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Directors Report of Gujarat State Petronet Ltd.

Mar 31, 2023

Directors take pleasure in presenting the 25^th Annual Report and Audited Accounts of Gujarat State Petronet Limited (âGSPLâ) for the year ended 31â March, 2023.

FINANCIAL HIGHLIGHTS

Your Company has been demonstrating stable performance parameters.

Major Highlights of the Company are summarized below:

	(''	in Crore)
Particulars (Standalone Accounts)	2022-23	2021-22
Total Income	1,930.21	2,124.52
Employee Benefit Expenses	72.22	65.33
Other Expenses	430.90	557.07
Total Expenses	503.12	622.40
PBDITA	1,427.09	1,502.12
Finance Cost	4.68	31.30
Depreciation & Amortisation	193.86	195.99
Profit Before Tax	1,228.55	1,274.83
Tax including Deferred Tax	283.60	295.78
Profit from continuing operations after tax	944.95	979.05
Profit from discontinued operations after tax	^-	30.70
Profit for the year after Tax	944.95	1,009.75
EPS for the year (Rs.) Appropriations	16.75	17.90
Transfer to General Reserves	NIL	NIL

PERFORMANCE HIGHLIGHTS

â¢ GSPL has successfully extended the gas grid up to 2704 kilometer.

â¢ 100% Pipeline grid availability and âaccident freeâ year of operations.

â¢ During FY 2022-23, Total Income stood at '' 1930.21 Crore, as compared to '' 2124.52 Crore and PBT was '' 1228.55 Crore as compared to '' 1274.83 Crore over Previous Year.

â¢ ^e Profit After Tax for FY 2022-23 is '' 944.95 Crores vis-a-vis '' 1009.75 Crores for FY 2021-22.

DIVIDEND

As per the provisions of the Regulation 43 (A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ), GSPL adopted a Dividend Policy which has been amended w.e.f. 1R^hMay, 2023. ^e Policy is available on the website of GSPL at https://gspcgrou.p.com/d.ocu.ments/pa.gecontent/DDPGSPl,.pd.f Keeping in view the various factors including the fund requirements for expansion of projects and subsidiaries,

Government of Gujarat Guidelines as mentioned in the Policy, the Board of Directors of GSPL is pleased to recommend Dividend of '' 5 (i.e. @ 50 %) per Equity Share of the face value of '' 10 each for the Financial Year 2022-23 subject to the approval of Shareholders in the ensuing Annual General Meeting. ^e total cash outflow on account of the proposed Dividend for the Financial Year 2022-23 would be approx '' 282.11 Crores.

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.

^e pipeline grid has been designed as per the highest international standards with inbuilt flexibility to cater to varying loads.

^e pipeline grid map of GSPL for Gujarat is enclosed herewith as Annexure - IX.

^e map showing the Cross-Country Natural Gas Transmission Pipelines being implemented through special purpose vehicles is enclosed herewith as Annexure - X.

Projects commissioned

During the year under review, your Company has successfully connected total 12 Nos. of customer locations in Bharuch, Anand, Dahod, Amreli, Gandhinagar and Ahmedabad District including connection to CGD entities.

^e grid operations account for approx 2704 Kms as on 31â March, 2023. Gas is flowing from Mundra / Hazira / Dahej / Vapi to various industries and City Gas Distribution (âCGDâ) Networks located in various Districts of Gujarat including Surat, Bharuch, Narmada, Baroda, Anand, Ahmedabad, Dahod, Gandhinagar, Sabarkantha, Panchamahal, Patan, Bhavnagar, Mehsana, Banaskantha, Surendranagar, Botad, Rajkot, Morbi, Jamnagar, Navsari, Kutch, Kheda, Valsad, Amreli, Gir & Somnath. Projects under execution

Your Directors are pleased to inform that GSPL continues to develop additional Pipeline infrastructure in the State of Gujarat. Your Company is currently implementing 2 source connectivity projects in Amreli and Gir Somnath Districts viz., Swan FSRU connectivity (3 Km Approx.) and Chhara LNG Connectivity pipeline (90 Km Approx.), CGD Connectivity for Geographical areas of Kutch-West, Rural-Ahemdabad, Jamnagar, Junagadh and Amreli District and Customer connectivity in Silvassa and in SEZ Kutch. Your Company also received authorisation from PNGRB for developing Jamnagar-Dwarka pipeline in Gujarat. Several customers in many industrial regions across Gujarat, including Dahej SEZ are receiving gas through Companyâs network with more getting connected on a regular basis.

WIND POWER PROJECT

Your Company being committed to promote clean and green energy has set up Wind Power Project of 52.5 MW in the areas of Maliya Miyana, Rajkot and Gorsar & Adodar, Porbandar. During the year, GSPL has sold 8,90,87,531 KWH of electricity generated through Windmill.

FUTURE PLANS

Your Company is working on future expansion projects based on the demand in various regions around the gas grid, including expanding towards other States. Your Company is also gearing up its pipeline by developing connectivity with new terminals that are being developed in Gujarat to ensure connectivity with all sources in Gujarat.

OPERATION & MAINTENANCE ACTIVITIES

GSPL has transported 9253 MMSCM of gas during the Financial Year 2022 - 23 (Previous year: 12369 MMSCM).

To safeguard pipeline assets and optimize utilization of the pipeline system, GSPL is giving utmost importance to efficient operations and preventive maintenance.

SUBSIDIARY, ASSOCIATE &JOINT VENTURE COMPANIES

Subsidiary Companies

Your Company has following three Subsidiary companies within the meaning of the Section 2(87) of the Companies Act, 2013:

1) GSPL India Gasnet Limited (GIGL) for development of Mehsana - Bhatinda and Bhatinda - Gurdaspur Pipeline Projects.

2) GSPL India Transco Limited (GITL) for development of Mallavaram - Bhopal - Bhilwara - Vijaipur Pipeline Project.

3) Gujarat Gas Limited (GGL) is India''s largest city gas distribution player with presence spread across 44 Districts in the State of Gujarat, Punjab, Rajasthan, Haryana, Madhya Pradesh, Maharashtra and Union Territory of Dadra and Nagar Haveli.

Associate Company

As on 31^st March, 2023, GSPL has one Associate Company viz. Sabarmati Gas Limited.

To avoid duplication between the Boardâs Report and Management Discussion and Analysis Report, the performance highlights/summary of the Subsidiary companies/Joint Venture companies /Associate companies of GSPL is given in Management Discussion & Analysis Report.

Accounts of Subsidiary, Associate & Joint Venture Companies: Pursuant to notification dated 16t^h February, 2015 of Ministry of Corporate Affairs notifying the Companies (Indian Accounting Standard) Rules, 2015, GSPL, its Associate, Subsidiary and Joint Venture Companies have adopted Ind AS w.e.f. 1 st April, 2016.

Consequently, though as per provision of Section 2 (87) (ii) of the Companies Act 2013, GSPL India Gasnet Limited (GIGL) and GSPL India Transco Limited (GITL) fall within the meaning of Subsidiary Company, as per guidance of Indian Accounting Standards [Ind AS], GIGL and GITL fall within the criteria of Joint Venture and accordingly they have been considered as Joint Venture for the purpose of disclosures and compliances in relation to the Financial Statements of GSPL for the Financial Year 2022 - 23.

Pursuant to provisions of Section 129 (3) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, a separate statement in prescribed Form AOC - 1 containing salient features of the financial statement of Subsidiary, Associate & Joint Venture Companies is provided in the Annual Report. Further, the audited annual accounts and related information of GIGL, GITL and GGL will be made available to any Member upon request. ^e annual accounts of GIGL, GITL and GGL will also be available for inspection by members in electronic mode. ^e same are also available on the website of GSPL viz. www.gspcgroup.com.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Ind AS - 28 on Investment in Associates and Joint Ventures read with Ind AS - 110 on Consolidated Financial Statements and Ind AS - 111 on Joint Arrangement, the Audited Consolidated Financial Statements are provided in the Annual Report.

HEALTH, SAFETY AND ENVIRONMENT

GSPL, in order to fulfil its commitment towards Health, Safety and Environment, has taken active steps towards establishment of Safety Management Systems. Environment and safety features have been integrated into design, construction and O&M operations of GSPL for ensuring utmost safety for the facilities, local community and the environment. *tte same is also being reflected in the QHSE policy of GSPL. It 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 GSPL is ensured through various training programs. "tte same is being monitored through internal audit teams and delegation of safety management up to the local level. Contractorsâ adherence to Companyâs QHSE policy is also assured through regular site visits and external audits. Regular site visits ensure the enhancement of safety culture which also facilitates safe commissioning of the new projects. GSPL is proud to maintain its target of âzero accidentâ year with full commitment of its employees and management.

Your Company is re-certified to integrated Management Systems (ISO 9001:2015, ISO 14001:2015 & ISO 45001:2018) with validity till 9^th November 2023. Effectiveness of these certifications is being assured through planned audits of the system. Continuous improvement is visible in various O&M systems. Preventive Maintenance schedules are being adhered to with updating of records. Further, Emergency Response and Disaster Management Plan (ERDMP) of GSPL was re-accredited as per the requirement of ERDMP Regulations, 2010 & and the amendment 2020 under PNGRB Act, 2006. ERDMP is being reviewed and updated regularly. All conditions of Accreditation are being adhered to. Effectiveness of ERDMP is verified through regular mock drills as per specified intervals as identified by respective work bases.

DEPOSITS

During the year, GSPL has not accepted Deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS,

GUARANTEES OR INVESTMENTS

Pursuant to Section 186 (11) of the Companies Act, 2013, loans made, guarantees given or securities provided or investment made by a company providing infrastructure facilities are exempted from compliance with Section 186 of the Companies Act, 2013 except sub Section (1). Accordingly, your Company being engaged in the Gas Transportation business is exempted from aforesaid compliance. However, the details of Loans, Guarantees, Securities and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188 (1) OF THE COMPANIES ACT, 2013

All Related Party Transactions that were entered into during the Financial Year were on an armâs length basis and were in the ordinary course of business.

Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseeable and repetitive nature and further would be executed on armâs length basis and in the ordinary course of business. Further, a statement giving details of all Transactions executed with Related Parties is placed before the Audit Committee on a quarterly basis for its approval/ ratification as the case may be.

^e Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions as approved by the Board is uploaded on GSPLâs Website.

None of the Directors has any pecuniary relationships or transactions vis-a-vis GSPL.

^e particulars of contracts or arrangements with Related Parties referred to in Section 188 (1) of the Companies Act, 2013, as prescribed in Form AOC - 2 of the Companies (Accounts) Rules, 2014 is enclosed as Annexure - III to this Report.

CORPORATE SOCIAL RESPONSIBILITY

GSPL has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. Pursuant to provisions of Section 135 of the Companies Act, 2013, GSPL has also formulated a Corporate Social Responsibility Policy which is available on the website of GSPL at http://gspcgroup.com/GSPL/csr.

Your Company being committed in fulfilling its Corporate Social Responsibility has been engaged in various social initiatives through its intervention in the areas of education, promoting healthcare/preventive healthcare, eradication of hunger, poverty & malnutrition etc. in accordance with the Corporate Social Responsibility Policy of GSPL.

^e Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed herewith as Annexure - IV to this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Since last Boardâs Report, Shri Pankaj Kumar, IAS (Retd.) ceased to be Chairman & Managing Director of GSPL consequent to superannuation as Chief Secretary to Govt. of Gujarat, Shri Sanjeev Kumar, IAS ceased to be Joint Managing Director consequent to resignation from the Board due to transfer and appointment as Principal Secretary to Government, Forests & Environment Department, Sachivalava, Gandhinagar and Shri J. P. Gupta, IAS ceased to be Director upon resignation from the Board on account of changes made by Finance Department, Govt. of Gujarat.

Your Directors wish to place on record appreciation for the services rendered by Shri Pankaj Kumar, IAS (Retd.) as Chairman & Managing Director, Shri Sanjeev Kumar, IAS as Joint Managing Director and Shri J. P. Gupta, IAS as Director of GSPL.

Further, based on the recommendation of Nomination and Remuneration Committee, the Board has appointed Shri Milind Torawane, IAS as Additional Director and as Joint Managing Director w.e.f. 10t^h April, 2023, Smt. Mamta Verma, IAS as Additional Director w.e.f. 4t^h May, 2023 and Ms. Arti Kunwar, IAS as Additional Director w.e.f. 1R^h August, 2023.

It is proposed to regularize their appointment in the 25^ Annual General Meeting.

Further, based on recommendation of Nomination and Remuneration Committee, the Board has appointed Shri Raj Kumar, IAS, Director as Chairman & Managing Director w.e.f. 23^rd February, 2023.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Shri M M Srivastava, IAS (Retd.), Director of GSPL shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment as Director liable to retire by rotation.

A brief resume of the Directors retiring by rotation/seeking appointment/re-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 is annexed to the Notice.

Directorsâ Independence:

Pursuant to the provisions of Section 149 (6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors of GSPL have given confirmation/ declaration to the Board that they meet with the criteria of Independence and are Independent in terms of Section 149 (6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In the opinion of the Govt. of Gujarat and the Board of Directors, the Independent Directors, fulfill the conditions of independence specified in Section 149 (6) of the Companies Act, 2013 and Regulation 16 (1) (b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors have carried out an annual performance evaluation of Chairman, Non-Independent Directors and the Board as a whole. Further, the Board has carried out an annual performance evaluation of the Independent Directors and the evaluation of the working of the various Committees of Directors of GSPL.

^e performance evaluation of individual Directors was carried out based on the various parameters after taking into consideration inputs received from the Directors and also parameters set out in the Policy for Evaluation of Performance of Directors, Committees & Board such as active participation & contributions in the Meetings, balance of knowledge, expertise and experience, safeguarding the interest of GSPL and its Stakeholders etc. ^e performance evaluation of the Board as a whole and various Committees of Directors of GSPL was carried out considering various parameters such as adequacy of the composition of the Board and its Committees, discharge of key functions and responsibilities prescribed under law, corporate governance practice etc. and the overall performance assessment was discussed in detail by the Board members.

Meetings:

^e Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business. ^e Board / Committee Meetings are pre-scheduled and a tentative annual calendar of the Board and Committee Meetings is circulated to the Directors in advance to facilitate them to plan their schedule and to ensure meaningful participation in the Meetings. However, in case of a special and urgent business need, the approval is taken by passing resolutions through circulation to the Directors, as permitted by law, which are noted in the subsequent Board/Committee Meetings.

During the year, five (5) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. ^e intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

AUDIT COMMITTEE

Audit Committee of Directors of GSPL at its Meeting held on 11^th May, 2023 approved the Annual Accounts for the Financial Year ended on 31â March, 2023 and recommended the same for approval of the Board.

AUDITORS

Statutory & 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 B P Bang & Co., Chartered Accountants as Statutory Auditors of GSPL for the Financial Year 2022 - 23.

^e C&AG has given NIL Comment Reports on the Standalone and Consolidated Financial Statements of GSPL for the Financial Year 2022 â 23. *tte NIL Comment Reports have been provided before the Standalone & Consolidated Financial Statements respectively.

Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of GSPL has appointed M/s Manoj Hurkat & Associates, Practising Company Secretaries, to conduct the Secretarial Audit of GSPL for the Financial Year 2022-23.

^e Report of Secretarial Auditor on Companyâs Secretarial Audit for the Financial Year 2022 - 23 is enclosed herewith as Annexure - V to this Report.

Secretarial Audit of Material Unlisted Indian Subsidiary:

For the Financial Year 2022 - 23, GSPL India Gasnet Limited is the Material Unlisted Subsidiary of GSPL. As per Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Secretarial Audit of the Material Subsidiary mentioned above has been conducted for the Financial Year 2022-23 by Practicing Company Secretaries.

^e Secretarial Audit Report of GSPL India Gasnet Limited for the Financial Year ended 31â March, 2023 is enclosed herewith as Annexure - VI to this Report.

Cost Auditors:

Your Company is required to get the Cost Audit carried out for âGas Transportationâ business as well as âGeneration of Electricity through Windmillâ business pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014. GSPL is maintaining the Cost Accounts and Records as specified by the Central Government under sub Section (1) of Section 148 of the Companies, Act, 2013.

Accordingly, your Company has got the Cost Audit carried out for the said business for the Financial Year 2022 - 23 through the Cost Auditor M/s Kailash Sankhlecha and Associates. ^e Cost Audit Report 2022 - 23 will be submitted to the Central Government in the prescribed format within stipulated time period. Further, the Board upon the recommendation of the Audit Committee, appointed M/s Kailash Sankhlecha and Associates, Cost Accountants as Cost Auditor to audit the cost accounts of GSPL for the Financial Year 2023 - 24 on a remuneration of '' 72,000/- plus applicable taxes and reimbursement of out of pocket expenses incurred by them during the course of Audit. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Memberâs ratification for the remuneration payable to M/s Kailash Sankhlecha and Associates, Cost Auditor for the Financial Year 2023 - 24 is included in the Notice convening the Annual General Meeting.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

Risk Management:

Your Company has a well-defined risk management framework. ^e Board of Directors of GSPL has adopted a Risk Management Policy.

Internal Control System:

Your Company has a proper and adequate system of Internal Controls commensurate with its size of operations and nature of business. ^ese are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee. ^e details about the identification of elements of Risk and Internal Control Systems are provided in detail in the Management Discussion & Analysis Report forming part of this Boardâs Report.

VIGIL MECHANISM

Your Company has established a Vigil Mechanism for Directors and Employees to report their genuine concerns, details of which have been given in the Corporate Governance Report forming part of this Boardâs Report.

DIRECTORSâ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013:

a. that in the preparation of the Annual Financial Statements for the year ended 31^st March, 2023, the applicable accounting standards have been followed and no material departures have been made from the same;

b. that accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 3Pt March, 2023 and of the profit & loss of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the Annual Financial Statements have been prepared on a going concern basis;

e. that proper Internal Financial Controls were in place and that the financial controls were adequate and were operating effectively;

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

MANAGEMENT DISUSSION AND ANALYSIS

^is Annual Report contains a separate Section (Annexure-I) on the Management Discussion and Analysis, which forms part of this Boardâs 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.

GSPL believes that good governance alone can deliver continuous good business performance. A Report on Corporate Governance as required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is incorporated as a part of this Boardâs Report (Annexure - II). ^e Compliance Certificate by the Practising Company Secretary is also attached to this Boardâs Report.

COMPLIANCE OF SECRETARIAL STANDARDS

Your Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2).

ANNUAL RETURN

^e draft Annual Return of GSPL for the Financial Year 2022 -23 in the Form of MGT - 7 is available on the website of GSPL at http://www.gspcgronp.com/GSPL/annnal-returns

PARTICULARS OF EMPLOYEES

Your Company being a Government Company is exempted from disclosing the information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of the employees of GSPL pursuant to Ministry of Corporate Affairs Notification dated 5 ^th June, 2015.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL)

ACT, 2013

Your Company has always believed that appropriate standard of conduct should be maintained by the employees in their conduct and that there should be a safe, indiscriminatory and harassment free (including sexual harassment) work environment for every individual working in GSPL. Your Company has in place a Policy on Prevention of Sexual Harassment at workplace as a part of its Human Resource Policy. It aims at prevention of harassment of employees and lays down the guidelines for reporting and prevention of sexual harassment. GSPL has constituted an Internal Complaints Committee (ICC) as required under the Act which is responsible for redressal of complaints related to sexual harassment.

^e details of complaints filed/disposed/pending in relation to the Sexual Harassment of Woman at Workplace as on 31â March, 2023 is provided below:

Sr.	Particulars	No. of Complaints
1	No. of Complaints filed during the year	0
2	No. of Complaints disposed during the year	0
3	No. of Complaints Pending at the end of the year	0

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,

FOREIGN EXCHANGE EARNINGS AND OUTGO

Information required to be disclosed pursuant to provisions of the Companies Act, 2013 read with Rules thereto with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo are furnished in Annexure - VIII to this Report.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

Your Company has always given the highest importance to the environment, health and safety. ^e same is also reflected in the business practices of the Company e.g. GSPL has implemented practices towards preservation of natural resources, Green Gas emission reduction, lowering costs, etc over these years. GSPL is also conscious of its responsibility towards its various stakeholders and is determined to increase its contribution to the society to bring positive social impact.

Pursuant to amendment in the SEBI Listing Regulations, 2015, top 1,000 listed entities based on market capitalisation are required to submit a Business Responsibility & Sustainability Report (âBRSRâ) with effect from the FY 2022 - 23.

^e BRSR indicates the Companyâs performance against the principles of the âNational Guidelines on Responsible Business Conductâ. ^is would enable the Members to have an insight into Environmental, Social and Governance initiatives of the Company. ^e Business Responsibility & Sustainability Report in the prescribed format describing the initiatives taken by GSPL from an environmental, social and governance perspective among other things is enclosed as Annexure - VII to this Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF GSPL

''ttere have been no material changes and commitments, if any, affecting the financial position of GSPL which have occurred between the end of the Financial Year of GSPL to which the Financial Statements relate and the date of this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

''ttere are no significant material orders passed by the Regulators / Courts which would impact the going concern status of GSPL and its future operations during the year.

ACKNOWLEDGEMENTS

^e Directors appreciate the continued support received from the valued customers and look forward to this mutually supportive relationship in future.

^e Directors place on record their deep appreciation to employees of GSPL at all levels for their hard work, dedication and commitment without whose contribution the excellent performance of GSPL would not have been possible.

^e Directors are extremely grateful for all the support given by the Government of Gujarat at all levels. ''tteir guidance, encouragement and moral support have enabled GSPL to expand the pipeline network in a professional manner.

^e Directors also wish to place on record the sincere thanks to PNGRB and other regulatory authorities at Central and State level for the continuous support extended to GSPL.

^e Directors place on record their sincere thanks to the Promoters, Shareholders and Lenders for their valuable support, trust and confidence reposed in GSPL.

For and on behalf of the Board of Directors, Raj Kumar, IAS

Chairman & Managing Director

Date: 19^ August, 2023 Place: Gandhinagar

Mar 31, 2022

Directors take pleasure in presenting the 24^th Annual Report and Audited Accounts of Gujarat State Petronet Limited (âGSPLâ) for the year ended 31â March, 2022.

FINANCIAL HIGHLIGHTS

Your Company has been demonstrating stable performance parameters.

Major Highlights of are summarized below: (''		in Crore)
Particulars (Standalone Accounts)	2021-22	2020-21
Total Income	2,124.52	2,148.69
Employee Benefit Expenses	65.33	59.16
Other Expenses	557.07	546.92
Total Expenses	622.40	606.08
PBDITA	1,502.12	1,542.61
Finance Cost	31.30	92.92
Depreciation & Amortisation	195.99	203.00
Profit Before Tax	1,274.83	1,246.69
Tax including Deferred Tax	295.78	316.00
Profit from continuing operations after tax	979.05	930.69
Profit from discontinued operations after tax	30.70	(6.45)
Profit for the year after Tax	1,009.75	924.24
EPS for the year (?)	17.90	16.38
Appropriations	-	-
Transfer to General Reserves	NIL	NIL

PERFORMANCE HIGHLIGHTS

â¢ GSPL has successfully extended the gas grid up to 2703 kilometer.

â¢ 100% Pipeline grid availability and âaccident freeâ year of operations.

â¢ Total Income stood at '' 2124.52 Crore, as compared to '' 2148.69 Crore and PBT was '' 1274.83 Crore as compared to '' 1246.69 Crore over Previous Year.

â¢ ^e Profit After Tax for FY 2021-22 is '' 1009.75 Crores vis-a-vis '' 924.24 Crores for FY 2020-21.

DIVIDEND

http://gspcgroiip.com/dociiments/pagecontent/Dividend-Disrrihnrion-Policy.pdf. Keeping in view the various factors including the fund requirements for expansion of projects and subsidiaries as mentioned in the Policy, the Board of Directors of GSPL is pleased to recommend Dividend of '' 2.00 (i.e. @ 20 %) per Equity Share of the face value of '' 10 each for the Financial Year 2021 - 22 subject to the approval of Shareholders in the ensuing Annual General Meeting. ^e total cash outflow on account of the proposed Dividend for the Financial Year 2021 -22 would be approx '' 112.84 Crores.

GAS GRID PROJECT

^e pipeline grid has been designed as per the highest international standards with inbuilt flexibility to cater to varying loads.

^e pipeline grid map of GSPL for Gujarat is enclosed herewith as Annexure - IX.

^e map showing the Cross-Country Natural Gas Transmission Pipelines being implemented through special purpose vehicles is enclosed herewith as Annexure - X.

Projects commissioned

^e grid operations account for approx 2703 Kms as on 31â March, 2022. Gas is flowing from Mundra / Hazira / Dahej / Vapi to various industries and City Gas Distribution (âCGDâ) Networks located in various Districts of Gujarat including Surat, Bharuch, Narmada, Baroda, Anand, Ahmedabad, Dahod, Gandhinagar, Sabarkantha, Panchamahal, Patan, Bhavnagar, Mehsana, Banaskantha, Surendranagar, Botad, Rajkot, Morbi, Jamnagar, Navsari, Kutch, Kheda, Valsad, Amreli, Gir & Somnath.

Projects under execution

Your Directors are pleased to inform that GSPL continues to develop additional Pipeline infrastructure in the State of Gujarat. Your Company is currently implementing connectivity projects for Geographical areas of Kutch-West, Rural-Ahemdabad, Jamnagar and Junagadh District. ^is year your Company also received authorisation from PNGRB for developing Jamnagar-Dwarka and Jafrabad-Hadala pipelines in Gujarat. Several customers in Dahej SEZ are receiving gas through Companyâs network with more getting connected on a regular basis.

