The Directors have pleasure in submitting their Report together with
 the Audited Accounts of your Company for the year ended 31 December
 2011:
 
 The results for the year and for the previous year are summarised
 below:
 
                                         Year ended     Year ended
 in rupees million                       31 Dec. 2011   31 Dec. 2010
 
 Gross Sales                               11,681.64      10,361.08
 
 Operating Profit after 
 depreciation, impairment
 and interest, but before
 exceptional items                          1,748.50       1,295.70
 
 Exceptional items (net)                        -               -
 
 Profit before tax                          1,748.50       1,295.70
 
 Provision for current and deferred tax      (531.93)       (359.38)
 
 Profit after tax                           1,216.57         936.32
 
 Profit brought forward                     2,856.34       2,116.02
 
 Profit available for appropriation         4,072.91       3,052.34
 
 Appropriations
 Proposed Dividend @ 15 % 
 (Previous year
 @ 15 %) on 85,284,223 Equity 
 Shares of Rs. 10
 each, absorbing                              127.93         127.93
 
 Tax on Proposed Dividend                      20.75          21.25
 
 Transfer to General Reserve                   60.83          46.82
 
 Balance carried forward                    3,863.40       2,856.34
 
 Financial Performance
 
 Your Company managed to sustain the momentum of growth achieved in 2010
 and the turnover for the year ended 31 December 2011 at Rs.  11,681.64
 million recorded an increase of nearly 13% compared to the previous
 year.  Turnover from the gases business grew by nearly 17% driven
 mainly due to take over of three captive Air Separation Units from Tata
 Steel, higher billings in the tonnage business from commissioning of
 the VPSA plant for Owens Corning, higher volumes achieved in the bulk
 business on the back of ramp-up of 221 tpd merchant Air Separation Unit
 at Selaqui in North India and commissioning of the 418 tpd Air
 Separation Unit at Jajpur in the last quarter of 2011. Other drivers of
 growth for the Gases business were the higher volumes achieved by the
 healthcare and the packaged gases businesses, which were partly offset
 by lower sales of electronic gases.  Project Engineering business
 recorded third party billings to the tune of Rs.  3,069.31 million
 during the year under review. The third party billings of the Division
 during the year were mainly driven on the back of execution of several
 large air separation unit projects, nitrogen VPSA plants and hydrogen
 PSA plants.
 
 The Company achieved profit before interest and tax of Rs. 1,682.65
 million for the year ended 31 December 2011, recording a significant
 increase in profit of about 35 % over the previous year. This increase
 in profits is driven by strong growth in Gases and Project Engineering
 businesses during the year, coupled with operating and other cost
 efficiencies. Besides, sale of land in Joka, write back of old
 liabilities and cost provisions no longer required also boosted the
 profits for the year. The net profit for the year 2011 amounted to Rs.
 1,216.57 million recording a significant increase over the net profit
 of Rs. 936.32 million achieved in the previous year.
 
 Dividend
 
 Your directors are pleased to recommend a dividend of 15 % (Rs. 1.50
 per equity share of Rs. 10 each) for the year 2011 in respect of
 85,284,223 equity shares of Rs. 10 each in the Company. The Board has
 recommended this dividend after careful consideration of the matter
 with a view to balance the expectation of the shareholders and the need
 to conserve resources for financing the ongoing investment program
 towards setting up of new plants. The dividend together with dividend
 tax will result in a cash outlay of Rs.148.68 million. The Board has
 also recommended a transfer to General Reserve of Rs. 60.83 million
 (Previous Year Rs. 46.82 million) in compliance with the Companies
 (Transfer of Profits to Reserves) Rules, 1975.
 
