MIRA INFORM REPORT

Report Date :

10.12.2011

IDENTIFICATION DETAILS

Name :	GAIL (INDIA) LIMITED
Registered Office :	16, Bhikaji Cama Place, R. K. Puram, Ring Road, New Delhi – 110 066
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	16.08.1984
Com. Reg. No.:	55-18976
Capital Investment / Paid-up Capital :	Rs.12684.800 Millions
CIN No.: [Company Identification No.]	L40200DL1984GOI018976
TAN No.: [Tax Deduction & Collection Account No.]	DELG00179E
PAN No.: [Permanent Account No.]	AAACG1209J
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Processor and Distributors of Natural Gas.
No. of Employees :	3544 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

A (66)

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 770000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company of Government of India having fine track. Financial Position Of the company appears to be sound. Trade Relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The Company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office :	16, Bhikaji Cama Place, R. K. Puram, Ring Road, New Delhi – 110 066, India
Tel. No.:	91-11-26182955 / 26172580
Fax No.:	91-11-26185941
E-Mail :	info@gail.nic.in vivek@gail.co.in hrm@gail.co.in nknagpal@gail.co.in
Website :	http://www.gail.nic.in http://www.gailonline.com
Factory :	· U P Petrochemical Complex, Pata, P.O. Pata – 206 241, District Auraiya, Uttar Pradesh, India · LPG Recovery Plant, Usar, P.O. Malyan – 402 203 Taluka Alibagh District Raigad, Maharashtra, India · LPG Recovery Plant, Vijaipur, GAIL Complex Vijaipur – 473 112, District Guna, Madhya Pradesh, India · LPG Recovery Plant, Vaghodia, GIDC Industrial Estate Vaghodia – 391 760 District Baroda, Gujarat, India · LPG Recovery Project, Gandhar, Village Rozantankaria, Taluka AMOD Disyrict Bharuch – 392 140, Gujarat, India
Zonal Office:	Located at: · Delhi · Chandigarh · Jaipur · Mumbai · Bhopal · Hyderabad · Bangalore · Kochi · Chennai · Kolkata · Lucknow
Regional offices/ Branches:	Located at:- · Baroda, Gujarat · Ahmedabad, Gujarat · Hazira · Chennai, Tamilnadu

DIRECTORS

As on 31.03.2011

Name :	Mr. R. D. Goyal
Designation :	Director (Projects)
Name :	Mr. S. L. Raina
Designation :	Director (HR)
Name :	Mr. Prabhat Singh
Designation :	Director (Marketing)
Name :	Mr. S. Venkatraman
Designation :	Director (Business Development)
Name :	Mr. P. K. Jain
Designation :	Director (Finance)
Name :	Mr. Sudhir Bhargava
Designation :	Director
Name :	Mr. Apurva Chandra
Designation :	Director
Name :	Prof. A. Q. Contractor
Designation :	Director
Name :	Mr. Mahesh Shah
Designation :	Director
Name :	Mr. R. M. Sethi
Designation :	Director
Name :	Dr. Vinayshil Gautam
Designation :	Director
Name :	Dr. U. K. Sen
Designation :	Director (upto 28.04.2011)
Name :	Mr. Arun Agarwal
Designation :	Director

KEY EXECUTIVES

Name :	Mr. N. K. Nagpal
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2011

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Central Government / State Government(s)	727,405,675	57.83
Sub Total	727,405,675	57.83
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	727,405,675	57.83
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	46,268,148	3.68
Financial Institutions / Banks	19,973,297	1.59
Central Government / State Government(s)	91,888,984	7.30
Insurance Companies	161,465,802	12.84
Foreign Institutional Investors	170,327,651	13.54
Sub Total	489,923,882	38.95
(2) Non-Institutions
Bodies Corporate	14,855,408	1.18
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 million	22,899,493	1.82
Individual shareholders holding nominal share capital in excess of Rs.0.100 million	1,582,264	0.13
Any Others (Specify)	1,269,344	0.10
Trust & Foundation	461,487	0.04
Non Resident Indians	807,857	0.06
Sub Total	40,606,509	3.23
Total Public shareholding (B)	530,530,391	42.17
Total (A)+(B)	1,257,936,066	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	-	-
(1) Promoter and Promoter Group	-	-
(2) Public	10,541,334	-
Sub Total	10,541,334	-
Total (A)+(B)+(C)	1,268,477,400	-

BUSINESS DETAILS

Line of Business :

Processor and Distributors of Natural Gas.

Products :

ITC Code	Product Description
27112100	Natural Gas
27111900	LPG
390120	Polyethelene
2711200	Propane

PRODUCTION STATUS (As on 31.03.2011)

Particulars	Licensed Capacity	Installed Capacity	Gas Throughput	Actual Production
i) Natural Gas including RLNG (MMSCMD)
a) HVJ, DVPL, SG and DUPL-DPPL	77.20	77.20	57.32	--
b) Others	74.65	74.65	20.83	--
c)RLNG Shipper	--	--	39.76	--
ii) LPG (M /T)	1112376	1112376	--	1068156
iii) Propane (M/T)	201085	201085	--	155152
iv) Ethylene (M/T)	400000	400000	--	428444
v) HDPE/LLDPE (M/T)	410000	410000	--	416396
vi) Pentane	82454	82454	--	34523
vii) SBP Solvent/Naptha	110743	110743	--	111140
viii)CNG (000’KG)	--	--	--	6334
ix) C2/C3**	--	400000	--	594372
x) Butene-1***	10000	10000	--	8432

Notes:

· * As Certified by the company and relied upon by auditors

· ** Internally consumed

· *** Internally consumed

GENERAL INFORMATION

No. of Employees :

3544 (Approximately)

Bankers :

· State Bank of India, Corporate Accounts Group, Branch Jawahar Vyapar Bhavan, 11th and 12th Floors, Tolstoy Marg, New Delhi – 110 001, India

· ICICI Bank Limited, 9A, Phelps Building, Connaught Place, New Delhi - 110 001, India

· HDFC Bank Limited, 1st Floor, Kailash Building, 26, Kasturba Gandhi Marg, New Delhi - 110 001, India

Facilities :

Secured Loan	As on 31.03.2011 (Rs. in Millions)	As on 31.03.2010 (Rs. in Millions)
Bonds Series – I (6.10% Secured Non-convertible redeemable Bonds-Series-I are redeemable in 5 equal installment commencing from the end of the 8th year upto the end of the 12th year from the deemed date of allotment August 22, 2003.) (Bonds are secured on pari passu basis, by charge on freehold non agricultural land at village Tandalja, Vadodra together with the entire building constructed thereon both present and future and whole of plant and machinery, spares, tools and accessories and other movables of the company pertaining to its projects at LPG Vaghodia Plant, Hazira Plant, Grep Vaghodia Plant, Gandhar Plant and Vadodra plant both present and future and whether installed or not and lying or in store)	5000.0000	5000.000
Bonds Series – II (5.85% Secured Non-convertible redeemable Bonds -Series - II are redeemable in 5 equal installment commencing from the end of the 6th year upto the end of the 10th year from the deemed date of allotment March 25, 2004.) (Bonds are secured on pari passu basis, by charge on freehold non agricultural land at village Tandalja, Vadodra together with the entire building constructed thereon both present and future and whole of plant and machinery, spares, tools and accessories and other movables of the company pertaining to its projects at LPG Vaghodia Plant, Hazira Plant, Grep Vaghodia Plant, Gandhar Plant, DUPL projects and Vadodra plant both present and future and whether installed or not and lying or in store)	3600.000	4800.000
Board 2010 Series – I (8.80% Secured Non-convertible redeemable Bonds -Series – I are redeemable in 4 equal installment commencing from the end of the 7th year upto the end of the 10th year from the deemed date of allotment December 13, 2010 with a call option at the end of the 7^th year). (Bonds are secured on pari passu basis, by charge on freehold non agricultural land at village Tandalja, Vadodra together with the entire building constructed thereon both present and future and whole of plant and machinery, spares, tools and accessories and other movables of the company pertaining to its projects at Vijaipur Dadri Pipeline Projects both present and future and whether installed or not and lying or in store)	5000.000	0.000
Oil Industry Development Board (Secured by hypothecation by way of first charge on whole pipeline, spur lines, plant and machinery, spares, equipments, tools and accessories and others movable both present and future, whether installed or not and whether now lying loose or in cases or which are now lying or stored in or about or shall hereinafter from time to time during the continuance of the security of these presents be brought into or upon or be stored or be in or about the borrower project of Chainsa-Jhajiar-Hissar Pipeline including spur lines or wherever else the same may be or be held by any party to the order or disposition of the borrower or in the course of transit or on high seas or on order of delivery, howsoever or wheresoever in the possession of borrower and either by way of substitution or addition.)	9500.000	4660.000
Total	23100.000	14460.000
Unsecured Loan
Oil industry Development Board	0.000	343.800
Total	0.000	343.800