CITY GAS DISTRIBUTION PROJECT

Your Directors are pleased to inform you that pursuant to the approval by the Board of Directors on 3^rd June, 2021, GSPL had executed Business Transfer Agreement (BTA) on 26^th October, 2021 to transfer City Gas Distribution (CGD) Business of Amritsar and Bhatinda Geographical Areas to Gujarat Gas Limited (GGL, a subsidiary company) by way of slump sale. GSPL has consummated the above transfer of business with effect from closing date i.e. 1â November, 2021. GSPL has received cash consideration of INR '' 153.86 Crores ('' 164.58 Crore Business valuation determined based on an independent valuation less '' 10.72 Crore working capital adjustment as on closing date) towards the transfer of business.

WIND POWER PROJECT

Your Company being committed to promote clean and green energy has set up Wind Power Project of 52.5 MW in the areas of Maliya Miyana, Rajkot and Gorsar & Adodar, Porbandar. During the year, GSPL has sold 9,60,59,196 KWH of electricity generated through Windmill.

FUTURE PLANS

OPERATION & MAINTENANCE ACTIVITIES

GSPL has transported 12369 MMSCM of gas during the Financial Year 2021 - 22 (Previous year: 13349 MMSCM).

To safeguard pipeline assets and optimize utilization of the pipeline system, GSPL is giving utmost importance to efficient operations and preventive maintenance.

SUBSIDIARY, ASSOCIATE &JOINT VENTURE COMPANIES

Subsidiary Companies

Your Company has following three Subsidiary companies within the meaning of the Section 2(87) of the Companies Act, 2013:

1) GSPL India Gasnet Limited (GIGL) for development of Mehsana - Bhatinda (approx 1850 Kms) and Bhatinda -Gurdaspur (approx 305 Kms) Pipeline Projects.

2) GSPL India Transco Limited (GITL) for development of Mallavaram - Bhopal - Bhilwara - Vijaipur (approx. 1811 Kms) Pipeline Project.

3) Gujarat Gas Limited (GGL) is India''s largest city gas distribution player with presence spread across 43 Districts in the State of Gujarat, Punjab, Rajasthan, Haryana, Madhya Pradesh, Maharashtra and Union Territory of Dadra and Nagar Haveli.

Associate Company

As on 31â March, 2022, GSPL has one Associate Company viz. Sabarmati Gas Limited.

To avoid duplication between the Boardsâ Report and Management Discussion and Analysis Report, the performance highlights/summary of the Subsidiary companies/Joint Venture companies /Associate companies of GSPL is given in Management Discussion & Analysis Report.

Accounts of Subsidiary, Associate & Joint Venture Companies Pursuant to notification dated 16t^h February, 2015 of Ministry of Corporate Affairs notifying the Companies (Indian Accounting Standard) Rules, 2015, GSPL, its Associate, Subsidiary and Joint Venture Companies have adopted Ind AS w.e.f. 1â April, 2016.

CONSOLIDATED FINANCIAL STATEMENTS

HEALTH, SAFETY AND ENVIRONMENT

GSPL, in order to fulfill its commitment towards Health, Safety and Environment, has taken active steps towards establishment of Safety Management Systems. Environment and safety features have been integrated into design, construction and O&M operations of GSPL for ensuring utmost safety for the facilities, local community and the environment. *tte same is also being reflected in the QHSE policy of GSPL. It 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 GSPL is ensured through various training programs. ^e same is being monitored through internal audit teams and delegation of safety management up to the local level. Contractorsâ adherence to Companyâs QHSE policy is also assured through regular site visits and external audits. Regular site visits ensure the enhancement of safety culture which also facilitates safe commissioning of the new projects. GSPL is proud to maintain its target of âzero accidentâ year with full commitment of its employees and management.

Your Company is re-certified to integrated Management Systems (ISO 9001:2015, ISO 14001:2015 & ISO 45001:2018) with validity till 9^th November 2023. Effectiveness of these certifications is being assured through planned audits of the system. Continuous improvement is visible in various O&M systems. Preventive Maintenance schedules are being adhered to with updating of records. Further, Emergency Response and Disaster Management Plan (ERDMP) of GSPL was reaccredited as per the requirement of ERDMP Regulations, 2010 & and the amendment 2020 under PNGRB Act, 2006. ERDMP is being reviewed and updated regularly. All conditions of Accreditation are being adhered to. Effectiveness of ERDMP is verified through regular mock drills as per specified intervals as identified by respective work bases.

DEPOSITS

During the year, GSPL has not accepted Deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS,

GUARANTEES OR INVESTMENTS

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188 (1) OF THE COMPANIES ACT, 2013

All Related Party Transactions that were entered into during the Financial Year were on an armâs length basis and were in the ordinary course of business.

Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseeable and

repetitive nature and further would be executed on armâs length basis and in the ordinary course of business. Further, a statement giving details of all Transactions executed with Related Parties is placed before the Audit Committee on a quarterly basis for its approval/ ratification as the case may be.

^e Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions as approved by the Board is uploaded on GSPLâs Website.

None of the Directors has any pecuniary relationships or transactions vis-a-vis GSPL.

CORPORATE SOCIAL RESPONSIBILITY

^e Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed herewith as Annexure - IV to this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Since last Boardsâ Report, Shri Pankaj Joshi, IAS ceased to be Director of GSPL consequent to his resignation from the Board of GSPL due to the transfer from Finance Department to CM Office, Govt. of Gujarat and Dr. Rajiv Kumar Gupta, IAS ceased to be Director on account of his superannuation as Additional Chief Secretary, Industries and Mines Department, Govt. of Gujarat. Further, Shri Bimal N Patel ceased to be Independent Director of GSPL consequent to expiry of term of appointment of 5years. Your Directors wish to place on record appreciation for the services rendered by Shri Pankaj Joshi, IAS and Dr. Rajiv Kumar Gupta, IAS as Directors and Shri Bimal N Patel as Independent Director of GSPL.

Further, based on the recommendation of Nomination and Remuneration Committee, the Board has appointed Shri J. P. Gupta, IAS as an Additional Director w.e.f. W^h December, 2021 and Shri Tapan Ray, IAS (Retd.) as Independent Director for a tenure of 5 years w.e.f. 5^ January, 2022.

It may be noted that the approval of the Members of GSPL for appointment of Shri J. P. Gupta, IAS as Director, liable to retire by rotation and Shri Tapan Ray, IAS (Retd.) as Independent Director was obtained through Postal Ballot.

Further, based on recommendation of Nomination and Remuneration Committee, the Board has appointed Shri Raj Kumar, IAS as an Additional Director w.e.f. 27^th July, 2022 to hold office till the ensuing Annual General Meeting.

It is proposed to regularize his appointment in the 24t^h Annual General meeting.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Shri Sanjeev Kumar, IAS, Joint Managing Director of GSPL shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment as Director (with continuity in his position as Joint Managing Director) not liable to retire by rotation, unless the constitution of the Board requires otherwise.

Directorsâ Independence:

Board Evaluation:

Meetings:

AUDIT COMMITTEE

Audit Committee of Directors of GSPL at its Meeting held on 12t^h May, 2022 approved the Annual Accounts for the Financial Year ended on 31â March, 2022 and recommended the same for approval of the Board.

AUDITORS

Statutory & 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 Anoop Agarwal & Co., Chartered Accountants as Statutory Auditors of GSPL for the Financial Year 2021 - 22.

^e C&AG has given NIL Comment Reports on the Standalone and Consolidated Financial Statements of GSPL for the Financial Year 2021 - 22. ^e NIL Comment Reports have been provided before the Standalone & Consolidated Financial Statements respectively.

Secretarial Auditors:

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of GSPL has appointed M/s Dhawal Chavda & Associates, Practising Company Secretaries, to conduct the Secretarial Audit of GSPL for the Financial Year 2021-22.

^e Report of Secretarial Auditor on Companyâs Secretarial Audit for the Financial Year 2021 - 22 is enclosed herewith as Annexure - V to this Report.

Secretarial Audit of Material Unlisted Indian Subsidiary:

For the Financial Year 2021 - 22, GSPL India Gasnet Limited is the Material Unlisted subsidiary of GSPL. As per Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Secretarial Audit of the Material subsidiary mentioned above has been conducted for the Financial Year 2021-22 by Practicing Company Secretaries.

^e Secretarial Audit Report of GSPL India Gasnet Limited for the Financial Year ended 31â March, 2022 is enclosed herewith as Annexure - VI to this Report.

Cost Auditors:

Accordingly, your Company has got the Cost Audit carried out for the said business for the Financial Year 2021 - 22 through the Cost Auditor M/s Kailash Sankhlecha and Associates. ^e Cost Audit Report 2021 - 22 will be submitted to the Central Government in the prescribed format within stipulated time period.

Further, the Board upon the recommendation of the Audit Committee, appointed M/s Kailash Sankhlecha and Associates, Cost Accountants as Cost Auditor to audit the cost accounts of GSPL for the Financial Year 2022 - 23 on a remuneration of '' 72,000/- plus applicable taxes and reimbursement of out of pocket expenses incurred by them during the course of Audit. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Memberâs ratification for the remuneration payable to M/s Kailash Sankhlecha and Associates, Cost Auditor for the Financial Year 2022 - 23 is included in the Notice convening the Annual General Meeting.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

Risk Management:

Your Company has a well-defined risk management framework. ^e Board of Directors of GSPL has adopted a Risk Management Policy.

Internal Control System:

VIGIL MECHANISM

DIRECTORSâ RESPONSIBILITY STATEMENT

a. that in the preparation of the Annual Financial Statements for the year ended 31^st March, 2022, the applicable accounting standards have been followed and no material departures have been made from the same;

b. that accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 3Pt March, 2022 and of the profit & loss of the Company for the year ended on that date;

d. that the Annual Financial Statements have been prepared on a going concern basis;

e. that proper Internal Financial Controls were in place and that the financial controls were adequate and were operating effectively;

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

MANAGEMENT DISUSSION AND ANALYSIS

^is Annual Report contains a separate Section(Annexure-I) on the management Discussion and Analysis, which forms part of this Boardâs Report.

CORPORATE GOVERNANCE

GSPL believes that good governance alone can deliver continuous good business performance. A Report on Corporate Governance as required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is incorporated as a part of this Boardâs Report (Annexure -II). ^e Compliance Certificate by the Practising Company Secretary is also attached to this Boardâs Report.

COMPLIANCE OF SECRETARIAL STANDARDS

Your Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2).

ANNUAL RETURN

^e draft Annual Return of GSPL for the Financial Year 2021 -22 in the Form of MGT - 7 is available on the website of GSPL at http://www.gspcgroup.com/GSPL/annu.al-retu.rns

PARTICULARS OF EMPLOYEES

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL)

ACT, 2013

^e details of complaints filed/disposed/pending in relation to the Sexual Harassment of Woman at Workplace as on 31â March, 2022 is provided below:

Sr.	Particulars	No. of Complaints
1	No. of Complaints filed during the year	0
2	No. of Complaints disposed during the year	0
3	No. of Complaints Pending at the end of the year	0

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,

FOREIGN EXCHANGE EARNINGS AND OUTGO

BUSINESS RESPONSIBILITY REPORT

emission reduction, lowering costs, etc over these years. GSPL is also conscious of its responsibility towards its various stakeholders and is determined to increase its contribution to the society to bring positive social impact.

^e Business Responsibility Report in the prescribed format describing the initiatives taken by GSPL from an environmental, social and governance perspective among other things is enclosed as Annexure - VII to this Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF GSPL

^ere have been no material changes and commitments, if any, affecting the financial position of GSPL which have occurred between the end of the Financial Year of GSPL to which the Financial Statements relate and the date of this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

^ere are no significant material orders passed by the Regulators / Courts which would impact the going concern status of GSPL and its future operations during the year.

ACKNOWLEDGEMENTS

^e Directors appreciate the continued support received from the valued customers and look forward to this mutually supportive relationship in future.

^e Directors also wish to place on record the sincere thanks to PNGRB and other regulatory authorities at Central and State level for the continuous support extended to GSPL.

^e Directors place on record their sincere thanks to the Promoters, Shareholders and Lenders for their valuable support, trust and confidence reposed in GSPL.

For and on behalf of the Board of Directors,

Pankaj Kumar, IAS

Chairman & Managing Director

Date: 4t^h August, 2022 Place: Gandhinagar

Mar 31, 2018

DIRECTORSâ REPORT

To,

The Members

Gujarat State Petronet Limited

The Directors take pleasure in presenting the 20^th Annual Report and Audited Accounts of the Company for the year ended 31^st March, 2018.

FINANCIAL HIGHLIGHTS

Your Company has excelled in most of the performance parameters.

Major Highlights of the Company are summarized below:

C in Crore)

Particulars (Standalone Accounts)	2017-18	2016-17
Total Income	1405.21	1115.76
Employee Benefit Expenses	43.20	38.84
Other Expenses	140.75	100.41
Total Expenses	183.95	139.25
PBDITA	1221.26	976.51
Finance Cost	35.41	59.58
Depreciation & Amortisation	175.04	179.14
Profit Before Tax	1010.81	737.79
Tax including Deferred Tax	342.38	241.15
Profit After Tax	668.43	496.64
Appropriations Transfer to General Reserves	NIL	NIL

PERFORMANCE HIGHLIGHTS

- 100% Pipeline grid availability and âaccident freeâ year of operations.

- Development of CGD networks in Geographical Area of Amritsar and Bhatinda is commenced.

- It is expected that in FY 2018-19, PNGRB shall determine final tariffs of your Companyâs Pipeline Network.

- Total Income stood at Rs, 1405.21 Crore, as compared to Rs, 1115.76 Crore and PBT was Rs, 1010.81 Crore as compared to Rs, 737.79 Crore over Previous Year.

- The Company has acquired additional 28.40% equity stake in Gujarat Gas Limited (GGL) during the year resulting in to total equity stake of 54.17% of the Company in GGL.

CAPITAL

During the year, the Board has approved allotment of 2,45,860 Shares to the eligible employees under ESOP â 2010 Scheme of the Company upon exercise of Options by them, consequent to which the paid up Share Capital of the Company has increased to Rs, 563.83 Crore.

DIVIDEND

As per the provisions of the Regulation 43 (A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ), the Company adopted a Dividend Policy which is broadly based on the same policy as has been followed by the Company since long. Keeping in view the various factors including the fund requirements for expansion of projects and subsidiaries as mentioned in the Policy, the Board of Directors of the Company is pleased to recommend Dividend of Rs, 1.75 (i.e. @ 17.5 %) per Equity Share of the face value of Rs, 10 each for the Financial Year 2017-18 subject to the approval of Shareholders in the ensuing Annual General Meeting. The total cash outflow on account of the proposed Dividend (including Dividend Distribution Tax after considering the credit of Dividend receivable from Subsidiary companies) for the year 2017-18 would be approx Rs, 112.82 Crore.

GAS GRID PROJECT

The pipeline grid has been designed as per the highest international standards with inbuilt flexibility to cater to varying loads.

The pipeline grid map of GSPL for Gujarat is enclosed herewith as Annexure - IX.

The map showing the Cross-Country Natural Gas Transmission Pipelines being implemented through special purpose vehicles is enclosed herewith as Annexure â X.

Projects Commissioned:

During the year under review, the Company has successfully completed commissioning of Dabhan Thasara Pipeline and provided natural gas connectivity to various customer(s) (connectivity projects) namely Sanand GIDC ring network, Dahej â PCPIR, Dahej SEZ-II network, IRM Energy and Panchmahal Dairy.

The grid operations account for approx 2518 Kms as on 31^st March, 2018. Gas is flowing from Hazira / Dahej / Vapi to various industries and City Gas Distribution (âCGDâ) Networks located in various Districts of Gujarat including Surat, Bharuch, Narmada, Baroda, Anand, Ahmedabad, Dahod, Gandhinagar, Sabarkantha, Panchamahal, Patan, Bhavnagar, Mehsana, Banaskantha, Surendranagar, Botad, Rajkot, Morbi, Jamnagar, Navsari, Kutch, Kheda, Valsad, Amreli, Gir & Somnath.

Projects under execution:

Your Directors are pleased to inform that the Company continues to develop additional pipeline infrastructure in the State of Gujarat. The Company has also started laying Anjar-Mundra Pipeline connecting GSPC LNG Terminal at Mundra to GSPLâs Gas Grid Network. Additionally, the Company is also installing Gas Compressor Station at Gana which is under construction.

The Company is a co-developer in Dahej SEZ and is developing pipeline infrastructure therein. Several customers have started receiving gas in Dahej SEZ through Companyâs network with more getting connected on regular basis.

WIND POWER PROJECT

Your Company being committed to promote clean and green energy has set up Wind Power Project of 52.5 MW in the areas of

Maliya Miyana, Rajkot and Gorsar & Adodar, Porbandar. During the year, the Company has sold 10,59,85,160 KWH of electricity generated through Windmill.

FUTURE PLANS

The Company is working on future expansion projects based on the demand in various regions around the gas grid. The Company is also gearing up its pipeline by developing connectivity with new terminals that are being developed in Gujarat to ensure connectivity with all sources in Gujarat. The Company is also authorised to develop the City Gas Distribution (CGD) Network in the Geographical Area (GA) of Amritsar District (Punjab) and Bhatinda GA (Punjab). Company has already started necessary activities in relation to the development of the CGD Network in both these GAs and gas supply is expected to be commenced in the coming Financial Year.

OPERATION & MAINTENANCE ACTIVITIES

The Company has transported 11511 MMSCM of gas during the Financial Year 2017 - 18 (Previous year: 9071 MMSCM).

To safeguard pipeline assets and optimize utilization of the pipeline system, the Company is giving utmost importance to efficient operations and preventive maintenance. The Company is in the process of implementing Pipeline Integrity Management System in line with PNGRB guidelines to safeguard the pipeline assets.

SUBSIDIARY, ASSOCIATE & JOINT VENTURE COMPANIES

Subsidiary Companies:

Your Company has following three Subsidiary companies within the meaning of the Section 2(87) of The Companies Act, 2013:

1) GSPL India Gasnet Limited (GIGL) for development of Mehsana â Bhatinda (approx 1670 Kms) and Bhatinda - Jammu

- Srinagar (approx 740 Kms) Pipeline Projects;

2) GSPL India Transco Limited (GITL) for development of Mallavaram - Bhopal â Bhilwara â Vijaipur (approx. 1881 Kms) Pipeline Project.

3) Gujarat Gas Limited (GGL) - w.e.f. 28^th March, 2018 Gujarat Gas Limited is Indiaâs largest city gas distribution player with presence spread across 22 Districts in the State of Gujarat and Union Territory of Dadra Nagar Haveli and Thane GA which includes Palghar District of Maharashtra.

Associate Company:

As on 31^st March, 2018, your Company has one Associate Company viz. Sabarmati Gas Limited.

To avoid duplication between the Directorsâ Report and Management Discussion and Analysis Report, the performance highlights/summary of the Subsidiary companies/Joint Venture companies /Associate companies of GSPL is given in Management Discussion and Analysis Report.

Accounts of Subsidiary, Associate & Joint Venture companies:

Pursuant to notification dated 16^th February, 2015 of Ministry of Corporate Affairs notifying the Companies (Indian

Accounting Standard) Rules, 2015, the Company, its Associate, Subsidiary and Joint Venture Companies have adopted Ind AS w.e.f. 1^st April, 2016.

Consequently, though as per provision of Section 2 (87) (ii) of The Companies Act 2013, GSPL India Gasnet Limited (GIGL) and GSPL India Transco Limited (GITL) fall within the meaning of Subsidiary Company, as per guidance of Indian Accounting Standards [Ind AS], GIGL and GITL fall within the criteria of Joint Venture and accordingly they have been considered as Joint Venture for the purpose of disclosures and compliances in relation to the Financial Statements of the Company for the Financial Year 2017-18.

Pursuant to provisions of Section 129 (3) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement in prescribed Form AOC - 1 containing salient features of the financial statement of Subsidiary, Associate & Joint Venture Companies is provided in the Annual Report.

Further, the audited annual accounts and related information of GIGL, GITL and GGL will be made available to any Member upon request. The annual accounts of GIGL, GITL and GGL will also be kept open for inspection at the Registered Office of the Company and that of the respective companies. The same are also made available on the website of the Company viz. www.gspcgroup.com.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Ind AS - 28 on Investment in Associates and Joint Ventures read with Ind AS â 110 on Consolidated Financial Statements and Ind AS â 111 on Joint Arrangement, the Audited Consolidated Financial Statements are provided in the Annual Report.

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. 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 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 up to the local level. Contractorsâ adherence to Companyâs QHSE policy is also assured through regular site visits and external audits. Regular site visits ensure the enhancement of safety culture which also facilitates safe commissioning of the new projects. The Company is proud to maintain its target of âzero accidentâ year with full commitment of its employees and management.

The Company is re-certified to Integrated Management Systems (ISO 9001:2015, ISO 14001:2015 & OHSAS 18001:2007) with validity till 30^th October, 2020. Effectiveness of these certifications is being assured through planned audits of the system. Continuous improvement is visible in various O&M systems. Preventive Maintenance schedules are being adhered to with updating of records. Further, Emergency Response and Disaster Management Plan (ERDMP) of GSPL was re-accredited by Disaster Management Institute, Bhopal as per the requirement of ERDMP Regulations, 2010 under PNGRB Act, 2006. ERDMP is being reviewed and updated regularly. All conditions of Accreditation are being adhered to. Effectiveness of ERDMP is verified through regular mock drills as per specified intervals as identified by respective work bases.

DEPOSITS

During the year, the Company has not accepted Deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188 (1) OF THE COMPANIES ACT, 2013

All Related Party Transactions that were entered into during the Financial Year were on an armâs length basis and were in the ordinary course of business.

The Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions as approved by the Board is uploaded on the Companyâs Website.

None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

The particulars of contracts or arrangements with Related Parties referred to in Section 188 (1) of the Companies Act, 2013, as prescribed in Form AOC â 2 of the Companies (Accounts) Rules, 2014 is enclosed as Annexure - III to this Report.

CORPORATE SOCIAL RESPONSIBILITY

Section 135 of the Companies Act, 2013, the Company has also formulated a Corporate Social Responsibility Policy which is available on the website of the Company at http://gspcgroup. com/gspl/csr.

Your Company being committed in fulfilling its Corporate Social Responsibility has been engaged in various social initiatives through its intervention in the areas of education, promoting healthcare/ eradication of hunger, poverty & malnutrition, conservation of natural resources like water/energy, etc. in accordance with the Corporate Social Responsibility Policy of the Company.

The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed herewith as Annexure - IV to this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Since last Directorsâ Report, Shri Anil Mukim, IAS & Shri Sujit Gulati, IAS ceased to be Directors of the Company consequent to their resignation as Directors from the Board of the Company.

Your Directors wish to place on record appreciation for the services rendered by Shri Anil Mukim, IAS & Shri Sujit Gulati, IAS as Directors of the Company.

Further, Shri Manish Seth, Chief Financial Officer of the Company has resigned from the Company w.e.f. 8^th August, 2018.

Shri Arvind Agarwal, IAS and Shri Raj Gopal, IAS have been appointed as Additional Directors to hold office till the ensuing Annual General Meeting. It is proposed to regularize their appointment in the 20^th Annual General Meeting.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Dr. T Natarajan, IAS, Joint Managing Director of the Company shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment as Director (with continuity in his position as Joint Managing Director) not liable to retire by rotation, unless the constitution of the Board requires otherwise.

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 is annexed to the Notice.

Directorsâ Independence:

Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors have carried out an annual performance evaluation of Chairman, Non-Independent Directors and the Board as a whole. Further, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of the various Committees of Directors of the Company.

The performance evaluation of individual Directors was carried out based on the various parameters after taking into consideration inputs received from the Directors and also parameters set out in the Policy for Evaluation of Performance of Directors, Committees & Board such as active participation & contributions in the Meetings, balance of knowledge, expertise and experience, safeguarding the interest of the Company and its Stakeholders etc. The performance evaluation of the Board as a whole and various Committees of Directors of the Company was carried out considering various parameters such as adequacy of the composition of the Board and its Committees, discharge of key functions and responsibilities prescribed under law, corporate governance practice etc. and the overall performance assessment was discussed in detail by the Board members.

Meetings:

The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business. The Board / Committee Meetings are pre-scheduled and a tentative annual calendar of the Board and Committee Meetings is circulated to the Directors in advance to facilitate them to plan their schedule and to ensure meaningful participation in the Meetings. However, in case of a special and urgent business need, the approval is taken by passing resolutions through circulation to the Directors, as permitted by law, which are noted in the subsequent Board/Committee Meetings.

During the year, six (6) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

AUDITORS

Statutory & 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 V V Patel & Co., Chartered Accountants as Statutory Auditors of the Company for the Financial Year 2017 - 18.

The C&AG has given NIL Comment Report on the Standalone and Consolidated Financial Statements of the Company for the Financial Year 2017 - 18. The NIL Comment Report has been provided before the Standalone & Consolidated Financial Statements respectively.

Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s Manoj Hurkat & Associates, Practicing Company Secretaries, to conduct the Secretarial Audit of the Company for the Financial Year 2017 - 18.

The Report of Secretarial Auditor on Companyâs Secretarial Audit for the Financial Year 2017 - 18 is enclosed herewith as Annexure

- V to this Report.

Cost Auditors:

Your Company is required to get the Cost Audit carried out for âGas Transportationâ business as well as âGeneration of Electricity through Windmillâ business pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014. The Company is maintaining the Cost Accounts and Records as specified by the Central Government under sub Section (1) of Section 148 of the Companies, Act, 2013.

Accordingly, your Company has got the Cost Audit carried out for the said business of the Company for the Financial Year 2017- 18 through the Cost Auditor M/s N D Birla & Co. The Cost Audit Report 2017-18 will be submitted to the Central Government in the prescribed format within stipulated time period.

