Dear Shareholders,
 
 On behalf of the Board of Directors of your Company, I am delighted to
 present the T}'' Annual Report of your Navratna Company along with
 Audited Financial Statements for the Financial Year 2010-11.
 
 PERFORMANCE OVERVIEW
 
 Your Company has recorded sustained growth in all key physical and
 financial parameters in the Financial Year 2010-11. During the year 2010-11,
 the important financial and physical highlights are as under-
 
 FINANCIAL
 
                                                          {Rs in crore)
 
 Particulars                           2010-11             2009-10
 
 Turnover (Net of ED)                  32,459               24,996
 
 Other lncome                              519                  541 
 
 Cost of Sales (excluding 
 Interest and Depreciation
 and including extraordinary items)    27,005               20,327
 
 Grass Margin                           5,973                5,210
 
 Interest                                  83                   70
 
 Depreciation                             650                  562
 
 Profit Before Tax                      5,240                4,578
 
 Provision for Tax                      1,679                1,438
 
 Profit after Tax                       3,561                3,140 
 
 Appropriations
 
 Interim Dividend                         254                  254
 
 Proposed Final Dividend                  698                  698
 
 Corporate Dividend Tax                   155                  159
 
 Net Transfer to Bond 
 Redemption Reserve                         8                  (3)
 
 Transfer to General Reserve              356                  314
 
 Balance carried forward to 
 Balance Sheet                          2,090                1,718
 
 
 PHYSICAL
 
 Particulars                           2010-11              2009-10
 
 GasTransmission(MMSCMD)               117.91               106.74
 
 LPG Production (TMTs)                  1,068                1,100 
 
 Pentane / Propane / SBP Solvents /
 
 Naptha Production (TMTs)                 301                  340
 
 Polymer Production (HDPE/ 
 LLDPE Pellets) (TMTs)*B                  416                  417
 
 LPGTransmission(TMTs)                  3,337                3,161
 
 * The total polymer production for FY2010-11 is 420 TMT which includes
 HDPE/ LLDPE pellets, LP flakes, wax, PE shreds, etc.
 
 
 CONVERGED ACCOUNTING STANDARDS (IFRS) IMPLEMENTATION
 
 In accordance with the notification issued by the Ministry of Corporate
 Affairs, Government of India, accounts are to be prepared on the basis
 of converged Accounting Standards i.e. Indian Accounting Standards
 converged with International Financial Reporting Standards (IFRS) as
 and when dates will be notified. Accordingly, your Company is taking
 necessary steps for the implementation of Ind AS which are converged
 with IFRS.  Basic IFRS training has also been imparted to all the
 Finance executives of your Company. Your Company is ready to implement
 the Converged Accounting Standards (Ind AS) as and when it would be
 notified by Central Government.
 
 DIVIDEND
 
 Your Company has a consistent track-record of divicerc payment. So
 far, your Company has disbursed dividend ofRs 8,325 crore to the
 shareholders.
 
 The Board of Directors of the Company had earlier approved payment of an
 interim dividend @ 20% on equity share ofRs 10 each {Rs2/- per equity
 share) amounting to Rs 253.70 crore paid in the month of December, 2010.
 Further, the Board had recommended payment of final dividend @55%on
 equity share ofRs 10 each {Rs 5.5 per equity share) for the year 2010-11.
 
 With this, the total dividend payment for the fiscal 2010-11 will be at 75%
 on equity share ofRs 10 each (Rs7.5 per equity share) amounting toRs 951
 crore on its paid-up equity capital ofRs 1,268.48 crore. The total dividend
 payout including tax accounts for 31% of profit after tax.
 
 CREDIT RATING
 
 Your Company has been reaffirmed the highest domestic credit rating of
 AAA''from ICRA, CARE and CRISIL which indicates 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 local currency issuer rating of A3''to your Company. Further,
 Fitch Ratings has also assigned a long term Foreign Currency Issuer default
 rating of''BBB-''with stable outlook which is equal to sovereign rating.
 
 
 CORPORATE STRATEGY
 
 Your company is successfully executing Strategic Plan 2007-12 and is
 well on its road to establish pan-India presence.The main thrust has
 been on expansion of gas transmission network (to over 14,500 km) and
 securing gas supplies for meeting demand of various consumer segments.
 Your Company has interest in 27 E&P Blocks including 2 outside ndia & 1
 CBM block for securing long-term gas supplies besides stake in
 LNG Terminals through equity stake in Petronet LNG and RGPPL Your
 Company has been successful to increase gas supplies to about 118
 MMSCMD for transmission in FY 2010-11 and is well poised to secure
 substantially higher volumes in the coming few years. Your Company is
 strengthening its petrochemical presence through expansion of existing
 capacities at Pata besides setting up a new plant in Assam through its
 subsidiary, Brahmaputra Cracker and Polymer Limited. In addition, your
 Company has also taken a 17% equity stake in the 1.1 MMTPA
 petrochemical project being implemented by ONGC Petro Additions Limited
 at Dahej, Gujarat.
 
 Your Company is also 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 upcoming PNGRB bidding rounds for other city gas projects.  Further,
 the Board of your Company, in order to consolidate the city gas
 distribution business, has approved the transfer of existing and
 ongoing expansion of local distribution assets in Agra and Firozabad to
 GAIL Gas Limited, and transfer of CNG distribution project in Vadodara
 to proposed JVC of GAIL Gas Limited with Vadodara Mahanagar Sewa Sadan,
 subject to consent of shareholders through postal ballot.
 
 On globalization front, your Company has acquired 4.17 % equity stake
 in South East Asia Gas Pipeline Company which is executing Myanmar to
 China gas pipeline project.This pipeline is being laid for transmission
 of natural gas from A-1 & A-3 blocks in Myanmar where GAIL has a 8.5%
 stake. Your Company is also in pursuit of diversifying in new business
 areas like wind and solar power and actively scouting opportunities in
 gas based power generation projects.
 
 In order to meet the huge capital requirements for funding the
 projects, the Board of Directors of your Company has approved the
 Foreign Currency Loan Facility of USD 150 million from The Bank of
 Tokyo- Mitsubishi UFJ Ltd, Singapore and USD 74.33 million from US
 Exim, Societe Genarale, New York.
 
 Further, your company has recently developed Strategy for the period
 2011 -20 and the same has been approved by the Board of Directors. As
 per this Strategy, your Company aspires to become an integrated
 hydrocarbon major with significant upstream and downstream interests by
 2020.To realize this ambition, your Company has identified several key
 growth areas and initiatives, in upstream, midstream and downstream
 segments of hydrocarbon value chain. In the upstream, the thrust will
 be on global sourcing and acquisitions, targeting equity linked LNG in
 addition to sourcing gas from domestic blocks.To support higher LNG
 imports, your Company will explore the possibility of setting up new
 LNG terminal(s) and tie-up additional re-gasification capacities in
 existing / upcoming terminals. In the midstream, expansion of pipeline
 infrastructure will continue with additional focus on strong market
 development efforts and strengthening marketing capability to remain
 the leading marketer of gas. On the retail side, large cities will be
 the focus for city gas business expansion.  In the downstream, your
 Company aims to be among the top 2 petrochemical players in the country
 and for this, your Company has plans to set up new capacities and
 further increase marketing volume through trading.To realize the
 ambitious business goals, capability building will remain at the core
 of your Company''s focus.
 
