gail final project 2
TRANSCRIPT
SUMMER TRAINING PROJECT REPORTON
FINANCIAL ACCOUNTING,MIS/BUDGETING/
COSTING SYSTEM
GAIL (India) Ltd., VIJAIPUR
SUBMITTED BY: AVINASH KUMAR ASTYA MBA (2011-12) PIMR ‘INDORE’
1
Certificate
This is to certify that Mr. Avinash Kumar Astya has completed her training on the
topic “Financial Accounting, MIS, Budgeting, Costing in GAIL Vijaipur” as per
the curriculum in the Finance department at GAIL India Limited, Vijaipur (MP)
Rajesh Agarwal S.Sampath
Sr.Manager (F&A) Chief Manager (F&A)
2
AcknowledgementWith great pleasure and sense of obligation express my heartfelt gratitude to Mr.
Rajesh Agrawal, my mentor, Sr.Manager (F&A), GAIL India Limited, Vijaipur, for
his encouragement throughout the training. I am highly indebted to him for his
valuable guidance and ever ready support. His persistent encouragement, perpetual
motivation, everlasting patience and excellent expertise in discussion have benefited
me to an extent which is beyond the scope of acknowledgement.
I would like to give warm expressions of thanks to Mr. S.Sampath, Chief Manager
(F&A), GAIL India Limited, Vijaipur, for providing all the facilities and for his
enlightening guidance throughout the training.
My sincere thanks to all the members of staff in Finance department of GAIL India
Limited, Vijaipur for direct or indirect help in the training.
I sincerely thank my family, all my friends and well wishers for directly or indirectly
helping me during the course of training.
Avinash kumar
Astya
3
CONTENTS
1) GAIL India Ltd ( Introduction) 6
2) Vision And Mission 10
3) Business description in brief. 11
4) Ongoing projects of GAIL.
15
5) Existing Project 19
6) Corporate strategy adopted by GAIL
21
7) Business segment performance
22
8) GAIL’s Subsidiaries & Joint Ventures 29
9) Events 38
10) Implementation in technology
44
11) Enterprise resource planning
48
12) Financial performance of GAIL India Ltd for F.Y 2010-2011 50
13) Business segment wise performance
51
14) About GAIL Vijaipur 53
15) Milestone of GAIL Vijaipur 55
16) LPG plant working 56
4
17) LPG & Other Liquid Hydrocarbon
18) Company Accounting Policy for 2010-2011 61
19) Financial Accounting system at GAIL Vijaipur with SAP procedure. 68
(a) Purchase Accounting of natural GAS
(b) Debtor Accounting
(c) Contract Payments.
(d) Purchase Payment for HVJ Pipeline
(e) Purchase Payment for LPG Pipeline
(f) Staff Payment/Off cycle Payment
(g) Transaction codes for T.A/TransferAdvance.
(h) Statutory Payments like Direct, Indirect Taxes
(i) Project Payment & Accounting
(j) E- banking and bank reconciliation
20) Management information system (MIS) 105
21) Budget 109
22) Audit 119
23) Core values 122
24) Reward and recognition
5
25) Conclusion
26) Bibliography
INTRODUCTION TO GAIL
6
GAIL (INDIA) LTD.
GAIL IS A NAVRATNA COMPANY OF GOVT.OF INDIA.
The setting up of GAIL (India) LTD., formerly known as GAS AUTHORITY OF
INDIA LTD. In August 1984, heralded a new era of natural GAS in the country.
GAIL is now completing 25 glorious years of service to the nation.
Since 1984, GAIL has made significant contribution to the nation’s economy by
supplying natural GAS through its pipeline network for
Generation of over 87,000 MW of power
Production of over 145million tones of urea
Production of LPG for over 7 cr. Households in the country
Over 5.7 lakes vehicles in the country today running on CNG supplied by
GAIL and over 7 lacs households on piped natural GAS (PNG) in the country.
Production of petrochemicals of around 4 lacs MTs which is used in the
plastic industry.
The natural GAS infrastructure of around 7,000 km. accounting for over 82% of total
pipeline infrastructure in India, set up so far by GAIL has contributed enormously to
the economically and socially critical sectors such as fertilizers and power.
7
GAIL has the distinction of pioneering the clean fuel revolution for transport sector in
the country with the introduction of CNG in Delhi and Mumbai which has
significantly helped in reducing pollution levels in these two cities.
It provides ready market access to the domestic GAS producers, making GAS
available to the customers including those remotely located and devoid of market
access. It has provided cheaper, environment friendly alternative fuel and has reduced
import-dependency as natural GAS has substituted liquid fuel such as Naphtha, fuel
oil, etc.
GAIL’s pipeline network to the GAS consumers in the states of
GUJRAT,
MAHARASHTRA,
RAJASTHAN,
MADHYA PRADESH
DELHI
HARYANA,
UTTAR PRADESH
ANDHRA PRADESH,
TAMILNADU
ASSAM
AND TRIPURA.
In addition to supplying natural GAS to various consumers, GAIL has also setup 7
LPG plants and a petrochemical plant to extract value added products from GAS.
GAIL produces around 1.35 MMTPA of liquid Hydrocarbon including LPG fro
domestic consumption.
8
In the area of corporate of corporate social responsibility, one of the major projects of
GAIL has been setting up of AIR POLLUTION RELATED DISEASE
DIAGNOSTIC CENTRES (APRDCs) in over 20 cities in various parts of the
country, at a cost of about Rs. 4 cr. APRDC also works as R&D for development of
facilities for diagnosing suspended particles, which are known to cause acute heart
diseases. Ujjain, 28th July 2006. Dr U D Choubey, Director (Marketing), GAIL
(India) Limited today inaugurated the Air Pollution Research and Disease Diagnostic
Centre (APRDC) at Ujjain Charitable Trust Hospital and Research Center, Ujjain.
The senior officials of GAIL were present on the occasion. With the APRDC going
functional, the hospital has acquired a system for pulmonary lung function testing and
other base line investigation of air pollution related diseases. The APRDC at Ujjain is
nineteenth of the 23 such centres to become operational. All these APRDCs have been
sponsored by GAIL in 23 cities in India.
To Combat the Pollution, GAIL is set to supply Natural GAS in 23 cities under “Blue
Sky Project” in Mumbai, Pune, Sholapur, Agra, Allahabad, Kanpur, Lucknow,
Mathura, Ahmedabad, Hyderabad, Vijaywada, Gwalior, Indore, Jhansi, Bareily,
Delhi, Ujjain, Kota, Kochi, Rajahmundry, Chennai, Banglore. Air Pollution is said to
be reduced as a consequence to supply of CNG to transport sector and piped Natural
GAS for domestic and commercial usage in these cities.
GAIL has initiated steam conversion project based on waste heat recovery system
from GAIL’s GAS turbines. This rare, multi-benefit project would not only utilize
clean development mechanism (CDM) for power generation, but also lead to
conversion of GAS as well as increased energy efficiency. GAIL has consistent track
record of dividend payment. So far GAIL has disbursed dividend of Rs. 6,230 cr. to
the shareholders including Govt. of India, which is more than seven times the original
investment of rs.845.65 cr. by the Government in its equity capital.
The Government has been disinvesting its shareholding in GAIL from time to time,
bringing down its equity holding to 57.345 % and there by contributing to the
exchequer and additional amount of Rs. 3400 cr.
9
The history of GAIL (India) Ltd., erstwhile GAS Authority of India Ltd., is closely
aligned to the growth of the Petroleum Industry in India. Till the mid eighties, state
owned public sector undertaking in the upstream and downstream segments were
concentrating on effective sourcing and utilization of the oil resources of the country.
ONGC have already made important guest discoveries in the western offshore south
bassein fields which could not be utilized in the absence of GAS piping infrastructure.
The government embarked upon a planned and focused development of the natural
GAS sector in the country.
VISION AND MISSION
Vision
Be the leading company in natural GAS and beyond with global focus, committed to customer care, value
creation for all stakeholders and environmental responsibility.
10
Business description in brief
Currently the business set up is as such
Asia’s No.1 GAS utility company as ranked by Platts.
7 LPG GAS Processing Units to produce 1.2 MMTPA of LPG and other
liquid Hydrocarbons.
1,922 km of LPG Transmission pipeline network with a capacity to transport
3.8 MMTPA of LPG.
13,000 km of OFC network offering highly dependable bandwidth for telecom
service providers.
6,700 km of Natural GAS high pressure trunk pipeline with a capacity to carry
148 MMSCMD of natural GAS across the country.
North India's only GAS based integrated Petrochemical complex at Pata with a
capacity of producing 4,10,000 TPA of Polymers.
27 oil and GAS Exploration blocks and 3 Coal Bed Methane Blocks.
11
Mission
To accelerate and optimize the effective and economic use of natural GAS and its fractions to the benefit of
national economy
13,000 km of OFC network offering highly dependable bandwidth for telecom
service providers.
Joint venture companies in Delhi, Mumbai, Hyderabad, Kanpur, Agra,
Lucknow, Bhopal, Agartals and Pune, for supplying Piped Natural GAS
(PNG) to households and commercial users, and Compressed Natural GAS
(CNG) to the transport sector.
Participating stake in the Dahej LNG Terminal and the upcoming Kochi LNG
Terminal in Kerala.
GAIL has been entrusted with the responsibility of reviving the LNG terminal
at Dabhol as well as sourcing LNG.
Established presence in the CNG and City GAS sectors in Egypt through
equity participation in three Egyptian companies: Fayum GAS Company SAE,
Shell CNG SAE and National GAS Company SAE.
Stake in China GAS Holding to explore opportunities in the CNG sector in
mainland China.
GROWTH
1990-91
2800Kms Hazira-Vijaipur Jagdishpur (HVJ) pipeline becomes operational in
1991.
LPG phase-I plant at Vijaipur commissioned in February 1991.
1991-92
Phase-2 at LPG Vijaipur plant commissioned in Feb 1992.
1992-93
LPG project at Vaghodia commissioned in Feb 1993.
1994-95
Joint venture Agreement signed with British GAS on December 6,
1994.Mahanagar GAS Limited Incorporated to implement Bombay City GAS
Distribution project.
1997-98
12
Government of India grants Navratna status to GAIL, herby entrusting greater
autonomy to GAIL after restructuring of the Board.
GAS processing units (GPU), offsite utilities of the petrochemical plant at
Pata, commissioned.
1999-00
GAIL participates in NELP bidding by submitting offer for 7 blocks in
association with ONGC & IOC and Russian company Gazprom. Government
of India approved award of 2 blocks to GAIL, One with ONGC in Orissa
offshore and another with Gazprom in Bengal Offshore.
LPG plant at Pata with a designed capacity of 2.58 lacs TPA of LPG
commissioned for commercial production in March 2000.
2000-01
GAIL conceptualizes a National GAS Grid to connect the supply and demand
centers in the country with high pressure cross country pipelines networks.
The GAS processing complex, Gandhar begins production in March 2001.The
process LPG, 0.43 Lacs MT of Pentane and SBP solvent.
Jamnagar-Loni LPG Pipeline project, the worlds longest and India’s first cross
country LPG 1296 Km long pipeline, which passes through Gujrat, Rajasthan,
Haryana and Delhi is completed.
2001-02
GAIL picks up 12% equity in GSEG’s 156 MW power project in Gujarat as a
strategic investment.
Marketing functions is restructured and decentralize at zonal levels.
GAILTEL phase-I commissioned, creating an OFC based DWDM network
connecting Delhi-Mumbai, Delhi-Jaipur, Delhi-Ahemdabad, Delhi-Vijaipur,
Meerut-Agra.
2003-04
GAIL has an initial success in the form of significant GAS find in the block
A-1 in Myanmar and discovery of oil and GAS in the Cambay block.
GAIL successfully secures participation in 2 retail GAS companies in Egypt,
Fayum GAS Company and Shell CNG.
Vizag – Secundrabad LPG pipeline. the 580 km pipeline with the maximum
throughput of 1.16 MMPTPA completed in June 2003
13
Bhagyanagar GAS Limited, a joint venture of GAIL and HPCL, incorporated
in August 2003, in the field of distribution and marketing of auto LPG, CNG
for vehicles and retailing of natural GAS in the cities of Andhra Pradesh.
Phase I and II of 8000 km network GAILTEL projects connecting Delhi,
Mumbai and 71 other cities, completed. This network provides a national
communication backbone.
2004-05
Incorporation of GAIL Global Singapore PVT.LTD
Acquisition of 15 % equity stake in Natural GAS, Egypt.
Agreement signed for acquisition of 9 % equity stake in China GAS Holding
LTD, a joint venture for city GAS projects in 42 cities of China.
Tripura Natural GAS Co.Ltd, a joint venture for city GAS project in Tripura,
incorporated
UP central GAS Ltd, a joint venture for city GAS project with BPCL in
Kanpur, incorporated De-bottlenecking of LLDPE swing unit from 150000
MT to 210000 MT at GAIL Pata. GAS management system commissioned for
HVJ, DVPL and SGPL. Commissioning of South Gujarat pipeline network
Commissioning of Vizag-Secundrabad LPG pipeline.
2005-06
GAIL, ilex Australia, Videocon, HPCL and BPCL consortium awarded Blocks
no 56 in Oman.
GAIL was ranked 11th among top 15 of the worlds largest listed GAS utilities
firms in the oil and GAS industry ,in terms of market capitalization ,for the
year 2005.
GAIL gets Golden Icon award for e-governance Inauguration of the National
GAS management centre (NGMC) of GAIL at NOIDA.
GAIL bagged two awards for excellence in cost management from the
Institute of Cost and Works Accounts of India (ICWAI).
2006-07
Mechanical completion of new HDPE (High Density Polyethylene) plant with
a capacity of 100,000 TPA at Petrochemical complex at PATA
Commissioning of Dahaj-Panvel pipeline
14
Brahmaputra cracker and polymer Limited-Joint Venture Company led by
GAIL, formed for implementing Assam GAS cracker projects GAIL acquires
stake in A7 Myanmar block
GAIL’s Vijaipur- Kota pipeline commissioned. GAIL’s Kailaras- Malanpur
pipeline commissioned GAIL’s consortium wins 3 CBM blocks in 3rd round
of bidding GAIL HPCL joint venture-Avantika GAS limited incorporated
GAIL ONGC ink GAS supply agreement GAIL brings India’s first spot LNG
cargo at Dahej.
Ongoing projects of GAIL
1. Dahej-Vijaipur (DVPL)
GAIL laid down 610 km. Dahej-vijaipur pipeline to supply re-GASified LNG from
Indias first LNG terminal to Dahej to consumers in western and northern India. This
pipeline with a capacity of 23.9 MMSCMD was commissioned in March 2004,6
months ahead of schedule. International Project Management Association (IPMA)
adjudged DVPL project as winner of Silver Medal in Mega Projects category ub
IPMA world Congress Meet-2006 in China.
The DVPL pipeline will lift GAS from R-LNG terminal at Dahej to Vijaipur. Its first
section Dahej-Vemar is 82.5 km. The second section 527.5-km Vemar-Vijaipur will
run parallel to the existing HVJ pipeline. The total section of this pipeline is 42" in
diameter and 610 km with 30-MMSCMD capacity.
15
2. HVJ Expansion Phase-III
HVJ (Hazira-vijaipur-Jagdishpur) being the first Natural GAS pipeline being
made by GAIL in 1984-87 is 1800 km long across the country at a cost of Rs. 1700
cr. Its implementation included many formalities to be completed before its
commencement. Like obtaining clearance, design parameters, documentation,
finalizing global bids, setting up of basic infrastructure, along isolated stretches, 92
river crossing, 50 km. of forest,221 land crossings, 450 km, of rocky terrain and 350
road crossings, across difficult terrains.
The HVJ pipeline was laid with the objective of transporting GAS to Fertilizer,
power, LPG, Petrochemical plants, and other industrial consumers in Gujarat, M.P.,
rajasthan, U.P., Haryana, and Delhi.
India used to fulfill 40% of its requirement for Natural GAS from overseas which
became self sufficient after the establishment of HVJ pipeline.