Banking Relations :	--
Statutory Auditors :	· Rasool Singhal and Company Chartered Accountants, Aligarh · M. L. Puri Chartered Accountant, New Delhi
Cost Auditors :	· Rohit J Vora Cost Accountant, Vadodara · R. Nanabhoy and Company Cost Accountants, Mumbai · M. Goyal and Company Cost Accountant, Jaipur · Chandra Wadhwa and Company Cost Accountants, New Delhi · Dhananjay V. Joshi and Associates Cost Accountant, Pune · DGM and Associates Cost Accountants, Guwahati · Mani and Company Cost Accountants, Kolkata · K. L. Jaisingh and Company Cost Accountants, Noida
Subsidiaries :	· GAIL Global (Singapore) Pte. Limited 5 Shenton Way, # 23-03 UIC Building, Singapore – 068808 · Brahmaputra Cracker and Polymer Limited Hotel Brahmaputra Ashok, M. G. Road, Guwahati – 781 001, Assam, India · GAIL Gas Limited 16, Bhikaji Cama Place, R. K. Puram, New Delhi – 110 066, India
Joint Venture/Associates :	· Mahanagar Gas Limited · Indraprastha Gas Limited · Petronet LNG Limited · Bhagyanagar Gas Limited · Tripura Natural Gas Corporation Limited · Central UP Gas Limited · Green Gas Limited · Maharashtra Natural Gas Limited · Avantika Gas Limited · GAIL China Gas Global Energy Holding Limited · ONGC Petro additions Limited (OPAL) · Shell Compressed Natural Gas · Gujarat State Energy Generation Limited · National Gas Company “Nat Gas” · Fayum Gas Company · China Gas Holdings Limited

CAPITAL STRUCTURE

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
2000000000	Equity Shares	Rs.10/- each	Rs.20000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
1268477400	Equity Shares	Rs.10/- each	Rs.12684.800 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		12684.800	12684.800	12684.800
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		179848.600	155305.200	135011.500
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		192533.400	167990.000	147696.300
LOAN FUNDS
1] Secured Loans		23100.000	14460.000	11000.000
2] Unsecured Loans		0.000	343.800	1001.300
TOTAL BORROWING		23100.000	14803.800	12001.300
DEFERRED TAX LIABILITIES		16332.400	13895.600	13259.300
TOTAL		231965.800	196689.400	172956.900
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		124035.700	119311.000	90503.200
Capital work-in-progress		58791.700	23304.900	24263.300
INVESTMENT		20357.400	17630.100	14375.200
Advances for Investments (Pending Allotment)		5467.800	3100.200	2997.500
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	8551.100	6317.000	6014.100
	Sundry Debtors	19059.000	12950.400	15033.400
	Cash & Bank Balances	21313.500	41715.100	34561.500
	Other Current Assets	35.900	82.600	546.300
	Loans & Advances	62502.400	76061.800	66210.100
Total Current Assets		111461.900	137126.900	122365.400
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	25433.900	20317.700	19724.900
	Other Current Liabilities	22109.800	34165.400	22054.300
	Provisions	40605.000	49300.600	39768.500
Total Current Liabilities		88148.700	103783.700	81547.700
Net Current Assets		23313.200	33343.200	40817.700
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		231965.800	196689.400	172956.900

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Sales	325911.300	250169.900	239033.800
		Other Income	5185.800	5411.000	7966.200
		TOTAL (A)	331097.100	255580.900	247000.000
Less	EXPENSES
		Purchase of Gas for Trading	215769.700	144618.500	143283.900
		Gas Pool	4289.400	9681.800	7520.000
		Manufacturing, Transmission, Administration, Selling and Distribution and other expenses	51509.800	49387.600	47750.300
		Prior Period Adjustment	172.000	(3.500)	103.900
		Expenditure during construction period transferred to Capital Work in progress	(375.200)	(206.400)	(167.400)
		TOTAL (B)	271365.700	203478.000	198490.700
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		59731.400	52102.900	48509.300
Less	INTEREST AND FINANCIALCHARGES (D)		828.600	700.000	870.000
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		58902.800	51402.900	47639.300
Less/ Add	DEPRECIATION/ AMORTISATION (F)		6502.900	5618.200	5599.100
	PROFIT BEFORE TAX (E-F) (G)		52399.900	45784.700	42040.200
Less	TAX (H)		16788.600	14386.300	14003.200
	PROFIT AFTER TAX (G-H) (I)		35611.300	31398.400	28037.000
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		0.000	0.000	0.000
Less	APPROPRIATIONS
		Interim Dividend	2537.000	2537.000	5073.900
		Proposed Final Dividend	6976.600	6976.600	3805.400
		Corporate Dividend Tax	1553.200	1589.900	1509.000
		Transfer from Bond Redemption Reserve	(300.000)	(300.000)	0.000
		Transfer to Bond Redemption Reserve	378.100	271.300	321.300
		General Reserve	3560.000	3140.000	2800.000
	BALANCE CARRIED TO THE B/S		20906.400	17183.600	14527.400
	EARNINGS IN FOREIGN CURRENCY
		Others	47.200	56.700	69.600
	TOTAL EARNINGS		47.200	56.700	126.300
	IMPORTS
		Raw Materials	5957.400	902.000	0.000
		Spare Parts and Components	1108.700	856.800	731.400
		Capital Goods	9716.700	740.100	284.700
	TOTAL IMPORTS		16782.800	2498.900	1016.100
	Earnings Per Share (Rs.)		28.07	24.75	22.10

QUARTERLY RESULTS

PARTICULARS	30.06.2011	30.09.2011
Type	1^st Quarter	2^nd Quarter
Net Sales	88890.000	97264.000
Total Expenditure	73117.800	80508.600
PBIDT (Excl OI)	15772.200	16755.400
Other Income	646.500	1160.000
Operating Profit	16418.700	17915.400
Interest	207.900	226.200
Exceptional Items	0.000	0.000
PBDT	16210.800	17689.200
Depreciation	1781.700	2007.600
Profit Before Tax	14429.100	15681.600
Tax	4582.400	4737.500
Provisions and contingencies	0.000	0.000
Profit After Tax	9846.700	10944.100
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	9846.700	10944.100

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	10.76	12.29	11.35
Net Profit Margin (PBT/Sales)	(%)	22.25	18.30	17.58
Return on Total Assets (PBT/Total Assets}	(%)	16.08	17.85	19.64
Return on Investment (ROI) (PBT/Networth)		0.27	0.27	0.28
Debt Equity Ratio (Total Liability/Networth)		0.58	0.71	0.55
Current Ratio (Current Asset/Current Liability)		1.26	1.32	1.50

LOCAL AGENCY FURTHER INFORMATION

PERFORMANCE OVERVIEW

The Company has recorded sustained growth in all key physical and financial parameters in the Financial Year 2010-11

CONVERGED ACCOUNTING STANDARDS (IFRS) IMPLEMENTATION

In accordance with the notification issued by the Ministry of Corporate Affairs, Government of India, accounts are to be prepared on the basis of converged Accounting Standards i.e. Indian Accounting Standards converged with International Financial Reporting Standards (IFRS) as and when dates will be notified. Accordingly, the Company is taking necessary steps for the implementation of Ind AS which are converged with IFRS. Basic IFRS training has also been imparted to all the Finance executives of the Company. The Company is ready to implement the Converged Accounting Standards (Ind AS) as and when it would be notified by Central Government.

