama Place, R. K. Puram, Ring Road, New
Delhi-110066, India |
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Tel. No.: |
91-11-26182955/26172580 |
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Fax No.: |
91-11-26185941 |
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E-Mail : |
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Website : |
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Zonal Office: |
GAIL (India) Limited B-21/A, Shiv Marg
Bani Park 4/257, Vivek Khand
Gomti Nagar B-1, Koh-E-Fiza
Sultania Road 809, Sakar-II Bldg.
Near Ellis Bridge Opp. Town Hall 12th Floor, Om Tower
32, Jawaharlal Nehru Road MMRDA Bldg., 3rd
Floor Bandra Kurla Complex Bandra (East) 6-3-871, 3rd Floor
Snehalata Building 21, Palace Road 4-B, Century Plaza 560-562, Anna Salai Teynampet |
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Factory : |
U P Petrochemical Complex, Pata P.O. Pata-206241 Distt. Auraiya (U.P) LPG Recovery Plant, Usar P.O. Malyan-402203 Tal. Alibagh Distt. Raigad (Maharashtra) LPG Recovery Plant, Vijaipur GAIL Complex Vijaipur-473112 . Distt. Guna (M.P.) LPG Recovery Plant, Vaghodia GIDC Industrial Estate Vaghodia-391760 Distt. Baroda (Gujarat) LPG Recovery Plant, Lakwa, Sivasagar-785688 (Assam) LPG Recovery Project, Gandhar Vill. Rozantankaria.Tal. Amod Distt. Bharucl> 392140 (Gujarat) |
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Regional
offices / Branches : |
Located
at:- ·
Baroda,
Gujarat ·
Ahmedabad,
Gujarat ·
Hazira
·
Chennai,
Tamilnadu |
DIRECTORS
|
Name : |
Mr. Mohan R. Hingnikar |
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Designation : |
Director (Human
Resources) |
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Name : |
Mr. R. K. Goel |
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Designation : |
Director (Finance} |
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Name : |
Mr. Santosh Kumar |
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Designation : |
Director (Projects) |
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Name : |
Mr. A. K. Purwaha |
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Designation : |
Director (Business Development) |
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Name : |
Mr. B. C. Tripathi |
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Designation : |
Director (Marketing) |
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Name : |
Mr. S. Sundareshan |
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Designation : |
Director |
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Name : |
Mr. D. N. Narasimha Raju |
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Designation : |
Director |
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Name : |
Dr. A. K. Kundra |
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Designation : |
Director |
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Name : |
Mr. B. C. Bora |
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Designation : |
Director |
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Name : |
Dr. Amit Mitra |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. N. K. Nagpal |
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Designation : |
Company Secretary |
55
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 29 September, 2007
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Shareholding of Promoter and Promoter Group2 |
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Indian |
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Central Government/ State Government(s) |
484937117 |
60.3003 |
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Public shareholding |
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Mutual Funds/ UTI |
13589228 |
1.6898 |
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Financial Institutions / Banks |
545903 |
.0679 |
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Central Government/ State Government(s) |
61259323 |
7.6174 |
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Insurance Companies |
78276190 |
9.7334 |
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Foreign Institutional Investors |
144860880 |
18.013 |
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Non-institutions |
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Bodies Corporate |
3849509 |
0.4787 |
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Individuals |
15676420 |
1.9493 |
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Individual shareholders holding nominal share capital in excess of Rs. 0.100
Millions. |
826230 |
0.1027 |
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Any Other (specify) i) Trust & Foundation |
19312 |
0.0024 |
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ii) Non Resident Individual |
362954 |
0.0451 |
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Total |
804203066 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Subject
is engaged in the following areas of business. v
Gas
Distribution & Marketing v
Trunk
Transmission & Distribution v
Regional
Transmission & Distribution v
Gas
Retailing v
LPG v
Petrochemicals v
Joint
Ventures |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
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Natural Gas including RLNG (MMSCMD) |
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HVJ,
GREP & DVPL |
(M/T) |
53.40 |
53.40 |
-- |
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Others |
(M/T) |
-- |
-- |
-- |
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RLNG Shipper |
(M/T) |
-- |
-- |
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LPG
(M /T) |
(M/T) |
11,68,844 |
11,68,844 |
10,26,413.22 |
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Propane
(M/T) |
(M/T) |
2,01,085 |
2,01,085 |
1,78,736.34 |
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Ethylene
(M/T) |
(M/T) |
4,00,000 |
4,00,000 |
3,67,150.08 |
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HDPE/LLDPE
(M/T) |
(M/T) |
3,10,000 |
3,10,000 |
3,53,921.28 |
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Pentane |
- |
- |
- |
72,826.50 |
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SBP
Solvent/Naptha |
- |
- |
- |
40181.88 |
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Naptha |
- |
- |
- |
25287.48 |
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C2/C3 |
- |
- |
400000 |
494705.99 |
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Butene
1 |
|
10000 |
10000 |
8814.52 |
GENERAL
INFORMATION
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No. of Employees : |
3385 |
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Bankers : |
Corporate Accounts
Group Branch Jawahar Vyapar Bhavan, 11th & 12th Floors,
Tolstoy Marg, New Delhi- 110001
9A, Phelps
Building, Connaught Place, New Delhi- 110001
1st Floor, Kailash
Building, Kasturba Gandhi Marg, New Delhi
110001 |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
statutory
auditors
Mehra
Goel and Company Chartered
Accountants New Delhi branch
auditors
SCJ Associates Chartered
Accountants Agra Chhajer
and Company Chartered
Accountants Bhopal,
Madhya Pradesh, India Cost
auditors
R.J. Goel and Company Cost Accountants New Delhi Ramnath Iyer and Company Cost Accountants New Delhi K.G. Goyal and Company Cost Accountants Jaipur Shome and Banerjee Cost Accountants New Delhi K. Narsimhma Murthy Cost Accountants Hyderabad Bandyopadhyay and Bhowmick and Company Cost Accountants Kolkata R.M. Bansal and Company Cost Accountants Kanpur |
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Associates/Subsidiaries : |
10Collyer# 19-08,
Ocean Building, Singapore-049315
Hotel Brahmaputra
Ashok, M.G. Road, Guwahati, Assam-781001 |
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Joint Venture
Companies: |
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CAPITAL STRUCTURE
Authorised
Capital
:
|
No.
