Gujarat State Petronet Ltd Management Discussions

1. INDUSTRY OVERVIEW

A. WORLD ECONOMY

Global economies started the year 2024 on a cautionary note, largely owing to multiple headwinds: elevated public debt in major systemic economies; protracted geopolitical tensions; inefficiencies from geo-economic fragmentation; and accentuated climate shocks. Many experts pointed out that though economic activity is expected to slow down, there is a concerted effort to ensure that growth is not stalled.

Accordingly, the year began with an expectation of slow growth and as the year progressed, the pace of economic activity was impacted by moderation in economic growth in some Asian and European economies, protracted geopolitical tensions and sluggish recovery in China Rs.s consumption demand and property market¹.

According to the United Nations flagship report, World Economic Situation and Prospects (WESP) 2025, global economic growth is expected to have been at 2.8% in 2024.

Global growth was stable yet underwhelming through 2024 and is projected to remain so in 2025. However, given the complexity and fluidity of the current moment, many experts are finding it more difficult than usual to make assumptions for reliable projections.

Swift escalation of trade tensions and heightened uncertainty and geopolitical tensions are expected to have a significant impact on global economic activity. ^us, global growth is projected to be ~2.8% in 2025 and 3% in 2026 - much below the historical (2000-19) average of 3.7%².

Figure 1

Global Growth rate

However, things could certainly end up on a more positive note if major economies reach lasting agreements that address trade tensions. Recent events, especially in the post-COVID era, strongly demand a determined multilateral policy effort to foster a more predictable and transparent environment which helps to resolve trade tensions.

B. GLOBAL GAS MARKETS

While trade and geopolitics dictated the global economic report card for 2024, the global gas markets were dominated by weather conditions.

As per IEA Gas Market Report, Q1 2025 the Global gas demand reached a new all-time high in 2024 and preliminary data indicate that natural gas consumption increased by 2.8% y-o-y in 2024, i.e. above the 2% average growth rate between 2010 and 2020.

Figure 2

Year-on-year change in key piped natural gas trade and global LNG supply, 2019-2025

100

? Russian piped gas to Europe oOther pipeline imports to Europe ? Russian piped gas to China

? Central Asia to China ? Global LNG supply ?Total y-o-y change

(Source: IEA Gas Market Report, Q1-2024)

In fact, first estimates indicate that natural gas met ~40% of the increase in global energy demand in 2024 - a greater share than any other fuel³.

Gas markets were supported by relatively low LNG prices during the first half of the year and widespread heatwaves in the second and third quarter of 2024.

As extreme temperatures alone accounted for around 1/5th of the increase in global natural gas demand, demand from Industry and electricity generation, which accounted for around 75% of incremental gas demand in 2024 gave global gas demand a much required boost⁴ .

Source: GECF Secretariat based on data from Ember and ^e Energy Institute Statistical Review of World Energy

As of the end of March 2025, global gas consumption was projected to continue robust growth at an annual rate of 2% in both 2025 and 2026, driven primarily by Asia Pacific⁵.

It is expected that the Asia-Pacific region will soon reach a historic milestone by surpassing the 1,000 bcm threshold for the first time—a level previously attained only by North America. "ttis achievement underscores the region Rs.s growing significance in the global natural gas market and highlights its dynamic energy landscape. ^is growth will be particularly notable in countries working to diversify their energy mix away from coal, with China and India expected to lead the way⁶.

With regards to prices, Global gas and LNG spot prices stabilised in 2024, offering a stark contrast to the unprecedented volatility experienced over the previous four years. Although global gas market fundamentals were relatively stable, geopolitical tensions and extreme weather events triggered some short-term price spikes throughout the year.

Despite the year being a mix of stabilization phases and volatility, gas prices remained elevated compared to pre-energy crisis levels. Figure 4

C. INDIAN ECONOMY

^e Indian economy supported by robust macroeconomic fundamentals and proactive policy measures, stayed on course towards growth even amidst a challenging global environment.