 BUSINESS SEGMENT ANALYSIS
 
 SEGMENTAL REVIEW
 
 Your Company has been consistently achieving the top-most all round
 Excellent rating by the Government of India, since the signing of the
 Memorandum of Understanding (MoU) with the Government of India on
 performance review. During the year under review, the segment wise
 business performance of the Company is as under:
 
 Natural Gas Marketing
 
 Natural gas continues to constitute the core business of your Company.
 During the year 2010-11, Gas Sales was 83.23 MMSCMD compared to 8143
 MMSCMD in the previous financial year. Major supplies of natural gas
 include fuel to power plants and feedstock for gas based fertilizer
 plants. Your Company holds around 50% market share in gas marketing in
 India.
 
 Natural Gas Transmission
 
 Your Company owns and operates a network of about 8,644 km of natural
 gas high pressure trunk pipeline with a capacity of approx. 170 MMSCMD
 of natural gas across the country.The gas transmission during the year
 was 11 7.91 MMSCMD compared to 106.74 MMSCMD in the previous financial
 year registering a growth of 10%. Your Company''s share of gas
 transmission business is around 74% in ndia.
 
 Natural Gas Pipeline Projects
 
 During the financial year, your Company has completed commissioning of
 various pipelines having length of about 761 km which includes
 Vijaipur-Dadri Pipeline (498 km), Sultanpur-Neemrana Pipeline (175 km)
 and Focus Energy Pipeline (88 km).
 
 LPG Transmission
 
 Your Company is the only Company in India which owns and operates
 pipelines for exclusive LPG transmission for third party usage.There
 are two LPG Pipeline transmission systems with a total length of about
 2038 km, 1415 km of which connects the Western and Northern parts of
 India (Jamnagar-Loni LPG Pipeline) and 623 km of network is in the
 Southern part of the country (Vizag-Secunderabad LPG Pipeline).  The
 LPG transmission system has a capacity to transport upto 3.8 MMTPA of
 LPG. LPG transmission throughput was about 3.337 million MTin the year
 2010-11.
 
 LPG Transmission Projects
 
 Kandla- Samakhiali section of JLPL system has been upgraded from 0.5
 MMTPA to 1.5 MMTPA by laying of 10X 60 km loopline, installing
 additional Pumps at Kandla and receiving facilities at Samakhiali.
 
 Petrochemicals
 
 During FY 2010-11, your Company has produced 420 TMT of polymer which
 includes 416 TMT of HDPE/ LLDPE pellets and remaining quantity of LP
 flakes, wax, PE shreds, etc. Further, during the period, it sold 420
 TMT of polymer (HDPE/ LLDPE/ low polymers /polymer lumps & shreds).
 
 LPG & Other Liquid Hydrocarbon Production
 
 Your Company has 7 LPG plants in the country. In the year 2010-11,
 total Liquid Hydrocarbon production was about 1.369 million MT which
 mainly included 1.068 million MT of LPG, 0.155 million MT of Propane,
 0.035 million MTof Pentaneand balance quantity included other products
 like SBP solvent and Naphtha.
 
 Exploration and Production (E&P)
 
 Your Company has Participating Interest (PI) in 27 Exploration and
 Production (E&P) blocks and one Coal Bed Methane (CBM) block. Out of
 the 27 E&P blocks, 25 blocks are in India and 2 blocks are overseas
 (A-1 and A-3 blocks in Myanmar). One of the onland blocks in Cambay
 basin is in regular production and Rs4141 crore has been generated as
 revenue during the year 2010-11.
 
 Out of the 27 E&P blocks where GAIL is participating, GAIL is the
 Operator in 2 blocks (Rajasthan Onland RJ-ONN-2004/1 and Cauvery Onland
 CY-ONN-2005/1). 1 st well- Lohara 1 is being drilled currently in
 Rajasthan onland block and two more wells are also planned to be
 drilled subsequently, while seismic data acquisition is planned in
 Cauvery onland block during the year 2011-12.
 
 The CBM Block (TR-CBM-2005/III) in Chhattisgarh is in first exploration
 stage where dewatering of test wells is in progress. Development
 activities in blocks
 
 A-1 and A-3, Myanmar offshore is in progress and the production of gas
 is expected to start from May 2013.
 
 During the year 2010-11, Declaration of Commerciality has been approved
 in the Mahanadi Offshore block (MN-OSN-2000/2).  Further, GAIL
 consortium has been awarded two deep water blocks in Andaman basin
 under NELP-VIII bidding round with ONGC as the Operator. GAIL has bid
 for E&P blocks in NELP-IX biddling round along with other consortium
 partners. Results are expected in FY 2011-12 and Production Sharing
 Contracts are expected to be signed soon thereafter.
 
 Telecommunications
 
 Leveraging on its pipeline network, your Company has built up a strong
 Optic Fibre Cable (OFC) network for its own internal use and leasing of
 bandwidth as a carriers'' carrier. Your Company''s telecom business unit
 -''GAILTEL has approximately 1 3,000 km of OFC network.
 
 SEGMENTAL OUTLOOK
 
 Natural Gas
 
 Major focus for your Company is to maintain its dominant position in
 the gas business, especially the transmission segment and continue the
 relationship with existing customers and also to add more customers.
 Therefore, your Company is expanding its transmission network by laying
 another 7,500 Km of pipelines at an investment of X 30,000 crores, out
 of which around 1,200 km have been completed, to transport and supply
 natural gas to various customers in Power, Fertilizer, Refinery,
 industries, CGD projects etc.These would include large trunk pipelines,
 along with smaller pipelines which would provide connectivity among
 trunk lines to form a grid. The pipelines being laid by your Company
 would help in achieving the objective of an Integrated National Gas
 Grid.
 
 Natural Gas Pipeline Projects
 
 The projects are concurrently being executed in 16 States, 2 Union
 Territories, 116 Districts and the construction activities are in full
 swing simultaneously for more than 10 projects.The following projects
 are in advanced stage of construction and completion is expected by the
 end of year 2011.
 
 I.  Dahej-Vijaipur Pipeline Phase-I (DVPL-II)                610 km
 
 ii.  Bawana-Nangal Pipeline (BNPL)                           501km
 
 iii.  Karanpur-Moradabad Kashipur- Rudrapur Pipeline Phase-I 105 km
 
 Further, installation of 2nd & 3rd compressors atJhabua&Vijaipurand
 installation of two Compressors at Kailaras SChainsa are also in
 advanced stage of construction and completion is expected by the end of
 year 2011.
 
 The completion of DVPL-II project along with commissioning of balance
 mainline compressors at Jhabua and Vijaipur will lead to enhanced
 capacity to transport RLNG from Dahej and KG Basin gas to consumers in
 northern part of India. Last mile connectivity has been given
 importance and steps have been taken up to connect customers within the
 shortest possible time leading to revenue generation.
 
 Construction has recently started for the following projects.
 
