GAIL (India) Limited PRESS CONFERENCE ON FINANCIAL RESULTS FY 2007-08 NG/LPG Transmission NG Trading LPG & OLHC Petrochemicals E&P City Gas Power GAIL

GAIL (India) LimitedGAIL (India) Limited

PRESS CONFERENCE ON FINANCIAL RESULTS FY 2007-08

NG/LPG Transmission NG Trading LPG & OLHC Petrochemicals

E&P City Gas Power GAIL Tel

GAIL (India) Limited2

GAIL ¦ ManagementThe Management Team that will deliver the Strategy

Dr. U D ChoubeyChairman & Management Director

Sh M R HingnikarDirector (HR)

Sh R K GoelDirector (Fin)

Sh Santosh KumarDirector (Projects)

Sh A K PurwahaDirector (BD)

Sh B C TripathiDirector (Mktg)

Functional Directors

Sh Sundareshan Sh D N Narsimha Raju Dr. A K Kundra Dr. U K Sen Sh Amit Mitra

Independent / Government Nominee Directors


GAIL ¦ Overview

Integrated Natural Gas Company

24 Years of History, Rich Experience & Expertise

Consistent Dividend Payer

Moody’s Intl. Rating – Baa2 (Foreign) & A3 (Local)

Government of India – Majority Stakeholder (57%)

Listed in BSE, NSE & London Stock Exchange

International Presence – China, Egypt, Oman, Singapore & Myanmar

10 Years Turnover CAGR – 13%

10 Years PAT CAGR – 10%

Employees – 3548

India’s Numero Uno Gas Company


GAIL ¦ Overview – Now & ThenEmerged as a Truly Integrated Company

1998

WAS

2008

IS

Branded as Gas Authority of India Ltd

GAIL (India) Ltd

NG Trans 55 MMSCMD 82 MMSCMD

NG Trading 55 MMSCMD 69 MMSCMD

LHC Prod 659 TMT 1347 TMT

Polymer Prod - 386 TMT

GAIL Tel - 13000 KM OFC

E&P Blocks - 27(3-Overseas) & 3 CBM

JVs/Associates - 12 (Domestic)

100% Subsidiary - GAIL Global Singapore

Global Ventures - 4 (1 - China & 3 – Egypt)

Lin

es

of

Bu

sin

es

sV

en

ture

s


Strong Financial Performance Delivered

1998

WAS

2008

IS

Share Capital 845 845

Reserves & Surplus 2568 12159

Loans 1478 1265

Gross Block 5183 16958

Turnover 5397 18008

Gross Margin 1706 4506

PBT 1390 3855

PAT 1020 2601

(Rs in Crores)

GAIL ¦ Overview – Now & Then


GAIL ¦ Business OverviewBusiness Portfolio

7 Plant across India

Significant Player

Production Cap ~ 1.3 MMTPA

LHC Significant

Player Only Polymer

Plant in North India

Production Cap 410000 TPA

Petrochemicals Gas Marketing No. 1 company

in terms of Market Share

Trading Core Business NG Trans Cap

~ 150 MMSCMD (7000 KM)

LPG Trans Cap ~3.8 MMTPA (1927 KM)

Transmission


Business Portfolio

Leveraging OFC Countrywide

Presence Carriers Carrier

Service Provider 13000 KM –

OFC Network

GAILTel Securing Gas

Supply 24 Domestic 3 Overseas (2-

Myanmar & 1 Oman)

3 CBM (2Chatisgarh, 1Jharkhand)

E&P High Growth

Area 8 JVs (IGL,

BGL, MGL, CUGL, GGL, TNGCL, MNGL, AGL)

230 Cities Planned

Retail PLL LNG

terminal (6.5 MMTPA)

RGPPL – Power (2184 MW) & LNG (2.5 MMTPA)

GSEG – Power (156 MW)