Benefits:
fuel economy
reduced cost
saving currency
The 920-km HVJ Expansion Phase-III project extends to Punjab, Haryana,
Rajasthan and Uttar Pradesh. This pipeline system with three new compressor stations
and 12 terminals is proposed for countrywide transportation and distribution of R-
LNG to the existing and future consumers.
The pipeline will be extended from Dadri to Sonipat, Panipat, Sangrur, Doraha
(Ludhiana) to Nangal and Bhatinda in Punjab and Haryana sectors. The pipeline will
also be extended from Vijaipur to Kota to Mathania and from Ibrahimpur to Dhaulpur
16
in the Rajasthan sector and the HVJ Auraiya-Jagdishpur line will be extended to
IFFCO Phulpur in the Uttar Pradesh sector.
3. Dahej - Hazira-Uran - Dabhol
The 1166-km Dahej-Hazira-Uran-Dabhol pipeline has a capacity of 24 MMSCMD,
12 MMSCMD from Dahej and 12 MMSCMD from Dabhol. The trunk pipeline route
passes from Dahej to Hazira to Gavlpada to Bhoirpada to Chindhran to Panvel to
Dahivli to Ambewadi to Dabhol. In addition, there are lines from Gavlpada to Nasik,
Chindhran to Trombay, Sanpada & Thana, Panvel to Uran, Dahivili to Pune,
Ambewadi to Usar and Dabhol to Kolhapur. The Hazira-Uran section will be
implemented in Phase-I.
4. Dabhol-Bangalore-Chennai
The Dabhol-Bangalore-Chennai project consists of 850-km Dabhol-Bangalore
pipeline and around 300-km Bangalore-Chennai pipeline. The trunk pipeline passes
from Dabhol through Kinjalkarvadi, Kasari river bank, Kharaklat, Tappalkatti Harva
forest, Gadag, Gannaikanahalli, Gullur, Sarajapur, Palmaner, Chittoor, Kattivakkam
to Chennai. The capacity of this pipeline is 10 MMSCMD from Dahej.
5. Kakinada-Hyderabad-Pune-Panvel
The 1035-km Kakinada-Hyderabad-Pune-Panvel pipeline passes from Kakinada,
Peddapuram, Samalkot, Rajahmundry, Khammam, Hyderabad, Barsi, Pune,
Lonavala, Khandala and Panvel. The pipeline capacity is around 20 MMSCMD from
Peddapuram.
6. Kakinada-Kolkata
The 1000-km Kakinada-Kolkata project pipeline passes through Peddapuram to
Srikakulam, Ganjam, Khorda, Bhubaneshwar, Cuttack, Jajpur, Baleshwar, Bhadrake,
Kharagpur, Medinipore, Hugli and Naida to Pandua near Kolkata in West Bengal.
The pipeline capacity is 10 MMSCMD.
17
7. Kakinada-Chennai
The 580-km Kakinada-Chennai pipeline project passes from Peddapuram to
Vijaywada to Machilipatnam to Guntur to Ongole to Nellore to Gammudipudi to
Ponneri to Chennai. The pipeline capacity is 10 MMSCMD.
8. Kolkata - Jagdishpur
The 853-km Kolkata-Jagdishpur pipeline extends from Pandua, Katoya, Bardhman,
Chittranjan, Giridih, Navada, Gaya, Daudnagar, Haziaribag, Buxar, Ballia to
Jagdishpur. The pipeline capacity is 10 MMSCMD.
9. Kochi-Coimbatore-Bangalore
This pipeline project consists of 100 km offshore Kochi-Kayamkulam designed for a
capacity of 1.4 MMSCMD and 860 km onshore portion designed for a capacity of 11
MMSCMD. The onshore portion of the pipeline passes from Kochi to Alwaye to
Kanjirkod to Mangalore and Bangalore.
10. Myanmar-India Pipeline Project
This project planned to lay a pipeline from Myanmar-India Border at Tripura to
Pandua-Krishnanagar in West-Bengal through Northeast states or to lay offshore
pipeline directly from Myanmar to Haldia in West-Bengal, India. The approximate
length of this pipeline for onshore alternative through the Northeast states is about
800 km and for direct offshore alternative route is about 550 km.
11. Pata Petrochemical Project
GAIL's Petrochemical Complex at Pata in Auraiya District of Uttar Pradesh, with a
production capacity of 260,000 TPA of Polyethylenes (LLDPE and HDPE) and
10,000 TPA of Butene-1, consists of a GAS Sweetening Unit, GAS Cracker and two
18
downstream polyethylene plants: Dedicated HDPE plant of 100,000-TPA capacity
licensed by Mitsui, Japan and LLDPE/HDPE (Swing plant) of 160,000 TPA capacity
licensed by Nova Chemicals, Canada.
Existing Projects
GAS Rehabilitation and Expansion Project (GREP)
In 1998-99, the capacity of HVJ pipeline was expanded to 33.4 MMSCMD under the
GAS rehabilitation and expansion project. By construction of a loopline of 505km.
from Vijaipur to Dadri and increasing compression capacity of existing compressor
stations and adding 2 more compressor stations Vaghodia and Khera.
Pipeline in North-eastern Regions
GAIL is also operating in 69 km. regional pipeline in Assam and Tripura. The
pipelines existing in Assam supply GAS to GAIL LPG plant and ASEB. In Tripura
19
the pipelines are connecting ONGC GAS fields at Agartala dome, Rokhia and
Konaban. GAIL is also supplying natural GAS to Tripura natural GAS co. ltd.
Pipeline in Rajasthan
GAIL laid the first pipeline in the country in desert area from Gamnewala upto
Ramgarh (66km.) to supply GAS to RSEB’s power plant.
Pipeline in Gujarat
Gujarat has huge resources of natural GAS. GAIL has laid Pipeline in north Gujarat
and south Gujarat regions to supply GAS to consumers which include power plants,
fertilizers and other industrial units.
Pipeline in Maharashtra
Around 125 km Pipeline network from Ex-Uran terminal in Maharashtra is being
operated by GAIL to supply GAS from Uran GAS fields to consumers in Mumbai
region. Major consumers include RCF Thal, RCF Trombay, MGL, IPCL, Ispat
Industries, etc.
Growth
The company has completed nearly two and half decades of an eventful journey.
Starting with a natural GAS transmission co., it is today and integrated energy
company along the natural GAS value chain with global footprints. Having started as
a GAS transmission company in the year 1984, it grew organically over the years by
building a large network of natural GAS trunk pipelines covering a length of around
7000 km. and over 1900 LPG Pipeline Transmission network. The Company is
adding another 5000 km. of new pipelines by the year 2011 at the estimated cost of
Rs. 14,500 cr. Which have been approved by the Board of the Company under
Navratna Powers. Today the company has interest in the business of natural GAS,
LPG, liquid Hydrocarbons and Petrochemicals, Exploration and Production, City
GAS Distribution and is steadily developing its overseas presence.
20
The major focus of the company is to maintain its dominant position in the GAS
business, specially the transmission segment. The thrust is to continue the
relationship with existing customers as well as add new customers. These new
Pipeline would include large trunk Pipelines along with smaller Pipelines which
would connectivity along trunk lines so that prospective sources and consumers are
connected.
Corporate strategy adopted by GAIL
The company has develop a long term strategic plan which has been reoriented during
the year, keeping in view the unfolding demand and supply scenario, entry of new
competitors, and changing dynamics in the market place. The goal set by the
company includes doubling of top and bottom lines in the near future.
The strategy developed to realize the set goals is as under:
1. Tying up with producers and suppliers for marketing and transmission of
natural GAS on long term and sustainable basis. This is likely to be realized
by security more GAS from new GAS finds and pursuing early finalization of
contract with customers and suppliers.
2. Expanding of the pipeline structure from 7000 km. to 12000 km. with the
laying of new pipelines by 2011-12.
3. Pursuing of city GAS distribution opportunities in the country. This requires
the introduction of Compressed Natural GAS for the automotive sector and
Piped Natural GAS for commercial and domestic use in 230 cities in a phased
manner.
The company also plans to strengthen E&P capability and resources by
participating as major partner/operator in domestic E&P biddiing. This would
help in developing E&P as a self sustainable business for augmenting additional
supplies of natural GAS. This would involve investment both domestic on-land
21
and offshore fields, with a balance portfolio of developmental and exploratory
projects.
The natural GAS demand in India is at an inflection point and increase forces are
at work that could dramatically increase the natural GAS demand. The present
sources of natural GAS are projected to deplete in the coming years and therefore,
there is a need to look at new sources that are coming up. The company is
aggressively pursuing GAS sourcing options both from the new domestic sources
as well through international sources by way of Pipelines and LNG routes.
Collectively, such a rapid rise in expected demand and realignment of sources of
GAS supply will interact to determine the robust future GAS structure.
In the area of Petrochemical business, the company is examining the possibility of
expansion of petrochemical complex and exploring Greenfield opportunities in the
sector in India and abroad.
On the globalization front, the company is stepping areas having synergy with
existing businesses by entering into new and emerging GAS rich countries with
focus on sourcing of GAS and participating in downstream activities.
Business segment performance
The company has been achieving an all round excellent rating by government of India
since a MOU signing. During the year under review, the segment wise business
performance of the company is as under.
1) Natural GAS
The company owns and operates a network of 7850km. of natural GAS high
pressure trunk Pipeline. It supplies over 81.43 million cubic meter of natural GAS per
day as fuel to power plants, feedstock for GAS based fertilizers plants to over 500
small, medium and large industrial units to meet their energy and process
22
requirements. The company’s share of GAS transmission business is 79% and it
holds 70% market share in GAS marketing in India. Natural GAS continues to
constitute the core business of the company. During the year 2010-11, a GAS sale
has increased marginally 14 percent to 79.06 MMSCMD from 69.10 MMSCMD in
the previous financial year.
The company continues to have focus on securing GAS supplies from international
markets. LNG and transnational Pipelines are the two prevalent modes of cross
border GAS trade and the company has been making all efforts to bring Natural GAS
in the country.
2) Petrochemicals
Company owns & operates a gas based integrated petrochemical plant at Pata, Uttar
Pradesh with a capacity of producing 4,10,000 TPA of Polymers i.e. HDPE &
LLDPE, which has been enhanced by 1,00,000 TPA, company is currently in the
process of setting up a 2,80,000 TPA Assam Petrochemical Complex at an investment
of Rs 5,460 Cores. During2010-11, the production of polymers has increased by 9
percent to 4.20 lakh MT as against 3.86 lakh MT in the previous year. The polymer
sales increased by 8 percent to 4.23 lakh MT from 3.91 lakh MT in the last financial
year.
3) LPG Transmission and other Liquid Hydrocarbons
Company has 7 LPG plants in the country. In 2010-11, total Liquid Hydrocarbon
production including LPG was 1.401 million MT as compared to previous year’s
production of 1.401 million MT. Production of LPG was 1.088 million MT during the
year against a production of 1.043 million MT in the last fiscal. The Propane
production was 1,52,671 MT against the previous year’s production of 155,873 MT.
The Pentane production was 58,932 MT during the year 2010-11 as against 73,505
MT produced in the year 2009-2010.
The LPG and other Liquid Hydrocarbons sales during FY 2010-11 were 1.405 million
MT as against 1.343 million MT in the previous year. The Propane sales were 1,
23
53,153 MT against 155,292 MT in the previous year, whereas the Pentane sales were
58,528 MT against 73,749 MT in the previous year.
4) Exploration and Production
In line with Company’s strategy & towards integration along the energy chain, E&P
activities have gathered momentum during the year. The gas discovery in blocks A-1
& A-2 in Myanmar is maturing to development stage & various studies preliminary to
finalization of the development plan & its implementation are underway. Presently,
Company is involved in oil & gas exploration activities over acreage of 1.7 Lac
sq.km. Company now holds a participating interest between 10 to 80 per cent in 27 oil
& gas exploration blocks. Of these, 9 are on-land blocks 7 18 are off-shore blocks.
In India there are 24 blocks which are in Basins such as Mahanadi, Bengal, Gujarat-
Saurashtra, Mumbai, and Cambay, Assam-Arakan & Cauvery. Company has got stake
in the A-1 & A-2 blocks in Myanmar & Block No. 56 in Omen. A beginning has been
made by Company in earning revenue from E&P activities. One of the on-land block
in Cambay basin started commercial production from February 2010 & Rs. 6.90
Crores has been generated as revenue during Feb-Mar’10
5) Coal Bed Methane
The company has been participating interest in 3 coal bed methane blocks within the
area of 1561 sq.km. Two of which are in Chattisgarh and one in Jharkhand. These
blocks were awarded to GAIL consortium in CBM-III bidding round.
6) Telecommunication
Leveraging on its Pipeline network, the company has build up an OFC network for
leasing of bandwidth as a carriers ‘carrier’. The company’s telecom business
24
Gas Supply Projections
59 56 55 5161 60 58 57
34
53
70
83
0102030405060708090
2008-09 2009-10 2010-11 2011-12
Year
Pro
ject
ion
s(M
MS
CM
D)
ONGC+OIL Pvt./JVs LNG
unit-‘GAILTEL’ has approximately 13,000 km. network. During the year under
review, GAILTEL achieved profit before tax of Rs.3 cr.
GAS Supply Projections
Sources 2008-09 2009-10 2010-11 2011-12
ONGC + OIL 59 56 55 51
Pvt./JVs 61 60 58 57
Sub-Total 120 116 113 108
LNG 34 53 70 83
Total 154 169 183 191
Business Initiatives
With changes taking place in the GAS market GAIL is continuously evolving
strategies to prepare itself for the regulatory scenario. With enactment of petroleum
and Natural GAS Regulatory Board Act 2006, by parliament and announcement of
GAS Pipeline policy by Government of India for business of Natural GAS
transmission, Refining, Processing, Storage, Transport, Distribution and marketing,
the regulator will over see and promote the development of Natural GAS sector and
25
also envisages an arms length relationship between transmission activity and
marketing/exploration activity.
Domestic Initiative
In its efforts to reduce Green House GAS (GHG) emissions, the company has
assigned an agreement with Apollo Tyres for sale of steam through waste heat
recovery at its Vaghodia Processing plant. This project will save substantial energy
by utilizing the waste heat and will lead to emission control by avoiding CO2
generations.
With a view to assist the national capital in increasing power generation, the
company has signed GAS Sales Agreement with Pragati Power for GAS supply to
Bawana Power Plant. The company has also executed GAS Supply Agreements with
major suppliers like ONGC, PMT, etc. for augmentation of GAS supplies.
The company has entered into GAS Transmission Agreement (GTA) with Reliance
GAS Transportation Infrastructure Ltd. (RGTIL) for Transmission of Natural GAS
from the Krishna-Godavari (KG) basin. The transmission agreement provides fro
transportation of Natural GAS from the exploration block located in the Krishna
Godavari basin in the east coast of India through GAIL’s network and for booking of
capacity by GAIL in RGTIL’s east- west Pipeline.
In order to strengthen the business activities in the area of petrochemicals, the
company has signed a MoU with Reliance Industries Ltd. (RIL) for exploring
opportunities for setting up mega petrochemical complex outside India in one of the
GAS rich countries. Further a petrochemical plant at Vizag is envisaged with HPCL,
TOTAL, OIL and MITTAL Energy.
The Company has signed an MoU with ONGCL to work jointly for transportation,
distribution, marketing of Natural GAS from its new GAS finds KG basin and
Mahanadi basin.
26
The company has signed a GAS Co-operation Agreement with Govt.of Puducherry
envisaging setting up of a coordination group to study the demand potential of the
union territory of Puducherry for R-LNG/CNG/PNG.
The company has signed an agreement with the consortium of Reliance Industries,
BG Group and ONGC, partner of PMT field for buying the entire quantity of 17.3
MMSCMD and the same had been effective from 01-04-08.
Global presence
The company is continuing its efforts to build strategic alliance with international
companies to gain entry in the international market.
Apart from its equity participation in three retail GAS companies in Egypt and China
GAS Holding Ltd., participating interest in off shore E&P blocks in Myanmar and
one on land E&P block in Oman, the company is pursuing business opportunity in
other regions of the world in its core area of operations. The company has set up a
wholly owned subsidiary company namely GAIL GLOBAL (Singapore) Pte. Ltd. In
Singapore to facilitate overseas investment.
