Investor Meet 26 March 2009 Mumbai Disclaimer Certain statements - PDF document

1 Gujarat Gas Company Limited Investor Meet 26 March 2009 Mumbai

Disclaimer Certain statements included in this presentation contain forward-looking information concerning Gujarat Gas Company Limited (GGCL)’s strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the sectors or markets in which GGCL operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within GGCL's control or can be predicted by GGCL. Although GGCL believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Actual results could differ materially from those set out in the forward-looking statements. For a detailed analysis of the factors that may affect our business, financial performance or results of operations, we urge you to look at the relevant article on Risk Management included in GGCL’s Annual Report and Accounts 2007. Nothing in these results should be construed as a profit forecast and no part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in GGCL or any other entity, and must not be relied upon in any way in connection with any investment decision. GGCL undertakes no obligation to update any forward-looking statements. 2

Agenda Ownership Structure Gas Infrastructure & Gujarat’s Economic Profile GGCL - Business Profile Financials Regulation Human Resources Way Forward 3

GGCL – Shareholding pattern 8.52% 12.23% Parent Com pany Holding (BGAPH) Foreign Institutional Investors 14.13% Others 65.12% Resident Individuals Shareholding as on 31 st Dec. 2008 Market cap as on 13 th March 2009. Source: GGCL Market Capitalisation ~ Rs 16 Billion ($ 320 Mn) 4

BG Group • Expertise across the gas chain • A rapidly growing gas company with interests across five continents • Turnover in 2008 was around $24bn (using the avg US$/£ exchange rate for the year) • Operating profit was $10.1bn • Present in over 25 countries • Listed on London Stock Exchange • A FTSE 10 company with a market cap over $50bn • BG India is a “core asset” for BG Group A strong parentage 5

BG India Company Information BG E&P • Jointly operates Panna-Mukta-Tapti fields (BG-30%, RIL - 30% & ONGC - 40%) India Ltd • Largest private oil & gas JV • Exploring KG-OSN-2004/1 with ONGC (55%) from NELP-VI Licensing round • Secured two deepwater exploration blocks: BG India • KG-DWN-98/4 (BG-30%, ONGC- 55%, OIL-15%) • MN-DWN-2002/2 (BG-25%, ONGC- 75%) 5 1 4 BGIES • Gas/LNG marketing entity and aggregator 6 of domestic supplies 3 2 Legend • India’s largest private CGD company (by GGCL volumes); 2008 sales: 1089 mmscm 1 Panna-Mukta-Tapti Fields • BG has a controlling equity stake of 65.12% 2 KG-OSN-2004/1 MGL • India’s largest private CGD company (by 3 KG-DWN-98/4 customers) 4 MN-DWN-2002/2 • JV with GAIL (49.75%) and State Govt. 5 Gujarat Gas Comp. (GGCL) (0.5%) 6 Mahanagar Gas Ltd. (MGL) Integrated player with presence in significant Indian markets Present across the full hydrocarbon chain 6

Agenda Ownership structure Gas Infrastructure & Gujarat’s Economic Profile GGCL - Business Profile Financials Regulation Human Resources Way Forward 7

Advantage Gujarat • 2nd most industrialized state in India • Population ~ 55 million • 265 industrial clusters and estates • 22% of India’s private sector investment • Vibrant Gujarat • Investment proposed > $ 20 Billion in Surat and Bharuch districts • Delhi-Mumbai Industrial Corridor (DMIC) • 38% of proposed freight corridor in Gujarat • Passes through GGCL areas of operations • Phase I - approved with proposed investment of $ 90 bn Source : vibrantgujarat.com & indextb.com 5% of India’s population - 13% of industrial production & 19.2% of exports 8

Gujarat – The nerve of DMIC DMIC GGCL Areas: Surat, Pipavav Ankleshwar & Bharuch GGCL Schematics GGCL in the heart of DMIC in Gujarat 9

Gujarat – the natural gas hub of India GSPL Transmission pipeline GAIL HBJ Mundra GSPL pipelines legends Dahej LNG Commissioned Under Construction Hazira LNG Pipavav RoU in Progress GAIL DUPL GGCL Schematics Proposed LNG Terminal Gas Pipelines Ultra Mega Power Project (4000 MW) Existing LNG Terminal Established CGDs Major SEZs New CGDs 10

Agenda Ownership structure Gas Infrastructure & Gujarat’s Economic Profile GGCL - Business Profile Financials Regulation Human Resources Way Forward 11

12 “We make natural gas the safe and preferred energy solution ” Vision

Strategy Moving up the Building value chain materiality Management • Grow retail market • Geographic expansion Strategy • Develop CNG business • Exploring alliances • Develop new applications GGCL Schematics Strategy aligned with regulatory framework 13

