GUJARAT STATE PETRONET LIMITED
ANNUAL REPORT 2011-2012
Gujarat State Petronet limited
The Directors have pleasure in presenting the 14th Annual Report and
Audited Accounts of the Company for the year ended 31st March, 2012.
FINANCIAL HIGHLIGHTS (Rs. in Crore)
Particulars (Standalone) 2010-11 2011-12
Total Income 1,068.15 1,174.63
Employee Benefit Expenses 14.86 19.69
Other Expenses 62.53 70.37
Total expenses 77.39 90.06
PBDITA 990.76 1084.57
Finance Cost 99.07 130.20
Depreciation & Amortisation 153.30 181.90
Preliminary Expenses Written-Off 0.10 0.25
Depreciation Written Back (23.38) -
Prior Period Adjustments (0.32) 3.21
Profit Before Tax 761.99 769.01
Tax including Deferred Tax 255.61 246.95
Profit After Tax Carried to
Balance Sheet 506.38 522.06
Transfer to General Reserves NIL NIL
Transfer from Bond Redemption
Reserve (1.00) NIL
(including Dividend Distribution Tax) 65.39 65.41
Profit After Appropriations 441.99 456.65
Your Company has excelled on all performance parameters. Major achievements
of the Company are summarized below:
* Total Income increased from Rs. 1068.15 crore in previous year to
Rs.1174.63 crore recording increase of 9.97%.
* PBDITA increased from Rs. 990.76 crore in previous year to Rs. 1084.57
crore, recording an increase of 9.47%.
* 99.97% pipeline grid availability and "accident free" year of operations.
* PNGRB has granted authorisation for Gas Pipeline Network of 2239 Kms in
* Your Company (with 52% stake) has signed Joint Venture Agreements (JVAs)
with IOCL (26%), BPCL (11%) and HPCL (11%) on 30th April, 2012 for
execution of the three Cross Country Pipeline Projects viz Mallavaram -
Bhopal - Bhilwara - Vijaipur (approx 1585 Kms) Pipeline Project, Mehsana -
Bhatinda (approx 1670 Kms) Pipeline Project and Bhatinda - Jammu - Srinagar
(approx 740 Kms) Pipeline Project.
* Achieved Financial Closure for the aforesaid three Cross Country Pipeline
During the year, paid up share capital of the Company has increased from
Rs. 562.58 crore to Rs. 562.69 crore on account of allotment of shares to
eligible employees under the ESOP -2005 & ESOP - 2010.
Keeping in view the fund requirements for expansion projects and
subsidiaries, the Board of Directors of the Company is pleased to recommend
dividend @ Rs. 1 (i.e. 10%) per Equity Share of the face value of Rs. 10
each for the Financial Year 2011-12.
GAS TRANSMISSION SERVICES
The Company has effective Firm GTAs of 29.70 MMSCMD for transmission of gas
to various customers and interruptible/short - medium term GTAs for 6.58
MMSCMD (Previous year: firm GTAs of 32.76 MMSCMD and interruptible GTAs of
GAS GRID PROJECT
Government of Gujarat has always played a pro-active role in the
development of the energy value chain in the State. Gujarat is the first
State to plan and execute a State-wide Gas Grid on an open access
The pipeline grid has been designed as per the highest international
standards with inbuilt flexibility to cater to varying loads.
The pipeline grid map of GSPL for Gujarat is enclosed herewith as Annexure
The map showing the proposed Cross Country Natural Gas Transmission
Pipelines to be implemented by GSPL Consortium (through special purpose
vehicles) is enclosed herewith as Annexure - VII.