The company has recently formed a joint venture with China GAS Holding Ltd. For
taking up the projects in various cities of China. The Company and China GAS
Holding Ltd. Are equal partners in the JV. This is the first JV Company of this
company abroad. During the year under review the company has signed a MoU with
IETRA Oil & GAS Company of Russia for cooperation in projects such as CNG;
GAS based petrochemicals and E&P.
PIPELINE PROJECTS
During the financial year 2007-08 the company has completed a major Pipeline
project from Dahej to Dabhol via Panvel to supply GAS to RGPPL which started
supplying much needed power to the state of Maharashtra. Branch and spur lines to
consumers like Deepak Fertilizers, MSEB Uran, BPCL and other consumers in the
state of Maharashtra have also been completed.
27
The works for providing the connectivity to Pune city and the consumers of Thal/Usar
region is under progress. Connectivity to REL’s east west Pipeline which will
transport GAS from Kakinada to Gujarat is being provided at Oduru in Andhra
Pradesh, Mhaskal in Maharashtra and Ankot in Gujarat to enable the flow of GAS to
consumers in various regions enabling optimum utilization of networks on national
basis. The company has received grant of authorization for laying new Pipeline viz.
Dadri-Bawana-Nangal Pipeline; Chainsa-Jhajjar-Hissar Pipeline; Dabhol-Banglore
Pipeline; Jagdishpur-Haldiya Pipeline and Kochi-Kanjirkodd-Manglore/Banglore
Pipeline
In addition to the above, the company would also augment the GREP (VIjaipur-
Dadri) Pipeline in Dahej-Vijaipur Pipeline (DVPL).
These projects are at various stages of implementation. The foremost among them is
the Pipeline from Vijaipur to Bawana which envisages supply of GAS to Pragati
Power at Bawana targeted to supply Power to NCR before commcement of Common
Wealth Games 2010.
These projects will also enable company to maintain its dominant position in the GAS
transmission and distribution business.
GAIL’S SUBSIDIARIES & JOINT VENTURES:-
The company has been the pioneer for City GAS Projects in India. With natural GAS
emerging as the fuel of choice in the country, company believes that the next decade
will belong to the city GAS. Company was the first Company to introduce City GAS
Projects in India for supplies to households, commercial users & for the transport
sector by forming Joint Venture Companies.
28
Subsidiaries
GAIL GAS Ltd.
The company has formed a wholly owned subsidiary named ‘GAIL GAS LTD.’ for
implementing and CNG corridors in the country. The subsidiary company will act as
a vehicle for bidding for laying of Pipeline infrastructure in the country.
GAIL Global (Singapore) Pte. Ltd.
The company has wholly owned subsidiary, namely, GAIL Global (Singapore)
Pte.Ltd. to manage investments in abroad. The company is looking for further
business opportunities through this subsidiary company.
Brahmaputra Cracker and Polymer Ltd.
The company has 70% equity share with Oil India Ltd. (OIL) Numaligarh Refinery
Ltd. (NRL), Govt. of Assam, each having 10% equity share. The authorized capital
of the company is Rs. 1200 cr. A Feedstock Supply Agreement has been signed
between Brahmaputra Cracker and Polymer Ltd. (BCPL), and all the three supplierely
ONGC, OIL and NRL.
GAILTEL
GAILTEL, the GAILTEL services arm of GAIL, is engaged in providing GAILTEL
services to mission critical in-house SCADA and ERP services apart form
commercially leasing services to GAILTEL Operators and ISP’s across India.
GAILTEL has been operating commercially in the Indian GAILTEL sector since june
2001. it is also responsible for meeting the captive communication requirements of
29
GAIL’s pipeline installation. GAILTEL, today serves most of the GAILTEL
operators of the country, which include HUTCH, VSNL, Airtel, idea cellular,
Reliance Infocom, Tata Tele services, to name a few.
Its high speed optic-fibre network extends to well over 13,000 km connecting around
200 cities across various states like: Rajasthan, Gujarat, Madhya Pradesh, Maharastra,
Uttar Pradesh, Andhra Pradesh, Haryana, Chandihgarh, Delhi, Karnatka, Tamil Nadu
and Kerela.
With SDH &DWDM as the core layer the network is built largely along the highly
secured GAIL’s cross country pipeline corridor ad also configured in “slef- healing
“rings to ensure highly relibal and error free services to its esteemed customer. The
netwok is managed centrally on round the clock basis from a state-of-art Network
Management Center.
SERVICE PROFILE:-
Low bandwidth leasing services- E1, E3, DS-3 and STM-1
High bandwidth leasing services- STM-4
Lamda leasing- STM-16 and STM-64
Managed bandwidth – n x 64 k to n x e1
Ethernet based services- Virtual LAN, Transparent LAN, Corporate Ethernet,
Broadband Internet Access, VPN.
SERVICE FEATURES
End-to-End bandwidth through Service Level Agreement (SLA).
High availability levels through redundant network.
Stringent rebate structure on non-availability of the service.
24 x 7 NOCC and Customer Service Centre
30
GAIL’s USP
Highly safe OFC routes mostly being along Pipeline at 99.97% availability.
First competitive service provider in market.
Solutions to meet specific individual needs.
Minimum MTTR, skilled maintenance teams at every 150 kms.
Discounts offered on TRAI rates for highly competitive tariffs.
Varied product feature.
Quick service commencement and upgradable capacities.
High quality, cost effective service.
QUALITY POLICY
Expanding telecom infrastructure in synergy with expansion of GAIL’s cross-country
pipeline network while significantly contributing to realization of goals and objectives
of National Telecom Policy, 1999.
To be a dominant and preferred telecom service provider in the area of operation.
To provide and maintain state-of-art communication facilities for smooth operation,
control and safety of GAIL’s cross-country pipeline infrastructure.
REFORMS AND GAIL’S ENTRY INTO TELECOM SECTOR
GAIL as part of its captive communication requirement created OFC and Microwave
based Telecommunication network. GAIL has substantial spare capacity in the
network which is being sold in the market.
New Telecom Policy 1999 identified GAIL as long distance Infrastructure Service
Provider for Telecom sector.
Liberalization of National Long Distance sector in 2000.
GAIL draws up its phased infrastructure expansion plan- June 2000.
GAIL took Infrastructure Provider Category II license in line with New Telecom
Policy 1999 in January 2001. Under the license GAIL can provide services to various
Telecom Operators
31
FUTURE PLANS
With the formation of “Triveni”, a consortium of GAILTEL, POWERTEL (telecom
wing of Powergrid) and RailTel, for cooperation in telecom sector
and jointly addressing the telecom market, offer better benefits to the customers in
terms of higher reliability and reach.
Acquiring NLD license shortly for addressing the NLD as well as Enterprise segment.
LOI for NLD received from DOT.
Creating highly reliable OFC based city access network (FTTC, FTTH etc) in
association with GAIL’s JV partners like IGL/BGL/MGL/CUGL along the city GAS
pipeline network.
Joint Ventures
Avantika GAS Ltd (AGL)
AGL is a JV of a company and Hindustan Petroleum Corporation Ltd.
(HPCL) for implementation of city GAS projects in the cities of MP.
32
AGL has started projects implementation activities in the city of Indore. The
company has 22.5% stake in the company along with HPCL as equal partner.
Bhagyanagar GAS Ltd.
BGL is currently operating three auto LPG stations in Hyderabad and
one auto LPG station in Tirupathi. It is currently operating six CNG
stations in Vijayawada and three LPG stations in Hyderabad. The
company has 22.5% stake in the company along with HPCL as equal partner.
Central U.P. GAS Ltd.
CUGL is currently operating five CNG stations in Kanpur, one CNG
station in Bareily And one CNG station in Kanpur is under
commissioning. CNGL is building MDPE network for supply of PNG
to domestic, commercial and industrial sector in the city of Kanpur. The company has
22.5% stake in the company along with BPCL as equal partner.
Green GAS Ltd. (GGL)
GGL is currently operating four CNG stations in Lucknow and three
CNG stations in Agra. GGL will also take up project implementation
in other cities of Western UP on the basis of GAS availability and project viability.
The company has 22.5% stake in the company along with IOC as equal partner.
Indraprastha GAS Ltd. (IGL)
IGL is supplying piped GAS to around one lakh domestic, 276
commercial, 16 small industrial consumers and CNG to our 1.35 lakhs vehicles
through 153 CNG Stations. IGL is catering to world’s largest CNG bus fleet of over
11,000 buses in Delhi. The company has 22.5% stake in the company along with
BPCL as equal partner.
33
Mahanagar GAS Ltd.
MGL has set up 128 CNG stations catering to over 1.85 lacs vehicles
spread over Mumbai, Thane, Mira-Bhayandar and Navi-Mumbai areas
besides supplying PNG to over 3.40 lacs domestic, 907 commercial and 36 small
industrial consumers. The company has 49.7% stake in the company along with
British GAS as equal partner.
Maharashtra Natural GAS Ltd (MNGL)
MNGL is a JV of the company and Bharat Petroleum Corp. Ltd.
(BPCL) for implementation of city GAS project in Pune city. The
company has 22.5% stake in the company along with BPCL as equal
partner.
Petronet LNG Ltd. (PLL)
PLL was formed for setting up of LNG import and reGASification
facilities. PLL has a long turn LNG supply contract with Ras GAS,
Qatar for import of 7.5 MMTPA. PLL Dahej terminal is being
expanded to 10MMTPA capacity. The company has 12.5% stake in the company
along with BPCL, IOCL and ONGL as equal partner.
Ratnagiri GAS & Power Pvt. Ltd. (RGPPL)
RGPPL is a JV company between this company, NTPC, Financial
Institution and MSEB. The company has 28.33% stake in the
company along with NTPC as equal partner. The capacity of
Ratnagiri GAS and Power Station is 2150MW. The company has made an investment
of Rs. 500 crores and has approved additional equaity of Rs. 475 crores to RGPPL,
out of the Rs. 475 crores, an amount of Rs. 92.9 crores has been paid during in the
month of May 2008.
34
Tripura Natural GAS Company Ltd. (TNGCL)
TNGCL is presently supplying GAS to 6600 domestic, 104
commercial, 21 industrial consumer and has set up one CNG Station in
Agartala city. The company has 29% stake in the company.
The company has approved formation of City GAS project in Vadodara with
Vadodara Mahanagar Sewa Sadan (VMSS) with 26% equity, while VMSS have 24%
equity. The balance of 50% equity will be held by strategic investor and public. And
JV agreement has also been sign with HPCL for City GAS analysis in Rajasthan.
The company is IT savvy organization and has been continuously adopting state-of-
the-art IT solutions keeping pace with fast changing industry. These solutioins are not
only helping in continuous improvement in efficiency and productivity but also
ensuring right information to right person by use of latest security solutions.
Continuing with IT initiatives, your company has launched e-tendering portal in 2007
and a large number of domestic and international tenders are being processed through
this transparent and secured system across all offices.
There have been a number of e-initiatives for increasing business process efficiency
and development of manpower. Your company has introduced several other web
based online applications like online Recruitment, e-Performance Management
System (e-PMS), Grievance Redressal system, Online Vigilance Complaint
Registration system, e-Budgeting System which has led to enhancing transparency,
ready and structured availability of information, enhancing speed of operation and
facilitating efficient decision making.
Another major initiative towards IT risk management was to set up the state-of-the –
art 3 way Disaster Recovery (DR) Centre at Jaipur. This will ensure resumption of
business operations in the eventuality of any disaster like Fire, Flood, Earthquake,
Cyber Attack etc. in the primary data centre at Noida. The DR setup will ensure
uninterrupted IT operation and business continuity of your company.
35
GAIL and UJVNL join hands to setup GAS based power generation
in Uttarakhand:-
GAIL
(India)
Limited
and UJVN Limited today signed a
Memorandum of Understanding
(MoU) on June 20, 2011 for
evaluating the potential of setting up
of GAS based combined cycle power
plants in Haridwar and Kashipur in
Uttarakhand under Joint Venture route. Shri S Venkatraman, Director (Business
Development) GAIL and Shri G P Patel, Managing Director, UJVNL inked the pact
in presence of Shri B C Tripathi, Chairman and Managing Director, GAIL (India)
Limited, Dr. Umakant Panwar, Secretary (Energy) and Chairman, UJVNL, Shri
Jagmohan Lal, Chairman, Uttarakhand Electricity Regulatory Commission, Shri
Prabhat Singh, Director (Marketing) GAIL (India) Limited, Shri A K Jain, M D,
Uttarakhand Power Corporation Limited and other senior officials of GAIL and
UJVNL.
Shri S Venkatraman, Director (Business Development) GAIL and Shri G P Patel,
Managing Director, UJVNL exchanging the documents after signing of MoU
evaluating the potential of setting up of GAS based combined cycle power plants in
Haridwar and Kashipur in Uttarakhand under Joint Venture route. The MoU was
signed inpresence of Shri B C Tripathi, Chairman and Managing Director, GAIL
(India) Limited, Dr. Umakant Panwar, Secretary (Energy) and Chairman, UJVNL,
Shri Jagmohan Lal, Chairman, Uttarakhand Electricity Regulatory Commission, Shri
Prabhat Singh, Director (Marketing) GAIL (India) Limited, Shri A K Jain, M D,
Uttarakhand Power Corporation Limited.
Shri B C Tripathi, Chairman and Managing Director, GAIL (India) Limited
speakiing on the occasion of signing of MoU evaluating the potential of setting up of
GAS based combined cycle power plants in Haridwar and Kashipur in Uttarakhand
under Joint Venture route
36
GAIL IN ADVANCE STAGE OF IMPLEMENTATION OF
TECHNOLOGY:-
E-BUSINESS -
GAIL made significant investments in IT
infrastructure and software over the last five years
in view of the current developments in the
industry and GAIL's growth plans. In the last two
years, GAIL has taken significant steps to
leverage its strength of existing robust IT
infrastructure. An IT Policy and an IT Strategy
have been put in place.
GAIL’s IT strategy is an Integrated Approach. In today’s competitive world, IT
strategy can provide the real competitive edge to companies. The company's IT
initiatives are spread across all its functional areas and the objective is to use IT to the
best possible extent. IT contributes directly to work efficiency and transactional
efficiency, leading to cost reduction and increased customer satisfaction. Thus, GAIL
has undertaken a number of IT initiatives which have significantly contributed to cost
reduction and operational efficiency. Rather than relying on reams of papers and files
37
and loads of unclassified information, one must develop a system of electronic
exchange of classified and appropriate information. GAIL’s IT strategy borders on
these principles in an effort to become a techno savvy and efficient company.
Personal E-Banking -
E-Banking at GAIL is an attempt to enable safe
and easy handling of employee’s salary accounts
and miscellaneous claims. Personal e-Banking has
been introduced in the corporate office and Noida
wherein the salary and other payments get
credited to employee’s account by electronic transfer. ATM facilities have been
provided at corporate office and Noida office for facilitating transactions.
Organisational E-Banking (E-Receivables and E-Payments) -
GAIL has also introduced organizational E-Banking covering E-Receivables and E-
Payments, for all the customers and vendors. An integrated system has been
developed to enable efficient and speedy transactions involving GAIL, banks,
customers and vendors. Besides better operational efficiency, lesser paper work and
better utilization of manpower, there has helped reduction in transaction cycle time
leading to financial advantages.
E-Investment of Surplus funds -
An online system for investing surplus funds has been
developed, wherein the banks are able to quote their rates
online, the transactions are compared and processed
electronically before the final investment is made. This
E-investment system has resulted in process cycle time
reduction and cost effectiveness for both GAIL and the
banks, besides better returns.
Paperless FAX -
GAIL has made a shift from the traditional FAX rooms to Paperless FAX System
based on Fax servers, which is an e-mail-based system through which employees can
conveniently send and/or receive fax messages through their messaging system
38
mailbox internally or by accessing the messaging system from anywhere in India and
abroad with the help of the Internet. The IT department has estimates that by adopting
this practice on a company-wide basis, a saving of around Rs 25 lakh per annum can
be achieved, excluding the STD charges, which register a higher amount when a fax
message is sent through an ordinary fax machine, the fax server.