of Shares |
Type |
Value |
Amount |
|
1000000000 |
Equity Shares |
Rs.10/- each |
Rs. 10000.000 Millions |
Issued,
Subscribed & Paid-up Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
845651600 |
Equity Shares |
Rs.10/- each |
Rs. 8456.500 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
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SHAREHOLDERS FUNDS |
|
|
|
|
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1] Share Capital |
8456.500 |
8456.500 |
8456.500 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
105472.600 |
91276.500 |
77804.600 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
113929.100 |
99733.000 |
86261.100 |
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LOAN FUNDS |
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1] Secured Loans |
11000.000 |
16000.000 |
16000.000 |
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2] Unsecured Loans |
2378.500 |
3165.600 |
3974.000 |
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TOTAL BORROWING |
13378.500 |
19165.600 |
19974.000 |
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DEFERRED TAX LIABILITIES |
13186.700 |
12997.000 |
12552.300 |
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TOTAL |
140494.300 |
131895.600 |
118787.400 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
74543.700 |
75559.600 |
78458.800 |
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Capital work-in-progress |
19369.400 |
6155.900 |
3090.800 |
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INVESTMENT |
14410.500 |
9275.700 |
7839.500 |
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Advances for Investments (Pending Allotment) |
227.900 |
5157.900 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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|
|
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Inventories |
5523.600
|
4831.900 |
4814.400
|
|
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Sundry Debtors |
7907.100
|
7534.700 |
8228.600
|
|
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Cash & Bank Balances |
26604.100
|
44959.400 |
34468.400
|
|
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Other Current Assets |
316.700
|
396.500 |
269.800
|
|
|
Loans & Advances |
37103.600
|
65163.900 |
16358.600
|
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Total
Current Assets |
77455.100
|
122886.4 |
64139.800 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
25855.900
|
31646.200 |
27161.300
|
|
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Provisions |
19656.400
|
55493.700 |
7580.200
|
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Total
Current Liabilities |
45512.3
|
87139.9 |
34741.500 |
|
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Net Current Assets |
31942.800
|
35746.500 |
29398.300 |
|
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
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|
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|
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|
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TOTAL |
140494.300 |
131895.600 |
118787.400 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
161224.400 |
144843.400 |
139135.700 |
|
|
Other Income |
5449.500 |
4555.400 |
|
|
|
Total Income |
166673.900 |
149398.800 |
139135.700 |
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|
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|
|
|
|
Profit/(Loss) Before Tax |
28597.800 |
32766.200 |
28722.700 |
|
|
Provision for Taxation |
4731.100 |
9665.500 |
9183.600 |
|
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Profit/(Loss) After Tax |
23866.700 |
23100.700 |
19539.100 |
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Earnings in Foreign Currency : |
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|
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Export Earnings |
219.600 |
185.800 |
|
|
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Other Earnings |
62.900 |
40.700 |
|
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Total Earnings |
282.500 |
226.500 |
788.700 |
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Imports : |
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|
|
|
|
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Stores & Spares |
719.300 |
640.000 |
|
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|
Capital Goods |
1099.000 |
382.500 |
|
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Total Imports |
1818.3 |
1022.500 |
919.700 |
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Expenditures : |
|
|
|
|
|
|
Purchase of Gas for Trading |
85370.700 |
77952.100 |
|
|
|
Gas Pool |
8919.300 |
4590.500 |
|
|
|
Manufacturing, Transmission, Administration,
Selling and Distribution |
37049.100 |
26587.000 |
|
|
|
Depreciation |
5753.800 |
5594.900 |
|
|
|
Interest and Finance Charges |
1071.700 |
1173.900 |
|
|
Total Expenditure |
138164.600 |
115898.400 |
109072.100 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2007 |
30.09.2007 |
|
Type |
|
1st Quarter |
2nd Quarter |
|
Sales Turnover |
|
42456.800 |
45289.000 |
|
Other Income |
|
912.700 |
1806.000 |
|
Total Income |
|
43369.500 |
47095.000 |
|
Total Expenditure |
|
32069.700 |
36505.900 |
|
Operating Profit |
|
11299.800 |
10589.100 |
|
Interest |
|
204.000 |
200.900 |
|
Gross Profit |
|
11095.800 |
10388.200 |
|
Depreciation |
|
1407.000 |
1491.600 |
|
Tax |
|
2765.100 |
3002.800 |
|
Reported PAT |
|
6852.200 |
5725.400 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
0.15 |
0.21 |
0.26 |
|
Long Term Debt Equity Ratio |
0.15 |
0.21 |
0.26 |
|
Current Ratio |
1.26 |
1.20 |
1.09 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.13 |
1.04 |
1.01 |
|
Inventory |
31.96 |
30.84 |
29.50 |
|
Debtors |
21.43 |
18.87 |
18.28 |
|
Interest Cover Ratio |
27.71 |
28.93 |
22.41 |
|
Operating Profit Margin (%) |
21.41 |
26.58 |
28.02 |
|
Profit Before Interest and Tax Margin (%) |
17.93 |
22.82 |
21.31 |
|
Cash Profit Margin (%) |
17.90 |
19.29 |
20.56 |
|
Adjusted Net Profit Margin (%) |
14.42 |
15.53 |
13.85 |
|
Return on Capital Employed (%) |
24.10 |
30.15 |
29.75 |
|
Return on Net Worth (%) |
22.34 |
24.84 |
24.32 |
LOCAL AGENCY
FURTHER INFORMATION
FIXED ASSETS
v Land: Freehold
Leasehold
v Building:
Office/Others
Residential
v Bunk Houses
v Plant and Machinery
v Railway Lines & Sidings
v Electrical Equipments
v Furniture, Fixtures and
v Other Equipments
v Transport Equipments
HISTORY
Subject
is India's largest natural gas transmission company, operating a gas pipeline
network of over 4600 km across India. The company dominates the gas sector,
transporting 90% of the total piped gas. In addition, it operates seven plants
to process natural gas into LPG, apart from having a small presence in the
petrochemicals and oil & gas exploration sectors.
Natural gas is increasingly being looked at as an important source of energy in
India, primarily as it is a cheaper substitute to naphtha, currently used as
feedstock/fuel by industrial users.
Gail appears well set to optimally capitalise on the future gas transportation
potential in the country. It is currently the only player with a pipeline
network across the country, the backbone of which is the
Hazira-Vijaipur-Jagdishpur (HBJ) pipeline connecting western and northern
India. Being the nodal agency for the proposed National Gas Grid, this
dominating position is likely to continue. In the near future, revenue growth
will come from the share of regassified LNG from Petronet LNG, expansion of the
petrochemical complex and additional LPG pipelines currently being laid.
The government is inclined to phase out subsidies on LPG for domestic
customers, which will facilitate enhancement of margins in this segment.
However, the increase in natural gas prices by suppliers may lead to a negative
impact on Gail's earnings from LPG and petrochemical business. Also, the
increase in natural gas prices will lead to increase in costs, as the company
uses natural gas to power various elements of its pipeline system. However,
there is a proposal by the government to increase the transmission charge along
the HVJ pipeline, which, if approved, could partly mitigate the adverse impact
of the increase in natural gas prices.
In March 2004, the government of india has disinvested through offer for Sale
of 84565160 Equity Shares of Rs. 10 each at a price of Rs. 195. ONGC and IOC
each have 4.8% stake in Gail India, but have committed not to offload the same
within six months from the present offer.
During September 2004,the company has formed a subsidiary in the Republic of
Singapore and it is in the name of Gail Global (Singapore) Pte Limited.
Subject has 11 blocks through unicorporated joint ventures in partnerships with
various exploration operates with a total acreage of over 67000 KM square. The
company has discovered gas in Myanmar A-1 block and Oil in Cambay block. The
company a joint venture with British Gas and the Government of Maharashtra was
incorporated in May 1995 to supply gas to domestic, commercial and small
industrial consumers and CNG to the transport sector in Mumbai. IGL a joint
Venture with BPCL and Government of Delhi was formed in December 1998 to supply
gas to domestic and commercial consumers and CNG to the transport sector in NCT
of Delhi. Petronet LNG Limited company a joint venture of IOCL, ONGC, BPCL and
GAIL, was formed for setting up of LNG import and regasification facilities.