Diversification

GAIL ¦ Business Overview


GAIL ¦ Wealth CreationCreating Value : More than 5 times since 2003

50

100

150

200

250

300

350

400

450

2003 2004 2005 2006 2007 2008

Year

Rs

/Sh

are

Share Price Movement on BSE

Grown more than 5 times


GAIL ¦ Segmental Physical Highlights – FY08Significant Growth in Core Segments

Gas Transmission

77.29

82.10

2006-07 2007-08

MMSCMD6%

Gas Trading

67.84

69.10

2006-07 2007-08

MMSCMD

2%

LPG Transmission

2,491

2,754

2006-07 2007-08

‘000 MT

11%

Petrochemicals

347

391

2006-07 2007-08

‘000 MT

13%

Liquid HC

1,351

1,344

2006-07 2007-08

‘000 MT

(1%)

GAILTel

3,270

5,132

2006-07 2007-08

MBPS

57%


GAIL ¦ Financial Performance – FY08Top to Bottom Growth

Sales (Net of ED)

16,047

18,008

15,000

15,500

16,000

16,500

17,000

17,500

18,000

18,500

2006-07 2007-08

12%

Gross Margin (EBITDA)

3,543

4,306

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2006-07 2007-08

27%

PBT

2,860

3,855

1,000

2,000

3,000

4,000

2006-07 2007-08

35%

PAT

2,3872,601

1,500

2,000

2,500

3,000

2006-07 2007-08

9%

(Rs in Crores)


GAIL ¦ Financial Performance – FY08Bottom Growth Excluding Abnormal Item

(Rs in Crores)

2387 2601

0

500

1000

1500

2000

2500

3000

Actual 06-07 Actual 07-08

2047

2551

0

500

1000

1500

2000

2500

3000

Actual 06-07 Actual 07-08

25%9%

Excluding abnormal items PAT grew by 25%


GAIL ¦ Pipeline Projects – Recently Completed

RAJKOT

KOTA

THULENDI

VIJAYPUR

DAHEJ

MALANPUR

DABHOL

Vijaipur-Kota LNTH – 192 Kms.Cost – Rs. 141 Cr.

Cap. – 3.5MMSCMDCompleted on – Jan 07

PITAMPUR

JAGOTI

Jagoti-PitampurLNTH – 180 Kms.Cost – Rs. 95 Cr.Cap. – 3MMSCMD

Completed on – March 07

KELARAS

Kelaras-MalanpurLNTH – 85 Kms.Cost – Rs. 60 Cr.Cap. – 2MMSCMD

Completed on – July 06

URAN

Dahej Uran (DUPL)LNTH – 474 Kms.Cost – Rs. 923 Cr.Cap. – 12MMSCMD

Completed on – June 07

PHOOLPUR

Thulendi-PhoolpurLNTH – 139 Kms.Cost – Rs. 142 Cr.

Cap. – 2.8MMSCMDCompleted on. – May 06

Dabhol Panvel (DPPL)LNTH – 327 Kms.Cost – Rs. 402 Cr.

Cap. – 12.5MMSCMDCompleted on – Phase I : July 07Completion sch – Phase I : May 08

Pipeline Project

Pipeline Projects – Strengthened the Core Business


GAIL ¦ Segmental Financial HighlightsGrowth in each Segment

No. 1 by Mkt share 57% contributor in Sale 4% contributor in GM Challenge – Sourcing

Gas Trading

9,552

10,332

2006-07 2007-08

181

207

2006-07 2007-08

Gas Transmission

11% contributor in Sale 40% contributor in GM Challenge - Incremental Gas volumes

1,9492,026

2006-07 2007-08

1,774

1,808

2006-07 2007-08

Only company in this segment 2% contributor in Sale 7% contributor in GM

LPG Transmission

341

382

2006-07 2007-08

260

300

2006-07 2007-08

Gro

ssM

arg

in (

GM

)S

ales

(N

et o

f E

D)

(Rs in Crores)

4%8%

12%

2% 14% 15%


15% contributor in Sale 22% contributor in GM Challenge – Subsidy

Liquid HC

1,987

2,641

2006-07 2007-08

190

992

2006-07 2007-08

14% contributor in Sale 31% contributor in GM Challenge – Sourcing of Rich gas

Petrochemicals

2,185

2,569

2006-07 2007-08

1,097

1,403

2006-07 2007-08

Inline with Corporate Strategy <1% contributor in Sale Higher E&P Activities

GAILTel & Others

33

58

2006-07 2007-08

41

-204

2006-07 2007-08

Sal

es

(Net

of

ED

)G

ross

Mar

gin

(G

M)