Bill Watch System -
Processing of the suppliers’ bills has been a major area
of concern for business organizations and their
suppliers. GAIL has made a sincere effort to
overcome delay in processing of bills by introducing
an online Bill Watch System, by which suppliers,
vendors and contractors are enabled through GAIL website to track the status of their
pending bills. All they have to do is enter the ‘receipt number’ given at the time of
submission of the bills and the system informs them instantly about the detailed status
of their bills and at which level the bills are pending, if applicable. This is an
important step towards strengthening our partnership with our suppliers, vendors and
contractors, and creates the needed supply chain efficiency.
There are significant results achieved at all the locations wherein more than 90% of
bills are cleared within 15 days after introduction of the Bill Watch System.
Video Conferencing -
GAIL has one of the best Video Conferencing facilities
connecting 23 major work centers and sites so far, which
will be extended to other locations as well. This facility
is being used for conference inaugurations, key
presentations and quick business reviews, internally. It
also helps in cost-efficient conferencing with foreign
vendors and suppliers to discuss key commercial issues.
File Watch System -
One of the key factors of success of a progressive
organization is fast and transparent decision making.
To enable this GAIL has introduced ‘File Watch
System’ which is a web based centralized system,
wherein brief information, about all the files,
39
including dates of entry and exit, are necessarily being entered at initiation level as
well at all the transaction levels where the file moves.
File watch system helps users, track the movement and status of the files, as well as
the time taken by the individual officers to clear the files and the total time taken for
approvals. The inbuilt aspect of accountability in this system, cuts down the decision
making time, which is a major cause of concern, especially in PSUs. “Reshaping” our
organization entails a fresh perspective of things which is why we have the
File Movement System and the Bill Watch System in place. Reaching Employees
(Corporate Intranet /100 % e-Mail Access / Internet Access to Executives)
In today’s era of knowledge workers, it is of paramount importance to be well
informed about all the happenings in the micro and macro business environment, on
time. To facilitate this, GAIL has achieved milestone of providing e-mail access to
each and every employee of company and further to enhance external orientation, all
executives of the company have Internet access. Banking upon this extensive reach of
computers and e-mail facility to all the employees, company has developed a
Corporate Intranet, which is a dedicated and a powerful medium of information
sharing between all the employees and the different business functions of GAIL. The
intranet is constantly updated and this sharing of information is on a continuous basis.
Enterprise Resource Planning -
GAIL is in the process of implementing the Enterprise
Resource Planning (ERP) system. ERP implementation
would improve the operational efficiency, productivity
and customer satisfaction levels, besides optimization
of cost, inventory and manpower utilization. This will
also lead to efficient Supply Chain Management. ERP
implementation would also lead to Integrated business & process control systems,
Standardized processes by adopting best industry practices across locations and
functions, Efficient and timely provision of Management Information for better
decision support and operational control, and Enabling internal performance
measurement and Improved responsiveness to changing market conditions,
40
The major benefits of GAIL's IT initiatives include cost reduction, operational
efficiency, faster decision making, better service to customers, better vendor
management, seamless and faster information sharing, quick response time with better
and faster communication.
OBJECTIVES
Enable GAIL to leverage information for competitive advantage in a
deregulated and highly competitive market scenario
Move up the value chain
Achieve higher customer service and satisfaction
Improve operational efficiency and productivity
Optimization of cost
ERP SOLUTION FOR GAIL GAIL decided to implement SAP - ERP solution after due diligence
SAP commands over 70 % market share
SAP has been implemented in over 3,50,000 organizations worldwide
including most oil & GAS majors
SAP is built on Global Best Business Practices
41
FINANCIAL PERFORMANCE OF GAIL FOR THE
YEAR 2010-11
GAIL (India) Limited has recorded sustained performance in all key physical as well
as financial parameters in the Financial Year 2010-11.
GAIL (India) Limited has recorded sustained performance in key physical as well as
financial parameters in the Financial Year 2010-11. According to the audited figures,
Turnover (net of excise duty) in the year 2010-11 increased by 30 per cent to Rs.
32,459 crore from Rs. 24,996 crore in FY 2009-10. The Profit Before Tax during the
year 2010-11 increased by 14 percent to Rs. 5,240 crore from Rs. 4,578 crore in the
previous year. The Profit After Tax during the year 2010-11 increased by 13% to Rs.
42
3,561 crore from Rs. 3,140 crore in the previous year. The Gross Margin during the
year 2010-11 increased by 15 percent to Rs. 5,973 crore from Rs. 5,210 crore. The
Board of Directors has recommended payment of total dividend at the rate of 75
percent on the paid-up share capital of the Company for FY 2010-11 inclusive of 20
percent interim dividend already paid. During the year 2010-11, as per consolidated
financial statements, the total group sales (net of Excise Duty) were Rs. 35,107 crore.
The consolidated Gross Margin was Rs. 7,065 crore, the Profit before Tax was Rs.
5,799 crore and Group Profit after Tax was Rs. 4,021 crore.The Earning Per Share
(EPS) was Rs. 28.07 per share in the year 2010-11 as against Rs. 24.75 per share in
the year 2009-10. The EPS as per consolidated statement was Rs. 31.70 per share as
against Rs. 26.23 per share in the previous year. The decrease in net profit during the
fourth quarter of the current financial year was mainly due higher LPG Subsidy
contribution by the Company.
Financial Performance of 2010-11
Segment-wise Revenue
During the Current financial year, revenues from Natural GAS Transmission business
have increased by 20 percent to Rs. 3790 crore as against Rs.3168 crore in last year.
The revenues from LPG transmission during the current financial year have increased
by 6 percent to Rs. 475 crore as against Rs. 447 crore in last year. The sales from
Natural GAS Trading during current financial year increased by 37 percent to Rs.
25,667 crore as against Rs.18,803 crore in last year. The net sales from
Petrochemicals business have increased by 2 percent to Rs. 2,960 crore as
against Rs.2, 912 crore in last year. The net sales from LPG and Liquid Hydrocarbons
business during the current financial was Rs. 2,786 crore as against Rs. 2833 crore in
last year.The increase in net profit during the current financial year was mainly due to
the increase in Natural GAS Trading and Transmission and increase in petrochemicals
sales.
Physical PerformanceDuring the current financial year, the Natural GAS transmission was 117.91
MMSCMD, increased by 10 percent from 106.74 MMSCMD in the last year. The
LPG transmission during the current financial year was 3,337 TMT, up by 6 percent
from 3,161 TMT in the last financial year. The Natural GAS sales during the current
43
financial year were 83.23 MMSCMD, up 2 percent from 81.43 MMSCMD in the last
year. The LPG and Other Liquid Hydrocarbon production during the current financial
year was 1,369 TMT, as against 1440 TMT in the last year. The LPG and Other
Liquid Hydrocarbon sales during the current financial year were 1373 TMT, as
against 1443 TMT in the last year. During FY 2010-11, the petrochemical production
was 416 TMT as against 417 TMT in the last year. The polymer sales during current
financial year were 420 TMT as against 410 TMT in the last year.
Q4 Results of 2010-11 GAIL (India) Limited registered a turnover (net of Excise Duty) of Rs. 8,894 crore in
the fourth quarter of FY 2010-11 as against Rs.6,522 Crore, a 36 percent increase
over the turnover in the corresponding quarter during the last financial year. GAIL’s
Net Profit for the fourth quarter of the FY 2010-11 decreased by 14 percent to Rs.
783 crore against Rs. 911 crore in the corresponding quarter of previous year due to
higher LPG Subsidy. The Gross Margin decreased by 9 percent to Rs. 1,340 crore in
the fourth quarter of the current financial year as against Rs.1,465 crore in the
corresponding period last year. The Profit Before Tax decreased by 13 percent to Rs.
1,139 crore in the fourth quarter of the current financial year against Rs.1,306 crore in
the corresponding period of last year.
Physical PerformanceDuring the fourth quarter of the current financial year, the Natural GAS sales were
85.73 MMSCMD, up 3 percent from 83.59 MMSCMD during the corresponding
quarter of last year. During the fourth quarter of FY 2010-11, the petrochemical
production was 122 TMT, up 9 percent from 112 TMT in the corresponding quarter
last year. The polymer sales during the fourth quarter of the current financial year
have increased by 32 percent to 144 TMT as against 109 TMT in the corresponding
quarter in the previous year. The LPG transmission during the fourth quarter of the
current financial year was 857 TMT as against 871 TMT during the corresponding
quarter in the previous financial year. The LPG and Other Liquid Hydrocarbon
production during the fourth quarter of the current financial year was 339 TMT as
44
against 357 TMT in the corresponding quarter of last year. The LPG and Other Liquid
Hydrocarbon sales during the fourth quarter of the current financial year were 339
TMT as against 356 TMT in the corresponding period last year. The Natural GAS
transmission during the fourth quarter of the current financial year was 120.43
MMSCMD, increased by 5 percent from 114.76 MMSCMD in the corresponding
period last year
ABOUT GAIL VIJAIPUR:
GAIL Vijaipur having two plants
(1)LPG plant
(2)HVJ plant
45
There are following departments at GAIL Vijaipur
GAIL (India) Limited is having its most valued
installation at Vijaipur Distt Guna of Madhya
Pradesh Vijaipur. GAIL Vijaipur is the O&M
Head Quarter of HVJ Natural GAS Transmission
Pipeline (includes 6 compressor stations at
different Locations, MCR station for monitoring pipeline health & hydraulics of
natural GAS), 2 GAS processing units for Liquid Hydrocarbon production. Journey of
GAIL Vijaipur has observed various milestones, GAS Processing Unit of Vijaipur
complexes started operations in the early nineties.
46
GAIL (India) Limited is also having its first LPG Plant at Vijaipur. In this plant,
LPG is extracted from Natural GAS by following latest Turbo-expander process.
The design GAS processing capacity of the plant (both trains combined) is 15 million
standard cubic meters of GAS per day (MMSCMD) with annual production installed
capacity of LPG as well as the other allied products, Propane, Pentane and Naphtha
being as following:
PRODUCT INSTALLED ACHIEVED
LPG 406000 MT 455562 MTPROPANE 130000 MT 85599 MTPENTANE 42000 MT 25360 MTNAPHTHA 24000 MT 41052 MT
Plant is now operated at 120 % of design GAS processing capacity on continuous Basis. The present annual production of all the products achieved is as following:
47
LPG PLANT WORKING –
GAS Compressor Stations:-The HVJ pipeline system consists of six compressor stations Hazira, Vaghodia,
Jhabua, Kheda, Vijaipur, and Auraiya. These compressor stations boost the pressure
of natural GAS for efficient transmission and for meeting the contractual pressure
requirements of different consumers. The compressor stations are main consumers of
Energy, their scheduling of operation is of utmost importance from energy efficiency
point of view. These compressors are GAS turbine driven equipments. Due care has
been taken at the time of selection of these machines from the energy consumption
point of view & suitable capitalization clause has been applied during evaluation of
technology. Details of Compressor Stations along the HVJ Pipeline are depicted in
Exhibit BO.4.
48
Centralized Pipeline Maintenance Base
The Centralized pipeline group monitors the health of pipeline. This centralized group
collates the data collected by other maintenance bases, analyzes the data & directs
corrective action to be taken for mitigating the adverse impact of the issue. The
pipeline integrity is ensured by analyzing the various parameters e.g. PSP, healthiness
of cathodic protection. Pipeline maintenance is very technology driven & it is being
planned without hampering the customer supply. The aerial surveys are also planned
to verify the site reports.
The pipeline integrity is ensured by analyzing the various parameters e.g. PSP,
healthiness of cathodic protection. Pipeline maintenance is very technology driven &
it is being planned without hampering the customer supply. The aerial surveys are
also carried out to verify the site reports.
GAS Processing Unit:
The Capacity of GAS Processing complex at Vijaipur is 15MMSCMD (Million
Metric Standard Cubic Meter Per day) of natural GAS with two trains of 7.5
MMSCMD each. The total plant capacity is 6 Lakh MT of Liquid Hydro Carbons
(LHC).
The entire process consists of:
1) GAS receiving, drying and regeneration,
2) Pre-cooling & Chill down in Expander,
3) Distill
GAS receiving, drying & regeneration:
Sr. No Station
Name
Compressor Details
Comp. Make
1 Hazira 7+3 RR-Allison KC5
2+0 RR-RB211 KB5
2 Vaghodia 2+1 RR-RB211
3 Jhabua 5+2 RR-Allison KC5
2+1 NP
4 Khera 2+1 RR-RB211
49
Natural GAS is received from HVJ ( Hazira – Vijaipur – Jagdishpur ) pipeline at a
pressure of around 54.2 Kg/cm2g and temperature of around 30 degree C. The GAS
flows to a Knock Out Drum (KOD) where any liquid present in the GAS is knocked
off. After this the GAS is dried in Molecular Sieve Dryers to remove the moisture to
below 1 ppm level. A two bed dryer system is used – one for drying & another for
regeneration.
Pre-cooling & Chill-down Section:
The dried GAS is cooled to approx (-) 69 degree C in two stages. In the first stage it is
pre-cooled to approx (-) 39 degree C in chiller by heat exchange with various cold
streams generated later in the process in the chill down system and external Propane
refrigeration. Propane refrigeration system is provided to supply additional
refrigeration required in chiller and LEF condenser for Propane recovery. The
condensed liquid is separated out in Separator-I and vapor is expanded through a
single stage Turbo-expander. The vapor-liquid mixture from Turbo-expander is fed to
Separator-II. The hydrocarbon liquid from the two separators, after heat exchange, is
fed to the fractionation section to recover the products i.e. LPG, Propane, Pentane and
SBP Solvent.
Vapors (Lean Natural GAS) from the second separator are taken through the chiller to
recover refrigeration. Then it is compressed to about 30 Kg/cm2g by the expander
compressor. The quantity of lean GAS required for NFL Plant & branch line of HVJ
pipeline is compressed in a GT driven two stage Lean GAS Compressor to 45
Kg/cm2g (Medium Pressure Lean GAS) and the rest of GAS is compressed to 55.2
Kg/cm2g (High Pressure Lean GAS) and sent to Vijaipur compressor station of HVJ
pipeline for further transmission.
Distillation Section:
The distillation section consists of four columns namely LEF, Propane, LPG and
Naphtha columns.
(a) LEF Column – Liquid from the two separators flows to chiller to supply
cold & is then routed to Light Ends Fractionation (LEF) column. This column
removes all Methane, Ethane and most of Carbon dioxide as overhead vapors. Bottom
stream consists of part of Propane, Butane, Pentane & heavier hydrocarbons.
Condensing a part of overhead vapors generates reflux. The refrigerant duty is
supplied by vapors from second separator and external Propane refrigeration.
50
(b)Propane Column – Liquid from LEF column bottom is fed to Propane
column where Propane is produced as top product.
(c) LPG Column – Liquid from Propane column bottom is fed to LPG column
for separation of LPG & heavier hydrocarbons. This column separates LPG as
top product.
(d)NAPHTHA Column – Liquid from the LPG column bottom is fed to
NAPHTHA column where Pentane is produced as the top product and Naphtha
as bottom product.
Storage facility:
Following facilities exist for storage of the products:
(a) LPG - Eight Spheres of 2575 M3 water capacity each.
(b) Propane - Three Spheres of 2575 M3 water capacity each.
(c) Pentane - Five Bullets of 198 M3 water capacity each.
(d) Naphtha - Two Tanks of 1300 M3 water capacity each.
Loading facility:
Following facilities exist for loading & dispatch of the products:
(a) LPG - (i) Rail Loading Gantry with Eighty loading points.
(ii) Road Loading Gantry with Eight loading bays.
(b) Propane - Road Loading Gantry with Four loading bays.
(c) Pentane - Road Loading Gantry with Two loading bays.
(d) Naphtha - Road Loading Gantry with Three loading bays.
