MIRA
INFORM REPORT
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Report Date : |
22.10.2007 |
IDENTIFICATION DETAILS
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Name : |
GAIL
INDIA LIMITED |
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Registered Office : |
16, Bhikaji Cama Place, R. K. Puram, Ring Road, New
Delhi-110066, India |
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Country : |
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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
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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 ( B-21/A, Shiv Marg
Bani Park 4/257, Vivek Khand
Gomti Nagar B-1, 809, Sakar-II Bldg.
Near Ellis Bridge Opp. Town Hall 12th Floor, MMRDA Bldg., 3rd
Floor Bandra Kurla Complex Bandra (East) 6-3-871, 3rd 21, Palace Road 4-B, |
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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 ( LPG Recovery Plant, Vijaipur GAIL Complex Vijaipur-473112 . Distt. Guna (M.P.) LPG Recovery Plant, Vaghodia GIDC Industrial Estate Vaghodia-391760 Distt. LPG Recovery Plant, Lakwa, Sivasagar-785688 ( LPG Recovery Project, Gandhar Vill. Rozantankaria.Tal. Amod Distt. Bharucl> 392140 ( |
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Regional
offices / Branches : |
Located
at:- ·
·
Ahmedabad, ·
Hazira ·
Chennai, Tamilnadu |
DIRECTORS
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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
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Name : |
Mr. N. K. Nagpal |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
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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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0 |
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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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0 |
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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. 1 lakh. |
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 |
20734425 |
100.00 |
BUSINESS DETAILS
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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 |
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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 |
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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
9A,
1st Floor, |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
statutory
auditors
Mehra
Goel & Company Chartered
Accountants branch
auditors
SCJ Associates Chartered
Accountants Chhajer
& Company Chartered
Accountants Cost
auditors
M/s R.J. Goel & Company Cost Accountants M/s Ramnath Iyer & Company Cost Accountants M/s K.G. Goyal & Company Cost Accountants Jaipur M/s Shome & Banerjee Cost Accountants M/s K. Narsimhma Murthy Cost Accountants M/s Bandyopadhyay & Bhowmick & Company Cost Accountants Kolkata M/s R.M. Bansal & Company Cost Accountants |
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Associates/Subsidiaries : |
10Collyer# 19-08,
Ocean Building, Singapore-049315 Hotel Brahmaputra
Ashok, |
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Joint Venture
Companies: |
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CAPITAL STRUCTURE
Authorised
Capital
:
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No.
of Shares |
Type |
Value |
Amount |
|
1000000000 |
Equity Shares |
Rs.10/- each |
Rs. 10000.000 Millions |
Issued,
Subscribed & Paid-up Capital :
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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 |
13378.5 |
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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0 |
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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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|
96149.1 |
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CURRENT ASSETS, LOANS & ADVANCES |
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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
|
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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 |
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|
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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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TOTAL |
140494.300 |
131895.600 |
118787.400 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
161224.400 |
144843.400 |
139135.700 |
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Other Income |
5449.500 |
4555.400 |
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Total Income |
166673.900 |
149398.800 |
139135.700 |
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Profit/(Loss) Before Tax |
28597.800 |
32766.200 |
28722.700 |
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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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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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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 : |
|
|
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|
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|
Purchase of Gas for Trading |
85370.700 |
77952.100 |
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|
Gas Pool |
8919.300 |
4590.500 |
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|
Manufacturing, Transmission, Administration,
Selling and Distribution |
37049.100 |
26587.000 |
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|
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Depreciation |
5753.800 |
5594.900 |
|
|
|
Interest and Finance Charges |
1071.700 |
1173.900 |
|
|
Total Expenditure |
138164.600 |
115898.400 |
109072.100 |
|
QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
|
30.06.2007 |
30.09.2007 |
|
Type |
|
1st Qtr |
2nd Qtr |
|
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 |
STOCK PRICES
|
Face Value |
Rs.
10.00/- |
|
High |
Rs.
242.45/- |
|
Low |
Rs. 235.15/- |
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
Natural gas is increasingly being looked at as an important source of energy in
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
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
During September 2004,the company has formed a subsidiary in the
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
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
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
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 (
- 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
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
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,
- 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
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)
In CBM-III bidding round, the Company participated in 7 blocks partnering with
a major CBM company of
- 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
Carrying forward the success stories of
- 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
All the four companies in which the Company made investment, viz, Fayum Gas
Company (FGC), Shell CNG Egypt (SCNGE), National Gas Company (Natgas) in
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
The Company is also pursuing other business opportunities in the gas sector of
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
- 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
- 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 (
The Company has a wholly owned
subsidiary namely, GAIL Global (
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
- 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
- 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
- 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
- Green Gas Limited (GGL):
GGL is currently operating 4 CNG
stations in
- 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
- 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
- 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,
- 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
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
·
Gas
Demand Outlook
On the background of fast GDP
growth, and the economic reforms process in
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,
- 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, your Company envisages to be a major player, particularly
in transmission segment. Your 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
- Enhanced Visibility on Gas Sourcing and
Volume Growth
The Ministry of Petroleum and
Natural Gas decision to grant permission to your 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, your 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 your Company as the MoU provides for the joint development of gas
transportation and utilisation of your 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 your 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 your 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 your Company.
- Inter-State Gas Grid
Your 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 your 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.
7,500 Crores.
GAIL to form JV for Vadodara City Gas
MoU with
RCF for Coal Gasification proposed
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
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
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 (
Subject is
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
(
GAIL
- RCF MoU proposed for coal gasification
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 (
Subject is
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 (
GAIL achieves mechanical completion of 100,000 TPA new HDPE
plant at PATA
The
capacity of the new HDPE plant is 100,000 TPA and is based on technology from
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
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 479 crore 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
Subject is currently also setting up a 280,000 TPA polymer capacity at
Dibrugarh in
BCP L Brahmaputra Cracker
and Polymer Limited Project
BCPL – ONGC sign Feedstock
Supply Agreement for Assam Gas Cracker Project
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
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.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No 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. 39.79 |
|
|
1 |
Rs. 81.41 |
|
Euro |
1 |
Rs. 56.87 |
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 |
|