GAIL (India) Ltd Directors Report.

Dear Shareholders,

On behalf of the Board of Directors of your Company, I am delighted to present the 37th Boards Report of your Company along with Audited Standalone and Consolidated Financial Statements for the Financial Year 2020-21:

Financial Performance Review

a. Financial highlights on standalone basis for FY 2020-21 areas under:

Particulars

FY 2020-21

FY 2019-20

US $ Million (Rs. in crore) US $ Million (Rs. in crore)
Revenue from Operations 7,683 56,738 9,451 71,886
Other Income 271 2,004 185 1,408
Cost of Sales (excluding Finance Cost and Depreciation) 6,810 50,293 8,337 63,405
Gross Margin 1,144 8,450 1,300 9,888
Finance Cost 21 156 14 109
Depreciation 258 1,908 241 1,836
Profit Before Tax (PBT) 865 6,386 1,044 7,943
Provision for Tax 203 1,496 174 1,323
Profit After Tax (PAT) 662 4,890 870 6,621
Appropriations
Final Dividend for previous year - - 52 399
Interim Dividend for current year 303 2,238 379 2,886
Corporate Dividend Tax - - 86 657
Net transfer to (from) Bond Redemption Reserve 2 15 2 15
Transfer to General Reserve 66 489 87 662
Net Surplus after Appropriations 291 2,149 263 2,001

Note: The following exchange rate are used in calculations.

For FY2020-21: 1 US$ = Rs. 73.85ason 31 March 2021 For FY2019-20: 1 US$ = X 76.06 as on 31 March 2020

b. Key Financial Performance Indicators on a Standalone basis

• Revenue from Operations decreased by 21% from Rs. 71,886 crore in FY 2019-20 to X 56,738 crore in FY 2020-21.

• Profit Before Tax registered a reduction of 20% from X 7,943 crore during FY2019-20toRs. 6,386croreduring FY2020-21.

• ProfitAfterTax(PAT)decreasedby26%fromRs. 6,621 crorein FY2019-20

toRs. 4,890crorein FY2020-21.

• In view of the decrease in PAT, Earnings Per Share (EPS) for FY 2020-21 has reduced toRs. 10.85 from X 14.68 in FY 2019-20.

c. Key Financial Highlights on a Consolidated basis for FY 2020-21

In accordance with the provisions of the Companies Act 2013 "the Act", SEBI (Listing Obligationsand Disclosure Requirement) Regulations, 2015 "SEBI (LODR)" and applicable Accounting Standards, the Audited Consolidated Financial Statements of the Company for FY 2020-21, together with the Auditors’ Report form part of this Annual Report. The key highlights of the Consolidated Financial Results are as follows:

:

Particulars FY 2020-21 FY 2019-20
Revenue from Operations 57,428 72,577
Profit Before Tax 7,725 10,429
Profit After Tax 6,143 9,515

Business Overview

1. PipelineTransportation

• Natural Gas Transportation

Your Company owns and operates a network of around 13,700 km of Natural Gas pipeline across the length and breadth of our country. The average gas transportation during FY 2020-21 was 104.20 MMSCMD vis-a-vis 108.37 MMSCMD in the previous financial year. Gross revenue of your Company from Natural Gas Transportation in FY 2020-21 was X 5,953 crore as againstRs. 6,044 crore in FY2019-20.

• LPG Transportation

Your Company owns and operates 2,038 km LPG pipeline network for LPG transportation namely the Jamnagar-Loni Pipeline (JLPL) and the Vizag-Secunderabad Pipeline (VSPL). JLPL networks achieved a throughput of 4.16 MMTPAduring the year 2020-21 against3.91 MMTPA in the previous year 2019-20. Gross revenue of your Company from LPG transportation in FY 2020-21 wasRs. 667 crore as against Rs. 636 crore in FY 2019-20.

2. Natural Gas Marketing

During FY 2020-21, your Company clocked a sales figure of 89.20 MMSCMD (which included sales within India of 80.28 MMSCMD and overseas sales of 8.92 MMSCMD) as against 96.26 MMSCMD (which included sales within India of 84.60 MMSCMD and overseas sales of 11.66 MMSCMD) during FY 2019-20. Gross revenue of your Company from Natural Gas Marketing in FY 2020-21 wasRs. 43,846 crore as against Rs. 59,955 crore in FY 2019-20.

3. Petrochemicals

During FY 2020-21, your Companys production increased by 3% to 813 KTA of polymers as against 788 KTA in FY 2019-20 and sales increased to 871 KTA of polymers as against 737 KTA in FY 2019-20. Gross revenue of your Company from Petrochemicals in FY 2020-21 was Rs. 7,061 crore as againstRs. 5,432 crore in FY 2019-20.

4. LPG and Other Liquid Hydrocarbon (LHC)

Your Company has five Gas Processing Plants (GPUs) at four locations in the country having total LHC production capacity of 1.4 Million MT. During FY2020-21, total Liquid Hydrocarbon production was about 1.14 Million MT as against 1.26 Million MT in FY 2019-20 of which almost 90% constitutes LPG and Propane. Gross revenue of your Company from Liquid Hydrocarbons in FY 2020-21 was Rs. 3,294 crore as against Rs. 4,234 crore in FY 2019-20.