Employee Profile:
The core of the organization :
GAIL, Vijaipur team consists of 327 employees, which includes both executives and
non-executives. The average age of employees is 36 years. Technically Vijaipur
executive team is highly capable with strong professional qualification base .Most of
the core functions like O&M of Plant, HR, Procurement, and Finance are carried out
by dedicated and trained employees. Some of the non-core activities like
Housekeeping & Township Security have been out-sourced through agencies who are
expert in their own areas. CISF has been kept for plant security.
COMPANY ACCOUNTING POLICY FOR 2010-11
51
(A) BALANCE SHEET
1) Fixed Assets -
Fixed Assets are valued at historical cost on consistent basis. In the case of
commissioned assets where final payment to the supplier/contractors is pending,
capitalization is made on provisional basis, including provisional liability pending
approval of Competent Authority, subject to necessary adjustment in cost and
depreciation in the year of settlement.
2) Intangible Assets -
Intangible assets like software, licenses and right-of-use of land including sharing
of ROU with other entities which are expected to provide future enduring
Economic benefits are capitalized as Intangible Assets.
3) Capital Work in Progress -
(a) Crop compensation is accounted for under Capital Work-in- Progress on the
basis of actual payments/estimated liability, as and when work commences where
ROU is acquired.
(b) The capital work in progress includes advance for capital goods/ material in
Transit/ value of materials / equipment etc. received at site for use in the projects
4) Borrowing Cost -
Borrowing cost of the funds specifically borrowed for the purpose of obtaining
qualifying assets and eligible for capitalization along with the cost of the assets, is
capitalized up to the date when the asset is ready for use after netting off any income
earned on temporary investment of such funds. Expenses Incurred During
Construction Period.
All revenue expenditure incurred during the year, which is exclusively attributable to
acquisition / construction of fixed assets, is capitalized at the time of commissioning
of such assets.
6) Depreciation/Amortization -
Depreciation on Fixed Assets other than those mentioned below is provided in
accordance with the rates as specified in Schedule XIV of the Companies Act, 1956,
on straight line method (SLM) on pro-rata basis (monthly pro-rata for bought out
assets).
Assets costing upto Rs.5,000/- are depreciated fully in the year of capitalization. Bunk
Houses are amortized on assumption of five years life. Oil and GAS Pipelines
52
including other related facilities are depreciated @ 3.17% per annum on SLM basis
based on useful life of 30 years.
Computers at the residence of the employees are depreciated @ 23.75% per annum on
SLM basis. Furniture, Electric Equipments and Mobiles provided for the use of
employees are depreciated @ 15% per annum on SLM basis.
Cost of the leasehold land not exceeding 99 years is amortized over the lease period.
Depreciation due to price adjustment in the original cost of fixed assets is charged
prospectively.
Capital expenditure on the assets (enabling facilities), the ownership of which is not
with the Company, is charged off to Revenue. Software / Licenses are amortized in 5
years on straight line method. No depreciation is being charged on ROU being
perpetual in nature.
After impairment of assets, if any, depreciation is provided on the revised carrying
amount of the assets over its remaining useful life.
Capital assets installed at the consumers premises on the land whose ownership is not
with the company, has been depreciated on SLM basis in accordance with the rates as
specified in Schedule XIV of the Company's Act, 1956
7) Foreign Currency Translation -
(a) Transactions in foreign currency are accounted at the exchange rate prevailing
on the transaction date.
(b) Monetary items (such as Cash, Receivables, Loans, Payables, etc.)
Denominated in foreign currencies, outstanding at the year end, are translated at
exchange rates (BC Selling Rate for Payables and TT Buying Rate for
Receivables) prevailing at year end.
(c) Non monetary items (such as Investments, Fixed Assets, etc), denominated in
foreign currencies are accounted at the exchange rate prevailing on the date of
transaction(s).
(d) Any gains or loss arising on account of exchange difference either on
settlement or on translation is accounted for in the Profit & Loss account.
8) Investments -
53
Investments are classified into current and long term investments. Current
investments are stated at lower of cost or market value. Long term investments are
stated at cost and provision for diminution in value is made only if such decline is
other than temporary in the opinion of management.
9) Inventories -
Raw materials and finished products are valued at cost or net realizable value,
whichever is lower.
Stock in process is valued at cost or net realizable value, whichever is lower. It is
valued at cost where the finished products in which these are to be incorporated are
expected to be sold at or above cost.
Stores and spares and other material for use in production of inventories are valued at
weighted average cost or net realizable value, whichever is lower. It is valued at
weighted average cost where the finished products in which they will be incorporated
are expected to be sold at/or above cost. Surplus / Obsolete Stores and Spares are
valued at cost or net realizable value, which ever is lower.
Surplus / Obsolete Capital Stores, other than held for use in construction of a
capital asset, are valued at lower of cost or net realizable value.
10) Machinery spares , which can be used only in connection with an item of fixed
asset and their use is expected to be irregular, are capitalized with the cost of that
fixed asset and are depreciated fully over the remaining useful life of that asset.
11) Grants -
In case of depreciable assets, the cost of the assets is shown at gross value and grant
thereon is taken to Capital Reserve which is recognized as income in the Profit and
Loss Account over the useful life period of the asset.
(B) PROFIT & LOSS ACCOUNT :-
12) Sale proceeds are accounted for based on the consumer price inclusive of
Statutory Levies and charges up to the place where ownership of goods is
transferred.
13) Income from Consultancy/Contact Services, if any, is recognized based on
Proportionate Completion Method.
54
14) The interest allocable to operations in respect of assets commissioned during
the year is worked out by adopting the average of debt equity ratios at the
beginning and closing of that year and applying the average ratio of debt
thus worked out to the capitalized cost.
15) Pre-project expenditure relating to Projects which are considered unviable /
closed is charged off to Revenue in the year of declaration/closure.
16) Employees Benefits -
All short term employee benefits are recognized at there undiscounted amount in the
accounting period in which they are incurred.
Employee Benefits under Defined Contribution Plan in respect of provident fund is
recognized based on the undiscounted obligation of the company towards contribution
to the fund. The same is paid to the provident fund which is administered through a
separate trust.
Employee Benefits under Defined Benefit Plans in respect of leave encashment,
compensated absence, post retirement medical scheme, long service award and other
terminal benefits are recognized based on the present value of defined benefit
obligation, which is computed on the basis of actuarial valuation using the Projected
Unit Credit method. Actuarial liability in excess of respective plan assets is
recognized during the year. Provision for gratuity as per actuarial valuation is funded
with a separate trust.
17) Taxes on Income -
Provision for current tax is made as per the provisions of the Income Tax Act, 1961.
Deferred Tax Liability / Asset resulting from ‘timing difference’ between book and
taxable profit is accounted for considering the tax rate and laws that have been
enacted or substantively enacted as on the Balance Sheet date. Deferred Tax Asset, if
any, is recognized and carried forward only to the extent that there is virtual certainty
that the asset will be realized in future.
18) R&D Expenditure -
All expenditure, other than on capital account, on research and development are
charged to Profit and Loss Account.
55
19) Exploration and Development Costs:-
i) The Company follows Successful Efforts Method for accounting of Oil & GAS
exploration and production activities, which includes:-
Survey Costs are expensed in the year in which these are incurred.
Cost of exploratory wells is carried as ‘Exploratory wells in progresses’. Such
exploratory wells in progress are capitalized in the year in which the Producing
Property is created or is expensed in the year when determined to be dry / abandoned.
All wells appearing as “exploratory wells in progress” which are more than two years
old from the date of completion of drilling are charged to Profits and Loss Account
except those wells which have proved reserves and the development of the fields in
which the wells are located has been planned.
ii) Capitalization of Producing Properties -
Producing Properties are capitalized when the wells in the area / field are ready to
commence commercial production having proved developed oil and GAS reserves.
Cost of Producing Properties includes cost of successful exploratory wells,
development wells, initial depreciation of support equipments & facilities and
estimated future abandonment cost.
iii) Depletion of Producing Properties -
Producing Properties are depleted using the “Unit of Production Method (UOP)”. The
depletion or unit of production charged for all the capitalized cost is calculated in the
ratio of production during the year to the proved developed reserves at the year end.
Company’s share of production costs as indicated by Operator consists of pre well
head and post well head expenses including depreciation and applicable operating
costs of support equipment and facilities.
20. Contingent Liabilities and Capital Commitments:-
a. Contingent Liabilities are disclosed in each case above Rs5
lakhs.
b. Estimated amount of contracts remaining to be executed
on capital accounts are disclosed in each case above Rs. 5
Lacs.
56
21. Impairment
The Carrying amounts of assets are reviewed at each Balance Sheet date. In case
there is any indication of impairment based on Internal / External factors, an Impairm-
-ent loss is recognized wherever the carrying amount of an asset exceeds its
recoverable amount.
GENERAL
22. Prepaid expenses and prior period expenses/income upto Rs.1,00,000/- in each
case are charged to relevant heads of account of the current year.
23. Liquidated Damages, if any, are accounted for as and when recovery is affected
and the matter is considered settled by the Management. Liquidated damages, if s
ettled, after capitalization on of assets are charged to revenue if below Rs. 50
lakhs in each case, otherwise adjusted in the cost of relevant assets.
24. Insurance claims are accounted for on the basis of claims admitted by the insurers.
25 a) Custom duty & other claims (including interest on delayed payments) are
accounted for when there is significant certainity that the claims are realizable.
b) Liability in respect of MGO of Natural GAS is not provided for where the same
is secured by MGO recoverable from customers. Payments/receipts during the
year on account of MGO are adjusted on receipt basis.
57
FINANCIAL ACCOUNTING SYSTEM AT GAIL- VIJAIPUR
Finance Department at GAIL Vijaipur is handling all accounting matters of HVJ Pipe Line and LPG Plant at Vijaipur. The Finance Department is headed by DGM (F&A). For proper accounting, the Business Area code for HVJ Transactions is 3000 and 6000 for LPG. The following activities are handled by Finance Department in GAIL Vijaipur:
Following activities related to Financial Accounting are being
handled by the Finance Department- Vijaipur:-
Purchase Accounting of Natural GAS.
Sales Invoicing and Debtors Accounting.
Contracts Payments.
HVJ Purchase Payments.
LPG Purchase Payments.
Misc. Payments.
Pay Roll Accounting, Staff Payments.
Statutory Payments like Direct & Indirect Taxes.
Projects Payments.
E. Banking and Bank Reconciliation.
Depreciation Accounting.
Central Accounting
MIS, Budgeting, Costing & Cost Accounting Records.
Internal Audit, Statutory, Cost Audit, Tax Audit
58
Purchase Accounting of Natural GAS:-
GAIL purchase Natural GAS from ONGC, Panna Mukta Tapti Projects and Petronet
LNG. The Natural GAS is transmitted from Hazira and Dahej thru Pipe Lines called
HVJ and DVPL. The purchase accounting of Natural GAS drawn from ONGC is done
by Hazira Unit. However, in respect of Natural GAS drawn by Vijaipur Plant from
HVJ line for supply to customers under Vijaipur Control and for extraction of LPG
and Hydrocarbons, the purchase adjustment entry is passed by the Vijaipur Plant in
books of Accounts.
Sales Invoicing and Debtors Accounting :-
Sales Invoicing:-
GAIL Vijaipur cater the requirement of various Gases to following customer
PRODUCTS MAJOR CUSTOMER IN ORGANIZED SECTOR
Natural GAS National fertilizers ltd, Chambal fertilizer ltd, NTPC Anta, Samatal India, Samcore glass ltd, DCM (Shriram)
RLNG(ReGASsified liquid Natural GAS)
Godrej Malanpur, Cadbury India, Surya Roshni ltd, Jamna auto ltd, Malanpur captive power plant
LPG To OMC i.e. IOCL, HPCL and BPCL, BORL (Bharat Oman Refinary Ltd)
Naphtha To NTPCPropane C.L Gupta, SAIL, TATA Steel. EtcPentane Reliable industries, J.C Enterprises
pvt. Ltd., AMKAP Marketing Pvt ltd. Etc
59
Trading of Natural GAS –
1) An agreement is made with customer for annual quantity & price agreed upon.
2) GAS Joint Ticket is raised by the Terminal incharge which is certified by the
customer & confirmed by NGMC. (Natural GAS Management Centre).
3) Invoice is raised on Fortnightly basis as per the terms of Agreement by
Finance department Vijaipur after confirmation of quantity by NGMC.
4) The payment from Customers is received centrally at Delhi Corporate office.
5) The accounting entries of Sales are made by Vijaipur Plant.
Sale of LPG:
LPG is sold to OMCs i.e IOCL, HPCL and BPCL. LPG to IOCL is supplied thru
pipe Line and to HPCL and BPCL, thru Tankers and Railway Wagons. The LPG
supplied for domestic purpose is Non-Excisable and LPG for Industrial purposeis
Excisable. The Prices are charged as per the Sales Agreement signed by GAIL with
OMCs as per APM Rates. The Invoicing is made on weekly basis.
Sales of Hydrocarbons i.e Naptha, Propane and Pentane :-
These products are supplied to NTPC, Malanpur Captive, Surya Roshni, etc. as per
the agreement signed by GAIL with these customers. The supply is made after
receipt of advance payment.
1) Despatch documents/Excise Invoice – Despatch Deptt in the loading section
inside the plant issues the requisite documents on daily basis. For the Excisable
products, requisite Excise Documents are also issued at loading point.
(2)Commercial Invoice – Commercial Invoice is prepared for LPG on weekly
basis and for other products on fortnightly basis as per the customer terms and
conditions. This is prepared on the basis of despatch report and joint ticket from the
loading control room.
60
(3) Invoicing against Transmission Cost:-
Against the GAS Transmission thru HVJ Pipe Line to customer’s i.e NTPC
Anta, Chambal Fertilizers, Samcore, Samtal and thru IOCL Pipe Line to IOCL and
pipe line to NFL, the Invoicing to these customers is made for Transmission Cost
as per the agreed rates and terms and conditions.
SAP Procedure for Sales Invoicing : -
Tcode : F-28
Enter the Document Date
Document type : default DZ
Enter the Company Code
Enter the Posting Date
Enter the Bank Account : bank Incoming g/I
Enter the amount
Enter the Cheque date and bank name
Enter the business area
Enter the customer code
Click process open item
Choose your relevant amount those should be in blue
Go to document and simulate than save.
61
DEBTORS ACCOUNTING : -
Debtors Accounting of Sales related transactions is made by Vijaipur Finance.
(1) Natural GAS –
Natural GAS invoicing is done by finance department & it include the following
accounting entries-
1) At the time of raising invoice to Customers:
Customer A/c Dr
To Sales A/c
To Service Tax payable A/c
To VAT payable A/c
To Entry tax payable A/c
Note- Here Sales include following:
Basic Price + Royalty 10% + Purchase tax 10% + Transmission charges = Selling
Price
2) At the time of receipt of payment from customer:
Bank A/c Dr
To Customer A/c
3) At the time of regularization of payment in which income tax is deducted:
Bank A/c Dr ( Actual amount received )
TDS A/c Dr (TDS amount)
To Customer A/c
Note- In case if the customer deducts the income tax from the payment.
62
(2) Liquefied Petroleum GAS (LPG):-
It includes Excise & Commercial invoicing.
Excise Invoicing:
The accounting entry is:
Excise Duty Expense A/c Dr
To Excise duty payable A/c
Commercial Invoicing:
The accounting entry is:
Customer A/c Dr
To Sales A/c
To VAT payable A/c
Liquid Hydro Carbons (LHC):
In case of Liquid Hydro Carbons (LHC) the finance department passes the following
entries in the books of accounts-
1) At the time of receipt of advance from customer-
Bank A/c Dr
To Customer Advance A/c
2) At the time of raising invoice of LHC –
Customer A/c Dr
To Sales A/c
To Sales tax payable A/c
3) At the time of regularization of payments –
Customer Advance A/c Dr
To Customer A/c
63
(3) Transportation invoicing:
In this following entries are passed by finance department in the books of account
1) At the time of raising invoice-
Customer A/c Dr
To Transmission Charges A/c
To Service tax payable A/c
2) At the time of receipt of payment –
Bank A/c Dr
To Customer A/c
3) At the time of regularization of payment in case of TDS deducted –
Bank A/c Dr
TDS receivable A/c Dr
To Customer A/c
SAP Procedure for Natural GAS Invoicing :-
In Standard Accounting Package (SAP) each transaction is given a particular code &
for Natural GAS transactions there are 2 different codes available:
(1) YRVI 001- This code is applicable for single invoicing.