India became the 4th largest global economy in 2025, driven by domestic reforms and global positioning under the vision of Aatmanirbhar Bharat. India is the world Rs.s fastest-growing major economy, with real GDP growing at 6.5%.

Moreover, India is projected to be world Rs.s fastest growing major economy (6.3% to 6.8% in 2025-26)⁷.

Even the Global Economic Prospects by World Bank Group (June 2025) has credited Indian economy for showing growth in construction and services activity which remained steady, and agricultural output which recovered from earlier severe drought conditions, supported by resilient demand in rural areas.

RBI in its Annual Report of FY 2024-25 states the following "Going forward, global financial market volatility, geopolitical tensions, trade fragmentation, supply chain disruptions and climate-induced uncertainties pose downside risks to the growth outlook and upside risks to the inflation outlook. However, the Indian economy is poised to remain the fastest-growing major economy in 2025-26 by leveraging its sound macroeconomic fundamentals, robust financial sector and commitment towards sustainable growth".

5. GECF Annual Gas Market Report, 2025

6. GECF Annual Gas Market Report, 2025

7. India Becoming An Economic Powerhouse, Jun 2025 - Research Unit, PIB, GoI

D. INDIAN GAS MARKETS

most encouraging lines on the status of Indian Gas markets came in IEA Rs.s Report India Gas Market Report-Outlook to 2030 (February 2025), which states that "India Rs.s dynamic economic growth, coupled with rapid urbanisation and industrialisation, is set to significantly transform its entire energy market, including natural gas, in the coming years."

"ttough production of gas (FY Rs.24-25: 35,594 MMSCM) remained marginally steady vis-a-vis previous year (35,717 MMSCM), gas consumption saw an increase by ~3.5% y-o-y. Encouraging numbers of growth in gas consumption from sectors like CGD, Manufacturing and Petchem grabbed the headlines. Sectors like Power, Refinery and Fertilizer retained their share in total consumption, y-o-y.

Total Gas consumption in India in FY 2024-25 was recorded at ~195MMSCMD, with LNG accounting for ~51% of the total volumes.

^e strong overall growth in the CGD sector is driven by the ongoing rollout of CNG filling stations and distribution grids, and supportive government policies towards the CGD sector. Moreover, in 2024 Gas played a pivotal role in supporting peak load demand during summer heatwaves since Government enacted an emergency provision for the use of gas power plants. Over the years, strong inter-fuel competition has led to a scenario wherein natural gas has to compete against coal, oil and renewables in several gas-consuming sectors.

Accordingly, even slight changes in global gas prices, can impact domestic consumption patterns.

Figure 8: Change in Gas Consumption Patterns in India Yearly change in Indian Sectoral Gas Consumption

Strengthening its footprints in global gas markets and in a move which would hedge the risk, State-owned Indian companies that have signed number of long terms contracts for a total volume of about 11 million tons per year of LNG were priced at Henry Hub index, which traditionally were done on oil benchmarks⁹.

In terms of domestic gas production, sources like Reliance-BP deep water fields located in the KG-D6 block and 3 other fields - R Cluster, Satellites Cluster, and MJ - helped Indian domestic production return to growth since 2021. It is expected that these fields combined will produce 85 bcm over their lifetime. ^ese fields accounted for nearly 25% of India Rs.s total net production of 36 bcm in 2024. As a result, India Rs.s total gas production has increased by nearly 30% between 2020 and 2024¹⁰ . India also witnessed growing output from CBM projects, although total CBM production remained under 1 bcm in 2024.

Going forward, rising energy demand coupled with sustainability goals, will ensure that Natural Gas plays an important role in India Rs.s energy mix.

During the inauguration of India Energy Week 2025 in February 2025 in New Delhi, Hon Rs.ble Prime Minister of India underlined that due to several discoveries and the expanding pipeline infrastructure in India, the supply of natural gas is increasing. He emphasized that this will lead to a rise in the utilization of natural gas in the near future. He also highlighted that there are numerous investment opportunities in these sectors.