Since last Directors` Report, the Company has successfully completed
commissioning of various Pipeline Projects like Nano Connectivity Pipeline,
Botad Spurline, Spurline to Bhavnagar, Electrothem Spurline, Tana - Amreli
Current grid operations account for approx 2065 Kms. Gas is flowing from
Hazira/Dahej/Vapi to various industries and City Gas Distribution ("CGD")
Networks located in various districts of Gujarat including Surat, Bharuch,
Baroda, Anand, Ahmedabad, Gandhinagar, Sabarkantha, Bhavnagar, Mehsana,
Surendranagar, Rajkot, Jamnagar, Navsari, Kutchh, Panchmahal, Kheda,
Projects under execution
Your Directors are pleased to inform that the Company continues to develop
pipeline infrastructure in the State of Gujarat. The following Pipeline
Sections are being developed on priority:
* Halol - Dahod Pipeline (approx 105 Kms)
* Mehsana - Palanpur Pipeline (approx 70 Kms)
* Anjar - Bhuj Spurline (approx 47 Kms)
Gujarat State Petronet Limited
* Bodighodi - Ambardi Pipeline (approx 47 Kms)
* Pipavav - Gundlav Pipeline (approx 46 Kms)
* Dabhan - Thasra Pipeline (approx 45 Kms)
* Amboli - Vantevad Pipeline (approx 44 Kms)
* Dahej SEZ Pipeline (approx 23 Kms)
Further, the Company continues to develop several other trunk and spurlines
to connect new industrial clusters and medium sized customers along the
pipeline network, which include regions like Anjar, Sikka, Dabhan, Thasra,
Halol Dahod and Dahej.
The Company is a co-developer in Dahej SEZ and Panoli SEZ and is developing
pipeline infrastructure in these SEZs. Several customers have started
receiving gas in Dahej SEZ through Company`s Network with more getting
connected on ongoing basis.
WIND POWER PROJECT
Your Company being committed to promote clean and green energy has set up
wind power project of 52.5 MW in the areas of Maliya Miyana, Rajkot and
Gorsar & Adodar, Porbandar. During the year, the Company has sold
10,91,44,509 KWH of electricity generated through Windmills.
The Company is working on future expansion projects based on the demand in
various regions around the gas grid.
OPERATION & MAINTENANCE ACTIVITIES
The Company has transported 12430 MMSCM of gas during the Financial Year
2011 - 12 (Previous Year: 13005 MMSCM). To safeguard pipeline assets and
optimize efficiency of the pipeline system, the Company is giving utmost
importance to efficient operations and preventive maintenance.
Your Company has incorporated following two subsidiary companies in
October, 2011 for execution of the three Cross Country Pipeline Projects
awarded by Petroleum and Natural Gas Regulatory Board:
Company Pipeline Project
GSPL India Gasnet Limited 1) Mehsana - Bhatinda
(approx 1670 Kms)
2) Bhatinda - Jammu - Srinagar
(approx 740 Kms)
GSPL India Transco Limited Mallavaram - Bhopal - Bhilwara
- Vijaipur (approx 1585 Kms)
In accordance with the General Circular No. 2/2011 dated 8th February, 2011
issued by the Ministry of Corporate Affairs, Government of India, the
Balance Sheet, Statement of Profit & Loss and other documents of the
subsidiary companies are not being attached with the Balance Sheet of the
Company. However, the financial information of the subsidiary companies is
disclosed in the Annual Report in compliance with the said Circular. The
audited annual accounts and related information of the subsidiary
companies, where applicable, will be made available to any member upon
request. The annual accounts of the subsidiary companies will also be kept
open for inspection at the Registered Office of the Company and that of the
respective subsidiary companies.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard-21 on Consolidated Financial
Statements read with Accounting Standard-23 on Accounting for Investments
in Associates, the Audited Consolidated Financial Statements are provided
in the Annual Report.
HEALTH, SAFETY AND ENVIRONMENT
The Company, in order to fulfill its commitment towards health, safety and
environment, has taken active steps towards establishment of Safety
Management Systems (SMS). Environment and safety features have been
integrated into design, construction and O&M operations of the Company for
ensuring utmost safety for the facilities, local community and the
environment. The same is also being reflected in the QHSE Policy of the
Company. The Company is expanding and managing its operations in a manner
which is safe and environmentally sustainable.
For developing effectiveness of Safety Management Systems, training of all
employees across the Company is ensured through various training programs.