 Industry Developments
 
 The gases business is capital intensive by nature as it requires large
 investments in setting up of air separation units. The supply chain in
 the gases business also requires significant investments in the form of
 distribution assets and storage networks to service bulk volumes at
 competitive prices as well as in cylinders to service relatively
 smaller volumes in packaged gases business, which includes special and
 electronic gases as well as gases in the healthcare business. The
 industry comprises of large captive users in steel, fertilizer and
 refinery sectors and a large number of merchant liquid customers
 primarily in metal, glass, automobile, petrochemicals and
 pharmaceutical sectors, besides customers for medical gases. New
 applications in segments like oil and gas, food freezing,
 refrigeration, fire suppression, solar photovoltaic, etc. continue to
 provide growth opportunities. This growth is being adequately supported
 by ''Build Own Operate'' (BOO) type of supply scheme opportunities from
 the users mainly in steel and refinery sectors, which are increasingly
 outsourcing their gases requirements.
 
 Business Segments
 
 Your Company''s business has two broad segments, viz. Gases and Related
 Products and Project Engineering in line with the operating model of
 its parent, Linde AG.
 
 Gases and Related Products
 
 The Gases and Related Products segment comprises of gases in bulk and
 packaged gases for industrial and healthcare segments and related
 products. Gases in bulk consist of liquid oxygen, nitrogen and argon
 and packaged gases consist of compressed industrial, medical,
 electronic and special gases.
 
 The strategy of the tonnage and bulk business is to build and sustain
 market leadership through aggressive but selective growth. BOC India
 leverages cutting edge technology of The Linde Group to differentiate
 itself with the support of a world class team through disciplined
 execution. The Packaged Gases business focuses on our competitiveness
 through process simplification/standardization and portfolio
 optimization with relentless focus on costs.
 
 The turnover of your Company''s Gases business for the year under review
 grew by 18% compared to the previous year on the back of consistent
 demand from most of the end user industry segments. This growth was
 largely driven by the tonnage business with almost all tonnage plants
 of the Company operating at full capacity. The primary end user
 segments in the base business along with their brown field expansions
 such as steel, glass, automobile, pharmaceutical, construction,
 fabrication, etc demonstrated sustained demand for gases. However, the
 greenfield investments especially in the automobile sector remained
 sluggish. Steel production by the steel majors was stable, driven by
 domestic and export demand inspite of rising cost of key inputs such as
 coal and iron ore. The commissioning of the VPSA plant for Owens
 Corning at Taloja during the first quarter and 418 tpd Air Separation
 Unit for Jindal Stainless at Jajpur during the last quarter boosted
 tonnage revenues during the year. Your Company has entered into a long
 term contract for supply of oxygen to J K Paper and would be setting up
 an onsite VPSA oxygen generator at the customer''s works in Rayagada.
 
 The Bulk business experienced a stretch in view of limited availability
 of product and your Company had to outsource gas from the market to
 cater to the merchant demand from customers, particularly during plant
 downtimes.  The north India merchant Air Separation Unit, which ramped
 up well during the year performed satisfactorily.
 
 The packaged gases business recorded revenue growth of about 9 %. The
 Argon/Argon based gas mixtures business grew significantly over the
 previous year, driven mainly by automobile, stainless steel and
 ancillary industry segments. The healthcare business maintained the
 momentum of growth with revenues recording a satisfactory growth over
 the previous year on the back of higher volumes in liquid medical
 oxygen. The medical engineering services witnessed a significant growth
 arising from new orders for pipelines at large private and public
 sector hospitals. The electronic gases business serving the solar
 photovoltaic industry witnessed a significant slowdown as compared to
 last year. The photovoltaic market slowdown is a global phenomena and
 the Company would continue to monitor the outlook of solar photovoltaic
 business closely.
 
 During the year under review, your Company completed acquisition of a
 merchant CO2 business. This business has added CO2 as a new product
 line and caters mainly to the beverage and engineering segments.
 
 Your Company has set up application technology based sales organization
 for the gases business, which shall pursue opportunities in steel
 reheating furnaces, heat treatment, profile & laser cutting along with
 inerting/ blanketing applications in myriad industry segments ranging
 from metals/ non metals, pharmaceuticals, glass, petrochemicals to
 refinery. Your Company has registered its first breakthrough by
 clinching an oxy fuel conversion deal in steel sector (REBOX
 Application Technology).
 