Greater gas availability for new industrial units and the potential expansion of refineries and petrochemical plants will boost Indian industrial gas demand. ^ough it is widely expected that sizeable growth will come from the CGD sector.

^is year saw many noteworthy developments taking place in the Indian gas sector including, commissioning of India Rs.s 8th LNG Terminal at Chhara in Gujarat by HPCL LNG Ltd. (January 2025), India becoming the world Rs.s 4th largest LNG importer, accounting for nearly 7% of global LNG imports in 2024^s and India also accounted for 40% of the contracted volumes, the largest share among Asian buyers (in 2024).

Efforts are underway to boost domestic gas production, including ONGC Rs.s technology collaboration with BP to enhance output from Mumbai High. Offshore gas production is set to grow with ONGC Rs.s KG-D5 project (2025-2030) but declines in legacy fields like Mumbai High and Bassein will offset gains.

Figure 10

Annual natural gas production in India, 2015-2030

Onshore - Offshore

(Source: IEA India Gas Market Report - Outlook to 2030)

On the gas transmission infrastructure front, during the year, total operational length of common carrier natural gas pipelines in India went by up ~2% and as on December 2024, the same stood at 23,752 kms

IEA in its Gas Market Report of Q1-2025 states that it expects natural gas demand in India to increase by 8% (or 6 bcm) in 2025, assuming average weather conditions, driven by the country Rs.s growing energy needs and rapid economic expansion.

PNGRB recently commissioned a Report on India Rs.s Natural Gas Demand Projection for 2030-2040 and this Report states that India Rs.s natural gas demand is likely to rise ~8% annually to 297 mmscmd by 2030 under the "Good-to-Go (GtG)" scenario, and to reach 495 mmscmd by 2040 with CAGR of ~5% under the same scenario. Under a more optimistic "Good-to-Best (GtB)" scenario, NG consumption could jump to 365 mmscmd by 2030 and hit 630 mmscmd by 2040.

India has a massive target of building additional 40% network across the nation (~9400 kms) of the existing pipeline length and as many new geographies shall be connected with trunk pipeline infrastructure in the coming years, it shall give a huge boost to gas demand in the country.

2. REGULATORY FRAMEWORK

Petroleum and Natural Gas Regulatory Board Act (PNGRB Act) mandates the Board, inter alia, to regulate downstream oil gas sector with view to protect interests of consumers/ entities also to promote competitive markets. ^us, PNGRB is required to play a proactive role in development of fair trade competitive markets in India.

PNGRB in its role as a regulator took various initiatives, including

(a) Formation of High level Committees to strengthen PNGRB Rs.s role in new regulatory areas (b) New guiding principles introduced for Common Carrier declaration of networks (c) Accelerating Gas Connectivity in Untapped Areas (d) Liberalised norms for CGS setup outside GA boundaries (e) Fast-tracking spur line development for quicker access (f) Enhancing Safety & Oversight in the Oil & Gas Sector.

Your Company has been an active member in the Settlement Committee and Industry Committee formed by PNGRB for effective implementation of Unified Tariff. Your Company has been at the forefront in providing valuable insights and information on the gas market in view of its connectivity with end users from varied sectors across its Gas Grid. Moreover, your Company has also commissioned and presented reports prepared by reputed consultants to PNGRB on various strategic issues, which need deliberation and discussions within the Industry and are crucial in attracting further investments to the gas transmission sector.

Gujarat being a very important gas user of India (over 24% of India Rs.s PNG Industrial connections are in Gujarat)⁰ , your Company along with its group CGDs plays a significant role in highlighting issues faced by major consuming segments in the State with various regulatory / Government bodies. Your Company believes that right advocacy is required to ensure that a level playing field is maintained at all times while bringing in gas market reforms.

Your Company has challenged the tariff order for its High Pressure Gas Grid at relevant forums in view of the anomalies in tariff determination and the matter is still sub-judice.

