Gail Assignment -

7/28/2019 Gail Assignment -

1/13

Financial Analysis ofGAIL India Ltd.

Submitted to :-

PROF. SAMRESH CHHOTRAY

Submitted by :-

Krishna Murari Mishra

PGDM-2nd Sem (PIBM)

7/28/2019 Gail Assignment -

2/13

Introduction to Gas Authority of IndiaLimited

Type State-owned enterprisepublic company

Traded as BSE: 532155,NSE: GAIL,LSE: GAID

BSE SENSEX Constituent

Industry Energy, Petrochemicals

Founded 1984

Headquarters New Delhi, India

Key people Sh B. C. Tripathi(Chairman & MD as of 2013)

Products Natural Gas, Petrochemical, Liquid Hydrocarbons, Liquefied

Petroleum Gas Transmission, City Gas Distribution, E&P,

Telecommunication, Electricity Generation.

Net income Rs36.54 Cr (201112)

Employees 3,994 (2013)

Parent MoP & NG

Subsidiaries GAIL Gas, BCPL and GAIL Global (Singapore) Pte Ltd.

7/28/2019 Gail Assignment -

3/13

About CompanyGAIL (India) Limited was incorporated in August 1984 as a Central Public Sector Undertaking (PSU) u

the Ministry of Petroleum & Natural Gas (MoP & NG). The company was previously known as

Authority of India Limited. It is India's principal Gas transmission and marketing company. The com

was initially given the responsibility of construction, operation & maintenance of the Hazira VijaypJagdishpur (HVJ) pipeline Project. It was one of the largest cross-country natural gas pipeline projects in

world. Originally this 1800-kilometre-long pipeline was built at a cost of Rs17 billion and it laid

foundation for development of market for natural gas in India. GAIL began its city gas distribution in

Delhi in 1997 by setting up nine compressed natural gas (CNG) stations.

In order to secure Gas for its mainstream business Exploration and Production department was cre

Today GAIL is a partner in the Dawoo-OVL led consortium in two offshore block in Myanmar which

made a gas discovery. Bulk of its blocks are located in India in the prolific basins of Cambay, Ass

Arakan, Mahanadi, Krishna Godavary Deep water and onland, Cauvery onland and deep water and wes

offshore. It is actively scouting for foreign blocks both exploratory or discovery.

GAIL today has reached new milestones with its strategic diversification into Petrochemicals, Telecom

Liquid Hydrocarbons besides gas infrastructure. The company has also extended its presence in Po

Liquefied Natural Gas re-gasification, City Gas Distribution and Exploration & Production thr

participation in equity and joint ventures. Incorporating the new-found energy into its corporate identity,

Authority of India was renamed GAIL (India) Limited on 22 November 2002.

Natural gas transmission

GAIL has built a network of trunk pipelines covering length of around 11,000 km. Leveraging on the

competencies, GAIL played a key role as gas market developer in India for decades catering to m

industrial sectors like power, fertilizers, and city gas distribution. Currently GAIL transmits more than

MMSCMD of gas through its dedicated pipelines and have more than 70% market share in both

transmission and marketing. However, at present there are regional imbalances in gas supply across

country. To bridge this gap in infrastructure, Ministry of Petroleum and Natural Gas, in the year 2

authorised five new pipelines to GAIL covering a length of over 5,500 km.

S. No. Pipeline Length km/ Capacity in MMSCMD Commissioning

1. Dadri Bawana Nangal* 610 km/31 MMSCMD 201112

2 Chainsa Jhajjar Hissar** 300 km/35 MMSCMD 201112

3. Jagdishpur Haldia 2000 km / 32 MMSCMD 201314

4. Dabhol Bangalore 1386 km/ 16 MMSCMD 201112

5. Kochi Kanjirikkod Bangalore 860 km / 16 MMSCMD 201213

TOTAL5156 km / 130 MMSCMD

7/28/2019 Gail Assignment -

4/13

Trading and Profit & Loss A/c ofGas Authority of India Limite

for theyear ending on 31st March 2011 & 2012. (Amt in RS. Cr.)