BUSINESS SEGMENT ANALYSIS
 
SEGMENTAL REVIEW
 
The Company has been consistently achieving the top-most all round Excellent rating by the Government of India, since the signing of the Memorandum of Understanding (MoU) with the Government of India on performance review. During the year, the segment wise business performance of the Company is as under:
 
Natural Gas Marketing
 
Natural gas continues to constitute the core business of the Company. During the year 2010-11, Gas Sales was 83.23 MMSCMD compared to 8143 MMSCMD in the previous financial year. Major supplies of natural gas include fuel to power plants and feedstock for gas based fertilizer plants. The Company holds around 50% market share in gas marketing in India.

Natural Gas Transmission
 
The Company owns and operates a network of about 8,644 km of natural gas high pressure trunk pipeline with a capacity of approx. 170 MMSCMD of natural gas across the country. The gas transmission during the year was 11 7.91 MMSCMD compared to 106.74 MMSCMD in the previous financial year registering a growth of 10%. The Company's share of gas transmission business is around 74% in India.
 
Natural Gas Pipeline Projects
 
During the financial year, the Company has completed commissioning of various pipelines having length of about 761 km which includes Vijaipur-Dadri Pipeline (498 km), Sultanpur-Neemrana Pipeline (175 km) and Focus Energy Pipeline (88 km).
 LPG Transmission
 
The Company is the only Company in India which owns and operates pipelines for exclusive LPG transmission for third party usage. There are two LPG Pipeline transmission systems with a total length of about 2038 km, 1415 km of which connects the Western and Northern parts of India (Jamnagar-Loni LPG Pipeline) and 623 km of network is in the Southern part of the country (Vizag-Secunderabad LPG Pipeline). The LPG transmission system has a capacity to transport upto 3.8 MMTPA of LPG. LPG transmission throughput was about 3.337 million MTin the year 2010-11.

LPG Transmission Projects
 
Kandla- Samakhiali section of JLPL system has been upgraded from 0.5 MMTPA to 1.5 MMTPA by laying of 10X 60 km loopline, installing additional Pumps at Kandla and receiving facilities at Samakhiali.
 
Petrochemicals
 
During FY 2010-11, the Company has produced 420 TMT of polymer which includes 416 TMT of HDPE/ LLDPE pellets and remaining quantity of LP flakes, wax, PE shreds, etc. Further, during the period, it sold 420 TMT of polymer (HDPE/ LLDPE/ low polymers /polymer lumps and shreds).
 
LPG and Other Liquid Hydrocarbon Production
 
The Company has 7 LPG plants in the country. In the year 2010-11, total Liquid Hydrocarbon production was about 1.369 million MT which mainly included 1.068 million MT of LPG, 0.155 million MT of Propane, 0.035 million MTof Pentaneand balance quantity included other products like SBP solvent and Naphtha.
 
Exploration and Production (E and P)
 
The Company has Participating Interest (PI) in 27 Exploration and Production (E and P) blocks and one Coal Bed Methane (CBM) block. Out of the 27 E and P blocks, 25 blocks are in India and 2 blocks are overseas (A-1 and A-3 blocks in Myanmar). One of the onland blocks in Cambay basin is in regular production and Rs.41410.000 millions has been generated as revenue during the year 2010-11.

Out of the 27 E and P blocks where subject is participating, subject is the Operator in 2 blocks (Rajasthan Onland RJ-ONN-2004/1 and Cauvery Onland CY-ONN-2005/1). 1st well- Lohara 1 is being drilled currently in Rajasthan onland block and two more wells are also planned to be drilled subsequently, while seismic data acquisition is planned in Cauvery onland block during the year 2011-12.
 
The CBM Block (TR-CBM-2005/III) in Chhattisgarh is in first exploration stage where dewatering of test wells is in progress. Development activities in blocks
 
A-1 and A-3, Myanmar offshore is in progress and the production of gas is expected to start from May 2013.
 
During the year 2010-11, Declaration of Commerciality has been approved in the Mahanadi Offshore block (MN-OSN-2000/2). Further, subject consortium has been awarded two deep water blocks in Andaman basin under NELP-VIII bidding round with ONGC as the Operator. Subject has bid for E&P blocks in NELP-IX biddling round along with other consortium partners. Results are expected in FY 2011-12 and Production Sharing Contracts are expected to be signed soon thereafter.
 

Telecommunications
 
Leveraging on its pipeline network, the Company has built up a strong Optic Fibre Cable (OFC) network for its own internal use and leasing of bandwidth as a carriers'' carrier. The Company's telecom business unit -''GAILTEL has approximately 1 3,000 km of OFC network.

SEGMENTAL OUTLOOK
 
Natural Gas
 
Major focus for the Company is to maintain its dominant position in the gas business, especially the transmission segment and continue the relationship with existing customers and also to add more customers. Therefore, the Company is expanding its transmission network by laying another 7,500 Km of pipelines at an investment of Rs.300000.000 millions, out of which around 1,200 km have been completed, to transport and supply natural gas to various customers in Power, Fertilizer, Refinery, industries, CGD projects etc. These would include large trunk pipelines, along with smaller pipelines which would provide connectivity among trunk lines to form a grid. The pipelines being laid by your Company would help in achieving the objective of an Integrated National Gas Grid.
 
Natural Gas Pipeline Projects
 
The projects are concurrently being executed in 16 States, 2 Union Territories, 116 Districts and the construction activities are in full swing simultaneously for more than 10 projects. The following projects are in advanced stage of construction and completion is expected by the end of year 2011.
 
I. Dahej-Vijaipur Pipeline Phase-I (DVPL-II) 610 km
 
 ii. Bawana-Nangal Pipeline (BNPL)  501km
 
 iii. Karanpur-Moradabad Kashipur- Rudrapur Pipeline Phase-I 105 km
 
 Further, installation of 2nd and 3rd compressors at Jhabua and Vijaipur and installation of two Compressors at Kailaras SChainsa are also in advanced stage of construction and completion is expected by the end of year 2011.
 
The completion of DVPL-II project along with commissioning of balance mainline compressors at Jhabua and Vijaipur will lead to enhanced capacity to transport RLNG from Dahej and KG Basin gas to consumers in northern part of India. Last mile connectivity has been given importance and steps have been taken up to connect customers within the shortest possible time leading to revenue generation.
 
Construction has recently started for the following projects.
 
 I. Dabhol Bangalore Pipeline Phase-I 997 km
 
 ii. Kochi-Koottanad Bangalore/ Mangalore 
 Pipeline Phase-I 44 km
 
 iii. Spurlinesto Roorkee-Haridwar, Ludhiana 
 Jalandhar(BNPLSpurlin es) 270 km
 
 iv. Spurlines to Chittorgarh (Vijaipur- Kota 
 Pipeline -VKPL extension) 290 km
 
The Dabhol- Bangalore and Kochi - Koottanad- Bangalore - Mangalore pipelines would increase subject's presence in southern India as these pipelines pass through virgin market areas. The quantum of gas transported is likely to increase, with commissioning of these projects.
 
Due to increase in gas availability, last mile consumer connectivity has been provided to 46 number of consumers for a gas quantity of approx 6.8 MMSCMD.
 
TheCompany is also expanding its pipeline network in the states of Rajasthan, Uttarakhand, Punjab, Andhra Pradesh and Tamil Nadu.
 
Petrochemicals
 
The Company owns and operates a gas based integrated petrochemical plant at Pata, Uttar Pradesh, with a capacity of producing 4,10,000 TPA of Polymers i.e. HDPE and LLDPE. The Company has commissioned in the month December, 2010 an additional gas cracking furnace and with debottlenecking of the Gas Cracker Unit, the Ethylene production capacity has been increased to 4,46,000TPA. Further the Company is doubling the capacity of Petrochemical plant at Pata by installing 4,50,000 TPA of Gas Cracker Unit and 4,00,000 TPA of Downstream Polymer Unit.
 
The Company is currently in the process of setting up a 2,80,000TPA Petrochemical Complex in Assam through its subsidiary, Brahmaputra Cracker and Polymer Limited (BCPL).
 