PLL has a long term LNG supply contract with Ras Gas, Qatar for import of 7.5
MMTPA. The Dahej terminal started operations in March 2004. Bhagyanagar Gas
Limited a joint venture with HPCL was incorporated in August 2003 for
distribution and marketing of Auto LPG and CNG for vehicles and natural gas for
domestic,commercial and small industrial consumers in cities of Andhra Pradesh.
Central Up Gas Limited is a Joint Venture with BPCL incorporated in February
2005 for city gas distribution in Kanpur city. Tripura Natural Gas Company
Limited is a joint venture company of Tripura Industrial Development
Corporation (TIDC), Assam Gas Company Limited (AGCL) and GAIL for distribution
of piped natural gas in the state of Tripura and the company's participating
equity is 29%. During 2005, GAIL has commissioned two pipeline projects namely
The South- Gujarat Pipeline project in May 2004 for supplying re-gasified LNG
to the consumers in South-Gujarat and the Lucknow & Kanpur Fedder Pipeline,
commissioned in March 2005 will carry gas to the cities of Lucknow and Kanpur
for city gas distributiion and Narimanam- Kuthalam pipeline project was
completed in 2005 for the supply of the gas from Cavery basin to the consumers
in Kuthalam region in Tamilnadu.
The major projects of company which are under execution are the Dahej-Uran
Pipeline Project, connecting Gujarat and Maharashtra, The Thulendi-Phulpur
Pipeline Project, the Vijaipur- Kota Pipeline Project, connecting MP and
Rajasthan, the Jagoti-Dewas-pithampur Pipeline project would cater to the gas
demand of Indore, Dewas, Ujjain and Pithampur, the Kelaras-Malanpur Pipeline
Project and the Petrochemical Expansion Project at Pata to bring up the Plant
to a Polymer Capacity of 4,40,000 TPA. The company has taken up laying of
Pipelines for supply of gas Krishna Godavari basin in Andhra Pradesh to the
power plants.
DIVIDEND
The Board of Directors of the Company had earlier approved payment
of an interim dividend @ Rs. 5.50 and special interim dividend @ Rs. 2.50 per
equity share of Rs. 10 each for the year 2006-07 amounting to Rs.4651.100
Millions and Rs.2114.100 Millions respectively which has since been paid to the
members of the Company.
The Directors are now pleased to recommend subject to the approval of the
members, payment of final dividend @ Rs. 2 per equity share of Rs. 10 each
amounting to Rs. 1691.300 Millions for the year 2006-07. With this, the total
dividend payment for the fiscal 2006-07 will be at 100% of the paid up equity
capital.
CORPORATE STRATEGY
The Board of Directors of the Company identified following
growth drivers as reported last year:
- Protection and strengthening of the gas transmission and marketing
business.
Increased gas sourcing from domestic fields and import of gas through cross border pipelines and LNG to secure gas supplies for transmission and trading businesses.
In the E&P front, the Company has stake in 29 E&P Blocks & 3 CBM Blocks and intends to participate aggressively in the upcoming E&P opportunities. To strengthen its presence in the operation of the blocks, it also has plans to participate as a operator JV partner to some of the probable resources in case found feasible after due diligence.
Pursue margin enhancing businesses namely, petrochemicals and city gas distribution projects.
The Company continues to focus on these drivers for increase in its top and
bottom line. Securing gas supply from the major producers for
transmission/marketing of gas, participating stake in E&P blocks and
issuing expression of interest for laying pipeline infrastructure in the
country are steps towards that direction. The Company also plans to exploit the
natural resource to its optimum level by adding value at various levels of the
gas value chain.
The natural gas demand in India is at an inflection point, and several forces
are at work that could dramatically increase the natural gas demand in order to
meet growing energy demand of the economy. The present sources of natural gas
are projected to deplete in the coming years and therefore, there is a need to
look at new sources that are rapidly coming up.
The Company is aggressively pursuing gas sourcing options both from the new
domestic sources as well as through international sources byway of pipelines
and LNG route. Collectively, such a rapid rise in expected demand and
re-alignment of sources of gas supply will interact to determine the robust future
gas industry structure.
The Company has adopted a focused approach to "protect & grow"
its core businesses. The Company is proactively positioning itself to build
around 5,000 Km pipelines in the next 5 years. The major pipelines planned are
Jagdishpur-Haldia Pipeline, Dabhol-Bangalore Pipeline, Dadri-Nangal Pipeline,
Kochi-Mangalore-Bangalore Pipeline, augmentation of HVJ&GREP Pipeline and
Chainsa-Gurgaon-Hissar Pipeline. Expressions of interest have been issued for
new pipelines worth over Rs. 180000 Millions. During the year, the Company
signed a Gas Supply Agreement with ONGC and also secured additional gas through
spot R-LNG to meet the demand of the consumers. The Company is determined to
improve the operational efficiency of the pipeline transmission network.
On E&P front, the Company is in the process of developing the operatorship
skills for domestic on-land fields & shallow offshore fields and is aiming
to secure additional E&P blocks with balanced portfolio between exploratory
& developmental projects.
In the Petrochemical business, the Company is currently expanding its
Petrochemical capacity at Pata plant from 3,10,000 TPA to 4,10,000 TPA.
Government approval for setting up a Petrochemical complex in Assam with a
production capacity of 2,80,000 MT per annum has been received in which the
Company will have 70% equity participation. The project execution activities
have already started and are scheduled to be completed by 2012. In addition,
the Company is continuing to expand marketing in wholesale gas distribution and
enhancing the roll-out of its retail marketing presence by creating statewise
new Joint Ventures for City Gas supply.
BUSINESS
PERFORMANCE
The Company has once again been rated "Excellent" by MoPNG for the
year 2006-07.
The segment wise business performance of the Company is as under:
- Gas Transmission
During the year 2006-07, the Company transmitted 77.29 MMSCMD of Gas as
compared to previous year volume of 78.87 MMSCMD. The Company enjoys dominant market
share of 78% in the Gas Transmission segment. The lower Gas Transmission was
mainly due to flood at Hazira (Gujarat) which adversely affected the HVJ system
for about a month.
- Petrochemicals
In the Petrochemicals business sector, the Company has registered remarkable
growth. During the year under review, the production of polymers (HDPE/LLDPE)
was 354 TMTs as against the production of 31 ITMTs in the previous year
representing an increase of 14%.
During the year under review, the Company has promoted a subsidiary named
"Brahmaputra Cracker and Polymer Limited (BCPL)", for producing
2,80,000 MT per annum of petrochemical products (HDPE/LLDPE/PP) at Lepetkata,
Assam.
The Company has 70% equity stake in the Company. With this project, the Company
would be foraying into the Polypropylene product portfolio besides boosting the
HDPE and LLDPE product volumes.
A new HDPE unit of 1,00,000 TPA is under commissioning at Pata which will
enhance the polymer capacity of the Company to 4,10,000 TPA from financial year
2007-08.
- Liquid Hydrocarbons
The total Liquid Hydrocarbon Production during 2006-07 is 1,343
TMTs as compared to 1,325 TMTs in 2005-06. The total product mix includes 1,026
TMTs of LPG, 179 TMTs of Propane, 73 TMTs of Pentane, 40 TMTs of Special
Boiling Point Solvent(SBPS), 25 TMTs of Naphtha for the year 2006-07.