Firstly the duration is set i.e. start & end date.
Then the Customer date is mentioned.
Cal. Value of Natural GAS is inserted which is given in GAS ticket.
Billing date is given for which date bill has to prepare.
Material number is selected from various types of GAS.
Plant is selected among Madhya Pradesh & Rajasthan.
Volume is set according to 1000/SCM unit.
Quantity is mentioned by using MMBTU unit.
Then from the list of all type of Gases & transmission, selection of natural
GAS is made. Then we execute the transaction, then a number is generated &
for getting the print out we use VF02 code. Then click the issue option from
64
the filing document option, printing command is given & we have our invoice
in our hand.
(2) YRVI 010 – This code is applicable for mass invoicing.
The SAP procedure is same as for the code YEVI 001, only the basic difference
is of the code.
SAP Procedure of LPG Invoicing :-
The Transaction code is VF04.
Duration of billing date i.e. to & from has to be mentioned
Shipping point has to be given.
Click to options & select the billing date.
Display the bill list.
Collective Billing is done in case of LPG Invoicing.
Print command VF02 for printing of invoice
SAP Procedure of Transportation Invoicing :-
The transaction code is 3015.
Firstly the duration is set i.e. start & end date.
Then the Customer date is mentioned.
Cal. Value of Natural GAS is inserted which is given in GAS
ticket.
Billing date is given for which date bill has to prepare.
Material number is selected from various types of GAS.
Plant is selected among Madhya Pradesh & Rajasthan.
Volume is set according to 1000/SCM unit.
Quantity is mentioned by using MMBTU unit.
65
CONTRACT PAYMENTS:-
Indigenous Contracts:-
GAIL Vijaipur is also responsible to process the payments against various contracts
related to O&M for LPG Plant and for HVJ. The Contracts are processed by C&P
Department Vijaipur as per Company guidelines laid under C&P procedures and
DOP. For each contract, the concerned head of the department, nominate one EIC, to
ensure the monitoring and execution of contracts. The EIC generate monthly Service
Entry Sheet for the quantity of works executed, verify the bills as per the terms of
contracts and sent to concerned officer in F&A Department- Vijaipur through BWS
(Bill Watch System) followed with hard copy. The Concerned Officer receives the
Bills from BWS as soon as the Bills are received in hard copy. F&A Department
process the bills verifying all the documents and terms and conditions. Penalty as
applicable as mentioned in the contract and other deductions as advised by EIC are
also deducted by F&A Department. TDS at applicable rates is deducted as per the
nature of contract and provision given under Income Tax Rules.
Foreign Contracts/Purchase Payments:-
GAIL Vijaipur Finance Department is also dealing with processing of payments
against Foreign Contracts, awarded for maintenance etc Plant & Machinery and also
for the spares purchased from these parties, in most of the case from Original
Equipment Manufacturer. The Contracts/PO to these is awarded by C&P Department
as per the company policy and procedure. There are also two types of forms submitted
to Reserve Bank of India through applicant’s bank in case of foreign payments –
Forms 1 – Form regarding Import of machinery & spare parts.
Form 2- Form regarding Repair & services.
These forms are to be submitted to the RBI by the Applicant bank regarding the
clarification of the transaction. The Foreign payments are regulated in following ways
(the mode of payment is specifically mentioned in PO/WO)
Through L.C
Through Wire Transfer.
66
A) Payment through LC :- For making any foreign payment through Letter of
Credit (LC), GAIL submit application to its concerned bank in the format prescribed
for it along with following important documents.
1) Application & Guarantee for LC Form no. 2
2) Copy of Purchase order/Letter of Acceptance as the case may be.
The Letter of Credit (LC) are of two types:-
Revocable Letter of Credit - in this type of LC continous payment is made until the
final date of payment comes.
Irrevocable Letter of Credit – in this type of LC one time payment is made on the
final date of payment.
B) Payment through Wire Transfer: - This mode of payment is followed when the
Letter of Credit is not opened. As per this mode Bank is authorized to debit GAIL
Account by equivalent amount in INR of Foreign Money of P.O. This authorization
is given accompanied with following documents:-
Bill/Invoice
Bill of Lading
Copy of Work Order/P.O
A1 / A2
SAP Procedure for Contract Payments:-
In SAP, for each payment liability is created by preparing JV. Following steps are
followed from preparation of JV to release of Payments.
Step 1 – MIGO is to be done in SAP, it include the following entry:
GL A/c Dr
To GR/IR A/c
Step 2 – MIRO is to be done after the first step, & following entry is passed:
GR/IR A/c Dr
To Vendor A/c
Entry of Service tax Credit –
Accountable receivable Service tax credit A/c Dr
To GL A/c
67
SAP Procedure for Foreign Payments : -
Step 1 – MIGO is to be done in SAP, it include the following entry:
GL A/c Dr
To GR/IR A/c
Step 2 – MIRO is to be done after the first step, & following entry is passed:
GR/IR A/c Dr
To Vendor A/c
Step 3 – In last step bank payment has to be made, entry is:
Vendor A/c Dr
To Bank A/c
Entry of Service tax Credit –
Accountable receivable Service tax credit A/c Dr
To GL A/c
In Invoice verification, we compare Purchase order & Goods receipt and vendor
invoices and checked on 3 parameters i.e. Price, Quantity, and Content. For Invoice
Verification we require Purchase Order (Material) / Work Order (Services) and
MIGO/Service Entry sheet. In SAP, we can do MIRO before Goods Receipt (MIGO)
Enter the Currency Rate
Go to T.Code MIRO
Enter the Purchase Order number and press enter
Enter the Section code
Enter the Text field
Take the printout of the accounting document through T.Code YRFS001
Enter the payment baseline date which is calculated the due date
Enter the Business area
Enter the House bank from which the payment is to be made
Enter the payment method of the relevant House bank
68
PURCHASE PAYMENTS FOR HVJ PIPELINE:-
GAIL Vijaipur Finance also deals with the payments against various purchases made
for maintenance and others for HVJ pipelines. For HVJ purchases payments the
company Code is 3000 and business area code for Vijaipur Unit is 3010. There are
separate Business Area codes for each unit from where the Hazira-Vijaipur-
Jagdishpur pipeline goes. The Departments responsible to ensure the proper upkeep
and maintenance of HVJ Pipe lines at Vijaipur, raises their Purchase Requisition to
Vijaipur C&P Department. The Receipt and Issues of HVJ stores items are
maintained by HVJ Stores at Vijaipur. The HVJ Stores prepare the GRV of the spares
received, through SAP and then run MIGO. This result to creat Debit Inventory and
credit GR/IR. The GRV along with the bills are entered in BWS and send to finance
depts. for processing of payments.
Finance runs MIRO in the SAP, this result to creation of vendor liability. In this
process the GR/IR has been debited and vendor liability is credited. This liability
voucher is send to E-Banking section for release of payment to the vendor. E Banking
Section prepares the ZP Voucher and debit the liability and credit to bank.
ACCOUNTING ENTRIES :-
Inventory A/c Dr
To GR/IR GR/IR Dr
To Vendor Vendor Dr
To Bank A/cSpecial GL regarding HVJ Purchase payments –
Security Deposit – L
Earnest money deposit – N
Retention money – K
69
PURCHASE PAYMENTS FOR LPG PLANT VIJAIPUR:-
The payments against various spares procured for the Operation and Maintenance of
the LPG Plant Vijaipur are also released by local finance. These payments included
procurement of various spares, consumables both indigenous and imported in nature.
The procurement of the same is made by local C&P Department based on Purchase
Requisition raised by the concerned department. The spares are received and issued
by LPG Stores. The procedure to release the payment is same as in the case of HVJ
Purchase payments.
PAYMENT AGAINST TRANSPORTATION :-
GAIL Vijaipur is also handling the Payment against Transportation as per the
Contracts awarded for Transportation of various products like Naptha, Propane,
Pentane etc. The TDS is deducted at the applicable rates under the Income Tax
Provisions.
MISCELLANEOUS PAYMENTS : -
Vijapur is the head quarter of HVJ Pipe line and other satellites RR Stations at Anta,
Malanpur, Gwalior, NFL and Narsingarh. Following Miscellaneous payments against
the Misc. contracts are fall under this category:-
Payment against Pest Control
Contractual Doctors
Electricity Bills of MPEB
RR Station Telephone and mobile bills of establishment and officers posted at these stations. CISF Security payment deployed at Plant and at these RR Stations
Payment against Guest House maintenance
Courier
AMC of Computers
Xerox Machine
Other Equipments
Other Social activities payments
Payments against Financial Aid to Schools run by GAIL
Crop Compensation Payments
70
Auditor Expenses etc.
The Bills are sent by the concerned officer/department through BWS.
PAY ROLL ACCOUNTING : -
Salary of the employees is prepared by Corporate HR Department based on the inputs
provided by HR Department. The Off Cycle Payments i.e Medical, which are part of
the Salary are being considered in SAP, while preparing salary. The Salary is credited
directly to the employees account and entry is passed in the books of accounts
according to Business Area given to the employees while giving them Number (i.e.
employee code).
STAFF PAYMENTS /OFF CYCLE PAYMENTS : -
Vijaipur Finance Department is responsible to release Off Cycle payments like
Medical, Telephone/Mobiles, Lease Maintenance, CPF Loans Refundable and Non
Refundable, HBA, Vehicle Advance, Furniture Advance, Computer advance and
Special Advance. Finance Department is also responsible to release the payments
against various recoveries made from the salary i.e. LIC, Professional Tax to the
concerned authority. The Finance Department is also responsible to pass needful
entries in the books of accounts in case of outgoing and incoming employees in
respect of their advances according to Business Area.
Payments against Business Trips, Leave Travel Assistance and Transfer Expenses are
also handled by Finance Department. The employees wish to take the advance against
Business Trips and Transfer Expenses have to apply in the SAP Programmer and to
submit through their concerned HOD. The Claims against Business Trip and Transfer
Expenses are also to be claimed in the SAP and to be submitted to finance department
duly recommended by their HOD.
71
Transaction Codes for T.A./TransferAdvance : -
In SAP the following procedure is followed for preparation of T.A / Transfer Advance –
T Code – PR05 is entered
CPF number of the employee is to be entered
See for trip number & double click
Click R & save
Click the ( ) Button
Approve
( ) Click this Button
Settle
LPG : 70
HVJ : 30
Click the ( ) Button
After settling come out of the session.
T Code – PRF9 is entered
Enter
Payroll _ _ _ _ _ _
Other period _ _ _ _ _ _ [ Only the number of months m which you are working is taken in this step]
Personnel number
Trip number
Execute
After executing get out of PRF9 code.
T Code – PRRW is entered
Click Execute
Double Click Document Create
Get Back Once
72
Post
Post Immediately
Get Back Once
Double Click Document Created
Click FI / CO document
Entries passed
Statutory Payments like Direct, Indirect Taxes:-
Finance Department is handling following Direct and Indirect Tax related matters.
In Direct Taxes, TDS on payment to Contractors and against foreign purchases is
deducted as per applicable rates under section given under Income Tax Act. Presently
TDS is deducted on following payments under the applicable sections.
HEADS SECTIONS TYPE OF PAYMENTS
Contractors 194 C Maintenance & civil work
Professionals 194 J Visiting doctors
Rent 194 I Rent payments
Commission 194 H Commission agent
Foreign payment 195 C Import payment to the exporter in their foreign currency
Tax collected at source(TCS)
206 Sales of scrap
The TDS is deducted as per the Rates given in the SAP under various sections of
TDS. While releasing the payment, the TDS is deducted from the payments and
liability is created in relevant GL Code. The liability stands in the books at the end of
month is deposited by 7th of following month thru on line payment. The Quarterly
Return of TDS is filed by 15th of following month ending the quarter. TDS
Certificates to the concerned parties against the TDS deducted are issued by 10th of
following month. These TDS Certificates are generated from SAP.
73
Following are the Steps in SAP for issuance of TDS Certificate against
Contracts/Foreign Payments:-
Step 1 - The subsequent steps required from remitting the TDS to certificate
generation are as follows:
1) T code J1INCHLN
2) Company code,
3) Section code
4) Vendor recipient type (i.e. corporate, on corporate of government) etc.
5) Document Date : Current Date
6) Bank A/c : put 2013299
7) Execute
8) The system will show the screen same as it shows while processing open items.
9) Assign the relevant amount and stimulate the transaction and save, the system will give an internal challan number and the clearing document will get generated
Step 2 – The next step is to enter the bank challan in the system
1) Tcode – J1INBANK
2) Company Code
3) Fiscal year
4) internal challan clearing no. put the one generated in J1INCHLN
5) bank challan number
6) bank challan date
7) bank key : key bank from which payment made
8) Finally after updation screen will be like this
Step 3 – Now the final step is to print the certificate
1) T Code J1INCERT
2) Company code
3) fiscal year
74
4) Business place/section code
5) section
6) posting dates
7) bank challan dates
8) rest fill the details according to he relevance
MIS Report on TDS in SAP : -
Step 1 – Use T-code J1INMIS is or go through SAP Menu> Accounting> Financial
Accounting> Account Payable> Withholding Tax> India> Extended Withholding
Tax> Information System> Withholding Tax.
Step 2 – The above screen will come, enter the following:
1) Company code
2) Fiscal Year
3) Posting Date ( From – To)
4) for refined search use Document number, Vendor, customer, Section code and
official withholding tax code is available
5) Select Consolidated report to view complete report of TDS or If User wants to
see Bank Challan Status select bank challan status option or If User wants to
see Certificate status select Certificate status.
6) Execute after filling in the details through clock icon or pressing F8 key.
Step 3 –
1) After execution the above report will come which shows the status of the TDS.
2) To save this report on to the hard drive uses the circled icon above. This will
pop up a window with the options to save the report in different file format as
shown below, choose the desired format and save the file.
3) Thus, the final report is generated with items of the vendors along with the
TDS status and the same can be saved. The report can be drilled down on the
line items to look at the document.
75
INDIRECT TAXES : -
EXCISE DUTY PAYMENTS:-
Excise duty is levied on non domestic LPG, Naptha, Propane, Pentane. Excise duty is
paid on the clearance basis i.e. on sales basis at the following rates of excise duty for
the products given under:-
Following Statutory Records for Excise are maintained at GAIL Vijaipur:-
RG 1 – This is maintained for day to day production and clearance of the Products.
Following information are recorded in RG-1.
Date
Description of Goods
Product Tariff Heading Number
Opening Qty
Quantity Manufactured
Total Quantity
Removal of Qty from the factory
Amount of duty payable
Qty Removed without payment of duty
Qty consumed for other purpose
Total amount of excise duty payable
Basic duty
Special duty
Cess payable
Secondary & Higher education Cess
PRODUCTS BASIC EXCISE RATES
LPG- Domestic 0%
LPG-Commercial 8%
Naphtha
14%
Propane 8%
Pentane 14%
76
Internal Consumption
Closing stock qty.
Physical stock qty.
Gain / Loss
Percentage of gain / loss (qty)
ER 6 (Excise Return) – In ER 6, Consumption & Production of Raw materials
are recorded on monthly basis. Consumption of LPG for Domestic use and Production
of Naptha, Propane, Pentane, LPG from natural GAS regarding this all the
transactions is recorded.
PLA (Personal Ledger Account) – In Personal Ledger Account, the record of
Amount Deposited in Government account for payment of Excise duty vis a vis
amount utilized by debiting in PLA, for discharge of Excise duty liability is recorded
on monthly basis.
TR 6 (Treasury Receipt) – This is a document in the form of challan for
deposition of amount in PLA in Government Account for payment of Excise Duty.
