#1GUJARAT GAS Investor Meet 2010 Mumbai 25th March 2010 GJ 5 CF 6459 1#2Disclaimer GUJARAT GAS 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 2008. 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#3Agenda Introduction Performance Highlights Business Profile Regulation Growth Opportunities Way Forward GUJARAT GAS 3#4Gujarat: The gas hub of India Gulf of Kuchchh Rann of Kachchh Kachchh Mundra Porbander GSPL Transmission pipeline Banas Kantha RAJASTHAN GAIL HBJ Patan Little Rann Mehsana of Kachchh Sabar Kantha hinagar GUJARAT GAS Gas Pipelines Established CGDS Ahm Kheda anchmahal Surendranagar Dahod New CGDs MADHYA PRADESH armada ot adara Dahej 0 Amreli agar Junargadh Pipavav Hazira Gulf of Khambhat Diu (Daman & Diu) Map not to Scale Proposed LNG Terminals District Headquarter Existing LNG ARABIAN SEA Terminals -GAIL DUPL sa The Dangs Daman (Daman & Diu) sad DADRA NAGAR HAVELI The best place to be in - for gas business GGCL's area of operation Commissioned Under Construction RoU in Progress#5GGCL - Shareholding pattern 4.51% 6.05% 9.85% 14.47% 65.12% GUJARAT GAS Parent Company Holding (BGAPH) Mutual Funds Foreign Institutional Investors Others Resident Individuals Shareholding as on 31st Dec. 2009 Market cap as on 19th March 2010 Market Capitalisation ~ Rs 35 Billion#6BG India footprint BG India GUJARAT GAS BG E&P India Ltd Company Information • Jointly operates Panna-Mukta-Tapti fields (BG-30%, RIL - 30% & ONGC - 40%) Exploring KG-OSN-2004/1 with ONGC (55%) from NELP-VI Licensing round Interest in deep water exploration blocks and MN-DWN -2002/2 BGIES • Gas/ LNG marketing entity and aggregator of gas supplies GGCL Legend 1 Panna-Mukta-Tapti Fields MGL 2 KG-OSN-2004/1 3 MN-DWN-2002/2 4 Gujarat Gas (GGCL) 5 Mahanagar Gas (MGL) • India's largest private CGD company (by volumes); 2009 sales: 1035 mmscm BG took over controlling stake in July 1997 • India's largest private CGD company (by customers) JV with GAIL (49.75% each), State Govt. (0.5%): started operations in April 1995 Present across the full hydrocarbon chain#7Share performance Market capitalisation rose from Rs. 1500 cr to 3000+ cr Bonus issue of 1:1 Special dividend recommended Dividend payout increased >5 times 450 400 350 300 250 200 150 100 50 0 Jan-09 Apr-09 Jul-09 Gujarat Gas (Actual) Shareholders' value almost doubled over one year Oct-09 Sensex Bonus issue GUJARAT GAS#8Agenda Introduction Performance Highlights Business Profile Regulation Growth Opportunities Way Forward GUJARAT GAS 8#9Key factors - that influenced our business . Gas supply GUJARAT GAS ● ▸ rLNG - 13% of annual and 20% of Q4 sourcing portfolio Reduced PMT supply from GAIL compared to 2008 KG D6 gas not allocated in 2009 Focus on retail ensured 8% growth in retail volumes Stable margins through increase in selling prices Interim permission for capital works pending regulatory authorisation Added 25+ km of steel and 300 km of PE pipelines Invested in IT and land infrastructure Significantly mitigated shortfall in market's requirement - with rLNG#10Highlights 2009 Fourth Quarter Topline Growth (Q4) 08 09 18% 2 ~ 10% -46% . Gas Volume increased by EBITDA Margins up by 2 PAT Growth (Q4) 08 09 Availability of affordable rLNG -key to higher sales GUJARAT GAS 42%#11Highlights 2009 FY 2009 Topline Growth 08 09 9% PAT Growth 08 09 90 ↑ 8% GUJARAT GAS • EBITDA margins up by • Gas Volume • Dividend • Special Dividend 10% 5% Rs 3 (on expanded capital base) Rs. 5 (on expanded capital base) Margins optimisation underpinned topline growth#12Revenue growth 169 2009 14028 21 2008 12991 2007 22 12424 114 2006 Rs Mn Transmission 9571 9685 Non Transmission 13012 12446 Revenue growth despite sourcing challenges GUJARAT GAS 14197 Source: GGCL 2009#13Profit growth 169 2009 PBT 2417 2345 21 2324 2008 22 2007 114 2006 1199 Transmission 2281 1313 Rs Mn Non Transmission 2303 Profits driven by efficient cost and price optimisation GUJARAT