The Company is a co-promoter with 1 7% equity stake in ONGC Petro-additions Limited (OPaL) which is implementing a green field petrochemical complex of 1.1 MMTPA Ethylene capacity at Dahej in the State of Gujarat.

Gas Sourcing
 
The Company continues to have focus on securing gas supplies from international markets. LNG and trans-national pipelines are the two prevalent modes of cross border gas trade and the Company has been making efforts to bring more natural gas into the country through both these modes. The Company has entered into a short term agreement to buy 0.48 MMTPA LNG from Marubeni Corporation, Japan and the first shipment was received in February 2011 .The Company has also imported about 0.20 MMTPA of LNG in this financial year from various international sellers on spot basis to supplement the shortfall in domestic production from time-to-time. Your Company also sourced around 80 MMSCM of spot RLNG in 2010-11 from its Joint Venture Petronet LNG Limited (PLL). Further, agreements for procurement of spot LNG have been signed with 19 international sellers. In addition, discussions are on with 8 prospective suppliers for long term tie up of LNG.
 
 Wind Energy
 
 The company has successfully commissioned a wind energy power project of 4.5 MW capacity at Sinoi in Kutch District of Gujarat at a cost of Rs.277.000 millions. The generated power is fully utilized for captive consumption at the Company's installations in Gujarat namely Gandhar, Samakhiali and Kandla.

Based on the satisfactory performance of 4.5 MW wind energy project, the Company is now executing another 15 MW wind energy power project in state of Gujarat at an estimated cost of Rs.937.600 millions for captive utilization. Further, the Company's Board has approved the project for setting up of a 100 MW Commercial Wind Energy Generation Project in the states of Tamil Nadu and/ or Karnataka. In line with the decision, the Board of the Company has approved the amendment in main object clause of Memorandum of Association to carry on the business of generation, distribution and marketing of wind, tidal, solar and any other form of renewable energy on commercial basis, subject to approval of shareholders through postal ballot. The Company is also exploring the possibilities of commercial wind power project in different states.
SUBSIDIARIES AND JOINT VENTURES
 
The Company has formed Subsidiaries and Joint Venture companies for City Gas Distribution and Petrochemicals. The Company is one of the pioneers to introduce City Gas Projects in India for supplies to households, commercial users and for the transport sector by forming Subsidiaries/ Joint Venture Companies.
 
SUBSIDIARIES
 
Brahmaputra Cracker and Polymer Limited (BCPL)
 
BCPL is setting up a 2,80,000 TPA polymer plant and project execution is in progress. The proposal for enhanced project cost and revised commissioning date is under Government approval.
 
Feedstock Supply Agreements have been signed between BCPL and all the three suppliers, viz, Oil and Natural Gas Corporation Limited, Oil India Limited and Numaligarh Refinery Limited. Technology license agreements have been signed for cracker, polyethylene and polypropylene units.
 
Entire land for the project has been acquired by BCPL. Civil structural works for the main process units, namely Ethylene Cracker unit, Polyethylene unit (HDPE/ LLDPE), Polypropylene unit, C2 extraction unit, Gas De- hydration unit and Gas sweetening unit of BCPL has commenced.

The Company has 70% equity share in BCPL with OIL, NRL and Government of Assam each having 10% equity share.

GAIL Gas Limited
 
GAIL Gas was incorporated with an objective of focused implementation of City Gas Distribution (CGD) projects in the Country. In first round of bidding process of Petroleum and Natural Gas Regulatory Board (PNGRB), GAIL Gas has been authorized to implement CGD projects in four cities, namely, Sonepat, Kota, Dewas and Meerut.
 
GAIL Gas has already commissioned CNG stations in Dewas and Sonepat. Gas supply to industrial units has commenced in Dewas, Sonepat and Kota. GAIL Gas has also commenced gas supplies to domestic consumers in Dewas and network construction is in progress for other cities.
 
GAIL Gas has already laid 168 Km steel pipeline and 229 Km MDPE pipeline in these cities. GAIL Gas is operating 1 CNG stations each at Dewas and Sonepat. The CNG stations at Kota and Meerut are under commissioning. GAIL Gas is supplying natural gas to 24 industrial units in Kota, Dewas, Sonepat and Meerut. GAIL Gas has also commenced gas supplies to domestic customers progressively. GAIL Gas has taken up investment for setting up the infrastructure along the national highways for building CNG corridors. Going ahead with the objective to establish CNG Corridor to facilitate the availability of CNG outside the cities, GAIL Gas has commissioned 2 CNG stations in Vadodara and 1 CNG station each at Panvel SVijaipur.The construction of CNG stations at Kovvur, Auriya, Ferozabad and Mathura is in full swing.

GAIL Gas is a wholly owned subsidiary of the Company.

GAIL Global (Singapore) Pte Limited
 
GAIL Global (Singapore) Pte Limited is as an overseas investment arm of the Company. The Company is looking for further business opportunities through this wholly owned subsidiary Company in Singapore.

JOINT VENTURES
 
Aavantika Gas Limited (AGL)
 
AGL is in operation in Indore and Ujjain and is supplying CNG to the II I transport sector in these cities. AGL is supplying CNG to almost 14,500 vehicles in both the cities and PNG to industrial sector. AGL has set up 1 Mother Station, 2 Online Stations and 5 Daughter Stations in Indore and 2 Daughter Stations in Ujjain for dispensing CNG. AGL has registered its first operational profit in FY 2010-11. MoPNG has authorised AGL for CGD in Indore, Gwalior and Ujjain. The Company has 22.5% stake in the Company along with HPCL as equal partner.
 
Bhagyanagar Gas Limited (BGL)
 
BGL is currently operating 8 CNG (1 Mother station and 7 Daughter Stations) in Vijaywada, 5 CNG stations in Hyderabad and 1 CNG station in Kakinada. BGL is supplying CNG in these 3 cities to almost 8,000 vehicles. BGL is currently operating in Hyderabad, Vijaywada and Kakinada. The Company has 22.5% stake in the Company along with HPCL as equal partner.
 
Central U.P. Gas Limited (CUGL)
 
CUGL is currently operating 10 CNG stations in Kanpur and 1 CNG station in Bareilly. CUGL is supplying CNG to almost 15,000 vehicles in the two cities. CUGL is supplying PNG to over 800 households. CUGL has received authorization from MoPNG for CGD in Kanpur and Bareilly. The Company has 25% stake in the Company along with BPCL as equal partner.

GAIL China Gas Global Energy Holdings Limited
 
The joint venture Company was formed with an objective to pursue gas sector opportunities, mainly in China. Potential gas sector projects are being identified for implementation by the company. The Company has 50% equity interest in the Company along with China Gas Holdings Limited as equal partner.
 
Green Gas Limited (GGL)
 
GGL is currently operating 7 CNG stations in Lucknow and 3 CNG stations in Agra. GGL is supplying CNG to almost 15,000 vehicles. MoPNG has authorized GGL for CGD in Lucknow and Agra. The Company has 22.5% stake in the Company along with IOCL as equal partner.
 
Indraprastha Gas Limited (IGL)
 
IGL is the largest CGD entity in terms of CNG sales and the number of vehicles running on CNG in India. IGL has received authorization from MoPNG for CGD in Delhi and adjoining cities of Noida, Greater Noida, Ghaziabad, Gurgaon and Faridabad.

As on 1st April, 2011, IGL was supplying piped gas to around 2.45 lac domestic consumers, 68 industrial and 463 commercial consumers. IGL is supplying CNG to over 4.3 lac vehicles through 278 CNG stations. The average per day sale during FY 2010-11 was 2.73 MMSCMD.
 
The Company has 22.5% stake in the Company along with BPCL as equal partner.

Mahanagar Gas Limited (MGL)
 
MGL has presently set up 149 CNG MAHANAGAR gas stations catering to about 2.2 lac vehicles spread over Mumbai,Thane, Mira- Bhayandar and Navi-Mumbai areas besides supplying PNG to about 5.2 lac domestic customers, about 1,240 small industrial and commercial consumers. Accepting the Central Government authorization, the PNGRB has granted authorization and exclusivity for the existing areas of Mumbai, Thane, Navi Mumbai and Mira bhayander and expansion areas of Kalyan, Dombivli, Ambernath, Badalapur, Ulhasnagar, Bhiwandi.Taloja, Kharghar and Panvel. The Company has 49.75% stake in the Company along with British Gas as equal partner.
 