ER 1 (Excise Return) – ER-1 is monthly Return to be submitted to the Excise
Department, giving the summarized status of all Excise documents i.e. RG-1, PLA,
RG-23A Part II (Cenvat Account).
SERVICE TAX PAYMENT: - Service tax is a tax levied on services providers
in India, except the State of Jammu and Kashmir. The tax is levied on service
providers. The service receiver also pays the service tax. Service tax paid on accrued
basis, by 5th of next month the service tax is to be deposited by the service providers
to the deptt and then it is to be reimbursed by the service receiver. The return is filed
on half yearly basis.
(1) April – September
(2) October – March
Main Services of GAIL Vijaipur -
Transport of goods through pipeline.
77
Transport of goods through road (service receiver)
Business Auxiliary services.
Foreign Consultancy services (service receiver)
Renting of immovable property
GAIL reimburses the service tax to the parties/service providers and avail credit of
this in Excise Records. This Credit is utilized for payment of service tax liability on
finished product. GAIL raises Bills for Transmission Charges on various customers
against supply of Natural GAS through HVJ Pipeline. The Service Tax is charged on
this Transmission Cost as per the Central Excise Rules. The requisite records of
Service Tax are maintained as per the provision of Service Tax Rules under Central
Excise Rules.
VAL UE ADDED TAX – Value Added Tax is a multi point tax with set off for
tax paid on purchases. The tax is collected in installments at each transaction in the
production distribution process. There is no cascading because of the system of
deduction or credit mechanism for taxes paid. The tax is levied on consumption. The
final and total burden of the tax is fully and exclusively borne by the domestic
consumer. No VAT is charged on goods exported. This is the tax system of the future.
The Products being supplied by GAIL Vijaipur with in MP State are levied with
VAT. In GAIL Vijaipur unit M.P.VAT rate is 13%.
CENTRAL SALES TAX (CST) – Central Sales Tax is levied under this act by
the Central Government but, it is collected by that state government from where the
goods are sold. The tax thus collected is given to the same state government which
collected the tax. The prevailing CST rates are 2% against form C and 5% without
Form C. Interstate procurement for HVJ are made on full rate of CST without
issuance of concessional declaration forms. In LPG, inter-state purchases are made at
concessional rate of tax with declaration forms.
WCT: - Works Contract Tax is being deducted at source on Civil and other Works
Contracts, as per the applicable rates in Madhya Pradesh. The same is deposited with
the Authority and requisite WCT Certificates are issued to the concerned parties.
78
Sales Tax/VAT/Entry Tax Returns: - Filing of Returns and finalization of
Assessment: - The activity involved timely filing of Sales Tax/VAT/Entry Tax Return
to the Sales Tax Authority and get finalized the Assessment.
PROJECT PAYMENTS & ACCOUNTING : -
GAIL- Finance Vijaipur is also handling the payments and accounting of various new
pipeline projects and expansion projects of HVJ Pipe Line, Dahej -Vijaipur pipe line,
Vijaipur Dadri pipe line etc and new Compressor Stations. The Project Consultant is
appointed by Project Department New Delhi through inviting Global Tenders. The
Project Consultant designs the whole project and makes the estimate of the project.
Based on this estimate the project is put up for the Board of Directors Approvals
under the guidelines of Ministry of Petroleum. Vijaipur Finance & Accounts
Department plays a key role in various teams made for Crop Compensation, Land
Acquisition for laying proposed pipe line in MP State. For Crop Compensation and
Land Acquisition, GAIL has appointed various state level officials on deputation
called Competent Authority.
Following Payments are handled by GAIL Vijaipur Finance.
Payment against enabling work for Compressor
Payment against Camp office facility
Payment against Vehicle hired for Projects/Sites.
Payment regarding Compensation for Land Acquisition , Crop Compensation
Payment for Support Services on Contract basis.
The major payments related to all the projects are released by the Project Finance
Department at Corporate Office in Delhi.
79
SAP Procedure for Project Accounting : -
Following is the summary of the SAP Procedure of the Project Accounting
Transaction Code – MIR6 is given
Bios number is entered
Basic data is mentioned
Payment method is selected
Assignment- whether work order or purchase order
Business area code is given
Withholding tax i.e. TDS is deducted
Service Entry sheet is prepared
Print out command is given for invoice generation
BWS – Misc. Bills :-
Steps to be followed for Transaction FBV0
1) Click on Document list TAB
2) Enter the Company code, Fiscal year and the 25 digit BWS number
3) Execute the transaction.
Double click on the line item
1) Enter the Section Code
2) Enter Narration in the text field
3) Enter the Business area
4) Enter the House Bank
5) Enter the baseline date
6) Check the Withholding Tax data if the vendor is applicable
7) Enter the Expense GL Account and the relevant cost center
8) Simulate the Document and if the document is correct
9) Post the document
80
Accounting Entries:-
Expenses A/c Dr
To Vendor
Vendor A/c Dr
To Bank Outgoing A/c
The above entries will update the Vendor balances in FBLN
E-BANKING AND BANK RECONCILIATION:-
NET BANKING
INTRA BANK INTER BANKING
GAIL deals with three banks
Reserve bank of India
SBI ICICI HDFC
All banks are
there
81
E-BANKING:-
GAIL Vijaipur has Bank Accounts with State Bank of India- GAIL Township, ICICI
and HDFC Bank. As per the Company policy, all payments to the employees,
vendors, contractors and statutory bodies are released only through E-banking
Company has the policy not to release any payment through manual cheques or
Demand Drafts, except statutory payments to Govt Authority. The vendors dealing
with the Company regularly are compulsorily to have their account in any of the
above three Banks. In case, any party do not have their account in any of these banks,
can be facilitated by Cheques to be issued by ICICI or HDFC, based on our advice
through E-banking to these Banks. In case of new party/contractors/employees, the
moping of bank account is made with these Banks to facilitate the E-banking
Payments. In E-banking payment system, as mentioned above, for all type of
payments, a liability voucher is prepared by doing MIRO. Based on this liability
voucher a ZP voucher is prepared and uploaded in the system. Two authorized
officers, authorize to release the payment through E-banking.
SAP Procedure for E-Banking : -
Transaction code : YRFR030
E-Banking text file generated in SAP.
One executive upload this text file on respective bank site portal.
Later on two executives authorize the transaction & send text file for release payment through e-banking.
BANK RECONCILIATION : -
For Bank Reconciliation, Bank statements are downloading from the bank site for the
month.
Transaction code: YRAR003, bank settlement if for upload in SAP for automatic
matching of transaction for BRS purpose. Unmatched transactions are clear with
Transaction code: FEBA manually. After matching transaction BRS statement
generated with Transaction code: YRFU 003 Efforts are made for clear outstanding
payment on BRS statement.
82
DEPRECIATION ACCOUNTING : -
The Assets are procured after taking I.O. Number (i.e. Capex No) for the assets
required for Plant and Establishment thru C&P Deptt. The Capitalization of these
Assets is made based on GRV issued by the Stores. The Depreciation is calculated on
single shift basis under SLM.
SAP Procedure for Depreciation Accounting: -
T Code is given
Company code is entered
Business Area is defined
Balance Sheet account is mentioned
Asset class is defined
Personnel number is given
Assert code is mentioned
Purchasing date is mentioned
Acquisition Value is inserted
Accumulated Depreciation is automatically calculated through SAP
Present Book Value is received
83
CENTRAL ACCOUNTING : -
Central Accounting Cell in GAIL Vijaipur Finance is responsible to ensure correct
and accurate accounting in all areas and correct provisioning in the books of accounts.
This cell is also to ensure that Company Accounting Policy and Accounting Standards
laid as per the Institute of Chartered Accountants are being strictly followed. The
Central accounting cell is also responsible to prepare the Books of Accounts so as to
ensure the smooth consolidation with Corporate Office and to get audited by the
Internal, Statutory and CAG Auditors. This Cell ensures timely completion of
Quarterly, Half yearly, Nine month and Annual Closing of Books of Accounts.
GAIL Vijaipur Finance prepares complete accounts for LPG Recovery Plant and
computes the profitability at the unit level. The same is audited by the Branch
Auditors. The Profit & Loss, Balance Sheet and Schedule of Accounts and Note on
Accounts are prepared as per the Company Law. The Books of Accounts of HVJ
activities are finalized at Corporate Office, after consolidation all the entries of all
Business Areas are audited by the Statutory Auditors at HO level. The profitability of
HVJ is derived as a whole for GAIL.
Balance Sheet of LPG Plant Vijaipur is prepared at Unit level and audited by the
Branch Auditors.
Sources of Funds:
1. Shareholders Funds
Capital (IUT/BA) (As per Schedule I)
Reserve & Surplus (As per Schedule II)
2. Loans Funds (As per Schedule III)
Secured Loans
Unsecured Loans
3. Deferred tax liability (Net)
Application of Funds: (As per Schedule IV)
1. Fixed Assets
Gross Block
Less-Depreciation
Net Block
Capital work in Progress (As per Schedule V)
84
2. Investments (As per Schedule VI)
Current assets, Loans and Advances (As per Schedule VII)
a) Inventories
b) Sundry Debtors
c) Cash & Bank Balances
d) Other Current Asset
Current liabilities provision (As per Schedule VIII)
Net Current Assets
Miscellaneous Expenditure
Deferred revenue expenditure
Profit & Loss (debit balance)
NOTES ON ACCOUNTS -
Following Schedules are the prepared as part of Notes on Accounts for LPG
Accounts comparing with last financial year on Annual Basis:-
Schedule 1A – IUT/BA Adjustment balances
Schedule 2 - Reserves & Surplus
Schedule 3 - Loan funds
Schedule 4A – Fixed Assets: Showing Gross Block, Depreciation and Net Block
with Break up of Tangible and Intangible Assets.
Tangible Assets: - are Land, Building, Bunk House, Plant & Machinery, Railway
Lines & Siding, Electrical Equipments, Furniture, Fixtures and other Equipments and
Transport Equipment. Intangible Assets:- are Software/Licenses. The Depreciation
is charged on single shift rate under SLM.
Schedule 5 - Capital work-in-Progress (including Capital Goods in Stock/Transit)
Schedule 6 - Investments
Schedule 7 – Current Assets, Loans & Advances: Showing the Inventory, Construction Surplus (net of Provision for losses/obsolescence), Debtors showing Secured and unsecured (net of provision for doubtful debts), Cash Bank Balance, Loans and Advances, Claim Receivables, Deposits with Customs, Port Trust and Others. Schedule 8-Current Liabilities & Provisions Sundry Creditors, Provisions for
Taxation etc.
Schedule 9-Other Income: i.e. Income from Dividend, interest, Export Incentives,
Masc. Income etc.
85
Schedule10- Manufacturing, Transmission, Administration, Selling & Distribution & Other Expenses: This includes details of Raw Material Consumed, Personnel Expenses, Establishment Expenses, R&M Expenses, Other Expenses. Schedule 11 – Incidental expenditure during Construction
Schedule 12 – Interest & finance charges
Schedule 13 – Prior period adjustments.
Schedule 14-Notes to Accounts:- It comprises of details on Capital Commitment,
Contingent liabilities not provided for, Free hold/lease hold land capitalized on
provisional basis, Freehold/leasehold land/flats, title deed pending execution, impact
of exchange rates variation, notes on LPG subsidy burden, segment disclosures,
related party disclosures, details of joint ventures as per AS-27, total outstanding
dues of micro & small enterprises, total outstanding dues other than micro & small
enterprises, disclosure of amount lying in CWIP, Quantitative information on
Products i.e LPG, Naptha, Pentane, Propane, showing details of Opening Stock,
Purchases, Sales, Internal Consumption and Closing Stocks. CIF Value of Imports,
Expenditures in Foreign Currency, Earning in Foreign Currency, Licensed, installed
and actual capacity achieved in production product wise, Details of Consumption in
RM, Stores & Spares, Stock Adjustment and other declarations
MANAGEMENT INFORMATION SYSTEM (MIS) : -
GAIL Vijaipur Finance has to provide various reports and information’s to Head
Office as part of MIS. These reports include Monthly Profitability Reports for LPG
and HVJ showing the Sales Value and Expenditures segment vise, Cost Sheets etc.
Profitability Report –
Profitability Report is prepared on monthly basis, it includes the followings:-
1) Quantity Sold
2) Quantity Produced
3) GAS Consumption by Plants
4) Prices
5) Income
6) Expenditure
7) Gross Margin
8) Profit Before Tax
86
Common Expenses are apportioned in LPG and HVJ in the following ratio:-
HVJ – 196 employees 60%
LPG - 131 employees 40%
Energy Expenses – The energy expenses are divided in following
categories –
Captive Power Generation: that includes
GTG-A
GTG-B
DEG
GTG Consumption: it includes
LPG
HVJ
DVPL
MPSEB Consumption: it includes
Plant
LPG
Township
DVPL
Common Expenses:-
Purchase of Medicine
Staff Welfare
Sport Expenses
Dispensary Expenses
Welfare School
Electricity Township
Property Tax
R & M General Building
Repairs & Maintenance Township
Communication Expenses- P & T
Telephone Expenses
87
Telephone Residence
Public Relation Expenses- Other
Vehicle Hiring Charges
Bus Hiring Charges
Social – Other
All these expenses are divided among-
1) HVJ Expenses
2) LPG Expenses
GTG Power Transfer Expenses:-In GAIL Vijaipur Plant GTG are installed. As and
when power requires for performing operations, GTG is used & its calculation
statement is prepared on monthly basis segments.
GTG in LPG
GTG in HVJ
GTG in DVPL
DEG in HVJ
Cost Sheets and Maintenance of Costing Records:-
After the preparation of expenditure statements, the cost sheet is prepared .The Cost
sheet is prepared for the following products. GAIL is preparing the records as per the
requirement of Institute of Cost & Works Accountants of India, specified for LPG
Industries. The same are being audited by the Cost Accountant Firm.
Manufacturing LPG
Naphtha
Pentane
Propane
Blended LPG.
88
The Cost Sheet comprises of followings:-
Variable Cost
Fixed Cost
Cost of Production
Total Cost of Sales
Closing Stock
Shrinkage
Value of Closing Stock (Including Excise Duty)
Value of Closing Stock (Excluding Excise Duty)
Difference in Closing Stock
BUDGETING: - As per company policy, all units are to submit to Corporate
Finance, their Revised Estimates for the financial year and Original Estimates for the
next financial year in the month of July & August. The Vijaipur Finance Department
also prepares the RE and BE in respect of Revenue and Capital Expenditures called
non planned expenditure. In the exercise of preparation of estimates, the head wise
proposed expenditures are taken from each department for HVJ and LPG
segment with their justification in the breakup of month-wise. The same is
scrutinized, discussed on its justification and complied. The complied Budgets are
submitted to Corporate Office for approval by Board of Directors. The Approved
Budget Estimates for Revenue and Capital (Non Planned) expenditures can be spend
with in the financial year and can not be carry forwarded to next financial year. The
Department concerned has made the provision in budget can only utilize these
approved budgets on the heads for the company business. In case, there is no
provision in the budget estimates against a specific head, the expropriation of budget
can be made with the approval of Competent Authority. Similarly, in case of Non
Planned/Capital Expenditures Budget, the amount can be spending to procure the
assets/equipment to be capitalized by raising I.O Number (Capex Sanctioned
Number).
89
Budget Allocation & Expenditure
Budgeting is the company’s formal short term planning process for the acquisition
and investment of capita. In the preparation of the Budgets, the principle of Zero Base
Budgeting is followed according to which expenditure is required to be justified after
evaluation of various alternatives and ranking them in order of importance by
systematic analysis.
Two main budgets are prepared annually in GAIL: Revenue Budgets and Capital
Budgets. The revenue budget is the operating budget for income and expenditure. The
objective of revenue budget is to fix a target in respect of physical parameters viz
GAS sales, Production and sale of LPG & other value added products, Petrochemical
production, internal consumption of GAS, shrinkage of GAS for production of LPG,
Liquid Hydrocarbons and petrochemicals, power, water and also that of operating
expenses which then become the basis from monitoring and controlling. Based on the
targeted physical parameters/ operating expenses, the likely profit/ internal resource
generation are estimated which will form the basis for funds management. The capital
budget comprises of capital expenditure on projects. The same is approved by the
MoP&NG and Planning Commission.
