gail india ltd share price Management discussions

Annexure-A

MANAGEMENT DISCUSSION AND ANALYSIS

1. iNDUSTRY STRUCTURE & DEVElOPMENTS A. Global Energy Sector

The energy sector has traversed through a tumultuous phase in FY 2022-23. While the global energy market was already facing supply constraints owing to faster than expected economic recovery from COVID-19, the geopolitical conflict in Europe, along with other factors, stirred further uncertainties around energy supply, price volatility and triggered significant peaks in energy prices.

The global gas prices were turbulent in 2021, with prices spiking at the start and the end of the year. Gas prices continued to rise during the early part of 2022, driven by the geopolitical conflict. The uncertainty regarding Russian gas exports to Europe pushed European prices to new record highs. All the gas indices such as JKM, TTF, HH etc. had witnessed price volatility during 2022 with prices softening during last quarter of FY2023.

Price Trend

The Crude oil prices increased during the first half of the year mainly because of supply concerns due to ongoing geopolitical conflict. The prices generally decreased in the latter half owing to concerns about reduced demand due to possible economic recession. Further, the severe COVID-19 containment measures in China also contributed to lower global petroleum demand leading to decrease in prices.

The recent discussions on the global energy policies have focused on the significance of decarbonization and the transition towards net zero goals. The events in the past year, especially in the energy sector, have set a reminder for all the stakeholders that the energy transition should take into account all the three components of a balanced energy equation i.e. security, affordability and sustainability. The success of an enduring energy transition should address all the above elements.

Post COP-26 (Conference of the Parties), Governments across the globe are working towards tackling climate change with focus on implementing various low-carbon energy systems like renewables, electric vehicles, blue and green hydrogen projects, Carbon Capture Utilization & Storage (CCUS) etc. As per BP outlook on World Energy 2023, the future of global energy will be dominated by four major trends: declining role for hydrocarbons, rapid expansion in renewables, increasing electrification, and growing use of low-carbon hydrogen.

The Renewables will expand rapidly offsetting the declining role of fossil fuels which is underpinned by the continuing electrification of the energy system. The decarbonization of the energy system will also be supported by the growing use of low-carbon hydrogen in hard-to-abate industries. Natural Gas being the cleanest fossil fuel will continue to play an important role in energy transition acting as bridging fuel. Natural Gas can meet growing demand for clean, affordable energy with limited deployment of capital and significant impact on emissions.

B. Global Gas Sector

The last year has been a challenging phase for the global Natural Gas market. The geopolitical crisis put an unprecedented supply pressure thereby triggering a global energy crisis. Russias gas pipeline cuts including disruption in the Nord Stream pipeline also had implications for gas consumers beyond Europe leading to record high spot prices. In spite of this, the majority of European countries were able to fill their gas inventory well above the required level, supported by a combination of policy measures, record inflow of Liquefied Natural Gas (LNG) and a sharp drop in consumption.

Global Natural Gas prices have remained very volatile in FY2022-23 and have seen large rise and falls. The market volatility was strong in the first half mainly driven by the dynamics in the European markets. As per the latest World Bank report, the European gas price now has fallen more than 70% after reaching an all-time high in August 2022 and in the United States, prices have dropped to an 18-month low, a stark turnaround from last year. In Japan, the benchmark reached an all-time high in September 20221. Unseasonably warm weather, improved energy efficiency, and behavioral changes in gas consumption were the main contributors for the decline.

The Natural Gas crisis triggered by geopolitical conflict last year has led to a series of market adjustments. LNG trade undertook a directional shift in 2022 as EU demand for LNG surged to replace Russian pipeline imports and amidst high European prices, global LNG trade were redirected to Europe. The increased LNG procurement by Europe led to market tightening and demand destruction in various importing nations especially developing Asian countries. This event has impacted the LNG contracting behaviors2, with comeback of traditional features like longer-duration contracts.

The geopolitical conflicts in Ukraine, reduction of gas supplies to European Union countries and disruption of the Nord Stream pipeline have led to a dramatic reduction in Russian pipeline gas exports. EU already is working on plans to reduce its dependency on Russian gas and under such scenario, the resumption of gas supply between Russia and key European importers seems highly unlikely. However, Russia will like to play a crucial role in global gas markets. Under the prevailing market dynamics, Russia will aim to increase gas sales to non-European countries through various options such as: increase gas sales through pipeline to Asia (Power Siberia 1 & 2), increase Liquefied Natural Gas (LNG) exports, increase domestic use and export through intermediaries (e.g. Turkey).

As per IEA Gas Market Report Q2-2023, Global gas demand is expected to remain flat in 2023, with higher demand coming from Asia Pacific region. The Asian gas demand is projected to increase by 3%, with China and India as the main drivers.

C. india Energy Sector

As one of the fastest growing economies of the world, India is also witnessing robust growth in the energy consumption supported by increase in energy access, urbanization and increasing income levels. India is the worlds third-largest energy consuming country and all the leading international agencies like IEA and BP are predicting sustained further growth in the energy consumption over the next two decades. As per BP Statistical Review of World Energy – 2022, Indias total primary energy consumption increased by 10% from 2020 level to 992 BCM in 2021. The combined share of energy consumption from oil, gas and coal stood at 90% (Coal – 56.7%, Oil – 26.5%, Gas – 6.3%). Renewables, Hydroelectric and nuclear contributed for the other 10%. Further, the Natural Gas consumption increased to 62 BCM

(a 3 % increase). However, the share of Natural Gas in primary energy decreased from 6.8% to 6.3% on account of increase in the overall energy basket.

To cater to increasing energy demand in the country, India will need to embrace all forms of energy i.e. both fossil fuels and low-carbon fuel. Indias economic growth is closely related to its energy demand, therefore, the need for oil and gas is projected to grow further, thereby making the sector quite conducive for investment. Indias medium-term outlook for Natural Gas consumption remains strong due to rising infrastructure and supportive environment policies. India is also on a path of diversification of its energy basket by investing in Natural Gas, renewable energy, bio fuel sectors, hydrogen, etc. Government has brought various policy measures to promote investment in infrastructure, increase share of Natural Gas in the primary energy mix and liberalizing policies to boost domestic production of hydrocarbon. Further, the wider adoption of electric vehicles and affordable storage technologies are going to transform the energy landscape in times to come.

D. india Gas Sector Developments

With a view to develop a Natural Gas Grid, projects are being undertaken to connect every part of the country. The development of Natural Gas infrastructure like National Gas Grid (NGG), development of CGD GAs across the country, Gas discoveries of gas in the East Coast, ramping up the production activities, etc. gives positive signals to the gas market. With the supporting policies and initiatives, GoI is paving the journey towards Gas Based Economy.

At the India Energy Week held at Bengaluru from 6th to 8th February, 2023, Honble Prime Minister Shri Narendra Modi underlined the role of the energy sector in setting the direction of future of the 21st century world. He provided guidance on the strategy for the energy sector under four major verticals - increasing domestic exploration & production, diversifying the supply, expanding fuels like biofuel, ethanol, compressed biogas & solar and de-carbonization via electric vehicles and hydrogen. The Honble Prime Minister also emphasized that the Government is working on mission mode to increase the consumption of Natural Gas in the energy mix from 6% to 15% by 2030 where all the needed infrastructure will be provided under ‘One Nation One Grid.

On the regulatory front, there have been several initiatives undertaken by the Government, Ministry of Petroleum and Natural Gas (MoP&NG), Petroleum and Natural Gas Regulatory Board (PNGRB), for furthering the use of gas in India and building a robust gas-based economy. PNGRB has amended "Determination of Natural Gas Pipeline Tariff Regulations" to incorporate the regulations pertaining to Unified Tariff for Natural Gas pipelines with a mission of "One Nation, One Grid and One tariff". The reform will specially benefit the consumers located in the far-flung areas where currently the additive tariff is applicable and facilitate development of gas markets and vision of Government to increase the gas utilization in the country.

The GoI has also announced new Natural Gas pricing regime based on the recommendations of Kirit Parikh Committee. The new pricing system will announce prices monthly and link them to 10% of the international price of the Indian crude basket. Indias energy map comprises of seven key drivers which have been steering Indias energy vision for a clean and sustainable energy mix. The 7 key drivers include targets such as moving towards Gas Based Economy, cleaner use of fossil fuels, increase of bio-fuels, setting up of 500 GW of Renewable Energy by the year 2030, use of EVs to help in decarbonization goal, explore emerging fuels like hydrogen and spreading digital innovation across all energy systems.

It can be clearly seen from the table that there is a shift in the consumption pattern among the top three anchor consumers. While fertilizer industry continues to be the major consumer of Natural Gas, CGD Sector has now surpassed the Power Sector to become the second largest consumer of Natural Gas. Indias gas consumption has declined by 4.5% in FY2023 on account of high gas prices. The high gas prices impacted the gas consumption in power sector (down 19.7% y-o-y), refining (down 26.4% y-o-y), petrochemicals sector (down 31.6% y-o-y) while demand in CGD sector remained broadly flat. While the consumption in the fertilizer segment saw modest expansion, it was not enough to compensate for the declines in the more price-sensitive market.

Natural Gas demand for CGD sector is expected to rise steadily due to the addition of gas networks in new cities as a result of the 11 and 11A bidding round, economic and increased use of PNG in domestic, industrial and commercial sectors. Also, it should be noted that number of CNG vehicles have been experiencing a strong growth.

GAIL recognizes the role of Natural Gas in India as a transition fuel in terms of environment, efficiency and cost competitiveness and is aligned with Government of India initiative pertaining to climate change and net zero emissions. GAIL has been working continuously to grow its core business segment such as Gas Marketing & Transmission, building of Natural Gas infrastructure like NGG, development of CGD GAs across the country, petrochemical portfolio expansion etc. In addition, it is also preparing roadmap for net-zero target and exploring business opportunities into cleaner energy domains like Hydrogen, Renewables, CBG, etc.

E. indian Petrochemical Sector

India has a huge demand for chemical and petrochemical products and it aspires to become a global manufacturing hub for chemicals & petrochemicals. With the increasing demand, India is projected to contribute to more than 10 percent of the incremental global growth in petrochemicals over the next decade. Currently, the Indian Chemical and Petrochemical Industry is estimated to be worth $178 billion & all analyst are quite bullish on the growth trajectory of India for next two decades. The per capita consumption of polymers is about one-third of the global average. Average per capita consumption of Polymer in India is 12 Kg w.r.t global average of 38 Kg. Hence, even a 1 kg increase in per capita consumption means that India need a cracker of 1.3 Million MT every year. The key drivers for petrochemical industry growth include robust GDP outlook, under penetrated markets, rapidly growing end-user industries, and significant import substitution opportunity.

A large share (around 80 %) of Indias petrochemicals capacity continues to be refinery integrated due to limited feedstock availability. Historically, naphtha has been the dominant feedstock for Indian producers. This is in contrast with other regions such as the Middle East and US, where abundant gas supply has led to a development of stand-alone petrochemicals assets. Notable exceptions to this are GAILs petrochemical plant at Pata, erstwhile IPCL petrochemical at Nagothane and Dahej which use Natural Gas as feedstock. However, major new greenfield petrochemicals plants in India are increasingly adopting mixed feed in their assets. GAILs upcoming PDHPP plant at Usar is based on Propane as feedstock.

Most of the upstream producer have started gas processing to extract various value-added products such as ethane, propane etc. and transporting majorly the lean gas. All these factors are going to increase the availability of multiple feedstock in the eco-system and will reduce the dependency on single feedstock. Indian petrochemical players may explore utilizing various feedstocks available to build flexibility and gain cost advantage and reduce import dependency leading towards Atmanirbhar Bharat.

2. GAil PERFORMANCE – DOMESTiC & OVERSEAS 2.1 Operational Performance

The operational performance of your Company for FY 2022-23 is as follows:

		2022-23		2021-22
Particulars	UoM	Quan- tity	*Revenue from Opera- tions ( i n crore)**	Quan- tity	*Revenue from Opera- tions ( n crore) i**
Natural Gas Marketing	MMSCMD	94.91	1,35,290	96.24	77,326
Natural Gas Transmission	MMSCMD	107.28	6,661	110.98	6,392
LPG Transported	TMT	4,335	722	4,199	669
Polymers Sales	TMT	399	4,917	790	8,549
Liquid Hydro-	TMT	929	5,570	1004	4,865
carbon Sales

*including intersegment revenue

? Natural Gas Marketing

Natural Gas (NG) trading continues to be one of your Companys core businesses. During the FY 2022-23, the Company clocked a sales figure of 94.91MMSCMD (which included sales within India of 83.03 MMSCMD and overseas sales of 11.88 MMSCMD) as against 96.24 MMSCMD (which included sales within India of 86.55 MMSCMD and overseas sales of 9.69 MMSCMD) during FY 2021-22. Revenue from operations from Natural Gas Marketing in FY 2022-23 was 1,35,290 crore as against 77,326 crore in FY 2021-22.

Your Company marketed 41.47 MMSCMD domestic gas in FY 2022-23 as against 41.85 MMSCMD in the previous FY 2021-22. Domestic gas volume contributed around 50% of the overall Natural Gas volume marketed by the Company in India.

The rest 41.56 MMSCMD (50%) gas marketed in India was through imported long-term, mid-term, and spot LNG volumes. Sector-wise details are as below:

Fertilizer Sector: Your Company supplied around 67% of the gas consumed in the Fertilizer sector in the country during FY 2022-23. During this FY, your Company supplied Gas to

Matix Fertilizers & Chemicals Ltd, Panagarh, Hindustan Urvarak & Rasayan Limited (HURL), Gorakhpur, Sindri and Barauni for commissioning of these plants and helped these plants in successfully achieving commercial urea production.

Power Sector: Your Company supplied around 43% of the gas consumed by gas-based power plants in the country during FY 2022-23. Over the past few years, the Company has successfully collaborated with various power producers to operationalize their stranded units. It continues to explore opportunities for the supply of Natural Gas to gas-based power generation units at affordable prices and is currently supplying around 1.79 MMSCMD of Regasified Liquefied Natural Gas (RLNG) to power plants apart from domestic gas.

? Natural Gas Transmission

Your Company expanded its network of ~15,600 km of Natural Gas pipelines across the length and breadth of our country. The average gas transmission during FY 2022-23 was 107.28 MMSCMD vis-?-vis 110.98 MMSCMD in the previous FY. Revenue from operation from Natural Gas Transmission in FY 2022-23 was 6,661 crore as against 6,392 crore in FY 2021-22.