Maharashtra Natural Gas Limited (MNGL)
 
MNGL was formed for MNGL implementation of City Gas B Projects in and around Pune city. MNGL has received authorization from MoPNG for CGD in Pune including Pimpri, Chinchwad, Talegaon, Hinjewadi SChakan areas. It has started 13 stations supplying CNG to more than 16,000 vehicles. MNGL has also started supply of PNG to domestic, industrial and commercial units. The Company has 22.5% stake in the Company along with BPCL as equal partner.
 
ONGC Petro-additions Limited
 
0PaL is implementing a green field petrochemical complex of 1.1 MMTPA Ethylene capacity at Dahej in the State of Gujarat. The Company is a co- promoter with 17% equity stake in ONGC Petro- additions Limited (OPaL). Oil and Natural Gas Corporation Limited (ONGC) and Gujarat State Petroleum Corporation Limited (GSPC) are the other promoters of the company.

Petronet LNG Limited (PLL)
 
PLL, formed for setting up of LNG import and re-gasification facilities, pursuant currently owns and operates LNG re-gasification terminal of 10 MMTPA capacity located at Dahej, Gujarat. PLL has a long term LNG supply contract with RasGas, Qatar for import of 7.5 MMTPA of LNG. Further, PLL is constructing a LNG re- gasification terminal at Kochi, Kerala with an initial capacity of 2.5 MMTPA, expandable upto 5 MMTPA and is scheduled for commissioning in early 201 2. PLL has entered into long term LNG supply contract with ExxonMobil for the supply of 1.5 MMTPA of LNG for the Kochi terminal. Your Company has 12.5% equity stake in PLL along with BPCL, ONGC and IOCL as equal partners.
 

Ratnagiri Gas and Power Private Limited (RGPPL)

The capacity of the Ratnagiri Gas and Power Station is 2,150 MW which is the largest gas based power generation facility in the country and currently producing 1,850 MW of power. RGPPL is in the process of commissioning LNG import terminal of 5 MMTPA capacity. The Company has 32.88% stake in the Company along with NTPC as equal partner. RGPPL is a joint venture company between your Company, NTPC, Financial Institutions and MSEB.

Tripura Natural Gas Company Limited (TNGCL)

TNGCL is presently supplying gas to around 8,475 domestic, 194 commercial and industrial consumers and has set up one CNG station in Agartala catering to more than 1,900 vehicles. TNGCL has received authorization from MoPNG for CGD in Agartala. Your Company has 29% stake in the Company

LAURELS

CORPORATE AWARDS
 
· GAIL was ranked no.1 company among gas utilities in Asia in the Platts Globa Ranking of Energy Companies for the year 2010.
 
· MOD Excellence Award by the Department f Public Enterprises for the year 2008-09 in the petroleum sector.
 
· Managing India Award for the Outstanding PSU of the Year by AIMA.
 
· Kaizen Warrior Award for Most Efficient Navratna PSU of the year.
 
· Dun and Bradstreet-Rolta Corporate Award for Gas-Processing, Transmission and Marketing.
 
· GAIL's KG Basin and Vizag Secuderabad LPG pipeline unit won the first and second National Award for Excellence in Cost Management 2010 respectively under the category of Public Sector Manufacturing Unit.
 
· Certificate of Recognition for Excellence in Corporate Governance in the 10th ICSI National Award for Excellence in Corporate Governance 2010 as one of the Top Companies adopting Excellent Practices in Corporate Governance.
 
· Asia's Best Employer by World HRD Congress in the category of ''Best HR Strategy in line with Business.

HSE AWARDS
 
· International Safety Award from British Safety Council (UK) for KG Basin and NCR.
 
· HVJ pipeline bagged consecutively 14th time Oil Industry Safety award with 1st rank for best overall safety performance under ''Cross Country Pipelines Category(Natural Gas/LPG).
 
· Gas processing Complex Vijaipur bagged for 7th time Oil Industry Safety Award with 2nd rank for best overal safety performance under other processing plants category.
 
· GAIL, Pata Bagged National Safety Award 2008 of Ministry of Labour and Employment, Government of India as 1st Winner (Category: Manufacture of Chemical and Fertilizers).
 
· GAIL Lakwa wins 1st Rankin overal Safety performance in the ''Other Processing Plants Category from OISD for 2009-10.
 
· Safety Innovation award for Agra, Khera, Lakwa and Nasirabad from Institute of Engineers Delhi State Center.
 
· GPU Vijaipur has won Sarvashresta award from National safety Council M. P Chapter.
 
· GAIL Pata, Vijaipur, Vaghodia, Jhabua, Hazira, NCR, and Mumbai bagged Greentech Environment Excellence (Gold) Award - 2010from Greentech Foundation, New Delhi.

OTHERS
 
· The Company was adjudged as Asia's Best Employer by World HRD Congress in the category of ''Best HR Strategy in line with Business.
 
· Subject won most coveted award OC customer responsiveness presented by Economic Times and Avaya Global Connect.

MANAGEMENT DISCUSSION AND ANALYSIS

NDIAN ECONOMY

India’s economy grew at 8.6% last year, next only to China and this is certainly a remarkable achievement as it comes in the backdrop of a challenging period of global recession where a few countries were even on the brink of bankruptcy and had to seek huge bailouts. With the world economy coming out of recession the Indian economy has successfully re-positioned itself on a faster growth trajectory, which prompts us to believe that the country will be able to grow at a rate of 9%, on a sustained basis.

Indian Energy Sector

At present, India’s per capita energy consumption stands at about 400 Kg of oil equivalent against world’s average energy consumption of about 1700Kg of oil equivalent. Nevertheless, India is the 5’ largest consumer of energy in the world and is expected to become the 3’ largest consumer of energy in the world by 2025, after US and China. However, inadequate energy addition on the supply-side has widened the demand-supply gap over the years, triggering to concerns regarding India’s energy security. Hence, Government of India is carrying out progressive energy reforms and is also taking steps to augment energy supplies.

It has been assessed that GDP growth of 9% requires commercial energy growth of 7%. It is also expected that fossil fuels will continue to be the mainstay of India’s supply basket in the short to medium term scenario and natural gas is expected to contribute significantly to our energy growth. Natural Gas consumption in the country has witnessed an impressive CAGR of about 13.5% in the last five years, making it the fastest growing segment among the fossil fuels.

Natural gas sourcing through increased domestic production and imports; adequate and timely gas infrastructure development and progressive policy reforms across the value chain are underway for ensuring accelerated development of gas market in the country. Continued investments and enhanced collaboration in the entire value chain among the various participants is required to address India’s energy security needs in a more sustainable and environment friendly manner.

Natural Gas Demand-Supply Outlook

In terms of overall gas supply in the country, the year 2010-11 has seen an increase in natural gas volumes to 154 MMSCMD from 147 MMSCMD in the year 2009-10.

The share of natural gas in India’s energy mix is around 10% against a world average of around 24%, providing a large scope for higher utilization of natural gas in India. The demand for natural gas is largely met through domestic production with imports contributing to about 20% of the total consumption as compared to over 75% imports in case of oil.

Going forward, given the advantages of natural gas in terms of efficiency, price and environmental impact, the demand for natural gas in the country may reach up to 600 MMSCMD by 2030 offering several opportunities for the development of the gas industry in India. In this scenario, India would have to augment its domestic production manifold, or else, would have to increasingly rely on gas imports in the coming years.

Natural Gas Infrastructure

Gas transmission infrastructure plays a crucial role in the gas industry for efficient delivery of gas to end consumers, the Company’s major strength has been development of gas transmission infrastructure in the country and several new pipelines are at different stages of execution in various parts of the country, which will lead to doubling of the existing pipeline length in the next five years.

Policy Initiatives

In the context of high global energy prices, the Government is giving increasing thrust to align the domestic prices of fuels with the global price levels, so as to give the right signals to both consumers and investors. In the natural gas sector, in the year 2010-lithe Government took up price revision of the APM (Administered Price Mechanism) gas in which the gas price was almost doubled to $ 4.2/MMBTU providing significant shift in the revenues from gas business.