5. Exploration and Production (E&P)

Your Company has participating interest in 12 E&P blocks of which 9 are in India, 2 blocks in Myanmar and 1 Shale Gas JV in Eagle Ford basin, Texas, USA (through wholly owned subsidiary GGUI). Out of these, your Company is an Operator in two onland blocks CB-ONN-2010/11 and CB- ONHP-2017/12 in Cambay basin awarded during NELP-IX and OALP-I bidding rounds respectively. The eleven E&P blocks (excluding Shale Gas in Eagle Ford Basin) hold an acreage of 2,170 km2 as per its Participation Interest (P.l.) in various consortiums.

Revenue from sale of hydrocarbons is being generated from 5 producing blocks namely A-1 & A-3 in Myanmar and CB-ONN-2000/1 & CB-ONN- 2003/2 (Cambay onshore blocks) in India and one (1) shale gas JV acreage in Eagle Ford basin, Texas, USA . Revenue from operations of Rs. 838 crore has been generated from E&P activities during FY 2020-21 as against Rs. 968 crore in FY 2019-20. Lower revenue from Myanmar is

mainly due to lower gas production (8 % lower i.e. 486 MMSCM vs 528 MMSCM in previous year) and lower gas price (11% lower i.e. US$6.53/ MMbtu vs US$7.35/MMbtu in previous year).

6. Renewable Energy

Your Company is committed to reduce carbon emission and implement renewable energy projects. Your Company has a total installed capacity of 130.21 MW of alternative energy; out of which 117.95 MW are wind energy projects and 12.26 MW are solar energy projects. Your Company is implementing a 1.8 MW captive Solar PV project at Vijaipur unit in Madhya Pradesh, 2.6 MW at Pata in Uttar Pradesh and 3.2 MW at various other O&M Sites.

7. Project Execution

Currently, your Company is executing around 6,000 km of pipeline projects as part of National Gas Grid & other small connectivities. Despite the immensely challenging times of COVID-19 pandemic, your Company has made significant progress & was able to commission over 1,000 km pipeline in FY 2020-21. The Kochi to Mangaluru Pipeline section of KKBMPL (450 km) & Dobhi to Durgapur Pipeline section (350 Km) of JHBDPL were commissioned & dedicated to the nation by Honble Prime Minister on 5th January, 2021 & 7th February, 2021 respectively. Also, a 174 km section of 352 km long Vijaipur Auraiya Pipeline capacity expansion project hasalso been commissioned.

Now, out of 2,655 km of Pradhan Mantri Urja Ganga Pipeline Project, also known as Jagdishpur Haldia and Bokaro Dhamra pipeline (JHBDPL), total 1,100 km has been commissioned. Dobhi-Durgapur section will supply gas to M/s Matix Fertilizers & M/s Hindustan Urvarak & Rasayan Ltd. (HURL), Sindri. Your Company is also extending this pipeline project to the North-eastern region of India upto Guwahati in Assam with construction of 729 km Barauni-Guwahati Pipeline as an integrated part of JHBDPL. In addition, GAIL as JV partner of Indradhanush Gas Grid Limited (JV of GAIL, IOCL, ONGC, OIL, and NRL) is implementing North Eastern Region Network from Guwahati onwards by executing around 1656 km natural gas pipelines to connect eight north eastern states.

With the commissioning of long-awaited Kochi-Mangaluru Pipeline (450 km), gas supply to 3 major customers in Mangaluru viz. Mangalore Chemicals and Fertilizers Limited (MCFL), ONGC Mangalore Petrochemicals Limited (OMPL) & Mangalore Refinery and Petrochemicals Limited (MRPL) have now started.

Further, your Company is also taking up hook-up connections from the GAIL pipeline network to City Gas Distribution (CGD) entities for the supply of natural gas as CNG and PNG to various cities. Your Company has completed 16 CGD hook ups with CGD entities authorised by PNGRB.

Other ongoing pipeline projects under execution at various stages include Mumbai-Nagpur-Jharsuguda Pipeline (1,755 km), Srikakulam-Angul Pipeline (744 km), Dhamra- Haldia Pipeline (253 km), Sultanpur-Jhajjar- Hisar Pipeline (135 km) & Haridwar-Rishikesh-DehradunPipeline(50 km).

Under the Petrochemicals business vertical, your Company is setting up two projects, one 500 KTA Propane Dehydrogenation and Polypropylene (PDH-PP) Project at Usar, Maharashtra and another 60 KTA Polypropylene (PP) project at Pata, Uttar Pradesh. For both these projects, M/s EIL has been appointed as EPCM and Environment clearance has been granted by the Ministry of Environment, Forest & Climate Change. For PDH-PP Project-Usar, M/s LummusTechnology LLC, USA has been selected as Technology Licensor for PDH unit & M/s Grace Technologies Inc. has been selected as Technology Licensor for PP Unit. For Polypropylene (PP) project at Pata, M/s Grace Technologies Inc, USA has been selected as the Technology Licensor. Both these projects are in various stages of execution.

Integrated Annual Report(IAR)

Your Company has transitioned from compliance-based reporting to governance-based reporting by adopting the framework developed by the International Integrated Reporting Council (IIRC). We are presenting to you our 1st Integrated Annual Report which highlights the performance of GAIL across the six capital that contribute to Energizing Growth and the measures taken by the Company towards a long-term sustainable value creation.

