The behalf of the Board of Directors of your Company, I am delighted to
 present the 28th Annual Report of your Navratna Company along with
 Audited Financial Statements for the Financial Year 2011-12.
 
 FINANCIAL HIGHLIGHTS
 
 Your Company has recorded sustained growth in all key financial
 parameters during the year 2011-12 and the important financial high
 lights are as under:-
 
                                                       (Rs. in crore)
 
 Particulars                                      2011-12    2010-11
 
 Income from operations (Net of ED)                40,281     32,459
 
 Other Income                                         549        519
 
 Cost of Sales (excluding Interest and             34,583     27,005 
 Depreciation and including extra ordinary items)
 
 Gross Margin                                       6,247      5,973
  
 Interest                                             116         83
 
 Depreciation                                         791        650
 
 Profit Before Tax                                  5,340      5,240
 
 Provision for Tax                                  1,686      1,679
 
 Profit after Tax                                   3,654      3,561 
 
 Appropriations
 
 Interim Dividend                                     381        254
 
 Proposed Final Dividend                              723        698
 
 Corporate Dividend Tax                               179        155
 
 Net Transfer to/(From) Bond                          (24)         8 
 
 Redemption Reserve
 
 Transfer to General Reserve                          365        356
 
 Net surplus after Appropriations                   2,030      2,090
 
 DIVIDEND
 
 Your Company has a consistent track-record of dividend payment. So far,
 your Company has disbursed dividend of Rs. 9,403 crore to the
 shareholders.
 
 The Board of Directors of your Company had earlier approved the payment
 of an interim dividend @30% on equity share of Rs. 10 each (Rs. 3/-per
 equity share) amounting to Rs. 381 crore which was paid in the month of
 January, 2012.  Further, the Board has recommended the payment of Final
 dividend @57% on equity share of Rs. 10 each (Rs. 5.70/- per equity share)
 for the year 2011-12.
 
 With this, the total dividend payment for the fiscal 2011-12 will be at
 87% on equity share of Rs. 10 each (Rs. 8.70/- per equity share) amounting
 to Rs. 1,104 crore on its paid-up equity capital of Rs. 1,268.48 crore. The
 total dividend payout including tax accounts for 35% of profit after
 tax.
 
 CONTRIBUTION TO EXCHEQUER
 
 Your Company has contributed over Rs. 5,560 crores to the exchequer by
 way of duties, taxes, etc as compared to Rs.4,440crores in 2010-11.
 
 CREDIT RATING
 
 Your Company has been reaffirmed the highest domestic credit rating of
 AAA1 from ICRA, CARE and CRISIL which indicate the highest credit
 quality and rated instruments carry the lowest credit risk. The
 international rating agency, Moody''s International, Hong Kong, has
 also reaffirmed the Corporate issuer rating of ''Baa2'', which is one
 notch higher than sovereign rating and revised the local currency
 issuer rating to''Baa2,from ''A31 to your Company in line with the
 publication of Moody''s Rating Implementation Guidelines titled ''How
 Sovereign Credit Quality May Affect Other Ratings Further, Fitch
 Ratings has also assigned a long term Foreign Currency Issuer default
 rating of ''BBB-1 with negative outlook which is equal to sovereign
 rating.
 
 BUSINESS STRATEGY
 
 Natural gas industry is poised to grow in future, which calls for an
 effective strategy to reap maximum out of such potential. To pave the
 way for future, your Company has developed strategy for the period
 2011-2020 and the same has been approved by the Board of Directors.
 Your Company aspires to become an integrated hydrocarbon major with
 significant upstream, midstream and downstream interests by 2020. To
 realize this ambition, your Company has identified several key growth
 areas and initiatives, in all segments of hydrocarbon value chain.
 
 In the Upstream segment, your Company plans for Merger & Acquisition
 (M&A) to acquire equity stakes in gas producing assets/ liquefaction
 facilities to source equity linked LNG at favorable terms for Indian
 market. In addition, convention along-term LNG sourcing will continue
 to remain the focus area for your Company, particularly in wake of
 constrained domestic supplies. In order to support increased LNG
 imports, your Company plans to set up new LNG terminal(s) and tie-up
 additional re-gasification capacities in existing and upcoming LNG
 terminals.
 
 Moving on to the Midstream segment, which has been the core area of
 your Company, several gas pipelines are being laid to maintain
 leadership in gas transmission. While ongoing pipeline projects such as
 Dhabol-Bengaluru, Kochi-Mangalore/ Bengaluru pipeline, etc. which are
 at different phases of execution, new projects like Jagdhishpur-Haldia
 pipeline and Surat-Pradip pipeline will further add to the strength of
 your Company''s core business of transmission. Your Company plans to
 give additional focus on strong market development efforts and
 strengthen marketing capability to remain the leading marketer of gas.
 Further, considering growing demand of natural gas and India''s energy
 security, your Company will continue to actively participate in
 transnational pipeline projects like TAPI. Your Company has also
 started international trading desk at Singapore and plans to establish
 it fully in the coming years. The trading desk shall explore multiple
 trading plays in LNG and petrochemicals in India and abroad to
 accelerate marketing revenues.
 
 Moving further on towards the natural gas retail segment, large Indian
 cities will be the focus for city gas business expansion. Your Company
 is strengthening its retail presence by setting up new city gas
 projects in Kota, Dewas, Meerut and Sonepat through its wholly-owned
 subsidiary, GAIL Gas Limited, which is also participating in PNGRB''s
 upcoming bidding rounds for other city gas projects. GAIL Gas is
 targeting additional40-50 cities/Geographical Areas (GAs) in the coming
 few years.
 
 In the Downstream segment, your Company aims to be amongst the top two
 petrochemicals marketers in the country and for this, your Company
 plans to set up new capacities and further increase marketing volumes
 through trading. Your Company is currently doubling existing capacity
 at Pata besides setting up two green field crackers, one in Assam
 through its subsidiary, Brahmaputra Cracker and Polymer Limited (BCPL)
 and another at Dahej through its Joint Venture Company, ONGC
 Petro-additions Limited (OPaL). By the year 2014-15, your Company Will
 have 1.7 MMTPA marketing volumes of polymers. For handling such a large
 product portfolio, your Company plans to strengthen its petrochemical
 trading capability as well as scale up its distribution network.
 
 Your Company plans to give significant thrust on Diversification in
 areas like gas based power and renewable energy. Gas based power
 projects at various locations are being explored and various business
 models are under consideration for setting up such projects. On
 renewable energy front, your Company plans to set up 500 MW wind power
 capacity in the next 3-4 years.  Further, your Company is targeting to
 set up over 300 MW of solar based power generation capacity in a phased
 manner.
 
 The above initiatives call for strengthening of human capital in tune
 with the Vision and Goals set-out. Therefore, your Company plans to
 grow capabilities in priority areas – global sourcing and
 acquisitions, market development and trading, joint venture/subsidiary
 management, capital productivity, E&P/shale, power generation, risk
 management, regulatory management, international operations and soon.
 