? liquefied Petroleum Gas (lPG) Transmission

Your Company owns and operates 2,040 km LPG pipeline network for LPG transmission, namely the Jamnagar-Loni Pipeline (JLPL) and the Vizag-Secunderabad Pipeline (VSPL). JLPL and VSPL networks together achieved a throughput of 4.335 MMTPA during the FY 2022-23 against 4.199 MMTPA in the previous FY 2021-22. Revenue from operation from LPG transmission in FY 2022-23 was 722 crore as against 669 crore in FY 2021-22.

? Petrochemicals

Your Company has a nameplate polymer production capacity of 810 Kilo Tons per annum (KTA) at the Pata complex.

GAILs subsidiary, Brahmaputra Cracker & Polymer Limited (BCPL) having GAIL equity of 70% has a capacity of 280 KTA. The marketing right of the BCPL plant is with GAIL taking the total marketing portfolio to 1,090 KTA. GAILs PATA Petrochemical complex has achieved around 55 % capacity utilization in FY 2022-23. Your Company was able to earn revenue from operations of 4,917 Crores in FY 2022-23 as against 8,549 Crore in FY 2021-22.

? lPG and Other liquid Hydrocarbons (lHC)

Your Company has five Gas Processing Plants units (GPUs) at four locations in the country having total LHC production capacity of 1.4 Million MT. During FY 2022-23, total liquid hydrocarbon production was about 0.93 Million MT as against 1.0 Million MT in FY 2021-22 of which almost 92% constitutes LPG and Propane. Revenue from operations from Liquid Hydrocarbons in FY 2022-23 also improved to 5,570 crore as against 4,865 crore in FY 2021-22.

? Exploration & Production (E&P)

Your Company has participating interest in 13 E&P blocks of which 10 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, the Company is an Operator in three onland blocks viz. (i) CB-ONN-2010/11 and CB-ONHP-2017/12 in Cambay Basin awarded during NELP-IX and OALP-I bidding rounds respectively and

(ii) block RJ-ONHP-2021/1 in Rajasthan basin awarded during OALP-VII bid round. The twelve E&P blocks (excluding Shale Gas in Eagle Ford Basin) hold an acreage of 2,656 km2 as per its Participation Interest (P.I.) in various consortiums. Revenue from the 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 1,134 crore has been generated from E&P activities during FY 2022-23 as against 834 crore in FY 2021-22. Your Company, as an operator has recently started the commercial crude oil production from its operated field Galiyana#1 in Gujarat from March 18, 2023.

? Renewable Energy

Your Company is committed to reduce its carbon emissions and implement renewable projects. It has a total installed capacity of 132 MW of alternative energy; out of which 117.95 MW are wind energy projects and 14.05 MW are solar energy projects including small solar units. The power generated from the plants will substitute power drawn from the grid, which will help in reducing its carbon footprint in addition to optimization of the power cost. Revenue from Operations of 46 Crore has been generated from Power Generation activities during FY 2022-23 as against 51 crore in FY 2021-22.

? City Gas Distribution

Your Company (including CGD JVCs/Subsidiaries) is currently authorized to operate in 67 Geographical Areas (GAs) throughout India including major metro cities of Delhi, Mumbai, Hyderabad, Bengaluru, Kolkata, etc. These City Gas Distribution (CGD) networks together cater to around 66% of the total of ~ 110 lakh Domestic PNG (DPNG) connections in the country. Out of the total of ~ 5,600 CNG stations in the country, GAIL and its CGD JVCs/ Subsidiaries operates 2,360 CNG stations representing 42% share. This year, your Company along with its CGD JVs and Subsidiaries has achieved more than 10 lakh domestic PNG connection.

GAIL Gas Limited (a wholly-owned subsidiary of your Company) is executing and operating CGD projects in 16 GAs, including Bengaluru. Currently, GAIL Gas Limited has 6 Joint Venture Companies (JVCs) and these JVs are implementing CGD project in 9 GAs. GAIL Gas Limited along with its JVCs is providing DPNG to more than 8.66 lakh households and catering to clean fuel requirements for vehicles through 456 CNG stations.

During FY 2022-23, GAIL Gas along with its JVCs has achieved around 0.87 lakh domestic PNG connections and set up 132 CNG stations.

Bengaluru remained a major focus for your Company for CGD expansion. 40 CNG stations were set up and more than 34000 domestic PNG connections were provided in the Bengaluru GA area during FY 2022-23.

2.2 Financial Performance

( in crore)

Particulars	FY 2022- 23	FY 2021- 22	Change increase/ (Decrease)
Revenue from Operations	1,44,302	91,646	57%
Profit Before Tax	6,584	13,590	(52%)
Profit After Tax	5,302	10,364	(49%)

? Financial Parameter

( in crore)

Particulars	FY 2022-23	FY 2021-22
Capex (including equity contribution to group companies)	9,099	7,738
Reserves and Surplus (excluding Transition Reserve, Other Compre- hensive Income & Bond Redemption Reserve) i.e. Free Reserves	44,284	45,480
Net worth	50,860	49,920
Total Loans outstanding	14,309	6,353

As against the total Foreign Currency Loans of 21.32 crore was outstanding as on 31st March, 2023. Further, 100% of loan are hedged with financial derivatives

? Ratio Analysis

Particulars	FY 2022- 23	FY 2021- 22
Debt–Equity ratio	0.22	0.15
Debt Service Coverage Ratio (times)	3.91	7.47
Interest Coverage Ratio (times)	13.89	46.07
Return to Net Worth (PAT/Net Worth) (%)	10.42	20.76
Return on Capital Employed (PBIT/Capital Employed) (%)	9.64	20.36
Debtors Turnover (Net Credit Sales (i.e. Net Sales)/Average Trade Receivables)	14.56	14.22
Inventory Turnover (Cost of Goods Sold/ Average Inventory)	33.77	28.45
Current Ratio (Current Assets/ Current Liabilities)	0.92	1.08
Operating Profit Margin [(EBIT – Other Income) / Net Sales] (%)	3.20	13.01
Net Profit Margin [Profit after Tax (PAT) / Net Sales] (%)	3.68	11.34

Company clocked record Turnover of 1,43,976 crore during FY 2022-23 with an increase of 57% over previous year due to comparatively better product prices. Profit Before Tax stood at 6,584 crore, a decrease of 52% while Profit after Tax stood at 5,302 crore, a decrease of 49% as compared to Previous Financial Year. This decline in profitability is mainly due to supply disruption from upstream supplier (GMTS), geopolitical crisis involving Russia-Ukraine war which led to skyrocketing spot gas prices, deallocation of domestic gas from NG Transmission segment, increase in APM gas prices coupled with various other factors. All such factors have impacted Key Financial Ratios significantly during this financial year as compared to previous financial year and as a result Companys Operating Profit Margin remain under pressure and stood at 3.20% along with Net Profit Margin at 3.68%. Further, Return on Net Worth reduced to 10.42%, Return on Capital Employed to 9.64%, Interest Service Coverage Ratio (ISCR) to 13.89 times and also Debt Service Coverage Ratio (DSCR) to 3.91 times. Debt to Equity Ratio has increased primarily due to increase in borrowings to meet the capex requirements during the current financial year. The companys average collection period continues to remain at same level i.e., ~ 25 days and inventory-holding period has improved to 11 days as compared to 13 days during previous year.

Market Capitalization

Market capitalization (BSE) of the Company increased from 69,137 crore on 31st March, 2022 to 69,203 crore on 31st March, 2023, due to an increase in share price from 105.15** /Share to 105.25/Share.

** Adjusted to bonus effect

2.3 Companys Global Presence

Your Company is constantly expanding its global presence through its participation in projects/ventures along the Natural Gas value chain. With the LNG portfolio of around 14 MMTPA from the USA, Qatar, Australia, Russia etc., the Company has emerged as one of the leading global LNG players and is actively involved in the LNG trading business in the international market. Your Company is part of a consortium in two offshore E&P blocks (A-1 & A-3) in Myanmar. Around 15.33 MMSCMD of gas is being produced from these blocks and supplied to China and Myanmar through South East Asia Gas Pipeline Company Limited (SEAGP), in which GAIL is also an equity partner. SEAGP is paying dividends to GAIL regularly. During the year, full Loan repayment (Principle plus interest) has been made by SEAGP. GAILs Branch Office in Myanmar is scouting for business opportunities in Myanmar and other South East Asian countries, in the areas of the gas value chain and beyond. Your Company is the Government of Indias nominee in the Turkmenistan-Afghanistan-Pakistan-India (TAPI) Natural Gas project for import of gas to India from Turkmenistan. TAPI Pipeline Company Limited (TPCL) has been incorporated in Isle of Man to build, own and operate the TAPI Pipeline.

The pipeline, when constructed, is expected to carry 90 MMSCMD (33 bcm) of Natural Gas, of which India will receive 38 MMSCMD. The project is currently under the pre-FID stage, wherein various activities are being undertaken by

TPCL. Considering the changes in the global energy market, GAIL is discussing with Turkmengas for arriving at mutually acceptable terms and conditions to enhance the marketability of the pipeline gas to be received from Turkmenistan. Due to prevalent situation in Afghanistan, the activities within Afghanistan are kept on-hold.

Your Company holds equity interest in two CGD companies in Egypt, namely Fayuom Gas Company (FGC) and National Gas Company (Natgas) involved in the supply of Natural Gas to residential, commercial and small industrial customers in Egypt. Your Company is also an equity partner in China Gas Holdings Limited (China Gas), a retail gas company involved in city gas and CNG business in China and listed on the Hong Kong Stock Exchange. China Gas is performing well and paying dividends regularly.

Your Company has formed GAIL Global (USA) Inc. ("GGUI") during 2011 in Houston, Texas as its wholly-owned subsidiary. GGUI has 20% interest in Eagle Ford shale acreages in Texas, USA. M/s Callon (Eagle Ford) LLC and M/s Texas American Resources II LLC are working as Operator for the Joint Venture acreage in Eagle Ford.

Your Company has formed GAIL Global (USA) LNG LLC ("GGULL"), a wholly-owned stepdown subsidiary in March, 2013 to enter into a long term (20 years) Terminal Service Agreement ("TSA") and a Pipeline Precedent Agreement ("PPA") with Cove Point LNG, LP ("CPLL"), earlier known as Dominion Energy Cove Point LNG, LP for booking of 2.3 MMTPA capacity in the Cove Point Terminal and corresponding capacity in Cove Point pipeline for the purpose of liquefaction & transmission of Natural Gas. GGULL is selling ~34 LNG cargoes per year to GAIL from Cove Point Terminal. GGULL has also entered into a Gas Sale and Purchase Agreement ("GSPA") with WGL Midstream, Inc. ("WGLM") for purchase and supply of upto 430,000 Dth/day of Natural Gas for delivery at the inlet of LNG terminal. In April 2021, Six One Commodities Vega LLC has purchased 100% interest in WGLM and WGLM has been converted to Six One Commodities Vega LLC.

Your Company has also formed GAIL Global Singapore Pte. Ltd (GGSPL) in 2004 as its wholly-owned subsidiary in Singapore. GGSPL is engaged in LNG trading. Your Company jointly with ONGC Videsh Singapore Pte Ltd, IOCL Singapore Pte Ltd, Oil India International Pte Ltd, and Engineers India Ltd has formed Bharat Energy Office LLC (BEO), Moscow, Russia for exploring business opportunities in Russia. In this financial year, your Company has acquired 26% stake in M/s LNG Japonica Shipping Corporation Limited ("Japonica") from M/s Mitsui O.S.K. Lines, Ltd, Japan. "Japonica" operates LNG vessel "GAIL Bhuwan" and your Company has entered into Time Charter Party Agreement with Japonica for shipping LNG from USA.

3. OUTlOOK FOR THE FUTURE

3.1 Strategy

Your Company remains actively engaged with the Government in shaping policy contours for expanding gas markets in India. Poised with the implementation of Strategy 2030, your Company has been working to chart renewed strategic direction ensuring the readiness of the organization while transitioning towards future energy.

Recognizing the pace of rapid changes in the technology space, marketplace, regulatory practices and also of macro-policy direction, the Company has been periodically reviewing ‘Strategy 2030 and has laid a path of growth in these exciting but challenging times.

In line with the above, the Strategy of your company outlines several ambitious initiatives. Your Company is pursuing and expanding the scale of its core business areas while leveraging capabilities to venture into newer opportunities in diversified sectors like Gas Sourcing and Marketing, expansion of the LNG portfolio, expansion of the National Gas Grid (NGG), growth and expansion of Petrochemicals portfolio including PDHPP, investment in CGDs, Specialty Chemicals etc. for the next decade for fostering the growth of GAIL.

Your Company has built more than 1300 KM of pipelines during the year providing clean energy access across the nation. Important limbs of the National Gas Grid - Bokaro-Angul Pipeline (533 km) was dedicated to the nation and the foundation stone for Srikakulam-Angul Pipeline (744 km) was laid by Honble Prime Minister. In order to secure Natural Gas for the nation and its customers, your Company has been making strenuous efforts. Your Company has won in E-Auctions a cumulative quantity of 109.5 MMSCM in FY 2022-23 from various gas blocks on the domestic front, while also sourcing through bilateral agreements and Gas Exchange. Your Company is exploring sourcing long-term LNG sourcing opportunities expeditiously with major global LNG producers.

Apart from pursuing business interests in new international markets, your Company is working towards building requisite capabilities & resources. Gas transmission and gas marketing are the key drivers of GAILs business and it transmitted ~107 MMSCMD of Natural Gas. Your Company has acquired 26% equity in the LNG Japonica vessel of Mitsui OSK Lines, Japan and has chartered a long-term vessel with a total charter period of 7 years plus 02 years extension.

Your Company looks forward to the growing chemical portfolio and was qualified as the Prospective Resolution Applicant and submitted Resolution Plan for business operations of JBF Petrochemicals Ltd. NCLT approved your Companys 2,079 Crore resolution plan for acquisition of JBF Petrochemicals Ltd. which has a production capacity of 1.25 MMTPA Purified Terephthalic Acid (PTA). As per implementation of the Resolution Plan, your Company infused 2,101 crore in JBF on 01.06.2023. Consequently, JBF has become a wholly-owned subsidiary of GAIL with effect from 01.06.2023. Your Company is setting up a 500 KTA Polypropylene plant at Usar (Maharashtra) and has approved the proposal for setting up 50 KTA Iso Propyl Alcohol (IPA) unit while prospects of setting up of Ethane Cracker is also being studied.

