GAIL (India) Ltd

Dear Shareholders,

It is my honour and privilege to present to you the Annual Report for the Financial Year 2024-25, a year that marks 41 years of your Company's unwavering commitment to advancing energy, equity and ensuring access to clean and reliable energy across the length and breadth of the nation.

The year under review witnessed your Company surpassing its previous record and attaining exceptional performance across a multitude of business and strategic dimensions. Your company has earned highest ever Profit Before Tax (PBT) and Profit After Tax (PAT) in FY 2024-25. The PBT rose by 28%, reaching Rs14,825 crore, up from Rs 11,555 crore in the preceding year. Similarly, the PAT registered a 28% increase, amounting to Rs11,312 crore compared to Rs8,836 crore in FY 2023-24. Revenue from Operations increased to Rs1,37,288 crore from Rs 1,30,638 crore. Further, your Company executed capital expenditure amounting to Rs10,512 crore during the reported year. In parallel, your Company received an 'Excellent Rsrating in the Memorandum of Understanding (MoU) performance evaluation for FY 2023-24, for the third consecutive year. These achievements serve as a reflection of the trust and confidence reposed in GAIL by its investors and stakeholders alike and signify the robust fundamentals and strategic resilience of your Company.

It is pertinent to underscore that these exceptional financial outcomes were achieved notwithstanding a multifaceted and evolving global landscape marked by economic complexity and precarious geopolitical headwinds. During FY 2024-25, persistent international tensions and regional instabilities exerted considerable influence over global trade and energy dynamics.

Notwithstanding such extraneous challenges, embedded as they are within the intrinsic volatility of global energy markets, your Company fortified its gas sourcing portfolio by (i) diversifying LNG sourcing across geographies and (ii) maintaining a balanced pricing structure for sourced gas comprising both Oil Price-Indexed contracts i.e. prices linked to crude oil benchmarks such as JCC and Brent, and Gas-on- Gas indexed contracts, with gas prices tied to gas benchmarks like the Henry Hub prices. With this long-term strategy, GAIL remains confident in its ability to maintain a stable, resilient and sustainable growth trajectory in the years ahead.

In pursuit of its role in strengthening the nation's energy security, GAIL, in FY 2024-25 has continued to proactively diversify its LNG sourcing portfolio. Several long-term LNG arrangements have already been secured, reaffirming your Company's position as India's foremost gas marketer. Recognising the evolving global geopolitical landscape, your Company is actively pursuing further diversification to ensure consistent and uninterrupted energy supplies. During the year, GAIL successfully concluded a mid-term agreement with Qatar Energy Trading for the supply of ~ 0.8 MMTPA of LNG (60 cargoes) over a five-year period commencing April 2025.

During FY 2024-25, your Company imported a record 141 LNG cargoes, the highest ever in its operational history, supplementing volumes sourced under various long-term contracts from Petronet LNG Limited. Additionally, for maximising power generation in the summer season from Gas Based Generating Stations, your Company also sourced five spot cargoes and approximately 112 MMSCM of RLNG during the period April to June 2024.

A landmark infrastructure achievement related to LNG sourcing was the successful construction of the long-awaited breakwater project at the Dabhol LNG terminal, operated by GAIL's subsidiary, Konkan LNG Limited (KLL). This critical development has now transformed Dabhol LNG Terminal into an all-weather port and significantly enhanced your Company's operational agility and flexibility.

In the area of LNG shipping, your Company further strengthened its logistics capabilities. GAIL inducted a state-of-the-art vessel, rechristened 'GAIL Sagar', under a long-term charter agreement with Kool Panther Corporation, a subsidiary of Cool Company (UK). This vessel, delivered on 17^th February, 2025 at Cove Point, USA, constitutes the fifth LNG carrier in GAIL's fleet and shall remain on charter till December 2038, the longest charter in the Company's history. Your Company also awarded a long-term vessel charter contract to a subsidiary of K-Line, Tokyo for deployment during the period 2027 to 2038. In respect of short-term requirements, GAIL chartered five LNG vessels on a spot basis and one on a short-term basis during FY 2024-25. This represents the largest number of spot and short-term charters concluded by GAIL in any financial year, and significantly augments your Company's ability to transport contracted LNG volumes with agility.

On the regulatory and legal front, GAIL in January, 2025 reached the settlement and realised USD 285 million towards its claim against SEFE Marketing & Trading Singapore Pte Ltd. (SMTS), for non-supply of contracted volume in 2022-23. I am also pleased to inform you that the Hon'ble Gujarat High Court quashed a customs duty demand of approximately Rs203 crore, along with equal amount of penalty and interest of Rs 250 crore relating to the denial of duty exemption on RLNG supplied to power generation companies. Consequently, contingent liabilities have been reduced by approximately Rs656 crore. Further, a clarification issued by the Central Board of Indirect Taxes and Customs (CBIC) regarding the issuance of e-Certificates of Origin by UAE authorities has enabled GAIL to secure a refund of approximately Rs180 crore in respect of import duty on UAE LNG cargoes.

