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GAIL (India) Ltd.

BSE: 532155 Sector: Others
NSE: GAIL ISIN Code: INE129A01019
BSE 00:00 | 17 Sep 154.15 -2.95
(-1.88%)
OPEN

157.10

HIGH

159.35

LOW

153.35

NSE 00:00 | 17 Sep 154.10 -3.05
(-1.94%)
OPEN

156.85

HIGH

159.35

LOW

153.25

OPEN 157.10
PREVIOUS CLOSE 157.10
VOLUME 1421753
52-Week high 170.00
52-Week low 81.25
P/E 11.11
Mkt Cap.(Rs cr) 68,449
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 157.10
CLOSE 157.10
VOLUME 1421753
52-Week high 170.00
52-Week low 81.25
P/E 11.11
Mkt Cap.(Rs cr) 68,449
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

GAIL (India) Ltd. (GAIL) - Chairman Speech

Company chairman speech

I hope that all of you are safe and in good health. The year gone by has been quitechallenging for all of us due to the COVID-19 pandemic. It truly tested our mettlewherein we had to deal with a very different world than the one we have known before. Thesupple yet firm and strong character of your Company built over years was put tostrenuous test during these times and your Company emerged out of it relatively unscathed.Here I want to pay our sincere gratitude to all frontline workers who have been workingtirelessly combating COVID-19 and its ill effects. With the pandemic far from over as wecontinue to face emerging threats from new variants we all must put our best effortstogether to sail through this uncharted territory. We are fully confident that withconcerted and collaborative efforts we would successfully overcome these challenges.

It is an honor and satisfaction for me to address you again to share the performancehighlights and achievements of your Company during the FY 2020-21 and its future outlook.Despite the initial contraction our business has recovered and recorded a steady year ofperformance in FY 2020-21. This year we have embarked upon the Integrated Reportingjourney which talks about your Company's performance across the six capitals which Ihave mentioned later in this message contributing to the growth and sustained valuecreation.

Your Company puts its focus on the present but always with an eye on the future. Wehave always strived to create sustainable value for all our stakeholders. Our shareholdershave been provided with steady long-term returns on their investments through a consistentdividend distribution. FY 2020-21 was a challenging year for the entire sector due to theCOVID-19 pandemic's first and subsequent second wave. Despite the sluggish businessenvironment your Company has paid dividend at X 5 per share representing a healthypayout ratio of 45.8%. In FY 2020-21 your Company also rewarded the investors through amaiden share buy-back amounting to X 1274 crore providing handsome returns to theinvestors. Despite the challenging times the market capitalization of the Company hasgrown from X 34480 crore as of 31st March 2020 to X 60189 crore as on 31stMarch 2021 reflecting strong investor confidence in your Company.

You will be happy to know that your Company has performed consistently and improved itsrobust fundamentals despite growing complexities in the industry and the continueduncertainty surrounding global economies. During the year under review the Petrochemicalbusiness has exhibited exemplary performance with more than 100% capacity utilization.Your Company has also achieved its highest-ever annual sales of Petrochemicals this yearwith combined sales of over 1.18 MTPA for GAIL Pata and BCPL. Your Company alsosuccessfully maintained uninterrupted and safe operations of its pipeline systems andplants despite the pandemic situation ensuring continuous availability of Natural Gas andLPG to the critical sectors in the country. Although your Company has witnessed somedecline in gas demand during the initial months of the pandemic the recovery in gasdemand post-September has brought our Gas Markeing and Transportation business back ontrack to pre-covid levels. We have maintained our strong Capex program and despite variousCOVID-19 induced constraints your Company has made a CAPEX of ~ X 7000 crore.