Your Company is taking steps towards strengthening LNG markets in the country and is putting up small-scale liquefaction skids capable of producing LNG on a pilot basis. These plants will help in the distribution of Natural Gas through liquefaction in new CGD areas, and liquefaction of gas at isolated fields and will support setting-up of LNG fueling stations. It will be first of its kind in the country to introduce portable and scalable liquefaction units.

India is planning a network of Liquefied Natural Gas (LNG) fueling stations along its 6,000-km-long golden quadrilateral highways, a move that would encourage thousands of truckers to switch to the cleaner fuel from polluting diesel. As stated earlier, GAIL is running a pilot project, with Coal India Ltd. (CIL), for retrofitting LNG kits in dumpers and putting together a plan and persuading all possible participants to help build an effective ecosystem for LNG-fueled vehicles in the country. To ensure growth in the gas market share, higher gas usage in the industrial segments including refineries, transport segment using CNG & LNG, tri-generation etc. has been a primary focus area. GAIL has envisaged expanding its global presence through its diverse gas portfolio. Your Company along with its CGD Subsidiaries and Joint Venture Companies (JVCs) have achieved more than 10 lakh DPNG connections and more than 350 CNG Stations for this FY. LCNG station at Ajmer was inaugurated while LNG station at Savroli has been mechanically completed. During the recently concluded 11th and 11A CGD Bidding Rounds, GAILs JVCs were awarded

2 Geographical Areas (GAs) Banda, Chitrakoot and Mahoba districts and Kondagaon, Bastar, Sukma, Narayanpur, Bijapur and Dantewada districts. Your Company has developed Net Zero GHG Emissions target to achieve a 100% reduction in Scope 1 and Scope 2 emissions and a 35% reduction in Scope 3 emissions by 2040. Your Company has made its Net Zero strategy based on 4 strategic pillars: Operational Decarbonization, Energy transition, Carbon Capture and Utilization (CCUS), and Offsetting. With an impetus towards charting the net zero path your Company has further opened up its energy basket with forays into Wind, Solar, Ethanol Blending, CBG, circular economy and Green Hydrogen contributing towards shaping a Net Zero future. Your Company is exploring both organic as well inorganic routes to expand its RE portfolio via participation in tenders and acquisition of operating RE assets. With the perspective of environmental benefits and to reduce import dependency to achieve Aatmanirbharta, your Company is actively pursuing business opportunities in biofuels (Ethanol, CBG). GAIL is exploring business opportunity in setting up two 1G Ethanol Plants of 500 (Kilo Litres Per Day) KLPD each in the States of Gujarat and Rajasthan though joint venture mode. Your Company is setting up Compressed Bio Gas (CBG) plant based on Municipal Solid Waste (MSW) in Ranchi & Bengaluru. Your Company has started a first of its kind pilot project where injection of blending of hydrogen upto 2% in Natural Gas in CGD network of Aavantika Gas Limited. Further, PNGRB has also given approval to M/s AGL to implement the proposal for hydrogen blending with Natural Gas up to 5% vol in PNG network. Your Company is also setting up a 10 MW green hydrogen production capacity at Vijaipur, MP.

Digital Strategy

Your Company has always been at the forefront of implementing and adopting new technologies, making significant investments in digital technologies. To address the dynamic market environment, your Company has leveraged advances in digital technologies to support effective decision-making and improve business operations and performance. The digitalization initiatives in your Company are focused on improving operations, maintenance, and sustainability. New digital solutions are facilitating timely capturing and monitoring of relevant data and helping to conduct operations in a better way.

Your Company has recently implemented first of its kind, state-of-the-art center for Vendor Invoice Management (VIM)

- Shared Service Centre (SSC) called ‘SARATHI, which is a major step towards complete digitization, centralization and automation of Vendor Invoice payment processes. The VIM solution, that went live from April 2023, digitalizes the entire invoicing process, moving away from a paper-based system. This includes electronic receipt of invoices, automated data fetching and workflow to streamline the approval process. Additionally, your Company has set up a centralized invoice management center to manage vendor invoices from one place. The VIM solution improves efficiency, reduces costs and enhances overall productivity.

Your Company has adopted Robotic Process Automation (RPA) technology to automate repetitive tasks through the use of software bots. RPA implementation helps increase efficiency, accuracy and productivity while reducing the possibility of human error in repetitive and time-consuming tasks.

3.2 Opportunities & New initiatives ? Natural Gas Marketing

Your Company is strengthening its existing customer base while simultaneously working on expanding gas consumption in existing/emerging sectors. Your Company has completed connectivity with major anchor load customers along JHBDPL enabling them to draw full load, gas supplies to new Fertilizer plants like Matix Fertilizers & Chemicals Ltd, Panagarh, HURL Barauni, HURL Gorakhpur & HURL Sindri. In the LNG business, GAIL imported 95 LNG cargoes to India amounting to approx. 6.08 MMT of LNG volumes during FY 2022-23, to cater to the growing need.

Your Company is also working closely with other industry players and stakeholders for commercial off-take of Compressed Bio-Gas from CBG producers towards shaping a Net Zero future.

Your Company has commenced Indias first-of-its-kind project of mixing hydrogen into Natural Gas system at Indore, Madhya Pradesh. The hydrogen blended Natural Gas is being supplied to M/s Aavantika Gas Limited in Indore.

In line with the National Hydrogen Mission, your Company has started hydrogen blending as a pilot project to establish the techno-commercial feasibility of blending hydrogen in City Gas Distribution (CGD) network. This project marks the stepping stone of Indias journey towards hydrogen based and carbon neutral future. It is expected that this pilot project would help in creation of a robust standard and regulatory framework in India to cover the aspects of injecting hydrogen into Natural Gas. This will pave the path for carrying out more similar projects in India.

Your Company along with its JVs and Subsidiaries is also working towards constructing LNG stations along major highways so that LNG can be utilized as an automotive fuel in the Heavy-Duty Vehicles (HDVs) segment. Efforts are also going on to commence the use of LNG as an automotive fuel for heavy equipment in the mining sector which can commercially replace High - Speed Diesel (HSD).

? Sourcing & Trading

Your Company has established itself as a major global LNG player. In the past several years, the Company undertook various deals including time swap transactions and third-party sales on a FOB basis to de-risk the LNG portfolio. With growing gas demand in India, the Company would be bringing most of the US volumes to India through an optimal mix of own ship charters and structured optimization transactions like Destination Swap, etc. Your Company is also scouting the market for long-term tie-up opportunities with leading global LNG producers/traders to meet the growing downstream gas demand in India.

Further, your Company is actively undertaking hedging to manage commodity price risk.

? lNG Shipping

To transport the LNG sourced from the USA, your Company hired a newly built LNG Vessel "DSME H2520" from a subsidiary of Mitsui O.S.K. Lines, Japan. The vessel is of state-of-the-art technology and design. With hiring of this vessel, GAIL will have 03 modern LNG Vessels in its fleet on long-term charter. Further, the Company continuously scouts the market for optimization of its shipping fleet as well as taking additional vessels on time-charter to ensure lifting of US FOB volume and optimize the transportation cost.

? lNG Regasification Terminals

Konkan LNG Limited (KLL) is a subsidiary company of GAIL. Your Company is the commercial operator of the 5 MMTPA Dabhol terminal in Maharashtra under KLL. After 100% completion of the commissioning activities related to breakwater facilities, ambient air heating system, etc. KLL shall be able to operate throughout the year at full capacity. Your Company has also booked regasification capacities at PLLs Dahej terminal on long-term basis and has been efficiently utilizing the capacity booked in the terminal. In addition to this, Dhamra LNG terminal in Orissa has been commissioned and ready for commercial operation.

GAIL placed its first cargo and started discharging LNG from 22nd May 2023. With this, GAILs pipeline network got its first RLNG feeding point on the eastern side of India. Further, in order to cater to GAILs spot regasification requirements, GAIL from time-to-time books additional regasification capacity at Indian regasification terminals such as Hazira, Dahej etc.

? Natural Gas Transmission

Your Company is committed to increasing the length of its Natural Gas pipeline infrastructure by developing new Natural Gas pipelines and expanding/extension of its existing pipelines. Your Company has taken steps to provide Tie-in connections with its Natural Gas pipelines to the upcoming new gas sources including in Rajasthan/ Gujarat Krishna Godavari (KG) Basin, Cauvery Basin, Coal Bed Methane (CBM) discoveries in Jharia, Bokaro & Shadol, new sources of domestic gas through bidding route and upcoming RLNG Terminals to enable more and new gas injections into its pipelines. Furthermore, Inter-Connections (ICs) are also being provided with the Natural Gas pipelines of other pipeline entities in the country.

In addition to providing Last Mile Connectivity (LMC) to various industrial consumers to enable them to consume Natural Gas and shift from other alternative fuels, your Company is also providing Hooking-up connectivity (i.e. connectivity from the trunk Natural Gas pipeline to the CGD network) to about 100 CGD Networks in various parts of the country which have been awarded up to 9th and 10th CGD Bidding Rounds by PNGRB. 05 new LMCs and 27 Hook-ups were completed to supply/ transport gas during FY 2022-23. Your Company has also firmed up modality with the newly established Gas Exchange for smooth transmission of gas traded in the Gas Exchange. In addition, your Company is the first gas pipeline company in the country that had started an online pipeline open-access portal for easier and transparent booking of Common Carrier Capacity in its Natural Gas pipeline. Around 9,700 Capacity Tranche (CT) requests have been processed through the portal during FY 2022-23 while over 21,000 CT requisitions were received since the launch of the online portal till 31st March, 2023 in 2018.

? Developing the National Gas Grid (NGG)

To develop the National Gas Grid, your Company along with its JVs is executing projects to lay ~ 7,879 km of Natural Gas pipelines across India and another 2,047 km pipelines through its JVs/JVs of GAIL Gas (which includes 1,656 km by Indradhanush Gas Grid Ltd. and 391 km by Andhra Pradesh Gas Distribution Company Ltd.). The status of ongoing projects are as follows:

1. Jagdishpur-Haldia & Bokaro-Dhamra Pipeline (JHBDPl) (2,655 km) and Barauni- Guwahati Pipeline (BGPl) (729 km) section as an integral part of JHBDPl:

This pipeline network shall pass through the Eastern part of U.P., Bihar, Jharkhand, Odisha, West Bengal, and Assam. The pipeline network would have two gas sources, one at Phulpur (Allahabad, U.P.) and the other at Dhamra RLNG Terminal (Odisha) and is also connected to Integrated HVJ network to receive gas supply. The pipeline from Barauni to Guwahati will connect the North eastern gas grid to National Gas Grid. Recently, PNGRB has granted authorization of Dhamra-Haldia Pipeline (DHPL) (253 km) for capacity expansion of JHBDPL network and increasing size of Dhamra-Paradip spur line. With this, the expansion capacity of the integrated JHBDPL network is now 23 MMSCMD from earlier 16 MMSCMD.

Till March 2023, 2,378 km pipeline section of integrated JHBDPL (including BGPL) have been commissioned including connectivity to 4 major fertilizers plant viz. M/s Matix Fertilizers, Durgapur, M/s Hindustan Urvarak & Rasayan Ltd. (HURL) in Sindri, Barauni & Gorakhpur.

2. Kochi-Koottanad-Bangalore-Mangalore Pipeline (KKBMPl) Project Phase-ii (891 km):

Kochi to Mangalore pipeline (KMPL-450 km) passing through Kerala & Karnataka was commissioned & anchor customers Mangalore Chemicals and Fertilizers Limited, ONGC Mangalore Petrochemicals Limited

& Mangalore Refinery and Petrochemicals Limited were also connected. 129 km section of Kootanad to Bengalore Pipeline has also been commissioned. Work is under progress in Tamil Nadu Section.

3. Vijaipur-Auraiya-Phulpur Pipeline: To de-bottleneck, the supply of the JHBDPL project, a parallel pipeline from Vijaipur to Phulpur via Auraiya (667 km) was executed. Phase-1 from Auraiya to Phulpur (315 km) was commissioned in March 2019. Further, Phase-2 from Vijaipur to Auraiya-352 km has been commissioned in March 2022.

Mumbai-Nagpur-Jharsuguda pipeline (1,755 km) MNJPL, part of National Gas Grid (NGG), will pass through 25 districts in the states of Maharashtra, Madhya Pradesh, Chhattisgarh & Odisha. It will originate from Thane (Maharashtra) & will connect to JHBDPL in Jharsuguda (Odisha). Also, spurline will extend from Nagpur (Maharashtra) to Jabalpur (Madhya Pradesh). The pipeline shall ensure availability of clean fuel and cater the demand of CGD industries and anchor load customers. Construction work is in full swing for Mumbai-Nagpur section.

4. Sultanpur-Jhajjar-Hisar pipeline (135 km) has been commissioned on 31.03.2023.

5. Construction work is in progress for Srikakulam (Andhra Pradesh)-Angul (Odisha) Pipeline (744 km), Dhamra-Haldia Pipeline (253 km), Haridwar- Rishikesh-Dehradun Pipeline (50 km) to provide Natural Gas connectivity to cities en-route the pipeline.

? Petrochemicals

Under the Petrochemical business vertical, your Company is in the process of setting up a 500 KTA Propane dehydrogenation and Polypropylene (PDH-PP) Plant at Usar, Maharashtra, which is expected to be commissioned in 2025. This would be the first plant in India using Propane Dehydrogenation technology for the production of Propylene. For this project, M/s Lummus Technology LLC, USA has been selected as technology Licensor for the PDH unit & M/s Grace Technologies Inc. has been selected as Technology Licensor for PP Unit. Various project-related activities are in full swing.

Your Company is also setting up a 60 KTA Polypropylene (PP) plant at Pata. Environment Clearance for the Project has been granted by the Ministry of Environment, Forest & Climate Change. M/S Grace Technologies Inc, USA has been selected as the technology Licensor for the PP unit at Pata. Your Company is also setting up 50 KTA Isopropanol (IPA) unit at Usar.