 Your Company''s tonnage plants and packaged gases plants continued to
 perform well during the year under review. The Company''s recently
 acquired 500 tpd ASU at Jamshedpur performed inconsistently and was
 under shutdown due to main air compressor motor failure. While the 1800
 tpd plant''s performance at Bellary showed improvement over the previous
 year, the plant operations were impacted briefly during the month of
 Oct.  2011 due to shortage of iron ore faced by the customer at
 Bellary. All these plants have since been operating satisfactorily. The
 north India merchant ASU showed significant improvement in terms of the
 plant loading.
 
 Your Company''s business in both its segments - Gases and Project
 Engineering is exposed to a variety of risks, which emanate from both
 internal and external sources. As a member of The Linde Group, the
 Company believes in taking entrepreneurial risks, which are reasonable
 and can be managed, so that it can exploit opportunities as they arise.
 As explained in the report on Corporate Governance, the Company has an
 adequate risk management system that takes care of identification,
 assessment and review of risks as well as their mitigation plans put in
 place by the risk owners. The risks dealt with by the Company during
 the year under review include risk of rising power cost, a key input in
 the gases industry, risk of plant outage, risk of continued
 inflationary trend in the economy adversely impacting margins, risk
 relating to retention of manpower, over dependence on certain key end
 user segment, slowdown in electronic gases, risk of major disruptions
 in the operations of a key customer, etc.  Besides, risk of increasing
 competition with on going pricing pressures in the merchant business
 needs to be dealt with a sharp focus on cost and ability to
 differentiate product and service offerings. Since the Project
 Engineering Division of your Company is engaged in execution of various
 in house and third party projects, it has an inherent risk of time and
 cost overruns due to various reasons. Your Board of Directors provides
 oversight of the risk management process in the Company and reviews the
 progress of the action plans for each of the identified key risk on a
 quarterly basis.
 
 The gases business involves transporting large volume of liquid
 products to long distances in transport tankers to customers spread
 across the country, which has its own challenges in terms of monitoring
 of timelines, transport safety, etc. In order to increase focus on this
 area, your Company had last year commissioned a national scheduling
 centre and fleet control room at Kolkata. The centre operates on 24X7
 basis and monitors approximately 450 tankers and cylinder delivery vans
 on real time basis using GPRS technology.  The centre supports the
 distribution, logistics and safety teams, which work tirelessly towards
 improving customer service, safe transportation and efficient
 distribution of the products by tankers and cylinder delivery vans.
 The fleet control room''s monitoring of driver behaviour for our entire
 fleet, speed, driving hours/rest hours, harsh braking, etc
 round-the-clock and generation of MIS for the management has yielded
 fantastic results in areas of customer service, safety and productivity
 of the distribution resources.  The team working at the National
 Scheduling Centre deals with nearly 600 customers for scheduling of
 their supplies and this planning and scheduling contributes to
 improvement in customer service and productivity of tankers.
 
 Project Engineering
 
 The Project Engineering segment comprises the business of designing,
 supply, installation and commissioning of tonnage Air Separation Units
 (ASU) of medium to large size, apart from projects relating to setting
 up of nitrogen plants, hydrogen Pressure Swing Adsorption (PSA) plants
 and gas distribution systems. The Project Engineering Division (PED)
 also manufactures cryogenic and non-cryogenic vessels for in-house use
 as well as for sale to third party customers.
 
 The PED achieved a spectacular performance during 2011 clocking in
 revenue of Rs. 3,069.31 million from third party projects. This
 performance surpassed previous year''s all time high revenue of Rs.
 3,031.08 million achieved by PED and is therefore, the highest ever
 turnover recorded by the Division so far.  The robust performance of
 PED was driven by execution of several projects relating to air
 separation units, nitrogen plants, Pressure Reducing Stations (PRS),
 cryogenic storage tanks and hydrogen PSA plants across refinery and
 steel industries both in public and private sector. In addition to the
 third party projects, the Division is also executing several in - house
 projects for the Gases business.
 
