Investors‟ Meet 2011 Mumbai 24 th March 2011 1
Disclaimer Statements in this presentation may 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 2009. Nothing in these results should be construed as a profit forecast and no part of these results or this presentation 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 or revise any forward-looking statements. 2
Agenda People and Community Introduction Regulation Performance Highlights Growth Opportunities Business Profile Way Forward 3
BG India footprint Company Information • Panna-Mukta-Tapti (PMT) : Jointly Operated BG Co-venturers :BG (30%), ONGC (40%), RIL(30%) E&P • Krishna Godavari Basin - Block KG-OSN-2004/1 India (Exploration Block) Ltd Co-venturers : BG (45%), ONGC (operator 55%) • Mahanadi Basin - MN-DWN-2002/02 (Exploration Block) BG Co-venturers : BG (25%), ONGC (operator 75%) India • Krishna Godavari Basin - KG-DWN-2009/1 (Exploration Block) Co-venturers : BG 30% (Operator), ONGC (45%), OIL (15%), APGIC (10%) • LNG importers, Gas Aggregators ,Bulk Industrial, BGIES Fertiliser, CGD operators, Power • India’s largest private CGD company (by volumes) GGCL • BG took over controlling stake (65.12%) in July 1997 • India’s largest private CGD company (by customers) MGL • JV with GAIL (49.75% each), State Govt. (0.5%) Source: BG Group Data Book 2010 4 Integrated gas chain player
Gujarat – where we operate • Remarkable and sustainable growth : Industrial production Average rate of growth: 10.4% in last 5 years 24% 2nd most industrialised state in India 33% • 83 industrial clusters and estates • 22% of total investment in India • “Hydrocarbon capital” of India 6% Statewide gas grid under development, 7% large areas covered 9% Hosts both operating LNG terminals in 21% India Petroleum products Chemicals Landfall point for majority of gas in India Food & agro Textile & apparel Second largest producer of onshore Basic & Metals Others natural gas ~48% of India’s installed refining capacity Source : Govt. of Gujarat 5 Highest number of oil & gas fields in India
Gujarat Gas – strong business model • Largest CGD in terms of volume* • Multiple source portfolio 95% gas sourced at market determined prices • Caters to multiple segments with different applications and alternate fuels • Operates in a highly industrialised and energy intensive zone • Easy access to rLNG : Proximity to country’s two operational LNG terminals • Strong capital efficiencies • Opportunities for growth * As at 31 st Dec 2010 6 Strong fundamentals for a successful business
Shareholders 9.44% 5.14% 4.43% 15.87% 65.12% Parent Company Holding (BGAPH) Foreign Institutional Investors Mutual Funds Others Resident Individuals As on 31 st Dec. 2010 7 Market Capitalisation ~ Rs 50 Billion
Share price performance: CY 2010 • Average daily trading Share price performance volumes improved by over 65% • Outperformed Sensex by 200 GGAS Sensex 1 80 over 60% 1 60 1 40 1 20 1 00 (Rebased to 100) • 80 Increased dividend on Dec-09 Feb-10 Mar-10 Apr-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Dec-10 expanded capital Regular : Rs. 4 per share Special : Rs. 8 per share Shareholders‟ value – growing consistently 8
Agenda Introduction People and Community Regulation Performance Highlights Growth Opportunities Business Profile Way Forward 9
Key determinants for 2010 • Gas supply Term rLNG contracted till December 2013 rLNG share increasing in portfolio (26% annual; 37% in Q4) KG D6 gas on fall back basis – not available (despite allocation) Supply levels sustained from other indigenous sources Increase in APM gas price • Increasing trend of gas cost • Growth in Industrial retail and CNG segment ensured 17% growth in volumes • Focused on growing high value markets 10 Procured additional rLNG volumes to deliver retail growth