 BUSINESS SEGMENT ANALYSIS SEGMENTAL REVIEW
 
 During the year under review, the segment wise business performance of
 your Company is as under:
 
 - Natural Gas Marketing
 
 Natural gas continues to constitute the core business of your Company.
 During the year 2011-12, Gas sales clocked 84.17 MMSCMD compared to
 83.23 MMSCMD in the previous financial year. Major supplies of Natural
 gas include fuel to power plants, feedstock for gas based fertilizer
 plants and LPG extraction. Your Company holds around 50% market share
 in gas marketing in India.
 
 - Natural Gas Transmission
 
 Your Company owns and operates a network of about 9,500 km of natural
 gas high pressure trunk pipeline with a capacity of approx. 172 MMSCMD
 of natural gas across the country. Gas transmission during the year was
 117.62 MMSCMD compared to 117.91 MMSCMD in the previous financial year.
 Your Company''s share of gas transmission business is around 74% in the
 country.
 
 - LPG Transmission
 
 Your Company is the only Company in India which owns and operates
 exclusive pipelines for LPG transmission for third party usage. Your
 Company owns and operates two LPG Pipeline transmission systems with a
 total length of2,038 km. Out of this, 1,415 km of pipeline network
 transports LPG from Western to Northern part of India (Jamnagar-Loni
 Pipeline) and the balance 623 km of pipeline network transports LPG in
 the Southern part of the country (Vizag-Secunderabad Pipeline). The LPG
 transmission system has a capacity to transport upto 3.8 MMTPA of LPG.
 In the year 2011-12, the LPG transmission throughput achieved was about
 3.36 million MT.
 
 - Petrochemicals
 
 During FY2011-12, your Company has produced 441 TMT of polymers and
 sold 448TMTof polymers.
 
 - LPG & Other Liquid Hydrocarbon Production
 
 Your Company has 7 LPG plants in the country. In the year 2011-12,
 total Liquid Hydrocarbon production was about 1.44 million MT which
 mainly included 1.124 million MT of LPG, 0.146 million MT of Propane
 and 0.146 million MT of SBP solvent and Naphtha.
 
 - Exploration and Production (E&P)
 
 The E&P portfolio of your Company is as follows:
 
                                 India     Overseas   Total
 
 Onshore Blocks                    9          -         9
 
 Shallow Water Blocks              7          -         7
 
 Deep Water Blocks                13          2        15
 
 Total                            29          2        31
 
 Hydrocarbon discoveries are in place in 7 E&P blocks (5 domestic blocks
 and 2 overseas blocks).
 
 Crude oil production is in progress from one of the on land blocks in
 Cambay basin and during the year 2011-12, revenue of Rs. 81.19 Crore was
 generated.
 
 Development activities are in progress in the blocks A-1 and A-3,
 Myanmar Offshore and production of gas is expected to start from 2013.
 
 Declaration of commerciality has been approved in the Mahanadi Offshore
 block (MN-OSN-2000/2). In other blocks with hydrocarbon discovery
 (Cambay Onland-Ankleshwar, Cauvery Offshore and Tripura On
 land),appraisal activities are under progress.
 
 During the year, one CBM block (TR-CBM-2005/III- Tatapani Ramkola,
 Chattisgarh) was relinquished as the gas content within the coalseams
 Was found to be non-commercial.
 
 Your Company has operatorship in 3 domestic E&P blocks. During the year
 2011-12, 3 exploratory wells were drilled in Rajasthan onland block
 (RJ- ONN-2004/1) where your Company is the Operator. Seismic data
 acquisition is in progress in Cauvery onland block (CY-ONN-2005/1),
 which is the second block where your Company is the Operator. One
 Cambay onland block (CB-ONN-2010/11) has been awarded, where your
 Company is the Operator, during NELP-IXbidding round.
 
 BUSINESS DEVELOPMENT
 
 - Overseas Business Initiatives
 
 Your Company is actively pursuing overseas business opportunities in
 the natural gas sector with an objective to contribute to the energy
 security of the country. The rationale for going overseas is to secure
 opportunities for from overseas tie-ups in newer areas such as shale
 gas in addition to establish foothold in resource rich countries and to
 strengthen and complement your Company''s core business.
 
 Your Company is scouting for upstream acquisition opportunities
 overseas in order to supplement gas sourcing initiatives on spot and
 long term basis. Upstream assets acquisition would provide sourcing
 opportunities besides additional revenue stream and potential upsides
 through new discoveries. The geographies under focus are North America,
 Africa, South-East Asia and Australia.
 
                         Overseas Presence 
 
             Egypt                             Singapore
 
 -Equity stake in two gas retail  - 100% subsidiary, GAIL Global 
 Companies                         (Singapore) Pte Ltd. (GGSPL)
                                    opened office in Singapore for 
 
 -GAIL Representative Office in   - trading LNG, petrochemicals etc.  
 Cairo
 
             China                             USA
 
 -Strategic partner in China Gas  - Equity in Eagle Ford Shale Acreage 
                                    through wholly-owned
 
 -50:50JV with China Gas            Subsidiary- GAIL Global (USA) Inc.
 
             Myanmar
 
 -Partner in A1, A3 E&P Blocks
 
 -Participation in Myanmar China
 Pipeline through South-East Asia
 Gas Pipeline Company Limited
 
 Your Company has established a wholly-owned subsidiary, GAIL Global
 (USA) Inc. in USA during 2011. This subsidiary acquired 20% stake in
 Eagle Ford Shale acreage of Carrizo Oil & Gas Inc., which has
 significant liquid content and is currently one of the attractive
 unconventional resource plays in North America. The subsidiary is
 operational with placement of manpower from your Company. Going forward
 this subsidiary would explore other business opportunities in North
 America.
 
 Further, your Company has signed a 20-year Sales and Purchase Agreement
 (SPA) with Sabine Pass Liquefaction LLC, a unit of Cheniere Energy
 Partners, for supply of 3.5 million tonnes/year of LNG. Your Company is
 the first Asian company to execute the dealindexed to Henry Hub gas
 price instead of the crude oilindices. Supplies are expected to
 commence from 2016-17.
 
 During FY 2011-12, your Company''s wholly-owned subsidiary, GAIL
 Global(Singapore) Pte. Ltd. (GGSPL) opened its office in Singapore with
 an objective to undertake trading activities in LNG and petrochemical
 commodities.
 
 Under the aegis of Government of India, your Company is actively
 pursuing import of gas through the proposed trans-national pipeline
 originating in Turkmenistan and passing through Afghanistan and
 Pakistan to India (TAPI pipeline). Your Company has executed the Gas
 Sales Purchase Agreement (GSPA) with Turkmengaz for 38 MMSCMD for 30
 year supply in May, 2012 at Ashgabat. Consequently, other agreements
 and arrangements are likely to be concluded soon. Your Company is
 playing lead role in the discussions on the project.
 
 During FY 2011-12, your Company divested its entire stake in Shell CNG
 Egypt (SCNGE) as it did not meet the strategic objectives.
 
 - Domestic Business initiatives
 
 The domestic business initiatives of your Company are as follows:
 
 - Natural Gas Pipeline Projects
 
 During the financial year, your Company completed commissioning of
 various pipeline networks and auxiliary systems having a length of
 about 1,337 km which include the following:
 
 1.  Commissioning of Compressors at Jhabua & Vijaipur
 
 2.  Dahej-Vijaipur Pipeline
 
 3.  Karanpur-Moradabad-Kashipur Pipeline and Connectivity to Siti
 Energy & Sarvanthi Energy
 
 4.  Agra-Ferozabad Expansion
 
 5.  Connectivity to Meerut
 
 Further, Bawana - NangalPipeline was charged with gas and the pipeline
 network Dahej - Vijaipur - Dadri- Bawana - Nangal/ Bhatinda was
 dedicated to the nation by Hon''ble Prime Minister of India during in
 auguralceremony of Asia Gas Partnership Summit held on 23rd March,2012.
 
