Akank

1
Certificate
I, Ms. Akanksha Sharma, Roll No. 08980003912 certify that the Summer Training
Report (Paper Code Ms-201) entitled Company Analysis and Peers Comparison is
done by me and it is an authentic work carried out by me at Gail (India) limited. The
matter embodied in this Report has not been submitted earlier for the award of any
degree or diploma to the best of my knowledge and belief.

AKANKSHA SHARMA
Date:

Certified that the summer Training Report (Paper Code MS-201) entitled Company
Analysis and Peer Comparisons done by Ms. Akanksha Sharma, Roll No.
08980003912, is completed under my guidance.

Date:

2

Acknowledgement

With a sense of gratitude and respect, I would like to extend my heartiest thanks to all
those who provided help and guidance to make this project a big success. This project
would not have been possible without the whole hearted encouragement, support and co-
operation of our guides.
I am highly indebted and thankful to Mr. Ashish Kumar Purwar, Chief Manager
(F&A) and Mr. S.K. Sinha, Chief Manager (F&A), my external guides and Dr. Sonali
Yadav, my internal guide, who has been constant source of inspiration and
encouragement to me.
Last but not the least; I would like to thank everybody who has directly or indirectly
helped me in completing this project report.

3

List of Tables

Table No. Title Page No.
1 Current Ratio Analysis 39
2 Quick Ratio Analysis 40
3 Gross Profit Ratio Analysis 41
4 Operating Profit Ratio Analysis 42
5 Net Profit Ratio Analysis 43
6 Return on Investment Analysis 44
7 Return on Equity Analysis 45
8 Total Asset Turnover Ratio Analysis 46
9 Inventory Turnover Ratio Analysis 47
10 Debtors Turnover Ratio Analysis 48
11 Debt Equity Ratio Analysis 49
12 Earnings per share Analysis 50
13 Dividend Payout Ratio Analysis 51
14 P/E Ratio Analysis 52
17 Gross profit Ratio Analysis 55
20 Return on Assets Analysis 58
22 Total Assets Turnover Ratio Analysis 60
25 Fixed Asset Turnover Ratio Analysis 63

4

List of Figures

Figure No. Title Page No.
1 Organisational Structure 20
4 Gross Profit Ratio Analysis 41
7 Return on Investment Analysis 44
9 Total Asset Turnover Ratio Analysis 46
13 Earnings per share Analysis 50
14 Dividend Payout Ratio Analysis 51
15 P/E Ratio Analysis 52
18 Gross profit Ratio Analysis 55
21 Return on Assets Analysis 58
23 Total Assets Turnover Ratio Analysis 60
26 Fixed Asset Turnover Ratio Analysis 63

5

List of Abbreviations

Sr. No. Abbreviated Name Full Name
1 LPG Liquefied petroleum Gas
2 CGD City Gas Distribution
3 JVs Joint ventures
4 AIMA All India mgmt. association
5 PSU Public sector undertaking
6 MOU Memorandum of Understanding
7 PETROFED Petroleum Federation of India
8 MMSCMD Million standard cubic metre per
day
9 GPU Gas processing unit
10 GCU Gas combustion Unit
11 TPA Tonnes per annum
12 E&P Exploration & production
13 NTPC National thermal power corporation
14 MW Mega Watt
15 MMTPA Million metric tonnes per annum
16 CNG Compressed Natural Gas
17 HSE Health, safety & employment
18 FDI Foreign Direct Investment
19 CRM Customer Relationship Management
20 ITES Information technology enabled
services
21 P/E Price Earning
22 NELP New exploration Licensing policy
23 SAP System, applications & products
24 PMT Performance monitoring team
25 GOI Govt of India
26 RTI Right to Information
27 ISO International standards org.
28 PNGRB Petroleum & Natural gas regulatory
board
29 ROCE Return on Capital Employed

6

Executive
Summary

7

EXECUTIVE SUMMARY

This project report includes the analysis of Financial Statements and analysis of market
competitors with the aim to understand the Profitability, Liquidity and Efficiency of the
company Gail.
Gail (India) Limited is a Public Sector Undertaking with a turnover of more than 40000
crore. It has a market share of around 78% and has been recognised as Asia no. 1 Gas
Utility Company and the worlds no. 1 downstream company. Currently, the company
operates in India, Singapore, China and Egypt.
Through this report, it has been tried to analyze the financial environment in which the
company is operating.
The main objectives of this Study is to evaluate the performance of the company by using
ratios as a yardstick to measure the efficiency of the company, Interpret the financial
statement so that the strength and weakness of a firm Historical performance and current
financial condition can be determined., To understand the liquidity, profitability and
efficiency position of the company during the study period, To make comparisons
between the ratios during different periods, and To offer appropriate suggestions for the
better performance of the organization .
In the first chapter, there has been given a brief description about the company profile
including its vision and mission, its Products, Board of Directors, subsidiaries and joint
ventures.

8

In the second chapter, Swot analysis of the company has been done in order to determine
what may assist the firm in accomplishing its objectives, and what obstacles must be
overcome or minimized to achieve desired results.
The next chapter i.e. Literature Review, includes the detailed explanation of the topic and
tool which has been used in the whole analysis.
Later, the Collected Data has been presented in the next chapter under the head Data
Collection and Presentation. This chapter was divided into two parts company Analysis
and Peers comparison.
For company Analysis, the Last five years data have been collected, analyzed and
Inferences were drawn to appreciate their impact on companys performance.
For Peers comparison or Competitors Analysis, again Ratio Analysis tool was used to
analyze and compare the performance of Gail with its major competitors. The major
competitors whose performances have been compared with that of Gail are RIL, ONGC
and IOC. The performances of the competitors have also been compared on the basis of
the last five years data, i.e. from March 2008 to March 2012.
The Scope of this project was -
1) To view companys Business profile at a glance
2) An Aerial view of the companys financial performance
3) In depth analysis of Various Factors affecting the growth of the company as well
as sector as a whole
4) Factors driving growth, Issues & Challenges
5) To find out the Strength, weakness, opportunities and threats
6) financial comparison of the company with its peers

9

The Research Design used in the study is Descriptive in nature because it provides an
accurate picture of some aspects of market environment.
Methods of Data Collection were secondary sources such as Internet, Published Data
and books.
At the end of this report, Findings have been shown on the basis of the analysis done
in the Data Presentation. Also, it was followed by conclusions and references.

10

Chapter 1.
Introduction

Profile of the company
Nature
Vision & Mission
Product range of the company
Size of organisation
Organisation structure
Market share and position
Present leadership
Source of Data Collection

11

1. Company Profile

1.1. Profile of the company
GAIL (India) Ltd is India's flagship Natural Gas Company, integrating all aspects of the
Natural Gas value chain including Natural Gas Transmission, Liquid Hydrocarbon, LPG
Transmission, Petrochemicals, City Gas Distribution, Exploration & Production,
GAILTEL and Electricity Generation. It is a Public Sector Undertaking conferred with
the status of Maharatna on 1
st
Feb, 2013, by the government of India.
1.1.2. Registered Office Address
It is a Multinational company with its The corporate office or the head office
Situated at New Delhi with following details:
GAIL (India) Limited
16, Bhikaiji Cama Place,
R K Puram, New Delhi -110066
Tel: 011-26172580 011-26182955
Fax: 011-26185941
Email: investorqueries@gail.co.in
Website: http://www.gailonline.com
1.1.3. Geographical Areas of Operation
GAIL has a big marketing network spread over the country with locations at New Delhi,
Pata, Noida, Jaipur, Ahmedabad, Bhopal, Mumbai, Hyderabad, Kochi, Chandigarh,

12

Chennai, Kolkatta, Lucknow and Bengaluru .It is a pioneer in City Gas Distribution
(CGD) business in India, with Indraprastha Gas Limited (IGL) in Delhi and Mahanagar
Gas Limited (MGL) in Mumbai being its biggest success stories. Besides IGL and MGL,
GAIL has set up several JVs for CGD to supply gas to households, transport sector &
commercial consumers in various cities including Hyderabad, Agartala, Kanpur, Indore,
Vadodara, Lucknow, Agra and Pune.

1.2. Nature
Gail (India) Ltd was incorporated on 14
th
August 1984 with the purpose of production,
transportation, marketing and Distribution of Natural Gas. It is India's principal Gas
transmission and marketing company.
It has a number of subsidiaries and joint ventures-
1.2.1. Subsidiaries
1.2.1.1. Brahmaputra Cracker and Polymer Limited (BCPL)
1.2.1.2. GAIL Global (Singapore) Pte Limited
1.2.1.3. GAIL Gas Limited
1.2.1.4.GAIL Global (USA) INC
1.2.2. Joint Ventures
1.2.2.1. Aavantika Gas Limited (AGL)
1.2.2.2. Bhagyanagar Gas Limited (BGL)
1.2.2.3.Indraprastha Gas Limited (IGL)
1.2.2.4.Mahanagar Gas Limited (MGL)
1.2.2.5.Maharashtra Natural Gas Limited (MNGL)
1.2.2.6.ONGC Petro-additions Limited (OPaL)

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1.2.2.7.Petronet LNG Limited (PLL)
1.2.2.8.Ratnagiri Gas and Power Private Limited
1.2.2.9.Tripura Natural Gas Company Limited (TNGCL)
1.2.3. Awards and accolades won by GAIL (India) Limited

GAIL (India) Limited has an impeccable record of consistently winning national and
international awards and laurels in all areas of Corporate Governance , management,
production , health safety and environmental (HSE) standards, customer relationship,
wealth creation and a number of other areas. That is why it is the most diversified and one
of the excellent Navratna energy Company of India.
It has won - Platts Global Energy Award, 2011 for Worlds No. 1 Company in
Downstream Operations, Prime Ministers Excellence Award for the year 2009-10 for
Best Performing CPSE in the Petroleum Sector consecutively for second year , 11th ICSI
National Award for Excellence in Corporate Governance, 2011 , Corporate Governance
Award 2012 by Indian Chamber of Commerce, Commendation Certificate from SCOPE
for Corporate Governance in 2010-11, Commendation Certificate from PetroFed for
being leading transporter of Oil & Gas in 2011., AIMA Managing India Awards 2011 for
Outstanding PSU of the Year., Kaizen Warrior Award for Most Efficient Navratna PSU,
2011, No.1 gas utility company in Asia and No.2 gas utility company globally, PLATTS
Top 250, 2010., Petroleum Federation of India (PETROFED) Awards 2010 for Oil &
Gas Marketing Company of the Year., ICSI National Award for Excellence in Corporate
Governance, 2010, Prime Ministers MoU Excellence Award for the year 2008-09 ,
Petroleum Federation of India (PETROFED) Awards 2008 for Oil & Gas Marketing
Company of the Year.