The same is being monitored through internal audit teams and delegation of
safety management up to the local level. Further, emergency management
plans are being reviewed and updated regularly. Moreover, contractors`
adherence to Company`s QHSE Policy is also assured through regular site
visits and external audits. Contract employees are subjected to training
programs like safety induction, defensive driving, Personal Protective
Equipment Policy etc. Regular site visits ensure the enhancement of safety
culture which has also ensured the safe commissioning of the new projects.
To achieve the highest quality of safety systems, the Company has moved
towards international recognition with the corporate membership of British
Safety Council. The Company is proud to maintain its target of `zero
accident` year with full commitment of its employees and management.
The Company is re-certified to Integrated Management Systems (ISO
9001:2008, ISO 14001:2004 & OHSAS 18001:2007) with validity till 30th
October 2014. Effectiveness of these certifications is being assured
through planned audits of the system. Continuous improvement is visible in
various O&M systems. Predictive maintenance schedules are being adhered to
with the updating of records. Emergency response plans are updated as a
part of routine function and their respective effectiveness is verified by
regular mock drills as per intervals identified by respective work bases.
To further enhance the benchmark of Safety Management Systems, your Company
was audited by British Safety Council for Five Star Safety Audit. British
Safety Council has awarded Four Star rating to O&M division after an
extensive evaluation by the auditor from British Safety Council. Your
Company has also bagged International Safety award for 2012 by British
Safety Council for its HSE performance in 2011. Besides, your Company has
received Certification of Appreciation in 2011 by Gujarat Safety Council
for its HSE performance in 2010.
During the year, the Company has not accepted any Fixed Deposits from the
CORPORATE SOCIAL RESPONSIBILITY
During the year, the Company focused on CSR initiatives, mainly for
promoting use of environment friendly fuel, creating awareness for
conservation of energy, promotion of educational activities, etc.
Since last Directors` Report, Shri Atanu Chakraborty, IAS, Shri M M
Srivastava, IAS (Retd.), Shri J K Jain and Shri Suresh Mathur ceased to be
the Directors of the Company. Your Directors wish to place on record an
appreciation of the services rendered by them as the Directors of the
Pursuant to the provisions of Section 256 of the Companies Act, 1956, Shri
N K Mitra, Director of the Company shall retire by rotation at the ensuing
Annual General Meeting and being eligible, offers himself for
A brief resume of the Director retiring by rotation at the ensuing Annual
General Meeting, nature of his expertise in specific functional areas and
details regarding the companies in which he holds directorship,
membership/chairmanship of committees of the Board are given in the
Corporate Governance Report forming part of this Directors` Report.
STATUTORY AND C&AG AUDIT
As your Company is a Government Company, the Statutory Auditors are
appointed by the Comptroller & Auditor General of India (C&AG).
Accordingly, the C&AG has appointed M/s P Singhvi & Associates, Chartered
Accountants as Statutory Auditors of the Company for the Financial Year
2011-12. C&AG has given Nil comment report for the Financial Year 2011-12.
The Nil comment Report is enclosed herewith as Annexure-V.
Your Company is required to carry out Cost Audit for "Gas Transportation"
business as well as "Generation of Electricity Through Windmill" business
from the Financial Year 2011-12 onwards pursuant to notification no. G.S.R.
870(E) & 871(E) dated 7th December, 2011 of Ministry of Corporate Affairs
under Section 209(1)(d) & 233B of the Companies Act, 1956. Accordingly,
your Company has appointed M/s R K Patel & Co. as Cost Auditor for
Financial Year 2011-12 for the said businesses and the necessary Report in
the prescribed form shall be submitted to MCA within stipulated time period
in accordance with the applicable Cost Audit Rules.
Audit Committee of Directors of the Company at its Meeting held on 24th
May, 2012 approved the Annual Accounts for the Financial Year ended on 31st
March, 2012 and recommended the same for approval of the Board.
DIRECTORS` RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956,
the Directors hereby confirm that,
(i) in the preparation of the Annual Accounts for the year ended 31st
March, 2012, the applicable accounting standards read with requirements set
out under revised Schedule VI to the Companies Act, 1956, have been
followed along with proper explanation relating to material departures.
(ii) accounting policies are selected and applied consistently and
judgments and estimates are reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company at the end of the
financial year and of profit of the Company for that period.
