TERM PAPER

OF
CORPORATE LAW
TOPIC: - GAIL INDIA

SUBMITTED TO SUBMITTED BY
SUPERNOVA MAM GAURAV AHUJA
RQ1807A07
10803958
Introduction
GAIL (India) Limited is India’s largest natural gas company. Company is mainly doing business
in natural gas transmission, distribution and processing, apart from this company is also doing
business in LPG transmission, petrochemicals, city gas projects and Exploration and Production
activities. The Company has also presence in Egypt and China through the city gas projects.
GAIL has set up a wholly owned subsidiary company GAIL Global (Singapore) Pte. Ltd. in
Singapore.

In a rapidly changing scenario, GAIL now is moving in new era of clean fuel industrialization,
creating a quadrilateral of green energy corridors that connect major consumption centers in
India with major gas fields LNG terminals and other cross border gas sourcing points. GAIL is
also expanding its business to become a player in the International Market.

GAIL currently possesses around 8000 km of natural gas pipeline transmission network with a
capacity of 157 MMSCMD and is laying 5 new natural gas pipelines measuring 5000 km.
involving a capex of nearly Rs. 30,000 crore, which shall enhance the transmission capacity to
around 300 MMSCMD in next two to three years.

GAIL's Business Portfolio includes:

1. 7,847 km of Natural Gas high pressure trunk pipeline with a capacity to carry 157
MMSCMD of natural gas across the country.
2. 7 LPG Gas Processing Units to produce 1.2 MMTPA of LPG and other liquid
hydrocarbons North India's only gas based integrated Petrochemical complex at Pata with
a capacity of producing 4,10,000 TPA of Polymers.
3. 1,922 km of LPG Transmission pipeline network with a capacity to transport 3.8
MMTPA of LPG.
4. 27 oil and gas Exploration blocks and 1 Coal Bed Methane Blocks.
5. 13,000 km of OFC network offering highly dependable bandwidth for telecom service
providers.
6. Joint venture companies in Delhi, Mumbai, Hyderabad, Kanpur, Agra, Lucknow, Bhopal,
Agartala and Pune, for supplying Piped Natural Gas (PNG) to households and
commercial users, and Compressed Natural Gas (CNG) to the transport sector.
7. Participating stake in the Dahej LNG Terminal and the upcoming Kochi LNG Terminal
in Kerala.
8. GAIL has been entrusted with the responsibility of reviving the LNG terminal at Dabhol
as well as sourcing LNG.
9. GAIL Gas Limited, a wholly owned subsidiary of GAIL (India) Limited, was
incorporated on May 27, 2008 for the smooth implementation of City Gas Distribution
(CGD) projects. GAIL Gas Limited is a limited company under the Companies Act,
1956.
10. Stake in China Gas Holding to explore opportunities in the CNG sector in mainland
China
Mission and Vision
Mission: - To accelerate and optimize effective and economic use of natural Gas and
fraction to the benefit of national economy.

Vision:- Be the leading company in natural gas and beyond, with global focus, committed to
customer care, value creation for all the stakeholders and environmental responsibility.

COMPANY PROFILE
Incorporated 16th August,1984
Turnover (2009-2010) Rs. 24996 crore
Net profit (2009-2010) Rs. 3140 crore
Employees 3,480
Registered Office 16 Bhikaiji Cama Place, R.K. Puram, New
Delhi 110066
Market Shares 78% Market Share in Natural Gas Transaction
70% Market Share in Natural Gas Marketing

Board of Director of Gail India

Name Designation

B C Tripathi Chairman and Managing director

R D Goyal Director
Prabhat Singh Director (Marketing)
Apurva Chandra Director
A Q Contractor Director
R M Sethi Director
S Venkatraman Director
R K Goel Director (Finance)

S L Saina Director (Human Resources)

Sudhir Bhargava Director
Directors Report Year End : Mar '10
On behalf of the Board of Directors, it is my privilege to present to you the 26th Annual Report
on the business and operations of the Corporation for the financial year ended 31s1 March, 2010
along with the Audited Statement of Accounts, Auditors Report and the Report on the Accounts
by the Comptroller & Auditor General of India.

CHANGE IN PAID-UP SHARE CAPITAL

Keeping in view the aspirations of the shareholders, company rewarded its shareholders by
issuance of bonus shares in the ratio of 1:1 i.e. one new bonus equity share of Rs.10 each for
every one existing equity share of Rs.10 each in November, 2009. Consequently, the paid-up
Share Capital of the Corporation has increased from Rs.1, 213.98 crore to Rs.2,427.95 crore.