Further, your Directors has, on the recommendation of the Audit Committee, appointed M/s N D Birla & Co., Cost Accountants as Cost Auditor to audit the cost accounts of the Company for the Financial Year 2018-19 at a remuneration of '' 1,00,000/- plus applicable taxes and reimbursement of out of pocket expenses incurred by them during the course of Audit. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Memberâs ratification for the remuneration payable to M/s N D Birla & Co., Cost Auditors for the Financial Year 2018-19 is included in the Notice convening the Annual General Meeting.

AUDIT COMMITTEE

Audit Committee of Directors of the Company at its Meeting held on 21^st May, 2018 approved the Annual Accounts for the Financial Year ended on 31^st March, 2018 and recommended the same for approval of the Board.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

Risk Management:

The Company has a well-defined risk management framework. The Board of Directors of the Company has adopted a Risk Management Policy.

Internal Control System:

The Company has a proper and adequate system of Internal Controls commensurate with its size of operations and nature of business. These are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.

The details about the identification of elements of Risk and Internal Control Systems are provided in detail in the Management Discussion & Analysis Report forming part of this Directorsâ Report.

VIGIL MECHANISM

The Company has established a Vigil Mechanism for Directors and Employees to report their genuine concerns, details of which have been given in the Corporate Governance Report forming part of this Directorsâ Report

DIRECTORSâ RESPONSIBILITY STATEMENT

a. that in the preparation of the Annual Financial Statements for the year ended 31^st March, 2018, the applicable accounting standards have been followed and no material departures have been made from the same;

b. that accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2018 and of the profit & loss of the Company for the year ended on that date;

d. that the Annual Financial Statements have been prepared on a going concern basis;

e. that proper Internal Financial Controls were in place and that the financial controls were adequate and were operating effectively;

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

MANAGEMENT DISCUSSION & ANALYSIS

This Annual Report contains a separate section (AnnexureâI) on the Management Discussion & Analysis, which forms part of this Directorsâ Report.

CORPORATE GOVERNANCE

The Company believes that good governance alone can deliver continuous good business performance. A Report on Corporate Governance as required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is incorporated as a part of this Directorsâ Report (Annexure â II). A Compliance Certificate by the Practising Company Secretary is also attached to this Directorsâ Report.

COMPLIANCE OF SECRETARIAL STANDARDS

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2).

ANNUAL RETURN

The draft Annual Return of the Company for the Financial Year 2017-18 in the Form MGT â 7 is available on the website of the Company at http://gspcgroup.com/GSPL/annual-returns.

GSPL EMPLOYEES STOCK OPTION PLAN (âESOPâ)

GSPL Employees Stock Option Plan â 2010 (ESOP â 2010) was instituted as incentives to attract, retain and reward the employees, and to enable them to participate in the future growth and success of the Company.

Under the said ESOP - 2010, each such Option has conferred a right upon the employee to apply for one Equity Share of the Company.

Auditors of the Company have certified that the Scheme is being implemented in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014 and the resolution passed by the Members. The Certificate would be placed at the Annual General Meeting for inspection by Members.

Statutory disclosure regarding ESOP â 2010 is enclosed at Annexure â VI .

Further, the Disclosure regarding ESOP â 2010 pursuant to SEBI

(Share Based Employee Benefits) Regulations, 2014 has been made on the website of the Company at http:// gspcgroup.com / GSPL/disclosures.aspx.

PARTICULARS OF EMPLOYEES

2014 in respect of the employees of the Company pursuant to Ministry of Corporate Affairs Notification dated 5 ^th June, 2015.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has always believed that appropriate standard of conduct should be maintained by the employees in their conduct and that there should be a safe, indiscriminatory and harassment free (including sexual harassment) work environment for every individual working in the Company. The Company has in place a Policy on Prevention of Sexual Harassment at workplace as a part of its Human Resource Policy. It aims at prevention of harassment of employees and lays down the guidelines for reporting and prevention of sexual harassment.

The Company has constituted an Internal Complaints Committee (ICC) as required under the Act which is responsible for redressal of complaints related to sexual harassment.

During the year ended 31^st March, 2018, no complaint has been received by the ICC pertaining to sexual harassment.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

BUSINESS RESPONSIBILITY REPORT

Your Company has always given the highest importance to the environment, health and safety. The same is also reflected in the business practices of the Company e.g. Company has implemented practices towards preservation of natural resources, Green Gas emission reduction, lowering costs, etc. over these years. The Company is also conscious of its responsibility towards its various stakeholders and is determined to increase its contribution to the society to bring positive social impact.

The Business Responsibility Report in the prescribed format describing the initiatives taken by the Company from an environmental, social and governance perspective among other things is enclosed as Annexure-VII to this Report

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations during the year.

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 deep appreciation to employees of the Company at all levels for their hard work, dedication and commitment 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 have enabled the Company to expand the pipeline network in a professional manner.

The Directors also wish to place on record the sincere thanks to PNGRB and other regulatory authorities at Central and State level 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 confidence reposed in the Company.

For and on behalf of the Board of Directors

Dr. J N Singh, IAS Dr. T Natarajan, IAS

Managing Director Joint Managing Director

Date: 29^th August, 2018

Place: Gandhinagar

Mar 31, 2017

To,

The Members

Gujarat State Petronet Limited

The Directors take pleasure in presenting the 19^th Annual Report and Audited Accounts of the Company for the Financial year ended on 31^st March, 2017.

FINANCIAL HIGHLIGHTS

Your Company has excelled in most of the performance parameters.

Major Highlights of the Company are summarized below:

Rs, in Crore)

Particulars (Standalone Accounts)	2016-17	2015-16
Total Income	1115.76	1057.56
Employee Benefit Expenses	38.84	36.12
Other Expenses	100.41	89.78
Total Expenses	139.25	125.90
PBDITA	976.51	931.66
Finance Cost	59.58	79.92
Depreciation & Amortization	179.14	182.91
Profit Before Tax	737.79	668.84
Tax including Deferred Tax	241.15	223.49
Profit After Tax	496.64	445.35

PERFORMANCE HIGHLIGHTS

- 100% Pipeline grid availability and âaccident freeâ year of operations.

- Company is in process of implementing City Gas Distribution (CGD) Network in the Geographical Area of Amritsar District (Punjab) and Geographical Area of Bhatinda District (Punjab).

- In January 2017, PNGRB issued Public Consultation Documents pertaining to determination of final initial unit natural gas pipeline tariff for your Companyâs High Pressure Gujarat Gas Grid and Low Pressure Gujarat Gas Grid. Many entities, including your Company, have provided comments on the said determination exercise. Accordingly, it is expected that in FY 2017-18, PNGRB shall determine such final tariffs of your Companyâs pipelines.

- Total Income stood at Rs, 1115.76 Crore, as compared to Rs, 1057.56 Crore and PBT was Rs, 737.79 Crore as compared to '' 668.84 Crore over Previous Year.

CAPITAL

During the year, the Board has approved allotment of 2,47,668 Shares to the eligible employees under ESOP â 2010 Scheme of the Company upon exercise of Options by them, consequent to which the paid up Share Capital of the Company has increased to '' 563.59 Crore.

DIVIDEND

As per the provisions of the Regulation 43 (A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (âListing Regulations, 2015â), the Company adopted a Dividend Distribution Policy which is broadly based on the same criteria as has been followed by the Company since long. Keeping in view the various factors as mentioned in the Policy including the fund requirements for expansion projects and subsidiaries, the Board of Directors of the Company is pleased to recommend Dividend @ Rs, 1.5 (i.e. 15 %) per Equity Share of the face value of Rs, 10 each for the Financial Year 2016-17. subject to the approval of shareholders in ensuing Annual General Meeting. The total cash outflow on account of the proposed dividend (including Dividend Distribution Tax) for the year 2016-17 would be approx Rs, 101.75 Crore.

INDIAN ACCOUNTING STANDARDS

The Ministry of Corporate Affairs (MCA), vide its notification dated 16^th February, 2015, notified the Indian Accounting Standards (Ind AS) applicable to certain classes of companies. Ind AS has replaced the Existing Indian GAAP prescribed under the Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. For your Company, Ind AS is applicable from 1^st April, 2016 with transition date of 1^st April, 2015.

GAS TRANSMISSION SERVICES

The Company has effective Firm GTAs of 25.43 mmscmd & interruptible / short - medium term GTAs for 8.77 mmscmd for transmission of gas to various customers (Previous year: Firm GTAs of 22.83 mmscmd and interruptible GTAs of 9.07 mmscmd)

GAS GRID PROJECT

The pipeline grid has been designed as per the highest international standards with inbuilt flexibility to cater to varying loads.

The pipeline grid map of GSPL for Gujarat is enclosed herewith as Annexure - X.

The map showing the Cross-Country Natural Gas Transmission Pipelines being implemented through special purpose vehicles is enclosed herewith as Annexure â XI.

Projects Commissioned:

During the year under review, the Company has successfully completed commissioning of Mandali-Becharaji pipeline and provided natural gas connectivity to automobile majors Honda and Maruti, Bodighodi Ambardi pipeline connected to Gujarat Gas Ltd and various customer(s) connectivity projects namely Sanand GIDC ring network, Dahej - PCPIR and Dahej SEZ-II network.

The grid operations account for approx 2454 Kms as on 31^st March, 2017. Gas is flowing from Hazira / Dahej / Vapi to various industries and City Gas Distribution (âCGDâ) Networks located in various districts of Gujarat including Surat, Bharuch, Narmada, Baroda, Anand, Ahmedabad, Dahod, Gandhinagar, Sabarkantha, Panchamahal, Patan, Bhavnagar, Mehsana, Banaskantha, Surendranagar, Botad, Rajkot, Morbi, Jamnagar, Navsari, Kutchh, Kheda, Valsad, Amreli, Gir Somnath.

Projects under execution:

Your Directors are pleased to inform that the Company continues to develop additional pipeline infrastructure in the State of Gujarat. The Company has also started laying Anjar-Mundra pipeline connecting GSPC LNG Terminal at Mundra to GSPLâs gas grid network. Additionally, the Company is also installing Gas Compressor station at Gana which is under construction.

WIND POWER PROJECT

Your Company being committed to promote clean and green energy has set up Wind Power Project of 52.5 MW in the areas of Maliya Miyana, Rajkot and Gorsar & Adodar, Porbandar. During the year, the Company has sold 11,36,48,724 KWH of electricity generated through Windmill.

FUTURE PLANS

The Company is working on future expansion projects based on the demand in various regions around the gas grid. The Company is also authorized to develop the City Gas Distribution (CGD) Network in the Geographical Areas (GAs) of Amritsar District (Punjab) and Bhatinda GA (Punjab). Company has already started necessary activities in relation to the development of the City Gas Distribution (CGD) Network in both these Geographical Areas (GAs).

OPERATION & MAINTENANCE ACTIVITIES

The Company has transported 9071 mmscm of gas during the financial year 2016-17 (Previous year: 8966 mmscm).

To safeguard pipeline assets and optimize utilization of the pipeline system, the Company is giving utmost importance to efficient operations and preventive maintenance. The Company is in process of implementing Pipeline Integrity Management System in line with PNGRB guidelines to safe guard the pipeline assets.

SUBSIDIARY, ASSOCIATES & JOINT VENTURE COMPANIES

Subsidiary Companies:

Your Company has following two Subsidiary Companies within the meaning of the section 2(87) of the Companies act, 2013:

1) GSPL India Gasnet Limited (GIGL) for development of Mehsana â Bhatinda (approx 1670 Kms) and Bhatinda - Jammu

- Srinagar (approx 740 Kms) Pipeline Projects;

2) GSPL India Transco Limited (GITL) for development of Mallavaram - Bhopal â Bhilwara â Vijaipur (approx. 1881 Kms) Pipeline Project.

Associate Companies:

As on 31^st March, 2017, your Company has two Associate Companies viz. Gujarat Gas Limited and Sabarmati Gas Limited.

To avoid duplication between the Directorsâ Report and

Management Discussion and Analysis, the performance highlights/summary of the subsidiary companies/joint venture companies /associate companies of GSPL is given in Management Discussion and Analysis Report.

Accounts of subsidiary, Associates & Joint Venture companies:

Pursuant to notification dated 16^th February, 2015 of Ministry of Corporate Affairs notifying the Companies (Indian Accounting Standard) Rules, 2015, the Company, its associates, subsidiaries and joint venture companies have adopted Ind AS w.e.f. 1^st April, 2016.

Consequently, though as per provision of Section 2 (87) of the Companies Act 2013, GSPL India Gasnet Limited (GIGL) and GSPL India Transco Limited (GITL) fall within the meaning of subsidiary company, as per guidance of Indian Accounting Standards [Ind AS], GIGL and GITL fall within criteria of Joint Venture and accordingly they have been considered as Joint Venture for the purpose of disclosures and compliances in relation to the Financial Statements of the Company for the year 2016-17.

Pursuant to provisions of Section 129 (3) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement in prescribed Form AOC - 1 containing salient features of the financial statement of following Subsidiaries, Associates & Joint Venture Companies is provided in the Annual Report.

Further the audited annual Financial Statement and related information of the GIGL and GITL, will be made available to any Member upon request. The annual Financial Statement of GIGL and GITL will also be kept open for inspection at the Registered Office of the Company and that of the respective companies. The same are also made available on the website of the company www.gspcgroup.com.

CONSOLIDATED FINANCIAL STATEMENTS

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. 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 Company is expanding and managing its operations in a manner which is safe and environmentally sustainable.

The Company is re-certified to Integrated Management Systems (ISO 9001:2008, ISO 14001:2004 & OHSAS 18001:2007) with validity till 30^th October, 2017. Effectiveness of these certifications is being assured through planned audits of the system. Continuous improvement is visible in various O&M systems. Preventive Maintenance schedules are being adhered to with updating of records. Further, Emergency Response and Disaster Management Plan (ERDMP) of GSPL was re-accredited by Disaster Management Institute, Bhopal as per the requirement of ERDMP Regulation, 2010 under PNGRB Act, 2006. ERDMP is being reviewed and updated regularly. All conditions of Accreditation are being adhered to. Effectiveness of ERDMP is verified through regular mock drills as per specified intervals as identified by respective work bases.

DEPOSITS

During the year, the Company has not accepted Deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Pursuant to Section 186 (11) of the Companies Act, 2013, loans made, guarantees given or securities provided by a company providing infrastructure facilities are exempted from compliance with Section 186 of the Companies Act, 2013 except sub section

(1). Accordingly, your Company being engaged in the Gas Transportation business is exempted from aforesaid compliance. However, the details of Loans, Guarantees, Securities and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188 (1) OF THE COMPANIES ACT, 2013

All Related Party Transactions that were entered into during the financial year were on an armâs length basis and were in the ordinary course of business.

Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseeable and repetitive nature. Further a statement giving details of all Transactions executed with Related Parties is placed before the Audit Committee on a quarterly basis for its approval/ ratification as the case may be.

The Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions as approved by the Board is uploaded on the Companyâs Website.

None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. Pursuant to provisions of Section 135 of the Companies Act, 2013, the Company has also formulated a Corporate Social Responsibility Policy which is available on the website of the Company at http://gspcgroup. com/GSPL/policies.

Your Company being committed in fulfilling its Corporate Social Responsibility has been engaged in various social initiatives through its intervention in the area of promoting education, eradication of hunger & poverty, creating awareness for conservation of energy, providing preventive health care etc in accordance with the Corporate Social Responsibility Policy of the Company.

The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed herewith as Annexure - IV to this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board has appointed Dr. J N Singh, IAS, Director on the Board of the Company as Managing Director w.e.f. 16^th April, 2016 till further intimation from Gujarat State Petroleum Corporation Limited consequent to resignation by Shri Atanu Chakraborty, IAS, as Director of the Company on 11^th April, 2016.

Further, Dr. T Natarajan, IAS has been appointed as Joint Managing Director of the Company w.e.f. 4^th August, 2016 till further intimation from Gujarat State Petroleum Corporation Limited.

Shri Anil Mukim, IAS has also been appointed as an Additional Director w.e.f. 11^th November, 2016 to hold office till the ensuing Annual General Meeting. Accordingly, it is proposed to approve their appointment in the 19^th Annual General Meeting. Further Shri Bimal N Patel has been appointed as Additional/Independent Director of the Company w.e.f. 29^th December, 2016 for the period of five years subject to approval of members in the ensuing Annual General Meeting.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Shri M M Srivastava, IAS (Retd), Director of the Company shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.

Directors Independence:

Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors have carried out an annual performance evaluation of Chairman, Non-Independent Directors and the Board as a whole. Further, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of the various Committees of Directors of the Company.

Meetings:

During the year, seven (7) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

AUDITORS

Statutory & C&AG Audit:

C&AG has given NIL comment reports on Standalone & Consolidated Financial Statements of the Company for the Financial Year 2016-17. The NIL comment reports have been provided before the Standalone & Consolidated Financial Statements respectively.

Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s Spanj & Associates, Practising Company Secretaries, to conduct the Secretarial Audit of the Company for the Financial Year 2016-17.

The Report of Secretarial Auditor on Companyâs Secretarial Audit for the Financial Year 2016-17 is enclosed herewith as Annexure -V to this Report. The Secretarial Audit Report is self explanatory in nature.

Cost Auditors:

Accordingly, your Company has got the Cost Audit carried out for the said businesses of the Company for the financial year 2016-17 through the Cost Auditor M/s R K Patel & Co. The Cost Audit Report 2016-17 will be submitted to the Central Government in the prescribed format within stipulated time period.

Further, your Directors have, on the recommendation of the Audit Committee, appointed M/s N D Birla & Co., Cost Accountants as Cost Auditor to audit the cost accounts of the Company for the financial year 2017-18 on a remuneration of '' 1,00,000/- plus applicable taxes and reimbursement of out of pocket expenses incurred by them during the course of Audit. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Memberâs ratification for the remuneration payable to M/s N D Birla & Co., Cost Auditors for the Financial Year 2017-18 is included in the Notice convening the Annual General Meeting.

AUDIT COMMITTEE

Audit Committee of Directors of the Company at its Meeting held on 25^th May, 2017 approved the Annual Financial Statements for the Financial Year ended on 31^st March, 2017 and recommended the same for approval of the Board.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

Risk Management:

The Company has a well-defined risk management framework. The Board of Directors of the Company has adopted a Risk Management Policy.

Internal Control System:

The details about the identification of elements of Risk and Internal Control Systems are provided in detail in the Management Discussion & Analysis Report forming part of this Directorsâ Report.

VIGIL MECHANISM

DIRECTORSâ RESPONSIBILITY STATEMENT

a. that in the preparation of the annual financial statements for the year ended on 31^st March, 2017, the applicable accounting standards have been followed and no material departures have been made from the same;

b. that accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2017 and of the profit & loss of the Company for the year ended on that date;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

MANAGEMENT DISCUSSION & ANALYSIS

This Annual Report contains a separate section (AnnexureâI) on the Management Discussion & Analysis, which forms part of this Directorsâ Report.

CORPORATE GOVERNANCE

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in Form MGT - 9 is enclosed herewith as Annexure â VII.

GSPL EMPLOYEES STOCK OPTION PLAN (âESOPâ)

Under the said ESOPs, each such Option has conferred a right upon the employee to apply for one Equity Share of the Company.

Members may note that GSPL Employees Stock Option Plan -2005 scheme is closed.

Statutory disclosure regarding ESOP-2005 and ESOP â 2010 is enclosed at Annexure â VI.

Further, the Disclosure regarding ESOP â 2010 pursuant to SEBI

(Share Based Employee Benefits) Regulations, 2014 has been made on the website of the Company at http:// gspcgroup.com/ GSPL/disclosures.aspx

PARTICULARS OF EMPLOYEES

2014 in respect of the employees of the Company pursuant to Ministry of Corporate Affairs Notification dated 5 ^th June, 2015.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has always believed that appropriate standard of conduct should be maintained by the employees in their conduct and that there should be a safe, in discriminatory and harassment free (including sexual harassment) work environment for every individual working in the Company. The Company has in place a Policy on Prevention of Sexual Harassment at workplace as a part of its Human Resource Policy. It aims at prevention of harassment of employees and lays down the guidelines for reporting and prevention of sexual harassment.

The Company has constituted an Internal Complaints Committee (ICC) as required under the Act which is responsible for redressal of complaints related to sexual harassment.

During the year ended 31^st March, 2017, no complaint has been received by the ICC pertaining to sexual harassment.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information required to be disclosed pursuant to provisions of the Companies Act, 2013 read with rules thereto with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo are furnished in Annexure - IX to this Report.

BUSINESS RESPONSIBILITY REPORT

From the financial year 2016-17, Listing Regulations, 2015 has mandated the top 500 companies based on the market capitalization to prepare and include in its Annual Report, the Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective among other things.

Your Company has always given the highest importance to the environment, health and safety. The same is also reflected in the business practices of the company e.g. company has implemented practices towards preservation of natural resources, Green Gas emission reduction, lowering costs, etc over these years. The Company is also conscious of its responsibility towards its various stakeholders and is determined to increase its contribution to the society to bring positive social impact.

The Business Responsibility Report in the prescribed format is enclosed as Annexure-VIII to this Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations during the year.

ACKNOWLEDGEMENTS

The Directors appreciate the continued support received from the valued customers and look forward to this mutually supportive relationship in future.

The Directors also wish to place on record the sincere thanks to PNGRB and other regulatory authorities at Central and State level 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 confidence reposed in the Company.

For and on behalf of the Board of Directors

Date: 11^th August, 2017 M M Srivastava, IAS (Retd.)

Place: Gandhinagar Chairman

Mar 31, 2016

To,

The Members

Gujarat State Petro net Limited

The Directors take pleasure in presenting the 18^th Annual Report and Audited Accounts of the Company for the Financial year ended 31^st March, 2016.

FINANCIAL HIGHLIGHTS

Your Company has excelled in most of the performance parameters.

Major Highlights of the Company are summarized below:

Rs, in Crore)

Particulars (Standalone Accounts)	2015-16	2014-15
Total Income	1056.00	1116.60
Employee Benefit Expenses	34.71	35.56
Other Expenses	91.71	101.02
Total Expenses	126.42	136.58
PBDITA	929.58	980.02
Finance Cost	77.25	117.83
Depreciation & Amortization	184.34	189.23
Prior Period Adjustments	0.13	12.64
Profit Before Tax	667.86	660.32
Tax including Deferred Tax	223.39	249.96
Profit After Tax Carried to Balance Sheet	444.47	410.36
Appropriations
Transfer to General Reserves	NIL	NIL
Proposed Dividend
(including Dividend Distribution Tax)	101.70	81.70
Profit After Appropriations	342.77	328.66

PERFORMANCE HIGHLIGHTS

- 100% Pipeline grid availability and âaccident freeâ year of operations.

- Company is in process of implementing City Gas Distribution (CGD) Network in the Geographical Area of Amritsar District (Punjab) awarded by PNGRB in May 2015. Further, PNGRB has granted authorization to GSPL for developing City Gas Distribution (CGD) Network in the Geographical Area of Bhatinda District (Punjab) in May, 2016.

- PNGRB is in the process of re-determining the level zed tariff for GSPLâs High Pressure and Low Pressure Natural Gas Pipeline Networks pursuant to APTEL decision on the appeal filed by GSPL.

- Total Income stood at '' 1056.00 Crore, as compared to '' 1116.60 Crore and PBT was '' 667.86 Crore as compared to '' 660.32 Crore over Previous Year.

CAPITAL

During the year, the Board has approved allotment of 3,60,084 Shares to the eligible employees under ESOP â 2010 Schemes of the Company upon exercise of Options by them, consequent to which the paid up Share Capital of the Company has increased to '' 563.34 Crore.

DIVIDEND

Keeping in view the fund requirements for expansion projects and subsidiaries, the Board of Directors of the Company is pleased to recommend Dividend @ Rs, 1.5 (i.e. 15 %) per Equity Share of the face value of Rs, 10 each for the Financial Year 2015 - 16.

GAS TRANSMISSION SERVICES

The Company has effective Firm GTAs of 22.83 mmscmd for transmission of gas to various customers & interruptible / short -medium term GTAs for 9.07 mmscmd (Previous year: Firm GTAs of 22.99 mmscmd and interruptible GTAs of 5.96 mmscmd).

GAS GRID PROJECT

The pipeline grid has been designed as per the highest international standards with inbuilt flexibility to cater to varying loads.

The pipeline grid map of GSPL for Gujarat is enclosed herewith as Annexure - X.

The map showing the Cross-Country Natural Gas Transmission Pipelines being implemented through special purpose vehicles is enclosed herewith as Annexure â XI.

Projects Commissioned

During the year under review, the Company has successfully completed commissioning of Anjar Bhuj pipeline, Halol Dahod pipeline and various customer connectivity (ies) projects namely Parle Connectivity, Ineos Connectivity, Rochling Connectivity.

The grid operations account for approx 2348 Kms as on 31^st March, 2016. Gas is flowing from Hazira / Dahej / Vapi to various industries and City Gas Distribution (âCGDâ) Networks located in various districts of Gujarat including Surat, Bharuch, Narmada, Baroda, Anand, Ahmadabad, Dahod, Gandhinagar, Sabarkantha, Panchamahal, Patan, Bhavnagar, Mehsana, Banaskantha, Surendranagar, Botad, Rajkot, Morbi, Jamnagar, Navsari, Kutchh, Kheda, Valsad, Amreli.

Projects under execution

Your Directors are pleased to inform that the Company continues to develop additional pipeline infrastructure in the State of Gujarat. Additionally, the Company is also installing Gas Compressor station at Gana which is under construction.

WIND POWER PROJECT

Your Company being committed to promote clean and green energy has set up Wind Power Project of 52.5 MW in the areas of Maliya Miyana, Rajkot and Gorsar & Adodar, Porbandar.