 During the year, the Division successfully commissioned your Company''s
 418 tonnes per day Air Separation Unit in the Kalinganagar Industrial
 Complex, Jajpur, in the State of Orissa. The plant presently supplies
 gases to Jindal Stainless Ltd., an onsite customer pursuant to a long
 term contract entered into by the Company and will also undertake gas
 supplies to Visa Steel in the Kalinganagar cluster in the near future.
 The ASU also produces liquid products for meeting merchant demand in
 local markets.
 
 The Division executed a number of third party projects and has
 commissioned several nitrogen plants during the year. Besides, the
 Division commissioned a large Compressed Air Station project at Bhilai
 Steel and is commissioning 2 x 750 tonnes per day ASU for IISCO,
 Burnpur. The Division is currently engaged in execution of several
 nitrogen plant projects, which are at different stages of execution
 including those for OPAL, Dahej and Brahamputra Cracker, Dibrugarh,
 BPCL Mumbai Refinery, etc.
 
 The Division is currently engaged in the execution of record number of
 projects, which are progressing satisfactorily. These includes 600 tpd
 ASU for Bhusan Power & Steel, Rengali, 420 tpd ASU for Neelachal Ispat,
 100 tpd ASU for Sesa Goa, 1000 tpd ASU for Bhusan Steel, Angul and two
 augmentation N2 plants for HPCL Mumbai and Vizag. The hydrogen PSA
 plant for HPCL Mittal Energy and Technip KT are ready for
 commissioning.
 
 Notwithstanding the significant increase in the third party revenues,
 the Division continues to provide sharp focus to execution of in-house
 projects for the Gases Division and is currently executing several
 large ASU projects. Execution of country''s largest ASU project of 2550
 tonnes per day at Jamshedpur for supply of gases to Tata Steel is
 nearing completion.  On completion, this will be the largest ASU in
 India and also the largest ASU of The Linde Group in South and East
 Asia. The Company''s prestigious supply scheme project of 2 x 853 tonnes
 per day ASUs located at Rourkela Steel Plant and merchant ASU project
 at Taloja having 450 tpd of merchant products are also in advanced
 stages of completion.
 
 In line with the Division''s commitment to make its business more
 competitive, your Company has taken several initiatives in the year
 under review. Such initiatives include indigenous manufacture of
 erstwhile imported components like large electrical heaters, radial
 absorber vessels, large size aluminum distillation columns, etc.
 Besides, the Division has also taken initiative to manufacture medium
 size ASU columns, hydrogen PSA skid at its Plant Manufacturing Works at
 Kolkata. The year 2011 has been remarkable for PED as it has been able
 to mark its footprint outside India by winning three large export
 orders namely, 64 tpd Oxygen Plant for Ceylon Oxygen Ltd, Colombo, 2000
 tpd Oxygen Plant for Linde Indonesia and 220 tpd Oxygen Plant for Abul
 Khair Steel Melting Ltd, Bangladesh . The progress of all these
 projects is satisfactory.
 
 The Division''s effective collaboration with Linde Engineering as their
 technology partner continues. This partnership has been successful in
 bidding and winning several prestigious projects and your Company
 expects further enhancement in the consortium activities in near
 future.
 
 During the year, the Division bagged orders valuing about Rs. 4,100
 million from third party projects and as on 31 December 2011, the total
 third party orders in hand were to the tune of approx. Rs. 6,400
 million.
 
 Finance
 
 Cash generation from operations increased from Rs. 1,585.95 million in
 2010 to Rs. 2,035.39 million during the year under review driven by
 higher operating profits and efficient working capital management.
 
 As informed in the earlier year, your company had finalised two inter
 corporate loans aggregating to Euro 122 million (INR Rs. 8,380.30
 million) through its parent company, Linde AG, meeting ECB (External
 Commercial Borrowing) guidelines. These borrowings had been made for
 financing of 2550 tpd ASU project of Tata Steel at Jamshedpur and 2X
 853 tpd ASU project of Steel Authority of India''s Rourkela Steel Plant.
 The Company has completed the draw down against the aforesaid loans in
 2011 and the funds have been fully utilized towards financing of the
 respective projects.
 
 Capital expenditure of Rs. 4,964.33 million during the year was mainly
 towards the setting up of ASUs for Tata Steel, Rourkela Steel Plant,
 Jindal Stainless, merchant ASU in Taloja and towards procurement of
 distribution resources.
 