 Due to increase in gas availability and commissioning of trunk lines,
 last mile consumer connectivity has been provided to 32 number of
 consumers in FY2011-12 for supplying approx 6.35 MMSCMD gas.
 
 During 2011-12, your Company was awarded authorization by PNGRB through
 a competitive bidding process to lay 1,500 km natural gas pipeline from
 Surat in Gujarat to Paradip in Orissa, connecting west to east coast.
 
 - Petrochemicals
 
 In order to have a robust presence in the Petrochemical sector, your
 Company is doubling the capacity of its existing Petrochemical
 manufacturing facilities at Pata to produce 9,00,000TPAof polymers.
 
 Your Company is setting upa green-field 2,80,000TPA Petrochemical
 Complex at Lepetkata in District Dibrugarh, Assam, through its
 Subsidiary ,Brahmaputra Cracker and Polymer Limited (BCPL).
 
 Further, your Company is also a co-promoter in ONGC Petro- additions
 Limited (OPaL) which is implementing a green field petrochemical
 complex of 1.4 MMTPA polymer capacity (dual feed cracker) in the
 Special Economic Zone(SEZ) at Dahej, Gujarat.
 
 - Power Sector
 
 Recognizing the potential reforms undertaken in the power sector and
 increased emphasis laid on capacity expansion in the power sector in
 the XIIth 5year plan, your Company is exploring opportunities in gas
 based power plants.
 
 - LNG Rega sification Terminals
 
 The increasing pace of demand for natural gas far outstrips its
 availability from indigenous sources. LNG imports will have to keep
 pace to meet the growing demand and bridge the gap in supply.
 Currently LNG import terminals are located on the Western coast of the
 country.  Keeping in view the demand potential for natural gas
 applications in the Eastern belt of the country and for feeding
 proposed pipelines in the region, your Company is exploring setting- up
 of a LNG import facility along the East Coast of India.
 
 - Renewable Energy
 
 At the beginning of the year, your Company had an installed capacity of
 4.5 MW wind energy at Sinoi, District Bhuj, Gujarat. The power
 generated was being wheeled for captive use by its installation in
 Samakhiali, Kandla and Gandhar in the state of Gujarat. During this
 year, it has set up another 14.7 MW wind energy projects in Gujarat for
 captive usage and 98.75 MW wind energy projects in the states of
 TamilNadu and Karnataka for commercial sale of power.
 
 Further, in the year 2011-12, your Company entered into solar power
 generation by winning the bid to setup a 5 MW Solar plant in Rajasthan
 under Jawaharlal Nehru National Solar Mission (JNNSM).
 
 IT ADVANCEMENTS
 
 For better serving the customer requirements and to bring about
 Operational efficiency, your Company has always been at the forefront
 Of adopting newer IT solutions.
 
 Your Company has taken several new IT initiatives to enhance
 productivity. SAP based Gas Management System (GMS), Governance, Risk &
 Compliance (GRC) and Reverse Auction modules have been implemented to
 enhance transparency, efficiency and customer satisfaction. Reverse
 Auction facilitates your Company to generate greater competition and
 reduce procurement cost.
 
 Your Company has implemented an online bidding portal through which
 existing customers can bid for supply of Spot RLNG gas. The system
 dynamically captures the market spot prices against the bids and has
 also reduced the overall cycle time of selling the spot gas. Further,
 your Company has implemented Tender Monitoring System to enhance &
 bring better transparency in the procurement process.
 
 Your Company has also consolidated its IT infrastructure to a central
 virtualized environment along with its Disaster Recovery (DR) setup in
 line with the latest technological advancements in the industry. This
 will provide better manageability of the infrastructure.
 
 Your Company has implemented electronic Document Management System and
 is rolling out the same all across company. All the important
 information and records of your Company shall be digitized.
 
 IT Security is a major thrust area of IT strategy and planning in the
 organization. Post SAP upgrade, an external expert agency is auditing
 entire IT systems and processes to strengthen Information Security,
 identify the risk areas and mitigate them with latest Industry standard
 security solutions.
 
 The Business Information Systems department of your Company is
 certified with ISO 9001:2008 standard.
 
 SUBSIDIARIES &JOINT VENTURES
 
 Your Company has formed Subsidiaries and Joint Venture companies for
 Power Generation, Gas Trading, Shale Gas, LNG, City Gas Distribution
 and Petrochemicals. Your Company is one of the pioneers to introduce
 City Gas Projects in India for natural gas supplies to households,
 commercial and transport sector through its subsidiaries and joint
 venture companies.
 
 The details of Subsidiary and Joint Venture Companies are mentioned
 hereunder:
 
 NATURAL GAS, LNG & POWER
 
 - GAIL Global (Singapore) Pte Limited (Wholly owned Subsidiary)
 
 GAIL Global(Singapore) Pte Ltd.  is as an overseas investment arm of
 the Company. Your Company is looking for LNG trading and Petrochemical
 trading through this wholly owned subsidiary company in Singapore.
 
 Total revenue of the Company for FY 2011-12 was USD 2,290,763 and
 Profit After Tax was USD 2,033,075.
 
 - GAIL Global (USA) Inc (Wholly owned Subsidiary)
 
 GAIL Global(USA) Inc., a wholly owned subsidiary of your Company was
 formed during the year 2011-12 to acquire 20% working interest in an
 unincorporated joint venture with Carrizo Oil & Gas Inc. in the Eagle
 Ford shale acreage in the state of Tex as. The subsidiary is
 operational At Houston and going forward, would explore other business
 opportunities in North America.
 
 Total revenue of the Company for the year ended 31st December, 2011 was
 USD 2.36 Mn and ProfitAfterTaxwasUSD0.26Mn.
 
 - GAIL China Gas Global Energy Holdings Limited
 
 The joint venture company was formed with an objective to pursue gas
 sector opportunities, mainly in China. Potential gas sector projects
 are being identified for implementation by the company. Your Company
 has 50% equity interest in the company along with China Gas Holdings
 Limited as equal partner.
 
 - Petronet LNG Limited (PLL)
 
 PLL, formed for setting up of LNG import and re-gasification
 facilities, currently owns and operates LNG re-gasification terminal of
 10 MMTPA capacity located at Dahej, Gujarat. PLL has a long term LNG
 supply contract with Ras Gas, Qatar for import of 7.5 MMTPA of LNG.
 Further, PLL is constructing a LNG re- gasification terminal at Kochi,
 Kerala with a capacity of 5 MMTPA and is scheduled for commissioning in
 fourth quarter of 2012. PLL has entered into long term LNG supply
 contract with Exxon Mobil for the supply of 1.5 MMTPA of LNG for the
 Kochi terminal, PLL. Your Company has 12.5% equity stake in PLL along
 with BPCL,ONGC and lOCL as equal partners.
 