During the year, the Company has sold 10,47,86,591 KWH of electricity generated through Windmill.

FUTURE PLANS

The Company is working on future expansion projects based on the demand in various regions around the gas grid. The Company has already started necessary activities in relation to the development of the City Gas Distribution (CGD) Network in the Geographical Area (GA) of Amritsar District (Punjab). Recently, the Company has also been awarded authorization for the Bhatinda GA and the Company would be starting the necessary activities for developing the CGD network in Bhatinda GA very soon.

OPERATION & MAINTENANCE ACTIVITIES

The Company has transported 8966 mmscm of gas during the financial year 2015-16 (Previous year: 8395 mmscm).

To safeguard pipeline assets and optimize utilization of the pipeline system, the Company is giving utmost importance to efficient operations and preventive maintenance. The Company is in process of implementing Pipeline Integrity Management System in line with PNGRB guidelines to safe guard the pipeline assets.

SUBSIDIARY, ASSOCIATES & JOINT VENTURE COMPANIES

Subsidiary Companies:

Your Company has two Subsidiary Companies viz 1) GSPL India Gasnet Limited (GIGL) for development of Mehsana - Bhatinda (approx 1670 Kms) and Bhatinda - Jammu - Srinagar (approx 740 Kms) Pipeline Projects and 2) GSPL India Transco Limited (GITL) for development of Mallavaram - Bhopal - Bhilwara â Vijaipur (approx. 1881 Kms) Pipeline Project awarded by Petroleum and Natural Gas Regulatory Board.

GIGL & GITL Performance Highlights:

GIGL and GITL have received all major statutory approvals for development of Pipeline. GIGL & GITL have initiated process for implementing the projects. Pursuant to the same construction activities would commence shortly by GIGL, wherein, GITL would be publishing NIT shortly.

These pipelines, once commissioned, shall lead to optimum utilization of GSPLsâ Network and be synergistic with your Companyâs foray into CGD Network Development also.

Associate Companies:

As on 31^st March, 2016, your Company has two Associate Companies viz. Gujarat Gas Limited and Sabarmati Gas Limited.

Gujarat Gas Limited

Gujarat Gas Limited is engaged in the City Gas Distribution (CGD) business to provide natural gas to retail, various industrial, commercial and domestic residential segment customers in the State of Gujarat. Further, it is also engaged in the business of distribution of CNG to transport segment customers through CNG filling stations at major cities and towns of Gujarat State.

During the year, the Scheme of Amalgamation of GSPC Gas Company Limited, Gujarat Gas Company Limited, Gujarat Gas Financial Services Limited and Gujarat Gas Trading Company Limited into Gujarat Gas Limited (Formerly known as GSPC Distribution Networks Limited) was approved by Honâble High Court of Gujarat and was implemented.

Post amalgamation, Gujarat Gas Limited has emerged as Indiaâs largest City Gas Distribution Company with its presence spread across various Districts in the State of Gujarat, Union Territory of Dadra and Nagar Haveli and the State of Maharashtra.

Gujarat Gas Limited in an endeavor to grow and retain the leadership position of being the largest CGD in the Country won the Geographical Areas of Thane (excluding areas already authorized) including the District of Palghar and the Geographical Area of Union Territory of Dadra and Nagar Haveli in Financial Year 2015 - 16 in addition to other Geographical Areas already won during the Financial Year 2014 - 15 including Bhavnagar, Jamnagar and Kutch (West).

With these newly added Geographical Areas of Thane & Palghar, Gujarat Gas Limited have now extended its foot prints beyond the State of Gujarat also.

Post Financial Year under review, PNGRB has also issued Grant of Authorization for development of CGD network to Gujarat Gas Limited for Geographical Areas of Dahej - Vagra taluka in Bharuch, Amreli, Anand (Rural), Dahod, Ahmadabad (Rural) and Panchmahal.

Gujarat Gas Limited is supplying natural gas to more than 10.7 Lakh residential, over 11,800 commercial and non-commercial segments and over 2,850 industrial customers as on 31^st March, 2016.

Gujarat Gas Limited also supplies natural gas in the form of Compressed Natural Gas (CNG) through 230 CNG stations catering to the automotive sector in the operational areas.

Your Company has a total shareholding of 25.76% in Gujarat Gas Limited as on 31^st March, 2016.

During the year ending 31^st March 2016, Gujarat Gas Limited contributed to approx 20% of total transmission revenues of your Company.

Sabarmati Gas Limited

During the year, your Company has acquired additional shares of Sabarmati Gas Limited and consequently the total shareholding of your Company in Sabarmati Gas Limited is 27.47 % as on 31^st March, 2016.

Sabarmati Gas Limited is engaged in the business of development of City Gas Distribution networks in Gandhinagar, Sabarkantha and Mehsana districts of North Gujarat. Sabarmati Gas Limited has established 47 CNG stations and commissioned approximately 330 kilometers of steel pipeline network and 2631 kilometers of MDPE pipeline network. Sabarmati Gas Limited has 98438 domestic customers and 254 industrial and 487 commercial customers as on 31^st March, 2016.

During the year ending 31^st March 2016, Sabarmati Gas Limited contributed to approx 3% of total transmission revenues of your Company.

Accounts of subsidiary, Associates & Joint Venture companies:

Pursuant to provisions of Section 129 (3) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement in prescribed Form AOC - 1 containing salient features of the financial statement of following Subsidiaries and Associate Companies is provided in the Annual Report.

Subsidiaries:

1. GSPL India Gasnet Limited â 13^th October, 2011

2. GSPL India Transco Limited â 13^th October, 2011

Associates:

1. Gujarat Gas Limited - 20^th May, 2013

2. Sabarmati Gas Limited â 18^th February, 2016

Further, the audited annual accounts and related information of the subsidiary companies, where applicable, will be made available to any Member upon request. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard - 21 on Consolidated Financial Statements read with Accounting Standard - 23 on Accounting for Investments in Associates, the Audited Consolidated Financial Statements are provided in the Annual Report.

HEALTH, SAFETY AND ENVIRONMENT

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 up to the local level. Contractorsâ adherence to Companyâs QHSE policy is also assured through regular site visits and external audits. Regular site visits ensure the enhancement of safety culture which also facilitates safe commissioning of the new projects. To achieve the highest quality of safety systems, the Company has moved towards international recognition with the renewal of corporate membership of British Safety Council. The Company is proud to maintain its target of âzero accidentâ year with full commitment of its employees and management.

Disaster Management Plan (ERDMP) of GSPL was re-accredited by Disaster Management Institute, Bhopal as per the requirement of ERDMP Regulation, 2010 under PNGRB Act, 2006. ERDMP is being reviewed and updated regularly. All conditions of Accreditation are being adhered to. Effectiveness of ERDMP is verified through regular mock drills as per specified intervals as identified by respective work bases.

To further enhance the benchmark of Safety Management Systems, your Company was audited by British Safety Council for Five Star safety audit for the fifth time. GSPL has achieved Four Star grading by British Safety Council (BSC) after an extensive evaluation by BSC auditor. GSPL has bagged Sword of Honour for the year 2015. This Sword of Honour award recognizes the commitment to excellent health and safety management standards. Your Company has also bagged International Safety award for 2016 by British Safety Council for its HSE performance of GSPL Gas Grid. Your Company has successfully bagged International Safety Awards from British Safety Council for Six Years continuously, based upon previous yearsâ HSE Performance of Gas Grid.

DEPOSITS

During the year, the Company has not accepted Deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188 (1) OF THE COMPANIES ACT, 2013

All Related Party Transactions that were entered into during the financial year were on an armâs length basis and were in the ordinary course of business.

The Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions as approved by the Board is uploaded on the Companyâs Website.

None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

CORPORATE SOCIAL RESPONSIBILITY

The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed herewith as Annexure - IV to this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Since last Directorâs Report, Shri Atanu Chakraborty, IAS and Shri L Chuaungo, IAS ceased to be Directors of the Company consequent to their resignation as Directors from the Board of the Company.

Your Directors wish to place on record appreciation of the services rendered by Shri Atanu Chakraborty, IAS as the Managing Director and Shri L Chuaungo, IAS as a Director of the Company.

Consequent to resignation by Shri Atanu Chakraborty, IAS, the Board has appointed Dr. J N Singh, IAS, Director on the Board of the Company as Managing Director w.e.f. 16^th April, 2016 till further intimation from Gujarat State Petroleum Corporation Limited.

Dr. Sudhir Kumar Jain and Shri Bhadresh Mehta have been appointed as Additional Independent Directors of the Company w.e.f. 23^rd October, 2015 for the period of five years subject to approval of members in the ensuing Annual General Meeting. Further, Shri Sujit Gulati, IAS has also been appointed as an Additional Director w.e.f. 19^th July, 2016 to hold office till the ensuing Annual General Meeting. Accordingly, it is proposed to approve their appointment in the 18^th Annual General Meeting.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Smt Shridevi Shukla, Director of the Company shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers herself for reappointment.

Directors Independence:

Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors have carried out an annual performance evaluation of Chairman, Non-Independent Directors and the Board as a whole. Further, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of the various Committees of Directors of the Company.

Meetings:

AUDITORS

Statutory & 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 V V Patel & Co., Chartered Accountants as Statutory Auditors of the Company for the Financial Year 2015 - 16.

C&AG has given NIL comment reports (Standalone & Consolidated) for the Financial Year 2015 - 16. The NIL comment reports have been provided before the Standalone & Consolidated Financial Statements respectively.

Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act,

2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s Spanj & Associates, Practicing Company Secretaries, to conduct the Secretarial Audit of the Company for the Financial Year 2015 - 16.

The Report of Secretarial Auditor on Companyâs Secretarial Audit for the Financial Year 2015 - 16 is enclosed herewith as Annexure - V to this Report. The Secretarial Audit Report is self explanatory in nature.

Cost Auditors:

Accordingly, your Company has got the Cost Audit carried out for the said business of the Company for the financial year 2015 - 16 through the Cost Auditor M/s R K Patel & Co. The Cost Audit Report 2015 - 16 will be submitted to the Central Government in the prescribed format within stipulated time period.

Further, your Directors has, on the recommendation of the Audit Committee, appointed M/s R K Patel & Co., as Cost Auditor to audit the cost accounts of the Company for the financial year 2016 - 17 on a remuneration of '' 1,08,000/- plus applicable taxes and reimbursement of out of pocket expenses incurred by them during the course of Audit.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Memberâs ratification for the remuneration payable to M/s R K Patel & Co., Cost Auditors for the Financial Year 2016 - 17 is included in the Notice convening the Annual General Meeting.

AUDIT COMMITTEE

Audit Committee of Directors of the Company at its Meeting held on 19^th May, 2016 approved the Annual Accounts for the Financial Year ended on 31^st March, 2016 and recommended the same for approval of the Board.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

Risk Management:

The Company has a well-defined risk management framework. The Board of Directors of the Company has adopted a Risk Management Policy.

Internal Control System:

The details about the identification of elements of Risk and Internal Control Systems are provided in detail in the Management Discussion & Analysis Report forming part of this Directorsâ Report.

VIGIL MECHANISM

DIRECTORSâ RESPONSIBILITY STATEMENT

a. that in the preparation of the annual financial statements for the year ended 31^st March, 2016, the applicable accounting standards have been followed and no material departures have been made from the same;

b. that accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2016 and of the profit & loss of the Company for the year ended on that date;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

MANAGEMENT DISCUSSION & ANALYSIS

This Annual Report contains a separate section (Annexure â I) on the Management Discussion & Analysis, which forms part of this Directorsâ Report.

CORPORATE GOVERNANCE

The Company believes that good governance alone can deliver continuous good business performance. A Report on Corporate Governance as required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is incorporated as a part of this Directorsâ Report (Annexure â II). A Compliance Certificate by the Practicing Company Secretary is also attached to this Directorsâ Report.

GSPL EMPLOYEES STOCK OPTION PLAN (âESOPâ)

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 success of the Company.

1. GSPL Employees Stock Option Plan â 2005 (ESOP â 2005).

2. GSPL Employees Stock Option Plan â 2010 (ESOP â 2010).

Under the said ESOPs, each such Option has conferred a right upon the employee to apply for one Equity Share of the Company.

Auditors of the Company have certified that the Schemes are being implemented in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014 and the resolution passed by the Members. The Certificate would be placed at the Annual General Meeting for inspection by Members.

Statutory disclosure regarding ESOP â 2005 and ESOP â 2010 are enclosed at Annexure â VI & VII respectively.

Further, the Disclosure regarding ESOP â 2005 and ESOP â 2010 pursuant to SEBI (Share Based Employee Benefits) Regulations,

2014 have been made on the website of the Company at http:// gspcgroup.com/GSPL/disclosures.aspx

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT â 9 is enclosed herewith as Annexure â VIII.

PARTICULARS OF EMPLOYEES

2014 in respect of the employees of the Company pursuant to Ministry of Corporate Affairs Notification dated 5^th June, 2015.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has always believed that appropriate standard of conduct should be maintained by the employees in their conduct and that there should be a safe, in discriminatory and harassment free (including sexual harassment) work environment for every individual working in the Company. The Company has in place a Policy on Prevention of Sexual Harassment at workplace as a part of its Human Resource Policy. It aims at prevention of harassment of employees and lays down the guidelines for reporting and prevention of sexual harassment.

The Company has constituted an Internal Complaints Committee (ICC) as required under the Act which is responsible for redressal of complaints related to sexual harassment.

During the year ended 31^st March, 2016, no complaint has been received by the ICC pertaining to sexual harassment.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations during the year.

ACKNOWLEDGEMENTS

The Directors appreciate the continued support received from the valued customers and look forward to this mutually supportive relationship in future.

The Directors also wish to place on record the sincere thanks to PNGRB and other regulatory authorities at Central and State level 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 confidence reposed in the Company.

For and on behalf of the Board of Directors

Date: 30 ^th July, 2016 M M Srivastava, IAS (Retd.)

Place: Gandhinagar Chairman

Mar 31, 2015

To , The Members

Gujarat State Petronet Limited

The Directors take pleasure in presenting the 17th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2015.

FINANCIAL HIGHLIGHTS

Your Company has excelled in most of the performance parameters.

Major Highlights of the Company are summarized below:

(Rs. in Crore)

Particulars (Standalone Accounts) 2014-15 2013-14

Total Income 1116.60 1105.88

Employee Benefit Expenses 35.56 28.71

Other Expenses 101.02 93.10

Total Expenses 136.58 121.81

PBDITA 980.02 984.06

Finance Cost 117.83 141.85

Depreciation & Amortisation 189.23 183.87

Prior Period Adjustments 12.64 0.05

Profit Before Tax 660.32 658.30

Tax including Deferred Tax 249.96 239.15

Profit After Tax Carried to Balance Sheet 410.36 419.15

Appropriations

Transfer to General Reserves NIL NIL

Proposed Dividend (including Dividend Distribution Tax) 81.70 65.84

Profit After Appropriations 328.66 353.31

PERFORMANCE HIGHLIGHTS

- 100% Pipeline grid availability and "accident free" year of operations.

- PNGRB has granted authorization to GSPL for developing City Gas Distribution (CGD) Network in the Geographical Area of Amritsar District (Punjab).

- PNGRB is in the process of re-determining the levelized tariff for GSPLÂs High Pressure and Low Pressure Natural Gas Pipeline Networks pursuant to APTEL decision on the appeal fled by GSPL.

- Total Income stood at Rs. 1116.60 Crore, as compared to Rs. 1105.88 Crore in previous year.

CAPITAL

During the year, the Board has approved allotment of 19232 Shares and 222053 Shares to the eligible employees under ESOP - 2005 and ESOP - 2010 Schemes of the Company respectively upon exercise of Options by them, consequent to which the paid up Share Capital of the Company has increased to Rs. 562.98 Crore.

DIVIDEND

Keeping in view the fund requirements for expansion projects and subsidiaries, the Board of Directors of the Company is pleased to recommend Dividend @ Rs. 1.2 (i.e. 12 %) per Equity Share of the face value of Rs. 10 each for the Financial Year 2014 - 15.

GAS TRANSMISSION SERVICES

Te Company has efective Firm GTAs of 22.99 mmscmd for transmission of gas to various customers & interruptible / short - medium term GTAs for 5.96 mmscmd (Previous year: frm GTAs of 26.56 mmscmd and interruptible GTAs of 4.88 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 frst 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 in-built flexibility to cater to varying loads.

Te pipeline grid map of GSPL for Gujarat is enclosed herewith as Annexure - XI.

The map showing the Cross-Country Natural Gas Transmission Pipelines being implemented through special purpose vehicles is enclosed herewith as Annexure Â XII.

Projects Commissioned

Since last Directors ÂReport, the Company has successfully completed commissioning of various customer connectivity (ies) projects namely Grasim, Dahej SEZ-II, China steel, Ford, OPaL, Valeo, Inbisco.

The grid operations account for approx 2192 Kms as on 31st March, 2015. 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, Narmada, Baroda, Anand, Ahmedabad, Dahod, Gandhinagar, Sabarkantha, Panchamahal, Patan, Bhavnagar, Mehsana, Banaskantha, Surendranagar, Botad, Rajkot, Morbi, Jamnagar, Navsari, Kutchh, Kheda, Valsad, Amreli.

Projects under execution

Your Directors are pleased to inform that the Company continues to develop pipeline infrastructure in the State of Gujarat. Currently, 366 Kms of Pipeline and Gas Compressor station at Gana (1Working 1Standby) having capacity of 14 mmscmd each is under construction.

The Company is a co-developer in Dahej SEZ and Panoli SEZ and is developing Pipeline infrastructure in these SEZs. Several customers have started receiving gas in Dahej SEZ through CompanyÂs network with more getting connected on regular basis.

WIND POWER PROJECT

Your Company being committed to promote clean and green energy has set up wind power project of 52.5 MW in the areas of Maliya Miyana, Rajkot and Gorsar & Adodar, Porbandar. During the year, the Company has sold 10,42,47,114 KWH of electricity generated through Windmill.

-FUTURE PLANS

The Company is working on future expansion projects based on the demand in various regions around the gas grid. Te Company has been granted authorization from PNGRB for developing City Gas Distribution (CGD) Network in the Geographical Area of Amritsar District (Punjab). Te Company is embarking on the development of the same.

OPERATION & MAINTENANCE ACTIVITIES

Te Company has transported 8395 mmscm of gas during the financial year 2014 Â 15 (Previous year: 7693 mmscm).

To safeguard pipeline assets and optimize utilization of the pipeline system, the Company is giving utmost importance to efficient operations and preventive maintenance. Te Company is in process of implementing Pipeline Integrity Management System in line with PNGRB guidelines to safe guard the pipeline assets.

SUBSIDIARY, ASSOCIATES & JOINT

VENTURE COMPANIES

Subsidiary Companies:

Your Company has incorporated following subsidiary companies in October, 2011 for execution of the three Cross Country Pipeline Projects awarded by Petroleum and Natural Gas Regulatory Board:

Company Pipeline Project

GSPL India Gasnet Limited 1) Mehsana - Bhatinda (GIGL) (approx 1670 Kms)

2) Bhatinda - Jammu - Srinagar (approx 740 Kms)

GSPL India Transco Limited Mallavaram - Bhopal - Bhilwara (GITL) - Vijaipur (approx 1881 Kms)

*Proposed length of Pipeline as on 31st March, 2015

GIGL & GITL Performance Highlights:

GIGL and GITL have achieved progress in obtaining various statutory clearances. Both these Companies have initiated process for implementing sections of the project where statutory clearances, environment approvals and ROU have already been received and foated EPC tenders in respect thereof.

Associate Companies:

Your Company had two Associate Companies viz. GSPC Gas Company Limited and GSPC Distribution Networks Limited as on 31st March, 2015.

GSPC Gas Company Limited and GSPC Distribution Networks Limited were engaged in the City Gas Distribution (CGD) business to provide natural gas to retail, various industrial, commercial and domestic residential segment customers in the state of Gujarat.

GSPC Gas Company Limited was also engaged in the business of distribution of CNG Gas to transport segment customers through CNG filling stations at major cities and towns of Gujarat State.

The GSPC Gas Company Limited and Gujarat Gas Company Limited have merged with GSPC Distribution Networks Limited with effective from 14th May, 2015 and has been renamed as Gujarat Gas Limited. Gujarat Gas Limited has emerged as IndiaÂs largest City Gas Distribution (CGD) player with presence spread across 19 Districts in the State of Gujarat and Union Territory of Dadra Nagar Haveli and Tane which includes Palghar Districts of Maharashtra.

Gujarat Gas Limited has IndiaÂs largest customer base in major CGD user segments: 10,25,000 domestic households, 2,775 industrial customers, 11,520 commercial customers, 234 CNG stations selling 7,75,000 kgs of CNG per day. Te total daily gas sales volume has reached up to 6.2 MMSCMD which is the highest for any CGD company in India. Gujarat Gas Limited has a widespread gas pipeline network of more than 15,000 KMs (incl. Steel and PE pipeline).

Gujarat Gas Limited is going to play a leading role in making India move towards becoming a gas-based economy so as to significantly contribute towards a ''Greener IndiaÂ.

Your Company has a total shareholding of 25.76% in the merged entity, Gujarat Gas Limited.

Accounts of subsidiary, Associates & Joint Venture companies:

Pursuant to provisions of Section 129 (3) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement in prescribed Form AOC - 1 containing salient features of the financial statement of Subsidiaries i.e. GSPL India Gasnet Limited and GSPL India Transco Limited and Associate Companies i.e. GSPC Distribution Networks Limited and GSPC Gas Company Limited is provided in the Annual Report.

Further, the audited annual accounts and related information of the subsidiary companies, where applicable, will be made available to any Member upon request. Te annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard - 21 on Consolidated Financial Statements read with Accounting Standard - 23 on Accounting for Investments in Associates, the Audited Consolidated Financial Statements are provided in the Annual Report.

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. 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. Te same is also being reflected in the QHSE policy of the Company. Te 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. Te same is being monitored through internal audit teams and delegation of safety management up to the local level. Contractors Âadherence to CompanyÂs QHSE policy is also assured through regular site visits and external audits. Regular site visits ensure the enhancement of safety culture which also facilitates 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. Te Company is proud to maintain its target of ''zero accident Âyear with full commitment of its employees and management.

The Company is re-certified to Integrated Management Systems (ISO 9001:2008, ISO 14001:2004 & OHSAS 18001:2007) with validity till 30th October, 2017. Effectiveness of these certifications is being assured through planned audits of the system. Continuous improvement is visible in various O&M systems. Preventive Maintenance schedules are being adhered to with updating of records. Further, Emergency Response and Disaster Management Plan (ERDMP) of GSPL was accredited by Disaster Management Institute, Bhopal as per the requirement of ERDMP Regulation, 2010 under PNGRB Act, 2006. ERDMP is being reviewed and updated regularly. All conditions of Accreditation are being adhered to. Effectiveness of ERDMP is verified through regular mock drills as per specified intervals as identified by respective work bases.

To further enhance the benchmark of Safety Management Systems, your Company was audited by British Safety Council for Five Star safety audit for the fourth time and under new specifications for the second time. GSPL has retained this Five Star grading by British Safety Council (BSC) after an extensive evaluation by BSC auditor. Your Company has sustained the retaining of this ''Five Star Âgrading continuously for the past three years. Your Company has also bagged International Safety award for 2015 by British Safety Council for its HSE performance of GSPL Gas Grid. Your Company has successfully bagged International Safety Awards from British Safety Council for 05 Years continuously, based upon previous yearÂs Performance of Gas Grid.

DEPOSITS

During the year, the Company has not accepted Deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Pursuant to Section 186(11) of the Companies Act, 2013, Loans made, Guarantees given or Securities provided by a company providing infrastructure facilities are exempted from compliance with Section 186 of the Companies Act, 2013 except sub section (1). Accordingly, your Company being engaged in the Gas Transportation business is exempted from aforesaid compliance. However, the details of Loans, Guarantees, Securities and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188 (1) OF THE COMPANIES ACT, 2013

All Related Party Transactions that were entered into during the financial year were on an armÂs length basis and were in the ordinary course of business.

Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseeable and repetitive nature and a statement giving details of all Related Party Transactions is placed before the Audit Committee for approval/ ratification on a quarterly basis as the case may be.

The Policy on Materiality of Related Party Transactions and Dealing with related Party Transactions as approved by the Board is uploaded on the CompanyÂs Website.

None of the Directors has any pecuniary relationships or transactions vis-Ã -vis the Company.

Te particulars of contracts or arrangements with Related Parties referred to in Section 188 (1) of the Companies Act, 2013, as prescribed in Form AOC - 2 of the Companies (Accounts) Rules, 2014 is enclosed herewith as Annexure - III to this Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. Pursuant to provisions of Section 135 of the Companies Act, 2013, the Company has also formulated a Corporate Social Responsibility Policy which is available on the website of the Company at http://gspcgroup.com /uploaded data /category_pdf/46.pdf.

Your Company being committed in fulfilling its Corporate Social Responsibility has been engaged in various social initiatives through its intervention in the area of promoting education, eradication of hunger & poverty, creating awareness for conservation of energy, providing preventive health care etc in accordance with the Corporate Social Responsibility Policy of the Company.

The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed herewith as Annexure - IV to this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Since, last DirectorÂs Report, Shri D J Pandian, IAS, Shri Yogesh B Sinha, Dr. Hasmukh Adhia, IAS and Smt. Vilasini Ramachandran, IAS (Retd.) ceased to be the Directors of the Company. Further, Shri Tapan Ray, IAS also ceased to be Managing Director of the Company.

Your Directors wish to place on record appreciation of the services rendered by them as the Directors of the Company.