Industrial segment – sustaining growth • 83% by volume mix Volume growth – CY 2010 in mmscm • Strong retail demand • Signed new contracts worth 1005 839 350,000 scmd 783 • Revised prices in December 2010 by ~16% 20% • Segmentation to access high value markets 08 09 10 • Crossed one billion scm of retail sales in December 2010 11 Industrial customers dominate market portfolio
CNG segment – robust growth Growth in volume Growth in customers in „000 in mmscm 122 135 104 109 91 84 18% 24% 08 09 10 08 09 10 • Growth in conversion rate higher by ~30% • Strong infrastructure growth; added 11 CNG retail outlets • Price revisions; 8.3% in September ’10, and 8.6% in January ’11 12 Fast growing segment
Highlights - Q4 2010 Topline growth Volume growth PAT growth 5,043 309 825 3,779 274 462 Rs. mn mmscm Rs. mn 09 10 09 10 09 10 • Revenues up by 33% • Volumes up by 13% • Profits up by 78% 13
Highlights - 2010 Topline growth Volume growth PAT growth 2590 18,136 1212 13,869 1035 1750 Rs. mn mmscm Rs. mn 09 10 09 10 09 10 • Topline grew by 31% • Volumes increased by 17% • PAT up by 48% 14 Focus on value in an environment of increasing gas cost
Revenue growth 18493 18319 174 2010 14197 14028 169 2009 13012 21 12991 2008 12446 22 12424 2007 Rs Mn Transmission Transmission Non Transmission Non Transmission Source: GGCL audited account 2010 15
Capex 1067 183 719 165 2010 1553 190 1230 133 2009 988 104 797 87 2008 1035 222 758 55 2007 Rs Mn Non Gas Capex Network Upgradation/Expansion CNG Source: GGCL audited account 2010 Investing in network and CNG infrastructure 16
Profit growth PBT 3833 3659 174 2010 2586 169 2417 2009 2345 2324 21 2008 2303 22 2281 2007 Rs Mn Transmission Non Transmission Transmission Non Transmission Source: GGCL audited account 2010 17
Distribution volumes 1212 1005 122 85 2010 1035 839 104 80 12 2009 1089 783 91 72 143 2008 1196 781 70 60 285 2007 mmscm Ind Ret CNG Dom/Com Bulk Ind. Retail CNG Domestic and Commercial Bulk Source: GGCL audited account 2010 18 Sustainable growth in retail market
Agenda Introduction People and Community Regulation Performance Highlights Growth Opportunities Profile – Business Way Forward 19
Customer profile GGCL‟s Business GGCL‟s Business Gas Distribution Gas Transportation 01 Retail Distribution Bulk Market 73 kms (18”) transmission pipeline Industrial Domestic Commercial CNG ~ 3500 kms dist. pipelines 875+ 300,000+ 6,000+ 135,000+ 11 City gate stations 42 CNG stations Source: GGCL 2010 (internal) 20 Added more than 30,000 households and 26,000 vehicles in 2010
Sales mix Year 2010 Dom & Com Industrial Retail 7% 83% (8%) (81%) CNG 10% (11%) ( %) – by realisation Source: GGCL 2010 (internal) 21
Gas sourcing mix Year 2010 GAIL PMT 49% rLNG 26% GAIL APM CAIRN NIKO 5% 15% 5% Source: GGCL 2010 (internal) 22 While PMT is largest source, rLNG becoming significant
Profile of industrial customers 100% 6% 6% 6% CHP 5% 39% 8% 75% 11% 19% 50% LFR 40% 25% 44% DF 21% 0% Textile Chemical Glass & Ceramics Dye & Intermediate Pesticides Pharmaceuticals Others Total CHP : Combined Heat and Power LFR : Liquid Fuel Replacement DF : Direct Firing Source: GGCL 2010 (internal) 23 Increased share of LFR: up from 29% to 40%
Agenda People and Community Introduction Regulation Performance Highlights Growth Opportunities Business Profile Way Forward 24
Building a strong HR base • Several Senior Management Team (SMT) members deputed from BG Group Succession plans in place for SMT • Strong HSSE culture • HR aligned to business strategy Building capabilities and capacities Promoting culture of execution and meritocracy People processes like performance and development reviews aligned to BG Group 25 Focus on talent management to meet current and future business needs
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