Digital Transformation is need of the hour. Considering high competitiveness in Petrochemicals market and growing demand, Your Company has adapted SAS Data Analytics Tool to enhance their ability to work faster, stay agile and give the organization a competitive edge over competitors. GAIL Petrochemicals business has developed Three Business Analytics Modules i.e. Margin Optimization, Price Forecasting, and Production Planning for Advanced Data Analytics. Apart from this our Company is in process of mapping Customer Journeys and improve Business Intelligence through State-of-an-art Customer 360 & Market Intelligence system.

Acquisition of Petrochemicals Plant under Corporate i nsolvency Resolution Process through NC lT

Your Company is constantly in search for acquisition of Companies in synergy with GAIL or in diverse fields. Lot of equity investments are scrutinized on regular basis. One such opportunity was acquisition of a JBF Petrochemicals Limited (JBFPL), a Petrochemicals Company incorporated in 2008 for setting up of 1.25 MMTPA Purified Terephthalic Acid (PTA) Plant within Mangalore Special Economic Zone (MSEZ) in the State of Karnataka. The plant, which is a backward integration project for polyester plants. The trial run of the Plant was conducted in March 2017; however, production was not started and was in the process of complying with the technical specifications and removing deficiencies. At that juncture, there was a need to infuse additional funds. The Company was admitted to Corporate Insolvency and Resolution Process (CIRP) pursuant to NCLT order.

Your Company participated in the aforementioned Corporate Insolvency and Resolution Process and submitted the Resolution Plan in Sept ‘22. Subsequent to approval from Lenders, NCLT in March ‘23 accorded approval to GAILs Resolution Plan for acquisition of JBFPL. As per implementation of the Resolution Plan, your Company infused 2,101 crores towards total

Resolution Plan amount in JBF on 01.06.2023. Consequently, JBF has become a wholly-owned subsidiary of GAIL with effect from 01.06.2023.

GAIL and the (acquired) JBFPL have presence in two different petrochemical sectors i.e. Polyethylene (PE) and Purified Terephthalic Acid (PTA) respectively which are differentiated w.r.t. molecular structures, feedstock, product characteristics and target consumer market. The PTA business is envisaged to be a complementary vertical to that of existing PE portfolio. It is understood that the Plant was under preservation until the year 2020 and as per GAILs revival Plan presented to the Honble NCLT, it is planned to commission the Plant by March 25.

? Coal Gasification

Your Company is in the process of setting up a coal gasification-based Urea project through a JV-Talcher Fertilizers Limited (TFL) formed with Coal India Limited (CIL), Rashtriya Chemicals and Fertilizers Limited (RCF), each having 31.85% stake and Fertilizer Corporation of India Limited (FCIL) having 4.45% equity. The project is envisaged to produce 2,200 MTPD Ammonia and 3,850 MTPD Urea.

The project has received investment approval from all the JV partners and project activities have already commenced with the award of 02 major LSTK tenders of coal gasification and ammonia/urea to M/s Wuhuan Engineering Co. Ltd., China along with other OSBL/Utilities packages. The selection of other vendors is in progress and all the pre-project construction activities at the site have been completed. Cabinet Committee on Economic Affairs (CCEA) has approved the exclusive subsidy policy for Urea to be produced by TFL on 20th April, 2021. The financial closure of the project has been successfully concluded in June 2021 with debt tie up of 9,560 crore (approx.). Contract of approx. value of 11,000 crore has already been awarded and project achieved an overall 23% progress. GAIL signed an Addendum to MoU with Coal India Ltd on 12th October, 2022 for development of Coal to Synthetic Natural Gas (SNG) project at Eastern Coal Field (ECL) Bardhhaman (W.B).

? Start-up initiative

GAIL launched its ambitious Start-Up initiative ‘Pankh in July 2017 to invest in promising Start-ups. Your companys StartUp Initiative "Pankh" aims to identify, invest and nurture start-ups that can become successful companies in the long run and provide returns from this diversification. Under this initiative, an initial Corpus of 100 crore has been created for funding in new & promising Start-ups working in focus areas. GAILs Investment in Start-Ups is spread across diverse Areas like AI, Logistics, Electric Mobility, Nutrition, Rural Development, Health, Pipe Inspection, Energy, Renewable Energy, Environment, Bio Products, IOT, Industry 4.0 (process improvement) etc.

During the FY 2022-23, your Company has signed investment agreement with 01 Start-Up in Fintech sector with credit line product of Social cause with a financial commitment of

1.5 crore. Your Company has so far supported 34 numbers of Start-Ups with a total investment commitment of 69.69 crore. The valuations of some of these start-ups based upon the current market trends have appreciated many folds. In FY 2022-23, 04 nos. of GAIL supported Start-Ups have raised funds at higher valuation than the valuation at which GAIL made initial investment.

? Advocacy initiatives

India seeks to reduce its carbon emissions and transition to a cleaner, more sustainable energy system. Honble Prime Minister of India has stated that analogous to the seven horses driving the chariot of Sun god, Indias energy map is envisioned to have seven key drivers including accelerating efforts to move towards a gas-based economy.

Natural Gas being an environmentally benign energy source suffices to be the fuel of 21st century. Natural Gas commonly known as "The Green Fuel" is the cleanest and efficient hydrocarbon because of its chemical properties. Aiming the focus on steering our country towards decarbonisation & energy transition, various initiatives & steps have been taken by the government to promote Natural Gas and envisages the share of gas to be around 15% of countrys primary energy mix by 2030. Natural Gas can complement as key drivers and augment the progress directly or indirectly depending on the nature.

Under the Cleaner use of fossil fuels initiative, the Coal Gasification plants could be established closer to the Natural Gas grid, so that product gas or hydrogen can be injected into Natural Gas pipelines. In addition, Natural Gas can also be used as a fuel/feedstock in the production of various products such as plastics and chemicals, which can help reduce the carbon footprint of these industries.

Various pipelines projects are under progress towards the development of National Gas grid in the country which will enable the gas availability to far flung areas including the Eastern and North Eastern parts of the country. For this, the government has taken several steps including provision of grants for development of pipeline projects and revival of anchor load customers such as fertiliser plants. In addition to the pan India presence of NG pipeline network, government is also making efforts for the development of CGD infrastructure in India for enhancing the availability and reach of Natural Gas to end consumers. An emerging growth area for your Company is marketing of Biogas produced from anaerobic fermentation of organic waste. As a significant step towards promoting Biogas economy, MoP&NG launched SATAT (Sustainable Alternative Towards Affordable Transportation) initiative on 01st October2018 to extract economic value from Biomass waste for production of Compressed Bio Gas (CBG) and its usage as an alternative fuel (similar to CNG) for transport vehicles. Further, MoP&NG has issued policy guidelines for synchronization of CBG produced by various plants with its utilization in CGD networks on a pan India basis. GAIL has been mandated to operationalize the CBG-CGD Synchronization Scheme, wherein Biogas/CBG would be supplied co-mingled with domestic gas at Uniform Base Price to all CGD entities for use in CNG (T) and PNG (D) segments. Enabling policy frameworks and systems / mechanisms aimed at accelerating the development of biogas economy in overall gas supply scenario is continuously evolving.

As far as renewables space is concerned, Natural Gas has the potential to mitigate the challenge of lack of round the clock availability of renewable resources as well as balancing the grid. Natural Gas might act as a flexible energy storage medium to relieve congestion during peak usage periods and balancing the grid.

Talking about transportation sector & mobility domain in the country, the establishment of Electric vehicles as a cleaner mobility solution would further require significant investment in electricity distribution and charging infrastructure. Through the faster growing CGD network, Natural Gas is trying to reduce the emissions and helping the clean mobility agenda. Contributing towards the hydrogen economy, CGD infrastructure may be used for blending of the Hydrogen in Natural Gas for end use. After establishing the blending in CGD network through pilot projects, optimum level of hydrogen blending in CGD network may be initiated subject to technical limit. Further for creating future hydrogen backbone infrastructure, ROU of gas pipeline infrastructure can be leveraged considering synergies such as nature of fuel & end consumers.

Over the years, GAIL has been a part of industry events organized to propagate gas as a better environmental fuel and endorse the market opportunities available for gas in India. GAIL is interacting with various Indian industry associations including FIPI, CII, FICCI, CSE, TERI NITI Aayog, etc. GAIL has been consistently engaged with global associations like International Gas Union, ADB, World Bank on Sustainable energy policy and reforms required in the gas sector. GAIL also regularly interacts with PNGRB, the regulatory body to update them on the current status and industry viewpoint. GAIL is also engaged with think tanks and govt. bodies for carrying forward Natural Gas advocacy and market development in India.

GAIL is part of various prestigious industry bodies and associations which provide platforms to discuss industry issues and convey the industry voice to the government in a collective way to make better inclusive policies and bring reforms. This forms a significant basis for the advancement of the public good. In FY 2022-23, GAIL was a part of the following associations:

Indian Wind Power Association (IWPA)

PHD Chamber of Commerce & Industry

Chemicals & Petrochemicals Manufacturers Association

(CPMA)

Indian Centre for Plastic in Environment (ICPE)

Indian Biogas Association (IBA)

International Swaps & Derivatives Association Inc (ISDA)

Indian Federation of Green Energy (IFGE)

International Group of Liquefied Natural Gas Importers

(GIIGNL)

Society for Human Resource Management (SHRM)

All India Management Association (AIMA)

National Institute of Personnel Management (NIPM)

Pipeline Operators Forum

TERI Council for Business Sustainability (TERI-CBS)

Global Reporting Initiative India Private Limited (GRI)

Standing Conference of Public Enterprises (SCOPE)

Federation of Indian Petroleum Industry (FIPI)

Federation of Indian Chambers of Commerce and Industry

(FICCI)

British Safety Council (India) LLP

India Myanmar Chamber of Commerce (IMCC)

Confederation of Indian Industry (CII)

International Gas Union (IGU)

? Green energy initiatives

Green Hydrogen is a renewable energy based alternative fuel for meeting Hydrogen requirements in fertilizer production and petroleum refining. It has the potential to reduce Indias dependence on fossil fuels and decrease the carbon footprint of these industrial processes. It can help curb the emissions from several processes that depend upon input materials or feedstock derived from fossil fuels such as production of fertilizers, chemicals, petrochemicals and steel. Hydrogen can also be used as a fuel for long range transportation and for long duration storage of renewable energy.

In line with Strategy 2030, your Company is exploring various opportunities for increasing its renewable portfolio through organic as well as inorganic routes. Towards shaping a Net Zero future, your Company is exploring various business opportunities in the Production of Compressed Bio Gas (CBG). The Company is an integral part of the MoP&NGs initiative – SATAT (Sustainable Alternative towards Af fordable Transportation) and invited Expression of Interest (EOI) from various CBG Producers for providing Marketing tie-up of CBG at the Retail Outlets of your Company and its JVs. During the FY 2022-23, the Company issued 327 ‘Letter of Intent (LoI) to potential CBG producers. Your Company has also taken the decision of venturing into CBG business by setting up CBG production plants. The Company is setting up its first CBG plant of 5 Tons per Day (TPD) CBG production capacity at Ranchi. It has signed a concession agreement for 22 years with Ranchi Municipal Corporation for the supply of Municipal Solid Waste (MSW) and associated infrastructure for setting up the plant. The Company has received approval from the Government of Karnataka on 30.12.2022 for setting up CBG Plant in Bengaluru, including the land allocation. In line with Government of Indias ‘National Hydrogen Energy Mission, your Company is setting up a Green Hydrogen Production unit with a capacity of 4.3 Tonnes per day at Vijaipur (M.P.). The unit will produce Green Hydrogen using Proton Exchange Membrane (PEM) technology based on water electrolysis. Also, study on technical feasibility of H2 blending in NG/CGD network has been initiated.

Subsequent to the launch of CBG-CGD Synchronization scheme in April 2021, the Company has already operationalized the Synchronisation Scheme all across the country. Following are the key highlights of implementation of the Synchronisation scheme: a. Around 38000 SCMD (~28 TPD) Biogas/CBG was supplied/injected into 17 CGD GAs across India under the CBG-CGD Synchronization scheme. b. The Cumulative Biogas/CBG sale under Synchro scheme is 5490 MT. For FY 2022-23, CBG sale per volume under CBG-CGD synchronization scheme is 5322 TPA. c. 46 nos. of Tripartite Agreements (TPA) have been executed amongst CBG Producer, GAIL and CGD entity. d. 28 CBG plants and 18 CGD entities have tied-up under the Synchronisation scheme.

Your Company is setting up 10 MW PEM Electrolyser for producing Green Hydrogen. Your Company has also entered into MoU with Gujarat Alkalies and Chemicals Limited (GACL) to explore the feasibility of setting up 500 KLPD BioEthanol Plant in Gujarat and other business opportunities related to Petrochemical/Chemical plant, Solar and Wind assets. Your Company has also taken few initiatives for development of solar energy such as (i) MOU with BHEL for development of solar power projects; (ii) setting up of Renewable Power plants for captive consumption; (iii) Opportunities explored for manufacturing of solar cells/modules; (iv) collaborated with International Solar Alliance (ISA) as a corporate partner.

? Small-Scale lNG

India has vastly expanded the city gas distribution network in recent years, adding to Natural Gas demand. Liquefaction facilities can help transfer gas from some fields that havent been commercially exploited as they are too small to support an evacuation pipeline.

Your Company plans to set up small liquefaction facilities to cater to Natural Gas demand in areas not connected to pipelines and to help transport gas from isolated fields. Your Company has placed orders for two small-scale liquefaction skids capable of producing Liquefied Natural Gas (LNG) on a pilot basis. Liquefaction will be achieved through proprietary technology-based mobile liquefaction skids. These plants will help in distribution of Natural Gas through liquefaction in new city gas distribution areas, liquefaction of gas at isolated fields and will support setting-up of LNG fueling stations and in bunkering. It will be first of its kind in the country to introduce portable and scalable liquefaction units. Your Company is also discussing the possibility of manufacturing liquefaction skids in India.