3. OPPORTUNITIES AND CHALLENGES

"One of the key factors behind Gujarat Rs.s wider natural gas use is its

extensive gas infrastructure ese facilities, supported by a

comprehensive pipeline network managed by Gujarat State Petronet Limited (GSPL), ensure reliable supply and distribution of natural gas across the state. "—IEA

IEA in its India Gas Market Report - Outlook to 2030 has given due recognition to your Company Rs.s extensive ~2700 kms statewide gas grid network and the critical role it has played in the establishment of gas based economy in the State of Gujarat.

^e Report further highlights the importance of conducive policy regime and aggressive development of gas infrastructure to support Government Rs.s vision of development of a gas based economy.

Figure 12

Key Indicators for Gujarat state compared to all of India, 2023

LNG imports LNG import Gas demand Domestic Natural gas Gas-fired CNG stations (bcm) capacity (bcm) PNG pipelines generation

(bcm/y) connections (km) capacity

(in millions) (GW)

[ Gujarat ? Rest of I ndia Indicators for total India

(Source: IEA- India Gas Market Report - Outlook to 2030)

Accordingly, it is very critical that there is a focus on ensuring simultaneous buildout of gas transmission, gas distribution and LNG import infrastructure as that is the key for further natural gas growth in the years ahead.

Your Company Rs.s connectivity with all major gas sources in the country, especially with all the 4 operational terminals in Gujarat gives it an edge over its competitors as customers on your Company Rs.s network have the option to choose from a wide range of sources available to procure the most competitive supplies of gas.

In fact, even E&P companies that are developing new areas in Gujarat have approached your Company to establish connectivity with the State grid as that ensures them the reach of the entire national gas grid.

With growing industrial activity in the State and requirement of environment friendly fuel to support the growth, your Company is further expanding its gas grid network to more demand centers in the State and is committed to retain its position as Gujarat Rs.s largest and most reliable gas transmission company. "tte State has been aggressive in its effort to enhance its industrial ecosystem and in October 2024 during the Rs.Vikas Saptah Rs. celebrations, infrastructure projects of more than Rs.550 crores for state-run industrial estates were inaugurated. ^ese infrastructure initiatives undertaken by the GIDC aim to boost industrial growth and ensure efficient water supply and road networks across various industrial estates.

In fact, before the Vibrant Gujarat Summit in 2026, the Govt. of Gujarat plans to unveil a new industrial policy and a new start-up policy in order to encompass new focus sectors like semiconductors, green hydrogen, renewable energy, fintech and others and shall also incorporate a new approach towards pollution-free industries.

All these efforts and forward looking initiatives act as a catalyst for industrial development in the State and provide further demand impetus to the energy sector.

Another growth area for your Company has also been growing demand on group company pipeline networks in other States. Your Company has signed several gas transmission contracts to facilitate supply of gas from LNG terminals in the State, including the new terminal at Chhara, to several locations on GIGL network. Demand from many CGD entities on GIGL Rs.s network has been gradually growing and this provides a huge opportunity of growth for Group Rs.s pipeline infrastructure business.

Similar to challenges faced in other businesses, even your Company continues to face challenges in the gas transmission segment, especially in view of changing regulatory landscape and evolving policy regime. However, your Company shall capitalize on its two decade strong expertise of being India Rs.s first pure gas transmission company and deal with challenges by focusing on its core strengths, including customer centric approach and dependability.

Gas pipelines are prone to third party damages and other similar challenges. However, in line with our Mission, your Company is steadfast in its commitment to health, safety and environment and accordingly, regular maintenance and surveillance routines are rigorously followed. ^e Company is increasingly leveraging state-of-the-art technologies, including cutting edge inspection technologies such as inline inspection tools and aerial monitoring in order to regularly assess the integrity of the pipeline and promptly address anomalies, if any.

4. OPERATIONS & FUTURE OUTLOOK

Scheme of Arrangement and Amalgamation

On August 30, 2024, Board of Directors of your Company approved the scheme of amalgamation of GSPL and two group entities namely Gujarat State Petroleum Corporation Limited and GSPC Energy Limited (GEL) with GGL (India Rs.s largest city gas distribution company) and subsequent demerger of gas transmission business into separate listed entity - GTL, subject to necessary approvals from shareholders and various stakeholders including stock exchanges, the Securities and Exchange Board of India (SEBI), Ministry of Corporate Affairs (MCA) and other regulatory authorities as may be required.

scheme is expected to be completed by October 2025.