- LPG Transmission & Marketing
In the LPG transmission
business, the Company transported 2.49 MMT LPG in current fiscal year as
compared to 2.23 MMT in 2005-06 representing an increase of 12%.
- LNG
The Company continues to have
strong focus on securing gas supplies from international markets. LNG and
trans-national pipelines are the two prevalent modes of cross border gas trade
and the Company has been making efforts in both directions.
During the year, the Company sourced its first spot cargo of LNG from Algeria
and later sourced additional spot LNG through PLL, Dahej and Shell, Hazira. The
entire quantity of spot LNG, was sold to consumers as well as consumed
internally. For long term sourcing of LNG, the Company has been in active
discussions with suppliers from Algeria, Australia and Malaysia. Other sources
in Qatar and Nigeria are also being pursued.
On the trans-national pipeline front, the Company has been pursuing three
options viz. Iran-Pakistan-India (IPI) Pipeline, Turkmenistan-
Afghanistan-Pakistan-India (TAPI) Pipeline and Myanmar-lndia (Ml) Pipeline. For
the IPI Pipeline, Pakistan has already agreed to the price of gas at
Iran-Pakistan Border subject to final approval from their Government.
Government of India is likely to take a decision on the same shortly. Efforts
are on to officially induct India as a partner in the TAPI Pipeline Project.
The Company has completed the detailed feasibility study of the pipeline from
Myanmar-India Border to Gaya through north-eastern states. However, final
decision on export of gas in A1 & A3 Blocks of Myanmar would be taken by
the Myanmar Government.
- Exploration and Production
(E&P)
In line with the Company's
strategy, E&P activities have gathered further momentum during the year.
Full fledged development and commercial production in the Cambay Block in
Gujarat where the Company holds 50% participating interest, is all set to
commence with the Government approval which is expected shortly. The gas
discovery in blocks A-1 and A-3 in Myanmar is maturing to development stage and
various studies prior to finalizationoftheplanandits implementation are
underway.
Currently, the Company is involved in exploration activities over an acreage of
1,92,884 Sq. Km, and plans to invest approximately Rs. 12000 Millions in
E&P activities over the next three years.
The Directors are glad to share with you the success of the Company in the
recently concluded NELP-VI bidding rounds. The Company, in consortium with
several national and international companies has been awarded 15 blocks under
NELP VI where a total of 55 blocks were under offer and 68 companies have
participated including 36 foreign companies.
In two blocks, one in Mahanadi Offshore and the other in Cauvery Offshore,
drilling ofwells has revealed significant gas potential where further work is
being carried out to assess the commercial viability.
With these blocks added to its portfolio, the Company now has a substantial
E&P portfolio of 29 blocks including 3 overseas blocks.
- Coal Bed Methane (CBM)
India, with its vast coal
resources, has a substantial CBM resource base of 35 to 105 TCF. Three rounds
on CBM have been offered by Government of India till date. Total 26 blocks have
been awarded under CBM-I, II & III bidding round and also on Nomination and
FIPB route.
In CBM-III bidding round, the Company participated in 7 blocks partnering with
a major CBM company of Australia, viz.. Arrow Energy as Operator and Energy Infrastructure
Group (EIG), Sweden and Tata Power Company as other partners. The Company's
forays in CBM area now begin with the award of 3 high ranking CBM blocks, one
in Jharkhand and two in Chattisgarh. The Company's participating interests in
the blocks ranges from 35% to 45%.
- GAILTEL
GAILTEL, the telecom arm of the
company, offers commercial telecom services to all the leading Telecom
operators in the country, apart from catering to captive communication needs.
GAILTEL currently operates 13,000 Km, state of the art fiber optic network.
During the year under review, GAILTEL achieved the maiden profit of Rs. 9.700
Millions.
- BUSINESS INITIATIVES
With changes taking place in the
gas market, GAIL is continuously evolving strategies to prepare itself for the
regulated scenario.
The Company has transformed into an integrated energy company through
integration of Gas Value Chain. The focal point of the Company's growth plan is
to prepare itself for the era of clean fuel industrialisation. In the process,
the Company is all set to create a green quadrilateral of clean energy
corridors in India, connecting major consumption centres with major gas fields,
LNG terminals and other cross border gas sourcing points. This will create an
optimal infrastructure network and balanced development of the Gas
market.
Carrying forward the success stories of Delhi and Mumbai, retail gas
initiatives are being taken in other cities of the country and in other parts
of the world in collaboration with other major players. Building up on the PNG
and CNG success stories, the Company is trying to pave the way for a clean and
green future.
- Global Initiatives
The Company is continuing its
efforts to build strategic alliances with international companies to gain entry
in the international market.
The Company entered into Memorandum of Understanding (MoU) with Arrow Energy of
Australia and Energy Infrastructure Group (EIG) of Sweden for cooperation in
pursuing Coal Bed Methane (CBM) opportunities in India, Australia and third
countries. In line with the MoU, the consortium of GAIL, Arrow & EIG
participated in India's CBM Bidding Round III and won three blocks.
All the four companies in which the Company made investment, viz, Fayum Gas
Company (FGC), Shell CNG Egypt (SCNGE), National Gas Company (Natgas) in Egypt
and China Gas Holdings Limited (China Gas) in China, are performing well.
Besides, the Company's plans to form a Joint Venture Company with China Gas for
pursuing CNG, City Gas, CBM and related gas sector opportunities in China. A
Joint Venture Agreement to this effect has been signed with China Gas.
The Company is in discussion with Myanmar Government as well as consortium
partners regarding options for bringing gas from A-1 and A-3 block in Myanmar.
The Company is one of the consortium partners in both the blocks. Similarly,
discussions are continuing with Iran and Pakistan Government and significant
progress has already been made for also bringing gas from Iran to India through
pipeline under the trilateral framework.
The Company is also pursuing other business opportunities in the gas sector of
Australia, Algeria, Libya, Egypt, Saudi Arabia, China, Singapore and
Oman.
PIPELINE PROJECTS
- Projects Commissioned
During the year under review, the following projects were
commissioned:
- Thulendi-Phulpur Pipeline
Project:
The Company has laid 139 Km
Pipeline from Thulendi (HVJ Tapoff) to IFFCO, Phulpur. The objective of the
Project is to supply R-LNG to IFFCO, Phulpur and industrial consumers in Rai
Bareli. Designed capacity of this pipeline is 2.8 MMSCMD. Pipeline was
commissioned in May, 2006.
- Kelaras-Malanpur Pipeline
Project:
The Company has laid 85 Km
feeder Pipeline to Malanpur, 10 Km of pipeline for Malanpur Customers through
local pipeline network. The objective of the project is to supply R-LNG to
customers in Malanpur industrial area near Gwalior. Designed capacity of this
pipeline is 2.0 MMSCMD. Pipeline was commissioned in July, 2006.
- Vijaipur-Kota Pipeline Project:
- The Company has laid 192 Km Vijaipur to Kota Pipeline for
transportation of R-LNG in that region. The objective of the project is to
supply R-LNG to CFCL-II, SFCL & Chambal Power and other customers in
that region. Designed capacity of this pipeline is 3.47 MMSCMD. Pipeline
was commissioned in January, 2007.
Ibrahimpur-Dholpur Pipeline Project:
The Company has laid 30 Km pipeline to RRVUNL Power plant at
Dholpur. The objective of the project is to supply R-LNG to RRVUNL power plant
at Dholpur. Designed capacity of this pipeline is 1.5 MMSCMD. Pipeline was
commissioned in February, 2007.