 Prescribed Particulars
 
 The prescribed particulars required under Section 217 (1) (e) and 217
 (2A) of the Companies Act, 1956, read with the Rules made there under
 as amended up to date are given by way of Annexure to this Report.
 
 There were 8 employees who were employed throughout the year and were
 in receipt of remuneration aggregating to Rupees 6 million or more or
 were employed for part of the year and were in receipt of remuneration
 aggregating to Rupees 0.5 million per month or more during the year
 ended 31 December 2011. In accordance with the provisions of Section
 217 (2A) of the Companies Act, 1956 and the rules framed there under as
 amended, the names and other particulars of employees are set out in
 the annexure to the Directors'' Report. However, in terms of the
 provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the
 Directors'' Report is being sent to all the shareholders of the Company
 excluding the said information.  The aforesaid statement is available
 for inspection by shareholders at the Registered Office of the Company
 during business hours on working days up to the date of the ensuing
 AGM. Any shareholder interested in obtaining a copy of the said
 information may write to the Company Secretary at the Registered Office
 of the Company.
 
 Human Resources
 
 The Human Resources function ensures the organization''s cohesion on the
 basis of shared values and management principles. As a member of The
 Linde Group, your Company gets strong support from its parent in areas
 of recruitment, training and development, appraisal, compensation,
 talent retention, etc. Linde believes in thriving through diversity. In
 line with this core value of Linde, your Company has been consciously
 promoting diversity in its employee profile and their capabilities,
 which is a source of competitive advantage given the global footprint
 of The Linde Group.
 
 Individual career management is supported by a dynamic job mobility
 policy and to a great extent decentralized ensuring personal attention
 to employees. Multi skilling and job rotation measures have been
 strengthened to support organization growth and meet employee
 expectations. This aims at identifying and supporting high potentials
 with strong business skills, with the required capabilities and the
 drive to work in a diverse and multi cultural organization.
 
 One of the HR function''s priorities has been to ensure employee
 development and growth. This is the purpose of talent management
 programme, which is based on dedicated training, leading to career
 development and cross functional and cross country exposure. During the
 year, the existing induction program was strengthened for all new
 employees, who joined the organization at various levels. There has
 been various training intervention aimed towards building capability in
 the workforce and developing managerial and leadership skills. Some of
 the key interventions were trainings on Cryoster pumps and Cryogenic
 equipments, First Line Manager''s Programme, Second Line Manager''s
 Programme, Linde Pro, etc.  A robust Graduate Development Program was
 also launched this year.
 
 The organization''s compensation policy is in line with market and is
 based on principles of fairness and transparency. Compensation for work
 and performance is supported by various reward schemes which reflect a
 responsible vision of the organization''s long term working
 relationships with its employees. The philosophy of employee
 recognition among others is promoted through the Country Excellence
 Award, Project Awards, Spot Awards, Long Service and Special Long
 Service Awards. Your Company believes that keen engagement and overall
 well being of the employees contribute to higher motivation and
 productivity. Therefore several Initiatives such as Fun at Work, CSR
 activities and Health Awareness Programs for employees across locations
 were taken during the year.
 
 Your Company had manpower strength of 797 employees as on 31 December
 2011. Successful negotiation and signing of union agreements on wages
 and terms of employment in Jamshedpur, West Bengal, Bangalore and
 Ahmadabad has helped the Company achieve higher productivity. Your
 Company continues to enjoy harmonious industrial relations at all its
 plants and offices across the country.
 
 Safety, Health, Environment and Quality (SHEQ)
 
 In the Linde Group, effective and comprehensive management of SHEQ
 issues is of utmost importance, more so, to its customers and
 employees. Safety is one of the foundation principles upon which the
 Linde Spirit is built. As a member of the Linde Group, your Company
 aims to continuously improve the quality of its products and services,
 at the same time focusing on highest standards of safety, health and
 environmental protection. In its endeavour towards becoming a truly
 high performance organization, the management ensures that the SHEQ
 rules and procedures are clearly defined, understood, respected and
 complied with by employees, contractors, supervisors and managers
 alike. Linde''s Golden Rules of Safety have therefore been rolled out
 throughout the Company amongst all employees as well as contractors.
 