DIVIDEND
Company has been consistently declaring dividend for the past many years. This year the
Board of Directors have recommended a dividend of Rs.13 per equity share of Rs.10 each on
the post-Bonus paid-up Share Capital, as against Rs.7.50 per share in the previous year. So
far, your Corporation has paid a cumulative dividend of Rs.15, 419 crore excluding a dividend
of Rs.3,156 crore payable for the current year subject to the approval by the shareholders.

PUBLIC DEPOSIT SCHEMES

The Public Deposit Scheme, which was open only for employees and ex-employees of the
Corporation, is closed with effect from 31st August, 2009. The total outstanding deposits
amount to Rs.75, 000 as on 31.03.2010.

CONTRIBUTION TO EXCHEQUER
Company making contribution on large scale to the Exchequer in the form of duties and taxes.
During the year, Rs.57, 680 crore was paid to the Exchequer as against Rs.57, 529 crore in the
previous year. Out of this, Rs.26, 541 crore was made to the Central Exchequer and Rs.31,
139 crore to the States Exchequer.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standards issued by the Institute of Chartered Accountants
of India, your Corporation has prepared the Consolidated Financial Statements of its
subsidiaries and joint venture entities. The highlights of the Consolidated Financial Results
are as follows:
Particulars 2009 -2010 2008-2009

Turnover exclusive 259360 cr. 271412 cr.

Profit before tax 15049 cr. 3649 cr.

Profit for the group (after tax) 10713 cr. 2599 cr.

CORPORATE GOVERNANCE
The Corporate Governance Report and Managements Discussion & Analysis Report have
been incorporated as separate sections, forming part of the Annual Report as stipulated under
Clause-49 of the Listing Agreement with the Stock Exchanges. Gail India also complies with
the Corporate Governance guidelines enunciated by the Department of Public Enterprises,
Government of India for Government Companies.

The Ministry of Corporate Affairs, Govt of India has issued a set of voluntary guidelines on
Corporate Governance in December 2009. The guidelines provide for good governance
practices which may be adopted by corporate voluntarily. Gail India command with most of
the provisions of the guidelines and would Endeavour to command with the other provisions
that are within the domain of a Government Company.

CODE OF CONDUCT
The Board has enunciated a code of conduct for the Directors and senior management
personnel of the Corporation, which has been circulated to all concerned and has also been
hosted on the website of the Corporation. The Directors and senior management personnel
have affirmed compliance with the code of conduct.

OPERATIONS Refineries

Gail India refineries achieved a crude throughput of 50.696 million tons during the year, as
against 51.367 million tons during 2008-09, which was marginally lower due to planned
shutdown of Gujarat, Mathura and Halide Refineries to carry out revamp jobs and hook-up
required for MS / HSD Quality Up gradation as per Bharat Stage-Ill / IV norms. Despite
major planned Maintenance & Inspection shutdowns, the Refineries together achieved
capacity utilization of 102% for the third consecutive year and the highest ever overall distil
late yield of 75.3 wt%. The specific energy consumption for all Refineries together was 62
MBN* which is the lowest ever and much below the industry average of 68 MBN. Gail India
refineries also achieved record overall production of MS and ATF during the year.
Director’s Report
31st March,2009

On behalf of the Board of Directors, it is my privilege to present the 25th Annual Report on
the business and operations of the Corporation for the financial year ended 31st March, 2009
along with the Audited Statement of Accounts, Auditors Report and the Review of Accounts
by the Comptroller & Auditor General of India. The Corporation was incorporated on 16
August, 1984. From a fledgling company, the Corporation has grown several folds to attain a
sales turnover of Rs. 2, 85,337 crore and a net profit of Rs. 2,950 crore during 2008-09.

Dividend

The Board of Directors of Gail India are recommending dividend of Rs. 7.50 per equity share
of Rs. 10/- each on the paid-up share capital as against Rs. 5.50 per share in the previous year.
This is the 43rd consecutive year of dividend declaration by your Corporation. Company has
paid a cumulative dividend of Rs.14, 509 crore, excluding a dividend of Rs. 910 crore payable
for the current year after approval by shareholders.