 Total revenue of the Company for FY 2011-12 was Rs. 22,780.74 Cr. and
 Profit After Tax was Rs. 1057.54 Cr.
 
 - Ratnagiri Gas and Power Private Limited (RGPPL)
 
 The capacity of the Ratnagiri Gas & Power Station is 1,967.08 MW which
 is the largest gas based power generation facility in the country and
 during the year 2011-12, the Company produced 11619 MUs (Gross) of
 power. RGPPL is in the process of commissioning LNG Terminal of 5 MMTPA
 capacity. Your Company has 31.52% stake in the Company along with NTPC
 as equal partner. RGPPL is a joint venture company between your
 Company, NTPC and other shareholders are MSEB Holding Co. Ltd. and
 Indian Financial Institutions.
 
 Total revenue of the Company for FY 2011-12 was Rs. 5223.83 Cr and Profit
 After Tax was Rs.  1089.24 Cr.
 
 CITYGAS DISTRIBUTION
 
 - GAIL Gas Limited (Wholly owned subsidiary)
 
 GAIL Gas was incorporated with an objective of focused implementation
 of City Gas Distribution (CGD) projects in the Country.  GAIL Gas has
 already laid 215.15 Km steel pipeline and 370.05 Km MDPE pipeline in
 these cities. GAIL Gas is operating 1 CNG station each at Dewas, Kota,
 Meerut and Sonepat. It has also established CNG stations at Panvel,
 Vijaipur and three stations at Vadodara. It is supplying natural gas to
 67 industrial units in Kota, Dewas, Sonepat and Meerut. It has also
 commenced gas supplies to 1,891 domestic customers progressively. To
 encourage the conversion of vehicles on CNG and make CNG refueling
 available at highways, GAIL Gas has commissioned 2 CNG stations and 3
 stations are scheduled to be commissioned in 2012-13. Effective from
 16.11.2011, your Company transferred the entire distribution network
 and business in the Agra-Firozabad area to GAIL Gas Ltd.  Accordingly,
 GAIL Gas is now handling 347 customers in the region for daily sales
 amounting to more than 1.3 MMSCMD.
 
 Total revenue of the Company for FY 2011-12 was Rs. 289.01 Cr. and Profit
 After Tax was Rs. 8.34 Cr.
 
 - Aavantika Gas Limited (AGL)
 
 AGL was incorporated with an objective of implementation of City Gas
 Distribution (CGD) projects in the state of Madhya Pradesh. As on date,
 AGL is present in three cities viz. Indore, Ujjain and Gwalior. AGL now
 operates 11 CNG stations-7 daughter stations (5 at Indore and 2 at
 Ujjain), 3 online stations (2 at Indore and 1 at Gwalior) and I Mother
 station at Indore.
 
 AGL also started supplying PNG to Domestic customers from December
 2011. With this, AGL is now present in all the 4 business segments viz.
 CNG for Transportation sector and PNG for industrial, Commercial and
 Domestic sectors. Your Company has 22.5% stake in the Company along
 with HPCL as equal partner.
 
 Total revenue of the Company for FY 2011-12 was Rs. 50.47 Cr and loss was
 Rs.  0.19 Cr.
 
 - Bhagyanagar Gas Limited (BGL)
 
 BGL was incorporated with an objective of implementation of City Gas
 Distribution (CGD) Prpkect of the state of Andhra Pradesh. BGL is
 currently operating 13 CNG stations in Hyderabad, 8 in Vijayawada, 2 at
 Kakinada and 1 at Rajahmundry. Further, Project work in respect of
 three CGD Projects, namely Hyderabad, Vijayawada and Kakinada are in
 progress. During FY 2011-12, it completed 2,872 PNG registrations in
 Hyderabad, 150 registrations in Vijayawada and 1,014 registrations in
 Kakinada. Your Company has 22.5% stake in the Company along with HPCL
 as equal partner.
 
 Total revenue of the Company for FY 2011-12 was Rs. 42.02 Cr and loss was
 Rs. 0.88Cr.
 
 - Central U.P. Gas Limited (CUGL)
 
 CUGL was incorporated with an objective of implementation of City Gas
 Distribution (CGD) projects in the state of Uttar Pradesh. CUGL is
 presently operating one Mother CNG station each at Kanpur & Bareilly
 and 10 more online stations in Kanpur.  Presently, CUGL is supplying
 CNG to 20,000 CNG vehicles in Kanpur and 5,000 CNG vehicles in
 Bareilly. As on date, CUGL is supplying PNG to 24 industrial, 26
 Commercial and 8 customers using PNG for power generation through gas
 generator.  Presently, CUGL is supplying 0.175 MMSCMD of gas in form of
 CNG and PNG in both the cities. Your company has 25% stake in the
 Company along with BPCL as equal partner.
 
 Total revenue of the Company for FY 2011-12 was Rs. 115.02 Cr. and Profit
 After Tax was Rs. 21.11 Cr.
 
 - Green Gas Limited (GGL)
 
 GGL was incorporated with an objective of implementation of City Gas
 Distribution (CGD) GGL projects in the state of U.P. GGL is currently
 operating 7 CNG stations in Lucknow and 4 CNG stations in Agra. GGL is
 supplying CNG to almost 18,000 vehicles. GGL has also commenced the
 domestic gas supply in both Lucknow and Agra city and industrial gas
 supply in Lucknow. MoPNG has authorized GGL for CGD in Lucknow & Agra.
 Your Company has 22.5% stake in the Company along with IOCL As equal
 partner.
 
 Total revenue of the Company for FY 2011-12 was Rs. 101.48 Cr. and Profit
 After Tax was Rs. 23.17 Cr
 
 - Indraprastha Gas Limited (IGL)
 
 IGL was incorporated with an objective of implementation of City Gas
 Distribution (CGD) projects in Delhi and adjoining cities of Noida,
 Greater Noida, Ghaziabad, Gurgaon and Faridabad. IGL is supplying piped
 gas to over 3.32 lac domestic consumers, 223 industrial and 639
 commercial consumers in Delhi, Noida, Greater Noida and Ghaziabad. A
 total of 308 CNG stations have been set up by IGL in the region out of
 which 245 CNG stations are currently in operation. IGL is catering to
 CNG requirements of over 5 lac vehicles operating in the region which
 also includes the entire public transport of national capital and also
 world''s largest bus fleet on CNG. Your Company has 22.5% stake in the
 Company along with BPCL as equal partner.
 
 Total revenue of the Company for FY 2011-12 was Rs. 2,525.34 Cr. and
 Profit After Tax was Rs. 306.43 Cr.
 
 - Mahanagar Gas Limited (MGL)
 
 MGL was incorporated with an objective of implementation of City Gas
 Distribution (CGD) projects in the city of Mumbai and adjoining areas.
 MGL has presently set up 151 CNG stations catering to about 2.4 lac
 vehicles spread over Mumbai, Thane, Mira- Bhayander and Navi-Mumbai
 area besides supplying PNG to about 5.6 lac domestic customers and
 about 1,540 small industrial & commercial consumers. Accepting the
 Central Government authorization, the PNGRB has granted authorization
 and exclusivity for the existing areas of Mumbai, Thane, Navi Mumbai
 and Mira-Bhayander and expansion areas of Kalyan, Dombivali, Ambernath,
 Badlapur, Ulhasnagar, Bhiwandi, Taloja, Kharghar and Panvel. Your
 Company has 49.75% stake in the Company along with British Gas as Equal
 partner.
 