 Your Company has made good progress with its SHEQ agenda during the
 year under review with the Gases Division achieving a significant
 milestone of 365 days of major incident free operations on 10th
 November 2011. This achievement demonstrates management''s visible
 commitment to the SHEQ agenda.
 
 The Safety agenda covering transport safety, general safety, process
 safety and behavioural safety have all shown improvement over the
 previous year.  Your Company''s policy of complete transparency in SHEQ
 and reporting of all accidents and incidents has yielded good results
 in identifying corrective actions, where required. The Lessons from
 Incidents (LFIs) of all major Incidents are circulated to prevent
 repeat of similar incidents.
 
 As the gases business involves transportation of large volume of liquid
 products and cylinders to long distances, transport safety continued to
 remain an important focus area during the year. Your Company has risen
 to this challenge and the achievement of 365 days of major incident
 free operations in the gases business bears ample testimony to this
 commitment.  The Company has completed installation of VTS (vehicle
 tracking system) in 100 % of its bulk and cylinder fleet and the Fleet
 Control Room has made significant contribution to safer driving and
 lesser transport related incidents. The Company''s dedicated transport
 fleet travels long distances in a very challenging environment to
 deliver products to customers, thereby covering over 20 million kms in
 a year. The transport safety performance therefore merits a special
 word of appreciation.
 
 Your Company also promotes various measures to improve the health
 management of its employees and contractors. To this end, various
 training & awareness initiatives and mitigation actions are taken up on
 areas such as manual handling, noise management, etc.
 
 Protection of the environment is another important area of concern.
 Your Company fulfils this commitment by offering, safe and
 environmentally friendly products, setting up water recycling and rain
 harvesting facilities at many of its tonnage plant sites, monitoring
 waste generation, emission of green house gases, effluents, quality of
 air, etc at the plant sites.
 
 As the production of gases is energy intensive, one of the challenges
 at the air separation units is the lowering of energy consumption per
 unit of production. The annexure to this report deals with several
 initiatives and investment plans to conserve energy and thereby
 contribute to environment protection. Additionally efficient scheduling
 of deliveries to the customers and optimization of routes of the
 transport tankers as well as cylinder delivery vans contribute to
 reduction in fuel consumption and the resultant emission. Your Company
 also has access to Linde''s gases applications technology across almost
 all industry sectors, which can make the customers'' processes more
 environment friendly whether by substituting materials, improving the
 efficiency of the combustion processes or by reducing emissions and
 waste.
 
 Most of our key ASU sites have already been covered under ISO
 14001:2004 accreditation while the other sites are in the process of
 acquiring the certification.
 
 Security arrangements at the plant sites and offices have been reviewed
 to make them more effective and alert against all possible threats with
 a view to make our plants and work places safer.
 
 Outlook
 
 The year 2011 has been somewhat difficult for the Indian economy due to
 rising inflation, high interest rates, depreciating rupee and rising
 crude prices. Globally, the Eurozone debt crisis and geo political
 developments in the Middle East have been other causes of concern. The
 inflationary trends and the rising interest rates have made new
 investment less attractive and led to a general slowing down in the
 industry. As per advance estimates released by the Central Statistical
 Organisation, India''s GDP growth is likely to fall to a three year low
 of 6.9 % due to slowdown in manufacturing, agriculture and mining
 sectors in the fiscal year 2011-12. In this backdrop, the RBI''s
 decision to cut CRR by 50 basis points towards last week of January,
 2012 is seen as a precursor to interest rate cuts later this year.
 India''s macroeconomic fundamentals, continue to remain good and its
 domestic demand led model of economic growth is likely to sustain in
 the long term.
 
 The steel industry in India continues to remain in growth mode and the
 ongoing capacity additions by the steel majors is expected to raise the
 country''s existing installed capacity of about 75 million tonnes to
 about 100 million tonnes by 2013-14. The Government''s long term vision
 of significantly increasing steel making capacity by 2020 augurs well
 for the future growth of the gases industry.
 