(iii) proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956 for
safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities is taken.
(iv) the Annual Accounts are prepared on a going concern basis.
MANAGEMENT DISCUSSION & ANALYSIS
This Annual Report contains a separate section (Annexure-I) on the
Management Discussion and Analysis, which forms part of this Directors`
Corporate Governance denotes the framework for companies to conduct their
business in an ethical and responsible manner. It is determined primarily
by the approach that a company has towards its stakeholders as well as to
the environment in which it operates. It stems from the belief and
realization that corporate citizenship has a set of responsibilities, which
must be fulfilled for a company to progress and succeed over the long term.
The Company believes that good governance alone can deliver continuous good
business performance. A Report on Corporate Governance as required under
Clause 49 of the Listing Agreement is incorporated as a part of this
Directors` Report (Annexure - II). A Compliance Certificate by the
Practicing Company Secretary is also attached to this Directors` Report.
GSPL EMPLOYEES STOCK OPTION PLAN ("ESOP")
The Company has instituted the following ESOP Schemes as incentives to
attract, retain and reward the employees, and to enable them to participate
in the future growth and success of the Company.
1. GSPL Employees Stock Option Plan - 2005 (ESOP - 2005).
2. GSPL Employees Stock Option Plan - 2010 (ESOP - 2010).
Under the said ESOPs, each such Option has conferred a right upon the
employee to apply for one Equity Share of the Company. Statutory
disclosures regarding ESOP - 2005 and ESOP - 2010 are enclosed as Annexure-
III & IV respectively to this Directors` Report.
PARTICULARS OF EMPLOYEES
During the year under review, none of the employees were drawing
remuneration, which require disclosure under Section 217 (2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
Conservation of Energy
During the period under review, there is no consumption of energy requiring
The Company has not imported any technology. However, the Company has
engaged consultants/advisors of international repute to make available
latest technology for project implementation.
Foreign Exchange Earnings & Outgo
The Company has incurred Expenditure in Foreign Exchange to the extent of
Rs. 1093.04 Lacs during the year under review. Foreign Exchange Earnings
during the year were NIL.
The Directors appreciate the continued support received from the valued
customers and look forward to this mutually supportive relationship in
The Directors place on record their appreciation of the valuable services
rendered by the employees of the Company at all levels, without whose
contribution the excellent performance of the Company would not have been
The Directors are extremely grateful for all the support given by the
Government of Gujarat at all levels. Their guidance, encouragement and
moral support has enabled the Company to expand the pipeline network in a
The Directors also wish to place on record the sincere thanks to PNGRB and
other regulatory authorities at Central and State level for the continuous
support extended to the Company.
The Directors place on record their sincere thanks to the Promoters,
Shareholders and Lenders for their valuable support, trust and confidence
reposed in the Company.
For and on behalf of the Board of Directors,
A K Joti, IAS
Date : 9th August, 2012
Annexure - I
Management Discussion and Analysis forming part of the Directors` Report
for the year ended on 31st March, 2012
A. INDUSTRY OVERVIEW
The role of energy in economic development cannot be underplayed. The
recently published BP Energy Outlook 2030 claims that the pace and scale of
development in India and China will play a major role in shaping the global
outlook (on energy). The Report claims that by the year 2030, China and
India will be the world`s largest and 3rd largest economies and energy
consumers, jointly accounting for about 35% of global population, GDP and
energy demand. As per IEA in its presentation at 7th Asia Gas Partnership
Summit 2012, the global energy demand will increase by one-third from the
year 2010 to the year 2035, with China & India accounting for 50% of the
India`s economy grew at an average rate of 8.4% p.a. while the primary
energy consumption grew at an average rate of over 7.6% from the year 2006
to the year 2010 (Source: BP Statistical Review of World Energy, June,
2011). Experts believe that this economic expansion, coupled with India`s
billion-plus population, will trigger soaring energy demand. India`s
indigenous sources of energy are woefully insufficient to meet this demand.
As a result, the Country is heavily dependent on overseas resources.