 I.  Dabhol Bangalore Pipeline Phase-I               997 km
 
 ii.  Kochi-Koottanad Bangalore/ Mangalore 
      Pipeline Phase-I                                44 km
 
 iii. Spurlinesto Roorkee-Haridwar, Ludhiana 
      Jalandhar(BNPLSpurlines)                       270 km
 
 iv. Spurlines to Chittorgarh (Vijaipur- Kota 
 Pipeline -VKPL extension)                           290 km
 
 The Dabhol- Bangalore and Kochi - Koottanad- Bangalore - Mangalore
 pipelines would increase GAIL''s presence in southern ndia as these
 pipelines pass through virgin market areas. The quantum of gas
 transported is likely to increase, with commissioning of these
 projects.
 
 Due to increase in gas availability, last mile consumer connectivity
 has been provided to 46 number of consumers for a gas quantity of
 approx 6.8 MMSCMD.
 
 Your Company is also expanding its pipeline network in the states of
 Rajasthan, Uttarakhand, Punjab, Andhra Pradesh & Tamil Nadu.
 
 Petrochemicals
 
 Your Company owns and operates a gas based integrated petrochemical
 plant at Pata, Uttar Pradesh, with a capacity of producing 4,10,000 TPA
 of Polymers i.e.  HDPE and LLDPE. Your Company has commissioned in the
 month December, 2010 an additional gas cracking furnace and with
 debottlenecking of the Gas Cracker Unit, the Ethylene production
 capacity has been increased to 4,46,000TPA. Further your Company is
 doubling the capacity of Petrochemical plant at Pata by installing
 4,50,000 TPA of Gas Cracker Unit and 4,00,000 TPA of Downstream Polymer
 Unit.
 
 Your Company is currently in the process of setting up a 2,80,000TPA
 Petrochemical Complex in Assam through its subsidiary, Brahmaputra
 Cracker and Polymer Limited (BCPL).
 
 Your Company is a co-promoter with 1 7% equity stake in ONGC
 Petro-additions Limited (OPaL) which is implementing a green field
 petrochemical complex of 1.1 MMTPA Ethylene capacity at Dahej in the
 State of Gujarat.
 
 Gas Sourcing
 
 Your Company continues to have focus on securing gas supplies from
 international markets. LNG and trans-national pipelines are the two
 prevalent modes of cross border gas trade and your Company has been
 making efforts to bring more natural gas into the country through both
 these modes. Your Company has entered into a short term agreement to
 buy 0.48 MMTPA LNG from Marubeni Corporation, Japan and the first
 shipment was received in February 2011 .Your Company has also imported
 about 0.20 MMTPA of LNG in this financial year from various
 international sellers on spot basis to supplement the shortfall in
 domestic production from time-to-time. Your Company also sourced around
 80 MMSCM of spot RLNG in 2010-11 from its Joint Venture Petronet LNG
 Ltd. (PLL). Further, agreements for procurement of spot LNG have been
 signed with 19 international sellers. In addition, discussions are on
 with 8 prospective suppliers for long term tie up of LNG.
 
 Wind Energy
 
 Your company has successfully commissioned a wind energy power project
 of 4.5 MW capacity at Sinoi in Kutch District of Gujarat at a cost ofRs
 27.7 crore.The generated power is fully utilized for captive
 consumption at your Company''s installations in Gujarat namely
 Gandhar.Samakhialiand Kandla.
 
 Based on the satisfactory performance of 4.5 MW wind evergy project,
 your Company is now executing another 15 MW wind energy power project
 in state of Gujarat at an estimated cost ofRs 93.76 crore for captive
 utilization. Further,yourCompany''s Board has approved the project for
 setting up of a 100 MW Commercial Wind Energy Generation Project in the
 states of Tamil Nadu and/ or Karnataka. In line with the decision, the
 Board of your Company has approved the amendment in main object clause
 of Memorandum of Association to carry on the business of generation,
 distribution and marketing of wind, tidal, solar and any other form of
 renewable energy on commercial basis, subject to approval of
 shareholders through postal ballot. Your Company is also exploring the
 possibilities of commercial wind power project in different states.
 
 BUSINESS INITIATIVES
 
 GLOBAL
 
 Considering the importance of enhancing energy security of the country
 for sustaining high level of economic growth, your Company has taken
 initiatives to look overseas for acquisition of energy assets.  This is
 being done in addition to the initiatives being pursued on the domestic
 front.
 
 There are good prospects of participating in oil and gas assets abroad
 which are either producing or planned to be on production in the near
 term. Your Company is now focused on diversification of its resource
 base through equity participation in overseas projects. A dedicated
 group has been formed to pursue overseas acquisition activities with
 the objective of sourcing gas for the domestic market. With this prime
 objective, your Company is continuously scouting for acquiring energy
 assets abroad and also to source natural gas in the form of Liquefied
 Natural Gas (LNG) and piped gas imports in order to meet the growing
 requirements of Indian market.  Further, your Company is also exploring
 various business opportunities abroad along the natural gas value chain
 for long term growth and to emerge as an integrated international gas
 company.
 
 In addition to sourcing of LNG from different sources, your Company with
 the support of Government of India is actively pursuing sourcing of gas
 from Turkmenistan through Turkmenistan-Afghanistan-Pakistan-India
 (TAPI) pipeline. Inter Governmentl Agreement (IGA) and Gas Pipeline
 Framework Agreement (GPFA) have already been signed among the countries
 participating in the project.These agreements are important milestones
 for the implementation of the project.
 
 Besides, your Company is pursuing an opportunity for participation in
 shale gas assets in USA so as to be ready with the skill and
 technological know-how for participation in the domestic shale gas
 bidding rounds as and when they are announced in the country.
 
 In recent years, Africa has emerged as a prospective destination for
 sourcing of resources. In order to participate in projects in the
 resource rich countries in Africa,your Company has opened a
 representative office in Cairo, Egypt which will also pursue business
 opportunities in the Middle East.
 
 DOMESTIC
 
 Your Company has identified petrochemicals as a strategic business
 segment for its growth. Your Company is strengthening its presence in
 petrochemicals business by expanding its capacity and also acquiring
 equity stake in petrochemical plants.
 
 Your Company has 70% equity share in Brahmaputra Cracker and Polymer
 Limited (BCPL), a subsidiary, with Oil India Limited (OIL), Numaligarh
 Refinery Limited (NRL), Govt, of Assam, each having 10% equity share.
 BCPL is setting up a 2,80,000TPA polymer plant.The financial commitment
 to the extent ofRs 5,460 crore has been made and project execution is in
 progress.
 
 Your Company is a co-promoter in ONGC Petro-additions Limited (OPaL)
 which is implementing a green field petrochemical complex of 1.1 MMTPA
 Ethylene capacity at Dahej in the state of Gujarat. Your Company is
 entitled to market one-third of the polymers produced from the plant in
 domestic and overseas market which shal enhance your Company''s market
 share in polymers. Further, your Company is exploring the possibility
 of setting up a downstream unit based on the by-product available from
 the project.
 
