The Members
 
 Gujarat State Petronet limited
 
 The Directors have pleasure in presenting the 13th Annual Report and
 Audited Accounts of the Company for the year ended 31st March, 2011.
 
 FINANCIAL HIGHLIGHTS
 
                                                (Rs. in Crore)
 
 Particulars                                    2009-10    2010-11
 
 Total Income                                   1016.72     1068.15
 
 Manpower Expenses                                 9.94       15.29
 
 Gas Transmission Charges                          0.36         NIL
 
 Admin, O&M & other Expenses                      49.14       62.10
 
 Miscellaneous Expenditure Written Off             2.79        0.10
 
 Total expenses                                   62.23       77.49
 
 PBDIT                                           954.49      990.67
 
 Interest (after Capitalization)                  93.83       96.06
 
 Depreciation                                    236.49      153.30
 
 Prior Period Adjustments                         (2.72)      23.70
 
 Profit Before Tax                                626.89      765.00
 
 Tax including Deferred Tax                      213.12      258.62
 
 Profit After Tax                                 413.77      506.38
 
 MAJOR ACHIEVEMENTS
 
 Your Company has maintained an upward trend in all performance
 parameters. The physical and financial performance of the Company is
 summarized as follows:
 
 - Total Income increased from Rs. 1016.72 crore in previous year to
 Rs.1068.15 crore, recording an increase of 5.06%.
 
 - PBDIT increased from Rs. 954.49 crore in previous year to Rs. 990.67
 crore, recording an increase of 3.80%.
 
 - PAT increased from Rs. 413.77 crore in previous year to Rs.  506.38
 crore, recording an increase of 22.38%.
 
 - 99.90% pipeline grid availability and accident free year of
 operations.
 
 - During the year, the Company transported an average of 35.64 mmscmd
 of gas.
 
 - Letters of Authorization have been awarded by Petroleum and Natural
 Gas Regulatory Board to the GSPL led consortium (BPCL, HPCL and IOCL as
 other consortium members) for developing three cross-country natural
 gas transmission pipelines, viz, Mallavaram - Vijapur - Bhilwara
 (approx 1585 kms) pipeline, Mehsana - Bhatinda (approx 1670 kms)
 pipeline and Bhatinda - Jammu - Srinagar (approx 740 kms) pipeline.
 
 CAPITAL
 
 During the year, paid up share capital of the Company has increased
 from Rs. 562.45 crore to Rs. 562.58 crore on account of allotment of
 shares to eligible employees under the ESOP - 2005.
 
 DIVIDEND
 
 Keeping in view the fund requirements for expansion projects, the Board
 of Directors of the Company is pleased to recommend dividend @ Re. 1
 (i.e. 10%) per equity share of the face value of Rs. 10 each for the
 Financial Year 2010-11.
 
 GAS TRANSMISSION SERVICES
 
 The Company has signed firm GTAs for transporting 32.76 mmscmd of gas to
 various customers and interruptible / short term GTAs for 6.16 mmscmd
 (Previous year: firm GTAs 35.46 mmscmd and interruptible GTAs 6.49
 mmscmd).
 
 GAS GRID PROJECT
 
 Government of Gujarat has always played a pro-active role in the
 development of the energy value chain in the State. Gujarat is the first
 State to plan and execute a State-wide Gas Grid on an open access
 principle.
 
 The pipeline grid has been designed as per the highest international
 standards with inbuilt fexibility to cater to varying loads.
 
 The pipeline grid map of GSPL for Gujarat is enclosed as Annexure - V.
 
 The map showing the proposed cross-country natural gas transmission
 pipelines to be implemented by GSPL is enclosed as Annexure - VI.
 
 Projects commissioned
 
 During the year, the Company has successfully completed commissioning
 of approx 250 kms of pipelines under various pipeline projects namely:
 Darod - Jafrabad, various spurs connecting customers like Sumangal
 Glass, Nirma, GACL Dahej Connectivity (Roxul), IOCL, IPCL, Ajanta, EOL
 (Refnery), Met Trade.
 
 Current grid operations account for approx 1874 kms. Gas is flowing 
 from Hazira / Dahej / Vapi to various industries and City Gas 
 Distribution (CGD) Networks located in various districts of 
 Gujarat including Surat, Bharuch, Baroda, Anand, Ahmedabad, 
 Gandhinagar, Sabarkantha, Bhavnagar, Amreli, Mehsana, 
 Surendranagar, Rajkot, Jamnagar, Navsari, Kutchh, Panchmahal, 
 Kheda, Valsad.
 