(Rs in Crores)

GAIL ¦ Segmental Financial HighlightsGrowth in core Segments

18%33%

75%

28%

422%


GAIL ¦ Breakup of TurnoverBalanced Mix of Business Segment Turnover

Turnover (FY 07-08) – Rs.18008 Cr

15% 11%

58%

14%

2%NG Trans

LPG Trans

Gas Trade

Petchem

LHC

GAILTel

* % share excluding unallocated segment


GAIL ¦ Breakup of Gross MarginBusiness Mix – Significant Gross Margin from Core Business Actives

Gross Margin (FY 07-08) – Rs.4506 Cr

21%

39%

4%

30%6%

NG Trans

LPG Trans

Gas Trade

Petchem

LHC

GAILTel

* % share excluding unallocated segment


GAIL ¦ Key Financial RatiosRatios Depicts Consistent Performer

25.2

22.8 23.4

2120

15

19

23

27

31

03-04 04-05 05-06 06-07 07-08

32

28 28

3030

24

27

30

33

36

03-04 04-05 05-06 06-07 07-08

2223

2728

31

20

24

28

32

36

03-04 04-05 05-06 06-07 07-08

0.29

0.230.19

0.12 0.1

0

0.1

0.2

0.3

0.4

03-04 04-05 05-06 06-07 07-08

EPS (Rs/Share) MARKET CAP (Rs in Crore)

PAT TO NET WORTH(%) ROCE (%) DEBT EQUITY RATIO

18072 17919

26913

22372

35928

10000

15000

20000

25000

30000

35000

40000

Mar 04 Mar 05 Mar 06 Mar 07 Mar 08


GAIL ¦ Financial Performance - Q4 Sustained Quarter on Quarter Performance

Growth in Q4 of FY 2007-08 over Q4 of FY 2006-07

LPG Subsidy - Rs.387 Crs (Rs.502 Crs. Q4 of FY 06-07)

Financial Parameters (Rs. in Crs.)

681

722

PBT

101%

546

1098

Gross Margin

(EBITDA)76%

716

1260

PAT

6%

3883

4935

Turnover(Net of ED)

27%


GAIL ¦ Upcoming Pipelines Pipeline Projects – Strengthen the Core Business

Phases

JAGDISHPUR

BAREILLY

RAJKOT

KOTA

HALDIA

GAYA

KOCHI

MANGLORE

BANGLORE

KOLHAPUR

KANJIKKOD

AURAIYA

GOA

VIJAYPUR

NANGAL

DADRI

CHAINSAJHAJJAR

HISSAR

DAHEJ

GADAG

MALANPUR

DABHOL

BAWANA

DADRI-BAWANA-NANGAL LNTH – 640 Kms. #Cost – Rs. 2500 Cr.

Add. Cap. – 31MMSCMD

DAHEJ-VIJAIPUR /GREP UpgradationLNTH – 1115 Kms.

Cost – Rs. 11000 Cr.Add. Cap. – 66MMSCMD

CHAINSA-JHAJJHAR-HISSAR LNTH – 450 Kms. #Cost – Rs. 1000 Cr.


DABHOL-BANGALORELNTH – 1480 Kms. #Cost – Rs. 4000 Cr.


JAGDISHPUR-HALDIALNTH – 1690 Kms. #Cost – Rs. 6600 Cr.


KOCHI-MANGALORE-BANGALORELNTH – 840 Kms.