In another key development, your Company signed its second Advance Pricing Agreement (APA) with the Central Board of Direct Taxes (CBDT), covering the transfer pricing margin applicable to GAIL's long-term LNG sourcing contracts from the United States through its wholly owned subsidiary. The agreement is valid for a period of five years from FY 2024-25 to FY 2028-29.

Your Company continues to be a driving force behind the expansion of India's natural gas infrastructure. With an operational network extending over approximately 16,421 km, GAIL is actively engaged in augmenting the National Gas Grid (NGG). During the reporting year, your Company commissioned approximately 277 km and undertook lowering works over 717 km of pipeline length. Notable projects under execution include the Durgapur-Haldia and Dhamra- Haldia sections of JHBDPL, the Srikakulam-Angul spur pipelines, the Mumbai-Nagpur-Jharsuguda corridor, the Krishnagiri-Coimbatore section of KKBMPL and the Gurdaspur-Jammu pipeline. In addition to expanding natural gas pipeline networks, GAIL has also received authorisation from PNGRB for capacity expansion of the Jamnagar- Loni LPG Pipeline from 3.25 MMTPA to 6.5 MMTPA. Furthermore, two significant liquid hydrocarbon pipelines, namely the Uran- Usar Propane pipeline and the Vijaipur-Pata C2/C3 pipeline, are progressing at various stages of project execution.

In terms of throughput, the natural gas transmission segment achieved an all-time high during the year, with average volumes increasing by 6% to 127.32 MMSCMD from 120.46 MMSCMD in the preceding year. This contributed to a 7% increase in revenue from this segment, reaching Rs 11,068 crore, as against Rs 10,308 crore in FY 2023-24, largely on account of higher volumes and upward tariff revisions. The segment registered a Profit Before Interest and Taxes (PBIT) of Rs5,488 crore in this financial year, as against Rs4,523.74 crore in previous financial year, an increase by around 22%.

With a view to maximise value addition of natural gas, your Company is expanding its petrochemical business portfolio. During FY 2024-25, production of petrochemicals rose by 6% to 827 TMT, as compared to 777 TMT in the previous year, while sales increased by 7% to 845 TMT. Revenue from this segment rose by 4% to Rs8,088 crore, leading to FY 2024-25 closing at almost breakeven levels with significant improvement over previous financial year. In pursuit of growth and diversification of GAIL's petrochemical portfolio, your Company is undertaking several projects. New facilities under development include a 60 KTPA polypropylene plant at Pata, a 500 KTPA polypropylene plant and a 50 KTPA isopropyl alcohol unit at Usar, and a 1.25 MMTPA Purified Terephthalic Acid (PTA) plant through wholly owned subsidiary GAIL Mangalore Petrochemicals Limited (GMPL), thereby marking GAIL's entry into the diversified petrochemical value chain.

In the City Gas Distribution (CGD) domain, your Company and its group entities continue to hold the largest footprint in the nation, with authorisation to develop CGD networks across 72 Geographical Areas (GAs) out of the total 307 GAs in the country. During the year, your Company and its group companies added 12.28 lakh PNG connections and 507 CNG stations, thereby reaching a cumulative base of approximately 95.7 lakh domestic PNG consumers and over 3,100 CNG stations. During FY 2024-25, the total combined CNG and D-PNG sales from GAIL's CGD entities amounted to ~15.4 MMSCMD which works out to over 54% market share.

Recognising that the growth of energy enterprises must be aligned with environmental and social imperatives, your Company remains firmly committed to the energy transition. In alignment with its revised target of achieving Net-Zero for Scope 1 and Scope 2 emissions by 2035, advancing its earlier Net-Zero commitment target year of 2040, your Company has been making strategic choices to build a sustainable value chain, inclusive of future-ready business models with customer centricity at the core, improving energy management, diversifying energy portfolios and pursuing capital excellence and project capabilities. To this end, GAIL has been steadily increasing its investments in renewable energy, hydrogen, Compressed Biogas (CBG), and other decarbonisation technologies.