 On the other hand, the growth in refining and petrochemicals sector in
 2011 has been particularly slow. It is however expected that the future
 expansion plans of the refineries in the public sector will lead to
 outsourcing of hydrogen, syngas and nitrogen from industrial gas
 companies. The oil and gas and refinery sector is therefore also
 expected to offer supply scheme opportunities which will sustain high
 momentum of demand for gases in the years ahead albeit in a fiercely
 competitive environment, where all the global gas majors are present.
 
 As a member of The Linde Group, BOC India is well poised to leverage
 the strengths of its parent, both in the gases and engineering segment
 to aggressively bid for large tonnage gas supply contracts apart from
 growing its bulk and packaged gases businesses and healthcare segment.
 
 Internal Control Systems and their adequacy
 
 Your Company has an adequate system of internal control commensurate
 with the size and the nature of its business, which ensures that
 transactions are recorded, authorised and reported correctly apart from
 safeguarding its assets against loss from wastage, unauthorised use and
 removal.
 
 The internal control system is supplemented by documented policies,
 guidelines and procedures. The Company''s Internal Audit Department
 continuously monitors the effectiveness of the internal controls with a
 view to provide to the Audit Committee and the Board of Directors an
 independent, objective and reasonable assurance of the adequacy of the
 organization''s internal controls and risk management procedures.  The
 Internal Audit function submits detailed reports periodically to the
 management and the Audit Committee. The Audit Committee reviews these
 reports with the executive management with a view to provide oversight
 of the internal control systems. The Company reviews its policies,
 guidelines and procedures of internal control on an ongoing basis in
 view of the ever changing business environment.
 
 Your Company''s statutory auditors have, in their report, confirmed the
 adequacy of the internal control procedures.
 
 Corporate Governance
 
 As a member of The Linde Group, your Company recognises the importance
 of good corporate governance. Your Company is therefore, committed to
 business integrity, high ethical values and professionalism in all its
 activities.  As an essential part of this commitment, the Board of
 Directors supports high standards in corporate governance. It is the
 endeavour of the Board and the executive management of your Company to
 ensure that their actions are always based on principles of responsible
 corporate management. In The Linde Group, corporate governance is seen
 as an ongoing process. Your Company''s Board will therefore closely
 follow future developments in the governance norms and will take lead
 in ensuring compliance with the same.  A separate report on Corporate
 Governance along with the certificate of the Auditors, BSR & Co.,
 confirming compliance of the conditions of corporate governance, as
 stipulated under Clause 49 of the Listing Agreement entered into with
 the Stock Exchanges is annexed.
 
 Responsibility Statement
 
 As required by Section 217 (2AA) of the Companies Act, 1956, the
 Directors state and confirm:
 
 That in preparation of the annual accounts for the year ended 31
 December 2011, applicable accounting standards had been followed along
 with proper explanations relating to material departures, if any.
 
 That they had selected such accounting policies and applied them
 consistently and made judgments and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company at the end of the aforesaid financial year and of the
 profit or loss of the Company for that period.
 
 That they had taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provisions of this
 Act for safeguarding the Assets of the Company and for preventing and
 detecting fraud and other irregularities.
 
 That they had prepared the aforesaid annual accounts on a going concern
 basis.
 
 Directors
 
 During the year, Mr Arun Balakrishnan was appointed as an additional
 non-executive independent director of the Company at its meeting held
 on 18 October 2011. Subsequently, at the Board meeting held on 9
 February 2012, Mr Aditya Narayan was appointed as an additional
 non-executive independent director of the Company. Both Mr Balakrishnan
 and Mr Narayan hold office as Additional Directors under Article 92 of
 the Articles of Association of the Company till the ensuing Annual
 General Meeting and it is proposed to appoint them as Directors of the
 Company at the said meeting.  Mr Jyotin Mehta, non-executive
 independent director of the Company retires by rotation at the ensuing
 Annual General Meeting and offers himself for re-election.
 
