30_down_chairman speech 06 08 12

7/29/2019 30_Down_Chairman Speech 06 08 12

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Seventeenth Annual General Meeting

of

MAHANAGAR GAS LIMITED

Statement of the Chairman

Mr. B. C. TripathiChairman

August 08, 2012


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STATEMENT OF THE CHAIRMAN

Dear Shareholders,

At the outset, on behalf of the Board of Directors, I extend a warm welcome to you at the Seventeenth Annual

General Meeting of your Company. The Annual Report containing the Directors Report and the audited

accounts along with Auditors Report for the year ended March 31, 2012 have been with you for some time and

with your permission, I take these as read.

Financial and Physical Performance

You will be happy to know that the year 2011-12 has been another successful year for the Company.

Your Company registered an impressive increase of 23% in net turnover from ` 1051 Crores to ` 1297 Croresfor the year 2011-12. The Profit after Tax reached ` 308 Crores representing a growth of around 37% over the

previous year.

The financial health of your Company continues to be

sound and robust. The return on average capital employed

improved to a healthy 30% per annum and EPS went up

from ` 25 per share to ` 34 per share. Your Company does

not have any interest bearing loan as on March 31, 2012.

Long term rating of the Company has been reaffirmed as

AAA by ICRA.

The Company continued its efforts to achieve a healthy

growth in developing Piped Natural Gas (PNG) and

Compressed Natural Gas (CNG) infrastructure. Theaverage gas sales volume of your Company during the

financial year 2011-12 has increased to 1.95 MMSCMD and

the highest daily throughput reached 2.33 MMSCMD.

CNG business continued to grow during the year under

review. MGL added 6 CNG stations to reach the present

total of 151 CNG stations. More than 25,870 vehicles were converted on CNG during the year, taking the total

number of converted CNG vehicles to over 2,39,900. The peak daily sale of CNG exceeded 11.85 lakh Kgs per

day during the year.

About 49,700 new homes were provided with the convenience of piped gas, taking total domestic connections

to over 5.58 Lakhs. As regards pipeline infrastructure, your Company has cumulatively laid around 330 Kms

of Steel pipeline and around 3290 Kms of Polyethylene pipeline.Business Initiatives

Let me share some of the important highlights of the last financial year.

Your Company commissioned the third City Gate Station (CGS) at Taloja, MIDC on June 23, 2012. The CGS atTaloja will cater to gas demand in the areas of Taloja MIDC, Kalamboli, Panvel , Kamothe, etc.

Your Company has constructed a new office building at Mahape which will be helpful for better coordination

and project execution while expanding infrastructure in Geographical Area 2.

Your Company has made good progress by making Geographical Information System available for field

applications through mobile and handheld devices. As a part of this initiative, successful trials have been

completed for data acquisition from the field direct into the MGL ERP system.


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The stability in ERP system has enabled newer initiatives in its Finance and HR sub-modules along withmobility solutions. Your Company is striving to be more customer friendly through implementation of meter

reading based on smart phones, automated meter reading, mobile phone enabled bill payments, etc.

MGL organised the first Knowledge Sharing Round Table of City Gas Distribution Companies in India at

Mumbai this year. This forum for exchange of innovative ideas and practices for higher growth of CGD sector

was well received by city gas distribution companies across the country.

For better talent management, your Company has evolved an online competency assessment tool, viz.,e-Competency Mapping (eCOMPMAPS) on which employees are assessed for their competency and training

requirements. This is a completely in-house initiative and also in accordance with global practices.

Opportunities and Challenges

Your Company is well placed to tap existing as well as new CGD markets. Allocation of domestic gas, ability

to source market priced gas from various sources through physical connectivity with the trunk pipeline

networks and large demand potential in the existing authorized areas of your Company provide a good scope

for growth.

Major challenges before your Company

are to roll out City Gas Distribution

infrastructure in a time bound manner,

meet the regulatory targets, develop

competitive skills to prepare for the

post-exclusivity scenario and source

long term gas at competitive rates

and terms. Availability of skilled

manpower and contractors is also a

challenge in view of the rapid growthexpected in CGD business all over

India. To address these, your Company

is focusing on enhancing the skill base

of its manpower and developing morevendors and contractors.

Your Company is also actively focusing

on efficient gas sourcing and supply

management, targeted gas pricing,

prudent fund management, and

effective operations management.

Health, Safety & Security EnvironmentYour Company adheres to high safety and environmental standards as it believes that outstanding business

performance requires outstanding HSSE performance. The Company has adopted best-in-class standards

and safety practices in the industry.

Your Company is accredited with OHSAS 18001:2007 for health and safety, ISO 14001 for Environmental and

ISO 9001:2008 for Quality Management System.

Future Outlook

Your Company is committed to grow the business and increase its customer base. In the next 5 years,

sales volumes are expected to be more than double. Over this period, your Company intends to increase

its customer base to over 11 lakh households covering a population of over 55 lakhs, operate over 350 CNG

stations, expand the steel pipeline network to around 600 KM and PE pipeline network to over 5500 KM.


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An investment of ` 2600 Crores would be made to expand this CGD infrastructure.

The Company has expansion plans to ensure greater security of supply which include commissioning of one

more CGS at Ambernath connecting with the DUPL network. The CGS at Ambernath would be catering to gas

demand of Kalyan, Dombivali, Ambernath, Badlapur, Ulhasnagar and Bhiwandi areas. Further, your Company

plans to set up RLNG connectivity at Wadala from the nearby available RLNG network. Besides providing

another source of supply to the Mumbai network, it will also cater to its future demand beyond the presentgas supply from CGS at Wadala.

Corporate Social Responsibility

I am happy to share that your Company continues to make meaningful social investments, primarily in the

areas of Health, Education and Environment.

Many initiatives were taken during the year such as distribution of saplings in the community, organization offree health and eye check-up camps for the welfare of auto rickshaw and taxi drivers across Mumbai, Thane

and Navi Mumbai.

Corporate Governance

Adoption of good governance practices has always been a high priority for your Company. Your Company goes

beyond adherence of statutory frameworks to bring transparency, accountability and equity in all facets of its

operations. The Company continuously endeavors to adopt innovative approaches for open and transparent

management. Your Company has been voluntarily following, to the extent possible, Clause 49 of the Listing

Agreement applicable to Listed Companies in respect of Corporate Governance. Your Company also continues

to conduct voluntary Secretarial Audit.

Acknowledgement

Before I conclude, I would like to take this opportunity to thank all the stakeholders including GAIL (India)Limited, the BG Group, the Government of Maharashtra, employees, bankers, suppliers, contractors, and

most importantly, our customers - all of whom have contributed to the success of your Company throughtheir continued confidence and co-operation.

On behalf of the Board of Directors and on my own behalf, I also express my sincere gratitude for the valuable

support received from the Ministry of Petroleum & Natural Gas, Petroleum & Natural Gas Regulatory

Board, Government of Maharashtra, Municipal Corporations of Greater Mumbai, Navi Mumbai, Thane,

Mira-Bhayander, Kalyan, Dombivli, other State and Central Government Authorities, Mumbai Metropolitan

Regional Development Authority, Maharashtra Industrial Development Corporation, and Police and Fire

Brigade Authorities.

I would also like to take this opportunity to express my gratitude to my colleagues on the Board for their

constant support.

I am confident that your Company will continue to deliver sustainable business growth and higher value

creation for all stakeholders.

Thank you very much ladies and gentlemen.

(B.C. Tripathi)

(This does not purport to be a record of the proceeding of the Annual General Meeting.)

30_down_chairman speech 06 08 12

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