4. Threats, Risks, Challenges, and Mitigation ? PNGRB Regulatory Framework

The Petroleum & Natural Gas Regulatory Board (PNGRB) was established by the Government of India on 1st October, 2007 for carrying out the various provisions of the PNGRB Act, 2006. The PNGRB Act provides a legal framework for regulating the refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and Natural Gas but excluding the activities of production of crude oil and Natural Gas, to protect the interests of consumers and entities engaged in these activities. The main functions of PNGRB include, inter-alia, (a) granting authorizations for laying, building, operating, or expanding new pipelines as common carriers or contract carriers and for laying, building, operating, or expanding new city gas distribution networks (CGD networks) (b) declaring existing Natural Gas pipelines, petroleum & petroleum product pipelines and CGD networks as common carriers or contract carriers (c) regulating access to common carriers or contract carriers (d) regulating transportation rates of common carriers or contract carriers and (e) to perform such other functions as may be entrusted to it by the Central Government to carry out the provisions of this Act.

During the FY 2022-23, PNGRB has notified various Amendments & Regulations in respect of Natural Gas Pipelines and CGD networks. In respect of Natural Gas Pipelines, based on regulatory provisions, PNGRB, by integrating the nine (09) inter-connected Natural Gas pipelines of your company, has determined an integrated tariff,duly apportioned into zonal tariffs, with effect from 01st April, 2023, which would significantly boost the Natural Gas transmission revenues of your Company. During this period, PNGRB has also notified the Unified Tariff Regulations with effect from 01st April, 2023. Under this, Unified tariff is calculated as weighted average zonal tariff (as approved by PNGRB) for all the constituent natural gas pipelines comprising the National Gas Grid System (NGGS) and thereafter the same is apportioned into Zonal Unified tariff over three zones, with first zone covers a distance from gas source to 300 kms, the second zone being more than 300 kms and up to 1200 kms and third zone being more than 1200 kms. Under this, all customers across the country connected to pipelines comprising the NGGS shall pay a single zonal unified tariff as applicable to them based on their location. This Unified Tariff regime would benefit customers located in far-flung areas by way of tariff rationalization and facilitate development of new markets to increase gas utilization in all pipelines including those of your Company. Further, the transportation tariff for other pipelines not forming a part of the NGGS is determined by PNGRB for each pipeline separately and further apportioned on a Zonal basis with each zone of 300 kms. Recently, PNGRB has also come out with a proposal for developing CGD Networks in J&K/Ladakh and the North-East under the 12th Bidding Round. Based on the business potential, your Company would assess participating in the same.

Your Company had emerged as the successful bidder for Gurdaspur-Jammu natural gas Pipeline and PNGRB issued the letter of intent of authorization of Gurdaspur-Jammu natural gas Pipeline.

During the FY 2022-23, your Company has also been granted authorization for developing a Tie-In Connectivity pipeline in Jambusar region in Gujarat which shall bring in more gas from new domestic sources. In this period, affiliates of your Company have also been granted authorization for developing City Gas Distribution Network in Geographical Area located in the state of Chhattisgarh under the 11A Round of CGD Bidding. PNGRB has also issued various orders and decisions in relevant matters. The details of the said regulations, amendments, authorizations, orders and decisions are available on the official website of PNGRB (www.pngrb.gov.in) and have varying implications on business. These regulations, amendments, authorizations, orders, decisions of PNGRB are appealable before the PNGRB Bench, Appellate Tribunal, and Courts and accordingly, some of them pertaining to your Company are also under various stages of appeals. The timing and content of any final changes in regulations made by PNGRB is not in your Companys control. However, regular interactions with PNGRB on sectoral issues, participation in public consultation exercises conducted by the Regulatory Board and making logical submissions to the Regulator in writing helps your Company to anticipate or to minimize risks associated with any sudden or unforeseen changes in regulations.

? Natural Gas Prices

Your Company currently markets Natural Gas purchased from domestic and international sources.

The Government of India, vide its order dated 25th October, 2014, had notified the New Domestic Natural Gas Pricing Guidelines, 2014. As per the notification w.e.f. 1st November, 2014, the gas price is determined bi-annually as per a specific formula, which in essence, is a twelve-month average price (minus transportation and treatment charges) of Natural Gas traded in the major hubs worldwide. The New Domestic Natural Gas Pricing Guidelines, 2014 are applied uniformly to all nominated fields to ONGC & OIL, New Exploration Licensing Policy (NELP) blocks, and Pre-NELP blocks that require Government Approval as per PSC, whereas the same are not applicable in case of small and isolated fields of nominated blocks that are covered under the pricing guidelines of 2013.

Government of India formed Dr. Kirit Parikh Committee in Sept-22 to review the pricing formula for gas produced in the country as global energy prices soared. The Committee recommended the domestic gas prices to be linked to Indian Crude Oil Basket. The decision on recommendations of Dr. Kirit Parikh Committee has been finalized by the Government of India.

Accordingly, Ministry of Petroleum and Natural Gas notified amendment to New Domestic Gas Pricing Guidelines, 2014 on 7th April 2023. As per the amendment, Domestic Natural Gas Price (APM price) shall be 10% of the Indian Crude Basket Price as defined by Petroleum Planning and Analysis Cell (PPAC) from time to time. The APM prices would be declared on monthly basis by PPAC. For the gas produced by ONGC and OIL from their nomination fields, the APM price shall be subject to a floor and a ceiling. The initial floor and ceiling price shall be $ 4/MMBTU and $6.5/MMBTU respectively. The ceiling would be maintained for the next two years (FY 2023-24 and 2024-25) and then increased by $0.25/MMBTU each year. Gas produced from new well or well intervention in the nomination fields of ONGC and OIL, where APM prices are subject to floor and ceiling, would be allowed a premium of 20% on these APM prices.

Further, the Government of India, vide its order dated 21st March, 2016, has notified guidelines on marketing including pricing freedom for the gas produced from discoveries in deep water, ultra-deepwater, and high pressure-high temperature areas. As per the guidelines, the Government has decided to ensure freedom of pricing for gas produced in these fields up to a ceiling price level calculated by taking a lower of the twelve-month average of landed price of imported fuel oil, substitute fuels, and LNG.

Your Company earns the marketing margin on the sale of domestic Natural Gas. Further, the Government of India, in its notification dated 24th December, 2015, applicable from 18th November, 2015, has put a ceiling on the marketing margin for the supply of domestic gas to fertilizer (Urea) and LPG producers to 200 per 1000 SCM.

In addition to the above, your Company purchases imported Natural Gas mainly from PLL at Dahej, Gujarat. The purchase and selling prices of such Re-gasfied Liquefied Natural Gas (RLNG) are based on international crude price indices. Further, your Company also directly imports LNG through carriers from various suppliers worldwide and gets it re-gasified either at PLLs regasification terminal at Dahej, Gujarat and Kochi, Kerala or at KLL regasification terminal at Dabhol, Maharashtra or at Shell Energy India Pvt Ltd (Formerly known as Hazira LNG Private Limited). Such LNG imports is either under a long-term agreement ranging above three years, medium-term agreement ranging up to three years or under spot cargo purchases. Under long-term & medium-term import, the selling price is largely based on the purchase price. However, under spot cargo imports, the selling price is dependent upon the demand and supply scenario and customer affordability. Import of LNG spot cargo is based on a thorough assessment of the affordability & requirement of the end consumers and the availability of LNG in the international markets.

? lNG Portfolio

Your Company and its subsidiaries/Joint ventures/affiliates till date have executed two long-term LNG contracts in the USA and one long-term LNG contract with Singapore based company to meet the growing LNG demand:

LNG Sale and Purchase Agreement with Sabine Pass Liquefaction LLC for sourcing of 3.50 MMTPA of LNG from Sabine Pass Liquefaction Terminal, USA with supplies commenced from February 2018.

Terminal Service Agreement for booking of 2.30 MMTPA liquefaction capacity in the Cove Point LNG liquefaction Terminal, USA with supplies commenced from April 2018 and Gas Sale and Purchase Agreement with WGL Midstream (now Six One Commodities) for the commensurate gas quantities.

LNG Sale and Purchase Agreement with SEFE Marketing

& Trading Singapore (SMTS) erstwhile, (GMTS Singapore (Gazprom) for sourcing up to 2.85 MMTPA, i.e. around 10.26 MMSCMD of LNG with supplies commenced from FY 2018-19. GAIL has been handling the SMTS (erstwhile GMTS) disruption by making various efforts to minimize the implications. Necessary actions to maintain gas supplies at sustainable levels to downstream RLNG customers were taken by suitable rationalization, reducing GAIL s internal consumption, primarily in Pata Petrochemical plant and by procurement of additional volumes of LNG/RLNG at Market Price.

LNG Sale and Purchase Agreement with Ras Laffan Liquefied Natural GasNatural Gas Company Limited (3) for sourcing ~0.3 MMTPA, i.e. around 1.08 MMSCMD of LNG on CFR basis.

The aforesaid LNG contracts were entered by your Company with the primary objective of meeting the demand of a growing Indian economy and ensure the energy security of the nation. Since FY 2016-17, your Company is undertaking hedging transactions also to mitigate the price and index risk. Further, as part of system enhancement, your Company has migrated from e-mail system to web based portal for undertaking LNG/ Ship Chartering/Ship Services enquiries.

? Power including Renewables

India is increasing its renewable energy capacity at a brisk pace with an aim to reduce carbon emission. With an increase in renewable energy portfolio, the stability of the grid is a major concern for the industry. Natural Gas-based power plants can act as a balance to provide grid stability as gas plants can respond more quickly to load changes than coal-based plants and can further help in the reduction of emission. Plant Load Factor (PLF) for conventional fuel plants is on a decline and Natural Gas-based power plants continue to run with structural issues requiring resolution through policy intervention. Your Company has been working on a case-to-case basis and in close coordination with MoP&NG and the Ministry of Power to increase/revive off-take of Natural Gas by the power sector.

? Polymer, lPG and other lHC

Your Company is also marketing petrochemicals, LPG, and other LHC products. The prices of these products are influenced and determined by global and domestic factors influencing demand and supply. Your Company has developed a range of market acceptable products to ensure steady consumption of the petrochemical products and has optimized its portfolio by having production facilities at Pata (UP) and Assam. LPG marketing is decided in close coordination with the PSU Oil Marketing Companies. Continuous measures are taken towards managing margins across your Companys range of products.

? Foreign Exchange Fluctuation Risk

Your Company, largely imports LNG, capital goods and stores & spares for various new projects, and operation & maintenance. It has also taken loans in foreign currency for meeting the capex requirement and making overseas investments. The loan portfolio is fully hedged by way of derivative products (currency swap and interest rate swap) and through the natural hedge from the foreign currency inflows. Your Company has an approved Foreign Currency & Interest Rate Risk Management Policy to manage foreign exchange exposure which has been reviewed during the FY. The short-term and long-term exposure of the foreign currency of your Company is being monitored as per the approved policy.

? Commodity Price Risk

Your Company has a Natural Gas Price Risk Management Policy to manage the price risk of Natural Gas. The price risk of Natural Gas used for internal consumption and as well as for selling to various downstream customers is being monitored as per the approved Policy. As and when the opportunity arises in the market, your Company has undertaken various derivative transactions to hedge the price risk arising out of fluctuation in the prices of imported Natural Gas.

? Natural or Man-made Calamity Risk

Various risks are associated with gas transportation and distribution like blowout of Natural Gas pipelines, earthquake, tsunami, terrorist activities etc. These risks are being mitigated right from the designing stage of these projects. However, such natural or man-made risks are emergent events and cannot be totally eliminated. If such an event occurs, it may incur significant liabilities for the Company. To mitigate the impact of such incidents, the Company has Emergency Response and Disaster Management Plan in place.

? Risk Management Framework

Risk management is an ongoing process and your Company has established a comprehensive Enterprise Risk Management (ERM) framework with the vision to integrate risk management with its overall strategic and operational practices. The Company has formed a Risk Management Committee (RMC) of the Board and its role is as specified in SEBI LODR Regulations. The primary objective is to ensure sustainable and stable business growth supported by a structured approach

Your Company has a Risk Management Policy and procedure to protect & add value to the organization & its stakeholders with the objective to establish a risk intelligence framework for objectively managing expected/ perceived & existing risk exposures by the decision-makers in compliance to prevailing statutory regulations so as to assure demonstrable achievement of objectives and improvement of financial stability of your Company.

Risk Management Approach

Your Company uses a structured Top-down and Bottom-up approach for managing risks. A Top-down approach helps to distil insights and provide clarity on the key risks whereas the Bottom-up approach helps to ensure comprehensive risk identification and prioritisation along with processes that control decision making across the Company ensuring a robust risk management culture.

Risk identification

Your Company assesses different types of risks including business and financial risks as well as the non-financial risks such as climate change, fuel prices, energy supply security that could potentially influence and impact the business in the future. The identified risks are assigned a Risk Rating based on their impact on the organisation and the likelihood of the occurrence. Risk Velocity is taken into consideration based on the time between the occurrence of an event and its impact on the Company.

In the changing business scenario and expansion of your Company into various other activities, business risks and their mitigation plans are assessed on regular basis. Top Corporate Level Key Risks are as under: to risk management. The ERM framework includes designing, implementing, monitoring, reviewing and constantly improving the risk management procedures for the organization.

The ERM framework at GAIL is designed after incorporating the requirements of ISO 31000 (Risk Management - Principles and Guidelines) and recommendations of the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The structure of Risk Management Framework of your Company is as under:

1. Risk of delay in Project Execution due to delay in obtaining Right of Use (RoU)/Land.

2. Underutilization of gas transmission pipeline will result in loss of revenue.

3. GAILs Restructuring Risk. [Challenges due to Monetization of GAILs Pipeline Assets and Creation of Transport System Operator (TSO)]

4. Inadequate controls to protect the systems against malicious attacks may result in loss of data and disruption of operations.

5. Risk of reduction in margin of Petrochemical due to lower industry demand, lower price & high input cost.

6. Market Risk of LNG in terms of adverse movement of crude oil price/ LNG prices, shortage of LNG cargos and expected increase in domestic gas volumes.

7. Risk of major leakage –

(a) Explosion / high fatality in case of leakage from LPG/ Natural Gas pipeline under high population density region.

(b) Explosion/high fatality in case of leakage in Petrochemical & GPU/C2-C3 Recovery Plants.

8. Risk of Third-Party Damage & Encroachment.

9. Risk of unfavorable Regulatory changes.

10. Effect on GAIL business on account of shutdown of ONGC facilities and reduction in allocation of APM/non-APM Gas for GAILs internal consumption.

All above Top Corporate Key Risks along with Mitigation measures are being monitored closely by the Top Management. Identified risks are deeply examined and quarterly reviewed by Corporate Level Risk Steering Committee (CLRSC), Bi-annually by Risk Management Committee (RMC), Annually by Audit Committee and Board.