Upon the completion of restructuring, Government of Gujarat shall directly hold ~26% equity stake in GGL and the resultant entity, GTL. Government of Gujarat, along with other Govt. of Gujarat entities, is expected to hold ~55% equity stake in both GGL and GTL.

Scheme would result in the following benefits (a) Achieving Better Business Synergies and Growth (b) Simplification of GSPC Group Holding Structure (c) Unlocking of Shareholders Rs. value (d) Improved Efficiency and Enhanced Scale of Operations & (e) Optimum Utilization of Resources.

Operations

Your Company is successfully operating its Statewide Gas Grid covering more than 2700kms in Gujarat and ensuring uninterrupted and seamless supply of gas to several customers in various sectors which are spread across different parts of the State. Sectoral break up of transmission volumes over the last 2 years have largely remained constant, with Power sector witnessing the most volatility.

CGD sector has seen a consistent growth of ~5% y-o-y, while Fertilizer volumes have largely remained steady. Price sensitivity has led to volumes from Industrial segment witnessing variation. On the other hand, GSPL has seen a good run from the Refinery & Petrochemicals sector.

It is a constant endeavour from your Company to grow its transmission volumes and increase in share in transmission of gas in Gujarat & eventually, establish its strong presence on a Pan India basis. Accordingly, it continues to develop new networks / connectivities in the State and explore newer regions and promote usage of gas in upcoming sectors like Metals & Specialty chemicals.

27^th Annual Report : 2024 - 2025

Your Company is further developing additional pipeline network of over 650 kms, including the 274 kms long Anjar Palanpur pipeline, which has been approved in PNGRB in March 2025. ^e Anjar Palanpur pipeline will eliminate the operational bottleneck for evacuation of additional volumes from GLLs Mundra terminal and at the same time help in meeting the growing energy demand of industries, households and commercial establishments in Gujarat, Rajasthan & Northern Indian markets.

^e other networks that are under development are largely pipelines which shall enable delivery to several other industrial estates across the State and facilitate connectivity to CGD entities which are developing networks in various districts / GAs to reach the last mile.

Future Outlook

India is the world Rs.s fastest-growing major economy and became the 4th largest global economy in 2025¹³

Even though India accounts for nearly 17% of the world population, its per capita energy consumption is much lower than global average.

Figure 17

Energy Intensity and Energy per capita (forecasts in different scenarios)

ST 8 300 m

(Source: World Energy Outlook 2030, IEA)

Similarly, though India was the 4^th largest importer of LNG in 2024, the Natural Gas Pipeline density in India is very low, vis-avis global average.

Accordingly, for gas to play a major role in the energy mix, India needs extensive investment in gas infrastructure development, especially pipelines and CGD networks along with competitive supplies of gas.

Government is working towards ensuring stability in policy and gas transporter Rs.s demand of balance in risk and reward. ^ere have been several representations from the Industry for the full chain of supply (Producer / Regas terminal to consumer) to be under same tax regime to optimize the cost.

As soon as these reforms are put in place, even if not immediately but gradually, India will witness growth in gas demand from all sectors.

Apart from required boost of demand from sectors like CGD, which are positioned to drive the growth in gas consumption, using more of India Rs.s underused gas-fired generation capacity could not only increase the role of gas in energy mix but also complement intermittent renewable generation, enable faster deployment of solar and wind capacity and displace coal to reduce GHG emissions and air pollution.

Currently, GSPC Group pipelines account for almost 19% of total pipelines operational / partially commissioned in India:

It may be noted that GSPL Rs.s statewide gas grid makes up for over 60% of total GSPC Group network.

On a national scale, GSPL has a significant share and in FY 2024-25, GSPL transported over 15% of total gas volumes consumed in India.