 Total revenue of the Company for FY 2011-12 was Rs.1,328 Cr. and Profit
 After Tax was Rs. 308.58 Cr.
 
 - Maharashtra Natural Gas Limited (MNGL)
 
 MNGL was formed for implementation of City Gas Projects in and around
 Pune MNGL city.
 
 MNGL has received authorization from MoPNG for CGD in Pune including
 Pimpri, Chinchwad,Talegaon, Hinjewadi & Chakan areas. At the close of
 the FY 2011-12, MNGL is supplying CNG to more than 27.000 vehicles
 which is comprising of 21.000 autos, 370 buses, 4,800 private cars and
 950 taxis which are plying in Pune and Pimpri - Chinchwad. CNG is being
 sold through 17 CNG stations spread across the city. MNGL is also
 supplying PNG (Piped Natural Gas) to around 2,400 domestic, 20
 industrial and 5 Commercial customers.  Your Company has 22.5% stake in
 the Company along with BPCL as equal partner. Government of Maharashtra
 (provisional), IDFC (PE), IL&FS and Axis Bank are other Equity partners
 in MNGL.
 
 Total revenue of the Company for FY 2011-12 was Rs. 76.89 Cr. and Profit
 After Tax was Rs. 12.23 Cr.
 
 Tripura Natural Gas Company Limited (TNGCL)
 
 TNGCL was incorporated with an objective of implementation of City Gas
 Distribution (CGD) Projects in Agartala. Presently, there are about
 10,000 Domestic, 205 Commercial and 8 Industrial Consumers and 2 CNG
 Stations (one Mother Station &one Daughter Booster Station). Your
 Company has 29% stake in the Company.
 
 Total revenue of the Company for FY 2011-12 was Rs. 24.90 Cr. and Profit
 After Tax was Rs. 3.50 Cr.
 
 PETROCHEMICALS
 
 - Brahmaputra Cracker and Polymer Limited (BCPL) (Subsidiary)
 
 BCPL is setting up a 2,80,000TPA polymer plant and project execution is
 in progress. Your Company has 70% equity share in BCPL with OIL, NRL
 and Government of Assam each having 10% equity share. The total revised
 project cost as approved by CCEA in November 2011 is Rs. 8,920 Crores.
 Gas Supply agreements with Oil India Limited and ONGC and the term
 sheet agreement for Naphtha with NRL is in place, thereby making the
 feedstock secured for the plant. Entire land for the project has been
 acquired by BCPL. Civil and structural works for all the process units
 is at the final stage of completion. Mechanical& Piping works is going
 on full swing. The mechanical completion of the project is scheduled on
 July 2013 and commissioning on December 2013.
 
 ONGC Petro-additions Limited (OPaL)
 
 OPal is implementing a green field petro chemical complex of Dahej in
 the State of Gujarat.  Your Company is a co-promoter with 17% equity
 stake in ONGC Petro-additions Limited (OPaL). Oil and Natural Gas
 Corporation (ONGC) and Gujarat State Petroleum Corporation Limited
 (GSPC) are the other promoters of the company.
 
 HEALTH, SAFETY & ENVIRONMENT
 
 Your Company is a responsible Corporate Citizen and Health, Safety &
 Environment (HSE) excellence has been extensively promoted as a
 corporate culture within the organization. The safety and health of
 employees and external stakeholders are embedded in the core
 organizational values of the Company.
 
 Corporate Health, Safety & Environment (HSE) Policy
 
 Your Company is committed to promote globally comparable levels of
 Health, Safety, Environment Management System in the areas of its
 business of exploration and production of Hydrocarbons, transmission
 and distribution of Natural Gas, production of Petrochemicals and LHCs,
 transmission of LPG, and generation of Power etc.  with a focus on
 improving harmony with environment through Sustainable Development.
 
 Safety Performance
 
 Your Company has always strived to maintain highest standards of safety
 and this is reflected in the HSE index which evaluates the safety
 performance of the organization on various elements of Health, Safety
 and Environment covering all business activities.
 
 Year                     HSE Index
 
              MoU Target (%)       Achieved (%)
 
 2010-11            97.5             98.92
 
 2011-12            98.0             99.05 
 
 Safety Training
 
 Your Company has always endeavored to keep its employees fully aware of
 the HSE aspects and to meet this objective, regular training to
 employees, contract workers, etc. is provided through internal as well
 as external resources.
 
 Your Company organized a two day HSE workshop for all business heads,
 fire & safety heads and HR representatives from sites. Theme of this
 year''s workshop was Occupational Health in view of the ever rising
 risks to health while on the job and to create awareness amongst the
 employees regarding methods & measures to mitigate these risks.
 
 Safety Audits
 
 To ensure compliance to statutory rules and regulations, implementation
 of safe work practices, and continual improvement in Safety Management
 System, your Company installations are being regularly audited through
 External Safety Auditors and experienced in-house auditors. During the
 year 2011-12, 27 External Safety Audits and 07 audits by experienced
 in- house auditors were undertaken.
 
 Occupational Health
 
 Your Company has a Corporate Occupational Health Committee supported by
 06 local level Occupational Health Committees which meet every quarter
 for continuous monitoring and improvement of the occupational health of
 the employees. During the year 2011-12, all employees at the work
 centers were medically examined.
 
 SUSTAINABILITY-CONTRIBUTION TO TRIPLE BOTTOM LINE
 
 Creating value beyond business forms the ethos of work at your Company.
 Besides wealth and value creation in financial and economic terms, your
 Company has always strived for providing value beyond business by
 taking care of the environment and society.
 
 Your Company has taken steps to improve the governance structure of
 Sustainability. The Board of Directors has formed a Sustainable
 Development Sub-Committee to formulate, monitor and approve the
 sustainable development plans and implementation. In addition to this,
 a senior level steering committee has been formed for planning and
 monitoring the project implementation.
 
 Your Company is progressively creating a port folio of renewable
 businesses (solar, wind, etc.) in order to grow the share of cleaner
 energy in the overall energy mix. Besides, your Company is taking up
 several other initiatives to promote sustainable development such as
 Global Methane Initiative, Green House Gas Accounting Report to
 Measure, Manage & Mitigate GHG emissions, construction of future
 buildings as green buildings, and so on.
 
 Your Company is taking measures for improving efficiency of Operational
 processes to make them more environment friendly. This not only ensures
 enhanced energy efficiency but also has a positive impact on climate
 change and stimulates innovation across operations to enable better and
 sustainable performance.
 
 Bombay Stock Exchange has recently launched the first environment
 friendly equity index named GREENEX. Your Company is the only company
 from Oil and Gas Sector to be listed in BSE- GREENEX. This is a major
 milestone in its sustainability journey.
 
 Your Company has also come up with its first Sustainability Report with
 the theme - ''Value Beyond Business The report is based on the GRI G3
 Guidelines for the financial year 2010-11 to efficiently disseminate
 information on various measures taken by the company on social,
 economic and environmental fronts.
 
 The Report highlights your Company''s business philosophy to grow in a
 way which is sustainable for the economy, the stakeholders, the
 community and the environment. Your Company has tried to address key
 issues which are of imperative concern for its business and
 stakeholders.
 