Presently, with India`s Reserve to Production (R/P) ratio of 30 years about
three-fourth of current oil consumption comes from overseas (Source: BP
Statistical Review of World Energy, June 2011 & MOP&NG). In the year 2030,
coal and natural gas are expected to comprise more than half of India`s
energy mix (Source: BP Energy Outlook 2030).
Currently, the Indian gas market can be characterized by nervousness. This
nervousness stems chiefly from two prime areas of concern which are
availability of gas and regulations. Gas from indigenous sources has been
declining. Last year, India witnessed a severe decline in production from
even the `prolific` KG D6 field of RIL not to mention the declining
production in fields of ONGC and OIL. Even though there are several other
domestic discoveries, including that of GSPC in KG Basin, due for
commercial production in the coming few years, the importance of LNG to
meet India`s growing energy requirement needs to be accentuated.
LNG: INDISPENSABLE TO ENERGY SECURITY
In today`s scenario, import of natural gas and development of
infrastructure required for the same are two issues of utmost importance.
While Petronet LNG Ltd. (PLL) and Hazira LNG Pvt. Ltd. (HLPL), the only 2
operating LNG terminals in India are in the process of expanding their
capacities, new terminals at Kochi, Dabhol, Ennore, Mundra, Pipavav,
Gangavaram, and Kakinada would add significant LNG Import capacity in the
upcoming decade. It is expected that by the year 2020 the LNG Import
capacity of India shall grow from existing 13.7 MMTPA to more than 50
Your Company also recognizes the importance of LNG import infrastructure.
Gujarat`s well-developed gas market owing to, inter alia, the existence of
2 LNG import terminals and a well integrated gas pipeline network
(belonging to your Company) across the State is a case in point.
B. REGULATORY FRAMEWORK
Government of India ("GOI") in May 2006 enacted the Petroleum & Natural Gas
Regulatory Board Act, 2006 with a primary objective of protecting the
interest of consumers and entities engaged in specified activities to
ensure uninterrupted and adequate supply of petroleum, petroleum products
and natural gas in all parts of the Country and promote competitive markets
in Oil and Gas sector of India.
However, in recent times, there have been growing concerns owing to the
numerous litigations that PNGRB has been facing, cancellation of CGD rounds
and no new CGD licenses being awarded.
C. OPPORTUNITIES AND CHALLENGES
One of the key consuming sectors of natural gas today in India is the City
Gas Distribution (CGD) segment. Ensuring availability of gas to SMEs,
transport, commercial and residential segments of CGD shall not only lead
to increased usage of efficient and environment friendly fuel to these
segments but shall also reduce the burden on Government coffers as gas
would primarily be replacing fuels like Petrol, Diesel and LPG.
CRISIL in its Report on Indian Gas Market Assessment (March 2011) indicates
that demand from CGD segment is expected to foresee a significant growth in
the future. Rising level of urbanization coupled with awareness amongst
consumers of usage benefits of natural gas shall continue to lead to
increased interests by developers in CGD network development. However, your
Company believes that a conducive regulatory framework will be very
essential to retain the interest of developers in this segment.
The CGD segment, owing to its socio-economic dimension and its direct
impact on economic growth, provides several opportunities to developers and
your Company also recognizes the importance of this segment. Your Company
believes that once PNGRB commences Geographical Area (GA) bidding, this
segment will offer vast business opportunities as gas price affordability
of CGD segment is relatively higher than Power & Fertilizer segment.
Your Company has invested in CGD business. The combined growth achieved by
the two group companies in CGD segment, namely GSPC Gas Co. Ltd. and
Sabarmati Gas Ltd., is a testimony to the same.
It is noteworthy to mention that GSPC Gas Co. Ltd. is the largest CGD
Company in the Country selling more than 4.0 MMSCMD of gas to around 1547
industrial customers, more than 3.3 Lacs households, around 1228 customers
in commercial segment and 135 CNG stations spread across Gujarat.
Further, Sabarmati Gas Ltd. is selling more than 0.8 MMSCMD of gas to
around 204 industrial customers, more than 0.6 Lacs households, around 320
customers in commercial segment and 23 CNG stations in the State.