- Jagoti-Pithampur Pipeline Project:
Project was approved for laying
of 98 Km pipeline from Jagoti to Pithampur via Ujjain with spur line 21 Km to Dewas.
In addition to that, local pipeline network of 16.5 Km and 44.6 Km is being
considered for supplying R-LNG to Dewas and Pithampur. Designed capacity of
pipeline is 3 MMSCMD. This pipeline will cater to the demand of gas supply to
the consumers in Dewas and Pithampur industrial areas and city gas at Indore.
The pipeline is mechanically complete
and already commissioned in Financial Year 2006-07.
- Dahej-Uran Pipeline Project:
Laying of 475 Km Pipeline of
capacity 12 MMSCMD from Dahej to Uran for supplying gas to Power Plants,
Fertilizer Plants and Industrial Consumers in Gujarat & Maharashtra.
Connectivity to Dabhol has been successfully completed.
- Dabhol-Panvel Pipeline Project:
Project was approved for laying
of 187 Km pipeline from Dabhol to Panvel (Phase I) and Branch lines 64.5 Km
from Kharegaon to Pune and 48.2 Km from Ambewadi to Usar (Phase II). Designed
capacity of this line is 12.5 MMSCMD.
SUBSIDIARIES
& JOINT VENTURES
- SUBSIDIARIES
GAIL Global (Singapore) Pte. Limited
The Company has a wholly owned
subsidiary namely, GAIL Global (Singapore) Pte. Limited A profit of Rs. 20.200
Millions has been made by this subsidiary company during the year under review.
The Company is looking for further business opportunities through this subsidiary
company.
- Brahmaputra Cracker and Polymer
Limited
The Company has promoted a
subsidiary named "Brahmaputra Cracker and Polymer Limited (BCPL)",
for producing 2,80,000 MT per year of petrochemical products (HDPE/LLDPE/PP) at
Lepetkata, Assam. The Company will have a 70% equity share with Oil India
Limited (OIL), Numaligarh Refinery Limited (NRL) and Govt. of Assam, each
having 10% equity share. The authorized capital of the company is Rs. 12000
Millions. The estimated cost of the project is Rs. 54610 Millions.
- JOINT VENTURES
The Company has formed the
following Joint Venture companies.
- Petronet LNG Limited (PLL):
PLL was formed for setting up of
LNG import and regasification facilities. PLL has a long term LNG supply
contract with Ras Gas, Qatar for import of 7.5 MMTPA. PLL Dahej terminal is
being expanded to 12.5 MMTPA capacity. The Company holds 12.50% stake in the
Company at an investment of Rs. 987.500 Millions.
- Indraprastha Gas Limited (IGL):
IGL is supplying piped gas to
71,000 domestic, 306 commercial consumers and CNG to over 1,28,000 vehicles
through 146 CNG Stations including 2 Stations in NOIDA.lt is worth mentioning
here that IGL is catering to the world's largest CNG bus fleet in Delhi (More
than 10,000 buses). The Company holds 22.5% stake in the Company at an
investment of Rs. 315 Millions.
Mahanagar Gas Limited (MGL): Currently MGL has set up 123 CNG stations catering
to over 1,80,000 vehicles spread over Mumbai, Thane city and Mira-Bhayandar
areas besides supplying PNG to over 2,75,000 domestic, 750 commercial and 40
industrial consumers. The Company holds a 49.75% stake in the Company at an
investment of Rs. 444.500 Millions.
- Bhagyanagar Gas Limited (BGL):
BGL is currently operating 3 Auto
LPG stations in Hyderabad and 1 Auto LPG stations in Tirupathi. It is currently
operating 5 CNG stations in the city. BGL has also commissioned the supply of
CNG in the city of Hyderabad by setting up one Daughter Booster Station in the
month of August, 2006 by transporting CNG in cascades from Vijayawada. The
Company holds 22.5% stake in the Company.
- Tripura Natural Gas Company Limited
(TNGCL):
TNGCL is presently supplying gas
to domestic, commercial & industrial consumers in Agartala city. The company
has commissioned the first CNG station of North East in Agartala city in
November, 2006. The Company holds 29% stake in the Company.
- Central U.P. Gas Limited (CUGL):
CUGL is currently operating 4
CNG stations and building network for supply of PNG to domestic, commercial and
industrial sectors in the city of Kanpur. The Company has a 22.5% stake in the
Company.
- Green Gas Limited (GGL):
GGL is currently operating 4 CNG
stations in Lucknow and 1 CNG station in Agra. GGL will also take up project implementation
in other cities of Western UP on the basis of gas availability and project
viability. The Company has 22.5% stake in the Company.
- Maharashtra Natural Gas Limited
(MNGL):
MNGL is a Joint Venture of GAIL
and Bharat Petroleum Corporation Limited and was incorporated in January, 2006
for implementation of City Gas ProjectsinPune city. MNGL will develop necessary
infrastructure for supply of CNG and PNG in the city. The Company has a 22.5%
stake in the Company.
- Aavantiica Gas Limited (AGL):
AGL is a Joint Venture MMM of
GAIL and Hindustan Petroleum Corporation Limited and was incorporated in June,
2006 for implementation of City Gas Projects in Madhya Pradesh. AGL has started
project implementation activities in the city of Indore and the cities of
Gwalior and Ujjain are in the pipeline. The Company has a 22.5% stake in the
Company.
- Ratnagiri Gas and Power Private Limited
(RGPPL)
RGPPL is a Joint Venture Company
between GAIL, NTPC, IFI's and MSEB. The Company has a 28.33% stake in the
Company. The Net Capacity of the Ratnagiri Gas & Power Station is 2,150 MW.
The Company has made an investment of Rs. 5000 Millions.
NEW TECHNOLOGY INITIATIVES
Some of the new technology initiatives adopted by the
Company are as follows:
- In line with the President of India's suggestion to industries to
work on alternative fuel Hydrogen, the Company has taken the initiative on
Hydrogen-CNG project in collaboration with ARAI (Automotive Research
Association of India), MGL (Mahanagar Gas Limited), MNGL (Maharashtra
Natural Gas Limited) and Brehon Energy, USA.
- The Company has successfully demonstrated the technology for
converting Natural Gas Liquid (NGL) to value added products like LPG rich
gas, gasoline and diesel blending stock. The technology, branded as NTGG
technology, was jointly developed by the Company and Indian Institute of
Petroleum (IIP), Dehradun.
- The Company has taken up a project in collaboration with IIP,
Dehradun for converting plastic waste of PE&PP available in the form of
carry bags, container waste and automobile parts and low polymer wax in
the Company's Petrochemical complex, Pata into value added
hydrocarbons.
- The Company, in collaboration with IIT, Kanpur has developed a
novel process to separate the gas mixtures into their pure components
using four beds of adsorption columns. Major benefit of the developed
process is that it is highly energy efficient.
- The Company has also jointly developed with IIT Kanpur, a coke
inhibitor for reducing coke formation in pyrolysis furnaces.
IT
INITIATIVES
For bringing efficiency and automation by integrating all
business processes, SAP-ERP systems were made fully operational across work
centers of the Company. Various other customer and supplier friendly
e-initiatives were taken like Customer Relationship Management (CRM) and
Supplier Relationship Management (SRM) for extending transparency to the
Company's esteemed customers/suppliers.
