The Global macro environment in the Western economies have shown signs of moderaterecovery during the fiscal period 2013-14 nevertheless fundamental and structuralweakness persists. Their growth recovery is being watched keenly as the same has atransmittal impact on our economy. Asian growth story remained a mixed bag during theperiod with Far East Asia being the fastest growing regions of the world whereas thedeveloping South Asian economies expanded at a slower pace. Inspite of the overalltapering effect the Asian pack grew between 4 to 7.5 percent during the year. Spurt inunderlying activities indicate positive traction to economic expansion and adjustments tothis growth need to be made on account of the headwinds-tighter monetary & financialconditions geo-political tensions in ME and European regions and volatility in commodityprices.
Much along the projected lines Indias GDP grew by 4.7% during the last fiscalyear and the economy had been awaiting fiscal and structural measures to spur revival.There is a general hope and anticipation of key reforms and changes being taken up acrossvarious sectors accompanied with a return to fiscal responsibility and prudence. Thecurrent fiscal year is projected to grow at about 5.5% and set the base for achievinghigher rates of economic growth in the subsequent period. The citizens seek an all-roundeconomic and social development. To provide wings to these aspirations your company isgeared up to meet the clean fuel challenges by expanding the markets and increasingpenetration in the backdrop of rising energy demand. Your company plans to leverage theanticipated reforms and its global expertise to play a key role in mitigating energyscarcity of our country. Given the challenge of ensuring a stable growth coupled withsustaining the environment and ecology Natural Gas shall be the preferred fuel of thecentury and GAIL shall be at the frontier of this change. The recent Budget for the fiscalsaw a thrust in this direction with the announcement of laying of an additional 15000kilometers of natural gas pipelines across the country to complete the National Gas gridnetwork to enable the reach across all the regions. Your Company plans to commenceconstruction of the 4000 kms. of authorized pipeline networks in phases subject to firmtie-up of anchor load customers enroute.
In the financial year that went by you would be glad to know that your company showeda healthy growth rate in spite of odds. In FY 2013-14 your Company registered a 21%increase in Net Revenue (Rs 57245 Crore) over the previous year. Despite sharing theunder-recoveries of Oil Marketing Companies (OMCs) to the tune of Rs 1900 Crores theProfit after Tax increased by 9% to Rs 4375 Crore during the year. Your company has tiedup with several international Oil and Gas majors for securing gas supplies to put inplace a diversified long-term import portfolio of approximately 86 MMSCMD. In FY 2013-14Your company imported 25 LNG cargoes (about 1.50 MMTPA) from various Internationalsources on short term as well as spot basis to meet requirement of the domestic market.Your Company also recognizes the need for accelerated growth of LNG infrastructure.Towards this a MoU with Paradip Port Trust Limited has been executed by Your Company forsetting up a LNG terminal at Paradip Port Odisha. In addition you company is alsoworking towards Marketing LNG to international off takers to leverage and de-risk theportfolio.
Your Companys E&P assets under A-1 and A-3 blocks in Myanmar have startedproducing gas resulting into a net positive generation of cash flow from this businessportfolio.
Amidst a robust performance and an optimistic outlook I convey with profound griefthat there has been a pipeline blow-out along the Tatipaka-Kondapalli section in KG Basinnetwork at Nagaram village Andhra Pradesh causing fatalities. GAIL as an abidingcorporate citizen took immediate rescue relief and rehabilitation measures to providesuccor to the affected people. In the wake of the incident a series of steps have beeninitiated on a precautionary note to reassess the health and integrity of the pipelinesand other hydrocarbon assets. HSE department has launched an internal drive to sensitizethe work force about ensuring safer operations maintaining zero tolerance to deviationsto Standard operating procedures and for addressing Safety related issues. Further theprocess is underway to engage International Consultants to review the operationalprocesses and recalibrate the same in line with benchmarks followed by Global majors inthe business. The Strategic core of the Company shall continue to focus on ensuringoperational Safety and efficiency of the hydrocarbon installations at World classstandards. At the same time your company shall remain committed to leverage and delivervalue across the entire gas value chain. Your Company will continue to strive for energysecurity for the country by tying up with Global players for gas/LNG sourcing throughvarious sources. In the domestic market the Company will play a focused role in LNGinfrastructure development with regas capacity bookings natural gas pipeline expansionwith CGD infrastructure development and Petrochemicals portfolio enhancement. To developdomestic gas infrastructure your Company is focusing at pipeline expansion and booking ofre-gasification capacities. These strategic endeavors are aimed at strengtheningIndias energy security and harnessing the Natural Gas value chain to ensure YourCompanys defining role and contribution towards the Nations socio-economicdevelopment.
Your Company received recognition for its work towards development of energyinfrastructure in the nation. The 1000 Km long Dabhol-Bengaluru Pipeline Projectconnecting south India to national gas grid was awarded the coveted Platts Global EnergyAwards 2013 as "Premier Project in Large Construction Category". As the Companyaspires to undertake pioneering initiates for Better Future it is but imperative tocontinually acquire a Young Capable and Motivated Human Capital into the GAILParivar. During the last fiscal 132 highly qualified individuals were inducted inthe Company.
Further Environmental sustainability and community Interventions towards empoweringmarginalized groups have been the underlying ethos of your companys operations andactivities. As part of the CSR initiative various activities for transforming andenriching community lives under the identified thrust areas were taken up with aninvestment of Rs. 91 crore (approx.). This reflects the Companys deep seatedphilosophy of "Care Share and Grow" for creating an all-round enduring impactaround the business operations.
On behalf of the Board of Directors and Team GAIL I thank you for your continuedsupport which has enabled us to build a robust and sustainable business.
B. C. Tripathi
Chairman & Managing Director