Consolidated Financial Statements

In accordance with the Accounting Standards issued by the Institute of Chartered

Accountants of India, your Corporation has prepared the Consolidated Financial Statements of
its subsidiaries and joint venture entities. The highlights of :he Consolidated Financial Results
are as follows:
(Rs. in Crore)
2008-09 2007-08
Turnover (inclusive of Excise Duty) 271,378 235,957
Profit Before Tax 3,649 12,439
Profit for the Group (after Tax) 2,599 7,913

Corporate Governance
As mentioned under Clause-49 of the listing agreement with the stock exchanges, the
Management Discussion & Analysis Report and the Corporate Governance Report have been
incorporated as separate sections forming part of the Annual Report. The company also
complies with the corporate governance guidelines enunciated by the Department of Public
Enterprises, Government of India, for Government Companies, which has been duly certified.
The board has enunciated a code of conduct for the Directors and Senior Management
Personnel of the Corporation, which has been circulated to all concerned and has also been
hosted on the website of the Corporation. The Directors and Senior Management Personnel
have affirmed compliance with the code of conduct.
Operations

Refineries

Gail India eight Refineries in which some of the refineries were setup through the joint
venture with the OIL and BPCL companies to gain the more profit from the market. Company
achieved highest ever refining throughput of 51.367 MMT during the year, surpassing the
previous best of 49.421 MMT (including Numaligarh Refinery Ltd) during 2007-08,
registering a growth of 3.94%. The refineries together achieved a capacity utilization of over
103% and highest ever combined distillate yield of 75.2 wt%

Board Meetings:-
03-Nov-10
Gail (India) Ltd has informed BSE that a meeting of the Board of Directors of the Company
will be held on November 03, 2010, inter alia, to consider, the un-audited financial results for
the quarter / half-year ended on September 30, 2010

02-Aug-10
Gail (India) Ltd has informed BSE that a meeting of the Board of Directors of the Company
will be held on August 02, 2010, inter alia, to consider, the un-audited financial results for the
quarter ended on June 30, 2010

17-May-10
Gail (India) Ltd has informed BSE that a meeting of the Board of Directors of the Company
will be held on May 17, 2010, inter alia, to consider, the Audited Financial Results for the
quarter / year ended on March 31, 2010 and also to consider recommendation of final
dividend for the year 2009-10, if any, subject to approval of shareholders in the ensuing
Annual General Meeting. Gail (India) Ltd has informed BSE that the Board of Directors of
the Company at its meeting held on May 17, 2010, inter alia, have recommended the payment
of final dividend @ 55 % (Rs. 5.50/- per share) on the paid-up equity share capital of the
Company for the FY 2009-10, subject to approval of shareholders in the ensuing Annual
General Meeting.
18-Jan-10
Gail (India) Ltd has informed BSE that a meeting of the Board of Directors of the Company
will be held on January 18, 2010, inter alia, to consider the un-audited financial results for the
quarter year ended on December 31, 2009

21-Dec-09
Gail India Ltd has informed BSE that a meeting of the Board of Directors of the Company
will be held on December 16, 2009, inter alia, to consider, proposal of interim dividend. With
reference to the earlier announcement dated December 10, 2009 regarding Board Meeting on
December 16, 2009 for proposal of Interim Dividend, Gail India Ltd has now informed BSE
that meeting of the Board of Directors of the Company stands postponed. The date of Board
Meeting and record date will be informed separately. (As Per BSE Announcement Website
dated on 14.12.2009) With reference to the earlier announcement dated December 14, 2009,
Gail India Ltd has now informed BSE that a meeting of the Board of Directors of the
Company is now scheduled to be held on December 21, 2009, inter alia, to consider proposal
of interim dividend. Further the Company has informed that, the 'Record Date' for the purpose
of payment of the said dividend, if so approved by the Board, has been fixed for the
'December 29, 2009'. (As Per BSE Announcement Website dated on 15.12.2009) Gail India
Ltd has informed BSE that the Board of Directors of the Company at its meeting held on
December 21, 2009, inter-alia, have approved payment of interim dividend @ 20% (Rs. 2/-
per equity share) on the paid-up equity share capital of the Company for the Financial Year
2009.

Annual General Meeting (2010)

Gail (India) Ltd has informed BSE that the Register of Members & Share Transfer Books of
the Company will remain closed from September 05, 2010 to September 22, 2010. According
to the earlier announcement dated July 21, 2010, regarding Book Closure from September 05,
2010 to September 22, 2010.

Main Issue in meeting is Final Dividend, Gail (India) Ltd has also informed BSE that, the
Company has Revised the Book Closure and for the purpose of Payment of Final Dividend.
26th Annual General Meeting of Gail (India) Ltd has submitted to BSE a copy of the
proceedings of the 26th Annual General Meeting of the Company held on September 22,
2010.
Annual General Meeting (2009)
25th Annual General Meeting (AGM) of the Company to be held on September 08, 2009. Gail
India Ltd has informed BSE that the 25th Annual General Meeting (AGM) of the Company was
held on September 08, 2009.