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1.2.4. Competitors
The major competitors of Gail India Limited
1.2.4.1. Oil and Natural Gas Corporation (ONGC)
1.2.4.2. Indian Oil Corporation Limited (IOCL)
1.2.4.3. Reliance Industries Limited (RIL)
1.2.4.4. Hindustan Oil Exploration company (HOEC)
1.2.4.5. Jindal Drilling & Industries Limited
1.2.4.6. Cairn India Limited
1.2.4.7. Nagarjuna Oil Refinery Limited (NORL)
1.2.4.8. Bharat Petroleum Corporation Limited (BPCL)
1.2.4.9. Great Eastern energy Corporation Limited
1.2.4.10. Petronet LNG Limited
1.2.4.11. Mahanagar Gas Limited (MGL)
1.2.4.12. Indraprastha Gas Limited (IGL)
1.2.4.13. Green Gas Limited (GGL)
1.3. Vision & Mission
1.3.1. Vision

15

Be the Leading Company in Natural Gas and beyond, with Global Focus, Committed
to Customer Care and Value Creation for all Stakeholders and Environmental
Responsibility
1.3.2. Mission
To accelerate and optimize the effective and economic use of Natural Gas and its
fractions to the benefit of national economy
1.4. Product range
The company has been dealing in various business segments such as Natural Gas
Transmission, Liquid Hydrocarbon, LPG Transmission, Petrochemicals, City Gas
Distribution, Exploration & Production, GAILTEL and Electricity Generation.
1.4.1. Natural Gas Transmission
Natural gas comes in four basic forms
Liquefied Natural Gas (LNG)
Regasified Liquefied Natural Gas (RLNG)
Compressed Natural gas (CNG)
Piped Natural gas (PNG)
Currently, GAIL sells around 51 % of Natural Gas sold in the country. Of this, 37% is to
the power sector and 26% to the fertilizer sector. Currently, GAIL is supplying around 60
MMSCMD of Natural Gas from domestic sources to customers across India. They are
present in 11 states, i.e., Gujarat, Rajasthan, Madhya Pradesh, Delhi, Haryana, Uttar
Pradesh, Maharashtra, Tamil Nadu, Andhra Pradesh, Assam, and Tripura. They are

16

further extending their coverage to states of Kerala, Karnataka, Punjab, Uttarakhand,
West Bengal and Bihar through their upcoming pipelines.
1.4.2. Liquid Hydrocarbon
GAIL is marketing Gas Processing Unit's (GPU's) products namely liquefied petroleum
gas, propane, pentane, naphtha and by-products of polymer plant namely MFO, propylene
& hydrogenated C4 mix. LPG is being sold exclusively to PSU oil marketing companies
(OMCs) while other products are sold directly to customers in retail segment. GAIL is
India's major producer of propane, popularly known as GAIL Propane. It is an eco-
friendly fuel and provides an effective way of reducing pollution and increasing
productivity. GAIL is presently operating seven gas processing units (GPU) located at
Vijaipur (2 Units), Auraiya, Vaghodia, Usar, Lakwa & Gandhar plant for production of
LPG and GCU at Pata plant for production of polymer.
1.4.3. LPG Transmission
LPG is the most widely used domestic and commercial fuel in India. Over the past four
years GAIL has emerged as one of the major LPG producers in the country. Around 90
per cent of the LPG is consumed in India as fuel by the household sector, while the
balance is sold to industrial and commercial customers. GAIL has seven LPG Plants, two
at Vijaipur and one at Vaghodia, and one each in Lakwa (Assam), Auraiya (UP), Gandhar
(Gujarat) and USAR (Maharashtra), producing over 1 million TPA LPG and other liquid
hydrocarbons. GAIL is the first company in India to own and operate pipelines for LPG
transmission. It has 1,900 km LPG pipeline network 1,300 km of which connects the
western and northern parts of India and 600 km of networks is in the southern part of the
country connecting Eastern Coast. It has a share of about 10% of the Indian LPG market
in LPG production and 7% in LPG sales.

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1.4.4. Petrochemicals
GAIL diversified from gas marketing and transmission into polymer business by setting
up North India's first gas based Petrochemicals complex. GAIL commissioned the plant
successfully in year 1999 by rigorous team work and project management capabilities.
Currently petrochemical business is one of the core focus area of GAIL. GAIL has set up
a world-scale gas cracker plant, petrochemical complex at Pata in Auraiya district of Uttar
Pradesh with an investment of 2,500 crore. GAIL Pata is the only HDPE/LLDPE plant
operating in Northern India and has a dominant market share in North India GAIL has set
up a joint venture, Brahmaputra Cracker and Polymer Limited BCPL, to construct a
Greenfield petrochemical plant in Assam.
1.4.5. City Gas Distribution
GAIL is the pioneer of city gas distribution in India. GAIL took many initiatives to
introduce PNG for households and CNG for the transport sector to address the rising
pollution levels. Pilot projects were launched in early 1990s in two metros Delhi and
Mumbai through joint venture companies Indraprastha Gas Limited (IGL) and Mahanagar
Gas Limited (MGL) leading to the start of commercial operation of city gas projects.
Based on the success of IGL and MGL, GAIL has further set up six more JVs viz
Bhagyanagar Gas Limited, Andhra Pradesh; Avantika Gas Limited in Madhya Pradesh;
Central U P Gas Limited & Green Gas Limited in Uttar Pradesh; Maharashtra Natural
Gas Limited in Pune Maharashtra and Tripura Natural Gas Company Limited in Tripura.
for CGD projects in various cities.
1.4.6. Exploration and Production
As the Indian Economy opened up around the year 2000, the business environment
changed dramatically. For GAIL, liberalisation meant competition in our core business i.e.

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midstream and downstream national gas distribution. Apart from securing sources for
Natural Gas, there were other compelling reasons for GAIL to get into E&P:
Integration in supply-chain
Large gap in Gas demand and supply
National Gas security
Balancing of Business portfolio
Global opportunity.
GAIL is currently participating in 31 exploration blocks, in Basins such as Mahanadi,
Mumbai, Cambay, Assam-Arakan, Tripura Fold Belt, Gujarat Kutch, Krishna Godavari,
Cauvery and Cauvery Palar. GAIL has partnership in these blocks with various
companies such as ONGC, OIL, GSPC, Hardy Exploration & Production, Petrogas,
JOGPL, Eni and Daewoo as Operators.
1.4.7. GAILTEL
GAILTEL, the Telecom & Telemetry services arm of GAIL (India) Limited, is providing
communication services for its business critical pipeline Supervisory Control and Data
Acquisition (SCADA), Enterprise Resource Planning (ERP) for automation of
organization-wide business processes/functions and inter/intra office communications
apart from commercially leasing telecom services to telecom operators across India since
2001. GAILTEL, today serves most of the Telecom operators of the country, which
include Vodafone, TCL(VSNL), Bharti Airtel, Idea Cellular, Tulip Telecom, Tata Tele
services, PGCIL, DEN Network to name a few.
1.4.8. Electricity Generation

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Ratnagiri Gas and Power Pvt. Ltd. (RGPPL) is a joint venture company between GAIL
(India) Ltd, NTPC Limited, Indian Financial Institutions (IFIs) and MSEB Holding
Company Limited. The promoters have incorporated and registered the company as a
private limited company on 8 July 2005. The authorised share capital of the company is
20 billion and the shareholdings of GAIL, NTPC and IFI's are 28 1/3% each and MSEB
15%. The project is located at Ratnagiri district of Maharashtra state about 340 km south
of Mumbai. The project has power generation capacity of 2150 MW along with an
integrated 5 MMTPA LNG terminal. Primary fuel for the power plant is natural gas.
1.5. Size of Organisation
Gail has the turnover of Rs 40,281 crore in 2011-2012 and owes its success to continuous
commitment of its workforce to which the company proudly refers to as 'Team GAIL'.
Presently there are about 3937 efficient employees are engaged in the company as per the
record on March 31, 2012.

20

1.6. Organisation Structure

Figure 1.6.1.Organisation Structure of GAIL
CMD
BOARD OF
DIRECTORS
EXECUTIVE DIRECTORS

DIRECTOR (HR)

DIRECTOR (FINANCE)
DIRECTOR (MARKETING)
DIRECTOR (BD)
DIRECTOR (PROJECTS)
General Manager General Manager
General Manager

General Manager

General Manager

Chief Manager
Senior Manager
Manager
Senior Engineers
Senior Manager

Manager

Senior Engineers

Senior Engineers

Senior Engineers

Senior Engineers

Manager

Manager

Manager

Senior Manager

Senior Manager

Senior Manager

Chief Manager

Chief Manager

Chief Manager

Chief Manager

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GAIL (India) limited has tall organisation structure. The pros of tall structures lie in
clarity and managerial control. The narrow span of control allows for close supervision of
employees. Tall structures provide a clear, distinct layer with obvious lines of
responsibility and control and a clear promotion structure. GAIL structure at the top is
CMD, followed by board of Directors, Executive Directors, General Managers, Deputy
General Managers, Chief Managers, Senior Managers, Managers, Deputy Manager and
Senior Engineers, each having own responsibility and roles.
The clear roles and responsibilities also enable GAIL to delegate powers to different level.
Greater delegation of Power (DOP) to executives frees up senior management for
devoting their time to bigger and strategic aspects which are important to organisational
growth. This enables board members to concentrate more on macro and strategic issues
which are vital for the growth of existing and new businesses. DOP not facilitates quick
decision making but also provide operational flexibility thereby reducing the procedural
delays and speeding up organisation responsiveness.
It works under the Ministry of Petroleum and Natural Gas (MoPNG), Government of
India, New Delhi.The company's general policies and administrative matters are
finalized by the Board of Directors. The Board of Directors have special enhanced
powers as the company is listed as a Navratna Company. The functional and financial
autonomy of the company is enhanced time to time with Government of India's
notifications regarding Navratna public sector companies of India. The Directors are
appointed by President of India through Ministry of Petroleum and Natural Gas
(MopPNG). The number of Directors cannot be less than three and not more than
twenty. There is a statutory Audit Committee having Board level members, which
looks after every internal system and practice. The Company has also constituted
Ethics Committee to ensure ethical conduct of business.

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1.7. Market share & position
GAIL, a major player in Indias natural gas industry, handling about 74% of the market
share, is today an integrated company across the Natural Gas Value Chain expanding its
business to become a global player. The government of India owns 57% of the company.
Presently, GAIL has been ranked sixth among the top companies in the industry.
1.8. Present Leadership
During my Summer Training at GAIL I have interacted with Mr. Ashish Kumar Purwar
and Mr. S.K. Sinha, who work as Chief Managers under Finance & Accounts Department
in GAIL.
1.9. Sources of Data Collection
The Information in this research study was collected from secondary sources. To collect
the data Company annual report, annual magazine, last 5 year balance sheet, and cash
flow statements had been referred.