GAS 2586 Source: GGCL 2009#14Capex 2009 190 2009 1230 988 2008 104 797 87 222 2007 1035 758 55 GUJARAT GAS 133 1553 1345 232 272 740 101 2006 Rs Mn ■ Cogen Non Gas Capex Network Upgradation/Expansion CNG Investing in network and other infrastructure Source: GGCL 2009#15Distribution volumes 2009 839 104 80 12 1035 2008 783 91 72 143 1089 2007 2006 657 Ind. Retail CNG 781 mmscm GUJARAT GAS 70 60 285 1196 47 57 327 1088 Domestic/Commercial Bulk Source: GGCL 2009 Sustainable growth in retail market; grew by 20% in Q4#16Agenda Introduction Performance Highlights GGCL Business Profile - Regulation Growth Opportunities Way Forward GUJARAT GAS 16#17Customer profile Gas Transportation 01 GGCL's Business 73 kms (18") trunk pipeline 11 City Gate Stations 10 3300 kms pipeline • 33 CNG Stations Gas Distribution GUJARAT GAS Bulk Market Retail Distribution Industrial Domestic Commercial CNG 875+ 275,000+ 5,000+ 109,000+ Source: GGCL 2009 Added more than 28,000 households and 22,000 vehicles in 2009#18Sales mix Retail 81% (79%) - (%) by realisation Year 2009 1035 mm scm Bulk 1% (1%) Dom & Com 8% (9%) CNG 10% (11%) GUJARAT GAS Source: GGCL 2009 Largest private sector CGD operator in India - by volume#19Gas sourcing mix PMT 65% Year 2009 CAIRN GAIL 5% NIKO 8% 9% 1051 mmscm RLNG 13% GUJARAT GAS 95% at market determined prices Source: GGCL 2009#20Sourcing portfolio rLNG Dahej Petronet LNG Gulf of Cambay Existing entry Point for new gas Gujarat Bhadbhut Bharuch Amboli Kosamba HAPI Kim-Karanj NIKO GGCL Mora Shell LNG CAIRN JV GSPC Hazira Proposed entry Point with GAIL for new gas azira PMT Gas Utran GUJARAT GAS River Narmada Ankleshwar GAIL Ank Surat Hojiwala GAIL Surat Magdala Vapi GAIL PMT Multiple sources - Jhagadia Proposed entry Point for new gas and receiving facilities Existing LDZ New areas GAIL'S HVJ GGCL pipelines GSPL pipeline GAIL's Utran- Baroda pipeline RGTL pipeline#21Industrial retail customer profile 100% 75% 18% 50% 25% 0 46% 6% 6% 8% 11% 5% GUJARAT GAS 23% 29% 48% Solid Fuel Liquid Fuel Power Textiles Chemical Dyes & Pesticides Pharmaceutical Intermediate Glass & Ceramics Others Total Source: GGCL 2009 Textiles (Surat) and Chemicals (Ankleshwar) dominate#22Combined Heat and Power (Mwe) GUJARAT GAS Mwe 350 300 250 200 187 150 100 50 234 2005 2006 2007 326 326 326 1 Mwe ~5000 scmd Sustained focus on CHP 2008 2009 Source: GGCL 2009#23. • • • ● Building a strong HR base 553 employees* - blend of experience and youth Senior Management Team deputed from BG Group GUJARAT GAS Strong HSSE culture - driven by BG Group guidelines Focus on appraisal process, training programmes help maintain high standards Progressive HR policies towards high employee engagement and development ESOP introduced last year, as a retention tool for select managerial talent (* as at 31 Dec 2009) Focus on internal talent development#24People - at Gujarat Gas GUJARAT GAS MD Director General Manager Asst. General Manager Manager Deputy Manager Associate Manager Sr. Engineer Staff Managerial 141 Executive 172 Staff 240 24#25Safety initiatives ● Enhanced leadership on safety • • • Establishing "Safe Work" practices ་ Lower confined space entry risk 2 Safety roadshows: 2,000 attended "Excavation Safety" seminar for SMC contractors/ licensed plumbers Competency Assurance; focus on - ་ ་ Migrant workers, mobile training van Safety Passport, defensive driving certifications Peer reviews Safer CNG business Bar codes, RFID, CCTV, training to fillers Step Forward for Safety ་ ་ Action plan rolled out Life Saver campaign Completed 10 million man-hours safely RIDH Show-2009 GUJARAT GAS#26Social investments ઔદ્યોગિક તાલીમ સંસ્થા 32 - GUJARAT GAS Skill development project to unemployed "Science is fun"; an entertainment based Environment Education Bus (Prakriti) tribal youths at ITI education program for school children Jhagadia • • Support for school enrollment drive for girl child education Leading utility