 Your Company looks upon this effort as an essential aspect for
 enhancing its corporate governance structure and transparency, a way to
 analyze and improve its business processes and operations and an
 efficient communicative tool with its stakeholders
 
 The complete details about the sustainability performance of your
 Company are available in the Sustainability Report available at website
 of your Company under the section on Sustainable Development.
 
 CONTRIBUTINGTO SOCIAL PROGRESS
 
 Corporate Social Responsibility(CSR) is an integral part of your
 Company''s ethos and culture. Your Company has a dedicated team,
 operating within the framework of a well-structured CSR Policy which
 mandates contribution of 2 % of your Company''s Profit after Tax to
 CSR activities.
 
 Following the ''Project Based Approach'' as put- forth by the DPE and
 as detailed in your Company''s CSR policy, your Company has
 implemented CSR Programmes primarily in and around the rural are as
 adjoining major GAIL work centres/installations. These programmes are
 taken up under the seven thrust areas identified by your Company -
 Education /Literacy Enhancement, SkillDevelopment/ Empowerment,
 Community Development, Drinking Water/Sanitation, Environment
 Protection/ Horticulture, Infrastructure and Healthcare/ Medical
 facility. Major initiatives undertaken by your Company under these
 thrust areas are detailed in Management Discussion & Analysis.
 
 VALUING HUMAN RESOURCES
 
 Your Company takes pride in its highly effecient and engaged workforce
 which falls in Best Employer/ High Performance Range according to the
 survey undertaken by M/s Aon Hewitt Pvt Ltd on Employee Engagement. A
 highly committed and motivated young work force at your Company, have
 also been the reason behind continuous rise in value added per employee
 during the lasts years. Value added per employee gives an account of
 efforts of company''s employees to make the best and most productive
 use of the resources available to them.
 
 - Training
 
 To fulfill the objective of Capability Development of organization''s
 human resource, your Company has been offering various training
 programs related to the gas value chain for professional development of
 executives working in the Oil & Gas sector from its training centers
 ''GAIL Training Institute''(GTI) at Noida and Jaipur. To achieve your
 Company''s vision, GTI is designing programs to sharpen knowledge,
 improve skills, align attitude and promote efficient use of latest
 technology.
 
 During the year, GTI organized 177 training programs through which it
 imparted 14,079 mandays training to your Company''s employees. Apart
 from in-house training programs, the employees are also nominated for
 attending external training programmes on contemporary subjects. This
 year, GTI had launched e-Gyan Prawah an e-Learning initiative for
 senior executives through Harvard Management Mentor covering 44
 e-learning modules to support the key developmental areas. Further,
 customized Executive Development programs are also being organized
 through IIM Calcutta & Bangalore.
 
 With an aim to create a learning environment and total quality culture
 in terms of people, products, services, work life, safety, energy and
 environment several Business quizzes were organized in English as
 well as in Hindi language. In order to motivate women employees in the
 organization, GTI has been taking forward the unique initiative of
 conferring annually ''GAIL Women Employees Award.
 
 Mentoring has been introduced for Executive Trainees (ETs) joining the
 organization to facilitate structured learning of Company''s culture.
 In addition, GTI has also organized programs on creating awareness on
 sustainable development across all work centers. Several other
 initiatives such as O&M seminar, Case study workshop, HSE summit, etc.
 were organized during the year with an objective of knowledge
 dissemination & experience sharing.
 
 GTI conducted courses in the field of City Gas/CNG, Natural Gas/LPG
 Pipeline Operation &Maintenance,Petrochemical,0&M,and Fire & Safety for
 the participants from external organizations like IOCL, BPCL, RGPPL,
 BCPL, IGL, MNGL, Adani Gas Ltd, Siti energy, Sabarmati Gas, UP Fire
 Service Departments, OPaL, Honda Scooters & Motorcycles, etc. As an
 Authorized Training Provider to American Society of Mechanical
 Engineers (ASME), GTI is regularly conducting specific ASME certified
 courses.
 
 With consistent efforts of team members and valued contribution of
 faculty, GTI achieved a training efficacy score of 91.76% during the
 year 2011-12.
 
 - Leadership Development Program
 
 Your Company realizes that it is critical to continually strive to
 develop and enhance the capability and competence of its existing
 talent pool. With the objective of development of its senior level
 executives and preparing them for future leadership positions, Senior
 Management Development Centre (SMDC) exercise has been undertaken as
 part of the Leadership Development Program. SMDC has been conducted for
 senior executives at Chief Manager and above grades. 471 such senior
 executives have been covered through this exercise.
 
 Taking the next step forward in the direction of Leadership
 Development, a detailed Individual Development Plan (IDP) has been
 drawn Up for all the participants of SMDC exercise which consists of
 customized training programmes, e-learning courses and suggested
 readings with emphasis on the development areas as identified.
 
 - Vigilance
 
 The main thrust of vigilance activities in your Company is on
 predictive and preventive actions rather than punitive vigilance. In
 accordance with this objective, several contract & procurement,
 operation & maintenance related system improvement measures were
 undertaken during FY 2011-12.  Intensive inspections of various works
 were taken up and corrective measures suggested.  Further, initiatives
 like Tender Monitoring System, e-QPR system, on-line written
 examination in e-recruitment module, etc were undertaken in furtherance
 of company''s objective to ensure transparency in systems & procedures.
 
 Further, under the aegis of the Central Vigilance Commission, your
 Company organized a day long Interactive Seminar for Independent
 External Monitors (lEMs). The seminar was organized to provide a
 platform for sharing and updating technical knowledge on procurement
 matters considering the vital role of LEMs in administration of the
 Integrity Pact adopted by your Company.
 
 A Vigilance Awareness Week was organised during the year. On this
 occasion, CVC launched an On- line Tender Monitoring System (TMS) and
 also released an in-house magazine titled JAGROOK.
 
 During the Vigilance Awareness Week, your Company organized Customer
 and Vendor Interactive meet. In order to spread awareness and to
 sensitize employees against the harmful effects of corruption, various
 competitions were also organized across your Company during the said
 period.
 
 - Representation of SCs, STs, OBCs, Minorities and Women Employees
 
 Your Company is complying with Presidential Directives on reservations
 for employment of Scheduled Castes (SCs), Scheduled Tribes (STs), Other
 Backward Classes (OBCs), physically challenged categories, etc.
 
 Details regarding total number of employees and the representation of
 Scheduled Castes, Scheduled Tribes, and Other Backward Classes in your
 Company as on 31.03.2012 have been provided in the table below:
 
 GROUP         EMPLOYEES       SC       ST      OBC 
               ON ROLL
 
 A               2784         437       164     453
 
 B                530         114        69      68
 
 C                565          93        23     172
 
 D                 58          17         5      14
 
 TOTAL           3937         661       261     707
 
 131 new employees joined your Company during the year 2011-12.  Total
 man power of the Company as on 31.03.2012 stood at 3,937 with 16.8 % of
 its employees belonging to SC category, 6.6% to ST category, 17.9% to
 OBC category, 7.22% to Minorities and 2.2% to Physically Challenged
 categories. Your Company''s workforce comprised 222 women employees as
 on 31.03.2012. Efforts are continuing for filling up the back log of
 vacancies reserved for SCs,STs and OBCs.
 