 Projects on Hand
 
 Your Directors are pleased to inform that the Company continues to
 develop pipeline infrastructure in the State of Gujarat. The following
 pipeline sections are being developed on priority:
 
 - Tana - Amreli pipeline (approx 75 kms)
 
 - Mehsana - Palanpur pipeline (approx 70 kms)
 
 - Nano connectivity pipeline (approx 37 kms)
 
 - Sterling SEZ pipeline (approx 26 kms)
 
 - Spurline to Botad (approx 24 kms)
 
 Further, the Company continues to develop several other trunk and
 spurlines to connect new industrial clusters and medium sized customers
 along the pipeline network, which include regions like Bhavnagar,
 Sikka, Vilayat, Dahej and Amreli.
 
 WIND POWER PROJECT
 
 Your Company being committed to promote clean and green energy has
 successfully commissioned wind power project of 52.5 MW in the areas of
 Maliya - Miyana, Rajkot and Gorsar - Adodar, Porbandar.
 
 FUTURE PLANS
 
 The Company is working on future expansion projects. The Company is
 planning to develop pipeline infrastructure of approx 1102 kms in the
 next two years. The Company is also participating in the bids invited
 by PNGRB for the Surat - Paradip pipeline (approx 1500 kms). Above
 initiations reflect Company''s long term vision of growth through
 expansion of business within and outside Gujarat.
 
 OPERATION & MAINTENANCE ACTIVITIES
 
 The Company has transported 13009 mmscm of gas during the Financial
 Year 2010 - 11 (Previous year: 11673 mmscm).
 
 To safeguard pipeline assets and optimize efficiency of the pipeline
 system, the Company is giving utmost importance to efficient operations
 and preventive maintenance.
 
 HEALTH, SAFETY AND ENVIRONMENT
 
 The Company, in order to fulfill its commitment towards health, safety
 and environment, has taken active steps towards establishment of Safety
 Management Systems (SMS).  Environment and safety features have been
 integrated into design, construction and O&M operations of the Company
 for ensuring utmost safety for the facilities, local community and the
 environment. The same is also being reflected in the QHSE policy of the
 Company. The concept of asset integrity for enhancement of SMS is being
 incorporated. The Company is expanding and managing its operations in a
 manner which is safe and environmentally sustainable.
 
 For developing effectiveness of Safety Management Systems, training of
 all employees across the Company is ensured through various training
 programs. The same is being monitored through internal audit teams and
 delegation of safety management upto the local level. Further,
 emergency management plans are being reviewed and updated regularly.
 Moreover, contractors'' adherence to Company''s QHSE policy is also
 assured through regular site visits and external audits. Contract
 employees are subjected to training programs like safety induction,
 defensive driving,
 
 Personal Protective Equipment Policy etc. Regular site visits ensure
 the enhancement of behavioral aspects of the contract employees and
 enhancement of safety culture which has also ensured the safe
 commissioning of the new projects. To achieve the highest quality of
 safety systems, the Company has moved towards international recognition
 with the corporate membership of British Safety Council. The Company is
 proud to maintain its target of ''zero accident'' year with full
 commitment of its employees and management. The Company won
 International Safety award by the British Safety Council based on its
 performance of zero accident in 2010.
 
 The Company is already certifIed to Integrated Management Systems (QMS,
 EMS & OHSAS). Effectiveness of these certifications is being assured
 through planned audits of the system. Continuous improvement is visible
 in various O&M systems. Predictive maintenance schedules are being
 adhered to with the updating of records. Emergency response plans are
 updated as a part of routine function and their respective
 effectiveness is verified by regular mock drills as per intervals
 identified by respective work bases.
 
 FIXED DEPOSITS
 
 During the year, the Company has not accepted any Fixed Deposits from
 the public.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 During the year, the Company focused on CSR initiatives, mainly for
 promoting use of environment friendly fuel, creating awareness for
 conservation of energy, promotion of educational activities, etc.
 
 DIRECTORS
 
 Pursuant to the provisions of Section 256 of the Companies Act, 1956,
 Shri D J Pandian, IAS and Shri A K Joti, IAS Directors of the Company
 shall retire by rotation at the ensuing Annual General Meeting and
 being eligible, offers themselves for reappointment.
 
 A brief resume of the Directors retiring by rotation/seeking
 appointment at the ensuing Annual General Meeting, nature of their
 expertise in specific functional areas and details regarding the
 companies in which they hold directorship, membership/ chairmanship of
 committees of the Board are given in the Corporate Governance Report
 forming part of this Directors'' Report.
 