Particulars Mar12 Mar 11 Particulars Mar12 Mar 11To Raw material 31202.7 23994.13 By sales 40396.63 32458.64To power & Fuel ost 1065.68 972.88 By closing stock 497.75 132.49

To Employee cost 678.00 784.09To other ManufacturingExp.

811.46 601.74

To Miscellane ous exp. 434.31 288.07To G/p (B/F) 6702.23 5950.22

40894.38 32591.13 40894.38 32591.13

To Selling & Admn Exp. 934.71 458.94 By G/P (B/d) 6702.23 5950.22

To Pre Operative Exp. (303.32) (37.52) By Other Income 376.38 518.58To Interest 313.43 139.90To Depreciation 790.71 650.29To Extra Ordinary items 125.37 17.20To Tax 1563.87 1678.86To N/p (B/F) 3653.84 3561.13

7078.61 6468.80 7078.61 6468.80

To Equity dividend 1103.57 951.36 By N/P (B/d) 3653.84 3561.13To Corporate dividend tax 179.02 155.32

To transferred to B/s

(Reserve & surplus )2550.27 2454.45

3653.84 3561.13 3653.84 3561.13

7/28/2019 Gail Assignment -

5/13

Balance Sheet of Gas Authority of India Limited

as on 31st March 2011 & 2012 (Amt in RS. Cr.)

Liabilities Mar12 Mar11 Assets Mar12 Mar11

Authorized Share Capital

Equity Share capital 1268.48 1268.48

Net Block 15857.62 12403.57

Reserves 20356.00 17984.86 Capital work in

progress

8241.76 5879.17

Secured Loans 3023.50 2310.00 Fixed deposits 895.81 1900.91

Unsecured Loans 2323.35 0.00 Investments 3548.93 2035.74

Current liabilities 9997.68 6986.31 Inventories 1419.74 855.11

Provisions 4359.51 4060.50 Sundry Debtors 2176.52 1905.90

Cash & Bank 35.52 230.44

Loans & Advances 9152.62 7399.31

41328.52 32610.15 41328.52 32610.15

Note : Contingent Liabilities 15739.13 18811.22

Mar12 Mar11 ANALYSI

7/28/2019 Gail Assignment -

6/13

No. of Share 12684.8 Lakhs 12684.8 Lakhs

Face Value 10 Rs 10Rs

Eps = PAT/Equity

share

capital

3653.84/126.848= 28.80 3561.13/126.848

=28.07 + .7

Eq. Divi.%= DPS/FV 8.70/10 = 87% 7.50/10= 75% + 12

Div. Payout Ratio

= DPS/EPS

8.70/28.80= 30.2% 7.50/28.07

= 26.72% + 3.48

Rate of Int.=

Int./Debt.

313.43/5346.85= .0586

= 5.86%

139.90/ 2310= .06

=6.06% -.20

Rate of Tax=

Tax/PBT

1563.87/5217.71= 30% 1678.86/5239.99

=32%

Kd = Int Rate (1-

Tax)

5.86(1-.30)= 04102

= 4.10%

6.06(1-.32)

= 4.12%

Ke= (Div.%

Xg)/Mp.

8.70(1.16)/375= 2.69%( Mp= 375 Rs as on 26th March 2012.)

(Mp= 323.45 Rs as on 19t Mar. 2013)

7.50(1.16)/461.2

= 1.89%( Mp= 461.20 Rs. as on

31st March 2011.)