In FY 2024-25, GAIL has embarked on the biogas generation business. GAIL's first CBG Plant in Ranchi was inaugurated by Hon'ble PM Narendra Modi on 2^nd October, 2024 marking a step towards clean energy & sustainable future. Your Company has been mandated by MoP&NG to implement the CBG-CGD Synchronisation Scheme. Till June 2025, your Company has executed a total of ~212 Tri-Partite Agreements, and 159 biogas plants tied up to 38 CGD entities under the synchro scheme. During FY 2024-25, a total of 31,937 MT of biogas was sold to CGD sector under the synchro scheme. Simultaneously, a strategic partnership has been established with TruAlt Bioenergy Limited for the development of 10 new biogas plants. Furthering its clean energy ambitions, GAIL is actively pursuing investments in advanced technologies such as green chemicals, carbon capture, utilisation and storage, bio-ethylene, and Coal-to-Synthetic Natural Gas. A new joint venture of GAIL and Coal India Limited, viz. Coal Gas India Limited was incorporated on 25^th March, 2025 to set up a Coal-to-SNG plant in West Bengal, and has been selected for incentives of up to Rs1,350 crore under Category 1 of RFP issued by Ministry of Coal for coal gasification projects.

To promote LNG in transportation and allied sectors, GAIL and its subsidiaries have established 12 LNG/LCNG stations towards infrastructure development along major highways and mining belts.

In the realm of digital transformation, GAIL has achieved a key milestone by becoming the first Maharatna Public Sector Undertaking to fully implement SAP S/4 HANA on i-Cloud, thereby enhancing operational integration and data driven decision making. The Vendor Invoice Management portal and the continued implementation of Project Sanchay-2, with 30 data analytics use cases underway, are enabling process innovation and efficiency.

Your Company has successfully embedded safety in its corporate culture. Health, Safety, and Environment (HSE) are essential to our operations with an achieved 'HSE Score Rsof 96.37% in FY 2024-25 exceeding the target of 95.5%. This demonstrates our strong dedication to safety and environmental standards.

Governance practices continue to be exemplary, with the 'NIL Rscomments from C&AG for the sixteenth consecutive year. International rating agencies have reaffirmed GAIL's credit ratings at 'BBB- Rsby Fitch and 'Baa3 Rsby Moody's both with a Stable Outlook. Domestically, GAIL has been rated as 'AAA Rsby three rating agencies i.e. ICRA, CARE Rating & India Ratings.

To strengthen its global financial operations, your Company has incorporated a wholly owned subsidiary, GAIL Global IFSC Limited, at GIFT City, Gujarat, with a mandate to manage treasury operations and explore ship-leasing opportunities.

Your Company has once again been included in the prestigious FTSE4Good Index Series of the London Stock Exchange, in recognition of its Environmental, Social, and Governance (ESG) standards. In addition, three Quality Circle Teams from GAIL received Gold Awards at the 49^th International Convention on Quality Control Circles (ICQCC 2024).

In procurement, GAIL transacted business worth Rs2,114 crore on the Government e-Marketplace (GeM) portal, surpassing the target by almost 17%. Further, nearly 48% of the eligible procurements were made from Micro and Small Enterprises (MSEs). Notably, 7.65% and 4.5% of the eligible procurement value originated from women- owned and SC/ST-owned MSEs respectively, surpassing MoU targets for the third consecutive year.

Your Company recognizes the importance of R&D to improve its technological capabilities to remain competitive. GAIL Board approved the purchase of 30 acres of institutional land from HSIIDC at Sohna, Haryana for the establishment of a state-of-the-art Research and Development (R&D) centre. The facility shall focus on key verticals such as pipeline technology, gas value addition, petrochemicals, renewable energy, and advanced materials including nanotechnology and biotechnology.

In the arena of Corporate Social Responsibility (CSR), your Company continues to support inclusive development initiatives positively impacting over 15 lakh individuals across India. Under GAIL Arogya, over 10 lakh people received primary healthcare through operation

of Mobile Medical Units across 13 states, focusing on marginalized communities, women, and children. Additionally, more than 250 open gyms have also been installed across multiple states of the country promoting physical health. Over 1.5 lakh individuals benefitted from GAIL Ujjawal initiatives through smart classrooms, open gyms, water access, STEM centres, and hygiene facilities. GAIL Utkarsh, marking 15 years since its inception, has supported 2,228 students and facilitated 1,664 admissions to IITs and NITs over the years. GAIL Kaushal initiatives provided training to over 1,000 youth in sectors like hydrocarbon, healthcare, textiles, and hospitality. GAIL Sashakt initiatives empowered more than 9,000 women with skill development, self-defence, menstrual hygiene awareness, and distribution of nutrition kits, while GAIL Saksham initiatives supported nearly 2,000 PwDs with training, assistive aids, and infrastructure upgrades reaffirming GAIL's commitment to holistic social upliftment.

In conclusion, GAIL remains resolute in its commitment to align with the national vision and contribute meaningfully to the energy security, economic progress, and environmental aspirations of the country. With continued emphasis on infrastructure expansion, clean energy transition, innovation, and stakeholder value creation, your Company is poised to navigate the evolving energy landscape with confidence and competence.

I sincerely thank all shareholders for their continued support and trust in GAIL's growth and vision.