Your Company is currently executing around 6000 km of pipeline projects of its own andabout 2000 km through two JVs as part of the National Gas Grid. PNGRB has authorizedyour Company to execute 1755 km long Mumbai-Nagpur-Jharsuguda Pipeline. Despite theimmensely challenging times of the COVID-19 pandemic your Company has made substantialprogress in project execution and has commissioned over 1000 km natural gas pipeline inFY 2020-21. Kochi- Mangalore-ll section of KKBMPL and Dobhi-Durgapur section of JHBDPLalso popularly known as the 'Pradhan Mantri Urja Ganga (PMUG)' project were dedicated tothe nation by the Hon'ble Prime Minister expanding the reach of the natural gas networkto Eastern and Southern India. With the commissioning of the Dobhi-Durgapur section theNational Gas Grid has now covered West Bengal. JHBDPL and its extension Barauni-Guwahatipipeline will act as a feeder line to North-East Regional Gas Grid also known asIndradhanush Gas Grid connecting East India with the National Gas Grid. In line with theGovernment's vision of providing access to energy for all at affordable prices GAIL andits group CGD companies have provided more than 1 million PNG connections to householdsand 341 new CNG stations were commissioned in FY2020-21 that merit a special mention.

Your Company currently owns and operates a network of around 13700 km of natural gaspipeline. The natural gas transportation segment has generated gross revenue of X 5953crore in FY 2020-21 with a transmission volume of 104.2 MMSCMD. Natural gas marketingremains one of the key core businesses of your Company providing a gross revenue of X43846 crore for the sale of 89.2 MMSCMD of gas during the FY 2020-21.

In the Petrochemicals segment your Company has achieved its highest ever production of813 KTA with 871 KTA sales volume for Pata. To expand the customer base your Company hasstarted an alternate supply chain by the online sale of the polymer through the webportal. The gross revenue of your Company from Petrochemicals was X 7061 crore in FY2020-21. In the LPG and Other Liquid Hydrocarbon segments your Company's gross revenuestood atRs. 3294crore.

As a responsible corporate citizen your Company is committed to reducing its carbonemissions and intending to increase its reliance on renewable energy to meet its energyrequirement. In addition to its existing renewable portfolio of over 130 MW your Companyis now executing a new 1.8 MW captive Solar PV project at Vijaipur in Madhya Pradeshanother 2.6 MW solar PV project at Pata in Uttar Pradesh and 3.2 MWat various O&Msites.

To complement its LNG trading business your Company has chartered a newly built LNGvessel - 'GAIL Bhuwan' from Mitsui O.S.K Lines in March 2021. Further your Company hasdeveloped the in-house capability to manage LNG vessels chartered by GAIL and even startedgenerating revenue from freight trading.

Your Company exceeded the required statutory spending of 2% of the average net profitof the three immediately preceding financial years on CSR activities. As a responsibleorganization your Company has contributed over X 80 crore in various COVID-19 reliefmeasures including X 50 crore towards the PM-CARES fund. Despite the pandemic highestnumber of apprentices were engaged by your Company during FY 2020-21. GAIL's SkillInstitute (GSI) in Nagaram (AP) was accredited with a 5-Star rating and GSI-Guna (MP) wascertified with a 4-star rating under Skill Management and Accreditation of Training Centre(SMART). Further the flagship CSR program 'Utkarsh Super 100' has been acknowledged inthe paper published by Harvard Business School titled 'Super 30: Educating the ElitePoor' dated fJuly 2020.

Digital strategy is one of the critical pillars of "Strategy 2030" thebusiness strategy of GAIL. Your Company has made significant investments in digital assetsand new technologies intending to address the Company's future needs and to improve theoverall efficiency. Your Company has taken various digital initiatives like theintroduction of the digital worker for its robotic process automation digitization ofcontactor payment processing digitization of employee's payments etc. to give a boost tothe Digital Yatra which your Company has embarked upon to manage its operations/activities even during the pandemic digitally. Natural gas trading and transportationinvoice generation through BOT have been successfully tested and E-invoicing has beenimplemented under GST. Bharat Bill Pay System (BBPS) has been implemented in CGD businessto enable customers to pay online through mobile. Implementation of suitable digitalsolutions has helped your Company to place orders/contracts worth X 6193 crore despiteCOVID-19 challenges without any complications and within the rigid timeline.