 - Official Language
 
 Your Company is continuously making vigorous efforts for the
 propagation and successful implementation of the Official Language
 Policy of the Union Government.  The Official Language Implementation
 Committees at Corporate as well as Regional/ Unit level held their
 quarterly meetings regularly to monitor and review the progress made in
 achieving the targets fixed in the Annual Programme.
 
 In an endeavor to familiarize the new entrants in the company with
 Official Language Act and various rules, training to Executive Trainees
 is being imparted during their orientation programme. To inculcate the
 knowledge of Official Language among the newly promoted employees from
 S7 to El and E2 grades, a two days training programme has been designed
 and implemented at corporate level besides other regular workshops at
 all the work centers.
 
 With a view to create greater awareness and consciousness amongst
 employees, Hindi Fortnight was celebrated from 14th to 28th
 September,2011 across your Company. During the fortnight, a Business
 Quiz competition was conducted at company level through video
 conferencing besides other interesting competitions, cultural
 activities, seminars on Hindi activities, etc. The employees
 participated with great enthusiasm.
 
 Bilingual software is provided to all offices of your Company for using
 on their computing device. To impart working knowledge of Hindi as well
 as to train employees in bilingual Software, a comprehensive programme
 was designed and implemented during the year.  Further, the OICs/HR
 heads of work centers and other senior officers were imparted training
 for preparing e-mail communication in Hindi.
 
 In order to cultivate the habit of reading Hindi, a book titled Ati
 Prabhavshali logon kisa at adaten'' was distributed among all employees.
 Quarterly Hindi magazines are published from work centres and
 distributed amongst employees in order to create interest among
 employees and their family members towards reading and creative writing
 in Hindi.
 
 RESEARCH AND DEVELOPMENT
 
 Your Company has been pursuing a unique collaboration with Municipal
 Corporation of Delhi for extraction of Land Fill Gas (LFG) at Ghazipur
 landfill site for conversion to CNG after purification. A Project
 Management Consultant (PMC) has been retained to take up project
 implementation activities. A CNG station running on landfill gas will
 be a first-of-its-kind in the world.  This innovative project will not
 only generate a dean fuel but also simultaneously help in combating
 global warming due to the capture of methane gas that would have
 otherwise got released into the atmosphere.  The success of this pilot
 project would open up the possibility of replicating its success
 allover the country. This project has been appreciated by the Platts
 Global Energy Awards Committee for the commitment towards harnessing
 All sources of energy.
 
 Another project that your Company has been pursuing is on conversion of
 waste plastics into fuel. The bench-scale tests have given encouraging
 results and it is planned to conduct the pilot-scale studies in the
 next phase. R&D efforts are also being undertaken to develop new
 polymer grades to better suit the customer requirements.
 
 Increasing the acceptability and usage of natural gas as vehicle Fuel
 serves the twin task of reducing environmental pollution as well as
 expanding your Company''s business. Your Company has started a
 collaborative project with CMERI Durgapur and I IT Kharagpur to develop
 composite cylinders for storage of CNG. These light-weight cylinders
 shall help increase the fuel efficiency of the vehicles and would also
 be more acceptable to the consumers. Continuing with its pragmatic
 approach, your Company has also started working with I IT Madras to
 develop nano- composite materials for storage of Hydrogen gas which is
 touted as the fuel of the future.
 
 Further, your Company is actively exploring potential technologies that
 can be used to exploit various non-conventional natural gas sources
 like Shale Gas, Gas Hydrates, Underground Coal Gasification (UCG) etc.
 that have potential to substantially increase the availability of
 natural gas in the country.
 
 With a view to give a boost to R&D spending in the country, the
 Department of Public Enterprises (DPE) has mandated all profitable PSUs
 to spend at least 1% of their Profit After Tax (PAT) on R&D from
 2012-13 onwards. Realizing the importance of R&D to improve the
 Technological capabilities and the requirement of meeting the DPE''s
 mandate, your Company has taken proactive strategic steps in this
 direction.
 
 Your Company has constituted a Research Advisory Committee (RAC)
 comprising of experts from Industry and Research Institutes with domain
 knowledge in areas relevant to its business to guide our future R&D
 endeavors. Your Company has also decided to take a quantum jump in its
 R&D projects and has solicited research proposals from various research
 and engineering institutes of national repute which shall be pursued in
 the near future.
 
 TOTAL QUALITY MANAGEMENT
 
 Your Company is always vying for continual and sustainable improvement
 in the process, systems and functional areas. Customer satisfaction is
 on the top agenda of your Company and is being continuously monitored
 through regular interactions. TQM department has taken following
 strides towards improvement:
 
 - The Customer satisfaction index achieved during 2011-12 by your
 Company is 89%;
 
 - Your Company is targeting application for Deming award (An
 International recognition for overall improvements in the processes).
 Actions have been initiated and roadmap drawn;
 
 - One hundred number of Quality Circle projects have been undertaken in
 all process & system areas in your Company, which lead towards
 continual improvements as well as tangible gains.
 
 AWARDS & ACCREDITATIONS
 
 Your Company has consistently been ranked Excellent by the Department
 of Public Enterprise (DPE), Government of India, ever since the
 introduction of the Memorandum of Understanding (MoU) based performance
 review system by the DPE. Your Company has been recognized for its
 performance in various areas, some of them are mentioned below:
 
 - Corporate Awards
 
 - 11th ICSI National Award for Excellence in Corporate Governance,2011
 
 - Corporate Governance Award 2012 by Indian Chamber of Commerce
 
 - Commendation Certificate from SCOPE for CorporateGovernancein2010-11
 
 - Platts Global Energy Award, 2011 for ''World''s No. 1 Company in
 Downstream Operations''
 
 - GAIL''s Jamnagar - Loni and Vizag Secunderabad LPG pipeline Unit won
 the first & second National Award for Excellence in Cost Management
 2011 respectively under the category of Public Sector Service Unit.
 
 - MoU Excellence Award for Best Performing CPSE in the Petroleum Sector
 consecutively for second year for the year 2009-10.
 
 - HSE Awards
 
 - International Safety Award from British Safety Council, United
 Kingdom for Gas Processing Unit and Natural Gas Compressor Station,
 Vaghodia; Gas Processing Unit, Gandhar; Jamnagar-Loni LPG Pipeline;
 Regional Natural Gas Pipeline Network, National Capital Region, Delhi
 and Agra.
 
 - Shrestha Suraksha Puraskar for Gas Processing Unit and Suraksha
 Puraskar for Natural Gas Compressor Station, Vijaipur from National
 Safety Council, Mumbai.
 
 - Certificate of Appreciation from Gujarat Safety Council, Vadodara for
 GAIL, Gandhar, Vadodara and Vaghodia.
 
 - Golden Peacock Occupational Health & Safety Award- 2011 for GAIL,
 Khera from Institute of Directors, New Delhi.
 
 - Safety Innovation Award from Institution of Engineers, New Delhi for
 Gas Processing Unit& Natural Gas Compressor Station at Vijaipur and
 Vaghodia; Gas Processing Unit, Lakwa; Natural Gas Compressor Station,
 Khera; Regional Natural Gas Pipeline Network, Mumbai; LPG Booster
 Station, Abu road and Man sarampura.
 