The year also saw developments on cross-border pipeline imports such as the Furkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline project. An Inter-Governmental Agreement (IGA) and Gas Pipeline Framework Agreement were signed with the related parties in the project. The Company is playing the lead role in organizing the discussions in the project so that it comes to fruition.

CONTINGENT LIABILITIES (As on 31.03.2011)

· Claims against the Company not acknowledged as debts: Rs.49304.000 millions, which mainly include:-

1. Legal cases for claim of Rs.27316.300 millions by vendors on account of Liquidated damages/Price Reduction Schedule and Natural Gas price differential etc. and by customers for Natural gas transmission charges etc.

2. Income tax assessments up to the Assessment Year 2008-09 have been completed and a demand of Rs.10172.500 millions relating to the Assessment Years 1996-97 and 2000-01 to 2008-09 has been raised by making disallowances/ additions. The company has already made the payment of Rs.13236.600 millions which is under dispute. Based upon the decision of the appellate authorities and the interpretation of the Income Tax Act, the company has been legally advised that the demand is likely to be deleted or it may be substantially reduced. The company has filed appeals against the Assessment orders /appeal orders for the Assessment Years 2000-01 to 2004-05, 2006-07 and 2007-08 with Income Tax Appellate Tribunal (ITAT) and for Assessment Year 1996-97, 2005- 06 and 2008-09 with Commissioner of Income Tax (Appeal). Based upon company’s appeal with ITAT, income tax assessments for the AY 1997-98 to 1999-2000 have been remanded back by ITAT to the assessing officer for reassessment.

3. Rs.7601.500 millions relating to disputed tax demand towards Excise duty, Sales tax, Entry tax, and Service Tax etc.

4. Claims of ONGCL for Rs.2895.700 millions on account of interest for delayed payment and MGO, etc. Out of these, MGO claims of Rs.253.400 millions are recoverable on back-to-back basis.

· Bank Guarantee and Letters of Credit : Rs.9973.700 millions including bank guarantees issued on behalf of subsidiaries Rs.458.800 millions

· The Company has issued corporate guarantees for Rs.2543.400 millions on behalf of Brahamputra Cracker and Polymer Limited (BCPL) and for Rs.1180.000 millions on behalf of GAIL Gas Limited, subsidiaries of the company, in favour of Oil Industry Development Board (OIDB) for raising loan from OIDB.

· Share in Contingent Liabilities of Joint Ventures based on their audited/unaudited statement of accounts: Rs.4372.000 millions.

UNAUDITED FINANCIAL RESULTS (PROVISIONAL) FOR THE QUARTER ENDED 30^TH SEPTEMBER, 2011

(Rs. in Millions)

Particulars	For the Quarter Ended	For the Half Year Ended
	30.09.2011	30.09.2011
Net Sales/ Income form operations	96990.200	185664.000
Other Operating Income	273.800	490.000
Expenditure
Increase / Decrease in stock in trade	(912.000)	(2787.000)
Consumption of raw materials	6315.700	12103.400
Purchase of traded goods	65926.400	128039.900
Employees cost	1778.700	3560.900
Depreciation	2007.600	3789.300
Other expenditure	7399.800	12709.200
Total expenditure	82516.200	157415.700
Profit from operation before other income, interest and exceptional items	14747.800	28738.300
Other income	1160.000	1806.500
Profit before interest and exceptional items	15907.800	30544.800
Interest	226.200	434.100
Profit after interest but before exceptional items	15681.600	30110.700
Exceptional items	--	--
Profit / Loss from ordinary activities before tax	15681.600	30110.700
Provision for Taxation
Current Tax	6446.700	9863.600
Deferred Tax	(1709.200)	(543.700)
Net Profit/ Loss from ordinary activities after tax	10944.100	20790.800
Extra ordinary items	--	--
Net profit / Loss for the period	10944.100	20790.800
Paid up equity share capital	12684.800	12684.800
Reserves excluding revaluation reserves	--	--
Earning per shares Basic (in Rs.)
Basic and Diluted EPS before Extraordinary items	8.63	16.39
Basic and Diluted EPS after Extraordinary items	8.63	16.39
Debt service coverage ratio	8.30	13.05
Interest service converge ratio	31.69	33.00
Public shareholding
Number of Shares	530530391	530530391
% of Shareholding	41.82	41.82
Promoters and Promoter Group Shareholding
a) Pledged/Encumbered
- Number of Shares	Nil	Nil
- Percentage of Shares (as a % of the Total Shareholding of Promoter and Promoter Group)	Nil	Nil
- Percentage of Shares (as a % of the Total Share Capital of the Company)	Nil	Nil
b) Non Encumbered
- Number of Shares	727405675	727405675
- Percentage of Shares (as a % of the Total Shareholding of Promoter and Promoter Group)	100.00	100.00
- Percentage of Shares (as a % of the Total Share Capital of the Company)	57.35	57.35

Note : Definition for Coverage Ratio

1. Debt Service Coverage Ratio (DSCR) = Earning Before Interest and Tax + Principal Repayment)

2. Interest Service Coverage Ratio (ISCR) = Earning before Interest and Tax / Interest Expense

SEGMENT WISE REVENUE, RESULTS AND CAPITAL EMPLOYED FOR THE QUARTER ENDED 30^TH SEPTEMBER, 2011

(Rs. in millions)

Particular	For the Quarter Ended	For the Half Year Ended
	30.09.2011	30.09.2011
1. Segment Revenue (Net Sales/Income)
A. Transmission Services
1) Natural gas	9799.900	19189.200
2) LPG	1098.300	2240.300
B. Natural Gas Trading	75753.800	147808.100
C. Petrochemicals	9376.400	15745.500
D. LPG and Liquid Hydrocarbons	9887.200	18025.500
E. Others	257.200	476.900
Total	106172.800	203485.500
Less : inter segment revenue	9182.600	17821.500
Sales/ Income from operation	96990.200	185664.000
2. Segment Results
(Profit before interest and tax)
A. Transmission Services
1) Natural gas	5562.300	12082.700
2) LPG	722.200	1411.900
B. Natural Gas Trading	2865.900	5997.000
C. Petrochemicals	4040.500	6474.100
D. LPG and Liquid Hydrocarbons	3521.300	5806.400
E. Others	(818.200)	(1153.300)
Total	15894.000	30618.800
Less :
i) Interest	226.200	434.100
ii) Other unallocable expenditure	1182.900	1923.000
iii) Others unallocable income	(1196.700)	(1849.000)
Total profit before tax	15681.600	30110.700
3. Capital employed (Segment Assets – Segment Liabilities)
A. Natural gas transmission / trading	132061.000	132061.000
B. LPG transmission	8119.100	8119.100
C. Petrochemicals	15448.000	15448.000
D. LPG and Liquid Hydrocarbons	11258.400	11258.400
E. Others	(735.600)	(735.600)
F. Unallocable	99656.400	989656.400
Total	265807.300	265807.300

STATEMENT OF ASSETS AND LIABILITIES AS AT 30^TH SEPTEMBER, 2011

(Rs. in millions)

Particulars	For the Half Year Ended
	30.09.2011
1. Shareholders Fund
(a) Capital	12684.800
(b) Reserve and Surplus	200638.800
2. Loan Funds	36695.000
3. Provision for Deferred Tax (Net)	15788.700
Total	265807.300
1. Fixed Assets	202115.500
2. Investment	30476.100
3. Current Assets, Loans and Advances
(a) Inventories	11622.200
(b) Sundry Debtors	20684.300
(c) Cash and Bank Balances	10308.800
(d) Other Current Assets	6.600
(e) Loans and Advances	63297.700
Less: Current Liabilities and Provision
(a) Current Liabilities	(43827.700)
(b) Provisions	(28876.200)
4. Miscellaneous Expenses (Not written off or adjusted)	0.000
5. Profit and Loss Account	0.000
Total	265807.300

Notes

1. The above financial results have been reviewed by the Audit Committee and approved by the Board of Directors at its meetings held on 24^th October 2011.