23

Chapter 2.
SWOT Analysis

Strengths
Weaknesses
Opportunities
Threats
Best Practices
Variations/Deviations in Practices followed

24

2. SWOT ANALYSIS

SWOT Analysis is a tool that identifies the strengths, weaknesses, opportunities
and threats of an organization. Specifically, SWOT is a basic, straightforward model that
assesses what an organization can and cannot do as well as its potential opportunities and
threats. The method of SWOT analysis is to take the information from an environmental
analysis and separate it into internal (strengths and weaknesses) and external issues
(opportunities and threats). Once this is completed, SWOT analysis determines what may
assist the firm in accomplishing its objectives, and what obstacles must be overcome or
minimized to achieve desired results.
The SWOT analysis of the company is as follows:
2.1. Strengths & Weaknesses
2.1.1. Strengths
2.1.1.1. Gail India Ltd. Played a key role as Gas Market developer.
2.1.1.2. Companys share of gas transmission business is around 74% in India.
2.1.1.3. The company maintains a dominant position in gas business.
2.1.1.4. Gail has been ranked no.2 gas utility company in Asia and 2
nd
in gas utility
globally.
2.1.1.5. Worlds No. 1 company in downstream operations.
2.1.1.6. Awarded with the status of Maharatna by Government of India.

25

2.1.1.7. First in Indias oil and gas sector to be listed in BSE-GREENEX., the first
environment friendly equity index launched by Bombay Stock Exchange.
2.1.1.8. Operating more than 2/3rd of country's CNG stations.
2.1.1.9. Gas Supply for about of the India fertilizer produced.
2.1.1.10. Highly efficient and engaged workforce according to the survey undertaken by
M/s Aon Hewitt Pvt Ltd. 2010-2011.
2.1.1.11. The company has the largest gas based polymer plant of India at Pata (U.P)
2.1.1.12. The Company received the coveted Scope Corporate Governance Award for
2007-08 for excellence in propagation and implementation of Corporate
Governance.
2.1.1.13. It has increased global ventures for energy security.
2.1.2. Weaknesses
2.1.2.1. Shortage of supply with respect to Demand.
2.1.2.2. Large dependence on internal supply chain.
2.1.2.3. Drop in gas supply leading to unreliability.
2.1.2.4. Since a govt. entity, decision making is affected.
2.2. Opportunities & Threats
2.2.1. Opportunities
2.2.1.1. More & more new customers and major private players are joining hands with
Gail.
2.2.1.2. Demand for clean energy sources like natural gas is growing exponentially.

26

2.2.1.3. Demand for gas is growing in its volume.
2.2.1.4. New ventures with gulf companies.
2.2.1.5. 100 per cent FDI is allowed for petroleum products and pipeline sector as well
as natural gas/LNG pipeline, for infrastructure related to marketing of
petroleum products, market study of formulation and investment financing.
2.2.2. Threats
2.2.2.1. Gas supply shortage poses threat to GAILs capacity utilization.
2.2.2.2. Gail is also facing tough competition from its competitors like, ONGC, RIL,
etc.
2.2.2.3. Shortfall in supply of domestic gases.
2.3. Some Best Practices followed by GAIL in different functional areas
2.3.1. Finance
2.3.1.1. GAIL have recently introduced RTGS/NEFT facility for making E-payments
in secure way, through HDFC bank, to vendors having bank account with any
bank under which all payments are made only through electronic transfers by
mapping all vendor bank accounts to their vendor management systems.
2.3.1.2. Balance sheets prepared by the company are in accordance of Companies Act,
1956 as well as Accounting standards issued by the institute of Chartered
Accountants of India.
2.3.1.3. It monitors the preparation of cost records in accordance the cost Accounting
Standards issued by ICWAI.
2.3.2. Human Resource (HR)

27

2.3.2.1. The safety and health of employees and external stakeholders are
embedded in the core organisational values of the company.
2.3.2.2. It has endeavoured to keep its employees fully aware of the HSE aspects
and to meet this objective; it provides regular training to employees,
contract worker through internal as well as external resources.
2.3.2.3. It ensures the implementation of safe work practices, and continual
improvement in Safety Management System in compliance with statutory
rules and regulations.
2.3.2.4. The Company has been offering various training programs related to the
gas value chain for professional development of executives working in
the oil & Gas sector from its training centres GAIL Training Institute
(GTI).
2.3.2.5. Senior Management Development Centre (SMDC) exercise has been
undertaken with an objective of development of its senior level
executives and preparing them for future leadership positions.
2.3.3. Marketing
2.3.3.1. It has implemented an online bidding portal through which existing
customers can bid for supply of spot RLNG gas.
2.3.3.2. Gail is making its presence in the polymer sector.

2.3.4. Information Technology (IT)
2.3.4.1. GAIL has taken new IT initiatives to enhance productivity-SAP based Gas
Management System (GMS),Governance, Risk & Compliance (GRC)

28

and Reverse Auction modules have been implemented to enhance
transparency, efficiency and customer satisfaction.
2.3.4.2. It has implemented Electronic Document Management System for maintaining
all the important information and records of the company in digitized form.
2.3.4.3. Many initiatives such as Tender Monitoring System, e-QRP system, online
written examination in e-recruitment module, etc have been undertaken to ensure
transparency in systems & procedures.
2.3.4.4. The Business Information Systems department of this Company is certified
with ISO 9001:2008 standard.

2.3.5. Production
2.3.5.1. GAIL follows Total Quality Management in all the processes, systems and
functional areas.
2.3.5.2. It has implemented Tender Monitoring System to enhance & bring better
transparency in the procurement process.

2.3.6. Operations
2.3.6.1. With increase in demand, Gail is laying more new pipelines.

2.3.7. Customer Relationship Management (CRM)
2.3.7.1. The company is committed to promote globally comparable levels of health,
safety, Environment Management System in the areas of its business
operations with a focus on improving harmony with environment through
Sustainable Development.

29

2.3.8. Corporate Social Responsibility (CSR)
2.3.8.1. GAIL contributes 2% of its companys performance after tax to CSR
activities.
2.3.9. Sustainable Development
2.3.9.1. GAIL (India) Limited is spreading clean and green fuel and energy to
households, commercial vehicles, small industries and big industrial sector
in India and abroad to enrich growth in economy and protecting
environment and ecology of the country.

2.4. Variations/Deviations in practices followed by Gail
2.4.1. According to the F.W.Taylor training should be given to employees from the
very beginning so they may achieve competence as early as possible, GAIL
follows this principle and provides training at the very beginning.
2.4.2. The company follows scientific training and development of workers so as to
achieve highest level of efficiency.
2.4.3. It has maintained close cooperation between management and labour to
ensure that the work is carried out in accordance with the principles which
are developed.
2.4.4. GAIL follows the principle of Division of Work which states that a worker
or group of workers is assigned a specialized task in order to increase
efficiency.
2.4.5. There is total transparency in the management and working of the company.

30

Chapter 3.
Data Collection &
Presentation

Data Collection
Data Presentation

31

3. DATA COLLECTION & PRESENTATION

A. DATA COLLECTION
3. A.1. Marketing
3. A.1.1. Product Planning Process
The production planning in GAIL starts with exploration of crude oil and produced
(upstream) and then transformed into various petroleum products with different end
uses in refineries and finally marketed to retail customers (downstream). Except
Aviation Turbine Fuel (ATF) and Liquefied Petroleum Gas (LPG), all the end
products are sent to intermediate storage plants through terminal/depots and finally
to retail customers . As regards ATF it is distributed directly to the Airfields or Air
stations and refined LPG is dispatched to LPG storage bottling plants for
liquefaction and marketing to retail customers.
3. A.1.2. Pricing Policies/Strategies
Price of Natural gas produced from nominated fields of ONGC Ltd and OIL Ltd is
governed by orders from MOP&NG from time to time. As per extant MOP&NG
order, company is allowed to levy a marketing margin of Rs. 200/MSCM on the gas
sold at APM/non APM prices. GAIL also prevents misuse of price sensitive
information by anyone by preserving the confidentiality of price sensitive
information.
3. A.1.3. Channel Planning &Management

32

Channel planning is required to maximize the returns from the existing infrastructure
and to plan future investments and other changes that maintain or improve position
by:
Implementation of Strategic plans
Acquisition/rationalisation/rebuild/conversion
Improving decision making
Improving competitive advantage
Managing change
The journey of channel planning in GAIL starts with Site classification, competition
assessment (no. of competitors in that area), Individual site strategy depending on
the kind of consumers coming in, proposal evaluation working on financial,
technical, marketing and economic feasibility of a proposed plan , network
optimization , performance measurement with regular and sudden audits.
3. A.1.4. CRM Policies
GAILs main aim is to develop products to meet changing market demands and specific
customer requirements for their current and future business growth. They have devised a
customer suggestion scheme and redressal mechanism module to address customer
enquiries and grievances. Customers are given easy access to these tools on their
corporate website. Their customer satisfaction surveys help them to assess the level of
their customers satisfaction and their key expectations. It also organizes customer meets
and felicitation events to further their relationship with their customers. To improve
customer satisfaction they have employed the latest technologies in their gas management
and metering system. They have made a policy in which they address queries raised by
customers through customer relationship portals, satisfaction surveys and other means of

33

engagement. They have expand their retail presence to a large number of cities and towns
for replacing polluting fuels with CNG and bringing PNG to the doorsteps of domestic
and commercial consumers.

3. A.1.5. Advertisement Process
Their advertising and marketing initiatives are supported by product brochures, road-
shows and campaigns, internet advertising etc.

3. A.2. HRM
3. A.2.1. Recruitment, Selection Process
The company ensures that they acquire the right talent to fuel our growth and give them
the right exposure and opportunity for their overall development. Their efforts focus on
recruitment from some of Indias best academic institutions. They also conduct a
stringent all India competitive test to give fair and transparent opportunities to talent
across the country and train them in their high class training facilities supported by the
GTI (GAIL Training Institute). The company has a well designed e-Recruitment System
in practice where in the posts are advertised through company's website, applications are
received online, processed and scrutinized online and all other important recruitment
business is done electronically. The company being a public sector company follows the
reservation policy as well. The organization also does not force employees to deposit their
original certificates pertaining to educational qualification or Date of Birth at the time of
joining.
In each Interview board there is SC/ST representative to safeguard the interest of SC/ ST
applicants. In case vacancies against which selection to be made, is less than 10, Efforts
are made to have a Minority community member in such Boards/ Committees.