GSPL transmission volumes

With gas consumption in India growing at a steady pace, it is expected that volumes of your Company shall also grow concurrently and with newer regions being added to your Company Rs.s gas grid as well as to group Company networks, future growth outlook is positive.

Your Company is committed to sustainable growth. ESG (Environmental, Social and Governance) is at the core of GSPL Rs.s operational strategy. GSPL continues to integrate responsible and sustainable business practices into its operations.

Performance highlights of Subsidiary, Associate & Joint Venture Companies:

GSPL India Gasnet Limited (GIGL) & GSPL India Transco Limited (GITL):

During the FY 2024-25, GIGL has successfully commissioned ~85 kms of the pipeline connecting HPCL Rajasthan Refinery Ltd. (HRRL) in Pachpadra, Rajasthan. Balance 1.2 kms of mainline works in Bathinda, Punjab was also completed with support of district administration under police protection in line with directions of Hon Rs.ble High Court of Punjab. With this, seamless pipeline connectivity from Mehsana to Bathinda has been achieved.

MBPL is a very critical project as it connects demand centres in North and Northwestern region with the existing and upcoming LNG receiving terminals in Gujarat and through MBPL Pipeline Network gas shall reach these customers.

GIGL now operates around 1387 kms pipeline and is transporting gas to Sirohi, Jalore, Barmer, Pachpadra, Pali, Ajmer, Jaipur, Sikar, Jhunjhunu, Churu and Bikaner, Rohtak, Jind & Sonipat, Sirsa, Amritsar, Hoshiarpur, Gurdaspur, Kapurthala and Jalandhar Districts.

foe Company transported 1344 MMSCM of natural gas during the year, a decrease of ~57% over last year Rs.s transportation volume of 2109 MMSCM. foe decrease in volume is due to restoration of gas supply to the affected customers of IOCL Rs.s Dadri Panipat Pipeline (DPPL), which got ruptured in July 2023 and reduction in the volume from Barmer field. GIGL maintained gas supply to the affected customers of DPPL from July 2023 till February 2024.

In GITL, initial section of 365 Kms Pipeline and associated facilities from Kunchanapalle Dispatch Terminal, Andhra Pradesh to Ramagundam Fertilizers & Chemicals Limited Rs.s Plant at Ramagundam, Telangana is in operations since the November 2019. GITL transported 755 MMSCM of gas in FY 2024-25 registering a growth of around 7% over previous year volumes (703 MMSCM).

Gujarat Gas Limited:

Gujarat Gas Limited (GGL) being India Rs.s largest city gas distribution player with presence spread across 44 Districts in the State of Gujarat, Punjab, Rajasthan, Haryana, Madhya Pradesh, Maharashtra & Union Territory of Dadra and Nagar Haveli is distributing PNG to various industrial, commercial and domestic residential customers & CNG to transport segment customers through CNG filling stations.

Gujarat Gas Limited has been continuously growing and expanding its horizon by venturing into new geographical areas and is committed to reach every possible natural gas users across its licensed expanse of around 1,75,700 square kilometers through its ever growing pipeline network spread across 44 Districts.

Gujarat Gas Limited has aggressively rolled out the expansion plans to develop networks to tap the unexplored CGD potential in new geographies within its operational areas. GGL now has total 27 CGD licenses and 1 pipeline license and operates in 44 districts encompassing six states and one Union territory.

Gujarat Gas Limited is supplying natural gas to more than 22.5 Lakh residential, over 15,600 commercial and non-commercial segments including Non Domestic Exempted Category (NDEC) and over 4,400 industrial customers as on March 31, 2025. Gujarat Gas Limited also supplies natural gas in the form of Compressed Natural Gas (CNG) through 828 CNG stations catering to the automotive sector in the operational areas.

Your Company has a total shareholding of 54.17% in Gujarat Gas Limited as on 31^st March, 2025.

During the year ending 3fo March 2025, Gujarat Gas Limited contributed to approx 33% of total transmission revenues of your Company.