Your Company believes that development of three Pan-India Pipelines would
lead to emergence of latent demand in States like Madhya Pradesh, Haryana,
Punjab and Rajasthan. Along with the growth in demand for natural gas, your
Company would also focus on facilitating development of infrastructure for
import of LNG.
Your Company provides gas transmission service to various customers,
through the infrastructure it has developed, thereby enabling access to
gas. Currently, the situation in India is such that the demand aggregators
are facing hurdles in importing LNG due to lack of adequate infrastructure
for unloading, storage and re-gasification of LNG imported from
VALUE CHAIN INTEGRATION FOR EFFECTIVE CAPACITY UTILIZATION
For importing gas, users would have to gain access to two important
capacities, i.e. capacity in re-gasification terminal and capacity in
transmission pipeline. In consonance with its role of an infrastructure
providing company, it is equally important for your Company to develop CGD
infrastructure, which is a critical downstream customer segment for the
Company, develop/facilitate access to LNG unloading, re-gasification as
well as storage infrastructure. As critical as it is for your Company`s
shippers to gain access to such re-gasification capacity, it is equally
necessary for your Company to ensure access to such capacities in order to
effectively utilize the capacity of its pipelines.
It is on this same premise that your Company has been participating in
synergistic business activities through equity participation in Companies
like GSPC Gas Company Limited and Sabarmati Gas Limited, which are in the
CGD business and companies like GSPC LNG Limited, which is developing LNG
terminal at Mundra. Your Company would continue to support such business
activities in future as well. By promoting/developing such regassification
capacity, your Company will play the role of an integrated infrastructure
provider acting as an energy channel between sources and gas consumers.
D. OPERATIONS AND FUTURE OUTLOOK
Your Company owns and operates the largest gas transmission network in
Gujarat totaling to approx 2065 Kms. The gas grid of the Company has
reached to 18 out of 26 districts in Gujarat. Your Company has been
successful in reaching remote industrial/coastal areas of Gujarat thereby
enabling supply of natural gas to all major industries spread across
regions in the State. The Company is working on future expansion projects
based on the demand in various regions around the gas grid.
Further, your Company is focusing on development of three Pan-India
Pipelines namely Mallavaram - Bhopal - Bhilwara - Vijaipur Pipeline,
Mehsana - Bhatinda Pipeline and Bhatinda - Jammu - Srinagar Pipeline.
Currently, your Company along with its Joint Venture partners, IOCL, BPCL
and HPCL, has executed Joint Venture Agreements and formed two Special
Purpose Vehicle for development of these Cross Country Pipelines.
One of the Special Purpose Vehicle namely, GSPL India Gasnet Limited, shall
implement the Mehsana - Bhatinda Pipeline and Bhatinda - Jammu - Srinagar
Pipeline, while another Special Purpose Vehicle, GSPL India Transco Limited
shall implement the Mallavaram - Bhopal - Bhilwara - Vijaipur Pipeline.
Your Company has achieved Financial Closure for the aforesaid three Cross
Country Pipeline Projects.
Your Company expects that by 2014-15, these new pipelines shall be
commissioned and shall act as the new growth engine for your Company. These
Pipelines will be in a position to serve several cities/markets in 8 States
of the Country. With significant volume of the supplies coming in from LNG
receiving terminals in Gujarat, the utilization of your Company`s Gujarat
grid shall also substantially improve.
In fact, your Company has been receiving a tremendous response and support
from Government agencies of States through which these Pipelines shall
traverse. Availability of gas to these gas starved regions of India shall
ensure growth in industrial activity and significant economic development.
Considering the length and breadth of the Country that these Pipelines
shall cater to, it is expected that your Company shall scale new heights.
Along with ensuring timely implementation of these Pipeline Projects, your
Company is also focusing on development of Pipelines to remaining
industrial & coastal regions in Gujarat.
Further, augmentation of existing Pipeline Network is required due to
increase in the gas demand and emergence of Inter-State Pipeline from GSPL
E. PERFORMANCE PROFILE
The Company continues to expand its gas grid to reach new markets and
connect to new supply sources.