+.80%

PE Ratio = MPS /

EPS

= 375 / 28.80 = 13.02 461.20/28.07

= 16.43

Interest coverage

Ratio = EBIT/Interest

payable

= (6447.22 - 790.71)/ 313.43

= 5656.51 / 313.43= 18.04%

5397.09/139.9

=38.57% -20.53

Debt. Eq. Ratio=Total

Lib./Equity

= (5346.85+14357.19)/(1268.48 + 20356)

= 19704.04 : 21624.48

= 1 : 1.92

13356.81/19253.34

=1 : 1.42

Roce

= (PAT/Liab.)X100

= (3653.84/26971.33) x100

= 13.547%

(3561.13/21563.34)

x100=16.51%

-2.96

KO (WACC) 2.97% 2.14% +.83%

Ko(Mar.2012) =

7/28/2019 Gail Assignment -

7/13

Amt. Proportion Cost Weighted cost

Equity 1268.48 .048 .0269 .00129

Debt 5346.85 .198 .0412 .00815

Reserve 20356 .754 .0269 .02028

26971.33 1.00 KO= .02972

(2012)= 2.972%

Ko(Mar.2011) =

Amt. Proportion Cost Weighted cost

Equity 1268.48 .059 .0189 .0012

Debt 2310 .107 .0412 .0044

Reserve 17984.86 .834 .0189 .0158

21563.34 1.00 KO(2011)= =.0214

= 2.14%

Profit & Loss account of GAIL India ------------------- in Rs. Cr. -------------------

Mar '12 Mar '11

12 mths 12 mths

Income

7/28/2019 Gail Assignment -

8/13

Sales Turnover 40,939.00 32,907.09

Excise Duty 542.37 448.45

Net Sales 40,396.63 32,458.64

Other Income 376.38 518.58

Stock Adjustments 497.75 132.49

Total Income 41,270.76 33,109.71

Expenditure

Raw Materials 31,202.70 23,994.13

Power & Fuel Cost 1,065.68 972.88

Employee Cost 678.00 784.09

Other Manufacturing Expenses 811.46 601.74

Selling and Admin Expenses 934.71 458.94

Miscellaneous Expenses 434.31 288.07

Preoperative Exp Capitalised -303.32 -37.52

Total Expenses 34,823.54 27,062.33

Mar '12 Mar '11

12 mths 12 mths

Operating Profit 6,070.84 5,528.80

PBDIT 6,447.22 6,047.38

Interest 313.43 139.90

PBDT 6,133.79 5,907.48

Depreciation 790.71 650.29

Other Written Off 0.00 0.00

Profit Before Tax 5,343.08 5,257.19

Extra-ordinary items -125.37 -17.20

PBT (Post Extra-ord Items) 5,217.71 5,239.99

Tax 1,563.87 1,678.86

Reported Net Profit 3,653.84 3,561.13

Total Value Addition 3,620.84 3,068.20

Preference Dividend 0.00 0.00

Equity Dividend 1,103.57 951.36

7/28/2019 Gail Assignment -

9/13

Corporate Dividend Tax 179.02 155.32

Per share data (annualised)