SRM solution is being practiced for online e-Tendering introducing faster and
transparent tendering process. In addition to the same, online catalog
procurement, online vendor registration etc. are the other e-initiatives taken
by the Company.
New initiatives like Document Management System, workflow based e-note sheet
systems etc. are being introduced in the direction of paperless environment and
faster & easier retrieval of information.
MANAGEMENT DISCUSSION AND ANALYSIS
·
INDUSTRY
STRUCTURE & DEVELOPMENTS
Demand for Natural Gas has been
increasing world over due to increase in energy requirements and being
environment friendly. Natural Gas, accounting for 24% of the total global
primary energy supply, is the third largest contributor to the global energy
basket. With a CAGR of about 3% over the last 5 years, it is growing at the
fastest rate among all the fossil fuels. The global gas markets are integrating
rapidly and the new market structures are evolving. More importantly, the Asian
gas markets are leading the growth in global gas sector, with special
investment focus on countries like India and China. With China's energy demand
growing by 15% and India's by 7.8%, these two Asian giants are projected to be
the leading gas consumers by the year 2020.
LNG has been one of the key drivers of the global gas market integration. With
an almost 75% increase in liquefaction capacities from 87 MMTPA to more than
150 MMTPA over the past 10 years, share of LNG in global gas trade has grown
from 14% to 26%. By meeting the buyers' expectations through price and
contractual flexibilities, price review option and destination flexibility, LNG
trading has emerged as a truly global and mature business.
At the same time. Trans-national gas pipelines have continued to be a dominant
gas supply option, especially between contiguous nations, and have emerged as a
dominant integrating factor. The Iran- Pakistan-India Pipeline and the
Turkmenistan-Afghanistan-Pakistan-India Pipeline are receiving the highest
attention from the concerned Governments.
- Indian Gas Sector - An overview
India is fast emerging as the
focal point for the future development of the Asian Natural Gas Market. The
rapid growth of the Indian Economy has greatly contributed to the development
of the Indian Energy Sector as a whole and provided major triggers for the
growth of the gas sector as well. Petroleum and Natural Gas Regulatory Board
Act, 2006 has been passed by the Parliament and the Regulatory Framework is in
final stages of being set up. The new gas policy has also been issued by the
Government of India. New discoveries under NELP have been made by RIL and GSPC
in KG Basin, and by ONGC in Mahanadi and KG basin which will increase the
availability of Natural Gas in the domestic market. Further, availability of
Natural Gas has increased on account of import of spot cargos of LNG by GAIL,
PLL and Shell, Hazira.
·
Gas
Demand Outlook
On the background of fast GDP
growth, and the economic reforms process in India, the Indian Natural Gas
Sector is showing signs of accelerated growth driven by a number of demand pull
factors. The current consumption of about 100 MMSCMD of gas in India is
primarily shared by the Power and Fertilizer Sector to the tune of 42% and 31%
respectively. This is followed by Petrochemicals - 4%, City Gas (CNG/Piped
Natural Gas)-4%, LPG/Other Liquid Hydrocarbons - 4% and Sponge Iron/Steel
Sectors-4%.
The overall new gas based power capacity addition identified for future during
the next 10 years by the power sector is of the order of 33,655 MW. The
magnitude of gas requirement for all these plants would be of the order of
100-120 MMSCMD. In the Fertilizer Sector, due to cost effectiveness of gas vs.
other feedstock, they are likely to switch over to natural gas, which is
expected to give a push to gas demand in this sector. City Gas Sector is
another sector which is going to be a potential growth sector. The emphasis on
clean environment and the Government's keenness to introduce gas distribution
infrastructure policy, this sector would get the necessary thrust in the coming
years.
The consolidated gas demand by 2011-12 is estimated to be 283 MMSCMD.
- Gas Supply Outlook
On the gas supply side, the
domestic supplies would be primarily driven by the expected supply from the KG
basin by RIL in 2008-09. The supplies projected by ONGC in the next 5 years are
expected to fall. The supplies from Private players/JVs are expected to
increase primarily due to gas supply by RIL from 2008-09 onwards and by GSPC
looking at the overall demand projections and the expected domestic supplies,
there would be a supply shortfall. There is already an import of LNG to the
tune of 18 MMSCMD by PLL at Dahej. This is being supported by the commencement
of LNG supply from the Hazira Terminal of Shell, which is, however, yet to
stabilize. To augment the shortfall, India is already pursuing imports both
through the LNG route and the Trans-national pipeline route.
- OPPORTUNITIES, THREATS, RISKS &
CONCERNS
The subcontinent is poised for
huge growth in gas trade. There being a huge gap between supply and demand of Natural
Gas, several players are desirous of entering the gas sector, which will boost
the economy at large. The key to success is sound planning of the gas
infrastructure, supply reliability and reasonable price in long term. In the
new gas economy, the Company envisages to be a major player, particularly in
transmission segment. The Company's Inter-State Gas Grid is a step towards this
goal.
The demand for gas and matching supplies along the gas grid are important to
achieve the capacity utilisation in terms of gas transmission volumes to
generate cash flows. The demand in turn is driven by the gas pricing vis-a-vis
the price of the alternate fuel.
- Gas Sourcing
Since there is a huge gap
between demand and supply, gas sourcing to meet unsatisfied demand plays a
vital role. This would be achieved by potential gas supply from reserves being
developed by RIL, GSPC and ONGC through drilling in the KG basin. Gas found in
other fields from the recent NELP awards and CBM blocks would further augment
production.
LNG imports are already being made by PLL for 5 MMTPA. Further, the increase in
PLL's capacity by 5 MMTPA by way of expansion of Dahej terminal, commissioning
of Dabhol terminal and supply from Shell's LNG terminal at Hazira and setting
up of Kochi terminal will boost the LNG supplies.
- Enhanced Visibility on Gas Sourcing and
Volume Growth
The Ministry of Petroleum and
Natural Gas decision to grant permission to the Company for expanding
Inter-State gas grid puts to rest concerns of domestic and global competitors
thwarting the company's growth plans in potential competitive bidding for cross
country pipelines under the proposed regulator. With increase in availability
of natural gas, coupled with robust financial strength, the Company sees
opportunity in the transmission business. The Government has already announced
infrastructure status to gas pipelines.
It is pertinent to mention here that the recent MoU with RIL would bolster gas
supplies to the Company as the MoU provides for the joint development of gas
transportation and utilisation of the Company's pipelines for transporting a
part of RIL's KG Basin gas that RIL plans to produce from its KG D-6 block by
December, 2008. The requisite agreements have also been signed with RIL. In
addition, the Company has also signed an agreement with RIL for sourcing of
Natural Gas which would be marketed by the Company to downstream
customers.
Further, the MoU & related agreements opens up downstream growth prospects
in City Gas distribution along the gas grid network of RIL and the Company as
well provides for cooperation in the joint development of upstream E&P and
CBM projects, thereby enhancing long-term growth prospects and ensuring gas
supply to the Company.
- Inter-State Gas Grid
The Company plans to complete eight new gas pipelines spread
over 5,000 Kms at an estimated capex of Rs. 180000 Millions by financial year
2012-13. This would increase the transmission capacity to 280 MMSCMD and almost
double its gas pipelines networks to over 10,000 Kms excluding LPG pipelines.