 STATUTORY AND C&AG AUDIT
 
 As your Company is a Government Company, the Statutory Auditors are
 appointed by the Comptroller & Auditor General of India (C&AG).
 Accordingly, the C&AG has appointed M/s P Singhvi & Associates,
 Chartered Accountants as Statutory Auditors of the Company for the
 Financial Year 2010-11.
 
 C&AG has given NIL Comment Report for the Financial Year 2010-11. The
 NIL Comment Report is enclosed as Annexure - VII.
 
 AUDIT COMMITTEE
 
 Audit Committee of Directors of the Company at its meeting held on 26th
 May, 2011 approved the Annual Accounts for the Financial Year ended on
 31st March, 2011 and recommended the same for approval of the Board.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
 1956, the Directors hereby confirm that,
 
 (i) in the preparation of the annual accounts, the applicable
 accounting standards had been followed along with proper explanation
 relating to material departures.
 
 (ii) accounting policies are selected and applied consistently and
 judgments and estimates 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 Profit of the Company for that period.
 
 (iii) 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 is taken.
 
 (iv) the annual accounts are prepared on a going concern basis.
 
 MANAGEMENT DISCUSSION & ANALYSIS
 
 This Annual Report contains a separate section (Annexure–I) on the
 Management Discussion and Analysis, which forms part of this Directors''
 Report.
 
 CORPORATE GOVERNANCE
 
 Corporate Governance denotes the framework for companies to conduct
 their business in an ethical and responsible manner.  It is determined
 primarily by the approach that a Company has towards its stakeholders
 as well as to the environment in which it operates. It stems from the
 belief and realization that corporate citizenship has a set of
 responsibilities, which must be fulfilled for a Company to progress and
 succeed over the long term.
 
 The Company believes that good governance alone can deliver continuous
 good business performance. A Report on Corporate Governance as required
 under Clause 49 of the Listing Agreement is incorporated as a part of
 this Directors'' Report (Annexure – II).  A Compliance Certificate by the
 Practicing Company Secretary is also attached to this Directors''
 Report.
 
 GSPL EMPLOYEES STOCK OPTION PlAN (ESOP):
 
 The Company has instituted the following ESOP Schemes as incentives to
 attract, retain and reward the employees, and to enable them to
 participate in the future growth and financial success of the Company.
 
 1. GSPL Employees Stock Option Plan - 2005 (ESOP - 2005).
 
 2. GSPL Employees Stock Option Plan - 2010 (ESOP - 2010).
 
 Each such Option has conferred a right upon the employee to apply for
 one Equity Share of the Company.
 
 Statutory disclosures regarding ESOP - 2005 and ESOP - 2010 are
 enclosed as Annexure - III & IV respectively to this Directors'' Report.
 
 PARTICULARS OF EMPLOYEES
 
 During the year under review, none of the employees were drawing
 remuneration, which require disclosure under Section 217 (2A) of the
 Companies Act, 1956, read with the Companies (Particulars of Employees)
 Rules, 1975.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 Conservation of Energy
 
 During the period under review, there is no consumption of energy
 requiring disclosure.
 
 Technology Absorption
 
 The Company has not imported any technology. However, the Company has
 engaged consultants/advisors of international repute to make available
 latest technology for project implementation.
 
 Foreign Exchange Earnings & Outgo
 
 Foreign Exchange Earnings - NIL
 
 Foreign Exchange Outgo - Rs. 8,84,81,382/-
 
 ACKNOWLEDGEMENTS
 
 The Directors appreciate the continued support received from the valued
 customers and look forward to this mutually supportive relationship in
 future.
 
 The Directors place on record their appreciation of the valuable
 services rendered by the employees of the Company at all levels,
 without whose contribution the excellent performance of the Company
 would not have been possible.
 
 The Directors are extremely grateful for all the support given by the
 Government of Gujarat at all levels. Their guidance, encouragement and
 moral support has enabled the Company to expand the pipeline network in
 a professional manner.
 
 The Directors also wish to place on record the sincere thanks to
 various regulatory authorities for the continuous support extended to
 the Company.
 
 The Directors place on record their sincere thanks to the Promoters,
 Shareholders and Lenders for their valuable support, trust and
 confdence in the Company.
 
                           for and on behalf of the Board of Directors
 
 Date: 12th August, 2011                                 A K Joti, IAS
 
 Place: Gandhinagar Chairman