2. Limited Review of the Financial Results has been carried out by the Statutory Auditors of the company.

3. In terms of the decision of the Government of India to share the under recoveries on LPG, the company has provided discount of Rs.5666.000 Millions for the quarter ended 30th September, 2011 and Rs.12485.200 Millions for the half year ended 30th September, 2011.

4. Other expenditure for the quarter ended 30^th September, 2011 includes Rs.938.900 Millions and Rs.1413.200 Millions for the half year ended 30^th September 2011 on account of Survey Expenses and write off of Dry well Expenditure in Exploration and Production (E and P) business segment.

5. During the quarter ended 30^th September, 2011, a wholly owned subsidiary “Gail Global (USA) Inc.” was incorporated in USA which acquired working interest to the extent of 20% in Eagle Ford assets (Shale assets) held by Carrizo Oil and Gas Inc. in USA.

6. There were nil investors’ complaint pending at the beginning of the quarter, four complaints were received, all the complaints were resolved and no complaints were pending at the close of the quarter.

7. Previous period figures have been regrouped / rearranged, wherever required.

INFORMATION FOR Q2 (2011-12)

Financial Information

(Rs. in millions)

PARTICULARS	2011-12 Q2
SALES TURNOVER (Net of ED)
1. Transmission Services
a) Natural Gas	9120.000
b) LPG Transmission	1100.000
2. Gas Trading	67350.000
3. Petrochemicals	9280.000
4. LPG and Other Liquid Hydro Carbons	9880.000
5. Unallocated	260.000
TOTAL SALES	96990.000
GROSS MARGIN
1. Transmission Services
a) Natural Gas	6790.000
b) LPG Transmission	840.000
2. Gas Trading	2880.000
3. Petrochemicals	4470.000
4. LPG and Other Liquid Hydro Carbons	3750.000
5. Unallocated	(820.000)
TOTAL GROSS MARGIN	17910.000

Physical Performance

(Rs. in millions)

PARTICULARS	U/M	2011-12 Q2
I. TRANSMISSION	MMSCMD	1190.000
LPG	000 MT	7960.000
II. PRODUCTION
Petrochemicals	000 MT	1110.000
LPG	000 MT	2980.000
Other Liquid Hydro Carbons	000 MT	810.000
III. SALES
Natural Gas	MMSCMD	840.000
Petrochemicals	000 MT	1290.000
LPG	000 MT	2980.000
Other Liquid Hydro Carbons	000 MT	800.000

FIXED ASSETS

· Land: Freehold / Leasehold

· Building: Office/Others/ Residential

· Bunk Houses

· Plant and Machinery

· Railway Lines and Sidings

· Electrical Equipments

· Furniture, Fixtures and Other Equipments

· Transport Equipments

WEB DETAILS

BUSINESS DESCRIPTION

Subject is a gas utility company in India. The Company’s products are petrochemicals, which include G-Lex and G-Lene; city gas distribution, which include CNG and PNG, liquid hydrocarbons, which include G PROPANE AND G PENTANE, and telecom, which include G AILTEL. The Company’s segments include Natural Gas Marketing, Natural Gas Transmission, Natural Gas Pipeline Projects, Liquefied Petroleum Gas (LPG) Transmission, LPG Transmission Projects, Petrochemicals, LPG and Other Hydrocarbon Production, Exploration and Production, and Telecommunications. Its supplies of natural gas include fuel t power plants and feedstock for gas fertilizer plants. During the year ended March 31, 2011 (fiscal 2011), the Company has completed various pipelines having length of about 761 kilometers. As of March 31, 2011, the Company had seven liquefied petroleum gas (LPG) plants. In September 2011, the Company incorporated a wholly owned subsidiary GAIL Global (USA) Inc. For the fiscal year ended 31 March 2010, subject's revenues increased 8% to RS276.15B. Net income increased 18% to RS33.28B. Revenues reflects increased income from Petrochemicals, Natural Gas Trading and City Gas Distribution and Natural Gas and LPG segments. Net income also reflects an increase in operating profit margin, an absence of preliminary expenses write off, a decline in lease charges and lower insurance costs.

BOARD OF DIRECTORS

Mr. B. C. Tripathi - Chairman of the Board, Managing Director

Education

Mechanical Engineering, Moti Lal Nehru Regional Engineering College

Mr. Sudhir Bhargava - Part-Time Director - Goverment Nominee

Education

M Physics, University of Calcutta

B Science, University of Calcutta

Mr. R. D. Goyal - Director - Projects, Executive Director

Mr. R. D. Goyal serves as Director - Projects, Executive Director in subject. He holds Bachelor in Mechanical Engineering from MITS, Gwalior and a Master in Production Engineering from University of Roorkee (now lIT), Roorkee, Shri. Goyal has a career spanning more than three decades in Hydrocarbon industry. Prior to becoming Director (Projects), Shri Goyal served the company as Executive Director (Projects) and spearheaded the task of concurrent implementation of some of the cross country gas pipeline projects such as Dahej - Vijaipur, Vijaipur Dadri, Dadri - Hawana - Narigal, Chainsa - Jhajjar - Hissar Pipelines stretching over 2200 km. and installation of four compressor stations at Jhabua, Vijaipur, Kailaras and Chainsa. After joining subject in 1990. Shri Goyal has held several key positions and some of the initial assignments included construction and commissioning of the twin LPG extraction plants at Vijaipur and Jamnagar - Loni cross country LPG Pipeline. After a brief stint as the Head of Zonal Marketing Office at Jaipur, he was entrusted with the charge of running the HVJ GREP pipeline networks in addition to the LPG plants at Vijaipur. The Dahej- Vijaipur pipeline (DVPL) to evacuate LNG from Dahej was completed during the period with Shri Goyal playing an important rote in its timely commissioning. He thereafter became Executive Director (Exploration and Production). Shri Goyal has served the Fertilizer and Petroleum Sectors in various capacities at different Locations. Shri. Goyal started his career as Graduate Apprentice with National Fertilizers Limited and rose the corporate ladder swiftly. He was also involved in the commissioning of the first gas based fertihzer plant on the Hazira - Vijaipur - Jagdishpur Pipeline at NFL, Vijaipur.

Education

M Production Engineering, IIT, Roorkee

B Mechanical Engineering, Madhav Institute of Technology and Science

Mr. P. K. Jain - Director - Finance, Whole Time Director

Mr. P. K. Jain is Director - Finance, Whole Time Director of subject. A Chartered Accountant and an MBA in Finance from the University of HULL, United Kingdom; Mr. Jain has an experience of over 33 years in Finance and Accounts and worked as Executive Director (Internal Audit) before joining as Director (Finance). Mr. Jain has experience in the area of financial and treasury management and was involved in restructuring of loan portfolio, raising funds at competitive rates through various sources including bonds (domestic/International), ECB, ECA, Term Loans to have the optimal cost of capital. He also has a experience in the area of project evaluation, financial appraisal of projects and headed finance team during execution of projects of subject like pipelines, petrochemicals, E and P, Pricing, Tariff Determination, Risk Management and Internal audit. He has travelled internationally and has represented the company in different road shows for IPO/Disinvestment. In subject, he has been involved in various specialized areas including mergers and acquisitions with due-diligence exercises of overseas ventures, finalization of LNG Purchase agreement from Ras Gas, Qatar for Petronet LNG Limited (Joint Venture of subject), Farm-in of two overseas E and P blocks, business model of petrochemical business, etc. He joined subject in 1986 in the early stages of the company and has immensely contributed to the growth of the company. Before joining subject, he had served in various capacities in different companies like ONGC Limited and Union Bank of India, he is also on the Board of subject’s 100% subsidiary GAIL Gas Limited as Part-Time Director.