Cost – Rs.3500 Cr.Add. Cap. – 16MMSCMD

Phase I by 2011

Phase II from 2012

# Including Spur lines


GAIL ¦ E&P Initiatives E&P Activities – To Secure Future Gas Supplies

Total Blocks - 30

Onshore Blocks - 9

Offshore Blocks - Deep Water 13 & Shallow - 5

CBM Blocks - 3

Major Operators - ONGC, GSPC, OIL, Gazprom, Daweoo,

Pertogas, Hardy, ENI, Jubilent, Arrow Energy

Net investment - Rs.1152 Cr (upto 31.03.08)

Discoveries made in 5 Blocks - Cambay onland, A1 & A3 block – Myanmar,

Cauvery offshore, Mahanandi offshoreCommercial Crude Oil Sales – started from 1st February 2008


GAIL ¦ International Rating

GAIL has been given Corporate Issuer Rating by Moody’s

Foreign currency – Baa2

(One notch above sovereign rating of Baa3)

Local Currency - A3

(Five notch above sovereign rating of Ba2)

Positive impact on debt raising capability


ConclusionWrapping up with confidence

Strong Financials

Strong GoI Support

Relatively New Asset

Strong Gas Demand

Dominant Position - Transmission

Large Capex Plans in Place

GAIL (India) LimitedGAIL (India) Limited

THANK YOU


GAIL ¦ OverviewState of Art ‘Gas & Beyond’ Infrastructure

GAS PIPELINES 7000 KMS(150 MMSCMD)

11 States

GANDHAR

VAGHODIA

USAR

VIJAIPUR

LAKWA

TRIPURA

KG BASIN

VSPL

CAUVERYBASIN

HVJ, DVPL

JLPLRAJASTHAN

NATURAL GAS PIPELINE

LPG PIPELINE

PATA

PETROCHEM PLANT

LPG PLANT

LPG PIPELINES

1922 KMS (3.8 MMTPA)

GAS PROCESSING7 Plants(1.3 MMTPA LPG)

PETROCHEMICALS410,000 TPA


GAIL ¦ OverviewState of Art ‘Gas & Beyond’ Infrastructure

INDIA

OFC Connectivity13,000 KMSE&P30 blocks (incl. 3 CBM Blocks)R-LNGPLL- Dahej (6.5 MTPA)Gas Retailing (8 JV)IGL,MGL,BGL,CUGL,GGL, MNGL,TNGCL,AGLPower156 MW GSEG, Hazira2184 MW Ratnagiri (Dhabol)GlobalizationSubsidiary100% subsidiary – GAIL GlobalRetail GasFayum Gas, Shell CNG, China Gas & NAT Gas

OFC CONNECTIVITYE&P BLOCKSMYANMAR BLOCKDAHEJ LNG TERMINALCITYGAS


2006 GDP2006 GDP

GAIL ¦ Strategic DirectionGDP Growth underlies Energy Growth

CanadaCanada

IndiaIndia$4.16T$4.16T

ChinaChina$10T$10T

BrazilBrazil$1.70T$1.70T

$1.16T$1.16T

RussiaRussia$1.72T$1.72T

MexicoMexico

$1.17T$1.17T

USUS

$13T$13T

JapanJapan$4.17T$4.17T


CanadaCanada

IndiaIndia$4.16T$4.16T

2006 GDP2006 GDP

ChinaChina$10T$10T

JapanJapan

BrazilBrazil$1.70T$1.70T

$1.16T$1.16T

RussiaRussia$1.72T$1.72T

$4.17T$4.17T

GAIL ¦ Strategic DirectionGDP Growth underlies Energy Growth - India on Growth high Path

MexicoMexico

$1.17T$1.17T

USUS

$13T$13T

$1.8T$1.8T

$22.4T$22.4T

$2.5T$2.5T

$3.4T$3.4T$15.6T$15.6T

$4.5T$4.5T

$39.5T$39.5T

$4.95T$4.95T

2030 GDP 2030 GDP

2.8%2.8%

3.08%3.08%

2.2%2.2%

1.77%1.77%

0.30%0.30%

5.65%5.65%

4.32%4.32%

5.31%5.31%


GAIL ¦ Strategic DirectionAsia is the Fastest Growing Region

0

100

200

300

400

500

600

700

800

1990

2003

2004

2010

2015

2020

2025

2030

North America

Europe

Asia

Middle EastAfricaCentral & South AmericaQuadrillion Btu

World Total PrimaryEnergy Consumption


GAIL ¦ Strategic DirectionChina & India is the Fastest Energy Consuming Region

0

100

200

300

19

90

20

03

20

04

20

10

20

15

20

20

20

25

20

30

0

100

200

300

400

500

600

700

800

1990

2003

2004

2010

2015

2020

2025

2030

Japan

South Korea

China

India

Other Asian

Quadrillion Btu


Asia’s Total PrimaryEnergy Consumption


GAIL ¦ Strategic DirectionCoal & Gas dominates India’s Total Primary Energy Consumption