Main issues considered in the meeting:-

1. Adoption of the audited Balance Sheet as at March 31, 2009, audited Profit & Loss Account
for the year ended March 31, 2009, Board's Report

2. Declaration of dividend @ 70% (Rs 7/- per share) on the paid-up Equity Share Capital of the
Company for the financial year ended on March 31, 2009, including Final Dividend of 30% (Rs
3/- per share) and Interim Dividend of 40% (Rs 4/- per share), already paid in February, 2009.

3. Re-appointment of Shri. A K Purwaha & Shri. S Sundareshan as Directors of the Company,

liable to retire by rotation.

4. Authorized Board of Directors to decide and fix the remuneration of the Statutory / Branch
Auditors of the Company for the Financial Year 2009-2010.

5. Appointment of Prof. A Q Contractor as a Additional Director of the Company, liable to retire

by rotation.

6. Appointment of Shri. Apurva Chandra as Director of the Company, liable to retire by rotation.

7. Appointment of Shri. R D Goyal as a Director (Project) of the Company, liable to retire by

rotation. (As Per BSE Announcement Dated on 24/09/2009)

Annual General Meeting (2008)

Gail India Ltd has informed BSE that the 24th Annual General Meeting of the Company is to be
held on September 04, 2008.

1. Adoption of the audited Balance Sheet as at March 31, 2008, audited Profit & Loss Account
for the year ended March 31, 2008, Board's Report, Auditor's Report and the comments
thereupon of Comptroller & Auditor General of India.

2. Declaration of dividend @ 100% on the paid-up Equity Share Capital of the Company for the
financial year ended on March 31, 2008, including Final Dividend of 60%, Interim Dividend of
40%, already paid in December, 2007.
3. Re-appointment of Shri. R K Goel, Dr. Amit Mitra & Dr. A K Kundra as Directors of the
Company, liable to retire by rotation.

4. Authorized to decide and fix the remuneration of the Statutory / Branch Auditors of the
Company for the Financial Year 2008-2009.

5. Appointment of Dr. U K Sen as a Director of the Company, liable to retire by rotation.

6. Authority to the Board to increase the Authorized Share Capital of the Company from Rs.
1000 crore to Rs. 2,000 crore ranking pari passu with the existing equity shares & consequential
amendments in the Memorandum & Articles of Association of the Company.

Annual General Meeting (2007).

Gail India Ltd has announced that the Company has drawn up a growth strategy which shall steer
it to revenues of Rs. 50,000 Crore plus by 2011 from revenue of Rs. 16,047 Crore in the year
2006-07. This vision was shared by GAIL's Chairman and Managing Director, Dr. U D Choubey
while addressing the Company's shareholders at the 23rd Annual General Meeting of the
Company in New Delhi on September 03, 2007. Director of the company said that Company
should focus on more protecting and strengthening the core competencies of gas transmission
and distribution and marketing businesses and petrochemicals and city gas projects. The
Company has a purpose to use first advantage of strategic benefit in Gas Retailing and
developing gradually a partnership based business model with gas producers. The Company also
diversifies its business in gas based LPG and Petrochemicals plants. GAIL wants to capture gas
sourcing options both from the new domestic sources as well as through international sources by
way of pipelines and LNG route for securing gas supplies for transmission and trading
businesses. GAIL believes in and is actively pursuing the philosophy of cooperation and
collaboration in the energy sector. GAIL has taken numerous steps to forge new relationships,
cement existing ones and collaborate within the hydrocarbon industry and beyond, with the
private as well as public sector. GAIL has entered into partnerships with the Oil and Gas
fraternity and outside by signed Contracts in critical business areas with IOCL, ONGC, HPCL,
BPCL, RIL, Shell, Indian Institute of Petroleum and a host of other organizations. GAIL is also
in active discussions with international suppliers for gas sourcing in addition to tying up
domestic supply sources. GAIL is the first Company who introduced City Gas Projects in India
for supply of PNG and CNG by forming Joint Venture Companies and has formed eight Joint
Venture Companies for city gas projects in various parts of the country. GAIL has recently
approached the Government with firm plans for granting approval to pursue city gas projects in
230 cities across the country.
1. Adoption of the audited Balance Sheet as at March 31, 2007, audited Profit & Loss
Account for the year ended March 31, 2007, Board's Report, Auditor's Report and the
comments there upon of Comptroller & Auditor General of India.