Education

MBA Finance, University of Hull

Mr. S. Venkatraman - Director - Business Development, Whole Time Director

Mr. S. Venkatraman has been appointed as Director - Business Development, Whole Time Director of subject with effect from September 25, 2010. Prior to joining as Director (Business Development), he was Executive Director (Business Development), subject since April 2008. As Director (BD), he is in charge of subject’ Business Development, Project Development, Petrochemical operations, Exploration and Production and global ventures of the Company. Prior to his assignment as Executive Director (BD), be was incharge of Marketing for various products of subject including natural gas, petrochemicals. liquid hydrocarbons and telecom bandwidth at Abmedabad Zonal Office. He also headed the Petrochemicals Marketing Department at Corporate Office as General Manager (Marketing). He was part of the core team that worked on the development and implementation of subject’ gas based petrochemical complex right from its conceptualisation to commissioning. He joined subject as Manager in December 1990 and served at various levels across different departments including Business Development, Marketing and Projects. Shri. S. Venkatraman has done B.Sc. (Physics) from University of Madras, Madras in 1973. In 1976, he completed Diploma in Instrumentation from Madras Institute of Technology, Madras and thereafter Diploma in Management from All India Management Association, New Delhi in 1989. He started his career in 1976 with Instrumentation Limietd, Kota and worked there at various levels till December 1990.

Education

BS Physics, University of Madras

PRESS RELEASES

GAIL INDIA'S SUBSIDIARY JOINS HAND WITH KSIDC TO SET UP JV COMPANY

India, December 07 -- GAIL Gas, a wholly owned subsidiary of GAIL (India) has joined hands with Kerala State Industrial Development Corporation (KSIDC) to set up a joint venture (JV) Company to implement supplementary gas infrastructure in the state. The JV Company formed is Kerala Gail Gas (KGGL). The company's board of directors has approved the business plan prepared for the JV Project. This includes promoting city gas distribution projects, laying of spur line to provide last mile connectivity to bulk/large consumers of natural gas, setting up of CNG stations for KSRTC depots, CNG Stations for boat services, marketing of gas related equipments, setting up of captive gas-based power plants, etc. Further, the JV Company - Kerala Gail Gas will also set up a gas training institute at Angamaly, near Kochi. The land for the same will be provided by KSIDC. The gas training institute will be a skill development centre for technicians and others in the natural gas business and will conduct short-term courses for skill development. Also, the company jointly with the Steel Manufacturers Association is planning to promote a gas based power plant for the steel cluster at Palakkad. For KSRTC buses, Kerala Gail Gas will establish CNG Stations. The first CNG Stations will be established in Kochi since natural gas will be available there within one year time.

GAIL INDIA SECURES 5-YEAR TERM LOAN OF $100 MILLION FROM BANK OF TOKYO

India, December 07 -- GAIL (India), India's leading natural gas company, has tied up for a five-year term loan of $100 million from Bank of Tokyo - Mitsubishi UFJ. The loan agreement is first in the series of three tie-ups that GAIL plans to enter into for a total ECB of $300 million. The loan funds would be partially used for funding the ongoing expansion/new projects of GAIL, which is estimated to cost around $9 billion. The company has already taken a term loan of $150 million from Bank of Tokyo-Mitsubishi UFJ in June this year. State-owned gas utility, recently, has bagged rights to lay a 1,550-km natural gas pipeline from Surat in Gujarat to Paradip in Orissa, connecting west to east coast by beating Gujarat State Petronet. The company bid an astonishingly low pipeline tariff of Rs 0.01 (one paisa) per million British thermal unit to bag the project.

GAIL INDIA SECURES $100 MN FOREIGN LOAN

NEW DELHI, December 7 -- State-owned gas utilIndia Limited said on ity GAIL India Limited said on Tuesday that it has secured a $100 million (Rs.5000.000 millions) loan from Bank of Tokyo-Mitsubishi UFJ to part-finance its pipeline expansion plans.

The loan agreement signed is the first in the series of three tie-ups that GAIL plans to enter into for a total of $300 million (Rs.15000.000 millions) in external commercial borrowings (ECB). The debt would help GAIL fund ongoing expansion plans and new projects of $9 billion (Rs.450000.000 millions). "The loan agreement was signed between GAIL India director (finance) P K Jain and Bank of Tokyo general manager Naoki Isetani," the company said in a press statement.

The term of the loan is five years and comes close on the heels of an earlier term loan of $150 million taken by GAIL from Bank of Tokyo in June, 2011.

GAIL is presently implementing projects to lay 5,500 km of pipelines at an estimated cost of Rs.250000.000 millions ($5 billion). The company is also doubling the capacity of its petrochemicals plant at Pata, in Uttar Pradesh, from 446,000 tonnes per annum to 900,000 tonnes by 2014.

GAIL GETS $100 MLN TERM LOAN FROM BANK OF TOKYO

NEW DELHI (Dow Jones)--GAIL (India) Limited (532155.BY) Tuesday said it has got a $100 million five-year loan from Bank of Tokyo-Mitsubishi UFJ Canada to help fund ongoing expansion and new projects totaling $9 billion.

The state-run natural gas company said the loan was the first in a series of three it is planning, to raise a total of $300 million in overseas borrowings.

GAIL is laying 5,500 kilometers of pipeline at an estimated cost of $5 billion to help expand its transmission capacity to over 300 million metric standard cubic meters from the existing 175 MMSCMD.

The New Delhi-based company is also doubling the petrochemical capacity of its plant in Pata in the northern state of Uttar Pradesh to 900,000 tons a year by 2014.

GAIL also agreed a loan of $150 million from Bank of Tokyo in June.

GAIL GAIL TIES UP US $ 100 MILLION LOAN FROM BANK OF TOKYO

Tie-up first in the series of three planned for US $ 300 million ECB

New Delhi, December 6, 2011. GAIL (India) Limited has tied up a term loan of US $ 100 million from Bank of Tokyo - Mitsubishi UFJ. The loan agreement was signed here between Mr. P K Jain, Director (Finance), GAIL (India) Limited and Mr. Naoki Isetani, General Manager, Bank of Tokyo yesterday.

The term of the loan is 5 years. This term loan agreement comes close on the heels of an earlier term loan of US $ 150 million taken by GAIL from Bank of Tokyo in June 2011. The loan agreement signed now is first in the series of three tie-ups that GAIL plans to enter into for a total ECB of US $ 300 million.

The loan funds would be utilised to partly fund the ongoing expansion/new projects of GAIL of around US $ 9 billion. GAIL is presently implementing projects to lay 5,500 km at an estimated cost of Rs.250000.000 millions (approx. USD 5 Billion). When completed, the capacity of GAIL pipelines would increase to over 300 MMSMD from the present 175 MMSCMD. GAIL is also doubling the petrochemical capacity of its plant at Pata from 446,000 TPA at present to 900,000 TPA by 2014.

GAIL is one of the leading public enterprises with a consistently excellent financial track record. Turnover and Profit After Tax during the last ten years have shown a compounded annual growth rate of 14 per cent and 12 per cent respectively. The Company recorded a Turnover of Rs.324590.000 millions (US $6.5 billion approx.) and Profit After Tax of Rs.35610.000 millions (US $ 710 million approx.) in the year 2010-11. The Debt-Equity ratio of the Company is 0.17 and the Debt Service Coverage Ratio (DSCR) of 9 times as on 30-Sep-2011.

GAIL IS WORLD’S NO. 1 COMPANY IN DOWNSTREAM OPERATION

New Delhi, December 2, 2011. GAIL (India) Limited, India’s leading natural gas company has received top honors as the “World’s No. 1 company in Downstream Operation” for this year at the 2011 Platts Global Energy Awards held at New York on December 1, 2011.

GAIL has been recognized for achieving year-on-year growth, ensuring uninterrupted availability of gas to customers, expanding pipeline infrastructure and making overall contributions to the country’s growth. It is understood that Platts’ independent panel of judges commended GAIL’s imaginative plans to tap urban landfills as a new source of natural gas and to conduct a pilot program in partnership with the municipality of Delhi to extract landfill gas. They noted that this project, if successful, could be replicated across India.

GAIL is the only company from Asia to win Platts Global Energy Award this year. 21 companies and individuals from seven countries have been given Platts Global Energy Awards. The Platts Global Energy Awards, now in their 13th year, recognize exemplary corporate and individual achievement, innovation and leadership, and low-carbon energy sustainability initiatives.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.52.23
UK Pound	1	Rs.81.55
Euro	1	Rs.69.60

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	7
--RESERVES	1~10	8
--CREDIT LINES	1~10	7
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		66

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.