34

3. A.2.2. Training, Performance Appraisal & Recognition Systems
GAIL ensures that they provide their employees an engaging atmosphere through their
welfare activities and internal communication. Therefore, it fulfils commitment towards
employee development by providing adequate opportunities to them to hone their
technical and inter-personal skills. Companys annual performance review program,
employee suggestion schemes, employee engagement surveys and internal review
meetings help employees in identifying and responding to their employees key concerns
and support these measures by on-going means of interaction including internal
magazines, newsletters and the intranet.
In the year 2012, Gail Training Institute (GTI) had launched e-Gyan Prawah an e-
Learning initiative for senior executives through Harvard Management Mentor covering
44 e-learning modules to support the key developmental areas.

3. A.2.3. Industrial Relations, Welfare, Career Development & Grievance
Handling Policies
GAIL has put efforts to effectively implement RTI Act at GAIL. In this regard, during the
year, they provided 11 training programs to 200 employees on the key elements and
enforcement areas for this Act. GAIL endeavours to create an organization free from
corruption and is inclined towards upholding high ethical values. To this end, they have
signed a MoU with Transparency International (TI) in 2007 for ratification of Integrity
Pact Programme in consultation with the CVC to maintain and foster ethical and
corruption free business environment. This pact is also mandatorily signed by vendors /
suppliers having high value contracts.

35

They have defined specific roles and responsibilities of the key departments in GAIL to
address the grievances, monitor them, and ensure that they are addressed in a timely and
efficient manner. They are one of the few companies in India to set up a focused Board
committee to address grievances of all stakeholders through the Stakeholders Grievance
Redressal Committee. This committee is empowered to take decisions on disputes
referred by stakeholders and resolve them amicably. To improve retention and
satisfaction amongst the employees, they have taken consistent investment efforts
towards building adequate infrastructure and promoting welfare activities grievance
Redressal Committee consisting of senior officers including the Advisor-Coordination &
officer on special duties has been constituted to handle day to day labour grievances in
coordination with the contractors representative & the contractors workers for prompt
disposal & for maintenance of a harmonious work environment.
They have announced a number of measures to address some of the challenges that
women face at work such as sexual harassment, child care leave of up to 2 years etc. The
company has a policy whereby minimum age for employment is prescribed and child
labour is strictly denied.

3. A.2.5.Safety Policies & Practices
They have stringent security arrangements to handle and manage any mishaps or
untoward incidents due to the increasing geo-political instability. They have also invested
on trained security staff to ensure seamless operations. In order to ensure greater
transparency in all aspects of the company, it has adopted a Whistle Blower Policy .This
policy provides for adequate safeguards against victimization of employees who avail of
the mechanism. They have a workplace policy on HIV/AIDS prevention and control to
prevent discrimination and create awareness on HIV/AIDS. They have established

36

occupational health, safety and wellbeing plans for all work centres in our company.
Despite dealing with hazardous processes/products, the company has endeavoured to
protect human lives by deploying state-of-the-art technology, regular maintenance of
Equipment and activities such as mock drills. The organisation also conducts various
training programmes pertaining to Safety, Health and Environment such as Lay-Off
Protection Analysis, Hazardous Waste Management and Environment Protection, First
Aid etc.
3. A.3. Production & Operations

3. A.3.1. Production & Procurement Planning
3. A.3.1.1.GAIL has appointed Independent External Monitors (IEM) of high repute to
lend transparency to their procurement procedures.
In order to enhance clarity and transparency in their procurement procedures, they have
initiated Procurement through reverse auction for high value procurement. They have
formed a transparent procedure for reverse auction, which was applied first to tenders
involving steel procurement, necessitated by the problem of fluctuation in steel prices.
The company has expansion plans for building more than 7500 km of gas pipelines in the
country and it is very ambitious to go in a very big way for expending its networks. The
Company is going to invest more than Rs. 30000 crores in next five years to install new
pipelines in gas transmission. These would include large trunk pipelines along with
smaller pipelines which would help the Company to complete its dream project of
'National Gas Grid.'
The company owns and operates the biggest gas based petrochemical plant of India at
Pata and has planned to double its production capacity in coming five years.

37

3. A.3.2. Supply chain Management such as Vendor Development, Logistics,
Inventory Management
Supply Chain Management of GAIL includes Refiner, Manufacturer, Distributer,
Marketer and Consumers. It has adopted a Gas Management System to handle multiple
sources of supply and delivery of gas in a co-mingled form and provide a seamless
interface between shippers, customers, transporters and suppliers. At GAIL, they have
deployed a Bill Watch System to improve processing of vendor bills, increase
transparency for vendors during tracking of payment, and enhance trust through
independent nature of the system involved.
Similarly, they have also upgraded their File Management System on similar lines to
track the movement of files within GAIL and also promote vigilance awareness through
their internal magazine, Jagrook, which provides information on proactive vigilance and
describes several successful case studies. This is supported by appropriate measures to
boost awareness of major vendors towards the need for proactive vigilance and ethics.
They have an Operation and Maintenance Policy, which outlines the objective, targets,
philosophy and guidelines for maintenance across their operations. This policy focuses on
increasing process efficiency and decreasing downtime to ensure optimum use of
resources.

3. A.3.3. Quality Assurance & Quality Control
All the gas processing and petrochemical plant and LPG pipeline systems and Natural
Gas Compressor Stations under operation in Gail are ISO 9001, ISO 14001 and OHSAS
18001 certified. We have designed an Integrated Management System (IMS) based on
systemic requirements of ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007 for

38

all our processes, activities, products and services across locations. These systems enable
us to effectively control and manage our performance.

3. A.3.4. Maintenance Practices
To have a focused approach on HSE issues, they have constituted a separate HSE sub-
committee of Directors at the Board level to closely monitor the performance and
emergency preparedness of our operations.
Several steps were taken to improve handling and disposal of hazardous waste by
ensuring proper disposal of hazardous waste through CPCB-authorized waste handlers
who process these wastes and ensure minimum impact on the environment from their
disposal.
Managing Water resources- GAIL understands that the depleting water resources pose a
major threat for the sustainability of major ecosystems and significant risk to the
sustainability of any business. They are consciously optimizing consumption of water and
at the same time make provisions for the nearby communities by trying to minimize their
use of groundwater. GAIL is making continuous effort to use recycled water and thus
reducing the overall water consumption.

3. A.4. Use of ITeS
To enhance productivity, transperancy, efficiency, and customer satisfaction GAIL
have implemented SAP based Gas Management System (GMS), Governance, Risk
& Compliance (GRC) & Reverse Auction modules. It has also implemented online
biding portal through which existing customers can bid for supply of spot RLNG gas.

39

B. DATA PRESENTATION
3. B.1. Intra-firm Financial Statement Analysis for 2007-2008 to 2011-2012:
Analysis of Liquidity Position of GAIL -
Liquidity refers to the existence of the assets in the cash or near cash form. This ratio
indicates the ability of the company to discharge the liabilities as and when they
mature. To fulfil this objective the following ratios were calculated:
3. B.1.1 Current Ratio
It is calculated by dividing current assets and current liabilities. The ideal current ratio is
2.1 i.e. Current Assets should be equal to Current Liabilities.
Year 2007-08 2008-09 2009-10 2010-11 2011-12
Current Ratio 1.40 1.29 1.16 1.11 0.95
Table 3.B.1.1.1. Current Ratio Analysis

Figure 3.B.1.1.2. Current Ratio Analysis
Interpretation
The Current Ratio of GAIL was reasonably good in the year 2007-2008 but it had shown
a declining trend from 2008-2009. In the year 2011-2012, it had a ratio less than 1 that
means companys current liabilities exceed the current Assets.
0
0.2
0.4
0.6
0.8
1
1.2
1.4
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

40

3. B.1.2. Quick Ratio
It is obtained by dividing the quick assets by quick liabilities. Quick Assets are obtained
by deducting stocks from Current Assets. Quick Liabilities are obtained by deducting
bank overdraft from Current Liabilities.
Year 2007-08 2008-09 2009-10 2010-11 2011-12
Quick Ratio 1.33 1.22 1.11 1.04 0.85
Table 3.B.1.2.1. Quick Ratio Analysis

Figure 3.B.1.2.2. Quick Ratio Analysis

Interpretation
The quick ratio of GAIL had been more than 1 in the past four years but the ratio went
down in 2010-2011 and then again declined in 2011-12.

0
0.2
0.4
0.6
0.8
1
1.2
1.4
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

41

Analysis of Profitability Position of GAIL-
The Profitability ratios are calculated to measure the operating efficiency of the company.
To fulfil this objective the following ratios were calculated:
3. B.3. Gross Profit Ratio
This is the ratio expressing relationship between gross profits earned to net sales.
The ratio shows whether the mark-up obtained on cost of production is sufficient
however it must cover its operating expenses.
Year 2007-08 2008-09 2009-10 2010-11 2011-12
Gross Profit Ratio 18.78 20.03 20.56 18.15 15.18
Table 3.B.3.1. Gross Profit Analysis

Figure 3.2.3.2. Gross Profit Analysis
Interpretation
The gross profit ratio of GAIL has been highest in the year 2009-2010 but in the next two
years it has shown declining trend.

0
5
10
15
20
25
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

42

3. B.4. Operating Profit Ratio
This ratio shows the relationship between cost of goods sold plus operating expenses &
Net sales. . It shows the efficiency of the company in managing the operating costs base
with respect to sales. The higher the ratio, the less will be the margin available to
proprietors.
Year 2007-08 2008-09 2009-10 2010-11 2011-12
OPR 21.95 17.33 18.77 17.03 15.02
Table 3.B.4.1. Operating Profit Ratio Analysis

Figure 3.B.4.2.Operating Profit Ratio

Interpretation
The operating profit ratio of GAIL has shown a decline in 2008-09 and then again in
2010-11, and has declined in 2010-11 and 2011-2012.

0
5
10
15
20
25
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

43

3. B.5. Net Profit Ratio
Net profit ratio establishes the relationship between net profit (after tax) & sales and
indicates the efficiency of the management in manufacturing selling, administrative
and other activities of the firm.
Year 2007-08 2008-09 2009-10 2010-11 2011-12
NPR 14.44 12.01 12.59 10.97 9.49
Table 3.B.5.1.Net Profit Ratio Analysis

Figure 3.B.5.2. Net Profit Ratio Analysis

Interpretation
GAIL's net profit ratio was less during 2008-09 and it increased next year but again it
decreased from 2010 to 2012.

0
2
4
6
8
10
12
14
16
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

44

3. B.6. Return on Investment
Return on Investment indicates the probability of business & is very much in use
among financial analysis.
Year 2007-08 2008-09 2009-10 2010-11 2011-12
ROI 18.16 17.89 17.22 16.52 14.21
Table 3.B.6.1.Return on Investment Analysis

Figure 3.B.6.2.Return on Investment Analysis

Interpretation
Return on investment of GAIL has shown a declining trend after 2007-2008 .