Buyback of Shares

Your Company made a maiden Buyback of 6,97,56,641 (Sixcrore Ninety Seven lakh Fifty Six Thousand Six Hundred Forty one) fully paid-up equity shares of face value of X 10 each (representing 1.55 % of the total number of fully paid-up equity shares) at a price of Rs. 150 (Rupees One Hundred Fifty Only) per equity share payable in cash for an aggregate consideration of X 1,046.35 crore (Rupees One Thousand Forty Sixcrore Thirty Five lakh only) excluding taxes. The paid-up equity share capital of the Company thus reduced from Rs. 4,510.14 crore to X 4,440.39 crore.

Disinvestment by President of India

Your Company is promoted by the Government of India (GOI) and as per its decision, GOI tendered and sold 4,98,59,905 equity shares of the Company under the buyback offer. After tendering equity shares under buyback offer, the GOIs shareholding is now reduced to 228,45,90,082 equity shares as on 31st March, 2021 representing 51.45% of paid-up share capital of your Company as against 51.76% held earlier.

Dividend

Your Company takes pride in being a consistent dividend paying Company. The Board of Directors of your Company had approved payment of two interim dividends during the financial year, 1st and 2nd Interim Dividend both @ 25% each on equity share of X 10 each (X 2.50 per equity share) amounting to X 2,237.63 crore on the paid-up equity share capital of the Company. The 1a & 2nd Interim Dividend was paid in February, 2021 and March, 2021 respectively.

The details of the Unclaimed Dividend are covered in the Corporate Governance Report section, which forms part of the Board’s Report.

Employee Stock Option

The disclosure requirement in relation to ESOP under Rule 12(9) and Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 is not applicable.

Contribution to Exchequer

Your Company has contributed X 1,961 crore in FY 2020-21 to the exchequer through duties, taxes and others, as compared to X 9,460 crore in FY 2019-20. "

Credit Rating

• Domestic Rating

Your Company has been reaffirmed the highest domestic credit rating of AAA by ICRA, CARE and India Rating. This signifies the highest credit rating in India, and hence, signifies a lower credit risk of the Company.

• International Rating

The International rating agency, Moody’s International, Singapore, has assigned the corporate issuer rating of Baa3 with a negative outlook which is equal to the sovereign rating of India. Further, Fitch Ratings has also assigned a long-term foreign currency issuer rating of BBB-with a negative outlook, which is also equivalent to the sovereign rating of India. The agencies have indicated that your Company’s rating maybe upgraded once the sovereign rating of India improves.

Particulars of Loans, Investments and Corporate Guarantees

Details of investments, loans and guarantees covered under Section 186 of the Companies Act, 2013 forms part of the financial statements, presented in this Annual Reportfor FY 2020-21.

Subsidiaries/ Associates/ Joint Ventures

Your Company has formed various subsidiaries / associates / joint venture companies for different business areas such as City Gas Distribution (GAIL Gas Limited, Indraprastha Gas Limited, Mahanagar Gas Limited etc.), Petrochemical production (Brahmaputra Cracker and Polymer Limited, ONGC Petro-additions Limited), LNG/ Re-gasification (Petronet LNG Limited, Konkan LNG Limited), Gas trading (GAIL Global (Singapore) Pte. Limited), and Shale gas (GAIL Global (USA) Inc.), LNG sourcing (GAIL Global (USA) LNG LLC). Contracts or arrangements/ transactions with related parties were on an arm’s length basis and in the ordinary course of business.

During the Financial Year, your Company acquired an equity stake of 5% in Indian Gas Exchange Ltd. (IGX), India’s first Gas Exchange to trade natural gas at designated physical hubs in India.

During the year, your Company swapped its shares in Ratnagiri Gas & Power Private Limited (RGPPL) with NTPC Limited’s shares in Konkan LNG Limited (KLL). With this share swapping, GAIL’s shareholding in KLL increased to 92.15% and it became a Subsidiary Company of GAIL. Further, your Company ceased to be a shareholder of RGPPL.

Investment in no other subsidiary / joint venture company except RGPPL ceased to exist during the year. No new subsidiary/ joint venture company wasformed during theyear.

The subsidiaries/ associates / joint venture companies of your Company have contributed significantly to its business expansion activities. A statement containing the salient features of the financial statements of your Company’s Subsidiaries, Associate Companies and Joint Ventures as per the first provision of Section 129(3) of the Companies Act, 2013 including the individual contribution of these companies towards the overall performance of Company during the period is given under Consolidated Financial Statements.

Vigilance

The Corporate Vigilance Department of your Company is ISO-9001:2015 certified for having adopted Quality Management System in compliance with the requirements of ISO.

During the year, effective systemic improvements have been suggested to ensure transparency, efficiency, automation of processes. Review of policies and procedures were carried out which can help in reduction in corruption and ensure all-round good governance. Some of these systemic improvements are:

i. Review of C&P procedure adopted by all JVs under jurisdiction to ensure compliance of CVC guidelines and Public procurement guidelines. Communication sent to JVs for compliance of CVC guidelines.

ii. As a preventive measure, a Ready Reckoner on common irregularities in procurement has been published and widely circulated.

iii. Preventive Vigilance Training Module for executives at induction level and mid-career level has been institutionalized.

All the above suggestions are under implementation/ under consideration by management.