Sabarmati Gas Limited:

Sabarmati Gas Limited (SGL) is engaged in the business of development of City Gas Distribution districts of Gandhinagar, Mehsana and erstwhile Sabarkantha (now comprising of Sabarkantha and Aravalli) and Patan. SGL was granted authorization under PNGRB bidding round 6 for expanding CGD network across Patan District. During Financial year 2024-25, SGL has connected 32,005 No. of Domestic customers, 30 Industrial customers and 110 commercial customers. SGL has a network of 600 Kms of steel pipeline and 7,325 Kms of MDPE pipeline and customer base of 330,340 domestic customers, 435 industrial customers and 1246 commercial customers as well as 161 CNG stations as on 31st March, 2025.

Your Company has a total shareholding of 27.47% in Sabarmati Gas Limited as on 31st March, 2025.

During the year ending 31st March 2025, Sabarmati Gas Limited contributed to approx 4% of total transmission revenues of your Company.

5. PERFORMANCE PROFILE

Company continues to expand its gas grid to reach new markets and connect to new customers and new supply sources. ^e infrastructure developed by the Company enabled the flow of LNG and domestic gas from various sources, including gas from Rajasthan fields, to reach various regions of Gujarat.

Company has managed with a lean manpower strength on account of its well thought out strategy of developing major pipeline projects on EPC (Engineering, Procurement and Construction) Model.

Company transported 11,032 MMSCM of natural gas during the year, a marginal decrease of ~1% over last year Rs.s volumes transportation of 11,159 MMSCM.

Income from transportation of gas for the year was Rs.1,076.18 Crore as compared to Rs.1,979.29 Crore for previous year. ^e reduction is due to revision in HP grid tariff by PNGRB.

Profit Before Tax (PBT) for the year is Rs.1,003.28 Crore as compared to Rs.1,642.20 Crore in the previous year.

During the year, the Net Worth of the Company has increased from Rs. 10,270.07 Crore to Rs. 10,783.31 Crore and Gross Block of Assets increased from Rs. 4,727.86 Crore to Rs. 5,455.40 Crore.

Wind Power Project:

Your Company believes that renewable energy sources can offer enormous economic, social and environmental benefits and India has the highest potential for effective use of the renewable energy sources like wind power. Your Company owns and operates Wind Power Project of 52.5 MW at Maliya Miyana, Rajkot and Gorsar & Adodar, Porbandar in the State of Gujarat.

^e Company has generated 8,65,25,354 units of power from the same which resulted in the revenue of approx Rs. 30.42 Crores in the year.

6. KEY FINANCIAL RATIOS:

a. Company Rs.s Return on networth for FY 2024-25 is 7.67% visa-vis 13.15% for FY 2023-24. ^e change in the Return on networth ratio is primarily due to a decline in gas transportation income during the year. ^is reduction in income resulted from a downward revision in transportation tariffs by the PNGRB, effective from May 1, 2024.

b. net profit margin is 73% in current year as compared to 63% for previous year.

c. Current Ratio as at 31^st March, 2025 is 4.45 vis-a-vis 7.50 as at 31st March, 2024. ^e change is mainly due to proportionally greater increase in Current Liabilities compared to Current Assets during the year. rise in Current Liabilities is mainly due to higher obligations towards the PNGRB Settlement Mechanism, Trade and Other payables. ^e Current Assets increased mainly due to higher deposits as compared to previous year.

d. ^e Debtors Turnover Ratio is 8.86 times in current year as compared to 14.24 times for previous year. ^e change is due to decrease in gas transportation income during the year.

e. ^e Inventory Turnover Ratio is 4.75 times in current year as compared to 9.61 times for previous year. ^e change is due to decrease in gas transportation income during the year.

f. Debt Equity Ratio, Interest Coverage Ratio and Debt Service Coverage Ratio are not applicable to the Company, as the Company does not have any debt on the reporting date of current year as well as of the previous year.

37

7. RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS

Risk Management:

Your Company has a comprehensive Risk Management System which identifies and documents business risks as well as provides for appropriate controls to mitigate these risks to the best extent possible across all aspects of the Company Rs.s business.