 In view of the natural convergence between gas and power and to foray
 in the fast growing power sector, your Company has undertaken a number
 of initiatives through which it, on its own and also in partnership
 with other companies, plans to set up power plants in various parts of
 the country.
 
 Due to wide gap in natural gas demand - supply scenario in India, the
 existing / new domestic gas sources and current / proposed LNG imports
 are not sufficient enough to meet the natural gas requirements of all
 demand centers in the country.To fill this gap, your Company is
 planning to set up a Floating Storage Re- gasification Unit (FSRU) unit
 on the east coast of India.
 
 IT INITIATIVES
 
 Your Company is an IT savvy organization and is continuously adopting
 the latest and state-of- the-art IT solutions, keeping pace with the
 fast changing industry.This helps in continuous improvement in
 efficiency and productivity of employees and also enables''right
 information to right person'' by use of latest IT security solutions.
 
 Your Company has taken several new IT initiatives to enhance
 productivity.The process of upgradation of the existing SAP ERP
 hardware and technical upgrade of SAP R/3 to the latest SAP ECC6
 software has been successfully completed.This has added several new
 features to the existing ERP setup. Many new components like
 Governance, Risk & Control (GRC), e-Recruitment and Gas Management
 System (GMS) have also been added to the SAP infrastructure.This will
 lead to greater operational efficiency and transparency thereby helping
 in faster and accurate decision making. Further, Reverse Auctioning,
 Bid- encryption and System Generation of Comparative Statement have
 been added as new features to the SRM/e-Procurement system.
 
 Your Company has started the implementation of a state-of-the-art
 centralized SCADA system for efficient, safe & smooth operation of
 existing & upcoming cross-country Natural Gas & LPG pipeline networks
 under large & complex National Gas Grid environment. On implementation
 of the centralized SCADA system substituting the existing multiple-
 heterogeneous SCADA systems for individual gas pipelines, your Company
 shall be able to monitors control its entire cross-country pipeline
 infrastructure at national and individual pipeline levels, providing
 relevant online pipeline data to its esteemed customers. It shal also
 enable your Company better integration with other critical applications
 like Gas Management System (GMS), SAP ERP and other applications and
 will also facilitate in implementation of SCADA in a cost effective and
 faster manner for future pipelines.
 
 Your Company has also initiated the process for consolidation of the IT
 infrastructure to a centra virtualized environment along with its
 Disaster Recovery (DR) setup in line with the latest technological
 advancements in the industry.  This will provide greater uptime and
 better manageability of the IT infrastructure.
 
 Your Company is also in the process for implementation of an electronic
 Document Management System (DMS) in line with the industry best
 practices.This will include digitization of all the important
 information and records of your Company across various locations,
 electronic workflow and secure authorizations-based access to
 information. In addition to the above, your Company has put in place
 the latest high-definition Video Conferencing (VC) systems with
 real-time streaming facility at all its major locations.  Moreover,
 desktop-based VC facility has been provided to all senior-level
 executives.This will further improve the communication facilities and
 reduce travel time and expenses.
 
 The Business Information Systems department of your Company has been
 certified with the new ISO 9001:2008 standard.
 
 SUBSIDIARIES & JOINT VENTURES
 
 Your Company has formed Subsidiaries and Joint Venture companies for
 City Gas Distribution and Petrochemicals. Your Company is one of the
 pioneers to introduce City Gas Projects in India for supplies to
 households, commercial users and for the transport sector by forming
 Subsidiaries/ Joint Venture Companies.
 
 SUBSIDIARIES
 
 Brahmaputra Cracker and Polymer Limited (BCPL)
 
 BCPL is setting up a 2,80,000 TPA polymer plant and project execution
 is in progress.  The proposal for enhanced project cost and revised
 commissioning date is under Government approval.
 
 Feedstock Supply Agreements have been signed between BCPL and all the
 three suppliers, viz, Oil and Natural Gas Corporation Limited, Oil
 India Limited and Numaligarh Refinery Limited.  Technology license
 agreements have been signed for cracker, polyethylene and polypropylene
 units.
 
 Entire land for the project has been acquired by BCPL. Civil structural
 works for the main process units, namely Ethylene Cracker unit,
 Polyethylene unit (HDPE/ LLDPE), Polypropylene unit, C2 extraction
 unit, Gas De- hydration unit and Gas sweetening unit of BCPL has
 commenced.
 
 Your Company has 70% equity share in BCPL with OIL, NRL&Government of
 Assam each having 10% equity share.
 
 GAIL Gas Limited
 
 GAIL Gas was incorporated with an objective of focused implementation
 of City Gas Distribution (CGD) projects in the Country.  In first round
 of bidding process of Petroleum and Natural Gas Regulatory Board
 (PNGRB), GAIL Gas has been authorized to implement CGD projects in four
 cities, namely, Sonepat, Kota, Dewas and Meerut.
 
 GAIL Gas has already commissioned CNG stations in Dewas and Sonepat.
 Gas supply to industrial units has commenced in Dewas, Sonepat and
 Kota. GAIL Gas has also commenced gas supplies to domestic consumers in
 Dewas and network construction is in progress for other cities.
 
 GAIL Gas has already laid 168 Km steel pipeline and 229 Km MDPE
 pipeline in these cities. GAIL Gas is operating 1 CNG stations each at
 Dewas and Sonepat. The CNG stations at Kota and Meerut are under
 commissioning. GAIL Gas is supplying natural gas to 24 industrial units
 in Kota, Dewas, Sonepat and Meerut. GAIL Gas has also commenced gas
 supplies to domestic customers progressively. GAIL Gas has taken up
 investment for setting up the infrastructure along the national
 highways for building CNG corridors. Going ahead with the objective to
 establish CNG Corridor to facilitate the availability of CNG outside
 the cities, GAIL Gas has commissioned 2 CNG stations in Vadodara and 1
 CNG station each at Panvel SVijaipur.The construction of CNG stations
 at Kovvur, Auriya, Ferozabad & Mathura is in full swing.
 
 GAIL Gas is a wholly owned subsidiary of your Company.
 
 GAIL Global (Singapore) Pte Limited
 
 GAIL Global (Singapore) Pte Ltd. is as an overseas investment arm of
 the Company. Your Company is looking for further business opportunities
 through this wholly owned subsidiary Company in Singapore.
 
 JOINT VENTURES
 
 Aavantika Gas Limited (AGL)
 
 AGL is in operation in Indore and Ujjain and is supplying CNG to the II
 I transport sector in these cities. AGL is supplying CNG to almost
 14,500 vehicles in both the cities & PNG to industrial sector. AGL has
 set up 1 Mother Station, 2 Online Stations & 5 Daughter Stations in
 Indore and 2 Daughter Stations in Ujjain for dispensing CNG. AGL has
 registered its first operational profit in FY 2010-11. MoPNG has
 authorised AGL for CGD in Indore, Gwalior and Ujjain. Your Company has
 22.5% stake in the Company along with HPCL as equal partner.
 