The Vigilance Awareness Week (VAW) 2020 was observed by GAIL (India) Limited, Corporate Office and its various site Offices from 27th October to 2nd November, 2020, under the guidance of the Central Vigilance Commission (CVC). The theme for this year’s Vigilance Awareness Week was "fldA HRS HRRs. (Vigilant India, Prosperous India)". The observance of the Vigilance Awareness Week commenced by taking the Integrity Pledge by GAIL Employees at the Corporate Office and all its work centers.

As per the guidelines of CVC, dedicated efforts have been made in internal housekeeping activities. Several areas, systems and procedures were reviewed and re-visited to identify the gaps. Issues related to Land management, low representation of women workforce, holding regular meetings of the internal committee on harassment of women employees etc. have been taken up and continuous efforts to streamline the internal processes are being taken.

During the Week, various knowledge-sharing sessions by eminent speaker, Shri Vinit Goenka, Member CRIS and Member IT Task Force, Ministry of Road Transport and Highway, Director (HR) and CVO, GAIL were organized in virtual mode.

Business Partner Interactive Meet on virtual platform was organized at New Delhi. The meet was attended by Shri Manoj Jain, CMD, GAIL, Ms Shubha N. Bhambani, CVO, GAIL, lEMsof GAIL- Shri Ajit Mohan Sharan, IAS (Retd.), Shri Sanjeev Behari, IRS (C&CE) (Retd.), Dr.Meeran Chadha Borwankar, IPS, DG Police (Retd) and other senior executives. Integrity Pledge was taken by all the Vendors present at the meet.

A compendium of systemic improvement suggested by GAIL Vigilance during 2013-2020 was released during VAW-2020.

GAIL also organized three Customer Interactive Meets for its customers of NCR, Mumbai and Lucknow zones. In all the meets, customers from Gas, Polymer and Retail businesses along with consignment stockiest participated. The meet was attended by Director (Marketing), GAIL and senior executives of Vigilance Department. Integrity Pledge was administered to all the participants present in the Customer meets.

Representation of Priority Section

Your Company has been complying with the Presidential Directives and other instructions/guidelines issued from time to time pertaining to Policies and Procedures of Government of India regarding reservation, relaxations, concessions etc. for Scheduled Castes (SCs), Scheduled Tribes (STs), Other Backward Classes (OBCs), Economically Weaker Sections (EWS) and Persons with Benchmark Disabilities (PWBDs) in Direct Recruitment.

Group wise details with regard to total number of employees and the representation of Scheduled Castes, Scheduled Tribes, Other Backward Classes, PWBD amongst them in your Company as on 31st March, 2021 are given in the Table below:

Group Total no. of Employees on Roll SC ST OBC PWBD
A 3,499 559 238 694 56
B 391 57 33 106 8
C 760 140 34 267 34
D 49 13 6 14 -
CMD, DIRECTORS &CVO 6
Total 4,705 769 311 1,081 98

A total of 156 new employees (including CVO) joined your Company during the FY 2020-21. Total Manpower of the Company as on 31 "March, 2021 stood at 4,705 (including Whole-time Directors & CVO) with 16% of its employees belonging to the SC category, 7% to the ST category, 23% to the OBC category, 8 % to the Minorities and 2.1% to the Persons with Benchmark Disabilities (PWBDs) category. Your Companys workforce is comprised of 304 women employees as on 31 "March, 2021.

Official Language

The Official Language Implementation Committees at the Corporate and Work Centre level meet every quarter to monitor and review the progress made for achieving the targets fixed in the Annual Program issued by the Official Language Department, Ministry of Home Affairs, Government of India.

Hindi workshops / trainings are organized on regular basis at Corporate Office and all work centres including training centres at GTI Noida and GTI Jaipur. Hindi computer training sessions are also an integral part of these programs. As many as 98 Hindi workshops were conducted during FY 2020-21 in which 1,972 employees were provided training.

Hindi Fortnight was observed across your Company from 14th to 28th September, 2020 to propagate linguistic harmony and to motivate the employees for the progressive usage of Hindi in their day-to-day work. Several Competitions/Programmes were organized to encourage the employees to work in Hindi and create a conducive atmosphere.

Your Company also publishes its Quarterly Hindi magazine "Rajbhasha Sahyog" to promote the Hindi language. During the year "15^1 3 f2^RuT/4l^iRs. rf for Official Language has been prepared and hosted on your Company intranet for the benefit of the employees.

GAIL Rajbhasha Sammelan was organized on 15th December, 2020 at GTI, Noida, and chaired by Director (HR). The purpose was to spread and propagate the essence of Hindi and simultaneously review the progress made on the implementation of the Official Language in the Company.

The First Sub-Committee of Committee of Parliament on Official Language inspected your Company, GAIL Jubilee Tower, Noida and GTI- Noida offices to review the steps undertaken to promote the Official Language and the efforts were appreciated by the Parliamentary Committee. The Draft and Evidence Sub-Committee of Committee of Parliament on Official Language also inspected GAIL Corporate Office to review the steps undertaken to promote the Official Language and the efforts were appreciated by the Committee.

Your Company has been recognised by The Ministry of Petroleum and Natural Gas for effective implementation of Official Language in Oil and Gas Sector Public Undertakings.