0

100

200

300

19

90

20

03

20

04

20

10

20

15

20

20

20

25

20

30

0

100

200

300

19

90

20

03

20

04

20

10

20

15

20

20

20

25

20

30

0

100

200

300

400

500

600

700

800

1990

2003

2004

2010

2015

2020

2025

2030

Quadrillion Btu


Asia’s Total PrimaryEnergy Consumption

India’s PrimaryEnergy Consumption

Liquid

Coal

Gas

Nuke

Other


VISIONVISION

Be the leading company in natural gas Be the leading company in natural gas and beyond with global focus, committed and beyond with global focus, committed

to customer care, value creation for all to customer care, value creation for all stakeholders and environment stakeholders and environment

responsibilityresponsibility

MISSIONMISSION

To accelerate and optimise the effective To accelerate and optimise the effective and economic use of Natural Gas and its and economic use of Natural Gas and its

fractions to the benefit of the national fractions to the benefit of the national economyeconomy

GAIL ¦ Strategic Direction – Vision & MissionBusiness Statement inline with Energy Dynamics of Indian Economy


GAIL ¦ Strategy ImplementationStrategy inline with Business Statement

UPSTREAM TRANSMISSION MID STREAM RETAIL & DIVERSIFACTION

Core Business

1

Move Upstream

2

Diversification

3

International Opportunity

4

TelecomTelecom

City GasCity Gas

PowerPower

E & PE & P

LNG ImportTrans National Pipeline

LNG ImportTrans National Pipeline

Marketing &TransmissionMarketing &Transmission

Gas processingGas processing

PetrochemicalPetrochemicalCross Country Pipelines

Cross Country Pipelines

Secure Gas From Domestic ProducersSecure Gas From

Domestic Producers


Telecom

Marginal Investmen

t

GAIL ¦ Strategy ImplementationStrategy inline with Business Strength & Industry Attractiveness

Liquid Hydrocarbon

Unattractive

Average

Attractive

StrongAverageWeak

Business Strength

Ind

ust

ry A

ttra

ctiv

enes

s E&P,

Power

Selective Investmen

t

NG Trading, NG Transmission

Retail & Petchem

Priority Investment

Wait & Watch

Su

bsi

dy


GAIL ¦ Strategy Implementation

LNG

Existing

Transmission Pipelines

Existing

Upcoming

GAIL’s Planned PipelineRIL’s East West PipelineRIL’s Planned PipelineGSPC’s Planned Pipeline