 Bhagyanagar Gas Limited (BGL)
 
 BGL is currently operating 8 CNG (1 Mother station and 7 Daughter
 Stations) in Vijaywada, 5 CNG stations in Hyderabad and 1 CNG station
 in Kakinada. BGL is supplying CNG in these 3 cities to almost 8,000
 vehicles. BGL is currently operating in Hyderabad, Vijaywada and
 Kakinada. Your Company has 22.5% stake in the Company along with HPCL
 as equal partner.
 
 lentral U.P. Gas Limited (CUGL)
 
 CUGL is currently operating 10 CNG stations in Kanpur and 1 CNG station
 in Bareilly. CUGL is supplying CNG to almost 15,000 vehicles in the two
 cities. CUGL is supplying PNG to over 800 households. CUGL has received
 authorization from MoPNG for CGD in Kanpur & Bareilly. Your Company has
 25% stake in the Company along with BPCL as equal partner.
 
 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.
 
 Green Gas Limited (GGL)
 
 GGL is currently operating 7 CNG stations in Lucknow and 3 CNG stations
 in Agra. GGL is supplying CNG to almost 15,000 vehicles.  MoPNG has
 authorized GGL for CGD in Lucknow & Agra. Your Company has 22.5% stake
 in the Company along with IOCL as equal partner.
 
 Indraprastha Gas Limited (IGL)
 
 IGL is the largest CGD entity in terms ofCNG sales and the number of
 vehicles running on CNG in India. IGL has received authorization from
 MoPNG for CGD in Delhi and adjoining cities of Noida, Greater Noida,
 Ghaziabad, Gurgaon and Faridabad.
 
 As on 1st April, 2011, IGL was supplying piped gas to around 2.45 lac
 domestic consumers, 68 industrial and 463 commercial consumers. IGL is
 supplying CNG to over 4.3 lac vehicles through 278 CNG stations.The
 average per day sale during FY 2010-11 was 2.73 MMSCMD.
 
 Your Company has 22.5% stake in the Company along with BPCL as equal
 partner.
 
 Mahanagar Gas Limited (MGL)
 
 MGL has presently set up 149 CNG MAHANAGAR gas stations catering to
 about 2.2 lac vehicles spread over Mumbai,Thane, Mira- Bhayandar and
 Navi-Mumbai areas besides supplying PNG to about 5.2 lac domestic
 customers, about 1,240 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 Mirabhayander and expansion areas of Kalyan, Dombivli,
 Ambernath, Badalapur, Ulhasnagar, Bhiwandi.Taloja, Kharghar and Panvel.
 Your Company has 49.75% stake in the Company along with British Gas as
 equal partner.
 
 Maharashtra Natural Gas Limited (MNGL)
 
 MNGL was formed for MNGL implementation of City Gas B Projects in and
 around Pune city.  MNGL has received authorization from MoPNG for CGD
 in Pune including Pimpri, Chinchwad, Talegaon, Hinjewadi SChakan areas.
 It has started 13 stations supplying CNG to more than 16,000 vehicles.
 MNGL has also started supply of PNG to domestic, industrial and
 commercial units. Your Company has 22.5% stake in the Company along
 with BPCL as equal partner.
 
 ONGC Petro-additions Limited
 
 0PaL is implementing a green field etrochemical complex of 1.1 MMTPA
 Ethylene capacity at 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 Ltd. (ONGC) and Gujarat State
 Petroleum Corporation Limited (GSPC) are the other promoters of the
 company.
 
 Petronet LNG Limited (PLL)
 
 PLL, formed for setting up of LNG import and re-gasification
 facilities, pursuant 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 RasGas, Qatar for import of 7.5 MMTPA of
 LNG.  Further, PLL is constructing a LNG re- gasification terminal at
 Kochi, Kerala with an initial capacity of 2.5 MMTPA, expandable upto 5
 MMTPA and is scheduled for commissioning in early 201 2. PLL has
 entered into long term LNG supply contract with ExxonMobil for the
 supply of 1.5 MMTPA of LNG for the Kochi terminal. Your Company has 1
 2.5% equity stake in PLL along with BPCL, ONGC and IOCL as equal
 partners.
 
 Ratnagiri Gas and Power Private Limited (RGPPL)
 
 The capacity of the Ratnagiri Gas & Power Station is 2,150 MW which is
 the largest gas based power generation facility in the country and
 currently producing 1,850 MW of power.  RGPPL is in the process of
 commissioning LNG import terminal of 5 MMTPA capacity. Your Company has
 32.88% stake in the Company along with NTPC as equal partner. RGPPL is
 a joint venture company between your Company, NTPC, Financial
 Institutions and MSEB.
 
 @Tripura Natural Gas Company Limited (TNGCL) 
 
 TNGCL is presently supplying gas to around 8,475 domestic, 194
 commercial and industrial consumers and has set up one CNG station in
 Agartala catering to more than 1,900 vehicles.TNGCL has received
 authorization from MoPNG for CGD in Agartala. Your Company has 29%
 stake in the Company
 
 OVERSEAS EXPOSURE
 
 GAIL is an equity partner in three retail gas companies in Egypt,
 namely Fayum Gas Company (FGC), Shell CNG Egypt (SCNGE) and National
 Gas Company (Natgas). FGC and Natgas are city gas distribution
 companies involved in supply of gas to residential, commercial and
 small industrial customers, whereas SCNGE is involved in setting up of
 Compressed Natural Gas (CNG) stations and supply of CNG to transport
 sector. However, the Board of your Company has approved the divestment
 of its shares in SCNGE as the strategic objectives of investment in
 SCNGE could not be met and accordingly, the process of sale of its
 equity shares in SCNGE is in process.
 
 GAIL is also an equity partner in China Gas Holdings Limited (China
 Gas), a retail gas company involved in city gas and CNG business in
 China. Further, GAIL and China Gas have formed an equally owned joint
 venture company, GAIL China Gas Global Energy Holdings Limited for
 pursuing gas sector opportunities primarily in China.
 
 GAIL is a part of consortium in two offshore E&P blocks (A-1 &A-3) in
 Myanmar and also holds participating interest in the joint venture
 Company - South East Asia Gas Pipeline Company Limited incorporated for
 transportation of the gas to be produced from A-1 &A-3 blocks in
 Myanmar to China.
 
 In addition to having a wholly owned subsidiary namely GAIL Global
 (Singapore) Pte Ltd for managing investments abroad, your Company has
 opened a office in Cairo, Egypt to pursue business opportunities in
 Africa and Middle East.
 
 SUSTAINABLE DEVELOPMENT
 
 Your Company operates in the energy sector which is a very vital
 component of the economy. Energy powers every other productive activity
 in the economy, whether it be agriculture, infrastructure,
 manufacturing or services sector.The demand for energy is growing at a
 rate that is much higher than the growth rate of the economy. While the
 demand for energy is growing, new resources are getting increasingly
 more difficult and challenging to find, produce and monetize. At the
 same time, ndia needs to provide energy to its people at affordable
 prices. Your Company continues to strive towards energy security of the
 country while maintaining equilibrium with the environment in order to
 achieve sustainable development.
 
 The principal business of your Company revolves around transmission of
 natural gas which in itself is a cleaner fuel and helps user industries
 reduce their pollution levels as compared to coal or other liquid
 fuels. Use of CNG in transport sector helps in reducing the pollution
 level in the cities. Your Company is also at the forefront of employing
 technologies and processes that reduce the energy consumption in its
 own operations.
 