Vishwa Hindi Divas was celebrated across your Company on 11,hJanuary, 2021. To mark the occasion, a Literary Seminar was organized at Corporate Office to promote Official Language. Several other programmes were organized across your Company to promote Hindi during Vishwa Hindi Divas.

Sexual Harassment of Women at Workplace

Your Company has in place a robust Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.The Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment.

Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 with respect to FY 2020-21:

a) Number of complaints pending at the beginning of the financial year NIL
b) Number of complaints filed during the financial year 01
c) Number of complaints disposed-off during the financial year 01
d) Number of complaints pending at the end of the financial year NIL

Procurement from Micro and Small Enterprises

The Government of India has already notified a Public Procurement Policy for Micro and Small Enterprises (MSEs), Order 2012 including the amendments.

In terms of the said policy, out of the total eligible value of annual procurement of approx. X 4,068 crore towards goods produced and services rendered by MSEs (including MSEs owned by SC/ST & Women Entrepreneurs) during the FY 2020-21, the value of total procurement made from MSEs wasRs. 1,390 crore, which is approx. 34.17%.

Further, 15 Vendor Development Program for MSEs (including 3 Special Vendor Development Program/ Hand Holding Session specially for MSEs owned bySC/ST&Women Entrepreneurs) were conducted.

GAIL is already registered on the Trade Receivable e-Discounting System (TReDS) portal of all the three service providers (i.e. M/s Mynd Soultions, M/s ATReDS and M/s RXIL) and is also making payment to MSE vendors through TReDS.

Procurement through GeM

The Government e-Marketplace (GeM) is a Government-run e-commerce portal. It is a one-stop to facilitate and enable easy online procurement of Goods & Services that are needed by various Government Departments, Organizationsand PSUs.

GAILs all work centers are registered on GeM Portal and procuring the Goods & Services available on the portal through GeM only.

In FY 2020-21, GAIL had made procurement of Rs. 1,033 crore through GeM (which is more than 25% of total procurement of Goods & Services as compared to FY 2019-20) and became a topper amongst PSUs. Further, GAIL has got the First Rank and Platinum Certificate in the Category of "Order Value" in "First Bi-Annual Award for the Buyers and Sellers" announced by Government E-Marketplace (GeM).

MoU Performance

A Memorandum of Understanding (MoU) is signed every year between your Company and its administrative ministry i.e., MoP&NG, to enhance the performance level of company through the targets set therein. MoU for FY 2020-21 was signed between Secretary (P&NG), Government of India and Chairman & Managing Director, GAIL on 19th October 2020. The thrust while fixing MoU targets was more towards aligning GAILs performance with Governments priorities in developing the natural gas sector in the country. Apart from the financial and physical performance parameters, MoU parameters also include parameters of strategic national importance like capital expenditure, setting up new D-PNG connections and CNG stations, supporting compressed Bio-Gas initiative "SATAT" and procurement through GeM portal. GAIL made all out efforts to meet the targets set in MoU FY 2020-21 despite the stretched targets and COVID-19 scenario. Self-Evaluation of MoU FY 2020-21 will be carried out and submitted to DPE in due time, the result of which is expected to be announced by December 2021.

Performance of MoU FY 2019-20 is under evaluation by DPE. Your Company is expected to achieve a Very Good MoU rating for FY 2019-20. GAIL has achieved Excellent rating in most of the parameters, despite the restrictions posed in the last month of the financial year due to COVID-19.

Right to Information

To promote transparency and accountability, an appropriate mechanism has been set up across the Company in line with the Right to Information Act, 2005. Your Company has nominated 01 CPIO, 54 Asstt. CPIOs and 21 First Appellate Authorities at its units/offices to provide information to citizens under the provisions of the RTI Act, 2005.

Your Company has hosted RTI Guidelines and related information on its website and the same may be accessed at http://www.gailonline.com/ final_site/RTI.html .Besides, MIS Report on RTI Applications, Record Retention Schedule, and latest RTI Audit Report has also been web- hosted under the same link.

Section 4(1)(b) of the RTI Act, 2005 lays down the information which should be disclosed by any Public Authority on a suo moto or proactive basis. Section 4(2) and Section 4(3) prescribes the method of dissemination of this information. Accordingly, keeping in view the purpose of suo moto disclosures under Section-4, GAILs Corporate RTI Cell has hosted a dedicated page on GAILs website, through which large amount of information in the public domain on the proactive basis is placed. This is being done to make the functioning of your Company more transparent and reduce the need for filing individual RTI applications.

Further, your Company has been made LIVE on the Government of India- DoPT Online RTI Portal from July, 2016 and ever since, we are providing information through Online mode. Besides, RTI applications received physically are being provided information accordingly.

For FY 2020-21, GAILs Corporate RTI Cell has a 100% disposal rate in respect of RTI Applications received & disposed-off. A total of 795 applications were disposed-off within prescribed time schedule as per the provisions of the RTI Statute. Further, your Company has received NIL penalty/adverse remarks from Central Information Commission for the year 2020-21 in respect of the second Appeal(s) filed byAppellant(s).

Risk Management

The details on the Risk Management activities including the implementation of risk management policy, key risks identified, and their mitigations are covered in the Management Discussion and Analysis section, which forms part of the Boards Report.

Managements Discussion and Analysis

In terms of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and clause 7.5 of DPE Guidelines on Corporate Governance, the detailed Managements Discussion and Analysis forms part of this report as Annexure-A.