2. Declaration of dividend @ 100% on the paid-up Equity Share Capital of the Company
for the financial year ended on March 31, 2007, including Final Dividend of 20%,
Interim Dividend of 55%, already paid in December, 2006 and Special Interim Dividend
of 25%, already paid in March 2007.

3. Re-appointment of Shri. M R Henniker & Dr. A K Kundra as Directors of the Company,

liable to retire by rotation.

4. Authorized to decide and fix the remuneration of the Statutory / Branch Auditors of the
Company for the Financial Year 2007-2008.

5. Appointment of Shri. A K Purwaha as a Director (Business Development) of the

Company, liable to retire by rotation, on remuneration, terms & conditions.

6. Appointment of Shri. Santosh Kumar as a Director (Projects) of the Company, liable to

retire by rotation, on remuneration, terms & conditions.

7. Appointment of Shri. D N Narasimha Raju & Shri. S Sundareshan as Directors of the

Company, liable to retire by rotation.

8. Appointment of Shri. B C Tirupathi as a Director (Marketing) of the Company, liable to

retire by rotation, on remuneration, terms & conditions.
Corporate Social Responsibility

HEALTHCARE / MEDICAL
1. Providing Hearing Aid – Chennai Z.O.

2. Mobile outreach programme through Mobile Health van for the nearby villages for
providing medicines and check up through GIDF – Pata & Vijaipur

3. Contributed in construction of hospital buildings, dispensary, special wards etc

4. Supported in Construction of trauma ward in govt. hospital, Naziabad.

5. Distribution of ECG Machines, furniture and fixtures to the hospitals
6. Contributed in the Leprosy Mission Trust India for re-constructive surgeries of leprosy
patients corporate office
7. Supported in Medical camp for poor villagers falling under Group Gram Panchayat,
Khanav & Beloshi at USAR.

ENVIRONMENT PROTECTION
1. Installation of solar street lights– Abu Road
2. Rain water harvesting structures in Govt. schools-Delhi/NCR, Vijaipur, Jaipur.
3. Destroy completely of Water borne diseases in Ujjain by providing seeds of Gambusia
fish.
4. Providing of 5 lac Lavivorous Gamusia Fish as assistance to Malaria Control Programme
through District Admn. Jhabua
5. Contribution of 8 seater Mahindra Jeep for Save the Tiger Project in Malenad-Mysore
Tiger conservation area along with construction of Field Research Center at
Melinahuluwathi, Bhadra Wild Reserve (implemented through Centre for Wildlife
Studies, Bangalore).
6. Support in Mobile Veterinary Services units running in the wildlife sanctuaries and
National Parks of Manas National Park, through Wildlife Trust of India.
7. Water shed management through adoption of mechanical and vegetative means to prevent
soil erosion at Ambegaon in Pune district through World Vision – Mumbai Z.O.

INFRASTRUCTURE
 1. Construction of the link road at Agra and link road from Pedapalla to Gummileru at
Rajahmundry.
2. Construction of boundary wall of Shivlakha Village Primary School.
3. Construction of CC road measuring 1500 Meters & 3.25 Meters width, 4" height in
Village Bhesan. Post Bhesan, Taluka - Chourasiya. Dist. Surat
4. Approach Road for newly constructed College Building by GAIL at Tarana
5. Beautification of access road in Malegaon, Guwahati by Corporate Office.
6. Repairing of road / lying of drinking water pipeline (2 K.M.) in Village Ethan, Taluka
Loped, and Dist. Surat.
7. Repair of bridge over Kalisindh River at Khera.

DRINKING WATER
1. Drinking water facility by providing bore wells in 11 SC boys & girls hostel.

2. Construction of Storm water drain : Dibiyapur

3. Support existing water supply system in Jhabua town including maintenance of pumps,
filters, tubes, pipe network etc. : Jhabua
4. Installation of hand pumps in villages near GAIL installations : Agra
5. Cleanliness and sanitation drive in 13 villages : Vijaipur
6. Installation of aqua guards in various schools : Vijaipur
7. Water Tanks for Gram Panchayat school, hospital etc. : Abu Road
8. Water tanks 20 Nos. of 5000 liters capacity each to drought and fluoride affected villages
under Ajmer District : Naziabad
9. Extension of drinking water pipeline at Peddapatnam : Rajahmundry
10. Provided 1500 meter drinking water pipeline in the villages : Usar
 References
1. http://www.gailonline.com/gailnewsite/index.html

2. http://www.topnews.in/gail-india-ltd-buy-call-stocks-idea-2259646

3. http://www.gailonline.com/gailnewsite/mediacenter/pressrelease-aug-1-09.html