 Your Company has installed a wind energy project of 4.5 MW capacity at
 Sinoi, District Bhuj, Gujarat. The power generated is being wheeled for
 captive use by your Company''s plants in Gujarat. Your Company has
 started work on setting up a new 15 MW wind energy project in Gujarat
 which will augment power supply for captive use of your Company''s
 plants at Samakhiali, Kandla and Gandhar. In addition, your company is
 also planning to set up Wind Energy Project for commercial sale of
 Power.
 
 Your Company is keen to enter into solar power.  Your Company
 participated in the 1st phase of bidding under Jawaharlal Nehru
 National Solar Mission (JNNSM). Your Company plans to participate in
 future bidding rounds as well to setup solar power projects.  Another
 initiative which your Company has undertaken to promote sustainable
 development is rain water harvesting. Your Company has implemented rain
 water harvesting projects at many of its office buildings at sites.
 Your Company has also invested Rs 20 crores to set-up a comprehensive
 waste water treatment plant at Fata site to maintain the water quality
 before discharging into the river. The treated wastewater is recycled
 and used for horticulture and fire water make-up.
 
 Your Company''s pilot project for production of landfill gas from the
 municipal solid waste site at Ghazipur, Delhi is another effort in
 sustainable development. Its success will pave the way for conversion
 of solid waste sites in cities to produce fuel. Such projects have
 multiple benefits as these not only generate fuel from waste by
 capturing methane that would have got released into the atmosphere but
 also reduce global warming since methane has a global warming potential
 of 21 times of Co,.
 
 Measuring the CO, emissions is the first step towards the efforts to
 reduce its emissions. Your Company is taking up Green House Gas
 Accounting for its installation at Vijaipur. As Vijaipur is a
 representative site of your Company with similar compressor stations
 and LPG plants at other locations, the methodology used for data
 collection at Vijaipur snail be useful ;n knowing the carbon footprint
 of your Company''s operations. This shall help to Measure, Managed
 Mitigate the GHG emissions.
 
 Your Company will be also coming up with its first Sustainability
 Report 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 shall
 also help your Company to align its sustainable development efforts
 such that these maximize value for various stakeholders.
 
 HEALTH, SAFETY & ENVIRONMENT
 
 Your Company is a responsible Corporate Citizen and Health, Safety and
 Environment (HSE) excellence has been extensively promoted as a
 corporate culture within the organization. The Safety & Health of
 employees and external stakeholders are embedded in the core
 organizational values of the Company. The HSE policy, inter-alia, aims
 to ensure safety of public, employees, plant & eguipment, ensure
 compliance with all statutory rules and regulations, imparting training
 to its employees, carrying out safety audits of its facilities, and
 promoting eco-friendly activities.
 
 Your Company has constituted HSE, sub-committee of the Board of
 Directors to review its HSE performance and emergency preparedness in
 the Company.
 
 CORPORATE HEALTH, SAFETY & ENVIRONMENT [HSE) POLICY
 
 Your Company is committed to promote globally comparable levels of
 Health, Safety,
 
 Environment and Loss Control in the areas of its business of
 Exploration and Production of Hydrocarbons, Natural Gas and LPG
 transmission, Production of LPG, Petrochemicals etc., with clear
 emphasis on improving the Environment for Sustainable Development.
 Projects, E&P etc. are brought under the monitoring purview of HSE.
 PNGRB regulations are being adopted at all sites.
 
 The safety and occupational health of its employees and external
 stakeholders are of paramount importance and all these attributes are
 embedded within the core organizational values of your Company.
 
 SAFETY PERFORMANCE
 
 Your Company continues to demonstrate excellent HSE performance. HSE
 indices, as indicated below, across all its work centers are
 meticulously monitored with the aim for continual improvement.
 
 Year(s)                                       HSE Index
 
                    MoU Target (%)           Achieved (%)
 
 2008-09              97.0                      98.95
 
 2009-10              97.5                      99.25
 
 2010-11              97.5                      98.92
 
 Monthly safety index monitoring has been made stringent by including
 more elements for monitoring site''s HSE performance.
 
 SAFETY TRAINING
 
 Your Company continues to give utmost importance to train the employees
 on HSE aspects. Apart from employees; spouses, children, contract
 workers, tanker drivers, nearby villagers etc. are also imparted safety
 training. Newly recruited trainees are given one week specific HSE
 training at site.
 
 Your Company had organized a two day workshop for all business heads
 and fire & safety personnel. In the workshop, the participants were
 exposed to external faculties, PNGRB regulations etc. Another two day
 training program was organized for business heads on ''Industrial Safety
 Sensitization''including introduction to''Behavior Based Safety''aspects.
 
 EXTERNAL SAFETY AUDITS (ESA)
 
 Your Company''s safety practices and systems are audited for continual
 improvement by external agencies and inter unit safety audit teams.
 
 External Safety Audits: During the year 2010-11, safety audits were
 carried out by external agencies for 20 O&M units. Also building safety
 audit was carried out in your Company''s corporate office building in
 Delhi, O&M and Training Institute building at Noida. Major work centers
 have been certified for Integrated Management Systems (IMS). IMS
 outlines the standards needed to align with, or conform to,
 internationally accredited certifications such as ISO 9001 (quality
 assurance), ISO 14001 (environment) and OHSAS 18001 (health and
 safety).
 
 Inter Unit Safety Audits (IUSA): During the year 2010-11, inter unit
 safety audits have been carried out for 6 units of your Company.
 
 OCCUPATIONAL HEALTH
 
 Your Company continued from the previous year its commitment to improve
 the well being of its employees. During the year 2010-11,al employees
 at the work centers were medically examined. Besides, contract workers,
 CISF personnel, villagers from nearby areas were also covered under the
 program.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 Your Company has set high standards of discharging Corporate Social
 Responsibility (CSR).The quantum of CSR allocation is 2% of profit
 after tax of the previous financial year for CSR programmes. CSR
 allocations are used for economic, environmental and social upliftment
 of communities in and around the work centers in the major thrust areas
 such as Community Development, Infrastructure, Drinking
 water/Sanitation, Literacy Enhancement/ Empowerment, Educational Aids,
 and Healthcare/Medical. Besides specific socia welfare programmes, the
 CSR funds are also used to provide relief to victims of national
 calamities. Major initiatives undertaken by your Company under these
 thrust areas are detailed in Management Discussion & Analysis.
 
 HUMAN CAPITAL
 
 Your Company takes pride in its highly efficient and engaged work force
 which has been the driving force behind continuous rise in value added
 per employee in last 5 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
 
 Oil &Gas Industry has been witnessing rapid growth & development both
 at the domestic as well as global levels. Your Company is also
 implementing various new projects to strengthen its presence across the
 entire gas value chain. With new technological developments and
 phenomenal expansion taking place in the hydrocarbon sector, need of
 the industry is changing from merely acquiring the latest state of the
 art technologies and equipment to engaging qualified personnel suitably
 equipped with knowledge, skills, attitude and a practical exposure to
 the highly specialized jobs. Therefore, it is essential to have a
 focused approach on training and development of the company''s human
 resources. ISO 9001 certified GAILTraining institutes (GTI) at Noida &
 Jaipur have been consistently working towards development of Human
 Capital of the Organization.
 