Corporate Governance

Your Company believes that good corporate governance plays a critical role in establishing a positive organizational culture. It is displayed through responsibility, accountability, consistency, fairness and transparency towards our stakeholders. Pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and DPE guidelines on Corporate Governance, a report on Corporate Governance forms part of this Report as Annexure-B.

The details of the meetings & composition of the Board, statutory committees of the Board including the terms of reference, Companys policy on Directors appointment and their remuneration, their shareholding in the Company, details of establishment of whistle blower mechanism, details related to Annual General Meeting, information pertaining to Dividend declared, I EPF Details and other matters, etc. forms part of this report in report on Corporate Governance.

There are no significant and material orders passed by the regulators or Courts or tribunals impacting the going concern status and operations of your Company in the future.

The Statutory Auditors of the Company have examined and certified your Companys compliance with respect to conditions enumerated in SEBI (LODR) Regulations, 2015 and DPE guidelines on Corporate Governance. The certificate forms a part of this Report as Annexure-C.

Business Responsibility Report

As stipulated under the SEBI (LODR) Regulations, 2015, the Business Responsibility Report (BRR) describing the initiatives taken by the Company from an environmental, social and governance perspective forms part of the Annual Report.

Auditors and Audit reports

1. Statutory Auditors

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India (C&AG). M/s ASA & Associates LLP, Chartered Accountants, New Delhi and M/s A.R. & Co., Chartered Accountants, New Delhi were appointed as Joint Statutory Auditors of your Company for the FY2020-21.

Review and Comments of C&AG, if any, on the Companys Financial Statements for the financial year ending 31st March, 2021 form part of Financial Statements. Notes on Financial Statements referred to in the Auditors Report are self-explanatory. There are no qualifications on the financial statements by the Statutory Auditors for FY 2020-21.

2. Cost Auditors

Your Company appointed six Cost Auditors for FY2020-21as follow:

S.No. Name of the Cost Auditor Region
1 RJ Goel & Co., New Delhi Northern Region-I
2 Chandra Wadhwa & Co., New Delhi Northern Region-ll
3 Shome & Banerjee, Kolkata Central Region
4 A B K& Associates, Mumbai Western Region
5 Dhananjay V Joshi & Associates, Pune Southern Region
6 Mani & Co., Kolkata Eastern Region

M/s R J Goel &Co., New Delhi is the lead Cost Auditor.

Your Company is maintaining Cost Accounting Records as prescribed under the Companies (Cost Records and Audit) Rules, 2014, specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013.

The Cost Audit Report for the financial year ended 31st March, 2020 was filed with Ministry of Corporate Affairs, Government of India on 4th September, 2020.

3. Internal Auditor

Your Company has an in-house Internal Audit Department, which is headed by Chief General Manager.

4. Secretarial Auditor

Your Company appointed M/s Agarwal S. & Associates as Secretarial Auditor for FY 2020-21. Secretarial Audit Report confirming compliance by Practicing Company Secretary to the applicable provisions of the Companies Act, 2013, SEBI (LODR) Regulations, 2015 and other applicable laws.forms part of this Report as Annexure-D.

Secretarial Auditor has made an observation that your Company is not complying with the provisions of Regulation 17,18,19 & 20 of SEBI (LODR) Regulations 2015 w.r.t. Composition of Board and other Statutory Committees (Audit Committee, Stakeholders Relationship Committee and Nomination & Remuneration Committee) and Performance Evaluation of Board. Further, due to non-compliance w.r.t. Composition of Board and Statutory Committees, NSE and BSE have imposed penalty(ies) for different quarters during FY 2020-21.

Reply of the Management to the qualifications made in the Secretarial Audit Report is as under:

GAIL is a Government Company and appointment/nomination of all Directors on the Board of the Company is done by Government of India (GOI). GAIL has taken up with MoP&NG, GOI from time to time for appointment of requisite number of Independent Directors. In absence of appointment of adequate number of Independent Directors by GOI, the provision related to composition of Independent Directors in Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship Committee could not be complied from 08.09.2020 onwards. Further, the terms & conditions of appointment as well as tenure and remuneration/fees payable to all Directors are also decided by GOI and there is a well laid down procedure for performance evaluation of the Directors by the Administrative Ministry.

Company has also requested to NSE and BSE to waive-off the penalties as per the Standard Operating Procedure issued by SEBI in this regard. BSE has already waived-off the penalty for the quarter ended September and December, 2020. For the remaining quarter(s) similar waiver is expected from NSE/BSE.

Performance Evaluation

GAIL is a Central Public Sector Enterprise (CPSE) and appointment/nomination of all the Directors including Independent Directors are being done by the President of India, through the MoP&NG, Government of India. Therefore, performance evaluation of individual Directors including Independent Directors is to be undertaken by the Government of India being the appointing authority.

Corporate Social Responsibility

Your Company firmly believes that the commitment towards playing a defining role in the development of its stakeholders extends to uplifting lives of the marginalised segments of the society, living in and around its areas of operation. The principles of Corporate Social Responsibility (CSR) are deeply imbibed in your Companys corporate culture. To amplify outreach efforts, your Company has incurred an expenditure of X 147.67 crore (2.08% of the average net profit of the preceding three years) on CSR activities during FY 2020-21 which is more than the statutorily mandated expenditure of 2% (X 141.91 crore) of average net profit of the preceding three years.