0
2
4
6
8
10
12
14
16
18
20
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

45

3. B.7. Return on Equity
Return on equity shows what percentage of profit is earned on the capital invested by
ordinary shareholders.
Year 2007-08 2008-09 2009-10 2010-11 2011-12
ROE 20.00 18.98 18.69 18.50 16.89
Table 3.B.7.1.Return on Equity Analysis

Figure 3.B.7.2.Return on Equity Analysis

Interpretation
The return on equity of the company has shown a declining trend as the ROE has
decreased from 20.00 in 2007-08 to 16.89 in 2011-12.

15
15.5
16
16.5
17
17.5
18
18.5
19
19.5
20
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

46

Analysis of Turnover Position of GAIL-
They are basically productivity ratios which measure the output produced from the given
input deployed. If asset turnover is high, it shows efficient or productive use of input. To
fulfil this objective the following ratios were calculated:
3. B.8. Total Asset Turnover Ratio
It is the ratio which measures the efficiency with which the assets were turned over a
period. It is the ratio of sales to total assets.
Year 2007-08 2008-09 2009-10 2010-11 2011-12
TATR 1.26 1.49 1.37 1.51 1.50
Table 3.B.8.1.Total Asset Turnover Ratio Analysis

Figure 3.B.8.2. Total Asset Turnover Ratio Analysis

Interpretation
The total asset turnover ratio of GAIL has increased from1.26 times in 2007-08 to 1.50
times in 2011-12.

1.1
1.15
1.2
1.25
1.3
1.35
1.4
1.45
1.5
1.55
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

47

3. B.9. Inventory Turnover Ratio
The number of times the average stock is turned over during the year is known as
Stock turnover ratio.
Year 2007-08 2008-09 2009-10 2010-11 2011-12
ITR 45.97 75.77 97.51 101.36 79.18
Table 3.B.9.1. Inventory Turnover Ratio Analysis

Figure 3.B.9.2. Inventory Turnover Ratio Analysis

Interpretation
The inventory turnover ratio of GAIL has increased from 45.97 times in 2007-08 to
101.36 times in 2010-11 .The highest ratio for the company in the last 5 years was 101.36
times in the year 2010-2011.

0
20
40
60
80
100
120
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

48

3. B.10. Debtors Turnover Ratio
The debtor turnovers suggest the number of times the amount of credit sales is
collected during the year.
Year 2007-08 2008-09 2009-10 2010-11 2011-12
DTR 19.79 20.28 17.86 18.46 19.32
Table 3.B.10.1.Debtors Turnover Ratio Analysis

Figure 3.B.10.2. Debtors Turnover Ratio Analysis

Interpretation
The debtors turnover ratio of GAIL was 20.77 times in 2006-07,but it has shown a
declining trend after that and in 2009-10 it went to the lowest of 17.86 times (in the last 5
years). In 2010-11 the ratio has increased to 20.28.

16.5
17
17.5
18
18.5
19
19.5
20
20.5
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

49

Analysis of Leverage Position of GAIL-
Leverage ratios are used to calculate the financial leverage of GAIL, to get an idea of the
company's methods of financing or to measure its ability to meet financial obligations. .
To fulfil this objective the following ratios were calculated:
3. B.11. Debt Equity Ratio
It establishes relation between the outside long- term liabilities and owner funds. It
shows the proportion of long term external equity and internal equities.
Year 2007-08 2008-09 2009-10 2010-11 2011-12
DER 0.09 0.08 0.08 0.11 0.25
Table 3.B.11.1.Debt equity Ratio Analysis

Figure 3.B.11.2. Debt equity Ratio Analysis

Interpretation
The debt-equity ratio of GAIL was 0.09 in 2007-08 then it declined later on and it went to
0.11 again in 2010-11 and 0.25 in 2011-2012.
0
0.05
0.1
0.15
0.2
0.25
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

50

Analysis of Valuation Ratios of GAIL
Valuation ratios are generally presented on a per share basis and are more useful to
the equity investors. To fulfil this objective the following ratios were calculated:
3. B.12. Earnings per share
This ratio measures profit available to equity shareholders on per share basis. It is
not the actual amount paid to shareholders as dividend but is the maximum that can
be paid to them.
Year 2007-08 2008-09 2009-10 2010-11 2011-12
EPS 30.76 22.10 24.75 28.07 28.80
3.B.12.1. Earnings per share Analysis

Figure 3.B.12.2.Earnings per share Analysis
Interpretation
The earnings per share of the company were 30.76 in 2007-08 and then it declined in
2008-10 and then again increases in 2010-12.
0
5
10
15
20
25
30
35
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

51

3. B.13. Dividend Payout Ratio
This ratio indicates split of EPS between cash dividends and reinvestment of profit.
If the company has profitable projects than it will prefer to keep dividend payout
ratio lower.
Year 2007-08 2008-09 2009-10 2010-11 2011-12
DPR 32.50 31.67 30.30 26.72 30.21
3.B.13.1. Dividend Payout Ratio Analysis

Figure 3.B.13.2. Dividend Payout Ratio Analysis

Interpretation
The dividend payout ratio of GAIL has shown a declining trend and from 32.50 in 2007-
08 it came down to 30.21 in 2011-12.

0
5
10
15
20
25
30
35
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

52

3. B.14. P/E Ratio
It is computed by dividing the current market price of a share by earning per share.
Year 2007-08 2008-09 2009-10 2010-11 2011-12
P/E Ratio 5.00 5.27 5.35 5.40 5.91
Table 3.B.14.1. P/E Ratio Analysis

Figure 3.B.14.2.P/E Ratio Analysis

Interpretation
Price earnings ratio of the company has shown increasing trend from 2007 2012.
Highest P/E ratio in the last 5 years is 5.91.

4.4
4.6
4.8
5
5.2
5.4
5.6
5.8
6
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
2007-2008
2008-2009
2009-2010
2010-2011-2011-2012
2010-2011-2011-2013

53

3. B.2. Peers Comparison
The competitors analysis has been done using the ratio analysis as a tool to analyze and
compare the performance of Gail with its major competitors. The major competitors
whose performances have been compared with that of GAIL are RIL, ONGC and IOCL.
The performances have been compared on the basis of the last five years data, i.e. from
March 2007 to March 2012.
Comparison of Liquidity Position of peers with GAIL-
3. B.2.1. Current Ratio
Current Ratio 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
GAIL 1.4 1.29 1.16 1.12 0.95
ONGC 1.56 1.45 1.39 1.36 1.15
RIL 1.01 1.08 1.11 1.22 1.68
IOCL 0.84 0.61 0.76 0.8 1.44
Table 3.B.2.1.1. Current Ratio Analysis

Figure 3.B.2.1.2. Current Ratio Analysis

0
1
2
3
4
5
6
2007-2001 2008-2009 2009-2010 2010-2011 2011-2012
IOCL
RIL
ONGC
GAIL

54

Interpretation
The current ratio of Gail is reasonably good but it has shown a declining trend from 2008-
09,its competitor ONGC has been good throughout but just like GAIL it has also shown a
decline in the current ratio.RIL unlike GAIL and ONGC has shown increasing trend
throughout in its current ratio which shows that the company is now having a good
position to meet its current liabilties.IOCL has shown an increase in its current ratio from
2008-09 but still its current ratio is quiet less as compared to the competitors, but after
2010-2011 it has shown some improvement in the current ratio.

3. B.2.2. Quick Ratio
Quick Ratio 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
GAIL 1.31 1.21 1.09 1.04 0.85
ONGC 1.39 1.27 1.22 1.2 1.05
RIL 0.93 0.9 0.76 1.01 1.17
IOCL 0.54 0.46 0.44 0.5 0.74
Table 3.B.2.2.1.Quick Ratio Analysis

Figure 3.B.2.2.2. Quick Ratio Analysis
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
IOCL
RIL
ONGC
GAIL

55

Interpretation
The overall quick ratio of GAIL and ONGC has been good and this shows that these
companies are having a good position to pay their current financial obligations with the
available quick funds in hand. IOCL has shown a consistency but still its quick ratio is
less as compared to its competitors and RIL has shown an increase in the ratio after 2009-
10 and it is the good sign for the company to meet its current financial obligations.

Comparison of Profitability Ratio of peers with GAIL-
3. B.2.3. Gross profit Ratio
Gross Profit
Ratio
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
GAIL 18.78 14.97 16.52 15.02 13.07
ONGC 42.99 43.58 53.87 50.87 37.99
RIL 13.14 13.35 10.13 9.76 6.80
IOCL 3.47 3.46 4.4 2.43 3.09
Table 3.B.2.3.1.Gross Profit Analysis

Figure 3.B.2.3.2.Gross Profit Analysis

0
20
40
60
80
100
120
140
160
180
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
IOCL
RIL
ONGC
GAIL

56

Interpretation
The gross profit ratio of ONGC has been the highest as compared to its competitors this
shows that the company is more efficient in controlling its production cost and the
company has enough revenue available to cover overhead, other expenses and profits.
GAIL has been a better performer than IOCL and RIL in these five years, IOCL has the
lowest gross profit ratio whereas RIL has been better than IOCL this is the area of
concern for the management of IOCL and also for RIL as they have not performed so
well as compared to the others.

3. B.2.4. Net Profit Ratio
Net Profit Ratio 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
GAIL 14.01 11.4 12.29 10.8 8.94
ONGC 25.93 23.5 26.35 26.43 31.02
RIL 14.45 10.65 8.35 8.08 5.99
IOCL 2.78 0.95 3.74 2.22 0.89
Table 3.B.2.4.1.Net Profit Analysis

Figure 3.B.2.4.2.Net Profit Analysis

0
10
20
30
40
50
60
70
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
IOCL
RIL
ONGC
GAIL

57

Interpretation
The net profit ratio of ONGC has been the highest among the competitors and thus this
shows the company's high margin of safety, i.e. lower risk that a decline in sales will
erase profits and result in a net loss. GAIL's net profit margin was less during 2008-09
and it increased next year but again it decreased from 2010 to 2012.RIL's net profit ratio
has shown a declining trend after 2007-08, this is not a good sign for the company in
terms of net profit ratio. IOCL has the lowest net profit margin as compared with others.