 Maintaining the track record of excellent performance, 1 2,789 training
 mondays were imparted during the period under review. During FY
 2010-11,14,298 mondays of training have been completed by GTI against
 the target of 14,000 mondays.
 
 GTI received the prestigious National Award for Innovative Training
 Practices from Indian Society for Training and Development (ISTD) in
 January 2011. In its pursuit of offering training programs to external
 organisations and to convert itself into a revenue generating centre,
 GTI has successfully organized training programs for participants from
 other organizations like IOCL, BCPL, IGL, Siti energy, UP Fire Service
 Department, OPaL, Honda Scooters & Motorcycles etc.
 
 Some of the key training initiatives taken by your Company during FY
 2010-11 are:
 
 1.  Launch of ASME (American Society of Mechanical Engineers) Certified
 Courses at GTI Noida as an Authorised Training Provider to ASME. 4
 faculty members from GAIL have been certified by ASME as Authorised
 Training Instructors for offering these courses.
 
 2.  The training institute of your Company organized new programs like
 Management Development Programs (MDPs) for newly promoted DGMs, GMsand
 EDs in April and May 2010, Workshop on Behaviour Based Safety for OICs
 in January 2011 and Effective Communication Skills for Non Executives
 through Video Conferencing during December, 2010 to March, 2011.
 
 3.  A new website was created for the training institute of your
 Company which was launched by CMD on 8th March, 2011. Additionally,
 publicity material like brochures and AV film on activities and
 services of the training institute have also been prepared.
 
 4.  The training institute of your Company also provided consultancy to
 EIL in terms of deputing GAIL Engineers from Pata Plant to Panipat
 Petrochemical plant for providing assistance commissioning and training
 to their employees.
 
 5.  The training institute of your Company had also successfully
 developed and delivered a course on Natural Gas Business Management for
 the MBA students of Rajiv Gandhi Institute of Petroleum Technology
 (RGIPT).
 
 VIGILANCE
 
 The main thrust of vigilance activities in your company is on
 predictive & preventive actions rather than punitive vigilance. In
 accordance with this objective, intensive inspections of various works
 were taken up and corrective measures suggested. Further, Shri Pratyush
 Sinha, the then Central Vigilance Commissioner of India visited your
 Company and interacted with senior officers of the company. He
 highlighted the importance of Corporate Governance, role of supervisory
 officers in eliminating corruption and stated that Vigilance is a
 management function which brings in more transparency and making
 objectivity in decision making.
 
 During the Vigilance Awareness period, your Company organized vendor
 interaction programme wherein 138 vendor representatives representing
 86 vendors providing services for various GAIL pipeline projects
 actively participated. The programme received active participation from
 vendors.  Rallies were organized by certain units in association with
 local NGOs for generation of awareness and publicity against ill
 effects of corruption.
 
 REPRESENTATION OF SCs, STs, OBCs, MINORITIES AND WOMEN EMPLOYEES
 
 Your Company has been complying with Reservation Policy in terms of
 Presidential Directives and other guidelines received from time to time
 from Government of India in respect of providing reservation in matters
 of employment to candidates belonging to Scheduled Castes (SCs),
 Scheduled Tribes (STs), Other Backward Classes (OBCs) and Persons with
 Disabilities (PWDs) in Direct Recruitment.
 
 Details with respect to total number of employees and the
 representation of Schedules Castes, Scheduled Tribes, Other Backward
 Classes amongst them as on 31.03.2011 have been given in Table below:
 
 GROUP         EMPLOYEES        SC          ST      OBC 
                ON ROLL
 
 A                2,661        422          158     422
 
 B                  495        105           65      59
 
 C                  664        113           28     191
 
 D                   58         17            5      14
 
 TOTAL            3,878        657          256     686
 
 A total of 220 new employees joined the company during the year
 2010-11. Total Manpower of the Company as on 31.03.2011 stood at 3,878
 with 16.9 % of its employees belonging to SC category, 6.60 % to ST
 category, 1 7.7% to OBC category, 7.1 % to Minorities and 2.24% to PWDs
 category. Your Company''s workforce comprised of 218 women employees as
 on 31.03.2011.
 
 EMPLOYEE ENGAGEMENT SURVEY
 
 Employee Engagement Survey was carried out by your Company during FY
 2010-11 to gauge the engagement level of the employees as it believes
 that only engaged employee will go extra mile in delivering superior
 results. With the help of the survey, valuable feedback was obtained
 from the employees on People Practices and suggestions were also taken
 for improving overall employee experience at GAIL.  Your Company was
 placed in the High Performance/ Hewitt''s Best Employer Range.
 
 SENIOR MANAGEMENT DEVELOPMENT CENTRE (SMDC)
 
 Your Company realizes that it is imperative to continually strive to
 develop and enhance the quality of its talent pool. This would enable
 it to place competent persons at strategic roles.  Senior Management
 Development Centre (SMDC) is being conducted in your Company as part of
 the Leadership Development Program to objectively assess the potential
 of its senior executives. The objective of this exercise is to identify
 the development needs of senior executives and design development
 programs so as to bridge the gaps.
 
 SMDC is being conducted for senior executives at Chief Manager and
 above grades. This exercise will be a crucial input for the development
 of pipeline of leaders in your Company.
 
 OFFICIAL LANGUAGE
 
 Your Company is continuously making vigorous efforts for the
 propagation and successfu implementation of the Official Language
 Policy.  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.
 
 With a view to create greater awareness and consciousness among
 employees, Hindi Fortnight was celebrated across the company.  Further,
 in order to provide a larger platform to discuss the problems and
 difficulties in implementation of Official Language, annual conference
 was organized wherein senior officials from corporate office and work
 centers participated and shared their thoughts.
 
 Bilingual software was provided to all GAIL offices. To impart working
 knowledge of Hindi as well as computer training to employees in
 bilingual software, a comprehensive and time bound programme was
 prepared and implemented during the year.
 
 RajbhashaSahyoga quarterly Hindi magazine was published and
 distributed among employees in order to create interest among employees
 of GAIL and their family members towards reading and creative writing
 in Hindi.
 
 RESEARCH AND DEVELOPMENT
 
 Your Company recognizes the importance of Research and Development
 (R&D) to improve its technological capabilities to remain competitive.
 Your Company pursues a focused R&D strategy to further its competitive
 edge in its existing business by improving operationa efficiency
 besides exploring new resources of energy to meet the growing demand of
 India''s populace for clean energy. Your Company has contributed X 16
 crores to the Hydrogen Corpus Fund managed by Centre for High
 Technology (CHT) to take up research projects in various facets of
 Hydrogen Production and Storage which is touted as the fuel of the
 future.
 