Ministry of Corporate Affairs vide its Notification(s) dated 22nd January, 2021, notified the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, which, inter alia, provides for the revised format of annual report for publishing the CSR activities undertaken during the financial year ended 31st March, 2021. The Companys CSR Policy Statement and Annual Report on the CSR activities undertaken during the Financial Year ended 31st March, 2021, are in accordance with Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out in Annexure-E to this report.

Your Companys CSR Policy is also available on Company website at https://www.gailonline.com/CSRPIoicy.html

For more information on CSR, you may also refer to the Social and Relationship and Natural Capital section of Integrated Annual Report which forms part of this report.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo

As per requirement of Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, details of conservation of energy and technology absorption and foreign exchange earnings and outgo forms part of this report at Annexure-F.

Particulars of Contracts or Arrangements with Related Parties

As per requirement of Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of contracts or arrangements with related parties as referred in section 188(1) of the Companies Act, 2013 in the prescribed form AOC-2 is placed at Annexure-G.

Your Company has formulated the policy on dealing with Related Party Transactions and the same is hosted on your Companys website at http://gailonline.com/pdf/lnvestorsZone/GAIL_Related_Party_Transaction_ Policy.pdf

Particulars of Employees

As per notification dated June 5, 2015 issued by the Ministry of Corporate Affairs, Government of India, Government Companies are exempted from complying with provisions of Section 197 of the Companies Act, 2013. As your Company is a Government Company, such particulars have not been included as part of the Boards Report.

Annual Return

Annual Return is hosted on your Companys website at https://gailonline.com/ IZAnnual Reports.html.

Dividend Distribution Policy

As per Regulation 43A of the SEBI (LODR) Regulations, 2015, your Company has formulated a Dividend Distribution Policy. The dividend pay-out is made in accordance with the Companys Dividend Distribution Policy.

The Dividend Distribution Policy of the Company is available on the Companys website, at http://gailonline.com/pdf/lnvestorsZone/GAIL%20Dividend %20Distribution%20Policy.pdf

Issue of Shares and Fixed Deposits

In FY 2020-21, there was no issue of shares.

Your Company has not accepted any fixed deposits including the Financial Year 2020-21.

Fund Raising

During FY 2020-21, your Company has not raised funds through preferential allotment or qualified institutions placement.

Foreign Exchange Earnings and Outgo

During FY 2020-21, Foreign exchange inflows were X 14,407 crore and Foreign Currency outflows wereRs. 27,238 crore.

Key Managerial Personnel and Directors

The following changes occurred in the Board / Key Managerial Personnel of the Company:

Appointments

• Shri Manoj Jain, Chairman and Managing Director was also given the additional charge of Director (Projects) w.e.f. 22.05.2020. He has also been given the additional charge of Director (HR) w.e.f. 01.04.2021.

• Shri E S Ranganathan joined as Director (Marketing) w.e.f. 01.07.2020.

• Shri M V Iyer joined as Director (Business Development) w.e.f.

25.1 1.2020.

• Smt. Usha Suresh was appointed as Government Nominee Director w.e.f. 10.12.2020.

• Dr. Navneet Mohan Kothari was appointed as Government Nominee Directorw.e.f. 16.06.2021.

Cessations:

• Dr. Ashutosh Karnatak, Director (Projects) upto21.05.2020

• Shri Gajendra Singh, Director (Marketing) upto 30.06.2020

• Shri Jayanto Narayan Choudhury, Independent Director upto 07.09.2020

• Dr. Rahul Mukherjee, Independent Director upto 07.09.2020

• Smt. Esha Srivastava, Government Nominee Director upto 10.12.2020

• Shri P K Gupta, Director (HR) upto 31.03.2021

• Shri Ashish Chatterjee, Government Nominee Director upto 01.06.2021

• Smt. Banto Devi Kataria, Independent Director upto 05.08.2021

The Board placed on record its deep appreciation for the valuable services rendered by outgoing Directors during their association with your Company.

Independent Directors Declaration

The Company has received the necessary declaration from Independent Director in accordance with Section 149(7) of the Companies Act, 2013 and Regulations 16(1)(b) and 25(8) of the SEBI (LODR) Regulations, 2015, confirming that:

• She meets the criteria of independence as laid out in Section 149(6) of the Act and Regulations 16(1)(b)of the SEBI (LODR) Regulations, 2015.

• It was confirmed that she has registered with the data base of Independent Directors maintained by the Indian Institute of Corporate Affairs under the Ministry of Corporate Affairs.

Familiarization Program for Independent Directors

The details of Independent Directorstraining/ familiarization programmes are available on the Companys website at https://gailonline.com/pdf/ InvestorsZone/GAILfamiliarizationprogram.pdf

Code of Conduct

Pursuant to the requirements of SEBI (LODR) Regulations, 2015 and DPE Guidelines on Corporate Governance, the Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct for the financial year ending 31st March, 2021.

Insolvency and Bankruptcy Code, 2016

No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the financial year is not applicable.