Dr. J N Singh, IAS, Shri L Chuaungo, IAS and Smt. Shridevi Shukla have been appointed as Additional Directors to hold office till the ensuing Annual General Meeting. It is proposed to -regularize their appointment in the 17th Annual General Meeting.

Shri Atanu Chakraborty, IAS has been appointed as Managing Director of the Company w.e.f 6th November, 2014 till further intimation from Gujarat State Petroleum Corporation Limited. As per the Notification issued by Ministry of Corporate Affairs, the provisions of sub Section (4) of Section 196 of the Companies Act, 2013 in relation to Shareholders approval for appointment of Managing Director are now not applicable to your Company being Government Company.

Further, Shri Manish Seth has been appointed as Chief Financial Officer of the Company w.e.f. 1st April, 2014 pursuant to Section 203 of the Companies Act, 2013.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Shri M M Srivastava, IAS (Retd.), Chairman of the Company shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself 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 Explanatory Statement forming part of Notice.

Directors Independence:

Pursuant to the provisions of Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Independent Directors of the Company have given confrmation/declaration to the Board that they meet with the criteria of Independence and are Independent in terms of Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Independent Directors has carried out an annual performance evaluation of Chairman, Non-Independent Directors and the Board as a whole. Further, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of the various Committees of Directors of the Company.

Pursuant to Section 178 of the Companies Act, 2013, the Nomination and Remuneration Committee has also evaluated performance of every Director on the Board of the Company.

The performance evaluation of individual Directors was carried out based on the various parameters after taking into consideration inputs received from the Directors and set out in the Policy for Evaluation of Performance of Directors, Committees & Board such as active participation & contributions in the Meetings, balance of knowledge, expertise and experience, safeguarding the interest of the Company and its Stakeholders etc. Te performance evaluation of the Board as a whole and various Committees of Directors of the Company was carried out considering various parameters such as adequacy of the composition of the Board and its Committees, discharge of key functions and responsibilities prescribed under law, corporate governance practice etc. and the overall performance assessment was discussed in detail by the Board members.

Nomination and Remuneration Policy:

Te CompanyÂs Nomination and Remuneration Policy on Directors Âappointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under the relevant provisions of the Companies Act, 2013 and Listing Agreement is enclosed herewith as Annexure - V to this Report.

Meetings:

The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business. Te Board / Committee Meetings are pre-scheduled and a tentative annual calendar of the Board and Committee Meetings is circulated to the Directors in advance to facilitate them to plan their schedule and to ensure meaningful participation in the Meetings. However, in case of a special and urgent business need, the approval is taken by passing resolutions through circulation to the Directors, as permitted by law, which are confirmed in the subsequent Board/Committee Meetings.

During the year, five (5) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. Te intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

AUDITORS

Statutory & 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 RMA & Associates, Chartered Accountants as Statutory Auditors of the Company for the Financial Year 2014 - 15.

C&AG has given NIL comment reports (Standalone & Consolidated) for the Financial Year 2014 - 15. Te NIL comment reports have been provided after this Report.

Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Te Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s Manoj Hurkat & Associates, Practising Company Secretaries, to conduct the Secretarial Audit of the Company for the Financial Year 2014 Â 15.

The Report of Secretarial Auditor on CompanyÂs Secretarial Audit for the Financial Year 2014 - 15 is enclosed herewith as Annexure - VI to this Report. Te Secretarial Audit Report is self explanatory in nature.

Cost Auditors:

Your Company is required to carry out Cost Audit for "Gas Transportation" business as well as "Generation of Electricity through Windmill" business pursuant to Section 148 of the Companies Act, 2013 read with Te Companies (Cost Records and Audit) Rules, 2014.

Accordingly, your Company has carried out Cost Audit for the said business of the Company for the Financial Year 2014 - 15 through the Cost Auditor M/s R K Patel & Co. Te Cost Audit Report 2014 Â 15 will been submitted to the Central Government -in the prescribed format within stipulated time period.

Further, your Directors has, on the recommendation of the Audit Committee, appointed M/s R K Patel & Co., as Cost Auditor to audit the cost accounts of the Company for the Financial Year 2015 - 16 on a remuneration of Rs. 1,08,000/- plus applicable taxes and reimbursement of out of pocket expenses incurred by them during the course of Audit.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking MemberÂs ratification for the remuneration payable to M/s R K Patel & Co., Cost Auditors for the Financial Year 2015 - 16 is included in the Notice convening the Annual General Meeting.

AUDIT COMMITTEE

Audit Committee of Directors of the Company at its Meeting held on 22nd May, 2015 approved the Annual Accounts for the Financial Year ended on 31st March, 2015 and recommended the same for approval of the Board.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

Risk Management:

Te Company has a well-defined Risk Management Framework for reviewing the major Risks and has adopted a Risk Management Policy.

Further, pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee inter-alia to monitor the Risk Management Plan of the Company.

Internal Control System:

The Company has a proper and adequate system of Internal Controls commensurate with its size of operations and nature of business. Tese are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.

The details about the identification of elements of Risk and Internal Control Systems are provided in detail in the Management Discussion & Analysis Report forming part of this DirectorsÂ Report.

VIGIL MECHANISM

The Company has established a Vigil Mechanism for Directors and Employees to report their genuine concerns, details of which have been given in the Corporate Governance Report forming part of this Directors ÂReport.

DIRECTORS''RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013:

a. that in the preparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed and no material departures have been made from the same;

b. that accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit & loss of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

MANAGEMENT DISCUSSION & ANALYSIS

This Annual Report contains a separate section (Annexure - I) on the Management Discussion & Analysis, which forms part of this Directors ÂReport.

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 ÂReport (Annexure Â II). A Compliance Certificate by the Practicing Company Secretary is also annexed to this Directors ÂReport.

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 success of the Company:

1. GSPL Employees Stock Option Plan Â 2005 (ESOP Â 2005)

2. GSPL Employees Stock Option Plan Â 2010 (ESOP Â 2010) Under the said ESOPs, each such Option has conferred a right -upon the employee to apply for one Equity Share of the Company.

Auditors of the Company have certified that the Schemes are being implemented in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014 and the resolution passed by the Members. Te Certificate would be placed at the Annual General Meeting for inspection by Members.

Statutory disclosure regarding ESOP Â 2005 and ESOP Â 2010 are enclosed at Annexure Â VII & VIII respectively.

Further, the Disclosures regarding ESOP - 2005 and ESOP - 2010 pursuant SEBI (Shares Based Employee Benefits) Regulations, 2014 have been made on the website of the Company at http:// gspcgroup.com/pdf/gspl/ESOP 2005 Disclosure.pdf & http:// gspcgroup.com/pdf/gspl/ESOP 2010 Disclosure.pdf.

EXTRACT OF ANNUAL RETURN

Te details forming part of the extract of the Annual Return in Form MGT Â 9 is enclosed herewith as Annexure - IX.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Companies Act, 2013, this Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees Âparticulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company in this regard.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has always believed that appropriate standard of conduct should be maintained by the employees in their conduct and that there should be a safe, in discriminatory and harassment - free (including sexual harassment) work environment for every individual working in the Company. Te Company has in place a Policy on Prevention of Sexual Harassment at workplace as a part of its Human Resource Policy. It aims at prevention of harassment of employees and lays down the guidelines for reporting and prevention of sexual harassment.

The Company has constituted an Internal Complaints Committee (ICC) as required under the Act which is responsible for redressal of complaints related to sexual harassment.

During the year ended 31st March, 2015, no complaint has been received by the ICC pertaining to sexual harassment.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information required to be disclosed pursuant to provisions of the Companies Act, 2013 read with rules thereto with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo are furnished in Annexure - X to this Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments, if any, affecting the fnancial position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations during the year.

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 deep appreciation to employees of the Company at all levels for their hard work, dedication and commitment 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 have enabled the Company to expand the pipeline network in a professional manner.

The Directors also wish to place on record the sincere thanks to PNGRB and other regulatory authorities at Central and State level 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 confidence reposed in the Company.

For and on behalf of the Board of Directors,

M M Srivastava, IAS (Retd.)

Chairman

Date: 7th August, 2015

Place: Gandhinagar

Mar 31, 2014

The Members

Gujarat State Petronet Limited

The Directors have pleasure in presenting the 16th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2014.

FINANCIAL HIGHLIGHTS

(Rs. in Crore)

Particulars (Standalone Accounts) 2012-13 2013-14

Total Income 1239.25 1105.88

Employee Benefit Expenses 24.71 28.71

Other Expenses 76.52 93.10

Total Expenses 101.23 121.81

PBDITA 1138.02 984.06

Finance Cost 126.26 141.85

Depreciation & Amortisation 186.11 183.87

Preliminary Expenses Written-Of - -

Prior Period Adjustments (0.05) 0.05

Profit Before Tax 825.70 658.30

Tax including Deferred Tax 287.58 239.15

Profit After Tax Carried to Balance Sheet 538.12 419.15

Appropriations

Transfer to General Reserves NIL NIL

Proposed Dividend (including Dividend Distribution Tax) 65.83 65.84

Profit After Appropriations 472.29 353.31

PERFORMANCE HIGHLIGHTS

Your Company has excelled in most of the performance parameters. Major highlights of the Company are summarized below:

- 99% Pipeline grid availability and "accident free" year of operations.

- PNGRB re-determined the levelized tarif for GSPL''s High Pressure Natural Gas Pipeline Network.

- Total Income stood at Rs. 1105.88 Crore, decrease of 11% over previous year, mainly due to reduction in production of domestic gas.

CAPITAL

During the year, the Board has approved allotment of 29862 Shares to the eligible employees under ESOP - 2005 upon exercise of Options by them, consequent to which the paid up Share Capital of the Company has increased to Rs. 562.74 Crore.

DIVIDEND

Keeping in view the fund requirements for expansion projects and subsidiaries, the Board of Directors of the Company is pleased to recommend Dividend @ Rs. 1 (i.e. 10%) per Equity Share of the face value of Rs. 10 each for the Financial Year 2013 - 14.

GAS TRANSMISSION SERVICES

The Company has efective Firm GTAs of 26.56 mmscmd for transmission of gas to various customers and interruptible / short - medium term GTAs for 4.88 mmscmd (Previous year: firm GTAs of 30.94 mmscmd and interruptible GTAs of 11.32 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 frst 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 herewith as Annexure - VI.

The map showing the Cross-Country Natural Gas Transmission Pipelines being implemented through Special Purpose Vehicles is enclosed herewith as Annexure Â VII.

Projects Commissioned

Since last Directors'' Report, the Company has successfully completed commissioning of various pipeline projects namely DGEN Connectivity, Banas Dairy, BASF & Styrolution connectivity and various customers in Dahej SEZ area.

Current grid operations account for approx 2180 Kms. Gas is fowing from Hazira / Dahej / Vapi to various industries and City Gas Distribution ("CGD") Networks located in various Districts of Gujarat including Surat, Bharuch, Narmada, Baroda, Anand, Ahmedabad, Dahod, Gandhinagar, Sabarkantha, Panchamahal, Patan, Bhavnagar, Mehsana, Banaskantha, Surendranagar, Rajkot, Morbi, Jamnagar, Navsari, Kutchh, Kheda, Valsad, Amreli.

Projects Under Execution

Your Directors are pleased to inform that the Company continues to develop Pipeline infrastructure in the State of Gujarat. Currently, approx 405 Kms of Pipeline is under construction.

Your Company is also developing Gana- Kalol - Palanpur Loopline.

The Company is a co-developer in Dahej SEZ and Panoli SEZ and is developing Pipeline infrastructure in these SEZs. Several customers have started receiving gas in Dahej SEZ through Company''s network with more getting connected on regular basis.

WIND POWER PROJECT

Your Company being committed to promote clean and green energy has set up wind power project of 52.5 MW in the areas of Maliya Miyana, Rajkot and Gorsar & Adodar, Porbandar. During the year, the Company has sold 10,79,14,415 KWH of electricity generated through Windmill.

FUTURE PLANS

The Company is working on future expansion projects based on the demand in various regions around the gas grid.

OPERATION & MAINTENANCE ACTIVITIES

The Company has transported 7692.84 mmscm of gas during the Financial Year 2013 - 14 (Previous year: 9966.06 mmscm).

To safeguard its Pipeline assets and optimize utilization of the Pipeline system, the Company is giving utmost importance to efcient operations and preventive maintenance. The Company is in process of implementing Integrity Management System in line with PNGRB guidelines to safe guard the Pipeline assets.

SUBSIDIARY COMPANIES

Your Company has incorporated following two subsidiary companies in October, 2011 for execution of the three Cross Country Pipeline Projects awarded by Petroleum and Natural Gas Regulatory Board:

GIGL & GITL - Project Status:

GIGL and GITL have achieved progress in obtaining various statutory clearances. Both these Companies have initiated process for implementing sections of the project where statutory clearances, environment approvals and ROU have already been received and foated EPC tenders in respect thereof.

Accounts of subsidiary companies:

Most of the provisions of the Companies Act, 2013 has been notifed with efect from 1st April, 2014. Ministry of Corporate Afairs (MCA) have vide circular dated 4th April, 2014 clarifed that for the Financial Year ended on 31st March 2014, Balance Sheet, Profit & Loss Account, Directors'' Report etc. shall be prepared and submitted as per the provisions of Companies Act, 1956. Accordingly, as per the requirement of Section 212 of the Companies Act, 1956, GSPL needs to publish in the Annual Report, the financial statements of its subsidiaries (i) GSPL India Gasnet Ltd. and (ii) GSPL India Transco Ltd. along with the stand-alone and Consolidated Financial Statements of Gujarat State Petronet Ltd.

However, in accordance with the General Circular No. 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Afairs, Government of India, the Balance Sheet, Profit & Loss Account and other documents for the Financial Year ended 31st March, 2014 of the subsidiary companies are not being attached with the Balance Sheet of the Company. The financial information of the subsidiary companies is disclosed in the Annual Report in compliance with the said circular. The audited annual accounts and related information of the subsidiary companies, where applicable, will be made available to any Member upon request. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered office of the Company and that of the respective subsidiary companies.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard - 21 on Consolidated Financial Statements read with Accounting Standard - 23 on Accounting for Investments in Associates, the Audited Consolidated Financial Statements are provided in the Annual Report.

HEALTH, SAFETY AND ENVIRONMENT

The Company, in order to fulfll its commitment towards health, safety and environment, has taken active steps towards establishment of Safety Management Systems. 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 refected in the QHSE policy of the Company. The Company is expanding and managing its operations in a manner which is safe and environmentally sustainable.

For developing efectiveness 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 up to the local level. Further, Emergency Response and Disaster Management Plan (ERDMP) of GSPL was accredited by the Tird Party Agency as per the requirement of ERDMP Regulations, 2010 under PNGRB Act, 2006. ERDMP is being reviewed and updated regularly. Moreover, contractors'' adherence to Company''s QHSE policy is also ensured through regular site visits and external audits. Regular site visits ensure the enhancement of safety culture which also facilitates 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 is re-certified to Integrated Management Systems (ISO 9001:2008, ISO 14001:2004 & OHSAS 18001:2007) with validity till 30th October, 2014. Efectiveness of these certifications is being enssured through planned audits of the system. Continuous improvement is visible in various O&M systems. Preventive maintenance schedules are being adhered to with the updation of records. GSPL ERDMP was accredited by Disaster Management Institute, Bhopal as required under ERDMP Regulations, 2010 of PNGRB Act. All conditions of Accreditation are being adhered to. Efectiveness of ERDMP is verifed through regular mock drills as per specified intervals as identified by respective work bases.

To further enhance the benchmark of Safety Management Systems, your Company was audited by British Safety Council for Five Star safety audit for the third time and under new Specifications for the frst time. GSPL has retained the Five

Star grading by British Safety Council (BSC) after an extensive evaluation by BSC auditor. Your Company has also bagged International Safety award for 2014 by British Safety Council for its HSE performance of GSPL Gas Grid. Your Company has successfully bagged International Safety Awards from British Safety Council for 04 Years continuously, based upon previous years'' HSE Performance of Gas Grid.

FIXED DEPOSITS

During the year, the Company has not accepted any Fixed Deposits from the public.

CORPORATE SOCIAL RESPONSIBILITY

The Company continues to make focused eforts for fulfilling its Corporate Social Responsibility, with the thrust areas being education, health & sanitation and public awareness.

DIRECTORS

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Shri D J Pandian, IAS, Director of the Company shall retire by rotation at the ensuing Annual General Meeting and being eligible, ofers himself for reappointment.

Pursuant to Section 149 of the Companies Act, 2013, the Board has recommended appointment of Dr. R Vaidyanathan, Prof. Yogesh Singh, Shri Yogesh B Sinha, Dr. Bakul Dholakia and Smt. Vilasini Ramachandran, IAS (Retd.) as Independent Directors of the Company, not liable to retire by rotation, for a period of five years from the date of the 16th Annual General Meeting for approval of the Members of the Company. These Directors have given the declarations to the Board that they meet the criteria of Independence as provided under Section 149 (6) of the said Act and also confirmed that they will abide by the provisions as mentioned in Schedule IV of the Companies Act, 2013.

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 RMA & Associates, Chartered Accountants as Statutory Auditors of the Company for the Financial Year 2013 - 14.

C&AG has given NIL comment report for the Financial Year 2013 - 14. The NIL comment report is enclosed herewith as Annexure - V.

AUDIT COMMITTEE

Audit Committee of Directors of the Company at its meeting held on 22nd May, 2014 approved the Annual Accounts for the Financial Year ended 31st March, 2014 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 for the year ended 31st March, 2014, the applicable accounting standards read with requirements set out under revised Schedule VI to the Companies Act, 1956, have been followed along with proper explanation relating to material departures.

(ii) accounting policies are selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of afairs of the Company as at 31st March, 2014 and of Profit of the Company for that period.

(iii) proper and sufcient 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

Tis Annual Report contains a separate section (Annexure - I) on the Management Discussion & 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 success of the Company.

1. GSPL Employees Stock Option Plan Â 2005 (ESOP Â 2005).

2. GSPL Employees Stock Option Plan Â 2010 (ESOP Â 2010).

Under the said ESOPs, each such Option has conferred a right upon the employee to apply for one Equity Share of the Company.

Auditors of the Company have certified that the Scheme has been implemented in accordance with the SEBI Guidelines and the Resolution passed by the Shareholders. The Certificate would be placed at the Annual General Meeting for inspection by Members.

Statutory disclosures regarding ESOP - 2005 and ESOP - 2010 are enclosed as Annexure - III & IV respectively to this Directors'' Report.

PARTICULARS OF EMPLOYEES

As per Notifcation issued by the Ministry of Corporate Afairs, the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are not applicable to government companies. As your Company is a Government Company, the information has not been included as a part of the Directors'' Report.

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.

Technolog y 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.

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 deep appreciation to employees of the Company at all levels for their hard work, dedication and commitment 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. Teir guidance, encouragement and moral support have enabled the Company to expand the Pipeline Network in a professional manner.

The Directors also wish to place on record the sincere thanks to PNGRB and other regulatory authorities at Central and State level 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 reposed in the Company.

For and on behalf of the Board of Directors,

M M Srivastava, IAS (Retd.)

Chairman Date : 25th August, 2014 Place: Gandhinagar

Mar 31, 2013

To, The Members of Gujarat State Petronet Limited

The Directors have pleasure in presenting the 15th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2013.

FINANCIAL HIGHLIGHTS

(Rs. in Crore)

Particulars (Standalone Accounts) 2011-12 2012-13

Total Income 1174.63 1239.25

Employee Benefit Expenses 19.69 24.71

Other Expenses 70.37 76.52

Total Expenses 90.06 101.23

PBDITA 1084.57 1138.02

Finance Cost 130.20 126.26

Depreciation & Amortisation 181.90 186.11

Preliminary Expenses Written-Off 0.25 -

Prior Period Adjustments 3.21 (0.05)

Profit Before Tax 769.01 825.70

Tax including Deferred Tax 246.95 287.58

Profit After Tax Carried to Balance Sheet 522.06 538.12

Appropriations

Transfer to General Reserves NIL NIL

Transfer from Bond Redemption Reserve NIL NIL

Proposed Dividend (including Dividend Distribution Tax) 65.41 65.83

Profit After Appropriations 456.65 472.29

MAJOR ACHIEVEMENTS

Your Company has excelled on all performance parameters. Major achievements of the Company are summarized below:

- Total Income increased from Rs. 1174.63 crore in previous year to Rs. 1239.25 crore recording increase of 6%.

- PBDITA increased from Rs. 1084.57 crore in previous year to Rs. 1138.02 crore, recording an increase of 5%.

- 100% Pipeline grid availability and "accident free" year of operations.

- PNGRB has granted authorization for High Pressure Gas Pipeline Network of 2239 Kms and Low Pressure Gas Pipeline Network of 57.60 Kms in Gujarat.

- During the year, PNGRB has determined the "Provisional" Initial Unit Natural Gas Pipeline Tariff'' (IUNGPT) for GSPLs High Pressure Natural gas Pipeline Network and the zonal tariff apportionment of the same thereof.

- Your Company in Financial Year 2011 - 12 had promoted two new special purpose vehicles i.e. GSPL India Gasnet Limited and GSPL India Transco Limited for execution of the three Cross Country Pipeline Projects viz. Mallavaram - Vijaipur - Bhilwara (approx 1746 Kms) Pipeline Project, Mehsana - Bhatinda (approx 1670 Kms) Pipeline Project and Bhatinda - Jammu - Srinagar (approx 740 Kms) Pipeline Project. The Company has signed Joint Venture Agreements (JVAs) with IOCL, BPCL and HPCL on 30th April, 2012 for the same. As per the JV Agreement, GSPL shall hold 52% stake in the JV with IOCL (26%), BPCL (11%) and HPCL (11%) holding the rest. The Financial closure for the three projects is already achieved.

CAPITAL

During the year, the Board has approved allotment of 19706 Shares to the eligible employees under ESOP - 2005 upon exercise of Options by them, consequent to which the paid up Share Capital of the Company has increased to Rs. 562.71 crore.

DIVIDEND

Keeping in view the fund requirements for expansion projects and subsidiaries, the Board of Directors of the Company is pleased to recommend dividend @ Rs. 1.00 (i.e. 10%) per equity share of the face value of Rs. 10 each for the Financial Year 2012 - 13.

GAS TRANSMISSION SERVICES

The Company has effective Firm GTAs of 30.94 mmscmd for transmission of gas to various customers and interruptible / short - medium term GTAs for 11.32 mmscmd (Previous year: firm GTAs of 29.70 mmscmd and interruptible GTAs of 6.58 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 flexibility to cater to varying loads.

The pipeline grid map of GSPL for Gujarat is enclosed herewith as Annexure - VI.

The map showing the Cross Country Natural Gas Transmission Pipelines being implemented through special purpose vehicles is enclosed herewith as Annexure Â VII.

Projects Commissioned

Since last Directors'' Report, the Company has successfully completed commissioning of various pipeline projects like Mehsana Â Palanpur Pipeline, Dahej SEZ Â I Pipeline, GSFC (Sikka) Spurline and GNFC TDI Dahej Spurline.

Current grid operations account for approx 2163 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, Mehsana, Banaskantha, Surendranagar, Rajkot, Jamnagar, Navsari, Kutchh, Panchmahal, Kheda, Valsad, Amreli.

Projects Under Execution

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:

- Halol Â Dahod Pipeline (approx 105 Kms)

- Anjar Â Bhuj Spurline (approx 47 Kms)

- Bodighodi - Ambardi Pipeline (approx 47 Kms)

- Pipavav - Gundlav Pipeline (approx 46 Kms)

- Dabhan Â Thasra Pipeline (approx 45 Kms)

- Amboli - Vantevad Pipeline (approx 44 Kms)

- Banas Dairy Connectivity (approx 9.87 Kms)

Your Company is also developing a Natural Gas Compressor station at Gana in Anand region.

The Company is a co-developer in Dahej SEZ and Panoli SEZ and is developing Pipeline Infrastructure in these SEZs. Several customers have started receiving gas in Dahej SEZ through Company''s network with more getting connected on ongoing basis.

WIND POWER PROJECT

Your Company being committed to promote clean and green energy has set up wind power project of 52.5 MW in the areas of Maliya Miyana, Rajkot and Gorsar & Adodar, Porbandar. During the year, the Company has sold 12,39,79,705 KWH of electricity generated through Windmill.

FUTURE PLANS

The Company is working on future expansion projects based on the demand in various regions around the gas grid.

OPERATION & MAINTENANCE ACTIVITIES

The Company has transported 9966.06 mmscm of gas during the Financial Year 2012 - 13 (Previous Year: 12430 mmscm).

To safeguard pipeline assets and optimize efficiency of the pipeline system, the Company is giving utmost importance to efficient operations and preventive maintenance. The Company is in process of implementing Integrity Management System in line with PNGRB guidelines to safe guard the pipeline assets.

SUBSIDIARY COMPANIES

Your Company has incorporated following two subsidiary companies in October, 2011 for execution of the three Cross Country Pipeline Projects awarded by Petroleum and Natural Gas Regulatory Board:

Company Pipeline Project

GSPL India Gasnet Limited 1) Mehsana - Bhatinda (GIGL) (approx 1670 Kms)

2) Bhatinda - Jammu - Srinagar (approx 740 Kms)

GSPL India Transco Limited Mallavaram - Bhopal - Bhilwara (GITL) - Vijaipur (approx 1746 Kms)

GIGL and GITL have achieved significant progress in implementation of the three Cross Country Pipeline Projects. The brief status of the Projects is as follows:

GIGL - PROJECT STATUS

- The Projects have received Environment Clearance from the Ministry of Environment & Forest.

- The respective State Governments have also appointed Competent Authorities for acquisition of ROU in lands, except Haryana and Jammu & Kashmir.

- The basic engineering activities for Mehsana - Bhatinda Pipeline Project are completed and activities for Batinda -Jammu Pipeline are under progress.