Actual performance vis-à-vis MOU targets are monitored by Management
Accounting Cell and periodic reports are submitted to top management.
Following Budget Estimates are prepared:-
Revenue Expenditure Budget for LPG and HVJ
Non-Plan Expenditure Budget (Capital Budget) for LPG and HVJ
Procurement Budget ( O&M )
Depreciation Budget
Employee Advances Budget
Repairs & Maintenance Budget
Stores & Spares Expenditure Budget
90
REVENUE EXPENDITURE BUDGET – It includes followings:-
Raw material consumption
Employees remuneration
Power, Fuel & Water charges
Consumption of stores & spares
Rent
Rates & Taxes
License fees
Bandwidth Consumption
Repair & Maintenance
Insurance
Communication Expenses
Printing & Stationery
Traveling Expense
Books & Periodicals
Advertisement & Publicity
Entertainment Expense
Recruitment & Training Expense
Vehicle hire & Running Expense
Exploration & Production Expense
Consultancy charges
Donations
Loss on sale of assets
R & D Expenses
Bad debts, Claims, Advance , Written off
Obsolescence of stores
Expense on enabling facilities
Selling & Distribution Expense
Security Expense
91
Other Expenses
NON-PLAN EXPENDITURE BUDGET –
The Non-plan expenditure budget/Capital Budget consist of amount to be spent on
equipments/assets capital in nature the various departments of Vijaipur unit prepare
this type of budget –
Pipeline
Human Resource
Fire & Safety
Civil Department
Contracts & Procurement
GAILTEL
Information Technology
Mechanical
Electrical
Instrumentation
HBJ
PROCUREMENT BUDGET (O&M)-
It includes expenses like:
Spares, consumable & chemicals
Fuel & Oil
Others
DEPRECIATION BUDGET –
Depreciation budget includes the following heads –
Depreciation for previous year
Less: a) Depreciation not provided for assets reaching 95 %
b) Depreciation for assets (if known)
Net total
Depreciation on additions
Total expenditure
EMPLOYEE ADVANCES BUDGET -
92
There are several type of advances which the GAIL Company gives it to their
employees & each unit of GAIL prepares budget for their advances, same is the case
with Vijaipur unit.
Car Advance
Scooter Advance
HBA Advance
Furniture Advance
PC Advance
Other Advance
REPAIRS & MAINTENANCE BUDGET –
There are several expenses which come under the heads of Repairs & Maintenance.
Vijaipur unit is having an LPG Plant therefore it has much more expenses in
comparison with the other units of GAIL. Following are the departments which give
their financial requirement regarding the repairs & maintenance –
Pipeline department
Human Resource department
Civil department
Mechanical department
Contracts & Procurement department
GAILTEL
Information Technology department
HBJ-Operations & Terminal
Electrical department
Electrical –Township
Instrumentation department
Fire & Safety department
HVJ BUDGET –
93
HVJ budget is prepared department wise in GAIL Vijaipur unit. The departments
preparing the HVJ budget are as follows –
Human Resource Department
Pipeline & Terminal
Contracts & Procurement
Electrical – HBJ
Electrical – Township
Civil department
Finance department
GAILTEL
Fire & Safety
HVJ Operations
STORES & SPARES EXPENDITURE BUDGET –
The stores & spares budget is prepared for the expenses incurred in the stores of various departments & spares used in the operational activities. The areas for which stores & spares expenditure budget is prepared are –
Electrical
Electrical Township
Instrumentation
Mechanical
Telecom
Pipeline
Contracts & Procurement
Information Technology
Fire & Safety
How to Create a Budget
94
Creating a budget may not sound like the most exciting thing in the world to do, but it
is vital in keeping your financial house in order. Before you begin to create your
budget it is important to realize that in order to be successful you have to provide as
much detailed information as possible. Ultimately, the end result will be able to show
where your money is coming from, how much is there and where it is all going
Here's How
1. Gather every financial statement you can:- This includes bank
statements, investment accounts, recent utility bills and any information
regarding a source of income or expense. The key for this process is to create
a monthly average so the more information you can dig up the better.
2. Record all of your sources of income:- If you are self-employed or
have any outside sources of income be sure to record these as well. If your
income is in the form of a regular paycheck where taxes are automatically
deducted then using the net income, or take home pay, amount is fine. Record
this total income as a monthly amount.
3. Create a list of monthly expenses:- Write down a list of all the
expected expenses you plan on incurring over the course of a month. This
includes a mortgage payment, car payments, auto insurance, groceries,
utilities, entertainment, dry cleaning, auto insurance, retirement or college
savings and essentially everything you spend money on.
4. Break expenses into two categories: fixed and variable:-
(a) Fixed expenses are those that stay relatively the same each month
and are required parts of your way of living. They included
expenses such as your mortgage or rent, car payments, cable and/or
internet service, trash pickup, credit card payments and so on.
These expenses for the most part are essential yet not likely to
change in the budget.
95
(b) Variable expenses are the type that will change from month to
month and include items such as groceries, Gasoline,
entertainment, eating out and gifts to name a few. This category
will be important when making adjustments.
5. Total your monthly income and monthly expenses:-If your end
result shows more income than expenses you are off to a good start. This
means you can prioritize this excess to areas of your budget such as retirement
savings or paying more on credit cards to eliminate that debt faster. If you are
showing a higher expense column than income it means some changes will
have to be made.
6. Make adjustments to expenses:- If you have accurately identified and
listed all of your expenses the ultimate goal would be to have your income and
expense columns to be equal. This means all of your income is accounted for
and budgeted for a specific expense.
If you are in a situation where expenses are higher than income you should
look at your variable expenses to find areas to cut. Since these expenses are
typically essential it should be easy to shave a few dollars in a few areas to
bring you closer to your income.
7. Review your budget monthly:- It is important to review your budget on
a regular basis to make sure you are staying on track. After the first month
take a minute to sit down and compare the actual expenses versus what you
had created in the budget. This will show you where you did well and where
you may need to improve.
96
AUDIT
There are five types of audit in the Organization, viz.
a) Internal Audit
b) Statutory Audit
c) Government Audit
d) Technical Audit
e) Tax Audit
Internal Audit
Internal Audit is a statutory requirement for all the Companies having paid up capital
of over Rs. 25.00 lakhs. Under the Manufacturing and other Companies (Auditor's
Report) order, 1988 (MAOCARO), the Companies are required to have an organized
Internal Audit Wing Commensurate with the size and nature of their business. The
function of Internal Audit may be expressed as an independent appraisal activity
within an organization for the review of operations as a service to Management. It is a
managerial control which functions by re assuring and evaluating effectiveness of
other internal controls.
The Internal Audit is functioning under the Director (Finance) through Head of
Internal Audit. The functions, duties, responsibilities and powers of Internal Audit
department have been detailed separately in the Internal Audit Manual. Internal Audit
should also examine independently the final accounts and attached Schedules to the
Balance Sheet and Profit & Loss Account. Any point or observation make by the
Internal Audit, which the Head of Finance Department considers acceptable for
modification of the accounts, may be accepted and changes made in the Accounts.
However, comments by Internal Audit, if any, should be offered will before the
Finalization of the accounts.
Statutory Audit
Under Section 619(2) of Companies Act, 1956, the statutory Auditors (Chartered
Accountants) are appointed by the Central Govt. on the advice of the Comptroller and
Auditor General of India for conducting the audit in accordance with the provisions of
the said Act. The Comptroller and Auditor General also has the power to direct the
97
manner in which the Company's accounts shall be audited by the auditor and to give
such auditor instructions in regard to any matter relating to the performance of his
functions as such. The Officer Incharge of the Central Accounts Section shall co
ordinate the audit work and supplies the relevant information / records / documents as
required by the auditors. With a view to finalize the final accounts well within the
prescribed time, it is necessary that all such information, documents are provided
expeditiously by the concerned Section / Departments to the Auditors.
Government Audit
Powers of the Comptroller and Auditor General
As mentioned earlier, the accounts of the Company are audited by the Statutory
Auditors appointed by the Central Government on the advice of the Comptroller &
Auditor General of India. The Comptroller & Auditor General of India conducts only
a supplementary or test audit of these accounts and gives his comments upon or
supplements the reports submitted by the Statutory Auditors. In terms of Section 619
(3) of the Companies Act, the Comptroller & Auditor General is empowered:
The Government audit conducts audit of the following three types:
a) Phase Audit under Section 619 (3) (b) of the Companies Act;
b) Periodical Comprehensive Reviews;
c) Balance sheet audit under Section 619 (4) of the Companies Act.
Technical Audit
Technical Audit normally functions directly under the Head of Technical Services or
the GM / Director (Projects). In the discharge of its functions and duties, any
information required by Technical Audit, if available with the Finance Department
should be furnished. Any expert advice sought by the Technical Audit from time to
time on financial matters should also be provided by the Finance Department
98
Tax Audit U / S 44 of the Income Tax
Finance Act, 1984 inserted a new Section 44 AB in the Income Tax Act, 1961 w.e.f.
1.4.1985 which requires that all persons carrying on business of profession and having
total sales, turnover or gross receipts exceeding the limits specified therein in any
previous year should get their accounts audited by a chartered accountant before the
date specified therein and obtain the report of such audit in the prescribed form duly
signed and verified by such account and setting forth such particulars as may be
prescribed. "Specified date" in relation to the accounts of the previous year relevant to
an assessment year (as per Income Tax Act / Rules amended up to 1995-96) means.
a) Where the assessed is a Company, the 30th day of November of the
assessment year, and
b) in any other case, the 31st day of October of the assessment year.
A Core Organization Values:
GAIL takes pride in its core organizational values:
Ethics
We are transparent, fair and consistent in dealing with all people. We insist on honest,
integrity and trustworthiness in all our activities.
People
We believe that our success is driven by the commitment and excellence of our
people. We attract and retain result – oriented people who are proud of their work and
are satisfied with nothing less than the very best in everything that they do. We
encourage individual initiative by creating opportunities for our people to learn and
grow. We respect the individual rights and dignity of all people.
Safety, Health and Environment
We promote highest levels of safety in our operation, health of our employees and a
clean environment. We strive for continuous development of the communities in
which we operate.
99
Customer
We strive relentlessly to exceed the expectations of our customer, both internal and
external. Our customers prefer us
Shareholders
We meet the objectives of our share holders by providing them superior returns and
value through their investments in us.
Technology
We believe technology is a key to the future success of our organization. We advocate
‘best in-class’ technologies.
100
Rewards and Recognition:
GAIL has been selected as the top Indian
company in the GAS Processing,
Transmission and Marketing sector for the
Dun & Bradstreet - American Express
Corporate Awards 2006. GAIL’s Dahej -
Vijaipur Pipeline Project has won the
Silver Medal in Mega Projects Category at
the International Project Management
Association Awards, 2006 The company
has received the Platts Global Industry
Leadership Award 2005 in recognition of
its commitment, continuous good work and collective efforts over a period of two
decades for the hydrocarbon industry at a global level.. Other awards include
Certification of Merit’ from Hon’ble President of India in recognition of systematic
and serious attempts for efficient utilization and conservation of energy during the last
three years, the Golden Icon Award for exemplary initiatives in e-Governance. The
Company was rated as one of the Best Employers in India by Hewitt Associates in
2004 and was adjudged as an Organization with Innovative HR Practices by HT
Power Jobs. GAIL has recently won the Quality Excellence Award by the Quality
Council of India. The Award was presented by His Excellency Hon'ble President of
India, Dr. A.P.J Abdul Kalam.
101
AWARDS
Sr. No.
Date Location
Subject
1 31/05/2010 13:02:11
MUMBAI GAIL MAHARASHTRA RECEIVED GREENTECH SAFETY GOLD AWARD 2010
231/01/2011
16:53:38 MUMBAIGAIL MUMBAI RECEIVED SAFETY INNOVATION
AWARD-2010
3 31/01/2011 16:18:57
MUMBAI
GAIL MUMBAI RECEIVED SAFETY INNOVATION AWARD-2010 FROM INSTITUTION OF
ENGINEERS
427/12/2010
13:06:08 NOIDASAFETY INNOVATION AWARD-2010 FOR GAIL
ABUROAD & MANSARAMPURA
5 26/05/2010 16:44:49
JHABUA GREENTECH SAFETY AWARD 2010 FOR JHABUA
623/10/2010
14:38:33 NOIDASAFETY INNOVATION AWARD-2010 FOR GAIL
AGRA (UP REGION)
721/08/2010
12:20:17 GANDHARGPU-Gandhar bagged ‘CMD’s Rolling Trophy for
Best Performing Unit’ for the year ‘09-10
8 19/04/2011 16:29:22
MUMBAI
GAIL MAHARASHTRA REGION PIPELINE SYSTEM RECEIVED CERTIFICATION FOR ISO-14001 &
OHSAS-18001
9 15/07/2010 12:09:43
AGARTALA GREENTECH AWARD 2010 FOR AGARTALA
1011/05/2010
17:32:43 NOIDAINTERNATIONAL SAFETY AWARD FOR GPU
GANDHAR
1106/04/2011
12:20:50 MUMBAIGAIL MUMBAI DECLARED WINNER OF
GREENTECH SAFETY GOLD AWARD-2011
1206/04/2011
12:14:37 MUMBAIGAIL MUMBAI DECLARED WINNER OF
GREENTECH GOLD AWARD-2011
13 03/06/2010 10:23:15
LAKWA GREENTECH SAFETY AWARD 2010 GOLD AWARD FOR GAIL LAKWA
1403/01/2011
15:26:38 JHABUAGAIL, JHABUA WON THE GOLD AWARD FROM
GREENTECH TOWARDS ENVIRONMENT EXCELLENCE
15 02/07/2010 17:18:49
JAIPUR JLPL selected for "Special Commendation" Certificate for GOLDEN PEACOCK AWARD
16 01/01/2011 13:23:59
LAKWA GREENTECH Environment Excellence Award 2010 GOLD Award for GAIL Lakwa
Conclusion
102
In the light of the developments that have happened in the past year the company has
shown that not only it has creating value for its shareholders but also creating value
for other stakeholders as well. The initiatives taken by this company focuses on
competitiveness both internally and externally
Internal capabilities building to outperform competitors in the near and long terms is
being gradually enhanced through several initiatives such as the e-initiatives for
increasing employed competencies. On the external front your company is now poised
to strengthen its base in the international markets via its global businessman in the
coming years.
The challenges in the Oil & GAS industry are many. Increase in crude oil prices
threaten competitiveness and pose marketing challenges. Besides, the Indian natural
GAS market is maturing and is expected to grow rapidly, bringing newer
opportunities. New regulations would govern new paradigm of domestic industry.
Being the market leader, the company is better prepared financially and intellectually
to drive on the growing Indian GAS economy.
During my training period I have noticed some of the following key areas which has
really helped company to bring efficiency in its working style. Being a public sector
company it is working like a full fledged MNCs.
Through well established SAP System the company has:
Improve operational efficiency and productivity within and beyond your
enterprise.
Extend transactions, information, and collaboration functions to a broad
business community.
Increase profitability, improve financial control, and manage risk.
Integrate and optimize business processes.
GAIL has fulfilled its corporate social responsibilities and followed its business ethics
in every stage of its existence.
103
The company has maintained transparency in its business through E-Banking, in its
contract and bidding process which has helped in gaining the confidence of clients.
Considering all the above points I can say that the company has well organized their
operational activity which has one hand benefited to company itself and all its
stakeholders.
104
BIBLIOGRAPHY:
www.GAILonline.com .
www.google.com
http://www.moneycontrol.com/financials/GAILindia/
balance-sheet/GAI
http://money.rediff.com/companies/GAIL-india-ltd/
15120010/balance-sheet
https://GAILcorintra.GAIL.co.in/
Published annual report of GAIL India Ltd 2010-2011.
Project Interconnect- SAP and User Manual- GAIL
India Ltd
Financial management by I.M. Pandey
105