Information Systems and Technology

Your Company has always been at the forefront in adoption of new technology solutions for continual enhancement of its business processes. With a vision to be a digitally empowered organization for operational excellence and stakeholder value creation, your Company has adopted several path-breaking technologies in its technology stack. State-of-the-Art Energy Trading and Risk Management (ETRM) system has been implemented in energy trading which has given complete visibility of the business segment under one platform. Hyper Convergence Infrastructure based Private Cloud setup with latest software and highest level of reliability, availability and efficiency has been established to cater to the business workload.

During the unprecedented COVID-19 pandemic, employees were given the facility to work from home and advised to strictly follow Government guidelines w.r.t COVID-19. Your Company could function well with the help of several technological solutions like collaboration and virtual meeting platform, e-Note-sheet, Secure access of systems for remote working, Online transactions, Mobile Apps, etc.

Your Company has seamlessly integrated its ERP system with several external applications such as

(i) Bharat Bill Pay System (BBPS) for receipt of payment from PNG customers,

(ii) Government e-Marketplace (GeM) portal for exchange of PO, Bill and Payment details,

(iii) GSTIN portal for submission of monthly GSTIN returns,

(iv) TCS, e-lnvoicing and e-Way bill portal for online and end-to-end integration with Statutory System

(v) Gas trading platform of IGX for invoicing and payment

(vi) Banks for auto-reconciliation etc. for faster and reliable exchange of information. Your Company adopted digital way to conduct Board and Committee meetings "G-Board Portal" (Paperless platform for GAILs1 Board/Committee Meetings.)

Your Company has adopted Robotic Process Automation (RPA) technology for easing out the repetitive tasks in very large volumes. Similarly, your Company has developed several Mobile Apps for employee claims processing, other Business Transactions as well as Reporting functionalities to facilitate ease of use and access through handheld devices. These implementations have resulted in enhanced productivity, efficiency and accuracy in the workplace.

Your Company has implemented several web based applications like

(i) Risk Management System to monitor key risks and their mitigation plans,

(ii) Online verification of documents of candidates,

(iii) Jahajrani Web application for tracking various post-award activities of contracts etc. for enhancing the transparency and completeness of business processes.

In the CGD segment, your Company has implemented CGD DPR Mobile App for monitoring penetration of PNG and CNG facilities by its JVs/ subsidiaries. App based CGD Meter Reading functionality as well as BBPS based payment system has provided a lot of convenience to the CGD customers.

Your Company has enhanced its Cyber Security portfolio with the addition of several modern Cyber Security solutions to protect its Information assets.

Your Company has successfully resolved the AGR issue with Department of Telecom (DoT) and subsequently, all the demand notices amounting to about Rs. 1.83 lakh crore have been withdrawn by DoT.

Your Company is in the process of upgrading the Centralized SCADA system with the latest technology for monitoring and controlling of the cross country NG & LPG pipelines.

GAILs Services during Lockdown and Impact of COVID-19 on GAILs business

Your Company maintained uninterrupted and safe operations of pipeline systems and plants to ensure the availability of Natural Gas and LPG to the essential sectors in the country.

GAILs gas transportation and gas marketing volumes saw a steep decline during the Lockdown period in 2020 and started returning to normal during the various phases of the unlock. The most prominent impact was seen in CGD sales which reduced by almost 5 times from February, 2020 to April, 2020. This was due to almost negligible consumption of gas in the CNG and industrial/commercial segment. However, by the month of Sept-Oct 2020, your Companys gas sales and transportation volumes resumed back to normal as all restrictions were lifted in the country.

In Petrochemicals, Pata produced 813 TMT of polymers (more than the rated design capacity) and made sales of 871 TMT during the year despite the restrictions imposed on account of COVID-19 outbreak. With the easing of restrictions, the progress of the Projects which came to a halt on account of COVID-19 outbreak and nationwide lockdown were ramped up and GAIL could achieve completion of Kochi Mangaluru Pipeline in South & Dobhi Durgapur Pipeline in East which is a part of JHBDPL Pipeline and crucial link towards expanding Natural Gas network towards eastern India. It is worth mentioning that despite COVID-19 induced fear & peoples reluctance to allow technicians inside their homes for PNG connections, GAIL was able to provide PNG connections to more than 10 Lakh households through GAIL Gas Limited and our CGD JV companies.

Directors Responsibility Statement

Your Directors confirm that they have:

i) followed applicable accounting standards, along with proper explanation relating to material departures, in the preparation of the annual accounts for the financial year ending March 31,2021;

ii) selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review:

iii) taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) prepared the annual accounts for the financial year ending March 31, 2021 on a going concern basis;

v) devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively; and

vi) laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

Acknowledgment

Your Directors express their gratitude for help, guidance and support received from the Government of India, especially the Ministry of Petroleum and Natural Gas, various state Governments, regulatory and statutory authorities.

Your Directors acknowledge wise counsel received from Statutory, Cost and Secretarial Auditors, guidance received from C&AG and are grateful for their consistent support and cooperation.

Your Directors also wish to thank all the share owners, business partners and members of the GAIL family for reposing their faith, trust and confidence in your Company.

All that we have achieved would not have been possible without the relentless and focused efforts of your Company employees; we place our deep appreciation for their commitment.

Your Directors and employees look forward to the future with confidence and stand committed towards creating a mutually rewarding future for all stakeholders.

For and on behalf of the Board J : * A
Manoj Jain
Place: New Delhi Chairman & Managing Director
Dated: 09th August, 2021 (DIN: 07556033)