3. B.2.5. Operating Profit Ratio
Operating
Profit Ratio
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
GAIL 21.95 17.33 18.77 17.03 15.02
ONGC 49.51 50.39 62.57 61.2 47.79
RIL 16.76 17.01 15.6 15.24 10.25
IOCL 4.56 4.4 5.6 3.8 4.20
Table 3.B.2.5.1.Operating Profit Analysis

Figure 3.B.2.5.2.Operating Profit Analysis

0
20
40
60
80
100
120
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
IOCL
RIL
ONGC
GAIL

58

Interpretation
The operating profit ratio of GAIL has shown a decline in 2008-09 and then again in
2010-11, this shows that the company's revenue has not been consistent and has declined
in 2010-11 and 2011-2012. ONGC has shown an increasing trend in its operating profit
ratio this shows that the company is performing well from its competitors and shows that
the sales of the company have been highly profitable. RILs performance has not been so
good as compared to GAIL and ONGC, its operating ratio has decreased in 2009-10 and
has continued the declining trend in 2010-2012. IOCL has been the poorest performer in
terms of operating ratio as compared to its competitors.
3. B.2.6. Return on Assets
Return on Asset 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
GAIL 1.53 1.16 1.32 1.51 1.70
ONGC 3.27 3.65 4.04 1.13 1.32
RIL 5.48 8.02 4.19 4.62 5.07
IOCL 3.43 3.68 2.08 2.27 2.38
Table 3.B.2.6.1.Return on Assets Analysis

Figure 3.B.2.6.2. Return on Assets Analysis

0
2
4
6
8
10
12
14
16
18
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
IOCL
RIL
ONGC
GAIL

59

Interpretation
The ROA of RIL has been the highest, it has shown a decline after 2008-09 but still its
ROA has been higher than its competitors, which shows that the company is efficient in
utilization of its assets to generate profit. The ROA of GAIL has been very low as
compared to its competitors but it has shown an increase after 2008-09.The ROA of
IOCL has shown a decline in the trend after 2008-09 which is the area of concern for the
company. The ROA of ONGC has also shown a sharp decline after 2009-10 which is the
area of concern for the management.
3. B.2.7. Return on Equity
Return on
Equity
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
GAIL 20 18.98 18.69 18.49 16.89
ONGC 23.87 20.65 19.39 19.56 22.24
RIL 12.64 13.36 24.66 19.49 12.29
IOCL 16.99 6.71 20.22 13.45 6.83
Table 3.B.2.7.1.Return on Equity Analysis

Figure 3.B.2.7.2. Return on Equity Analysis

0
10
20
30
40
50
60
70
80
90
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
IOCL
RIL
ONGC
GAIL

60

Interpretation
The ROE of GAIL has shown a decline after 2007-08 but it has been reasonably good.
The ROE of RIL has shown a major increase after 2008-09 but has again fallen in 2010-
11.The ROE of IOCL has been inconsistent and ROE of ONGC has shown a declining
trend after 2007-08.
Comparison of Turnover Position of peers with GAIL-
3. B.2.8. Total Asset Turnover Ratio
Total Asset
Turnover Ratio
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
GAIL 1.27 1.5 1.39 1.52 1.52
ONGC 0.73 0.68 0.58 0.58 0.65
RIL 1.15 0.79 1.48 1.66 1.91
IOCL 3.24 3.47 2.85 3.09 3.47
Table 3.B.2.8.1. Total Asset Turnover Analysis

Figure 3.B.2.8.2.Total Asset Turnover Analysis
Interpretation
The total asset turnover ratio of IOCL has been the highest and this shows that the
company's performance with respect to the sales has been good, but the total asset
0
1
2
3
4
5
6
7
8
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
IOCL
RIL
ONGC
GAIL

61

turnover ratio has decreased after 2008-09 but again increased after 2009-2010. GAIL has
shown an increase during 2010-11 and thus shows an improvement.RIL has shown an
increasing trend after a downfall in total asset turnover ratio in 2008-09 which is a good
sign for the company. ONGC has been the lowest as compared to others and thus
becomes the area of concern for the company.
3. B.2.9. Inventory Turnover Ratio
Inventory
Turnover Ratio
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
GAIL 79.18 101.36 97.51 75.77 45.97
ONGC 122.77 111.98 87.82 94.69 14.88
RIL 10.57 12.92 8.29 9.59 10.42
IOCL 9.09 13.98 8.37 7.56 8.15
Table 3.B.2.9.1. Inventory Turnover Analysis

Figure 3.B.2.9.2. Inventory Turnover Analysis
Interpretation
The inventory turnover ratio of GAIL has been good even though it has decreased after
2008-09, the ratio of GAIL reflects that the company is quiet efficient in management of
inventories. ONGC'S inventory turnover ratio has been better than its competitors even
though it has declined after 2007-08 and thus shows more efficient management of
0
50
100
150
200
250
300
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
IOCL
RIL
ONGC
GAIL

62

inventories. The inventory turnover ratios of RIL and IOCL are very less as compared to
GAIL and ONGC and therefore this shows the less management of inventories of IOCL
and RIL.
3. B.2.10. Debtors Turnover Ratio
Debtors
Turnover Ratio
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
GAIL 19.32 18.46 17.86 20.28 19.79
ONGC 16.87 15.16 16.87 19.17 15.24
RIL 26.87 26.29 23.67 17.05 18.40
IOCL 36.5 48.15 45.91 45.15 36.01
Table 3.B.2.10.1.Debtors Turnover Analysis

Figure 3.B.2.10.2.Debtors Turnover Analysis
Interpretation
The debtors turnover ratio of IOCL has been the highest as compared to its competitors,
this shows that IOCL is good enough to collect its debts more quickly.RIL is reasonably
good but it has shown a big decline after 2009-10.The debtors turnover ratio of GAIL has
been less as compared to IOCL and RIL but the ratio has increased after 2010-11 and this
0
20
40
60
80
100
120
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
IOCL
RIL
ONGC
GAIL

63

is a good sign for the company .The debtors turnover ratio of ONGC has been the lowest
as compared to the others.
3.B.2.11. Fixed Asset Turnover Ratio
Fixed Asset
Turnover Ratio
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
GAIL 1.07 1.36 1.2 1.48 1.56
ONGC 1.05 1.05 0.85 0.82 0.40
RIL 1.29 1.01 1.24 1.58 2.05
IOCL 4.38 4.98 3.78 3.61 4.49
Table 3.B.2.11.1.Fixed Asset Turnover Analysis

Figure 3.B.2.11.2.Fixed Asset Turnover Analysis
Interpretation
The fixed asset turnover ratio IOCL has been highest as compared to its competitors but It
has shown a declining trend after 2007-08.The fixed asset turnover ratio of ONGC has
been the lowest as compared to others .The fixed asset turnover ratio of GAIL is lower
than that of IOCL but it has shown an increase in the year 2011-12.The fixed asset
turnover ratio of RIL has also shown an increase after 2008-09.

0
1
2
3
4
5
6
7
8
9
2007-2008 2008-2009 2009-2010 2010-2011 2011-20122
IOCL
RIL
ONGC
GAIL

64

Comparison of Leverage Ratio of peers with GAIL-
3. B.2.12. Debt Equity Ratio
Debt -Equity
Ratio
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
GAIL 0.09 0.08 0.08 0.11 0.25
ONGC 0.17 0.2 0.18 0.18 0.04
RIL 0.46 0.64 0.48 0.46 0.36
IOCL 0.86 1.02 0.88 0.95 1.22
Table 3.B.2.12.1.Debt-EquityAnalysis

Figure 3.B.2.12.2.Debt-Equity Analysis
Interpretation
The debt-equity ratio of GAIL has shown consistency through these five years and shows
good long term financial position and sound long term financial policies of the firm.
ONGC has also shown consistent trend and reflects sound long term financial position,
but after 2010-2011 it has shown a huge decline. RIL's debt-equity ratio is higher than
that of ONGC and GAIL, but it has shown a decline n the trend and thus shows that the
company is now relying less on debt. The debt-equity ratio of IOC has been the highest
and thus shows that company is relying more on the long term debt than the shareholder's
0
0.5
1
1.5
2
2.5
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
IOCL
RIL
ONGC
GAIL

65

equity and therefore it shows that there is higher degree of risk for the lenders as
compared to the other competitors.

66

Chapter 4.
Functional Analysis
of the company

Finance
Marketing
Human Resource
Information Technology

67

4. FUNCTIONAL ANALYSIS

4.1. Finance
4.1.1. GAIL follow the process of converting physical shares into electronic format i.e.
dematerialisation of shares.
4.1.2. It provides Investor education and protection Fund.
4.1.3. The company has put up an adequate risk assessment and minimization procedure,
with a vision to integrate risk management with the overall strategy and
operational practices Risk Management Policy and framework has been
established in the company.
4.1.4. GAIL ensures greater transparency in all aspects of the companys functioning; it
has adopted resolution no.89 of Govt. of India pertaining to public Interest
Disclosure and protection of informer and implemented the same as
Whistle Blower Policy in the company.

4.2. Marketing
4.2.1. GAIL follow social marketing discipline transactional by nature and focus on
Price, Product, Place and Promotion to determine what benefits and costs they
would consider acceptable to reach consumers effectively (Andreason, 1995).
4.2.2. One of the major Marketing practices is consumer satisfaction and to improve
customer satisfaction GAIL have employed the latest technologies in their gas
management and metering system. They have made a policy in which they address

68

queries raised by customers through customer relationship portals, satisfaction
surveys and other means of engagement.
4.2.3. The organisation also conducts various training programmes pertaining to Safety,
Health and Environment such as Lay-Off Protection Analysis, Hazardous Waste
Management and Environment Protection, First Aid etc.

4.3. Human Resource
4.3.1. Torrington (2008) explains that human capital signifies the combined intelligence
and experience of staff as a source of competitive advantage that cannot be
imitated by rivals therefore; their efforts focus on recruitment from some of
Indias best academic institutions and They also conduct a stringent all India
competitive test to give fair and transparent opportunities to talent across the
country and train them in their high class training facilities supported by the GTI
(GAIL Training Institute).
4.3.2. According to Mullins (2010), to guarantee high performance, feedback must be
given as means of checking goals attainment and a basis for any revision of goals.
They have built committee to address grievances of all stakeholders through the
Stakeholders Grievance Redressal Committee. This committee is empowered to
take decisions on disputes referred by stakeholders and resolve them amicably. To
improve retention and satisfaction amongst the employees, they have taken
consistent investment efforts towards building adequate infrastructure and
promoting welfare activities grievance Redressal Committee consisting of senior
officers including the Advisor-Coordination & officer on special duties has been
constituted to handle day to day labour grievances in coordination with the

69

contractors representative & the contractors workers for prompt disposal & for
maintenance of a harmonious work environment.
4.3.3. Huselid (1995) used some HRM practices in his study and these include personnel
selection, performance appraisal, incentive compensation, grievance procedures,
information sharing, attitude assessment, labour management participation,
recruitment efforts, employee training and promotion criteria. GAIL follows all of
them to achieve the best Human Resource Practices in their company.