Shares in issue (lakhs) 12,684.77 12,684.77

Earning Per Share (Rs) 28.80 28.07

Equity Dividend (%) 87.00 75.00

Book Value (Rs) 170.48 151.78

Balance Sheet of GAIL India ------------------- in Rs. Cr. -------------------

Mar '12 Mar '11

12 mths 12 mths

Sources Of Funds

Total Share Capital 1,268.48 1,268.48

Equity Share Capital 1,268.48 1,268.48

Share Application Money 0.00 0.00

Preference Share Capital 0.00 0.00

Reserves 20,356.00 17,984.86

Revaluation Reserves 0.00 0.00

Networth 21,624.48 19,253.34

Secured Loans 3,023.50 2,310.00

Unsecured Loans 2,323.35 0.00

Total Debt 5,346.85 2,310.00

Total Liabilities 26,971.33 21,563.34

Mar '12 Mar '11

12 mths 12 mths

Application Of Funds

Gross Block 26,306.63 22,144.38

Less: Accum. Depreciation 10,449.01 9,740.81

Net Block 15,857.62 12,403.57

Capital Work in Progress 8,241.76 5,879.17

Investments 3,548.93 2,035.74

Inventories 1,419.74 855.11

Sundry Debtors 2,176.52 1,905.90

7/28/2019 Gail Assignment -

10/13

Cash and Bank Balance 35.52 230.44

Total Current Assets 3,631.78 2,991.45

Loans and Advances 9,152.62 7,399.31

Fixed Deposits 895.81 1,900.91

Total CA, Loans & Advances 13,680.21 12,291.67

Deffered Credit 0.00 0.00

Current Liabilities 9,997.68 6,986.31

Provisions 4,359.51 4,060.50

Total CL & Provisions 14,357.19 11,046.81

Net Current Assets -676.98 1,244.86

Miscellaneous Expenses 0.00 0.00

Total Assets 26,971.33 21,563.34

Contingent Liabilities 15,739.13 18,811.22

Book Value (Rs) 170.48 151.78

Yearly Results of GAIL India------------------- in Rs. Cr. -------------------

Mar '12 Mar '11

Sales Turnover 40,397.95 32,536.52

Other Income 431.88 440.70

Total Income 40,829.83 32,977.22

Total Expenses 34,582.65 27,004.08

Operating Profit 5,815.30 5,532.44

Profit On Sale Of Assets -- --

Profit On Sale Of Investments -- --

Gain/Loss On Foreign Exchange -- --

VRS Adjustment -- --

Other Extraordinary Income/Expenses -- --

Total Extraordinary Income/Expenses -- --

Tax On Extraordinary Items -- --

Net Extra Ordinary Income/Expenses -- --

Gross Profit 6,247.18 5,973.14

Interest 116.46 82.86

PBDT 6,130.72 5,890.28

Depreciation 790.71 650.29

Depreciation On Revaluation Of Assets -- --

PBT 5,340.01 5,239.99

7/28/2019 Gail Assignment -

11/13

Tax 1,686.17 1,678.86

Net Profit 3,653.84 3,561.13

Prior Years Income/Expenses -- --

Depreciation for Previous Years Written Back/Provided

-- --

Dividend -- --

Dividend Tax -- --

Dividend (%) -- --

Earnings Per Share 28.80 28.07

Book Value -- --

Equity 1,268.48 1,268.48

Reserves 20,356.00 17,984.86

Face Value 10.00 10.00

Directors ReportYear End : Mar '12

The behalf of the Board of Directors of your Company, I am delighted to

present the 28th Annual Report of your Navratna Company along with

Audited Financial Statements for the Financial Year 2011-12.

FINANCIAL HIGHLIGHTS

Your Company has recorded sustained growth in all key financial

parameters during the year 2011-12 and the important financial high

lights are as under:-

(Rs. in crore)

Particulars 2011-12 2010-11

Income from operations (Net of ED) 40,281 32,459

Other Income 549 519

Cost of Sales (excluding Interest and 34,583 27,005

Depreciation and including extra ordinary items)

Gross Margin 6,247 5,973

Interest 116 83

7/28/2019 Gail Assignment -

12/13

Depreciation 791 650

Profit Before Tax 5,340 5,240

Provision for Tax 1,686 1,679

Profit after Tax 3,654 3,561

Appropriations

Interim Dividend 381 254

Proposed Final Dividend 723 698

Corporate Dividend Tax 179 155

Net Transfer to/(From) Bond (24) 8

Redemption Reserve

Transfer to General Reserve 365 356

Net surplus after Appropriations 2,030 2,090

DIVIDEND

Your Company has a consistent track-record of dividend payment. So far,

your Company has disbursed dividend of Rs. 9,403 crore to the

shareholders. The Board of Directors of your Company had earlier approved the paym

of an interim dividend @30% on equity share of Rs. 10 each (Rs. 3/-per

equity share) amounting to Rs. 381 crore which was paid in the month of

January, 2012. Further, the Board has recommended the payment of Final

dividend @57% on equity share of Rs. 10 each (Rs. 5.70/- per equity share)

for the year 2011-12.

With this, the total dividend payment for the fiscal 2011-12 will be at

87% on equity share of Rs. 10 each (Rs. 8.70/- per equity share) amounting

to Rs. 1,104 crore on its paid-up equity capital of Rs. 1,268.48 crore. Thetotal dividend payout including tax accounts for 35% of profit after

tax.

7/28/2019 Gail Assignment -

13/13