 - GAIL, Usar bagged the Confederation of Indian Industry (CII) -Shohrab
 GodrejGreen Business Centre (GBC) Environmental Best Practices Awards
 for 2012 under ''Most Innovative
 
 Project of the Year'' Category.
 
 - Others
 
 - Your Company scrip was included by Bombay Stock Exchange in
 BSE-Sensex on the basis of average free float market capitalization for
 3 months.
 
 - GTI has received the prestigious Golden Peacock Quality Award For
 Training System and ''Green Tech Gold HR award for outstanding
 achievement in Training Excellence1 for the year2011.
 
 RIGHT TO INFORMATION
 
 In order to promote transparency and accountability, an appropriate
 mechanism has been set up across the Company in line with the Right to
 Information Act, 2005. APIOs/ PIOs/CPIO at units/ offices across the
 country have been nominated to provide information to citizens under
 the provisions of RTI Act. 1st legal Appellate Authority have also been
 nominated for considering appeals of Information seeker against the
 orders of APIOs/PIOs/CPIOs.
 
 MANAGEMENT DISCUSSION AND ANALYSIS
 
 The detailed Management Discussion and Analysis forms part of this
 Report at
 
 
 
 
 Annexure-A.
 
 CORPORATE GOVERNANCE
 
 Your Company believes Corporate Governance is at the root of
 shareholder''s value creation.  Pursuant to clause 49 of the Listing
 Agreement with the Stock Exchanges & DPE guidelines on Corporate
 Governance, a report on Corporate
 
 Governance forms part of this Report at Annexure-B.
 
 The statutory auditors of the Company have examined and certified your
 Company''s compliance with respect to conditions enumerated in clause
 49 of the Listing Agreement and DPE guidelines on Corporate Governance.
 The certificate forms part of this Report at Annexure-C.
 
 Secretarial Compliance Report confirming compliance by Practising
 Company Secretary to the applicable provisions of Companies Act 1956,
 Listing Agreement, Guidelines on Corporate Governance for Central
 Public Sector Enterprises, 2010forms part of this Report at Annexure-
 D.
 
 ENERGY CONSERVATION, TECHNOLOGY ABSORPTION
 
 Details of conservation of energy, technology absorption in accordance
 with Companies (Disclosure of Particulars in the Report of Board of
 Directors) Rules, 1988 are annexed at Annexure- E.
 
 PARTICULARS OF PERSONNEL UNDER SECTION 217 (2A) OF THE COMPANIES ACT,
 1956
 
 The particulars of employees u/s 217 (2A) of the Companies Act, 1956,
 read with Companies (Particulars of Employees) Rules, 1975 is annexed
 to this report at Annexure-F.
 
 FIXED DEPOSITS
 
 Your Company has not accepted any Fixed Deposits and, as such, no
 amount of principal or interest was outstanding as of the balance sheet
 date.
 
 FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 During the year, foreign exchange earnings were Rs. 8.85 crore.
 Expenditure in foreign currency was Rs. 2,451.42 crore.
 
 During the year under review, your Company has incurred an expenditure
 of Rs. 5.27 crore on foreign tours and training, Rs. 0.17 crore on
 entertainment and Rs. 24.21 crore on advertising & publicity.
 
 DIRECTORS
 
 Dr Neeraj Mittal was appointed as Part-time (Govt.  Nominee) Director
 w.e.f. 28.02.2012 and Smt Shyamala Gopinath, Shri R.P. Singh, Dr. A.K.
 Khandelwal and Shri Vivek Mehrotra were appointed as Non-official
 Part-time (Independent) Directors w.e.f. 29.02.2012.
 
 Prof A.Q. Contractor, Non-official Part-time (Independent) Director and
 Shri Apurva Chandra, Part-time (Govt. Nominee) Director ceased to be
 Director(s) w.e.f. 03.08.2011 and 08.08.2011 respectively. Further,
 Shri Vivek Mehrotra, Non- official Part-time (Independent) Director
 ceased to be Director w.e.f. 14.05.2012.
 
 The Board placed on record its deep appreciation for the valuable
 services rendered by outgoing Directors during their association with
 your Company.
 
 CODE OF CONDUCT
 
 Pursuant to the requirements of clause 49 of Listing Agreement, the
 Board Members and Senior Management Personnel, have affirmed compliance
 with the Code of Conduct for the financial year ending 31st March,
 2012.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF
 THE COMPANIES ACT,1956
 
 Pursuant to the requirement of Section 217(2AA) of the Companies Act,
 1956 in relation to Directors'' Responsibility Statement, it is
 confirmed that:
 
 i) in the preparation of the annual accounts for the financial year
 ending 31st March, 2012, the applicable accounting standards have been
 followed along with proper explanation relating to material departures;
 
 ii) the Directors have 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 financial year and of the profit of
 the Company for the year under review;
 
 iii) the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities;
 
 iv) the Directors have prepared the annual accounts for the financial
 year ending 31st March,2012onagoingconcern basis.
 
 AUDITORS
 
 - Statutory Auditors
 
 The Statutory Auditor of your Company is appointed By Comptroller &
 Auditor General of India (CAG). M/s Rasool Singhal& Co., Chartered
 Accountants, Aligarh and M/s M.L.  Puri, Chartered Accountants, New
 Delhi were appointed as Joint Statutory Auditors of your Company for
 The year 2011-12.
 
 The review of Annual Accounts of your Company for the financial year
 ending 31st March, 2012 by CAG forms part of this report. Notes on
 accounts referred in the Auditors'' Report are self-explanatory and
 therefore, do not call for any further comments.
 
 - Cost Auditors
 
 Your Company has appointed M/s Rohit & Associates, Vadodara, M/s R.
 Nanabhoy & Co., Mumbai, M/s Chandra Wadhwa & Co., New Delhi, M/s M
 Goyal& Co., Jaipur, M/s Dhanajay V. Joshi & Associates, Pune, M/s DGM &
 Associates, Guwahati, M/s Mani & Co., Kolkata, and M/s. K.L Jaisingh &
 Co., Noida as Cost Auditors for financial year 2011-12 for the purpose
 of cost audit of various LPG/CNG unit/Telecom unit on 10thJune,2011.
 
 The due date for filing Cost Audit Reports for the financial year ended
 31st March, 2011 was 27th September, 2011 and the same were filed to
 Registrar of Companies on 24th September, 2011.
 
 ACKNOWLEDGMENT
 
 Your Directors express their gratitude for continued co-operation and
 support provided by Government of India, in particular the Ministry of
 Petroleum and Natural Gas, various State Governments, regulatory and
 statutory authorities from time to time.
 
 Your Directors acknowledge the constructive suggestions received from
 Statutory Auditors and Comptroller & Auditor General of India and are
 Grateful for their consistent support and help.
 
 Your Directors also wish to thank all the stakeholders of your Company
 for reposing their faith, trust and confidence in the Company.
 
 On behalf of your Directors, I would like to place on record our deep
 and sincere appreciation for the hard work, dedication and unstinted
 efforts of your Company''s employees to ensure that your Company
 achieves greater milestones and scales the newer pinnacle of success.
 
                                    For and on behalf of the Board
 
 
                                                      B C Tripathi 
 
                                      Chairman & Managing Director
 
 Place: New Delhi
 
 Date: July 19,2012