5. investor Relations and Engagement

Investor Relations (IR) is playing an increasingly important role in todays volatile world in enabling companies to manage investor expectations. The objectives of Companys investor relations activities are to boost confidence and develop a long-term relationship of trust with stakeholders including Shareholders, Investors & Analysts, through true and fair disclosure of information/explanation, and bilateral communication. In order to pursue these objectives at all times, your Company continuously discloses necessary information and conducts various investor relations activities. Engaging closely with the investor community helps the Company to gain investor confidence, thereby enabling it to drive maximum value out of the IR programme.

During the FY 2022-23, your Company conducted following major activities for Investor Relations and Engagement:

a) Organized Investors & Analysts Meet 2022

b) Organized Earning Calls immediately after announcement of the financial results for Q1 FY23 and Q2/H1 FY23, Q3 FY23

c) Participated in 8 domestic investor conferences and 1 International Investor conference organized by top brokerage houses of the country

d) Interactive Meet with Investor/Analysts in March23 to explain the key changes in regulations, key projects etc. and its impact on the Company

All these meetings/ conferences were attended by Top Management/ Senior Executives of the Company. Besides organizing such meet and arranging Earnings call, Company also arranged office meeting with Investors on need basis.

Your company has witnessed increased interest by the Investor community and to meet the expectation, Company has been engaging with Investors and analysts to respond to their queries in a fair and transparent way keeping in mind the regulatory and fairness requirements.

In addition, Your Company also arranges Site Visit for Analyst & Investors community to showcase the on ground development of project which in turn helps to get an insight to the Investors/Analysts on the functioning of plant.

All such initiatives by the company towards disseminating information to investors & Analysts has been recognized & appreciated by the Investor and Analyst Community from time to time.

In line with SEBI (Prohibition of Insider Trading) Regulations, 2015 &, SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018, Structured digital database system is already in place at GAILs Intranet for (i) obtaining the necessary disclosures from Designated Person(s) w.r.t. Immediate Relatives, (ii) sharing of Unpublished Price Sensitive Information (UPSI) for furtherance of duties. This system enabled the Company to maintain the digital database as required under SEBI PIT Regulations 2015. The investor presentation(s) and the mentioned guidelines are shared with Stock exchanges and are also hosted on the website of your Company.

6. Capability Development ? Human Capital

As on 31st March, 2023, your Company had 4823 (including Whole-time Directors and CVO) employees on its roll. Your Company understands that more investment a company makes in human capital, the chances of its productivity, innovation and success become higher.

Along with this, the Company has been following the practice of assigning mid-level employees who have been involved with a project/task to make presentation before CMD/Directors whenever the opportunity exists. The practice brings the young talent to the fore-front and gives them opportunity to hone their skills while giving a chance to be recognized by the Top Management.

Your Company has dedicated resources to develop its human capital through training and mentoring. People are our most precious resource and their effective investment and management are critical to the continued success of GAIL.

Your Company has a well-defined policy for allowing leave for Study Purposes in place, which facilitates employees with 5 years or more experience to go on sabbatical for study purposes.

Regular performance feedback is one of the key aspects through which performance culture is achieved. A focused emphasis has been given on the "Art of giving feedback through workshops. In-house videos (03 nos.) on the same subject were released to help reporting officers understand the ways to assess individual capabilities, suggest areas of improvement etc.

A major deciding factor in improving human capital is improving the quality of life being offered at various work locations through the quality of infrastructure provided to the employees and their families. The Company puts this aspect on high importance and makes sure that employees have access to the best of facilities like Township, Hospital, School, Clubs, Sports facilities etc. The maintenance of the infrastructure is taken care at Local Level by HR Department.

Your Companys focus with regard to human capital management is to provide a safe and healthy work environment to deliver the performance required for business continuity while pursuing individual aspirations. Through strategic and targeted development programmes and employee engagement initiatives, your Company is building an employee base that can leverage their potential and talents to create a world where access to clean energy is given.

Value Added per Employee reflects its emphasis to make the optimal & productive use of the available resources and business opportunities. For the FY 2022-23, Value Added per Employee was 218.29 lakh.

? leadership Development Program

Taking cognizance of the challenges of coming years, the Company has defined its business strategy till 2030 to continue the unstinted growth pattern. The new projects will need to be spearheaded by leaders who have the fortitude to act entrepreneurially by actively looking and advocating for new opportunities for the Company. The Board has approved Succession Planning Policy to be followed for executives at 3 levels below the Board. The policy lists out in detail the approach and methodology to be adopted for the Succession Planning Process. It identifies Unique Role (UR) between E-7 to E-9 grade. For URs in the said levels, specification in terms of essential and desired qualification and experience has been prepared.

Succession and Staffing for all the identified Unique Roles in E-7 to E-9 grade is conducted through extant Career Progression/ DPC and Placement/APE Policy Framework. Role Specifications for each of the target UR will be referred to assess readiness level of the potential successor at the time of APE/ DPC.

Your Company believes that capacity building and enhancing the competency of employees is the key to the successful execution of its strategic plans. As a part of preparedness for coming challenges, your Company has put an Integrated Leadership Development Framework and Succession Planning Framework for facilitating leadership development and career planning. The Development strategy comprises multi-pronged Talent Development Interventions which includes:

360 Degree Feedback Exercise

Senior Management Development Centre (SMDC) Exercise

Focused development programmes

360 Degree Feedback is aimed to provide an effective feedback to the concerned executive(s) via his/her peers, subordinates, and seniors.

Senior Management Development Centre (SMDC) exercise has been undertaken for senior executives in Chief Manager (E-5) Grade & above. SMDC is an aid to ensure better and inspiring leadership in the organization. Based on the input of SMDC exercise, the executives are provided competency- specific training in premier B-schools and supplemented with books & e-learning modules.

Additionally, a structured Management Development Program is also imparted to all newly promoted General Manager/ Chief General Manager (E-7 and E-8) level Executives.

Your Company is grooming the senior-level executives of GAIL at the level of Executive Director and Chief General Manager for the Board Position through capability building programs like Master Class for Directors and Board Room Effectiveness. Also, to develop future leaders, a special initiative was taken to conduct program on Vigilance Awareness through Case Study at various work centres.

? Capability Development

GAIL Training Institute (GTI) has extended its wings to cater to the requirement of the Human Resource development and professional training, to the entire Oil and Gas fraternity especially in the domain of Gas Transmission and Distribution, City Gas Distribution, Gas Processing, Petrochemicals and LNG.

GAIL Training institute celebrated 25 years of its foundation on 6th June 2022 with the theme "Joy of Learning".

GTI resumed the trainings in physical mode from April 2022, post COVID-19. GTI (Noida and Jaipur) conducted about 221 training programs based on the Training Need Assessment (TNA) of the employees and covered more than 4520 employees under these training programs during the FY 2022-23.

GTI is accredited by American Society of Mechanical Engineers (ASME) as Authorized Training Provider (ATP) for conducting ASME training programs such as ASME B31.8 and ASME 31.8S codes. GAIL has its own Subject Matter Experts certified as Authorized Training Instructor (ATI), who are taking various sessions on ASME B31.8 and ASME B31.8S standard, for internal participants as well as participants from external organizations.

In line with the global business environment and Indias future growth trajectory, Capability building programs in the emerging areas such as Renewable and Alternate Energy (Solar and Wind Energy), Specialty Chemicals, Hydrogen Transport in NG Pipeline, Industry 4.0 & Automation and Role of Hydrogen in Emerging Economy were organized with the help of reputed Academic Institutions like IIT Delhi, IIT Bombay and National Institute of Wind Energy, Chennai etc. For the year 2022-23 more than 150 Executives have been trained with a total of about 550 Executives trained in last three years, in the areas of GAILs Strategy and other emerging business areas. GTI has imparted training to the executives of various organisations in the field of Oil and Gas including BPCL, IOCL, IGL etc. and various participants from across globe. GTI partnered with Ministry of External Affairs in Indias Development Partnership through Capacity Building Initiative under ITEC (Indian Technical and Economic Cooperation) Program organized for Developing and Neighboring Countries and conducted a training program through International Centre for Information Systems and Audit (ICISA). Under Industry- Academia collaboration, GAIL is providing support to academic institutions by providing Faculty / Subject Matter expert for the elective course titled Natural Gas Engineering, for the students of Undergraduate Engineering program.

GTI conducted awareness programs on City Gas Distribution including CNG and PNG during Azadi ka Amrit Mahostav during April 2022 to July 2022. To form a sector wide engagement platform for the Millennial executives in the Oil & Natural Gas PSUs, a HR Task Force was constituted under MoPNGs administrative control and was mandated with an industry wide youth engagement platform named YOUphoria. GTI Organized a fortnight long Theatre Work-Shop for young participants from Oil & Gas PSUs. The work-shop culminated in the form of a play that was staged on 26th January 2023, at GTI.

GTI-Noida has been awarded with two highly Coveted Awards during the year (2022-23).

1) Special Commendation Award by ISTD during 31st National Award for Innovative Training Practices on 25th June 2022.

2) 16th edition of BML Munjal Awards for Business Excellence through Learning and Development.

Skill Development programs:

Your Company is also playing a proactive role to support the National Skill Development Mission through active participation of Hydrocarbon Sector Skill Council (HSSC) and other Sector Skill Councils for providing Skill Trainings at Skill Development Institute (SDI) at Raebareli, and GAIL Institute of Skills at Guna and Nagaram.

a) GAil institute of Skills-Guna: A total of 400 youths were trained in various job roles during FY 2022-23 for getting gainful employment.

b) GAil institute of Skills-Nagaram: 180 youths were trained in various job roles during FY 2022-23 for getting gainful employment.

c) Skill Development institute- SDi- Raebareli:

i. SDI Raebareli has been registered and approved as Government Training Partner (GTP) with NSDC for skill training under PMKVY 4.0 Scheme of Govt. of India, in a step towards self-sustainable model.

The institute is accredited and affiliated with 5 star rating.

ii. A total of 405 youth were skillfully trained for gainful employment including 117 candidates trained under UPSDM scheme of skilling during the FY 2022-23 on self-sustainable model.

iii. Further, SDI Raebareli has registered 120 beneficiaries for providing skill training under PMKVY4.0 scheme of Ministry of Skill Development and Entrepreneurship for FY 2022-23.

iv. A smart phone distribution program was organized on 10.01.2023 at Skill Development Institute- Raebareli under DigiShakti Program of UP Govt. in which smart phones were distributed to the trainees of the Institute.

v. Total of 98 girls were trained during FY 2022-23 in job-roles of Data Entry Operator, Industrial Electrician & Process Instrumentation Operator.

vi. Online lectures on each course and other events of SDI are hosted on YouTube channel "SDI Raebareli" to facilitate the trainees.

7. Health, Safety, and Environment Management

? Corporate HSE Policy

Your Company has the VISION of promoting highest levels of safety, employee health and clean environment. It always strives to have positive impact on the environment and the community.

Your Company has formulated Corporate Health Safety and Environment Policy, which is being reviewed periodically to align the HSE Policy in line with Vision of Organization. This HSE Policy document clearly entails the top management commitment and employees responsibilities to conduct business with in line with integrated Health, Safety and Environment (HSE) Management System.

Your Company endeavors to generate value through Sustainable Development by placing commitment to Occupational Health, Safety, and Environment of its business areas and various stakeholders. Your Company is committed to Design, Construct, Operate and Maintain its facilities as per National & International Standards to ensure adequate safety in all spheres of business areas. It encourage all employees including contract workers to adopt safe working habits and behavior to create positive HSE Culture within organization in order to have the responsibility and authority to notify and stop any unsafe work/act, as deemed fit.

? Safety Performance

Your company has developed systems as per existing Health, Safety and Environment Management System. In order to ensure the effective implementation of HSE Management System and Management Governance pertaining to HSE matters, HSE Score System is in place to monitor the HSE Performance of GAIL Installations. HSE Score System is a unique tool to measure the performance of O&M installations on significant aspects like Leadership Commitment, Employees Participation, Standard Operating Procedures, Risk Assessment, Healthiness and Operability of Fire Fighting System and Appliances, Emergency Preparedness, Safety Audits etc. of HSE Management System through pre-defined parameters with weightage.

Your Company achieved an "HSE Score" of 97.60 in the FY 2022-23.

? Safety Training & Awareness

Your company is having excellent training institutes located at Noida and Jaipur to impart Technical, Behavioral, Management & Functional Training to its regular employees.

HSE Training and Awareness has been identified as one of the key elements of HSE Management System of your Company to understand the hazards and risks associated with workplace so as to implement the mitigation measures for loss control. Your Company has established an Internal Operational and Safety Training System at O&M Installations, in accordance with OISD & PNGRB Codes/Standards. The objective of this Internal Operational and Safety Training Procedures is to provide structured training to managers, supervisors, workers and other stakeholders so that they have the:

Knowledge and skills needed to carry out their work safely and avoid creating hazards that could place themselves or others at risk.

Awareness and understanding of workplace hazards and how to identify, report, and control them.

Specialized training, when their work involves unique hazards.

Also, in order to address specific requirements, a specialized training on " Safety Aspects of Scaffolding, Rescue from Work at Height & Confined Space Work " conducted for two batches of employees at Pata from 13th -15th & 16th - 18th February, 2023 respectively.

Case studies on Worldwide Industrial Incidents (occurred in the past) are also circulated to employees on monthly basis and Key Learnings from case studies are also discussed at GAIL Installations during Monthly Safety Day Meeting on every 10th day of the month.

? Safety Audits

Your Company undertakes Safety Audits of O&M Installations to identify the gaps with respect to applicable Codes & Standards and identify the improvement areas, if any. Various Audits of Installations are carried out by Third Party Inspection Agencies (TPIA), in accordance with the applicable Central and State Regulations:

External Safety Audit of Major Installations is carried out once in a year in line with Manufacturer, Storage & Import of Hazardous Chemical Rules (MSIHC), 1989.

Technical and Safety Audits of GAIL, LPG Storages and Handling facilities, NG/LPG Pipelines and CGD Networks are being carried out by Third Party Inspection Agency duly approved by PNGRB to ensure compliance wrt applicable PNGRB Regulations. A Compliance Assessment Audit to the PNGRB Regulations, 2009 of Hazira-Vijaipur section of Hazira-Vijaipur-Jagdishpur (HVJ) Natural Gas Pipeline (NGPL) was conducted by PNGRB nominated committee during the FY 2022-23.