 Your Company is pursuing a unique collaboration with Municipal
 Corporation of Delhi for extraction of gas at Ghazipur Landfil site. A
 10 acres of area has been earmarked initially for carrying out a pilot
 project for extraction of landfill gas. As per the preliminary analysis
 carried out, the project holds a potential to generate 600-800 m3/Hr of
 gas. It is also planned to put up a CNG station on this landfill gas to
 improve the economics. 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 clean 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 the possibility of replicating its success all over the country.
 
 Another innovative project that your Company is working upon is
 conversion of waste plastics into fuel.The bench scale tests have given
 encouraging results.This project shall not only help in proper disposal
 of waste plastic but also generate fuel from the same. R&D efforts are
 also being undertaken to develop new polymer grades to better suit the
 customer requirements
 
 Efforts are also being made to harness technologies that can be used to
 exploit various non-conventional natural gas sources like Shale Gas,
 Gas Hydrates, Underground Coa Gasification (UCG) etc. that have
 potential to substantially increase the availability of natural gas.
 
 LAURELS
 
 CORPORATE AWARDS
 
 - GAIL was ranked no.1 company among gas utilities in Asia in the
 Platts Globa Ranking of Energy Companies for the year 2010.
 
 - MOD Excellence Award by the Department f Public Enterprises for the
 year 2008-09 in the petroleum sector.
 
 - Managing India Award for the Outstanding PSU of the Year by AIMA.
 
 - Kaizen Warrior Award for Most Efficient Navratna PSU of the year.
 
 - Dun & Bradstreet-Rolta Corporate Award for
 Gas-Processing,Transmission & Marketing.
 
 - GAIL''s KG Basin and Vizag Secuderabad LPG pipeline unit won the first
 and second National Award for Excellence in Cost Management 2010
 respectively under the category of Public Sector Manufacturing Unit.
 
 - Certificate of Recognition for Excellence in Corporate Governance in
 the 10th ICSI National Award for Excellence in Corporate Governance
 2010 as one of theTop Companies adopting Excellent Practices in
 Corporate Governance.
 
 - Asia''s Best Employer by World HRD Congress in the category of''Best HR
 Strategy in line with Business.
 
 HSE AWARDS
 
 - International Safety Award from British Safety Council (UK) for KG
 Basin & NCR.
 
 - HVJ pipeline bagged consecutively 14th time Oil Industry Safety award
 with 1st rank for best overall safety performance under''Cross Country
 Pipelines Category(Natural Gas/LPG).
 
 - Gas processing ComplexVijaipur bagged for 7th time Oil Industry
 Safety Award with 2nd rank for best overal safety performance under
 other processing plants category.
 
 - GAIL, Pata Bagged National Safety Award 2008 of Ministry of Labour &
 Employment, Government of India as 1st Winner (Category: Manufacture of
 Chemical & Fertilizers).
 
 - GAIL Lakwa wins 1st Rankin overal Safety performance in the''Other
 Processing Plants Categoryfrom OISD for 2009-10.
 
 - Safety Innovation award for Agra, Khera, Lakwa & Nasirabad from
 Institute of Engineers Delhi State Center.
 
 - GPU Vijaipur has won Sarvashresta award from National safety Council
 M. P Chapter.
 
 - GAIL Pata, Vijaipur, Vaghodia, Jhabua, Hazira, NCR, & Mumbai bagged
 Greentech Environment Excellence (Gold) Award - 2010from Greentech
 Foundation, New Delhi.
 
 OTHERS
 
 - Your Company was adjudged as Asia''s Best Employer by World HRD
 Congress in the category of''Best HR Strategy in line with Business.
 
 - GAIL won most coveted award OC customer responsiveness presented by
 Economic Times & Avaya Global Connect.
 
 
 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. Your Company has nominated APIOs/ PIOs/ CPIO at
 its units/offices across the country to provide information to citizens
 under the provisions of RTI Act.
 
 MANAGEMENT DISCUSSION AND ANALYSIS
 
 The detailed Management Discussion and Analysis form 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, 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.
 
 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, 1 988 are annexed at Annexure- D.
 
 PARTICULARS OF EMPLOYEES 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 E.
 
 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 wereRs4.72 crores.
 Expenditure in foreign currency was X 2,382.58 crores.
 
 During the year under review, your Company has incurred expenditure ofRs
 2.79 crores on foreign tours, foreign training, seminars & conferences,
 X 0.15 crores on entertainment and X 20.92 crores on advertising &
 publicity.
 
 DIRECTORS
 
 Shri S. Venkatraman was appointed as Director (Business Development)
 w.e.f 25.09.2010, Shri P.K.Jain was appointed as Director (Finance) in
 place of Shri R.K. Goel w.e.f. 01.03.2011 and Shri Arun Agarwal was
 appointed as non-official part-time (Independent) Director w.e.f.
 24.02.2011. Dr. U.K. Sen, non-official part-time (Independent) Director
 ceased to be Director w.e.f. 28.04.2011.
 
 The Board placed on record its deep appreciation for the valuable
 services rendered by Shri R.K. Goel and Dr U.K. Sen during their
 association with your Company.
 
 CODE OF CONDUCT
 
 In line with 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 31 March, 2011.
 
 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
 ended 31 March, 2011, 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 ended 31st March, 2011 on a going concern 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 Mi. Puri, Chartered Accountants, New Delhi
 were appointed as Joint Statutory Auditors of your Company for the year
 2010-11.
 
 The review of Annual Accounts of your Company for the year ended 31
 March, 2011 by CAG forms part of this report as an addendum. Notes on
 accounts referred in the Auditors''Report are self explanatory and
 therefore, do not call for any further comments.
 
 COST AUDITORS
 
 Pursuant to the directions of the Centra Government for audit of cost
 accounts, your Company has appointed M/s Rohit J Vora, Vadodara for
 Vijaipur-LPG, M/s R. Nanabhoy &Co, Mumbai for Pata-LPG, M/s M Goyal &
 Co, Jaipur for Gandhar-LPG, M/s Chandra Wadhwa&Co, New Delhi
 forVaghodia-LPG, M/s DhanajayV.Joshi & Associates, Punefor Usar-LPG,
 M/s DGM & Associates, Guwahati for Lakwa-LPG and M/s Mani &Co, Kolkata
 for Baroda-CNG station as Cost Auditor(s) for the financial years
 2010-11 to 2013-14.  Further, M/s K.L. Jaisingh & Co, Cost Accountants,
 Noida was appointed as cost auditor for GAILTEL Business for the
 financial years 2011-12 to 2013-14.
 
 ACKNOWLEDGMENT
 
 Your Directors express their gratitude for the valuable guidance and
 support provided by Government of India in particular the Ministry of
 Petroleum and Natural Gas and 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 cooperation.
 
 Your Directors also wish to thank all the stakeholders of GAIL for
 reposing their faith, trust and confidence in your Company.
 
 Your Directors would, at the end, like to place on record their deep
 and sincere appreciation for the hard work, dedication and unstinting
 efforts of your Company''s employees to ensure that your Company reaches
 the pinnacle of success.
 
 
                                       For and on behalf of the Board
 
                                                         B.C.Tripathi 
 
                                         Chairman & Managing Director
 
 Place: New Delhi 
 
 Dated: July 18,2011