Gujarat Gas Company Limited (GGCL) About GGCL GGCL holds the distinction of being Indias largest private

sector player in the natural gas transmission and distribution business. Incorporated in 1980 with the primary objective to procure, distribute and utilize natural gas and allied technology GGCL pioneered the concept of compressed natural gas distribution to the industrial, commercial and domestic customers. Today it supplies gas to more than 349296 domestic, industrial and commercial customers and serves over 175757 compressed natural gas users. The corporate office of GGCL is in Ahmedabad and its area of operations is spread in the districts of Surat and Bharuch. In 1989 company began its operations in the industrial hotspot of Ankaleshwar. In 1991, GGCL expanded its operations to surat. The first CNG station was setup in Surat. The company has been a part of BG group portfolio since 1997. BG group has a 66% controlling stake in GGCL. FIs, FIIs and public hold the remaining 34% stake. Profitability Ratios of GGCL: 2007 Operating Profit Margin (%) Gross Profit Margin (%) Net Profit Margin (%) Return On Capital Employed (%) 21.38 23.04 13.10 42.68 2008 19.17 16.05 12.01 33.25 2009 20.26 17.01 12.11 34.63 2010 22.83 19.95 13.86 46.46 2011 16.25 14.37 11.15 49.47

Return On Net Worth (%) 28.25 25.08 23.58 31.54 35.88 Operating profit margin is a ratio of EBIT to sales revenue, from above table it can be observed that in 2008 and 2011 it has been decreased. This is because the operating profit is decreased in those years. In 2011 it decreased sharply because of a decrease in the operating profit, and the net sales hardly increased from

30.22% to 30.87%.This might be because of the increase in operating expenses (15%) especially cost of raw material in 2011. Gross profit margin is also observed to be decreased as the variable cost for producing a product is observed to be increased(13% ) in 2011 and (7%) in 08. Net profit margin ratio has also observed to be followed the same trend, but though here both the net profit and net sales are increasing the later is increasing in more proportion to the former. ROCE initially observed to be deceased and then increased showing the capital structure that they have employed to increase their operating profit and Return on net worth decreased in first 3 years because of the increase in capital inflow through equity share capital as compared to the increase in PAT. Liquidity and solvency ratios: 2007 Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio 0.649 0.66 0.03 0.03 2008 0.71 0.68 0.02 0.02 2009 0.66 0.63 0.02 0.02 2010 0.64 0.62 0.02 0.02 2011 0.64 0.63 0.02 0.02

The current ratio observed to be decreased from 08 because of the 15% increase in current liabilities than that of 10% increase in current assets in 09 and its also less than the standard current ratio (1:1) showing company is less capable of paying its short term obligations. Quick ratio is also observed to follow the same trend wherein even after reducing the inventory which showed a sizeable increase, the liability side is more indicating company is relying on other means than profit to meet its current financial obligations and facing problems in paying bills on time.

Debt to equity ratio and long term debt ratio are very miniscule because the company is hardly making the use of long term debt for financing their operations. Debt coverage ratios: 2007 2008 2009 2010 2011

Interest Coverage 1297.93 2088.84 1921.42 839.75 2588.36 Total Debt to Owners Fund 0.03 0.02 0.02 0.02 0.02 Interest coverage ratio is observed to be decreased sharply in 10 because the interest payable is increased in proportion to its EBIT. In 11 however it is increased because of increase in operating profit showing a good position. Debt to owners fund ratio is decreasing showing company is relying more on equity for its financing purpose. Cash flow indicators: 2007 2008 2009 2010 2011

Dividend Payout Ratio 14.67 14.38 68.84 69.49 120.26 Earning Retention Ratio 85.55 85.51 31.34 30.49 25.61 Earnings Per Share 24.64 24.60 13.57 20.09 21.27 Dividend payout ratio is increasing showing the Company is increasing the percentage of the dividend paid to their shareholders out of total net income over the years. In 11 it is suddenly increased showing the industry is matured and there is a little room for growth of the industry and paying higher dividends is the best use of their profits. EPS is less in 2009 because at that point in time % of number of shares issued was much higher (nearly double from the previous year) than the % increase in their profit after tax (hardly 13%).