City Gas/ CNGExistingPlanned

LNG Terminal

JAGDISHPUR

PHOOLPUR

BHATINDA

BAREILLY

DISPUR

DELHI

AGARTALA

BARODA

LUCKNOW

PATNA

AHMEDABAD

RAJKOT

KOTA

MATHANIA

GWALIOR

UJJAIN

AGRA

KOLKATA

GAYA

BOKARO

VARANASIJHANSI

DAHEJ I & II10 mmtpa*

HAZIRA2.5 mmtpa

COIMBTORE

MANGLORE

MUMBAIBHUBANESHWAR

KRISHNAPATNAM

NELLORE

CHENNAI

TUTICORIN

TIRUCHCHIRAPALLI

HASANBANGLORE

KOLHAPUR

SOLAPURKAKINADA

VIJAYAWADA

DAMRA

DABHOL5 mmtpa

KANJIKKOD

AURAIYA

Iran-Pak-India Pipeline

Turk-Afg-Pak-India Pipeline

GOA

CUTTACK

VIJAYPUR

KANPUR

NANGAL

GURGAUN

PUNE

BHARUCH

SURAT

HYDERABAD

RAJAMUNDRY

BHOPAL

KOCHI5 mmtpa

BARMER

MANGALORE2.5 mmtpa

Synergy in Thinking and Acting


GAIL ¦ Strategy ImplementationSegment wise Investments – Balanced Approach

Funded Through a Mix of Internal Resources and Borrowings

1082

137

459

73

157

89

4

29

39

1

27

8

0

200

400

600

800

1000

1200

Pipeline Petchem E&P City Gas Others

Plan Actual

Rs

in

Cr

Capex in 2007-08:Rs. 1,349 Cr

66%

29%

1%2%

2%

P/L E&P Petchem City gas Others


GAIL ¦ Strategy ImplementationSegment wise Investments – Balanced Approach

Funded Through a Mix of Internal Resources and Borrowings

17

24

33

72

30

64

54

60

68

94

88

67

59

80

76

32

23

38

35

04

0

2000

4000

6000

8000

10000

12000

14000

16000

2007-08 2008-09 2009-10 2010-11 2011-12

Pipeline Total Capex

Rs

in

Cr

Total Capex in 5 years:Rs. 28,835 Cr

69%

15%3%

1%2% 10%

P/L E&P PetchemGlob Diversify City gas


GAIL ¦ Strategy ImplementationRecent Accomplishments

MoU with RIL – International Petrochemical Plant

GTA signed with RIL

100% PMT Gas supply through GAIL’s infrastructure

MoU with HPCL, Mittal, TOTAL and OIL for integrated refinery project in Vizag

Feedstock Supply Agreements for Assam Gas Cracker Project signed - GAIL assures full support to the project

GAIL, ONGC sign MoU for formation of JV for monetizing the gas reserves discovered by ONGC in KG and Mahanadi basins

GAIL signs MoU with Transparency International India for Integrity Pact with Contractors

Petroleum Secretary compliments GAIL on Dahej – Dabhol pipeline completion

GAIL, Apollo Tyres sign accord for Steam Conversion Project through Waste Heat Recovery

GAIL bags National Award for Excellence in Cost Management

GAIL and China Gas to form Joint Venture Company

GAIL-HPCL sign JV agreement for city gas projects in Rajasthan

GAIL and Indian Oil ink MoU for JV in City Gas Distribution projects in West Bengal


Segment Turnover

Particulars Q42006-07

Q42007-08

%Change

over2006-07

Transmission Services

a) Natural Gas 411 498 21

b) LPG Transmission 91 107 18

Gas Trading 2339 2769 18

Petrochemicals 633 741 17

LPG & OLHC 400 791 98

GAILTEL, CNG and E&P 9 29 222

Sales Turnover (net of ED) 3883 4935 27

(Rs in Crores)


Segment Gross Margin (EBITDA)


Q42007-08

%Change

over2006-07






LPG & OLHC (51) 379 843

GAILTEL 3 3 -

Unallocated (19) (123)

Gross Margin (EBITDA) 716 1260 76

(Rs in Crores)


Segment PBT


Q42007-08

%Change

over2006-07






LPG &OLHC (75) 354 572

GAILTEL 1 0.17 (69)

Unallocated (22) (126)

Profit before Tax (PBT) 546 1098 101

(Rs in Crores)


57.34%

14.89%

16.69%

3.59%

3.58%3.91%

GoI FII CorporatesGDR MF Others

GAIL ¦ Overview

Government of India (“GoI”) is GAIL’s majority shareholder

The administrative ministry is the Ministry of Petroleum & Natural Gas, GoI

GoI has no plans to reduce its shareholding in GAIL

Government of India (“GoI”) is GAIL’s majority shareholder

The administrative ministry is the Ministry of Petroleum & Natural Gas, GoI

GoI has no plans to reduce its shareholding in GAIL

Shareholding Pattern as on 31.03.08Shareholding Pattern as on 31.03.08 Shareholders >1% or moreShareholders >1% or more

President of India57.34%

Life Insurance Corporation 5.94%

ONGC 4.83%

IOC2.42%

Templeton Global Advisers 1.55%

Magellan1.20%

Shareholding Pattern - Strong Support from GoI

Documents

GAIL (India) Limited PRESS CONFERENCE ON FINANCIAL RESULTS FY 2007-08 NG/LPG Transmission NG Trading LPG & OLHC Petrochemicals E&P City Gas Power GAIL