- The company is awaiting for other statutory clearances.

GITL - PROJECT STATUS

- The Projects have received Environment Clearance from the Ministry of Environment & Forest.

- The respective State Governments have also appointed Competent Authorities for acquisition of ROU in lands.

- The basic engineering activities for Mallavaram - Bhopal - Bhilwara - Vijaipur Pipeline Project are completed.

- The company is awaiting for other statutory clearances.

In accordance with the General Circular No. 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit & Loss Account and other documents for the Financial Year ended 31st March, 2013 of the subsidiary companies are not being attached with the Balance Sheet of the Company. However, the Financial information of the subsidiary companies is disclosed in the Annual Report in compliance with the said circular. The audited annual accounts and related information of the subsidiary companies, where applicable, will be made available to any member upon request. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard - 21 on Consolidated Financial Statements read with Accounting Standard - 23 on Accounting for Investments in Associates, the Audited Consolidated Financial Statements are provided in the Annual Report.

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. 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 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 up to the local level. Further, Emergency Response and Disaster Management Plan (ERDMP) of GSPL was accredited by the Third Party Agency as per the requirement of ERDMP regulations 2010 under PNGRB Act, 2006. ERDMP is 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 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 is re-certified for Integrated Management Systems (ISO 9001:2008, ISO 14001:2004 & OHSAS 18001:2007) with validity till 30th October 2014. Effectiveness of these certifications is being assured through planned audits of the system. Continuous improvement is visible in various O&M systems. Preventive maintenance schedules are being adhered to with the updating of records. New accredited ERDMP is being submitted to statutory bodies. All conditions of accreditation letter are being adhered to. Effectiveness of ERDMP is verified through regular mock drills as per intervals identified by respective work bases.

To further enhance the benchmark of Safety Management Systems, your Company was audited by British Safety Council for Five Star safety audit for the second time. British Safety Council has awarded Five Star rating to O&M division after an extensive evaluation by the auditor from British Safety Council. Your Company has also bagged International Safety award for 2013 by British Safety Council for its HSE performance in 2012. Your company has successfully bagged International Safety Awards from British Safety Council for 3 Years continuously, based upon previous years'' HSE Performance.

FIXED DEPOSITS

During the year, the Company has not accepted any Fixed Deposits from the public.

CORPORATE SOCIAL RESPONSIBILITY

The Company continues to make focused efforts for fulfilling its Corporate Social Responsibility, with the thrust areas being education, health & sanitation and public awareness.

DIRECTORS

Since last Director''s Report, Shri A K Joti, IAS (Retd.), Dr. Varesh Sinha, IAS and Shri N K Mitra ceased to be the Directors of the Company. Your Directors wish to place on record appreciation of the services rendered by them as the Directors of the Company.

Dr. Hasmukh Adhia, IAS, Prof. Yogesh Singh and Shri Yogesh B Sinha were appointed as Additional Directors to hold office till the ensuing Annual General Meeting. It is proposed to regularize their appointment in the 15th Annual General Meeting.

Pursuant to the provisions of Section 256 of the Companies Act, 1956, Dr. R Vaidyanathan, Director of the Company shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself 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 Jain Seth & Co., Chartered Accountants as Statutory Auditors of the Company for the Financial Year 2012 - 13.

C&AG has given NIL comment report for the Financial Year 2012 Â 13. The NIL comment report is enclosed herewith as Annexure Â V.

COST AUDITORS

Your Company is required to carry out Cost Audit for "Gas Transportation" business as well as "Generation of Electricity Through Windmill" business from the Financial Year 2011 - 12 onwards pursuant to notification no. G.S.R. 870(E) & 871(E) dated 7th December, 2011 of Ministry of Corporate Affairs under Section 209(1) (d) & 233B of Companies Act, 1956.

Accordingly, Central Government has approved appointment of M/s R K Patel & Co. as Cost Auditor for Financial Year 2012 - 13 on recommendation by the Company for the said businesses. The Cost Audit Report for the Financial Year 2011 - 12 which was due to be filed in XBRL with the Ministry of Corporate Affairs on 28th February, 2013 was filed on 28th January, 2013. The due date for filing the Cost Audit Report for the Financial Year ended 31st March, 2013 is 27th September, 2013.

AUDIT COMMITTEE

Audit Committee of Directors of the Company at its meeting held on 30th May, 2013 approved the Annual Accounts for the Financial Year ended on 31st March, 2013 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 for the year ended 31st March, 2013 the applicable accounting standards read with requirements set out under revised Schedule VI to the Companies Act, 1956, have been followed along with proper explanation relating to material departures.

(ii) accounting policies are selected and applied 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 as at 31st March, 2013 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 Â I) on the Management Discussion & 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 Â 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 success of the Company.

1. GSPL Employees Stock Option Plan Â 2005 (ESOP Â 2005).

2. GSPL Employees Stock Option Plan Â 2010 (ESOP Â 2010).

Under the said ESOPs, each such Option has conferred a right upon the employee to apply for one Equity Share of the Company.

Auditors of the Company have certified that the Scheme has been implemented in accordance with the SEBI Guidelines and the resolution passed by the shareholders. The Certificate would be placed at the Annual General Meeting for inspection by members.

Statutory disclosures regarding ESOP - 2005 and ESOP Â 2010 are enclosed as Annexure - III & IV respectively to this Directors'' Report.

PARTICULARS OF EMPLOYEES

As per Notification issued by the Ministry of Corporate Affairs, the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are not applicable to government companies. As your Company is a Government Company, the information has not been included as a part of the Directors'' Report.

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

The Company has incurred Expenditure in Foreign Exchange to the extent of Rs. 1063.13 Lacs during the year under review. Foreign Exchange Earnings during the year were NIL.

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 deep appreciation to employees of the Company at all levels for their hard work, dedication and commitment 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 have enabled the Company to expand the pipeline network in a professional manner.

The Directors also wish to place on record the sincere thanks to PNGRB and other regulatory authorities at Central and State level 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 confidence reposed in the Company.

For and on behalf of the Board of Directors,

M M Srivastava, IAS (Retd.)

Chairman

Date: 23rd August, 2013

Place: Gandhinagar

Mar 31, 2012

The Members

Gujarat State Petronet limited

The Directors have pleasure in presenting the 14th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2012.

FINANCIAL HIGHLIGHTS

(Rs. in Crore) Particulars (Standalone) 2010-11 2011-12

Total Income 1,068.15 1,174.63

Employee Benefit Expenses 14.86 19.69

Other Expenses 62.53 70.37

Total expenses 77.39 90.06

PBDITA 990.76 1084.57

Finance Cost 99.07 130.20

Depreciation & Amortisation 153.30 181.90

Preliminary Expenses Written-Off 0.10 0.25

Depreciation Written Back (23.38) -

Prior Period Adjustments (0.32) 3.21

Profit Before Tax 761.99 769.01

Tax including Deferred Tax 255.61 246.95

Profit After Tax Carried to Balance Sheet 506.38 522.06

Appropriations

Transfer to General Reserves NIL NIL

Transfer from Bond Redemption Reserve (1.00) NIL Proposed Dividend (including Dividend Distribution Tax) 65.39 65.41

Profit After Appropriations 441.99 456.65

MAJOR ACHIEVEMENTS

Your Company has excelled on all performance parameters. Major achievements of the Company are summarized below:

- Total Income increased from Rs. 1068.15 crore in previous year to Rs. 1174.63 crore recording increase of 9.97%.

- PBDITA increased from Rs. 990.76 crore in previous year to Rs. 1084.57 crore, recording an increase of 9.47%.

- 99.97% pipeline grid availability and "accident free" year of operations.

- PNGRB has granted authorisation for Gas Pipeline Network of 2239 Kms in Gujarat.

- Your Company (with 52% stake) has signed Joint Venture Agreements (JVAs) with IOCL (26%), BPCL (11%) and HPCL (11%) on 30th April, 2012 for execution of the three Cross Country Pipeline Projects viz Mallavaram - Bhopal - Bhilwara - Vijaipur (approx 1585 Kms) Pipeline Project, Mehsana - Bhatinda (approx 1670 Kms) Pipeline Project and Bhatinda - Jammu - Srinagar (approx 740 Kms) Pipeline Project.

- Achieved Financial Closure for the aforesaid three Cross Country Pipeline Projects.

CAPITAL

During the year, paid up share capital of the Company has increased from Rs. 562.58 crore to Rs. 562.69 crore on account of allotment of shares to eligible employees under the ESOP -2005 & ESOP - 2010.

DIVIDEND

Keeping in view the fund requirements for expansion projects and subsidiaries, the Board of Directors of the Company is pleased to recommend dividend @ Rs. 1 (i.e. 10%) per Equity Share of the face value ofRs. 10 each for the Financial Year 2011-12.

GAS TRANSMISSION SERVICES

The Company has effective Firm GTAs of 29.70 MMSCMD for transmission of gas to various customers and interruptible / short - medium term GTAs for 6.58 MMSCMD (Previous year: firm GTAs of 32.76 MMSCMD and interruptible GTAs of 6.16 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 flexibility to cater to varying loads.

The pipeline grid map of GSPL for Gujarat is enclosed herewith as Annexure -VI.

The map showing the proposed Cross Country Natural Gas Transmission Pipelines to be implemented by GSPL Consortium (through special purpose vehicles) is enclosed herewith as Annexure - VII.

Projects commissioned

Since last Directors'' Report, the Company has successfully completed commissioning of various Pipeline Projects like Nano Connectivity Pipeline, Botad Spurline, Spurline to Bhavnagar, Electrothem Spurline, Tana - Amreli Pipeline.

Current grid operations account for approx 2065 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, Mehsana, Surendranagar, Rajkot, Jamnagar, Navsari, Kutchh, Panchmahal, Kheda, Valsad, Amreli.

Projects under execution

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:

- Halol - Dahod Pipeline (approx 105 Kms)

- Mehsana - Palanpur Pipeline (approx 70 Kms)

- Anjar - Bhuj Spurline (approx 47 Kms)

- Bodighodi - Ambardi Pipeline (approx 47 Kms)

- Pipavav - Gundlav Pipeline (approx 46 Kms)

- Dabhan - Thasra Pipeline (approx 45 Kms)

- Amboli - Vantevad Pipeline (approx 44 Kms)

- Dahej SEZ Pipeline (approx 23 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 Anjar, Sikka, Dabhan, Thasra, Halol Dahod and Dahej.

The Company is a co-developer in Dahej SEZ and Panoli SEZ and is developing pipeline infrastructure in these SEZs. Several customers have started receiving gas in Dahej SEZ through Company''s Network with more getting connected on ongoing basis.

WIND POWER PROJECT

Your Company being committed to promote clean and green energy has set up wind power project of 52.5 MW in the areas of Maliya Miyana, Rajkot and Gorsar & Adodar, Porbandar. During the year, the Company has sold 10,91,44,509 KWH of electricity generated through Windmills.

FUTURE PLANS

The Company is working on future expansion projects based on the demand in various regions around the gas grid.

OPERATION & MAINTENANCE ACTIVITIES

The Company has transported 12430 MMSCM of gas during the Financial Year 2011 - 12 (Previous Year: 13005 MMSCM).

To safeguard pipeline assets and optimize efficiency of the pipeline system, the Company is giving utmost importance to efficient operations and preventive maintenance.

SUBSIDIARY COMPANIES

Your Company has incorporated following two subsidiary companies in October, 2011 for execution of the three Cross Country Pipeline Projects awarded by Petroleum and Natural Gas Regulatory Board:

Company Pipeline Project

GSPL India Gasnet Limited 1) Mehsana - Bhatinda (approx 1670 Kms) 2) Bhatinda - Jammu - Srinagar (approx 740 Kms)

GSPL India Transco Limited Mallavaram - Bhopal - Bhilwara

- Vijaipur (approx 1585 Kms)

In accordance with the General Circular No. 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit & Loss and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. However, the financial information of the subsidiary companies is disclosed in the Annual Report in compliance with the said

Circular. The audited annual accounts and related information of the subsidiary companies, where applicable, will be made available to any member upon request. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard-21 on Consolidated Financial Statements read with Accounting Standard-23 on Accounting for Investments in Associates, the Audited Consolidated Financial Statements are provided in the Annual Report.

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 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 up to 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 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 Âzero accident'' year with full commitment of its employees and management.

The Company is re-certified to Integrated Management Systems (ISO 9001:2008, ISO 14001:2004 & OHSAS 18001:2007) with validity till 30th October 2014. 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.

To further enhance the benchmark of Safety Management Systems, your Company was audited by British Safety Council for Five Star Safety Audit. British Safety Council has awarded Four Star rating to O&M division after an extensive evaluation by the auditor from British Safety Council. Your Company has also bagged International Safety award for 2012 by British Safety Council for its HSE performance in 2011. Besides, your Company has received Certification of Appreciation in 2011 by Gujarat Safety Council for its HSE performance in 2010.

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

Since last Directors'' Report, Shri Atanu Chakraborty, IAS, Shri M M Srivastava, IAS (Retd.), Shri J K Jain and Shri Suresh Mathur ceased to be the Directors of the Company. Your Directors wish to place on record an appreciation of the services rendered by them as the Directors of the Company.

Pursuant to the provisions of Section 256 of the Companies Act, 1956, Shri N K Mitra, Director of the Company shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.

A brief resume of the Director retiring by rotation at the ensuing Annual General Meeting, nature of his expertise in specific functional areas and details regarding the companies in which he holds 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 2011-12.

C&AG has given Nil comment report for the Financial Year 2011-12. The Nil comment Report is enclosed herewith as Annexure-V.

COST AUDITORS

Your Company is required to carry out Cost Audit for "Gas Transportation" business as well as "Generation of Electricity Through Windmill" business from the Financial Year 2011-12 onwards pursuant to notification no. G.S.R. 870(E) & 871(E) dated 7th December, 2011 of Ministry of Corporate Affairs under Section 209(1)(d) & 233B of the Companies Act, 1956.

Accordingly, your Company has appointed M/s R K Patel & Co. as Cost Auditor for Financial Year 2011-12 for the said businesses and the necessary Report in the prescribed form shall be submitted to MCA within stipulated time period in accordance with the applicable Cost Audit Rules.

AUDIT COMMITTEE

Audit Committee of Directors of the Company at its Meeting held on 24th May, 2012 approved the Annual Accounts for the Financial Year ended on 31st March, 2012 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 for the year ended 31st March, 2012, the applicable accounting standards read with requirements set out under revised Schedule VI to the Companies Act, 1956, have 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 (AnnexureÂI) 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 success of the Company.

1. GSPL Employees Stock Option Plan - 2005 (ESOP - 2005).

2. GSPL Employees Stock Option Plan - 2010 (ESOP - 2010).

Under the said ESOPs, 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

The Company has incurred Expenditure in Foreign Exchange to the extent of Rs. 1093.04 Lacs during the year under review. Foreign Exchange Earnings during the year were NIL.

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 PNGRB and other regulatory authorities at Central and State level 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 confidence reposed in the Company.

for and on behalf of the Board of Directors,

A K Joti, IAS

Chairman Date : 9th August, 2012 Place: Gandhinagar

Mar 31, 2011

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 (AnnexureÂI) 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 Â 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

Mar 31, 2010

The Directors have pleasure in presenting 12th Annual Report and audited accounts of the Company for the year ended 31st March, 2010.

FINANCIAL HIGHLIGHTS

(Rs. in crores)

Particulars 2008-09 2009-10

Total Income 511.81 1016.72

Manpower Expenses 10.94 9.94

Gas Transmission Charges 3.58 0.36

Connectivity Charges 9.08 NIL

Admin, O&M & Other Expenses 35.85 49.14

Total Operating Expenses 59.45 59.44

Gross Margin/EBIDTA 452.36 957.28

Miscellaneous Expenditure

Written off 2.99 2.79

Interest (after capitalization) 87.12 93.83

Depreciation 170.49 236.49

Prior Period Adjustments 0.41 (2.72)

Profit Before Tax 191.35 626.89

Tax including Deferred Tax 67.94 213.12

Profit After Tax 123.41 413.77

MAJOR ACHIEVEMENTS

The year was marked by several accomplishments, both in terms of physical and financial performance. Your Company has maintained an upward trend in all performance parameters as follows,

- Total Income increased from Rs. 511.81 crores in previous year to Rs. 1016.72 crores, recording an increase of 98.65%.

- EBIDTA increased from Rs. 452.36 crores in previous year to Rs. 957.28 crores, recording an increase of 111.62%.

- PAT increased from Rs. 123.41 crores in previous year to Rs. 413.77 crores, recording an increase of 235.28%.

- Pipeline grid availability and Âaccident freeÂ year of operations.

- The Company is currently transporting an average of 37 mmscmd of gas.

- PNGRB is in the process of granting authorization to GSPLÂs existing pipeline network.

- The Company had filed Expressions of Interest (EOI) for development of cross country gas transmission pipeline network comprising of Mallavaram Â Bhilwara (approx 1585 Kms), Mehsana Â Bhatinda (approx 1670 Kms), Bhatinda- Jammu- Srinagar (approx 740 Kms) and Surat- Paradip (approx 1680Kms). Out of these four pipeline projects, PNGRB has invited bids for the first three projects.

CAPITAL

During the year, paid up share capital of the Company has increased from Rs. 562.11 crores to Rs. 562.45 crores on account of allotment of shares to eligible employees under the ESOP 2005 Scheme.

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 2009-10.

GAS TRANSMISSION SERVICES

The Company has signed firm GTAs for transporting 35.46 mmscmd of gas to various customers and interruptible / short term GTA for 6.49 mmscmd (Previous year: firm GTAs :- 31.99 mmscmd & interruptible GTAs :- 11.17 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 flexibility to cater to varying loads.

The pipeline grid map is enclosed herewith as annexure-IV.

Projects commissioned

Since last DirectorsÂ Report, the Company has successfully commissioned various pipeline projects like Gana Hadala, Morbi-Anjar, Welspun-Anjar, OlpadÂGESC Utran and Spur to customers like Euro Ceramics-Anjar, Hindustan Glass-Halol, Birla Copper-Dahej etc.

Current Grid operations account for approx. 1666 kms. Gas is flowing from Hazira / Dahej / Vapi to various industries and City Gas Distribution(ÂCGDÂ) Networks located in Surat, Bharuch, Baroda, Anand, Ahmedabad, Gandhinagar, Sabarkantha, Mehsana, Surendranagar, Rajkot, Jamnagar, Navsari, Kutchh, Panchmahal, Kheda and Valsad districts of Gujarat.

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:

- Darod Jafrabad Pipeline Project (24Â x 220 kms)

- Mundra spurlines to connect various customers (approx 40 kms)

- Satej to Sanand Pipeline for Tata Motors (Nano plant) (12Â x 35 kms)

- Mehsana Palanpur ( 30Âx 75 kms)

Further, the Company also continues to develop several other spur lines to connect uncovered industrial clusters and medium sized customers along the pipeline network, which include regions like Tarapur, Vilayat, Dahej, Silvasa, Bhavnagar, Amreli, Veraval, Gandhidham, Anjar, Mundra, Jafrabad.

WIND POWER PROJECT

The Company is committed to promote clean and green energy and for this cause, the Company has initiated a 52.5 MW wind power project in the areas of Maliya Miyana, Rajkot and Gorsar, Porbandar. The Company has commissioned 4 machines with an aggregate capacity of 6 MW wind power generation in March 2010 at Maliya Miyana, Rajkot. The balance 46.5 MW capacity wind power project is under implementation and shall be completed shortly.

FUTURE PLANS

The Company is working on future expansion projects. The Company has participated in the bidding for cross country gas transmission pipeline offered for bidding by PNGRB. Above initiations reflect CompanyÂs long term vision of growth through expansion of business within and outside Gujarat.

OPERATION & MAINTENANCE ACTIVITIES

The Company has transported 11673 mmscm (Previous year: 5428.48 mmscm) of gas during the financial year under review.

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 programmes. The same is being monitored through Internal Audit teams and delegation of safety management up to the local level. Further emergency management plans are being reviewed and updated regularly. Moreover, ContractorsÂ adherence to CompanyÂs 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 taken a step towards international recognition vide corporate membership of British Safety Council. The Company is proud to maintain its target of ÂZero Accident year with full commitment of its employees and management.

The Company is already certified to Integrated Management Systems (QMS, EMS & OHSAS). Effectiveness of this certification 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. During the year, the Company also contributed Rs. 6.75 crores to GERMI, a centre of excellence in industry learning which has been set up to develop human resource assets to cater to the need of the petroleum and allied energy sectors and to provide a competitive edge to future leaders, to compete in the global arena.

DIRECTORS

Since last Directors Report, Shri D Rajagopalan, IAS, ceased to be the Director and Chairman of the Company pursuant to his retirement from Govt. Services. Further Shri P K Pujari, IAS, Shri Hasmukh Adhia, IAS and Shri S Jagadeesan, IAS also ceased to be the Directors of the Company. Your Directors wish to place on record an appreciation of the services rendered by them as the Directors of the Company.

Shri A K Joti, IAS, Chief Secretary, Govt. of Gujarat has been appointed as an Additional Director and Chairman of the Company vice Shri D Rajagopalan, IAS. Further Shri Atanu Chakraborty, IAS, Shri R Vaidyanathan, Shri J K Jain and Shri

N K Mitra were appointed as Additional Directors to hold office till the ensuing Annual General Meeting. It is proposed to regularize their appointment in the 12th Annual General Meeting.

Pursuant to the provisions of Section 256 of the Companies Act, 1956, Shri Suresh Mathur, Director of the Company shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself 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 of companies in which they hold Directorship and Membership/ Chairmanship of committees of the Board are given in the Corporate Governance Report forming part of the DirectorsÂ 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, Gandhinagar as Statutory Auditors of the Company for the Financial Year 2009-10.

The Company has received comments of Comptroller & Auditor General of India (C&AG) on the accounts of the Company for the Financial Year 2009-10 which forms part of this DirectorsÂ Report. Management response to comments of C&AG is enclosed as Annexure-V.

AUDIT COMMITTEE

Audit Committee of Directors of the Company at its meeting held on 27th May, 2010 approved the Annual Accounts for the Financial Year ended on 31st March, 2010 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 (AnnexureÂI) on the Management Discussion and Analysis, which forms part of the DirectorsÂ 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 DirectorsÂ Report (Annexure Â II). A compliance certificate by the practicing company secretary is also attached to the DirectorsÂ Report.

GSPL EMPLOYEES STOCK OPTION PLAN (ÂESOPÂ):

ESOP 2005

The Company instituted ESOP Scheme in October 2005 to provide an incentive to attract, retain and reward the employees and to enable them to participate in future growth and financial success of the Company. Each such option has conferred a right upon the employee to apply for one equity share of the Company.

Statutory disclosures regarding ESOP Scheme are enclosed as Annexure-III to this DirectorsÂ Report.

ESOP 2010

The Company also intends to implement GSPL Employees Stock Option Plan-2010 (ESOP 2010) for itÂs employees and employees of itÂs holding company i.e. Gujarat State Petroleum Corporation Limited for which approval of members is being sought at the ensuing Annual General Meeting.

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. The Company has developed PAMS (Pipeline Asset Management Software) with the help of GIPL Â SECON.

Foreign Exchange Earnings & Outgo

Foreign Exchange Earnings - NIL

Foreign Exchange Outgo - Rs. 14,446,089/-

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 enabled the Company to expand the Pipeline Network in a professional manner.

The Directors place on record their sincere thanks to the Promoters, Shareholders and Lenders for their valuable support, trust and confidence in the Company.

For and on behalf of the Board of Directors

Date: 23rd August, 2010 A K Joti, IAS

Place: Gandhinagar Chairman

Mar 31, 2009

The Directors have pleasure in presenting 11th Annual Report and audited accounts of the Company for the year ended 31 * March, 2009.

FINANCIAL HIGHLIGHTS

(Rs. in crore)

Particulars 2007-08 2008-09 Total Income 447.28 511.81 Manpower Expenses 7.63 10.94 Gas Transmission Charges 1.45 3.58 Connectivity Charges 11.22 9.08 Admin, O&M & other Expenses 33.12 38.97 Total Operating Expenses 53.42 62.57 Gross Margin 393.86 449.24 Interest (after capitalization) 81.51 86.99 Depreciation 163.22 170.49 Prior Period Expenses 0.02 (0.41) Profit Before Tax 149.15 191.35 Tax including Deferred Tax 49.23 67.94 Profit After Tax 99.92 123.41

MAJOR ACHIEVEMENTS

The year was marked by several accomplishments, both in terms of physical and financial performance. Your Company has maintained an upward trend in all performance parameters as follows,

- Total Income increased from Rs. Rs.447.28 crores in previous year to Rs.511.81 crores, recording increase of 14%.

- EBIDTA increased from Rs. 396.85 crores in previous year to Rs.452.23 crores, recording increase of 14%.

- PAT increased from Rs.99.92 crores in previous year to Rs.123.4l crores, recording increase of 24%.

- 100% pipeline grid availability and "accident free" year of operations.

- Company is currendy carrying 31 MMSCMD of gas which is 50% more than peak volumes achieved previously.

- PNGRB has initiated process of public consultation by inviting comment on GSPL request to grant authorization to GSPL existing pipelines.

- The Company has acquired equity stake in Krishna Godavari Gas Network Limited(KGGNL). KGGNL is incorporated for developing gas transmission and distribution network in the State of Andhra Pradesh.

- The Company has filed Expression of Interest (EOI) for development of cross country gas transmission pipeline network from Mallavaram - Bhilwara (approx. 1400 Kms),

Mehsana- Bhatinda (approx. 900 Kms), Bhatinda-Jammu - Srinagar (approx. 770 Kms) and Surat - Paradip Pipeline (approx. 1600 Kms). These projects may be offered for bidding by PNGRB during the current year.