Your Company has always been progressive in implementing leading practices. We arepleased to present our first-ever Integrated Report for FY 2020-21 following theInternational Framework of Integrated Reporting. This next generation annual report aimsto provide an insight into your Company's resources and relationships that are known asthe capitals and how the Company interacts with the external environment and the capitalsto create value. The integrated report highlights ourvalue creation journey by focusing onour performance on the six capitals (i.e. financial capital intellectual capital naturalcapital manufactured capital social & relationship capital human capital) riskmanagement governance outlook and strategy as well as adherence to a sustainable future.

The global energy sector is witnessing a paradigm shift in recent years as the world istransitioning to a sustainable energy future. To accomplish a cleaner primary energy mixfor India the Indian Government is emphasizing the expansion of India's Natural Gassector and is also laying a roadmap for achieving a gas-based economy along with growth inrenewables. To boost the gas-based economy the Government has announced various reformsin the gas sector giving the much-needed thrust to the industry.

As a leading integrated energy major your Company has aligned itself with theGovernment's vision to play a vital role in the fastgrowing energy sector in the country.We are already making confident strides towards making vision of 'gas-based economy' areality. The development of the Indian gas market is a key focus area of your Company.Maintaining the leadership position in the core businesses including gas transportationmarketing and LNG remains a key focus area. Your Company has the largest and mostdiverse LNG portfolio in India that can offer both stable prices and reliable supply toconsumers. Your Company shall be pushing for higher gas usage in the industrial segmenttransport segment using CNG & LNG Trigeneration cold storageetc. Further yourCompany is looking for avenues to supply gas in the new segments like LNG trucking i.e.LNG for long haul transportation.

Your Company is looking to expand its presence in petrochemicals and also diversifyinginto high-margin downstream businesses. The focus is on having Polypropylene (PP)production capacity through setting up two polypropylene units (Propane DehydrogenationPolypropylene Plant - PDHPP in Usar Maharasthra and PP Plant at Pata Uttar Pradesh) andassessing opportunities in certain speciality chemicals in India. Your Company hassuccessfully completed the Licensors selection process for both the PDHPP and PP unitsduring the year. With the forthcoming capacity additions your Company will have a morebalanced and diversified polymer portfolio of over 1.6 MTPA consisting of bothPolyethylene (PE) and Polypropylene (PP). Your Company is also promoting India'sfirst-ever coal gasification- based ammonia-urea project at Talcher through JV mode andhas concluded the financial closure of M/s Talcher Fertilizers Ltd. (TFL) in June 2021.

Your Company will be selectively investing in the Renewable Energy (RE) domain giventhe future growth potential and is also supporting Gol's initiatives towards meetingIndia's INDC (Intended Nationally Determined Contributions) commitments on climate change.Your Company has been scouting for opportunities to scale up the RE portfolio from thecurrent 130 MW through bidding and other inorganic routes such as mergers andacquisitions. In addition your Company is also foraying into Ethanol and Hydrogengeneration. To promote new technologies your Company has invested in startups that focuson Electric Vehicles digitization etc. Under SATAT initiative a pilot project of 5 TPDCompressed Bio Gas (CBG) plant at Ranchi Jharkhand is being implemented in sync withGovernment's vision of pursuing low carbon pathways and will benefit environment boostIndia's "Urja Atmanirbharta" and also further economic growth by revitalizingrural economies. Thus your Company is continuously exploring new business opportunitiesthat can offer substantial growth along with portfolio diversification.

Before I conclude on behalf of the Board of Directors I wish to convey our sincereregards and deep gratitude to our valued stakeholders for continued support and trust. Youalways have been the motivational force that has facilitated us to move ahead and achievetargets despite the numerous challenges. I also put my heartfelt appreciation for all GAILemployees who took on a courageous responsibility with a commitment to ensure energy andfeedstock supplies even during the worst COVID-19 situation. They are the backbone of thisCompany and they have put their best efforts day after day to transform your Company andto make it more competitive.

I would like to conclude by saying that your Company is not only resilient enough to gothrough this tough time but also to shape the energy future. We will keep working to makea difference in your life and to enhance the quality of your life through clean energy andbeyond.

Thankyou

f V Manoj Jain

Chairman & Managing Director

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