Sales mix (by volume) Year 2008 Bulk 13% R etail 72% Dom & Com m 7% CN G 8% 1089 mmscm Source: GGCL Largest private sector CGD operator in India - by volume 14

Industrial retail segment � Dispersed customer base across diverse industry sectors Profile � Low volume (< 50,000 scmd) high margin: large number of customers � Low probability of gas-on-gas competition � Gas off-take risk mitigated by ToP liability clause Risk � Margin risk mitigated by gas cost pass-through clause Profile � Credit Risk mitigated by security deposits / bank guarantee � Geographical expansions and network extensions Gro wth drivers � Captive Power demand Core business segment driving growth 15

Industrial retail customer profile 100% 5% Solid Fuel 11% 23% 6% 75% 6% Liquid Fuel 8% 29% 18% 50% Power 25% 48% 46% 0 Textiles Chemical Dyes & Pesticides Pharmaceutical Glass & Others Total Intermediate Ceramics Source: GGCL Demand from textile and chemical industry remained firm 16

CHP (Mwe) 350 326 326 300 234 250 187 200 Mwe 140 150 100 50 0 2004 2005 2006 2007 2008 1 Mwe ~ 5000 scmd Source: GGCL Sustained focus on CHP 17

Distribution volumes 1400 1196 1200 1088 1089 285 143 1000 327 72 60 813 91 70 800 695 mmscm 57 217 47 600 200 48 21 44 3 400 783 781 657 526 447 200 0 2004 2005 2006 2007 2008 Ind Ret CNG Dom/Com Bulk Source: GGCL Added more than 26000 households and 23500 vehicles in 2008 CAGR of 17.6% in retail markets 18

Multiple gas sources Gujarat RLNG River Bharuch Narmada Dahej Ankleshwar GAIL Ank Petronet LNG Amboli Jhagadia Gulf of Kosamba Cambay H A P i Niko Kim-Karanj GGCL Mora Existing LDZ Shell LNG New areas Surat CAIRN JV GAIL Surat GAIL’s HVJ Hojiwala GGCL pipelines Magdalla GSPL pipeline GSPC/ Niko Hazira Vapi PMT JV PMT Gas GGCL Schematics Multiple receiving facilities 19

Gas sourcing mix Year 2008 C A IRN 11% PMT 76% N IK O 8% GA IL 5% 1095 mmscm Source: GGCL Predominantly indigenous sources 95% at market determined prices 20

Agenda Ownership Structure Gas Infrastructure & Gujarat’s Economic Profile GGCL - Business Profile Financials Regulation Human Resources Way Forward 21

Performance in 2008 Growth vs 2007 • Top line 5% • Distribution volume - 9% • PAT 5% Profitability sustained 22

Revenue growth 14000 13012 12446 12000 9685 10000 Rs Mn 7468 8000 6531 12991 12424 6000 9571 4000 7182 6089 2000 22 286 114 21 442 0 2004 2005 2006 2007 2008 Transmission Non Transmission Source: GGCL Re-emergence of transmission revenues in Q4 of 2008 23

Profit growth PBT 2303 2345 2500 2000 1455 1313 1500 1235 1116 Rs Mn 2324 2281 1000 1199 1169 793 638 500 478 442 114 286 21 22 0 2003 2004 2005 2006 2007 2008 Transmission Non Transmission Source: GGCL Profits driven by strong growth in distribution business 24

Capital investment 1800 1602 1600 136 1345 1400 232 1200 1035 988 1000 Rs Mn 272 104 222 800 1406 580 600 104 797 740 758 400 245 394 200 206 101 82 87 60 55 39 0 2003 2004 2005 2006 2007 2008 Non Gas Capex Network Expansion/Upgradation CNG COGEN Source: GGCL Investment – for sustained growth 25

Key factors which affected business in 2008 • Gas supply – PMT gas reduced by 30% from April ‘08 – GAIL replaces PMT JV as supplier – Term Sheet with GAIL governs current supply • Sources aligned with market segments – GAIL APM & PMT supply to Domestic and CNG segments – GAIL PMT gas to SMEs (< 50,000 scmd customers) – Non GAIL sources piped to larger customers – rLNG to meet peak customer demand • Depreciation of Rupee against USD impacted margins • Optimized margins through improved customer mix Key 2008 challenge: sustaining supply to core markets 26

Agenda Ownership structure Gas Infrastructure & Gujarat’s Economic Profile GGCL - Business Profile Financials Regulation Human Resources Way Forward 27