It includes:
1. Laying five new Natural Gas pipelines over 3,366 Kms at a cost
of Rs. 105000 Millions. These five pipelines are a part of the Company's
original gas grid proposal and have recently been approved by the MoPNG.
2. Three pipelines within the existing Right of Use (RoU) namely Dahej-
Vijaipur pipeline, Vijaipur-Dadri pipeline and Vijaipur-Auraiya-Jagdishpur
pipeline. These projects envisage augmentation of capacity in the existing HVJ,
DVPL network. These three pipelines would stretch over 1,686 Kms costing Rs.
75000 Millions.
PRESS RELEASE
GAIL - RIL Sign MoU
To Set Up Petrochemical Plants globally
New Delhi, December 4, 2007:Reliance
Industries Limited (RIL) and GAIL (India) Limited today signed a Memorandum of
Understanding (MoU) for Joint Co-operation in Petrochemicals. The MoU was
signed in Mumbai by Shri A K Purwaha, Director (Business Development), GAIL and
Shri Nikhil Meswani, Executive Director, RIL in the presence of Dr. U.D.
Choubey, Chairman and Managing Director, GAIL and Shri Mukesh D. Ambani,
Chairman and Managing Director, RIL. The Directors and senior officials from
both the companies were also present on the occasion.
Under the MoU, GAIL and RIL will explore opportunities for
setting up petrochemical complexes outside of India in feedstock rich
countries. Identified opportunities will be examined by a Working Group,
consisting of representatives from both the companies. GAIL and RIL will set up
a Special Purpose Vehicle (SPV) for setting up petrochemical complexes abroad.
The Working Group is examining such opportunities in Middle
East, Russia and FSU countries.
In addition, the two companies will also examine the
possibilities of mutual co-operation in the domestic market.
This MoU signed today is the beginning in the area of
petrochemical between GAIL and RIL. A Memorandum of Understanding (MoU) was
also signed between the two companies on March 15, 2007 for co-operation in
identified areas in the natural gas sector including Natural Gas pipeline, City
Gas distribution, Coal Bed Methane, Exploration & Production and Operations
& Maintenance services.
Describing the development as a major event, Dr. U D
Choubey, CMD, GAIL said, “This is an important milestone for both the companies.
It is also an extension of the concept of working together, which took shape
with the signing of the co-operation MoU in the Natural Gas sector between GAIL
and RIL earlier this year. The MoU signed today is the beginning of
co-operation in the area of petrochemicals.”
Speaking on the occasion, Mr. Mukesh D. Ambani, Chairman and
Managing Director, RIL echoed the feelings of GAIL CMD on the need to work
together. He said, “GAIL and RIL are India’s leading companies in the energy
and infrastructure sector. The decision will enable us to look for
opportunities globally on a competitive scale for the petrochemical business
which will further strengthen India’s position on the global map.”
GAIL (India) Limited
GAIL is a major gas processing, transmission, distribution
and marketing company in India as well as has diversified its operations in
other integrated energy and petrochemical activities, having India’s largest
gas based petrochemical complex at Pata, U.P. GAIL, along with other partners,
is also setting a petrochemical project in Assam as a majority Joint Venture
partner. The petrochemicals business contributes around 35 percent to the Gross
Margin of the Company.
Reliance Industries Limited
Reliance Industries Limited (RIL) is India’s largest private sector company on
all major financial parameters with turnover of Rs 1183540 Millions (US$ 27.23
billion), cash profit of Rs 176780 Millions (US$ 4.07 billion), net profit of
Rs 119430 Millions (US$ 2.75 billion) and net worth of Rs 639670 Millions (US$
14.72 billion) as of March 31, 2007.
RIL is the first and only private sector company from India
to feature in the Fortune Global 500 list of ‘World’s Largest Corporations’ and
ranks amongst the world’s Top 200 companies in terms of profits. RIL is amongst
the 25 fastest climbers ranked by Fortune. RIL also features in the Forbes
Global list of world’s 400 best big companies and in FT Global 500 list of
world’s largest companies.
Dr. U D Choubey, Chairman and Managing Director, GAIL
(India) Limited and Shri Mukesh D. Ambani, Chairman and Managing Director,
Reliance Industries Limited exchanging documents after the signing of the MoU
between GAIL and RIL to set up petrochemical plants globally, as Shri Nikhil
Meswani, Executive Director, RIL and Shri A K Purwaha, Director (Business
Development), GAIL look on.
BCP L Brahmaputra Cracker and Polymer
Limited Project
BCPL – ONGC sign Feedstock Supply Agreement
for Assam Gas Cracker Project
New Delhi, October 15, 2007: Brahmaptura Cracker
and Polymer Limited (BCPL) today signed the Feedstock Supply Agreement with
ONGC for the Rs. 54600 Millions, 2,80,000 TPA gas cracker plant
being set up at Lepetkata, Dibrugarh, Assam. The Feedstock Supply Agreement was
signed by Shri R K Kashyap, Chief Operating Officer, BCPL and Shri J G
Chaturvedi, Executive Director and Asset Manager, Assam, ONGC in presence of
Shri B K Handique, Hon’ble Union Minister of State for Chemicals, Dr. U D
Choubey, Chairman and Managing Director, GAIL, Shri A K Purwaha, Director
(Business Development), GAIL, Shri N K Mitra, Director (Offshore), ONGC, Shri A
K Hazarika, Director (Onshore), ONGC and other senior officials of the two
companies in New Delhi.
With the signing of Feedstock Agreement
with ONGC, BCPL has now signed Feedstock Agreements with all the three
suppliers who are to supply feedstock to the petrochemical plant. The
agreements with other feedstock suppliers Oil India Limited (OIL) and
Numaligarh Refineries Limited (NRL) were signed last month in Dibrugarh.
Under the Feedstock Supply Agreements, BCPL
will source 6.0 MMSCMD gas from Oil India Limited (OIL) Duliajan which shall be
processed to recover C2+ Liquid as feedstock for the Petrochemical Complex. The
balance gas after recovery of C2+ Liquid shall be returned back to the gas
consumers. The Petrochemical Complex shall also utilize 160,000 TPA of
petrochemical grade Naphtha from Numaligarh Refinery Limited (NRL). In addition
to fuel supplies from OIL and NRL, 1.35 MMSCMD gas from Oil & Natural Gas
Corporation Limited (ONGCL) upto 31/3/2012 and 1.00 MMSCMD thereafter will be
utilized by BCPL.
The petrochemical complex will comprise of
a cracker unit, downstream polymer and integrated off-site/utilities plants.
The complex has been configured with a capacity of 220,000 tons per annum (TPA)
of Ethylene and 60,000 tons per annum of propylene with Natural Gas and Naphtha
as feed stock.
The existing LPG plant of GAIL at Lakwa
will be modified to process gas for recovery of ethane and higher hydrocarbon
fraction which will be transported to Lepetkata through a pipeline.
The Products from the Petrochemical Complex
shall be 220,000 Tons per annum (TPA) of HDPE/LLDPE, 60000 TPA of
Polypropylene, 55,000 TPA of Raw Pyrolysis Gasoline and 12,500 TPA of Fuel oil.
Brahmaputra Gas Cracker and Polymer Limited
is a Joint Venture Company with GAIL as the lead promoter with 70% equity. The
other Joint Venture partners are OIL, NRL and Assam Government, each having 10%
equity.