All functional teams manage risks by proactively identifying them at each level, then address risks relevant to the assets, projects or functions and also work towards identifying appropriate mitigation strategies. Moreover, the Company has always focused on developing a "risk culture" that encourages all employees to identify risks and associated opportunities and to respond to them with effective and resilient actions.

Based on the current economic scenario affecting the Oil & Gas sector and the prevalent economic scenario and regulatory regime, these are the major risks being faced by your Company:

I. Affordability and Availability of Natural Gas:

Current estimates and outlooks for natural gas availability are positive and the likelihood of over-supply is nil. Several upstream players like RIL-BP & ONGC have announced commercialization of their gas fields.

However, for an emerging economy like India, affordability of natural gas vis-a-vis other fuels, especially in the wake of growing geopolitical issues is definitely a concern. In fact, the biggest risk for gas is its affordability in key demand sectors, especially owing to further supply disruptions or extreme weather conditions. Moreover, considerable investments by upstream players in further developing gas fields shall also need consistent support from the Centre in form of policy / tax incentives.

II. Regulatory Risk:

^e Petroleum and Natural Gas Regulatory Board (PNGRB) constituted in 2007, regulates midstream and downstream activities in the petroleum and natural gas sector. It protects the interests of consumers and entities engaged in the specified activities and works towards ensuring uninterrupted and adequate supply of petroleum, petroleum products and natural gas in all parts of the country to promote competitive markets. Your Company believes that it is important that all critical issues are addressed in a way that it does not lead to market distortion in favour of a dominant player. It is expected that improved regulatory scenario would ensure more investments in the sector.

III. Safety and Operational Risk:

^e changing technologies and the natural ageing of existing facilities like Pipelines and stations pose a risk as aged Pipelines are prone to unplanned shutdowns, increased maintenance and operating costs. Deployment of new technologies in line with Pipeline Integrity Management Systems and ongoing maintenance processes are the key to enhance the reliability of operations and reduction in operating costs as well as for maximising the life of assets while improving the safety of operating conditions. Pipeline system Rs.s safety is also a major challenge and even minor operational issue and safety issues may cause major safety hazards, disrupt operations at large levels, posedanger to life, property and safety of people and penalties from statutory/regulatory bodies and reputation of the organization may also be at stake.

Internal Control Systems:

Company has a proper and adequate system of internal controls commensurate with its size of operations and nature of business. ^e Company Rs.s internal control systems are further supplemented by extensive programs of audits, i.e. internal audit, proprietary audit by the Comptroller & Auditor General of India (C&AG) and statutory audit by Statutory Auditors appointed by the C&AG. ^e internal control system is designed to ensure that all financials and other records are reliable for preparing financial statements and other data and for maintaining accountability of assets and compliance with statutory requirements.

Company has mapped a number of business processes on to SAP system, thereby leading to significant improved controls & transparency. Your Company also continues to invest in Information Technology to support various business processes.

8. HUMAN RESOURCES

During the year, the Company did not experience any strikes or lockouts.

increasing human capital aspirations and the competitive environment are a major challenge for the Company in terms of attracting and retaining the human talent. In order to remain competitive, it is imperative that Company has to hire and retain sufficient number of skilled talent so as to strengthen its technical and project management skills.

Company employed 264 employees as on 31^st March, 2025. (Previous year: 254 employees).

Company believes that training and personnel development is of vital importance to create a climate where people maximize their technical skills and inner potential which can help the Company in capitalizing the emerging business opportunities through their involvement.

Company has in place an attractive policy of performance linked incentive to encourage and reward employee performance. Forward Looking Statements:

is Annual Report contains forward-looking statements, which may be identified by words like will, believes, plans, expects, intends, estimates or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the Company Rs.s strategy for growth and market position are forwardlooking statements. Forward-looking statements are based on certain assumptions and expectations of future events. ^e Company cannot guarantee that the assumptions and expectations are accurate or will be realized. ^e Company Rs.s actual results, performance or achievements could differ materially from those projected in any such forward looking statements. ^e Company assumes no responsibility to amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or event.