4.4. Information Technology
4.4.1. The Company has SAP management System, Enterprise Resource Planning (ERP)
System, Six Sigma System and a number of other best Practices in its operations.
4.4.2. The company has introduced e-Recruitment, e- Performance Management System
(e-PMS), Online Vigilance Complaint Registration System, e- Budgeting System,
Management Information System.

70

Chapter 5.
Summary &
Conclusions

Findings/Results
Suggestions
Limitations of study

71

5. SUMMARY & CONCLUSIONS

5.1. Findings
After going through the various ratios, I have found that:
5.1.1. The Current Ratio of the company is less than 1 therefore it is finding difficulty in
meeting its financial obligations.
5.1.2. The quick ratio of the company indicates that the business can meet its current
financial obligations with the available quick funds on hand.

5.1.3. The Gross Profit ratio shows that the company is more efficient in handling the
production cost in the year 2009-10.
5.1.4. The Operating Profit Ratio of the company shows that the company's revenue has
not been consistent.
5.1.5. The net profit ratio is little low in the current year as compared with the previous
year which means that the company is less profitable in that year.
5.1.6. Return on investment of the company shows that the company has less productivity
& Earnings.
5.1.7. There is a decline in Return on Equity which shows higher increment in reserves &
surplus of the company.

72

5.1.8. The total asset turnover ratio shows that the company is using its asset efficiently to
generate sales.
5.1.9. Inventory Turnover Ratio shows that the company has become more efficient in
management of inventory.
5.1.10. Increase in Debtors Turnover Ratio in the current year shows that company is
more efficient in determining the outstanding cash balances from its customers
during an accounting period.
5.1.11. The debt equity ratio shows that the financial position of the company is highly
solvent & shows sound long term financial policies.
5.1.12. The earnings per share are maximum in the current year which shows that the
company is profitable.
5.1.13. The dividend payout ratio of the company is little low therefore the shareholders
looking for quick returns would a bit disappointment as they prefer high ratio but
those investors who are looking for capital appreciation would be satisfied with
dividend payout ratio.
On the basis of the above findings we can conclude that the company is managing its
current assets effectively, it has shown an upward trend over the years and expected to
grow with the same compounded annual growth rate over next few years. Overall it has a
decent Financial Management.
Being an undisputed leader in the Natural Gas market in India and a significant player in
the global natural gas industry, by growing aggressively while maintaining the highest
level of operating standards, GAIL focuses on all aspects of the Natural Gas value chain
and beyond including Exploration, production, Transmission, Marketing, Extraction,

73

processing, Distribution, Utilization including petrochemicals & Power and Natural Gas
infrastructure, Products and Services. Gail is also committed to operational excellence in
everything they do with a focus on continuous efforts to improve environmental
performance for themselves and their customers and will be sensitive to the needs of the
environment in all its actions. Its overall vision is to accelerate and optimize the effective
and economic use of Natural Gas and its fractions to the benefit of national economy and
to Anticipate and exceed customer expectations through the provision of highest quality
infrastructure, products and services.
5.3. Suggestions
5.3.1. Gail should search for alternatives to get gas to meet the demand.
5.3.2. The company should maintain the current ratio in such a manner that it does not
face any difficulty in meeting its financial obligations.
5.3.3. It would be good for the company if it maintains its ROCE higher as low ROCE
indicates inefficiencies.
5.3.4. Liquidity refers to the ability of the concern to meet its current obligations as and
when these become due. The company should improve its liquidity position.
5.3.5. The profit ratio is decreased in current year so the company should pay attention to
this because profit making is the prime objective of every business.
5.3.6. The long term financial position of the company is very good but the company
should pay little attention to its short term solvency.

74

5.4. Limitations of the study
The analysis and interpretation are based on secondary data contained in the published
annual reports of GAIL India Limited for the period, so it is subject to all limitations that
are inherent in the condensed published financial statements. Due to the limited time
available the study has been confined for a period of 8 weeks only. The study of financial
performance of the company through ratio itself will not completely show the companys
good or bad financial position.

75

Bibliography

76

B IBLIOGRAPHY

WEBSITES
1. http://money.rediff.com/companies/gail-india-ltd/15120010/balance-sheet
2. http://www.gail.nic.in/final_site/index.html
3. www.gailonline.com
4. Economicstimes.com
5. www.indiainfoline.com
6. www.ongcindia.com
7. www.ril.com
8. http://www.moneycontrol.com/financials/gailindia/ratios/GAIL
9. www.ioc.com
10. http://www.ijhssnet.com/journals/Vol_2_No_22_Special_Issue_November_2012/
32.pdf
BOOKS
1. Khan M.Y. and Jain P.K. Financial Management Mc Grew Hill Publishing Co.
Ltd., New Delhi, Third Edition.
2. Annual reports of GAIL India Ltd.

77

Annexure

78

ANNEXURE -1
BALANCE SHEET
Particulars Mar'12 Mar'11 Mar'10 Mar'09 Mar'08
Liabilities
12
Months
12
Months
12
Months
12
Months
12
Months
Share Capital 1268.48 1268.48 1268.48 1268.48 845.65
Reserves & Surplus 20356.00 17984.86 15530.52 13501.15 12159.23
Net Worth 21624.48 19253.34 16799.00 14769.63 13004.88
Secured Loan 3023.50 2310.00 1446.00 1100.00 1100.00
Unsecured Loan 2323.35 .00 34.38 100.13 165.87
TOTAL LIABILITIES 26971.33 21563.34 18279.38 15969.76 14270.75
Assets
Gross Block 26306.63 22144.38 21037.67 17603.98 16957.86
(-) Acc. Depreciation 10449.01 9740.81 9106.57 8553.66 8024.57
Net Block 15857.62 12403.57 11931.10 9050.32 8933.29
Capital Work in Progress 8241.76 5879.17 2640.51 2426.33 816.66
Investments 3548.93 2035.74 1763.01 1737.27 1490.88

79

Inventories 1419.74 855.11 631.70 601.41 569.81
Sundry Debtors 2176.52 1905.90 1295.04 1503.34 1073.54
Cash and Bank 931.33 2131.35 4171.51 3456.15 4472.99
Loans and Advances 9152.62 7399.31 7800.99 6833.03 4408.71
Total Current Assets 13680.21 12291.67 13899.24 12393.93 10525.05
Current Liabilities 9997.68 6986.31 7024.42 5661.24 4795.74
Provisions 4359.51 4060.50 4930.06 3976.85 2699.39
Total Current Liabilities 14357.19 11046.81 11954.48 9638.09 7495.13
NET CURRENT ASSETS -676.98 1244.86 1944.76 2755.84 3029.92
Misc. Expenses .00 .00 .00 .00 .00
TOTAL
ASSETS(A+B+C+D+E)
26971.33 21563.34 18279.38 15969.76 14270.75

80

ANNEXURE-2
PROFIT & LOSS ACCOUNT
12Months 12Months 12Months 12Months 12Months
INCOME:
Sales Turnover 40939.00 32907.09 25375.80 24292.24 18580.81
Excise Duty 542.37 448.45 384.15 507.53 568.07
NET SALES 40396.63 32458.64 24991.65 23784.71 18012.74
Other Income 0 0 0 0 0
TOTAL INCOME 40828.51 32962.65 25532.75 24580.97 18567.99
EXPENDITURE:
Manufacturing
Expenses
1877.14 1574.62 1985.18 1703.06 1536.61
Material Consumed 30704.95 23861.64 16840.05 16646.23 11371.17
Personal Expenses 678.00 784.09 621.20 576.67 470.01
Selling Expenses 190.95 158.63 151.23 54.93 42.28
Administrative
Expenses
1178.07 588.38 723.06 698.03 639.74
Expenses Capitalised -303.32 -37.52 -20.64 -16.74 -2.16
Provisions Made .00 .00 .00 .00 .00

81

TOTAL
EXPENDITURE
34325.79 26929.84 20300.08 19662.18 14057.65
Operating Profit 6070.84 5528.80 4691.57 4122.53 3955.09
EBITDA 6502.72 6032.81 5232.67 4918.79 4510.34
Depreciation 790.71 650.29 561.82 559.91 571.02
Other Write-offs .00 .00 .00 .00 .00
EBIT 5712.01 5382.52 4670.85 4358.88 3939.32
Interest 313.43 139.90 85.18 101.09 94.25
EBT 5398.58 5242.62 4585.67 4257.79 3845.07
Taxes 1563.87 1678.86 1438.63 1400.32 1253.54
Profit and Loss for
the Year
3834.71 3563.76 3147.04 2857.47 2591.53
Non Recurring Items -55.50 14.57 -7.55 -43.74 -12.32
Other Non Cash
Adjustments
-125.37 -17.20 .35 -10.03 22.25
Other Adjustments .00 .00 .00 .00 .00
REPORTED PAT 3653.84 3561.13 3139.84 2803.70 2601.46
KEY ITEMS

82

ANNEXURE 3
BALANCE SHEET OF ONGC
Liabilities
12
Months
12
Months
12
Months
12
Months
12
Months
Share Capital 4277.76 4277.76 2138.89 2138.89 2138.89
Reserves & Surplus
108678.9
7
93226.67 85143.72
76596.5
3
68478.5
1
Net Worth
112956.7
3
97504.43 87282.60
78735.4
2
70617.4
0
Secured Loan 4500.00 .00 .00 .00 .00
Unsecured Loan .00 17564.26 16405.64
16035.7
0
12482.7
1
TOTAL
LIABILITIES
117456.7
3
115068.6
9
103688.2
4
94771.1
2
83100.1
1
Assets
Gross Block
191914.7
5
80938.60 71553.78
61355.6
0
57463.7
8

83

(-) Acc. Depreciation
123857.7
8
62299.05 55905.28
50941.2
3
46945.7
7
Net Block 68056.97 18639.54 15648.50
10414.3
7
10518.0
1
Capital Work in
Progress
26879.29 65354.44 56073.25
52923.1
9
41154.6
3
Investments 14398.82 5332.84 5772.03 5090.32 5899.50
Inventories 5165.44 4118.98 4678.57 4060.67 3480.64
Sundry Debtors 6194.82 3845.90 3058.64 4083.80 4360.37
Cash and Bank 20124.56 22446.55 18231.04
19096.2
1
22417.6
6
Loans and Advances 30907.71 64693.91 63721.90
55964.0
2
38906.5
3
Total Current Assets 62392.53 95105.34 89690.14
83204.7
0
69165.1
9
Current Liabilities 30715.22 35384.31 27244.53
26854.1
1
22482.9
4
Provisions 23555.65 34775.19 37092.46
30657.9
8
21828.1
7