The infrastructure put up by the Company enabled the flow of LNG and
domestic gas from various sources including KG Basin to reach various
regions of Gujarat.
The Company has managed to achieve fast track growth in a short period of
time with a lean manpower strength on account of its well thought out
strategy of developing major Pipeline Projects on EPC (Engineering,
Procurement and Construction) Model.
The Company transported 12430 MMSCM of natural gas during the year, a
marginal decrease of 4% over last year`s volumes transportation of 13005
Such decrease in volume may be attributed to decline in gas production from
RIL`s D6 fields which could not be fully replaced by LNG due to economic
reasons and poor demand from Power Sector.
Income from transportation of gas for the year was Rs. 1076.46 crore, an
increase of 5% over last year`s figure of Rs. 1025.21 crore. However, Gross
Income was increaseed by 10%.
Profit After Tax for the year was Rs. 522.06 crore as compared to Rs.506.38
crore in the Previous Year, recording an increase of 3%.
The Net Worth of the Company has increased from Rs. 2006.33 crore to
Rs.2466.68 crore as compared to Previous Year. During the year, Gross Block
of Assets increased from Rs. 4193.53 crore to Rs. 4322.46 crore.
The Company continues to have a healthy Debt Equity Ratio of less than 1.
Wind Power Project
Your Company believes that renewable energy sources can offer enormous
economic, social and environmental benefits and India has the highest
potential for effective use of the renewable energy sources like Wind
Considering the cost benefit which a Wind Power Project can offer, your
Company ventured into and has successfully completed commissioning of the
Wind Power Project of 52.5 MW at Maliya Miyana, Rajkot and Gorsar - Adodar,
Porbandar in the State of Gujarat. The Company has generated 109144509
Units of power from the same which resulted in the revenue of approx
Rs.38.86 crore in the year.
F. RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS
The Company has a well-defined risk management framework. The Board of
Directors of the Company has adopted a risk management policy and put in
place a framework for reviewing the major risks. The Company is focusing on
development of a "risk culture" that encourages all employees to identify
risks and associated opportunities and to respond to them with effective
The Company has a proper and adequate system of internal controls
commensurate with its size of operations and nature of business. The
Company`s internal control systems are further supplemented by extensive
programs of audits, i.e. internal audit (by an independent firm of
Chartered Accountants), proprietary audit by the Comptroller & Auditor
General of India (C&AG) and statutory audit by Statutory Auditors appointed
by the Comptroller & Auditor General of India (C&AG). The internal control
system is designed to ensure that all financials and other records are
reliable for preparing financial statements and other data and for
maintaining accountability of assets and compliance with statutory
requirements. The Company has mapped a number of business processes on to
SAP system, thereby leading to significant improved controls &
G. HUMAN RESOURCES
During the year, the Company did not experience any strikes or lockouts.
The increasing human capital aspirations are a major challenge for the
Company. In order to remain competitive it is imperative that Company has
to hire and retain sufficient number of skilled talent so as to strengthen
its technical and project management skills.
The Company employed 195 employees as on 31st March, 2012 (Previous Year:
The Company believes that training and personnel development is of vital
importance to create a climate where people maximize their technical skills
and inner potential which can help the Company in capitalizing the emerging
business opportunities through their involvement. During the year,
employees were sent for various training programs and seminars in line with
the Annual Training Calendar to enhance employee skills/knowledge.
The Company has in place an attractive policy of performance linked
incentive to encourage and reward employee performance. The Company has
managed to achieve substantial growth with a lean organization structure.
Forward looking Statements:
This Annual Report contains forward-looking statements, which may be
identified by words like will, believes, plans, expects, intends,estimates
or other words of similar meaning. All statements that address expectations
or projections about the future, including but not limited to statements
about the Company`s strategy for growth and market position are forward-
looking statements. Forward-looking statements are based on certain
assumptions and expectations of future events. The Company can not
guarantee that the assumptions and expectations are accurate or will be
realized. The Company`s actual results, performance or achievements could
differ materially from those projected in any such forward looking
statements. The Company assumes no responsibility to amend, modify or
revise any forward looking statements, on the basis of any subsequent
developments, information or event.