GAIL - RCF MoU proposed for coal gasification
New Delhi , October 17, 2007: Subject will shortly be joining hands with
Rashtriya Chemicals and Fertilizers Limited (RCF) for jointly exploring
potential of proposed surface coal gasification project in Talcher. The Board
of Directors of GAIL approved the signing of a Memorandum of Understanding
(MoU) with RCF in its meeting held in New Delhi today.
Under the MoU, GAIL will carry out techno-economic study of a commercial
coal gasification plant, whereas RCF will carry out the techno-economic study
of a commercial plant for utilizing synthesis gas from the proposed coal
gasification plant. GAIL and RCF will jointly evaluate the coal gasification
potential for the fertilizer industry.
About GAIL (India) Limited
Subject is India's largest natural gas company having a market share of
78% in natural gas transmission and 70% in natural gas marketing. Apart from
natural gas transmission, distribution and processing, the Company has
diversified business interests in LPG transmission, petrochemicals, city gas projects
and exploration and production activities. The Company has presence in
countries such as Egypt, Myanmar, China and Oman.
Subject is one of the leading public enterprises with a consistently
excellent financial track record. Turnover and Net Profits during the last ten
years has shown a compounded annual growth rate of 14 per cent. The Company
recorded a Turnover of Rs. 160470 Millions and
Profit After Tax of Rs. 23870 Millions in the
year 2006-07.
Subject owns and operates around 6700 km of natural gas pipeline
transmission network with a capacity of 148 MMSCMD and is laying five new
natural gas pipelines measuring 5000 km. involving a capex of nearly Rs. 200000
Millions which shall enhance the transmission
capacity to around 300 MMSCMD in 2011.
About RCF
RCF is a premier Fertilizer Government Undertaking and has been selected
to be a part of the Coal Gasification Committee by Ministry of Chemicals and
Fertilizers.
GAIL achieves mechanical
completion of 100,000 TPA new HDPE plant at PATA
New Delhi, September 5, 2007: Subject has achieved mechanical completion of its new
HDPE (High Density Polyethylene) Plant at the Petrochemical Complex at PATA.
GAIL Chairman & Managing Director, Dr. U. D. Choubey formally marked the
completion by opening the Plant on Tuesday at Pata.
The
capacity of the new HDPE plant is 100,000 TPA and is based on technology from
Mitsui, Japan. With the completion of the new HDPE plant, the polymer capacity
of the Pata Petrochemical plant has increased to 410,000 TPA from 310,000 TPA.
The
project was completed within the estimated project cost of Rs. 6473.800 Millions.
Commissioning
process will now commence and the plant is expected to be commissioned shortly.
GAIL’s polymer products include wide range of HDPE grades based on technology
from Mitsui, Japan, and wide range of HDPE and LLDPE grades based on technology
from NOVA chemicals, Canada.
Subject
made an entry into the petrochemicals market in the year 1999. Since then,
polymer sales have increased nearly three-fold in volume, from 110,000 tonnes
in the Financial Year 1999-2000 to 347, 000 tonnes in the Financial Year
2006-2007, and over five fold in value, from Rs 4790
Millions in the
Financial Year 1999-2000 to Rs. 25700 Millions
in the Financial Year 2006-2007. Out of a total Gross Margin of Rs. 23870 Millions, polymers have contributed nearly 40 per
cent in 2006-07.
Today,
more than one-fifth of the polymers (HDPE, LLDPE) consumed in India are
produced and marketed by GAIL. GAIL's polymer products are environment-friendly
and fully recyclable. GAIL’s petrochemical complex at Pata is North India's
only gas based integrated petrochemical complex and is a ISO 9000 and ISO 14000
certified facility.
Subject is currently also setting up a 280,000 TPA polymer capacity at
Dibrugarh in Assam at an investment of Rs. 54606.100 Millions
through a Joint Venture Company Brahmaputra Cracker and Polymer Limited. GAIL
is also looking to expand its presence through Joint Ventures – with atleast
one more plant in India and one overseas.
GAIL to form JV for Vadodara City Gas
MoU with RCF for Coal Gasification proposed
New Delhi , October 17, 2007: Subject will form a Joint
Venture Company for City Gas Projects in Vadodara. The Board of Directors of
GAIL approved the formation of JV with Vadodara Mahanagar Seva Sadan (VMSS) in
its meeting held in New Delhi today.
GAIL will have 25 percent equity in the
proposed JV, while VMSS will have 26 percent equity. The balance 50 percent
equity will be held by strategic investors and public.
GAIL’s contribution to the JV shall be by
way of management and technical skills, signing Gas Sale / Purchase Agreement
and expanding CNG outlets network
VMSS is already supplying gas to domestic and
commercial establishments in Vadodara and has an allocation of 1 lakh SCMD.
The existing infrastructure of VMSS and
GAIL’s presence in Gujarat shall be pooled to promote City Gas and CNG in
particular in Vadodara. The JV will be run by its own Boar which will have
representation from both GAIL and VMSS.
MoU with RCF for Coal Gasification Project
Subject will shortly be joining hands with
Rashtriya Chemicals and Fertilizers Limited (RCF) for jointly exploring
potential of proposed surface coal gasification project in Talcher. The Board
of Directors of GAIL also approved the signing of a Memorandum of Understanding
(MoU) with RCF in its meeting held in New Delhi today
Under the MoU, GAIL will carry out
techno-economic study of a commercial coal gasification plant, whereas RCF will
carry out the techno-economic study of a commercial plant for utilizing
synthesis gas from the proposed coal gasification plant. GAIL and RCF will
jointly evaluate the coal gasification potential for the fertilizer industry.
The project will help produce 7.76 MMSCMD
of synthesis gas (equivalent to 3000 tonnes per day of ammonia). The estimated
cost of proposed coal gasification project is Rs. 24000 Millions. GAIL will focus
on the production and marketing of synthesis gas which will be in line with its
core function of gas handling.
About GAIL (India) Limited
Subject is India's largest natural gas
company having a market share of 78% in natural gas transmission and 70% in
natural gas marketing. Apart from natural gas transmission, distribution and
processing, the Company has diversified business interests in LPG transmission,
petrochemicals, city gas projects and exploration and production activities.
The Company has presence in countries such as Egypt, Myanmar, China and Oman.
Subject is one of the leading public
enterprises with a consistently excellent financial track record. Turnover and
Net Profits during the last ten years has shown a compounded annual growth rate
of 14 per cent. The Company recorded a Turnover of Rs. 160470 Millions and Profit after
Tax of Rs. 23870 Millions in the year 2006-07.
Subject owns and operates around 6700 km of
natural gas pipeline transmission network with a capacity of 148 MMSCMD and is
laying five new natural gas pipelines measuring 5000 km. involving a capex of
nearly Rs. 200000 Millions which shall enhance the transmission capacity to around 300
MMSCMD in 2011.
About RCF
RCF is a premier Fertilizer Government
Undertaking and has been selected to be a part of the Coal Gasification
Committee by Ministry of Chemicals and Fertilizers
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government official
or a family member or close business associate of a Government official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on Corporate
Governance to identify management and governance. These factors often have been
predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.39.41 |
|
UK Pound |
1 |
Rs.79.81 |
|
Euro |
1 |
Rs.57.58 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
69 |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|