coordination in Surat to minimise damages. Focus on sustainable development#27Agenda Introduction Performance Highlights GGCL Business Profile - Regulation Growth Opportunities Way Forward GUJARAT GAS 27#28* ** Regulations GUJARAT GAS • Authorisation* applications filed with PNGRB** awaiting final award ་ For CGD network in districts of Surat and Bharuch For Hazira-Ankleshwar transmission pipeline PNGRB public consultation process completed without any significant objections • MoPNG authorisation received for Surat, Bharuch and Ankleshwar in 2008 The Delhi High Court has held that the Regulator's powers to grant authorisations are subject to S 16 of the PNGRB Act being notified. Petroleum and Natural Gas Regulatory Board High degree of engagement with the PNGRB#29. • Regulations(2) GUJARAT GAS Interim permissions received from PNGRB to continue construction in all operational areas Two rounds of CGD bidding conducted by PNGRB 13 Geographic Areas, primarily along HBJ and EWPL bid out Bid round for Gujarat opportunities awaited 29#30Agenda Introduction Performance Highlights GGCL Business Profile - Regulation Growth Opportunities Way Forward GUJARAT GAS Cond 30#31Strategy Moving up the value chain • Grow retail market • Develop CNG business • Develop new applications GUJARAT GAS Building materiality Management Strategy Geographic expansion Strategy aligned with regulatory framework GGCL Schematics#32Gujarat - The focus of DMIC DMIC - Global Manufacturing and Trading Hub 38% of DMIC passes through Gujarat* • Phase I plan at Dholera identified under Early Bird Projects • Investment regions: Bharuch-Dahej Region Surat-Navsari Industrial Area and Valsad-Umbergaon Industrial Area DFC Dedicated Freight Corridor - DFC DMIC GGCL's operational areas • DFC, a new rail transportation system with high axle loads and GUJARAT GAS computerised features with Bharuch, Ankleshwar, Surat and Valsad as industrial nodes • A high impact industrial area within 150 km distance on both sides • 2 Expected investment of ~ $30 bn in the region* Expected to triple industrial output in five years* Map: Indicative, not to scale as per DIPP and Govt. of Gujarat DMIC passes through the heart of GGCL's operations#33Surat & Bharuch Districts GUJARAT GAS • • Fast growing investment region contributes ~ 12% to State GDP 2 13 SEZs, 32 Industrial estates, 4 industrial parks and PCPIR Surat: India's fastest growing city with growth rate of 11.5% Vadodara - Ankleshwar Industrial Area Bharuch - Dahej Investment Region Bharuch Surat Navsari sIndustrial Area Valsad - Umbergaon Industrial Area • Growth in vehicle population 2 8% Map: Indicative, not to scale Source: Govt. of Gujarat, Indicus Analytics 2008 Remains a favoured investment destination#34Opportunities • Gujarat Gas operates in a high growth region . Strong opportunity for growth in current districts of operations Bid for new geographic areas . Grow CNG business, aggressively GUJARAT GAS Additional gas sourcing predicated on term rLNG and indigenous gas 34#35Agenda Introduction Performance Highlights GGCL Business Profile - Regulation Growth Opportunities Way Forward GUJARAT GAS 35#36• Key challenges GUJARAT GAS Augmenting the gas sourcing portfolio at optimal price ● • Segmented market strategy for stable margins Securing regulatory authorisation for new areas • Ensuring health and safety of all GGCL's employees and contractors 36#37• • • Key messages • GUJARAT GAS Robust business model for stable performance and growth Ample opportunities in a high growth region CGD expertise optimally extending network enabling conversion from various applications to natural gas Resources in place for growth Regulatory authorisation for existing areas imminent; bidding strategy for new areas Global expertise on technical standards and safety from BG Group To build on its leadership position in industry#38Thank you for your attention GUJARAT GAS 38