-Enhanced strategic equity stake in GSPC Gas Company Limited, which is developing City Gas Distribution Network in the State of Gujarat.

CAPITAL

During the year, paid up share capital of the Company has increased from Rs.562.01 crore to Rs.562.11 crore on account of allotment of shares to eligible employees under the ESOP Scheme.

DIVIDEND

Keeping in view the fund requirements for expansion projects, the Board of Directors of the Company is pleased to recommend dividend @ Re. 0.75 (i.e. 7.5 %) per equity share of the face value of Rs. 10 each for the Financial Year 2008-09.

GAS TRANSMISSION SERVICES

The Company has signed Firm GTAs for transporting 31.99 MMSCMD of gas to various customers and interruptible / short term GTA for 11.17 MMSCMD (Previous year : Firm GTAs - 29.27 MMSCMD & interruptible GTAs - 7.53 MMSCMD).

GAS GRID PROJECT

The Government of Gujarat has always played a proactive role in the development of energy value chain. Gujarat is the first State to plan and execute a State wide Gas Grid on open access principle.

The gas grid has been designed as per the highest international standards with inbuilt flexibility to cater to varying loads.

The gas grid map is enclosed herewith as Annexure-IV.

Projects Commissioned

Since last Directors Report, the Company has successfully commissioned various pipeline projects like Bhadbhut- Gana, Rajkot-Jamnagar, Padmala Halol, Suzlon Spur, etc.

The current span of the Grid under operation is approx. 1420 kms and gas is flowing from Hazira / Dahej / Vapi to various industries and City Gas Distribution Networks located in Surat, Bharuch, Baroda, Anand, Ahmedabad, Gandhinagar, Sabarkantha, Kalol, Mehsana, Morbi, Surendranagar, Rajkot, Jamnagar, Navsari, Vapi and Valsad districts.

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 basis:-

- Gana - Hadala Pipeline Project (30" x 85 kms)

- Darod - Jafrabad Pipeline Project (24" x 220 kms)

- Morbi - Mundra Pipeline Project (18" x 130 kms)

- Olpad - GESC, Utran Pipeline Project (12" x 17 kms)

Further, the Company also continues to develop several spur lines to connect Industrial clusters and medium size customers along the pipeline network, which include regions like Tarapur, Vilayat, Dahej, Silvasa, Bhavnagar, Amreli, Veraval, Gandhidham, Anjar, Mundra, Jafrabad region.

Future Plans

The Company is working on future expansion projects. The Company has participated in the bidding for cross country gas transmission pipeline and CGD project offered for bidding by PNGRB. Above initiations reflect Companys long term vision of growth through expansion of business within and outside Gujarat.

Operation & Maintenances Activities

The Company has transported 5428.48 MMSCM (Previous year: 6144.91 MMSCM) of gas during the Financial Year under review.

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 attaches great importance to Health, Safety and Environmental aspects. The Company is expanding and managing its business operations in a safe and environmentally sustainable manner. The environment and safety features have been integrated into design, construction and O&M to have utmost safety for the facilities, local community and the environment. Further, Disaster Management plans are reviewed and updated regularly.

The Company is ensuring effectiveness of HSE Management Systems through training, regular audits and review mechanism. HSE is everyones responsibility and each employee is encouraged to act in accordance with HSE policy. All contractors are required to adhere to our HSE policies while executing the Company work.

The Company has already obtained ISO 9001/2000 certification for its O&M activities. Further the Company has obtained ISO-14001 and OHSAS-18001 certification during the year under review.

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. This mainly involved organizing blood donation camps, promoting use of environmentally friendly fuel, creating awareness for conservation of energy, promotion of educational activities, etc.

DIRECTORS

Since last Directors Report, Shri M M Srivastava, IAS, Shri N Venketiswaran, Shri N J Jhaveri and Shri U Sundararajan ceased to be the Directors of the Company. Your Directors wish to place on record appreciation of the services rendered by them as Directors of the Company.

Shri S Jagadeesan, IAS, was appointed as Additional Director to hold office till the ensuing Annual General Meeting. It is proposed to regularize his appointment in the 11th Annual General Meeting.

Pursuant to the provisions of section 256 of the Companies Act, 1956 Shri P K Pujari, IAS and Shri Tapan Ray, IAS shall retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

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 names of companies in which they hold Directorship are given in the Corporate Governance Report forming part of the DirectorsReport.

STATUTORY AND C&AG AUDIT

Your Company being a Government Company, the Statutory Auditors are appointed by the Comptroller & Auditor General of India (C&AG). Accordingly, C&AG has appointed M/s P Singhvi & Associates, Chartered Accountants, Gandhinagar as Statutory Auditors of the Company for the Financial Year 2008-09.

The Company has received comments of Comptroller and Auditor General of India (C&AG) on the accounts of the Company for the Financial Year 2008-09. The Report of C&AG and Management Explanation to the comments of C&AG forms part of the Directors Report.

AUDIT COMMITTEE

Audit Committee of Directors of the Company at its meeting held on 27th June, 2009 approved the Annual Accounts for the financial year ended on 31st March, 2009 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 the 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 only good governance 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 the Directors Report.

GSPL EMPLOYEES STOCK OPTION PLAN ("ESOP"):

The Company instituted ESOP Scheme in October 2005 to provide an incentive to attract, retain and reward the employees and to enable them to participate in future growth and financial success of the Company. Each such option has conferred a right upon the Employee to apply for one Equity Share of the Company.

Statutory disclosures regarding ESOP scheme are enclosed as Annexure-III 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. The Company has developed (PAMS) software with the help of GIPL - SECON.

Foreign Exchange Earnings & Outgo

Foreign Exchange Earnings - Nil

Foreign Exchange Outgo - Rs. 11,520,619/-

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 employees 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 enabled the Company to expand the Pipeline Network in a professional manner.

The Directors place on record their sincere thanks to the Shareholders and Lenders for their valuable support, trust and confidence in the Company.

For and on behalf of Board of Directors Date : 23rd October, 2009 D Rajagopalan, IAS Place: Gandhinagar Chairman

Mar 31, 2008

The Directors have pleasure in presenting 10th Annual Report and audited accounts of the company for the year ended 31st March, 2008.

FINANCIAL HIGHLIGHTS

(Rs. in crore) Particulars 2006-07 2007-08

Total Income 335.01 447.28

Manpower Expenses 3.97 7.63

Gas Transmission Charges 7.20 1.45

Connectivity Charges 13.06 11.22

Admin, O&M & other Expenses 25.61 33.12

Total Operating Expenses 49.84 53.42

Gross Margin 285.17 393.86

Interest (after capitalization) 45.65 81.51

Depreciation 102.61 163.22

Prior Period Expenses 0.34 0.02

Profit Before Tax 137.25 149.15

Tax including Deferred Tax 47.88 49.23

Profit After Tax 89.37 99.92

MAJOR ACHIEVEMENTS

The year was marked by several accomplishments, both in terms of physical and financial performance. Your company has maintained an upward trend in all performance parameters as follows,

* Turnover increased from Rs.335.01 crores to Rs.447.28 crores in previous year, recording increase of 34%.

* EBIDTA increased from Rs.285.17 crores to Rs.393.86 crores in previous year, recording increase of 38%.

* PAT increased from Rs.89.37 crores to Rs.99.92 crores in previous year, recording increase of 12%.

* 100% pipeline grid availability and "accident free" year of operations.

* Finalized Equity and Term Loan tie-up with International Finance Corporation (IFC) for approx. Rs.445 crore.

* Enhanced strategic equity stake in City Gas Distribution Network being developed in the State of Gujarat.

CAPITAL

During the year, paid up share capital of the Company has increased from Rs.542.80 crore to Rs.562.01 crore on account of allotment of shares on preferential basis to IFC and also to eligible employees under the ESOP Scheme.

DIVIDEND

Keeping in view the fund requirements for expansion projects, the Board of Directors of the Company is pleased to recommend dividend @ 5% for the Financial Year 2007-08.

Gas Transmission Services

The Company has signed firm GTAs for transporting 30.33 MMSCMD (Previous year 32.13 MMSCMD) of gas to various customers and interruptible GTAs for 6.69 MMSMCD.

GAS GRID PROJECT

The Government of Gujarat has always played a proactive role in die development of energy value chain. Gujarat is the first state to plan and execute a state wide Gas Grid on open access principle.

The pipeline grid has been designed as per the highest international standards with inbuilt flexibility to cater to varying loads.

The pipeline grid map is enclosed herewith as Annexure - IV

Projects commissioned:

Since last Directors Report the Company has successfully commissioned various pipeline projects like Atul Spur, Palej Spur, NTPC Jhanore Pipeline, etc.

The current span of the Grid under operation is approx. 1130 kms and gas is flowing from Hazira / Dahej to various industries and City Gas Distribution Networks located in Surat, Bharuch, Baroda, Anand, Ahmedabad, Gandhinagar, Sabarkantha, Kalol, Mehsana, Morbi, Surendranagar, Rajkot, Navsari, Vapi and Valsad districts.

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 basis,

* Rajkot-Vadinar Pipeline Project (30"x 110 km)

* Bhadbut-Gana Pipeline Project (30"x 109 km)

* Gana-Hadala Pipeline Project (30" x 85 km)

* Petronet LNG Connectivity (24"x .035 km)

* Morbi - Mundra Pipeline Project (18" x 130 km)

* Baroda - Halol Pipeline Project (12" x 37 km)

* Suzlon Spurline (8" x 28 km)

* IPCL Connectivity (12" x 3.5 km)

* ONGC - Olpad (12" x 5 km)

* IOCL Connectivity (12" x 5 km)

* Olpad - GSEC Utran Pipeline Project (12" x 15 km) Further, the Company also continues to develop several Spur lines to connect Industrial clusters and medium size customers along the pipeline network, which include regions like Vapi, Morbi, Mehsana and Baroda.

Future Plans

The Company is working on future expansion plans. The pipelines, which may be taken up for implementation in future include:

* Darod - Jafrabad Pipeline Project (30" x 205 km)

* Spurline to EOL, Refinery (24" x 8 km)

* Dahej Network Pipeline Project (12" x 45 km)

* Spurline to Vilayat GIDC (12" x 15 km)

* Tarapur - Isharvada (8" x 15 km)

* Mehsana - Palanpur (18" x 75 km)

Further the Company has also initiated activities for expanding the pipeline network beyond the State of Gujarat.

Operation & Maintenance activities

The Company has transported 6144.92 MMSCM (Previous year: 5246.46 MMSCM) of gas during the Financial Year under review.

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 attaches great importance to Health, Safety and Environmental aspects. The Company is expanding and managing its business operations in a safe and environmentally sustainable manner. The environment and safety features have been integrated into design, construction and O&M operations to have utmost safety for the facilities, local community and the environment. Further, Disaster Management plans are reviewed and updated regularly.

The Company is ensuring effectiveness of HSE Management systems through training, regular audits and review mechanism. HSE is everyones responsibility and each employee is encouraged to act in accordance with HSE policy. All contractors are required to adhere to our HSE policies while executing the Company work.

The Company has obtained ISO 9001:2000 certification for its O&M activities. The Company has also initiated process for ISO-14001 and OHSAS-18001 certification.

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. This mainly involved organizing blood donation camps, promoting use of environmentally friendly fuel, creating awareness for conservation of energy, promotion of educational activities, etc.

DIRECTORS

Since last Directors Report, Smt. V L Joshi, IAS, Shri H K Dash, IAS and Shri Luis Miranda ceased to be the Directors of the Company. Your Directors wish to place on record appreciation of the services rendered by them as Directors of the Company.

Shri M M Srivastava, IAS was appointed as Additional Director to hold office till the ensuing Annual General Meeting. It is proposed to regularize1 his appointment in the 10th Annual General Meeting.

Pursuant to the provisions of section 256 of the Companies Act, 1956 Shri U Sundararajan, Shri Suresh Mathur and Shri Hasmukh Adhia, IAS shall retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

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 names of companies in which they hold Directorship and Membership/Chairmanship of committees of the Board, are given in the Corporate Governance Report forming part of the Directors Report.

STATUTORY & C&AG AUDIT

Your Company being a Government Company, the Statutory Auditors are appointed by the Comptroller & Auditor General of India (C&AG). Accordingly, C&AG has appointed M/s T. N. Shah & Co, Chartered Accountants, Gandhinagar as Statutory Auditors of the Company for the Financial Year 2007-08. C&AG office has given NIL Comment Report for the Financial Year 2007-08. The NIL Comment Report is annexed herewith.

AUDIT COMMITTEE

Audit Committee of Directors of the Company at its meeting held on 27th June, 2008 approved the Annual Accounts for the financial year ended on 31st March, 2008 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 departutes.

(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 the 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.

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 the Directors Report.

GSPL EMPLOYEES STOCK OPTION PLAN ("ESOP")

The company instituted ESOP Scheme in October 2005 to provide an incentive to attract, retain and reward the employees and to enable them to participate in future growth and financial success of the Company. Each such option has conferred a right upon the Employee to apply for one Equity Share of the Company.

Statutory disclosures regarding ESOP scheme are enclosed as Annexure-III to this Directors Report.

PARTICULARS OF EMPLOYEES

During rhe 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 - Rs. NIL Foreign Exchange Outgo - Rs.0.92 crore

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 employees at all levels, without whose contribution die 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 enabled the Company to expand the Pipeline Network in a professional manner.

The Directors place on record their sincere thanks to the Shareholders and Lenders for their valuable support, trust and confidence in the Company.

For and on behalf of Board of Directors

Date : 29th August, 2008 D Rajagopalan, IAS Place : Gandhinagar Chairman

Mar 31, 2007

The Directors have pleasure in presenting 9th Annual Report and audited accounts of the company for the year ended 31st March, 2007.

FINANCIAL HIGHLIGHTS

(Rs. in Crore)

Particulars 2005-06 2006-07

Total Income (A) 267.93 335.02 Manpower Expenses 2.67 3.97 Gas Transmission Charges 19.23 7.20 Connectivity Charges 22.15 13.06 Admin, O&M & other Expenses 25.26 25.61 Total Operating Expenses 69.31 49.84 Gross Margin 198.62 285.17 Interest (after capitalization) 41.21 45.65 Depreciation 79.06 102.61 Prior Period Expenses 0.06 0.34 Profit Before Tax 78.40 137.26 Tax including Deferred Tax 31.73 47.88 Profit After Tax 46.68 89.38

MAJOR ACHIEVEMENTS

The year was marked by several accomplishments, both in terms of physical and financial performance. Your company has maintained an upward trend in all performance parameters as follows :-

* Turnover increased to Rs.335.02 crores from Rs.267.93 crores in previous year, recording increase of 25%.

* EBIDTA increased to Rs.285.17 crores from Rs. 198.62 crores in previous year, recording increase of 44%.

* PAT increased to Rs.89.38 crores from Rs.46.68 crores in previous year, recording increase of 91%

* During the Financial Year, the Company has commissioned pipeline projects of 620 kms resulting in increase in pipeline network to 1130 kms.

* Executed Gas Transmission Agreement with Reliance Industries Limited for transmission of 11 MMSCMD gas for a period of 15 years.

* 100% pipeline grid availability and "accident free" year of operations.

* Uninterrupted gas availability even during flood situation in Surat Region.

* Acquiring strategic stake in City Gas Distribution Networks being developed in the State of Gujarat and Andhra Pradesh.

* Successful implementation and operation of mySAP ERP Package.

CAPITAL

During the year, paid up share capital of the Company has increased from Rs.542.24 crores to Rs.542.90 crores on account of allotment of shares to eligible employees under the ESOP Plan 2005 of the Company.

DIVIDEND

Keeping in view the fund requirements for expansion projects, the Board of Directors of the Company is pleased to recommend dividend @ 5% for the Financial Year 2006-07.

GAS TRANSMISSION SERVICES

The Company has signed long term GTAs (Gas Transmission Agreements) for transporting 30.79 MMSCMD of gas to various customers (Previous year 18.99 MMSCMD). The Company has also entered in to short term GTAs for transporting 4.62 MMSCMD of gas.

GAS GRID PROJECT

The Government of Gujarat has always played a proactive role in the development of energy value chain. Gujarat is the first state to plan and execute a state wide Gas Grid on open access principle. A Grid Map showing details about the operational pipelines, Projects under construction and future projects is enclosed as Annexure-I.

The pipeline grid has been designed as per international benchmarks.

Projects commissioned:

Since last Directors' Report the Company has successfully commissioned following pipeline projects:

* Mora-Vapi Pipeline Project (128km x 30") which will provide pipeline connectivity to industries including textile and chemical along with CGD networks located in Vapi.

* Anand-Rajkot Morbi Pipeline Project (224km x 24" and 67 x 18"). Morbi, the hub of Ceramic Industries, will be benefited from this project.

* Kalol-Himmatnagar Pipeline Project (60km x 12").

* Kalol-Mehsana Pipeline Project (40km x 18").

* Morbi-Dhuva Pipeline Project (22km x 12").

* Spurlines in Kadi, Karjan, Than, Sarigram GIDC and Himmatnagar. Further, the Company has commissioned spurlines to connect various industrial customers like Gujarat Fluorochem, Welspun, JBF Industries etc. Total spurlines commissioned since last Directors Report is approx. 79 kms.

The current span of the Grid under operation is approx. 1130 kms and gas is flowing from Hazira/Dahej to various industries and City Gas Distribution Networks located in Surat, Bharuch, Baroda, Anand, Ahmedabad, Gandhinagar, Surendranagar, Sabarkantha, Kalol, Mehsana, Morbi, Vapi and Valsad districts.

Projects on Hind

The Directors ire pleased to inform that the Company has taken initiative for developing pipeline infrastructure in the State of Gujarat and has aggressively started work for developing following pipeline sections on priority basis :-

* Torrent Spur line (24" x 21 km) is mechanically completed and is likely to be commissioned shortly.

* NTPC-Jhanore Spur line (24" x 12 km) which is likely to be completed shortly.

* Petronet LNG Connectivity (24" x .035kms) which is likely to be completed shortly.

* Rajkot-Vadinar Pipeline Project (30" x 110 km). The company has already awarded EPC Contracts for this project.

* Bhadbhut-Gana Pipeline Project (30" x 109 km). The company has already awarded EPC Contracts for this project.

* Further, the Company has initiated activities for developing several spur lines to connect Industrial clusters and medium size customers along the pipeline network. The Company has taken up development of spur lines in Vapi, Morbi, Mehsana and Baroda regions on priority basis.

FUTURE PLANS

The Company is working on future expansion plans. The pipelines, which may be taken up for implementation in future include :-

* Morbi - Mundra * Baroda - Halol * Limbdi - Pipavav

OPERATION & MAINTENANCE ACTIVITIES

The Company has transported 5229.69 MMSCM (Previous year: 3821.38 MMSCM) of gas during the Financial Year under review.

To safeguard Pipeline assets and optimize efficiency of the pipeline system, the Company is giving utmost importance to efficient operations and preventive maintenance. The Company has designed and followed O & M manual to ensure efficient customer service.

HEALTH, SAFETY AND ENVIRONMENT

The Company attaches great importance to Health, Safety and Environmental aspects. The Company is expanding and managing its business operations in a safe and environmentally sustainable manner. The environment and safety features have been integrated into design, construction and O&M operations to have utmost safety for the facilities, local community and the environment. Further, Disaster Management plan is reviewed and updated regularly.

The Company is ensuring effectiveness of HSE Management systems through regular audit and review. HSE is everyone's responsibility and each employee is encouraged to act in accordance with HSE policy.

FIXED DEPOSITS

During-the year the company has not accepted any Fixed Deposits from the public.

DIRECTORS

During the year, Shri Balwant Singh.IAS ceased to be the Chairman of the Company. Your Directors wish to place on record appreciation of the services rendered by Shri Balwant Singh, IAS as Chairman of die Company.

Shri D Rajagopalan, IAS is appointed as Chairman of the Company in place of Shri Balwant Singh, IAS.

Smt. V L Joshi, IAS, Shri Tapan Ray, IAS and Shri N Venkiteswaran were appointed as Additional Directors to hold office till the ensuing Annual General Meeting.

Pursuant to the provisions of section 256 of the Companies Act, 1956, Shri H K Dash, IAS and Shri N J Jhaveri shall retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

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 names of companies in which they hold Directorship and Membership/Chairmanship of committees of the Board, are given in the Corporate Governance report forming part of the Directors' Report.

STATUTORY & GAG AUDIT

The Company being a Government Company, the Statutory Auditors are appointed by the Comptroller & Auditor General of India (C&AG). Accordingly, C&AG has appointed M/s T. N. Shah & Co, Chartered Accountants, Gandhinagar as Statutory Auditors of the Company for the Financial Year 2006-07.

CAG office has given NIL comment report for the Financial Year 2006-07 which is annexed and forms part of Directors' Report.

AUDIT COMMITTEE

Audit Committee of Directors of the Company at its meeting held on 6th June, 2007 approved the Annual Accounts for the financial year ended on 31st March, 2007 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 judgements 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-II) on the Management Discussion and Analysis which forms part of the Directors' Report.

CORPORATE GOVERNANCE

The company has always been proactive in adopting good Corporate Governance practices. The Board of Directors recognizes its accountability to all the stakeholders of the company. The Company believes that good governance is voluntary and self disciplining with the strongest impetus coming from the Directors and the Management themselves and that good Corporate Governance alone will take the Company to achieve its ultimate goal of maximizing value to all its stakeholders.

A Report on Corporate Governance as required under clause 49 of the listing agreement is incorporated as a part of this Directors' Report (Annexure - III). A compliance certificate by the practicing company secretary is also attached to the Directors' Report.

GSPL EMPLOYEES STOCK OPTION PLAN ("ESOP"):

The company instituted ESOP Scheme in October 2005 to provide an incentive to attract, retain and reward the employees and to enable them to participate in future growth and financial success of the Company. Each such option has conferred a right upon the Employee to apply for one Equity Share of the Company.

Statutory disclosures regarding ESOP scheme are enclosed as Annexure-IV 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 - Rs. NIL Foreign Exchange Outgo - Rs. 0.81 crore

ACKNOWLEDGEMENTS

The Directors convey their sincere appreciation of the valuable services rendered by employees at all levels, without whose contribution the excellent performance of the Company would not have been possible.

The Directors take this opportunity to convey appreciation for confidence, support and co-operation of the valued customers and look forward to this mutually supportive relationship in future.

The Directors are extremely grateful for all the support given by the Government of Gujarat at all levels. Their guidance, encouragement and moral support enabled the Company to expand the Pipeline Grid Network in a professional manner.

The Directors place on record their sincere thanks to the Shareholders and Lenders for their valuable support, trust and confidence in the Company.

For and on behalf of Board of Directors

Date : 23rd August, 2007 D Rajagopalan, IAS Place: Gandhinagar Chairman

Mar 31, 2006

The Directors have pleasure in presenting 8* Annual Report and Audited Accounts of the company for the year ended 31st March, 2006.

This is our first report to the shareholders since GSPL's debut in the equity segment of the capital market. Our initial Public Offering met with a resounding success demonstrating investor community's confidence in the company. This has further strengthened your Board's resolve for enhancing shareholders' value continually.

Financial Highlights (Rs. in Crore)

Particulars 2004-05 2005-06

Net Sales/Income from Operations 203.49 263.47 Other Income 2.01 4.47 205.50 267.94 Total Expenditure (Increase)/decrease in stock in trade 0.00 0.00 Gas Transportation Charges 45.37 19.23 Connectivity Charges 11.34 22.15 Staff Cost 2.59 2.74 Administration, O & M and other expenses 14.84 25.07 74.14 69.19 Interest Charges 36.34 41.28 Depreciation 65.64 79.06 Profit Before Tax 29.38 78.41 Provision for Taxation - Income Tax 1.47 - - Deferred Tax 11.86 31.51 - Fringe Benefit Tax - 0.22 Net Profit 16.05 46.68 Major Achievements

* PAT increased from Rs.16.05 crores to Rs.46.68 crores in previous year, recording increase of 191%.

* Since last Directors' Report, the Pipeline under operations have increased from 433 kms to 550 kms.

* Successfully completed IPO of Rs. 372.60 crores for part funding the expansion projects.

* Executed Gas Transmission Agreement with Torrent Power for transmission of 4.9 MMSCMD of gas for a period of 20 years.

* Executed short term gas transmission agreement with Hazira LNG Pvt. Ltd. for transportation of gas up to 3 MMSCMD of gas to NTPC, Kawas.

* 99.6% pipeline grid availability.

* "Accident free" year of operations.

* Successfully implemented mySAP ERP Package.

* ISO-9001/2000 Quality Management System Certification for company's operation and maintenance activities.

* Constructed Mora Gas Terminal, which has facilities to handle multi-source and multi-customer integration at different pressures.

CAPITAL

During the financial year the Authorized Share Capital of the Company was increased by Rs.350 Crores from Rs.350 Crores to Rs.700 Crores.

During the year, your company made an Initial Public Offering of 13.80 Crores equity shares with a price band of Rs.23/- to Rs.27/- for which the subscription was opened from 24th January, to 28th January, 2006. The issue received an overwhelming response from the investors. The price was fixed at the upper band of Rs.27/- per equity share of Rs.10/-. On 16th February 2006, the Equity Shares were listed on the National Stock Exchange of India Limited and The Stock Exchange, Mumbai.

With the allotment of 13.80 Crores equity shares to the public and 5,43 Crores equity shares through private placement, the paid up share capital of the Company has increased from Rs.349.95 Crores to Rs.542.24 Crores.

DIVIDEND

Keeping in view the fund requirements for expansion projects, the Board of Directors of the Company is pleased to recommend dividend @ 2.50% for the Financial Year 2005-06.