84

Total Current
Liabilities
54270.87 70159.50 64337.00
57512.0
8
44311.1
2
NET CURRENT
ASSETS
8121.66 24945.84 25353.14
25692.6
2
24854.0
7
Misc. Expenses .00 796.02 841.32 650.61 673.90
TOTAL
ASSETS(A+B+C+D+E
)
117456.7
3
115068.6
9
103688.2
4
94771.1
2
83100.1
1

85

ANNEXURE 4
PROFIT & LOSS ACCOUNT OF ONGC
INCOME:
Sales Turnover 76887.06 66487.19 60470.18 64342.28 60466.48
Excise Duty 371.96 322.85 218.41 338.29 401.38
NET SALES 76515.09 66164.34 60251.77 64003.99 60065.10
TOTAL INCOME 80968.07 71595.45 63615.11 68608.50 64406.12
EXPENDITURE:
Manufacturing
Expenses
581.93 32384.37 26913.20 19849.28 17501.66

86

Selling Expenses .00 6812.24 6527.78 7005.91 6540.76
Administrative
Expenses
30207.24
-
22749.34
-
18823.82
-
10465.65
-7871.06
Expenses Capitalised .00 .00 .00 .00 .00
TOTAL
EXPENDITURE
39944.85 25670.22 22549.17 31750.74 30324.84
EBITDA 41023.22 45925.23 41065.94 36857.76 34081.28
Depreciation 7495.92 6835.01 5242.66 4355.62 3915.76
Other Write-offs .00 .00 .00 .00 .00
EBIT 33527.30 39090.22 35823.28 32502.14 30165.51
Interest 34.83 11133.34 11276.89 8485.40 5016.88
EBT 33492.47 27956.88 24546.39 24016.74 25148.64
Taxes 12137.06 9177.53 8258.73 8437.78 8941.85

87

Profit and Loss for
the Year
21355.41 18779.35 16287.66 15578.96 16206.78
Non Recurring Items 3140.55 -403.04 252.63 -518.92 -112.39
Other Non Cash
Adjustments
626.97 547.70 183.99 790.68 607.25
Other Adjustments .00 .00 43.27 275.60 .00
REPORTED PAT 25122.92 18924.00 16767.56 16126.32 16701.65
KEY ITEMS
Preference Dividend .00 .00 .00 .00 .00
Equity Dividend 8341.61 7486.05 7058.28 6844.39 6844.39
Equity Dividend (%) 194.99 174.99 329.99 319.99 319.99
Shares in Issue
(Lakhs)
85554.90 85554.90 21388.73 21388.73 21388.73

88

ANNEXURE 5
BALANCE SHEET OF RIL
Liabilities
12
Months
12
Months
12
Months
12
Months
12
Months
Share Capital 3254.00 3271.00 3273.37 3270.37 1642.78
Reserves & Surplus
176766.0
0
159698.0
0
142799.9
5
125095.9
7
112945.4
4
Net Worth
180020.0
0
166096.0
0
151540.3
2
137170.6
1
126372.9
7
Secured Loan 2422.00 6969.00 10571.21 11670.50 10697.92
Unsecured Loan 52101.00 51658.00 56825.47 50824.19 63206.56
TOTAL
LIABILITIES
234543.0
0
224723.0
0
218937.0
0
199665.3
0
200277.4
5
Assets
Gross Block
218745.0
0
209552.0
0
221251.9
7
215864.7
1
149628.7
0
(-) Acc. Depreciation
103406.0
91770.00 78545.50 62604.82 49285.64

89

0
Net Block
115339.0
0
114655.0
0
137239.4
7
144455.6
2
88558.31
Capital Work in
Progress
13525.00 4885.00 12819.56 12138.82 69043.83
Investments 52509.00 54008.00 37651.54 23228.62 21606.49
Inventories 42729.00 35955.00 29825.38 26981.62 14836.72
Sundry Debtors 11880.00 18424.00 17441.94 11660.21 4571.38
Cash and Bank 49547.00 39598.00 27134.86 13462.65 22176.53
Loans and Advances 32982.00 24573.00 17320.60 10517.57 13375.15
Total Current Assets
137138.0
0
118550.0
0
91722.78 62622.05 54959.78
Current Liabilities 79620.00 66244.00 61399.87 48018.65 42664.81
Provisions 4348.00 4258.00 4563.48 3565.43 3010.90
Total Current
Liabilities
83968.00 70502.00 65963.35 51584.08 45675.71

90

NET CURRENT
ASSETS
53170.00 48048.00 25759.43 11037.97 9284.07
Misc. Expenses .00 .00 .00 .00 .00
TOTAL
ASSETS(A+B+C+D+
E)
234543.0
0
224723.0
0
218937.0
0
199665.3
0
200277.4
5

91

ANNEXURE 6
PROFIT & LOSS ACCOUNT OF RIL
INCOME:
Sales Turnover 371119.00 339792.00 258651.15 200399.79 146328.07
Excise Duty 10822.00 9860.00 10515.09 8307.92 4369.07
NET SALES 360297.00 329932.00 248136.06 192091.87 141959.00
TOTAL INCOME 368295.00 334489.00 250824.04 194285.00 143672.38
EXPENDITURE:
Manufacturing
Expenses
9424.00 6651.00 5170.51 4860.38 4518.96
Selling Expenses .00 5393.00 5353.10 4123.77 3095.27
Administrative
Expenses
9621.00 2372.00 2355.25 2284.63 2203.75
Expenses
Capitalised
.00 -37.00 -30.26 -1217.92 -3265.65

92

TOTAL
EXPENDITURE
329510.00 296101.00 210303.35 162122.80 117806.61
EBITDA 38785.00 38388.00 40520.69 32162.20 25865.77
Depreciation 9465.00 11394.00 13607.58 10496.53 5195.29
Other Write-offs .00 .00 .00 .00 .00
EBIT 29320.00 26994.00 26913.11 21665.67 20670.48
Interest 3036.00 2668.00 2328.30 1999.95 1774.47
EBT 26284.00 24326.00 24584.81 19665.72 18896.01
Taxes 5281.00 5710.00 4969.14 4324.97 3137.34
Profit and Loss for
the Year
21003.00 18616.00 19615.67 15340.75 15758.67
Non Recurring
Items
.00 1424.00 670.63 894.92 -449.35
Other Non Cash
Adjustments
.00 .00 .00 .00 .00
REPORTED PAT 21003.00 20040.00 20286.30 16235.67 15309.32
KEY ITEMS

93

Equity Dividend 2628.00 2531.00 2384.99 2084.67 1897.05
Equity Dividend
(%)
81.38 77.37 72.86 63.74 120.56
Shares in Issue
(Lakhs)
32286.63 32710.59 32733.74 32703.74 15737.98

94

ANNEXURE 7
BALANCE SHEET OF IOCL
Liabilities
12
Months
12
Months
12
Months
12
Months
12
Months
Share Capital 2427.95 2427.95 2427.95 1213.97 1192.37
Reserves & Surplus 55448.75 52904.37
48124.8
8
42789.2
9
39893.8
8
Net Worth 57876.70 55332.32
50552.8
3
44003.2
6
41086.2
5
Secured Loan 13045.97 20379.65
18292.4
5
17565.1
3
6415.78
Unsecured Loan 57277.96 32354.22
26273.8
0
27406.9
3
29107.3
9
TOTAL LIABILITIES
128200.6
3
108066.1
9
95119.0
8
88975.3
2
76609.4
2
Assets
Gross Block 99455.46 92696.69
71780.6
0
62104.6
4
56731.5
0

95

(-) Acc. Depreciation 39336.13 34509.29
30199.5
3
27326.1
9
23959.6
8
Net Block 60119.33 58187.40
41581.0
7
34778.4
5
32771.8
2
Capital Work in
Progress
13434.77 12620.44
21268.6
3
18186.0
5
9170.22
Investments 18678.46 19544.76
22370.2
5
32232.1
3
21535.7
8
Inventories 56829.20 49284.52
36404.0
8
25149.6
0
30941.4
8
Sundry Debtors 15502.87 8869.65 5799.28 5937.86 6819.23
Cash and Bank 307.01 1294.42 1315.11 798.02 824.43
Loans and Advances 44988.11 25454.49
17453.0
1
13348.9
9
14920.9
3
Total Current Assets
117627.1
9
84903.08
60971.4
8
45234.4
7
53506.0
7
Current Liabilities 66510.58 60441.18
40818.9
6
38890.2
8
39326.0
7
Provisions 15148.54 6763.46
10271.5
6
2603.46 1172.99

96

Total Current
Liabilities
81659.12 67204.64
51090.5
2
41493.7
4
40499.0
6
NET CURRENT
ASSETS
35968.07 17698.44 9880.96 3740.73
13007.0
1
Misc. Expenses .00 15.15 18.17 37.96 124.59
TOTAL
ASSETS(A+B+C+D+E
)
128200.6
3
108066.1
9
95119.0
8
88975.3
2
76609.4
2

97

ANNEXURE 8
PROFIT & LOSS ACCOUNT OF IOCL
INCOME:
Sales Turnover 463285.27 357275.89 291272.84 329806.88 270410.49
Excise Duty 24455.59 26141.04 21834.76 22682.89 23051.25
NET SALES 438829.68 331134.85 269438.08 307123.99 247359.24
TOTAL INCOME 442027.70 334359.58 272758.43 309833.58 249781.97
EXPENDITURE:
Manufacturing
Expenses
5267.68 3518.60 1755.28 1500.51 1558.14
Selling Expenses 4321.11 12250.68 10488.13 9684.04 8753.07
Administrative
Expenses
14283.79 2436.16 1824.74 1888.60 2004.30
Expenses
Capitalised
.00 -945.24 -1121.28 -544.01 -403.58
TOTAL 420386.03 318523.82 254339.35 293599.64 236063.34

98

EXPENDITURE
EBITDA 21641.67 15835.76 18419.08 16233.94 13718.63
Depreciation 4867.79 4546.67 3227.14 2881.71 2709.70
Other Write-offs .00 132.04 133.98 317.64 236.53
EBIT 16773.88 11157.05 15057.96 13034.59 10772.40
Interest 5590.54 2702.14 1572.35 4020.98 1589.73
EBT 11183.34 8454.91 13485.61 9013.61 9182.67
Taxes -200.34 1297.71 3097.87 1364.71 3104.54
Profit and Loss for
the Year
11383.68 7157.20 10387.74 7648.90 6078.13
Non Recurring
Items
-7707.82 330.21 -130.67 -5615.51 705.81
Other Non Cash
Adjustments
278.76 -41.93 -36.52 915.26 178.64
REPORTED PAT 3954.62 7445.48 10220.55 2949.55 6962.58
KEY ITEMS
Equity Dividend 1213.98 2306.55 3156.34 910.48 655.81

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