 Necessary resolution for appointment of Mr Arun Balakrishnan and Mr
 Aditya Narayan as Directors of the Company and for re-appointment of Mr
 Jyotin Mehta as a Director of the Company is included in the Notice of
 the ensuing Annual General Meeting. The Board recommends the said
 resolutions for your approval.
 
 At the meeting of the Board of Directors of the Company held on 9
 February 2012, your Board had to regretfully accept Mr Susim Mukul
 Datta''s resignation as a Director and Chairman of the Board of your
 Company with effect from the conclusion of that meeting. Mr Datta
 joined the Board of your Company in the year 1996 and soon took over as
 the Chairman of the Audit Committee in the year 1997. Mr Datta was
 later also inducted in the Remuneration Committee and
 Shareholders''/Investors'' Grievance Committee of the Board and was
 elected Chairman of the Board in the year 2007. During his tenure as a
 Director, including as Chairman of the Audit Committee and the Board,
 the Company''s Board as well its Audit, Remuneration and the
 Shareholders'' Grievance Committees have benefited immensely from his
 wise counsel and advice. Your Directors therefore, place on record
 their most sincere appreciation of the immense contribution made by Mr
 Datta to the deliberations of the Board as well as in upholding high
 standards of corporate governance.
 
 In view of the above, your Board unanimously elected Mr Sanjiv Lamba, a
 non-executive director of BOC India as the Chairman of the Board of
 Directors of the Company with effect from conclusion of the Board
 meeting held on 9 February 2012. Mr Lamba represents The Linde Group,
 the promoters of the Company and is a member of the Executive Board of
 Linde AG and is presently responsible for the Group''s operations in its
 Regional Business Units of Asia Pacific and Greater China.
 
 Cost Audit
 
 The Central Government''s directions vide their Order dated 10 August
 2000 pursuant to Section 233B of the Companies Act, 1956, requires
 audit of the cost accounting records of the Company relating to
 Industrial Gases, for every financial year. Messrs S. Gupta & Co., a
 firm of Cost Accountants in Kolkata conducted this audit for the
 Company''s financial year ended 31 December 2010.  As per The Companies
 (Cost Audit Report) Rules, 2011, the due date for forwarding this
 report to the Central Government was 30 June 2011 and the Cost Auditors
 filed their reports with the Central Government on 25 June 2011. The
 Cost Auditors'' appointment for the financial year 2011 was considered
 by the Board of Directors on the recommendation of the Audit Committee
 and necessary application for approval of the appointment of the cost
 auditor had been filed with the Central Government. The Company has
 subsequently received the approval of the Ministry of Corporate Affairs
 in the Central Government for appointment of M/s. S. Gupta & Co. as
 Cost Auditors for auditing the cost accounts relating to industrial
 gases for the financial year ended 31 December 2011. The Cost Auditors
 would take up their audit as soon as possible and would submit their
 report for the financial year ended 31 December 2011 within the due
 date.
 
 Auditors
 
 Messrs BSR & Co., Chartered Accountants, Auditors of the Company
 retires, and being eligible, offers them for re-appointment. The
 Company has obtained a written consent from Messrs BSR & Co. to the
 effect that their re-appointment if made, will be within the limits
 specified under Section 224 (1B) of the Companies Act, 1956.
 
 Disclaimer
 
 Certain statements in this report relating to Company''s objectives,
 projections, outlook, expectations, estimates, etc may be forward
 looking statements within the meaning of applicable laws and
 regulations. Although the Company believes that the expectations
 reflected in such forward looking statements are reasonable, no
 assurance can be given that such expectations will prove to have been
 correct. Accordingly, actual results or performance could differ
 materially from such expectations, projections, etc whether express or
 implied as a result of among other factors, changes in economic
 conditions affecting demand and supply, success of business and
 operating initiatives and restructuring objectives, change in
 regulatory environment, other government actions including taxation,
 natural phenomena such as floods and earthquakes, customer strategies,
 etc over which the Company does not have any direct control.
 
 On Behalf of the Board
 
 S Lamba       S Menon
 
 Chairman    Managing Director