Oil Industry Safety Directorate (OISD), a technical wing of MOPNG, Government of India also conducts Safety Audits of Gas Processing Plants, Petrochemicals and NG/LPG Pipelines once in 3/4 years to check the conformity with various OISD Standards and Guidelines.

Your company has established structured procedure to carry out Internal Technical and Safety Audit of O&M Facilities. Internal Audit (Proactive Safety Audit and Internal Audit-CO) is being conducted at least once in a year by in-house team to identify the improvement areas w.r.t PNGRB and other regulations, OISD Standards, Management Governance etc. Also, 02 Nos. of Electrical Safety Audit of O&M Installations have been undertaken to ensure various compliances with regard to electrical safety aspects.

? Occupational Health

Your Company has formulated Occupational Health Guidelines to implement Occupational health, Hygiene Measures and Medical Surveillance Programs to monitor and enhance occupational health of employees. The Corporate Occupational Health Committee meets once in three months to evaluate the effectiveness of the Occupational Health Programs in GAIL. Occupational Health check-up of regular employees were also conducted during the FY 2022-23 at O&M installations. Occupational Health Audit was also undertaken by in-house multi-disciplinary teams at Gas Processing Units Vaghodia and Gandhar in the FY 2022-23 to check effectiveness of Occupational Health System / facilities.

? HSE initiative and Achievements

Your Company has taken various initiatives to further improve HSE Management System. Some of the important HSE

10th day of every month is observed as "Monthly Safety Day" at each Operations & Maintenance (O&M) site in your Company during the FY 2022-23. On this day, the Officer-In-Charge of all installations (OICs) reviews all the safety related aspects of their installations under their jurisdiction.

08 Nos. of Health, Safety and Environment Review Meeting organized, chaired by Executive Directors/Functional Directors.

19th Annual HSE Workshop on the theme "Achieving HSE Excellence through innovations and learnings" organized on 22nd June, 2022. The Workshop was inaugurated by Honorable Chairman and Managing Director.

Petroleum & Natural Gas Regulatory Board (PNGRB) organized a ‘Knowledge Sharing Workshop on Natural Gas Pipelines in association with GAIL at GAIL Jubilee Towers, Noida on 10th June, 2022. The Knowledge Sharing Workshop was attended by members from Cross Country Pipelines and City Gas Distribution Networks Entities.

Organizational HSE Audit of GAIL was carried out by multi-organizational team headed by ED (IOCL), coordinated by OISD from 16th – 20th January 2023, as recommended by High Level Committee set up to inquire into the incident of Baghjan and Cyclone Tauktae,

Senior Level Committee headed by Executive Director, Corporate Operational & Maintenance visited City Gas Distribution Networks to review the compliances of GAILs HSE Management System and identify the systemic improvement areas.

09 Nos. of T4S/OISD Audit Compliance checks were carried out by Corporate HSE Officials at O&M sites to physically verify the compliances of audit recommendations.

25 Nos. of Awareness Sessions covering more than 400 employees on EHSM Modules were organized to further strengthen the HSE Management System in GAIL.

GAIL has participated in 3rd Session of National platform for Disaster Risk Reduction in Vigyan Bhawan, New Delhi from 10.03–11.03.2023.

Internal Technical and Safety Audit of City Gas Distribution Networks and associated Retail Outlets carried by multi-disciplinary team in compliance to PNGRB (Third Party Conformity Assessment) Regulations 2015. system, F&S Policy document, Incident reporting system, have been revised and updated in line with applicable HSE requirements.

8. innovation, Research and Development

Technology & Innovation is one of the core values of your company. In this aspect, innovation through R&D at GAIL plays a key role in addressing the dual challenges of developing affordable energy transition pathways and reducing the environmental carbon foot print. This includes deployment of decarbonizing technological interventions such as solar power, wind power and bio-fuels and development of new sustainable energy value chains, such as hydrogen, waste valorization and CO2 utilization. In this year, R&D efforts mainly focused on leveraging these energy transition and resource conservation and augmentation opportunities for advancing breakthrough energy research works for providing a wider, more sustainable mix of energy sources for the countrys economic growth. Solving the emerging complex energy transition challenges of oil and gas industries requires collaboration between countless teams of scientists and engineers from academics and professionals from industries. In this direction, the Company continuously emphasis on open innovation through collaborative R&D works. This innovative paradigm is a powerful tool for enhancing the capability for innovation as it multiplies the R&D resources and also provide more choices for solving scientific and technical problems with reduced risks.

Your company is continuously forging new research partnerships with various academic and research institutes across India, to work together to advance energy research works from concept to scale. The collaborative research projects are defined by commitment to green energy while sustaining the growth strategy.

Accordingly, in this year, your company is pursuing research works in the following research themes focusing on Waste valorization & Waste water recycling, CO2 separation, pipeline integrity management Indigenous catalyst development and Hydrogen Initiatives etc.

R&D programmes under waste valorization & waste water recycling signifies effort on waste minimization. Under this initiative, your company is collaborating with IIT-Roorkee for developing a co-gasification hydro thermal process for simultaneous valorization of lignocellulosic biomass with effluent water from petrochemical plant for production of hydrogen rich methane and nanometal- impregnated carbon hydrides as a byproduct. These byproducts can be used in fuel cell, battery applications as electrocatalyst. The successful outcome of this project may provide a sustainable solution for treatment of industrial waste water while extracting valuables.

Towards the realization of Zero Liquid Discharge, your company in association with IIT-Madras has developed a lab scale "hydrate forming" process for purification of effluent water for its reuse/ recycle in the plant. As compare to other conventional recycling process, hydrate process is considered "green process" as it produces minimum sludge and consume less energy. The lab scale process has shown nearly 75-90% separation efficiency and is being scaled up to a continuous bench scale mode for further validation.

Your Company is also working on development of novel separation processes that could lower the energy required during the purification of Natural Gas. GAIL R&D in association with IIT-Guwahati is developing a novel high-performance mixed-matrix membrane with high selectivity and permeability from Natural Gas. In future, this for efficient separation of CO2 process may be integrated in the unit operations to improve energy efficiency and mitigate emissions and enable easy enrichment of Natural Gas/biogas.

Commensurate with your companys core value of safety, your company continuously emphasis on pipeline integrity management to secure its pipeline assets. In this reference, your company is developing an indigenous fiber optic-based intrusion and leak detection system using the existing optical fiber cable (OFC) system. This system is being co-developed in association with IIT-Madras and shall leverage machine learning techniques and big data analytics to provide highly reliable, meaningful information about actual intrusions incidents and early detection of gas leakages.

Your company is also making remarkable efforts in the development of indigenous catalysts for petrochemical production. On this matter, extensive research carried out in collaboration with CSIR-NCL has resulted in successful design of chromium based single site catalyst for polymer (HDPE) production with improved product quality. Further, research works are in progress for improving its thermal stability. In addition to collaboration with CSIR Labs and reputed academic institutes, your company has also partnered with other Oil and Gas PSUs for setting up of a Center for excellence for Oil, Gas and Energy (CoE-OGE) in IIT-Bombay for capacity building of Oil & Gas executives and to develop sustainable research solutions for the challenges faced by fossil fuel industries through mission mode approaches.

Further, to support the GoI initiative in "National Hydrogen Energy Mission" for promotion of usage of green hydrogen in hydrogen value chain, the Company is also carrying out a pilot project on injection of green hydrogen in CGD network and evaluation of its impact Natural Gas pipeline in association with EIL and IIT-Kanpur. Currently 5 % of hydrogen is being blended and soon it will be increased in small increments for further evaluations. Further, your company is also in process of setting up 10 MW green hydrogen plant based on PEM water electrolyzers (largest in India) in Guna, Madhya Pradesh. On commissioning, this plant shall produce nearly 4.3 metric tons of green hydrogen per day.

This year, your company has filed five nos. of Indian patents in the fields of waste plastic to diesel, bulk synthesis of 2D COF adsorbents, waste water treatment using gas hydrate process, unmanned aerial vehicle for inspection of cross-country gas pipeline and sodium-ion battery. In addition, your company has also been granted five nos. patents in the areas of pipeline health monitoring, improved process for PV preparation, methane recovery from marine hydrate, sea water desalination using LNG refrigeration, and 3D-COF adsorbents for methane storage. So far, your company has been granted 20 nos. of patents (17 Indian + 3 Foreign) for unique concepts, products and processes.

Your company also vigorously implements technological upgradation innovation initiatives under the R&D head at its various facilities. These technology transformations and renovation projects are implemented to improve efficiency in operations or cost reduction at our installations. Some of the outstanding measures carried out under this scheme include; use of low flow intelligent pigging tool for in line inspection, setting up of Natural Gas close loop calibration facility, optimization of LHC production by enhancing C2/C3/C4 recovery and integration of continuous emission monitoring system (CEMS) analyzers as per latest CPCB guidelines.

The road to innovation starts with a strong innovation ecosystem which promotes team work and system thinking to solve business problems. To promote this innovative, culture your company encourages ingenious business ideas from all employees through Central Suggestion Scheme and such ideas are evaluated continuously. Based on their feasibility, best suggestions among them are implemented to improve operational flexibility and efficacy.

9. Total Quality Management

Your Company is committed to enhance customer satisfaction and standardizing business processes through the implementation of a Quality Management System.

Your Company endeavours for continual and sustainable improvement through the implementation of effective quality practices, innovation and standardization. Quality Management System and Energy Management System have been implemented along various Pipelines & Process units also at Corporate and Marketing offices. Your Company undertakes Quality Circle Projects with engagement of its employees resulting in high employee morale and increased productivity. Voice of customers is being captured through Customer Value Management and Customer Satisfaction Index surveys. Your Company is proud to share that Customer Satisfaction Index for FY 2022-23 is 89%.

10. Sustainability initiatives

Your Company firmly believe in integrating Environmental, Social and Governance (ESG) in its value chain and aims at contributing to creating a better world for the next generation. Your company, being Indias top gas distributor, is dedicated towards advancing the countrys energy sector in a sustainable way, by incorporating sustainability in its operations and decision making. Sustainability, is a method of creating long-term value by examining companys operations in terms of the environments ecological, economic and social elements. The Companys sustainability roadmap has been carefully crafted based on stakeholder requirements, nations strategy for clean and accessible energy and the rising demand for Natural Gas in the country.

It is an achievement for your Company to be included in the FTSE4 Good Index Series (FTSE ESG Rating) as a part of London Stock Exchange Group Sustainability Index for the year 2022 affirming the strength in demonstrating environmental, social and governance practices of international standards. The Company has been awarded by PCRA for ‘Significant contribution towards energy conservation & fuel efficiency during Sakasham-2023 and Green Ribbon award for its sustainability and decarbonisation initiatives by CNBC Network 18. These awards are a recognition of Companys continued sustainability efforts.

Being a responsible energy company and to further accelerate its decarbonization goals, GAIL has developed a Net-Zero strategy and clear organization-vide carbon roadmap to achieve a 100% reduction in Scope 1 and Scope 2 emissions and a 35% reduction in Scope 3 emissions by 2040. The action plan has been developed after conducting a detailed study on science-based Net-Zero ambition and action plan for GAIL. The Company has entered into MoU with the Center of Excellence in Oil, Gas and Energy (CoEOGE) under the aegis of IIT Bombay for conducting study titled Decarbonization of Petrochemical, Gas Processing, and Petroleum Refineries: Technology evaluation and Life Cycle Assessment in line with its Net Zero 2040 Vision. It has undertaken a Techno Commercial Study on Carbon Capture Utilisation and Sequestration (CCUS) with leading technology provider for reducing carbon footprint at its installations.

To assess the Carbon Credit potential of CBG plants being setup at India under LOI issued by GAIL and its CGD JVs, the Company has undertaken a model study in 03 CBG plants across India.

11. Environment Protection and Conservation/Renewable Energy Developments

Your Company is committed towards maintaining and ensuring a safe and clean environment by having certified Integrated Management System (Quality Management System, Environment Management System and Occupation Health & Safety Management System). Being a flagship energy company, your Company is committed to play a key role in building a sustainable energy future for the country. Your Company has a Corporate HSE as well as Sustainable Development Policy to prevent environmental degradation and aims to continue growing in a sustainable manner to the benefit of Communities, Environment and Stakeholders at large. Sustainability Steering Committee supports the Sustainable Development Policy directives, and is accountable for executing the companys sustainability ambitions and management of relevant risks and performance.

Interactive Meet with Analysts and Investors

Your Company by virtue of its business in Natural Gas plays an instrumental role in transitioning towards a low-carbon economy. Your Company has significantly contributed in reducing the carbon emissions by development of pipeline networks, which has led to the supply of gas as a fuel and feedstock to power, fertilizer, CGD, and other industries, where Natural Gas emits 50 to 60 percent less carbon dioxide (CO2) than conventional fuels. It also emits greenhouse gases with a lower life cycle into the atmosphere. Unlike coal, Natural Gas does not require huge amount of water for its purification and it does not contaminate the ground water. Further, it is either transported through the pipeline as a gas or closed cryogenic vessel as liquid and therefore does not contaminate air during transportation. When used in power generation or as a transport fuel, Natural Gas results in negligible emissions of SOx, NOX, Hg and particulates compared with other fuels. The increased use of Natural Gas offers a significant contribution to improved local air quality and public health.

Your Companys O&M Installations are compliant to provisions of Environment (Protection) Rules and operate under valid Environmental Clearance from the Ministry of Environment, Forests & Climate Change. Air and Water Consent for Operation have been obtained from State Pollution Control Boards, and the same is in place as applicable. Your Company monitors environmental parameters to assess the environmental quality on regular basis through an in-house team and as well as by independent third-party agencies. Updated and latest technological instruments are used for monitoring environmental quality.

The monitoring is done regularly and reports are sent to the respective State Pollution Control Boards. An audit is also conducted for the process plants and pipelines to ensure the proper functioning of the environmental management systems. Since your Company uses Natural Gas for its feedstock as well as fuel requirements, the level of pollutants emitted is consistently much below the national stipulated norms. Adequate stack height has been provided for the effective dispersion of pollutants. Low NOx burners are used in all the furnaces. Loading facilities are provided with vapor-return circuits. Your Companys petrochemical complex at Pata and Vijaipur have the facility of monitoring stack air and ambient air on continuous basis. State-of-the-art permanent ambient air monitoring stations measure sulphur dioxide, oxides of nitrogen, hydrocarbons, carbon monoxide and noise levels on a real time basis.