Gas Transmission Services

The Company has signed long term GTAs for transporting 22.08 MMSCMD of gas to various customers (Previous year 13.67 MMSCMD).

GAS GRID PROJECT

The Government of Gujarat has always played a proactive role in the development of energy value chain. Gujarat is the first state to plan and execute a state wide Gas Grid on open access principle.

The pipeline grid has been designed as per international benchmarks to cater the peak loads without any modifications.

Projects commissioned:

Since last Directors' Report the Company has successfully commissioned following pipeline projects :

* Anklav-Dhuvaran pipeline project (ADPL). Commissioning of ADPL has made it possible to transport gas to Gujarat State Electricity Company Ltd., Dhuvaran.

* Ambapur-Gandhinagar pipeline project (AGPL). AGPL has enabled transportation of Gas for City Gas Distribution Network in Gandhinagar.

* Kalol-Himmatnagar pipeline project (KHPL). KHPL has enabled GSPL to transport gas for Ceramic Industry in Himmatnagar region.

* Spurline to NTPC, Kawas. This spurline has enabled GSPL to transport Gas to NTPC, Kawas.

* Mora-ONGC, Hazira. Commissioning of this pipeline has provided connectivity to landfall point of Panna Mukta Tapti (PMT) field.

The current span of the Grid under operation is approx. 550 kms and gas is flowing from Hazira/Dahej to various industries in Surat, Bharuch, Baroda, Anand, Ahmedabad and Sabarkantha districts.

Projects on Hand

The Directors are pleased to inform that the Company has taken initiative for developing pipeline infrastructure in the State of Gujarat. Currently the following projects are in advanced stage of completion:

* Mora-Vapi Pipeline Project (30" x 138 kms) * Anand-Rajkot Pipeline Project (24" x 225 kms + 18" x 69 kms spurline) * Kalol-Mehsana Pipeline Project (18" x 47 kms) * Torrent Spur line (24" x 22 kms) * NTPC-Jhanore Spur line (24" x 12 kms)

* Further, the Company has initiated activities for developing several spur lines (approx. 200 kms X 6" to 24") to connect Industrial clusters and medium size customers along the pipeline network. The Company has taken up development of spur lines in Vapi, Morbi, Mehsana and Baroda regions on priority basis.

Future Plans

The Company is working on future expansion plans. The pipelines, which may be taken up for implementation in future includes :-

* Dharod - Jafrabad. * Rajkot - Jamnagar * Bhadbhut - Gana * Morbi - Mundra * Baroda - Godhra

Operation & Maintenance activities

The Company has transported 3821.38 MMSCM (Previous year: 3017.548 MMSCM) of gas during the Financial Year under review.

The Gas Grid is being operated as per International Safety Standards and Set Systems and Maintenance Procedures so as to achieve 100% availability of Gas Grid with zero accidents and meeting customer satisfaction.

HEALTH, SAFETY AND ENVIRONMENT

The Company attaches great importance to Health, Safety and Environmental aspects. The Company is expanding and managing its business operations in a safe and environmentally sustainable manner. The environment and safety features have been integrated into design, construction and O&M operations to have utmost safety for the facilities, local community and the environment. Further, Disaster Management plan is reviewed and updated regularly.

The Company is ensuring effectiveness of HSE Management systems through regular audit and review.

FIXED DEPOSITS

During the year the company has not accepted any Fixed Deposits from the public.

DIRECTORS

During the year, Shri Darius Pandole and Shri Jayant Parimal, IAS ceased to be the Directors of the Company. Your Directors wish to place on record appreciation of the services rendered by Shri Darius Pandole and Shri Jayant Parimal, IAS as Directors of the Company.

Shri Luis Miranda, Shri U Sundararajan, Shri N J Jhaveri, Shri Suresh Mathur and Shri Hasmukh Adhia, IAS were appointed as Additional Directors to hold office till the ensuing Annual General Meeting.

Pursuant to the provisions of section 256 of the Companies Act, 1956 Shri P K Pujari, IAS shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

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 names of companies in which they hold Directorship and Membership/Chairmanship of committees of the Board, are given in the Corporate Governance report forming part of the Directors' Report.

STATUTORY & CAG AUDIT

The Company being a Government Company, the Statutory Auditors are appointed by the Comptroller & Auditor General of India (CAG). Accordingly, CAG has appointed M/s T. N. Shah & Co, Chartered Accountants, Gandhinagar as Statutory Auditors of the Company for the Financial Year 2005-06.

CAG office has given NIL comment report for the Financial Year 2005-06.

Review of accounts of the Company for the Financial Year ended 31st March, 2006 carried out by the office of CAG is annexed and forms part of Directors' Report.

AUDIT COMMITTEE

Audit Committee of Directors of the Company at its meeting held on 21st June, 2006 approved the Annual Accounts for the financial year ended on 31st March, 2006 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 seperate section on the Management Discussion and Analysis (Annexure-I) which forms part of the Directors' Report.

CORPORATE GOVERNANCE

The Company believes that good governance is voluntary and self disciplining with the strongest impetus coming from the Directors and the Management themselves and that good Corporate Governance alone will take the Company to achieve its ultimate goal of maximizing value to all its stakeholders.

The company has always been proactive in adopting good Corporate Governance practices. The Board of Directors recognizes its accountability to all the stakeholders of the company.

A Report on Corporate Governance as required under clause 49 of the listing agreement is incorporated as a part of the Directors' Report (Annexure - II). A compliance certificate by the practicing company secretary is also attached to the Directors' Report.

GSPL EMPLOYEES STOCK OPTION PLAN ("ESOP"):

The company instituted ESOP Scheme in October 2005 to provide an incentive to attract, retain and reward the employees and enable them to participate in future growth and financial success of the Company. Each such option shall confer a right upon the Employee to apply for one Equity Share of the Company.

Statutory disclosures regarding ESOP scheme are enclosed as Annexure-III to the Directors' Report.

PARTICULARS OF EMPLOYEES

During the period 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 - Rs.NIL Foreign Exchange Outgo - Rs.4.91 crore

ACKNOWLEDGEMENTS

The Directors convey their sincere appreciation of the valuable services rendered by employees at all levels, without whose contribution the excellent performance of the Company would not have been possible.

The Directors take this opportunity to convey appreciation for confidence, support and co-operation of the valued Customers and look forward to this mutually supportive relationship in future.

The Directors are extremely grateful for all the support given by the Government of Gujarat at all levels. Their guidance, encouragement and moral support enabled the Company to expand the Pipeline Grid Network in a professional manner. We take this opportunity to convey our sincere appreciation for the support given by the Ministry of Environment & Forest, Foreign Investment Promotion Board, SEBI, BSE and NSE.

The Directors place on record their sincere thanks to the investors for their valuable support, trust and confidence in the Company and overwhelming response to the IPO of the Company.

For and on behalf of Board of Directors

Balwant Singh, IAS Chairman

Date : 22nd August, 2006 Place : Gandhinagar

Mar 31, 2005

The Directors are pleased to present their report on performance of GSPL together with the Audited Statement of Accounts for the financial year ended 31st March 2005.

Financial Highlights

(Rs. In crore) Particulars 2003-04 2004-05

Total Income (A) 142.09 205.50 Manpower 2.44 2.59 Expenses Gas 47.83 45.37 Transportation Charges Connectivity - 11.34 Charges Admin, O&M & 9.78 14.87 other Expenses Total Operating Expenses 60.06 74.17 Gross Margin 82.03 131.33 Interest (after 25.48 36.34 capitalization) Depreciation 39.79 65.64 Prior Period Expenses 0.99 0.94 Profit Before Tax 17.75 29.38

Total Income and PBT have shown significant growth recording increase of 44% and 65% respectively as compared to previous year.

Further, Net Worth of the Company has increased from Rs.258 crorc to Rs.403 crore as compared to previous year. Gross Block of Assets has increased from Rs. 475.11 crores to Rs. 872.73 crores and consequently there has been an increase in depreciation from Rs. 39.79 crs. to Rs. 65.64 crs.

CAPITAL

During the financial year the Authorised Share Capital of the Company was increased by Rs. 139 Crore from Rs. 211 Crore to Rs. 350 crore and Paid up Share capital increased by Rs.139.80 crore making total paid up capital of Rs.349.95 crore.

DIVIDEND

The Board of Directors of the Company are pleased to recommend a token dividend @2.50% for the Financial Year 2004-05 as a goodwill gesture towards the shareholders,

GAS GRID PROJECT

The Government of Gujarat has always played a proactive role in the development of energy value chain. Gujarat is the first state to plan and execute a state wide Gas Grid and that too on internationally accepted common carrier principle.

The Company plans to create a Pipeline Network of approx. 2200 Kms across the State of Gujarat Out of this approximately 433 Kms. of pipeline has been currently operationalized and gas is flowing from Hazira / Dabej to various industries in Surat, Bharuch, Baroda,

Anand, Ahmedabad and Gandhiangar Districts.

The pipeline grid has been designed as per international benchmarks to cater to peak loads without any modifications.

The Company has constructed Mora Gas Terminal, which has facilities to handle multi-source and multi customer integration at different pressures.

The Company has signed GTAs for transporting around 13.67 MMSCMD of gas to major customers. More GTAs are likely to be signed during the Financial year 2005-06.

Projects commissioned:

The Company has commissioned Mora- Sajod Pipeline (MSPL) Project. This crucial Pipeline Section has provided seamless connectivity between Hazira and Kalol Commissioning of MSPL has also made it possible to reverse flow the gas from LNG Terminal at Dahej to Hazira market. MSPL will enable the Company to carry more gas and at the same time reduce dependence on Hazira-Ankleshwar pipeline of GGCL

The Company has successfully commissioned Kalol Santej pipeline project The Company has started transporting gas to Arvind Mills at Santej.

The Company has also mechanically completed Ambapur Gandhinagar pipeline project which provides connectivity to Gandhmagar city.

Out of the 2200 kms of Gas Grid planed across the State of Gujarat, 4-18 kms of Gas Transportation pipeline has been constructed and 433 km is under operation. Details arc as follows :

Sr. Pipeline App Date of no Section rox. commissi Kms oning

1. Hazira-Mora 14 23/11/00 2. Amboli-Dahej 45 03/11/01 3. Mora-Utran 25 20/06/02 4. Bhadbhut- 26 21/08/02 Paguthan 5. Cairn-Mora 6 02/11/02 6 GNPC Spur 5 27/11/02 Line 7 Videocon Spur 1 27/12/02 Line 8 Mora Kribhco 3 18/01/03 Spur Line 9 Paguthan 83.5 20/06/03 Baroda 10 GACL- 8.5 18/04/04 Petrpnet 11 Baroda 143 18/05/04 Ahmedabad Kalol 12 Mora Sajod 58 26/12/04 13 Kalol Santej 14.5 28/12/04 14 Ambapur - 15.5 To be Gandhinagar commissi oned shortly. Total 448

Projects on Hand

Your Directors arc pleased to inform that the Company has taken initiative for developing pipeline infrastructure in the State of Gujarat and has aggressively started work tor developing following pipeline sections on priority basis.

- Mora-Vapi Pipeline Project (127 Km x 30 inch) - EPC Contract for Mora- Vapi Pipeline Project awarded to M/s. L&Z M/s. L&T has already started work for developing Mora-Vapi Pipeline Project. The project is scheduled to be commissioned by April, 2006.

- Anand-Rajkot Pipeline Project (24" x 225 kms + 18" x 68 kms spuriine) - EPC Contracts for Anand-Rajkot Pipeline Project awarded to M/s. L&T (Section -A) & M/s. Essar - STG Consortium (Section-B). The project is scheduled to be commissioned by July, 2006.

- Anklav-Dhuvaran Pipeline Project (18" x 30 kms) - EPC Contract for Anklav-Dhuvaran Pipeline Project awarded to M/s. Essar. The project is scheduled to be commissioned by January, 2006.

- Kalo I-Himmatnagar Pipeline Project (12" x 63 kms.) - EPC Contract awarded to M/s, Jay Somnath. The project is scheduled to be commissioned by March, 2006.

- Kalol-Mehsana Pipeline Project (18" x 47 kms.) - EPC Contract is likely to be awarded shortly.

- Further, the Company is planning to develop several spur lines to connect Industrial clusters and medium size customers along the pipeline network.

Project funding

The Company would need approx. Rs.1450 crore for funding the expansion projects. The Company is planning to raise funds from the market including an IPO.

Operation & Maintenance activities

The Company has transported 3017.548 MMSCM (Previous year 2391.52 MMSCM) of gas during the Financial Year under review.

To safeguard Pipeline assets and optimize efficiency of the pipeline system, the Company is giving utmost importance to efficient operations and preventive maintenance. The Company has complied with O & M manuals and safety guidelines to ensure Zero Accident, Zero Shutdown and efficient customer service.

The Company is in advanced stage of implementation of ISO: 9000 Quality Management System for operation & maintenance activities.

HEALTH, SAFETY AND ENVIRONMENT

To fulfill the commitment towards health, safety and environment to enrich quality of community life, which is one of the mission of GSPL, we have formulated HSE policy. The environment and safety features have been integrated into design, construction & commissioning to have utmost safety for the facilities, local community and the environment.

Disaster Management plan is reviewed and updated as per new pipeline network. We ace proud to announce this year as an "Accident Free Year"

The Company attaches great importance to Health, Safety and Environmental aspects. The Company is expanding and managing its business operations in Safe and Environmentally sustain able manner.

HSE Policy has been communicated to all employees and they ate actively involved in implementation of HSE manual.

Qualified personnel from reputed institutions have been appointed exclusively in Health, Safety & Environment department.

The Company is ensuring effectiveness of HSE Management systems through regular audit and review.

Your Directors arc committed to make GSPL a responsible corporate citizen by following Quality Systems and implementing HSE policy.

FIXED DEPOSITS

The Company had an aggregate amount of Rs. 53.33 lac as Fixed Deposits from public as on 31st March, 2005, of the said deposits, there are 142 depositors aggregating to Rs.22.96 lac who have not claimed their deposits on maturity. The Company has sent reminders to such depositors to complete formalities for repayment of deposits. Subsequently, 48 depositors aggregating to Rs. 8,84,000 have been repaid. Further, the Company has discontinued renewal /acceptance of deposits from September, 2002.

DIRECTORS

During the year Shri C K. Koshy, IAS (Retd.) has ceased to be the Chairman of the Company Further Shri Atanu Chakraborry, IAS has resigned from the Board of Director of the Company. Your Directors wish to place on record appreciation of the services rendered by Shri C K- Koshy, IAS (Retd.) and Shri Atanu Chakraborry, IAS.

Shri Jayant Parimal, IAS, CEO, GIDB was appointed as Additional Director of the Company. Shri Jayant Parimal, IAS shall hold office up to the date of next Annual General Meting. It is proposed to appoint Shri Jayant Parimal, IAS as regular Director at the ensuing Annual General Meeting.

Pursuant to the provisions of section 256 of the Companies Act, 1956 Shri Darius Pandole shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re- appointment.

STATUTORY & CAG AUDIT

Your Company being a Government Company, the Statutory Auditors arc appointed by the Comptroller & Auditor General of India (C&AG). Accordingly, C&AG has appointed M/s T. N. Shah & Co, Chartered Accountants, Gandhinagar as Statutory Auditors of the Company for the Financial Year 2004-2005.

AUDIT COMMITTEE

Audit Committee of Directors of the Company consisting of following Directors at its meeting held on 14th July, 2005 has approved the Annual Accounts for the financial year ended on 31" March, 2005 and recommended the same for approval of the Board.

1. Shri H K Dash, IAS

2. Shri P K Pujari, IAS

3. Shri Darius Pandole

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 arc selected and applied consistently and judgments and estimates arc reasonable and prudent so as to give a true and fair view of the 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 arc prepared on a going concern basis

PARTICULARS OF EMPLOYEES

During the period 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 In 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 - Rs.NIL Foreign Exchange Outgo - Rs.81.97 lacs

ACKNOWLEDGEMENTS

The Directors convey their sincere appreciation of the valuable services rendered by employees at all levels, without whose valuable contributions the excellent performance of GSPL 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 enabled GSPL to expand the Pipeline Grid network in a professional manner. We take this opportunity to convey our sincere appreciation for the support given by the Energy & Petrochemicals Dept, Finance Dept and regional Government offices.

The Directors take this opportunity to convey appreciation for confidence, support and co-operation of the valued customers and look forward to this mutually supportive relationship in future.

The Directors place on record their thanks to the Shareholder, Bondholders, Fixed Deposit holders, EPC Contractors and technical Consultants for their valuable support to the Company.

For and on behalf of Board of Directors

Balwaat Singh, IAS Chairman

Date : 8th August, 2005 Place: Gandhinagar

Mar 31, 2004

The Directors are pleased to present their report on performance of GSPL together with the Audited Statement of Accounts for the financial year ended 31st March 2004

Financial Highlights (Rs. in lacs) Particulars 2003-04 2002-03

Revenue 14016.41 9071.15 from

operations Other 192.40 51.53 Income

Total 14208.81 9122.68 Income

Less:

Expenditure 12532.80 7974.32 PBT 1676.01 1148.36

Further, revenue from operations has increased by 54.52% as compared to previous year.

CAPITAL

During the year the Authorised Share Capital of die Company was increased by Rs. 139 Crorc from Rs. 211 Crore to Rs. 350 crore and Paid up Share capital increased by Rs.25 crore making total paid up capital of Rs.210 crore.

DIVIDEND

In view of fund requirements for the ongoing and future projects, your Directors are not recommending any dividend for the Financial Year ending on 31st March, 2004

GAS GRID PROJECT

The Company plans to create a Pipeline Network of approx. 681 Kms. in Phase - I of the Gas Grid Project

Out of this approximately 361) Kms. of pipeline has been currently ope rationalized and gas is flowing from Hazira to variuo industries in Surat, Bharuch, Baroda, Ahmedabad and Kalol.

The Petronet LNG Ltd. has commissioned first LNG Terminal at Dahej. Further, LNG terminal of SHELL at Hazira would be commissioned shortly which will help in bridging the demand & supply gap. The Company has signed GTA for more gas volume and would transport around 13.29 MMSCMD of gits to major customers in the near future.

The installation of centralized SCADA system is in full swing, shortly We would be able to monitor & control our gas grid from Gandhinagar based master control room.

Projects commissioned:

The Company has successfully commissioned 143 Kms Baroda - Ahmedabad -Kalol Pipeline project in a record time involving 2490 survey nos. covering 75 villages. Tins Pipeline section has made il possible CO transport gas to the city of Ahmedabad and Kalol. Industries in \hmedabad & Kalol will be immensely benefited by this Project. The Company has also started supply of gas to AE< and iFFC< I

The Company has commissioned GACL - Pcironei Pipeline Project in a record rime pf 5 months. This crucial Pipeline Section would make available R-LNG from the LN(i Terminal of Petronct LNG Ltd Wiih the successful commissioning of this line, the reverse flow in the grid has Started and currently 3 sources of gas arc being Commingled in die grid.

We have already commissioned 361) kms of Pipeline network. Details of the commissioned pipeline sections arc given

below;

Sl. Pipeline App Date of no Section Fox. commissi Kms oning

1. Hazira-Mora 14 23/1/00 2. Amboli-Dahcj 45 03/11/01 3. Mora-Utran 25 30/06/02 4. Bhadbhut 26 21/08/02 Paguthan 5. Cairn-Mora 6 02/11/02 6 GNFC Spur 5 27/11/02 Line 7. Videocon Spur 1 27/12/02 Line 8 Mora Kribhco 3 18/01/03 Spur Line 9 Paguthan 83.5 20/06/03 Baroda 10 GACL 8.5 18/4/04 Petronct 11 Baroda-Abad 143 18/5/04 Kalol Total 360

Projects on hand:

Total project cost for commissioned and ongoing projects is estimated to be Rs,l074crores.

The Company is currently focusing on development of following pipeline sections,

* Mora - Sajod

* Kalol - Santcj Spur Iine

* Ambapur - Gandhinagar Spur I Aim

Future Projects:

Your Directors are pleased CO inform lhat the Company has taken initiative for developing pipeline infrastructure in the State of Gujarat and has aggressively started work for developing following pipeline sections on priority basis,

Descripti Lcng Status on th in kms

Anklav - 30 Acquisition of Dhuvaran ROU completed

Pre-qualificauon of engineering consultant is in progress.

Pre Qualification process for F-PC contractor is under process.

Anand- 250 Detail Rajkot engineering (Morbi - survey

Surendra completed. Nagar) BEP & RFP is under progress.

Mora 145 Revalidation of Talasari route completed.

Technical evaluation of EPC contractor completed.

Kalol- 60 Detail Mcbsana engineering survey is in Progress.

Crossing permission has been applied.

Process for acquiring ROU in progress.

Suvali 8 Detail ESSAR engineering survey completed

BEP is in progress.

kalol 60 Detail Himatnag engineering ar Survey started.

Process for acquiring ROU initiated

Applied for crossing permission.

Anand 250 Detail Pipavay engineering survey completed

Process for acquiring ROU initiated 743

Operation & Maintenance activities

The Company has transported 2391.52 MMSCM Previous year 1193 MMSCM) of gas during the Financial Year under review.

To safeguard Pipeline assets- and optimise efficiency of the pipeline system, the Company is giving utmost importance to efficient operations and preventive maintenance The Company has implemented all functional manuals, Disaster Management Plan and Safety Manuals to ensure Zero Accident, Zero Shutdown and efficient customer service

Gas Transmission Agreements

The Company has signed following Gas

Transmission Agreements (CiTAs),

Customer Quantity

MMSCMD ESSAR Steel 3.64 (Hazira & LNG) ESSAR Power - LNG 1.30 GSEG 0.78 GSEC 0.50 GSPC (Kribhco) 0.30 GGCT. (Kribhco) 0.35 GACL 0.50 GPEC 2.95 1 GNFC 0.10 Videocon 0.05 GIPCL 0.15 GGCL 1.27 1GSFC 0.40 AEC 0.50 Arvind Mill 0.15 1FFCQ 0.45 Adani (Baroda) 0.10

The Company has signed GTA for transportation of total 13.49 MMSCMD

HEALTH, SAFETY AND ENVIRONMENT

The Company attaches great importance to icalth. Safety and Environmental aspects.

The environment and safety features have been integrated into design, construction & commissioning to have utmost safety for the facilities, local community and the environment

The Company is expanding and managing its business operations in Safe and

Environmentfllly sustainable manner The i ompany has therefore set up a separate wing called HSE (Health, Safety and Environment) to further these objectives inGSPL

I BE Policy has been communicated to all

employees and they are actively involved in implementation of USE manual O&M employees have undergone First-aid training in Kribhco / Gujarat Safety Council and Disaster Management Qualified personnel from reputed institution have been appointed exclusively. in Health, Safety & F.nvironmcnt department.

The Company is ensuring effectiveness of HSE Management systems through regular audit and review.

Your Directors are committed to make GSPL a responsible corporate citizen by following Quality Systems and implementing HSE policy*.

FIXED DEPOSITS

The Company recognizes that service to depositors is of prime importance and continues to focus on this area.

The Company had an aggregate amount of Rs. 625.85 lac as Fixed Deposits from public as on 31st March, 2004, of the said deposits, there arc 387 depositors aggregating to Rs.60.67 lac who have not claimed their deposits on maturity. The Company has sent reminders to such depositors to complete formalities for repayment of deposits- Subsequently, 212 depositors aggregating to Rs.35.71 lac have been repaid. Further, the Company has discontinued renewal/acceptance of deposits from September, 2002.

DIRECTORS

During the year Dr. Manjula Subramaniam, LAS resigned from the Directorship of the Company. Your Directors wish to place on record appreciation of the sen-ices tendered by her as a Director of the Company.

Shri Balwant Singh, IAS and Shri H. K. Dash, IAS were appointed as Additional Directors of the Company. Shri Balwant Singh, IAS and Shri H. K. Dash. IAS shall hold office up to the date of next Annual General Meting. It is proposed to appoint Shri Balwant Singh, IAS and Shri H. K. Dash, IAS as regular Directors at the ensuing Annual General Meeting.

Pursuant to the provisions of section 256 of the Companies Act, 1956 Shri P K Pujari, IAS shall retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re- appointment-

STATUTORY AUDITORS

Your Company being a Government Company, the Statutory Auditors are appointed by the Comptroller & Auditor General of India (C&AGJ. Accordingly, C&AG has appointed M/s G C Patel &

Co, Chartered Accountants, Gandhinagar as Statutory Auditors of die Company for the Financial Year 2003-200-1.

AUDIT COMMITTEE

Audit Committee of the Company consisting of following Directors at its meeting held on 30th September, 2004 has reviewed the Annual Accounts for the financial year ended on 31st March, 2004.

1. Sim Bahvani Sing, LAS

2. Shri P K Pujart, i AS

3. Shri HK Dash, IAS

DI RECTORS RESPONSI BILITY STATEMENT

Pursuanl 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

PARTICULARS OF EMPLOYEES

During the period 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

In the period under review, there is no consumption of energy requiring disclosure.

Teciinotogy 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 - Rs.NIL Foreign Exchange Outgo - Rs.1.76 crore

ACKNOWLEDGEMENTS

The Directors convey their sincere appreciation of the valuable sen-ices rendered by employees at all levels, without whose valuable contributions the excellent performance of GSPL would not have been possible.

The Directors take this opportunity to convey appreciation for confidence, support and co-operation of the valued customers and look forward to this mutually supportive relationship in future.

The Directors place on record their thanks to the Government of Gujarat. Gujarat Infrastructure Development Board, Lenders, Shareholder,

Bondholders and Fixed Deposit holders for their valuable support to the Company.

For and on behalf of Board of Directors

P K Pujari , IAS D J Pandian, IAS Director Managing Director Date : 13/10/2004 Place: Gandhinagar

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