Your Company has been continuously taking initiatives to safeguard the environment and biodiversity along with its diverse business segments. All major installations of your Company carry out extensive afforestation in their respective sites and maintain the requisite area as Green belt. These greenbelt regions are home to a wide range of native plants and fauna. Within these green-belt zones, there are also large water reservoirs that are home to a variety of aquatic animals. In collaboration with local administration, a scientific approach to care and preservation of these green-belt regions is used. Regular surveys as well as studies pertaining to environment and ecology of the area in and around GAIL units conducted to ensure prevention and timely mitigation of environmental issues.

Your Company always encourages and supports innovative and smart approaches to conserve water at sites through various water management initiatives such as reduction of freshwater consumption, rainwater harvesting system/ rainwater collection system, monitoring and management of waste-water discharge, waste-water treatment and recycling based on our Environmental Policy, National, Local and Regional Guidelines. Your Company considers water as a precious natural resource and hence its consumption is closely monitored and controlled. Further, state-of-the-art technologies have been adopted to reduce and treat the waste-water generated.

Your Company maximizes the concept of reuse and recycle of water. Discharge at all locations is compliant to the norms of the respective State Pollution Control Boards. Your Companys operations at all locations are state-of-the-art and involve clean technologies. Adequate treatment and reuse of treated waste-water is adopted across the Company. Treated effluent water is recycled and used in-house for horticulture purposes within plant and township premises. Further, adequate measures are taken for waste management. Your Company manages its waste by efficiently segregating, treating and disposing based on the type of waste generated i.e. hazardous and non-hazardous.

The water and wastewater samples are also analyzed at the in-house laboratory as well as external laboratories regularly. Your Company has taken a number of initiatives to improve energy efficiency through effective management processes in the reporting year 2022-23 including the adoption (replacement and retrofitting) of efficient technologies, best practices, energy efficiency training/workshops, and climate change adaptation and mitigation measures. Monitoring energy consumption, conducting energy audits, and implementing energy efficiency measures are all made easier by our highly efficient Integrated Energy Management System

In addition to the above, significant initiatives/achievements that have been taken by your Company during the year 2022-23 are:

captured through Microbial route in

Utilization of CO2

Pilot Scale at GAil, Pata: In recent years, cultivation of micro algae has received renewed attention on account of its possibility as a feasible sequestration technology.

CO2

conversion offers a cost effective option

Algae-based CO2

towards reducing the carbon footprint. GAIL, Pata in collaboration with Central Institute of Mining and Fuel Research (CIMFR), Dhanbad has commissioned a Pilot-scale capture through Microbial Route. Artificial

project for CO2

sequestration has

system of micro algal cultivation for CO2

also been developed.

Miyawaki Plantation: GAIL, Pata undertook a Project for plantation of 1,50,000 saplings based on Miyawaki Methodology. The Plantation was carried out in an Area of 4.3 Hectares near to GAIL, Pata. This is the largest Miyawaki Plantation in U.P. The Plantation was carried out through Uttar Pradesh State Forest Department (UPSFD) on the occasion of Van Mahotsav 2022.

EPR of GAil Pata: GAIL, Pata has been registered on centralized portal of CPCB as brand owner of Polymer Products on 24.11.2022 under Plastic Waste Management Rules, 2016. EPR Obligations for the FY 2021-22 (995 MT) and FY 2022-23 (2885 MT) have been suitably completed by receipt of EPR Certificates for 3880 MT (Category-II Recycling) on the EPR Portal.

SANJEEVANi – A Sustainable Journey: GAIL Pata has published the third edition of magazine, "SANJEEVANI – A Sustainable Journey", fully designed and crafted by in-house team which was released on 02.01.2023. Employees of GAIL Pata and their family members have beautifully contributed for this publication. This publication is one of the initiatives which further showcases our commitment towards environment and sustainability awareness among our employees.

Zero liquid Discharge: Design basis and Basic Engineering for Zero Liquid Discharge/treated waste water recycling at GAIL Pata has been prepared. After approval of the project, implementation shall be started at site. GAIL, Vijaipur is already being operated on zero discharge basis.

Construction of Butterfly Garden: Roadmap was prepared for development of butterfly garden at GAIL, Pata. Construction and developmental activities for the butterfly garden has been completed and inaugurated during FY 2022-23.

GreenCo Rating: GreenCo Rating is the ‘first of its kind in the world holistic framework that evaluates companies on the environmental friendliness of their activities using the life cycle approach. GAIL had embarked upon the journey of adoption of GreenCo Rating in FY 2019-20. In this endeavour GAIL, Vaghodia and GAIL, Vijaipur have received silver rating and GAIL, Pata has received a Gold rating by CII GreenCo.

CEMS: Continuous Emission Monitoring System (CEMS) for plant emission stacks are installed for all stacks at different locations through which emissions quality are maintained on real time basis.

Organic Waste Composting: Organic Waste Composting (OWC) plants are being operated at Pata, Vijaipur and other locations. Produced manure is utilized at plant premises and surrounding area for horticulture purpose.

12. internal Control Systems & Their Adequacy

Your Company has distinct and efficient Internal Control Systems in place. It has a clearly defined organizational structure, manuals and standard operating procedures for its business units and service entities to ensure orderly, ethical and efficient conduct of its business. The Companys internal control system ensures efficiency, reliability, completeness of accounting records and timely preparation of reliable financial and management information. Internal financial controls framework and Risk Control Matrix (RCM) for various business processes is in place and reviewed continuously by the management. In addition, it also ensures compliance of all applicable laws and regulations, optimum utilization and safeguard of the Companys assets.

Your Company has independent and integral internal audit department having diligent professionals covering aspects relating to commercial and technical domains. The Internal Audit department functionally reports to the Audit Committee and administratively reports to the Director (Finance). The audit assignments are conducted as per the annual audit program approved by the Audit Committee. The Internal audit examines the effectiveness of internal controls through a risk-based audit of business processes. In congruence with the mission of internal audit "To provide comprehensive and quality audit services, which facilitates efficiency of business operation, enhance integrity of information and result in recommendations that improves operating procedures, to enable the company to achieve its objective", the significant audit observations along with its root cause and impact are reported to the management. The Audit Committee reviews the significant findings of internal audit and C&AG audit regularly.

13. Corporate Social Responsibility

Your Company as a socially responsible Corporate understands and acknowledges its responsibilities towards the communities, the environment and all other stakeholders involved in the process. CSR function at your Company aims to promote social good and integrate economic, environmental and social objectives with the companys operations and growth. In alignment with the vision of your Company, the CSR initiatives strive to enhance value creation in the society and the communities in which it operates, through its services, conduct & initiatives, so as to trigger poverty alleviation, promote sustained growth for the society, the community and those at the bottom of the pyramid, with the long term goal of contributing towards the development of prosperous and inclusive India. Your Company has complied with DPE guidelines regarding spending on identified Thematic Areas, i.e. Health & Nutrition.

14. liFE (lifestyle for environment)

Indias Mission LiFE seeks to empower people to fight against climate change. The concept of ‘Lifestyle for the Environment (LiFE) was introduced by Prime Minister Narendra Modi at COP26 in Glasgow on 1st November 2021, calling upon the global community of individuals and institutions to drive LiFE as an international mass movement towards "mindful and deliberate utilization, instead of mindless and destructive consumption" to protect and preserve the environment. LiFE puts individual and collective duty on everyone to live a life that is in tune with Earth and does not harm it. Those who practice such a lifestyle are recognized as Pro Planet People under LiFE.

GAIL is committed to contributing to Indias decarbonization goals and ensuring its energy security. In an article in the May 2022 issue of Business World, GAIL is listed among the top 10 companies in the country that have paved the way towards a sustainable future by considering crucial aspects such as efficient utilization of resources, promotion of social welfare, incorporation of inclusive supply chains, and other significant sustainability metrics. Mission LiFE will play an important role in incorporating best practices for employees and companys culture to promote lifestyle for environment.

Theme-wise initiatives by GAIL for Mission LiFE:

? Save Energy

Energy transition includes the technology switch and initiatives taken to replace existing source of energy. While currently Natural Gas is a clean transitional fuel, it is not the clean fuel of the future. Hence GAIL is exploring alternate green fuel sources to reduce its emissions such as CBG, Ethanol blended petrol, Green Hydrogen. Gail has total installed capacity of 131.75 MW of alternative energy and various RE projects are planned under its Net Zero Roadmap.

GAIL is also focussing on operational decarbonization which includes the technology and initiatives to reduce its direct in-house GHG emissions by means of energy efficiency, fuel switch, electrification, etc.

? Save Water

GAIL ensures that its operations have no negative effects on the supply and quality of water resources throughout the various sites. GAIL has proactively evaluated and mitigated any water related risk in the future to make its operations resilient. At GAIL, we regularly conduct water audits (both internal and third party) to monitor the water demand. GAIL encourages and supports water saving innovative ideas across sites via various initiatives such as reduced freshwater consumption, rainwater harvesting/collection system, monitoring and management of waste-water discharge, wastewater treatment and recycling based on its Environmental Policy, national, local, and regional guidelines.

? Say no to single use plastic

GAIL is committed to avoid single use plastic in its all operations and offices by creating awareness and establishing system to avoid usage of single use plastic.

? Reduce Waste

GAIL ensures that waste materials are disposed of in a way that minimizes their impact on the environment and human health. We strive to implement REDUCE REDUCE

E-WASTE WASTE

circular economy across our operations by deploying resource efficient technology. We follow effective waste management practices which involve reducing, reusing, recycling, and responsibly disposing of Hazardous and Non-hazardous waste at all sites.

? Adopt healthy lifestyles

The Saksham Cyclothon, was organized by GAIL, Karaikal as part of an awakening campaign, " Azadi Ka Amrit Mahotsav Through Green & Clean REDUCE E-WASTE Energy" -an initiative of the Petroleum Conservation Research Association (PCRA) under the aegis of the Union Ministry of Petroleum and Natural Gas. The objective of this cyclothon is to create awareness amongst the people about the fuel conservation, environment protection and promote the use of cycle for short distances, which will not only save fuel but also help in creating a cleaner, greener & healthier REDUCE environment. Further, GAIL ensures availability of Open Gym, E-WASTE Recreational and sports facilities in its townships for leading a healthy lifestyle and soliciting employees to participate in Yoga Day, Walkathons, Marathons etc

? Reduce E-Waste

GAIL has effective waste management

REDUCE system which includes e-waste disposal, E-WASTE which is done with utmost care and responsibility by engaging authorized REDUCE E-WASTE vendors. GAILs sites have Extended Producer Responsibility plan submitted to respective Pollution Control Boards.

Accordingly, it manages it waste collection and recycling.

15. Awards & Accolades

CMD, GAIL (India) Limited has received Indias Best CEO award for Oil and Gas Sector, presented to him by the Union Minister of Civil Aviation & Steel, Government of India.

GAIL won the "Platts Global Energy Award" in the "Energy Transition – Midstream" category in 2022.

GAIL has won the Bronze Shield in "SAFA Best Presented Annual Report Awards, Integrated Reporting Awards & SAARCREDUCE REDUCE E-WASTE WASTE

Anniversary Awards for Corporate Governance Disclosure, 2021 in Power and Energy Category.

GAIL bags the 17th National Awards for "Excellence in Cost Management 2019" for JLPL by ICAI in 2022.

GAIL bags the "Gold Shield in the category XI- Public Sector Entities of ICAI Awards of Excellence" in Financial Reporting (2020-21) in 2022.

GTI was awarded the prestigious ISTD "Innovative Training Practice" award in 2022.

GAIL has been awarded the 3rd prize for 2021-22 under the Petroleum Rajbhasha Shield Scheme for commendable performance in Official Language.

Director (Finance) has been conferred the CFO of the Year Award 2022 at the Global Refinery & Petrochemicals Congress (2022) and Downstream India Excellence Awards 2022 in recognition of his stellar leadership & path-breaking initiatives.

Director (Finance) has been conferred with "CFO Leader of The Year" under the category "Best CFO Oil & Gas" at the ET Ascent - 21st Global Edition & 6th Edition India Business Leader of the Year.

GPU Gandhar won the "CII GreenCo Silver Rating."

VSPL Pipeline was awarded the "CII GreenCo Silver Rating" - in Pipeline Segment in GAIL in 2022.

KKBMPL bags Shrestha Suraksha Puraskar by National Safety Council – 2022.

VSPL bags GreenCo Silver Award from CII, Hyderabad, at HICC, Hyderabad.

The National Safety Council of India has awarded GAIL Vijaipur, Gas Processing Unit the Winner of Suraksha Puraskar (Bronze Trophy) – 2022.

GAIL has been awarded prestigious Digital PSU – Digital 2.0 by Governance Now under 9th PSU Award.

Asian Leadership Awards - CSR Leadership Award (an international recognition held at Dubai)

ET Ascent National Award for Leadership & Excellence in CSR & Sustainability 2022

National CSR Award 2022

GAILs "Hawa Badlo" initiative won Economic Times Brand Equity Shark Awards 22 for persistent Social Awareness Campaigns against Air Pollution for a better environment.

CAUTiONARY STATEMENT

Statements in the Boards Report and Management Discussion & Analysis, describing the Companys objectives, strategies, projections and estimates, expectations, etc. may be "forward looking statements" and progressive within the meaning of the applicable laws and regulations. By their nature, forward-looking statements require your Company to make assumptions and are subject to inherent risks and uncertainties. Forward looking statements which involve a number of underlying identified/non-identified risks and uncertainties that could cause actual results to differ materially from the expectations. Critical factors that could influence the Companys operations include global and domestic demand and supply conditions, changes in Government regulations/tax laws, economic developments within the country and factors such as litigation and industrial relations. Since the factors underlying these assumptions are subject to change over time, the estimates on which they are based, are also likely to change accordingly. These forward-looking statements represent only your Companys current intentions, beliefs and expectations. Your Company assumes no obligation to revise or update any forward-looking statement, whether as a result of new information, future events, or otherwise. Readers are cautioned not to place undue reliance on the forward-looking statements.

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