DCM Shriram Consolidated Limited

Presentation and discussions

September, 2011

Promoters

Murli Dhar

Sir Shriram

(Founder)

• DCM Shriram Consolidated Ltd.

Shri Dhar

Ajay

Charat Ram Bharat Ram

Vinay/Vivek/Arun

• Over 120 years business history.

• Tradition of contribution to society -

Education, Cultural, Research.

• Core Values - Trust, Ethics & Fairness.

• Focus on long term value creation.

• Several firsts to its credit.

Siddharth/Deepak

Vikram Ajit

Bansi Dhar

• Formed in 1990 consequent to restructuring of DCM Ltd

• Two lines of business

– Agri/Rural

– Chemicals and Polymers

• Each Vertical includes some Commodity businesses and some Non Commodity businesses (Service/knowledge driven)

• Non Commodity businesses include – Bioseed (Hybrid Seeds), Farm Solutions, Hariyali (Rural Retail), Fenesta (UPVC Windows & Door Systems) , Polytech

• Revenue growth Last 20 Years 11x- CAGR-13%- FY 11 Turnover- USD 923 Mn.

• Strengths-

– Deep understanding of Agri/Rural sector, multiple interfaces with rural Customers.

– Ability to spot and incubate new business opportunities.

– Multiple skills catering to broad range of sectors.

• ~300 MW Power generating capacity

• Strong brands representing Trust and Reliability.

• Long term association with all Stakeholders.

Overview

Agri/Rural Business

• Inputs – Urea

• ~ 400,000 tonnes/year

– Farm Solutions

• Bulk Fertilizers, Specialty Fertilizers, Micro nutrients, Crop Care Chemicals, Seeds etc.

– Hybrid Seeds

• India, Philippines, Vietnam,

Thailand and Indonesia

Working towards improving farmer profitability – supported by over 500 agronomists

• Output – Sugar

• 500,000 tonnes/year

– Bagasse based Power • ~ 95 MW

• Rural Business Centers – Hariyali Kisaan Bazaar ( 264

Outlets)

• Retailing of Products ( Agri and Family goods)

• Services ( Agronomy, financial)

• Outputs ( Grain, Seeds, Milk)

• Trust, Reliability, Dignity – basic foundation of engagement with customers.

• Partner with farmer – Solutions to increase his profits

• Strong Research and applications development programme.

• Last Mile delivery of relevant knowledge/ solutions ~ 500 agronomist and ~

1000 Agri- Extension professionals, backed by strong Central team.

• Multiple interfaces directly with farmers-

– Sugar - Over 200,000 farmers

– Farm Solutions - 300,000 farmers; over 100 SKVK‟s

– Hybrid Seed - 500,000 farmers

– Hariyali Kisaan Bazaar - ~4 Mn rural families in catchment area of ~2.2 Mn sq.feet.

Agri/Rural Business: Key Drivers

Farm Solutions

• Farm solutions business include sale of Bulk Fertilizers, Micro-nutrients,

Seeds, Crop Care Chemicals, Pesticides etc.

• 18000 retail outlets in 17 states.

• Process of introduction of new products is a continuous one.

• Over 3 decades of direct relationship with the farming community.

• “Shriram” brand signifies Trust, Reliability ,Quality and latest technology to

the farmer.

• The products are backed by extensive service network which helps in

transferring latest technology to farmers to improve their productivity.

Farm Solutions – Extension programs

Soil Testing Compost Manufacturing

Zero Tillage Farmer Productivity Management

Bioseed

• Complete seed company- Research, Production, Processing, Extension activity and marketing.

• Focus on Tropical and Sub-Tropical climates

• Operations in India, Vietnam and Philippines, and testing/test marketing in Thailand,

Indonesia and China.

• Own Breeding programme in various crops.

• Field Crops-Cotton, Corn, Rice, Millet, Sorghum, Sunflower

• Vegetable Crops- Tomato, Okra, Gourds, Melon, Cabbage, Cauliflower etc.

• Large investments made in Research, People and Seed processing infrastructure.

• Over 60 scientists.

• Spending ~ 10% of revenues on Research in last few years.

• Investing in Bio-Technology.

• Strong product pipeline to support future growth

Bioseed – Field Research Stations

Hyderabad,

(India)

Philippines

Vietnam

Sugar- Manufacturing facilities

DSCL Sugar plant - Ajbapur

Location - Central U.P.

• Current operation – 4 mills

• Creating an inter-factory grid with

large command area

• Over 200,000 farmers, extensive cane development program

• Sugar capacity : 33,000 TCD

• Ajbapur : 10,500 TCD

• Rupapur : 6,500 TCD

• Hariawan : 8,000 TCD

• Loni : 8,000 TCD

• Power Co-gen : 94.5 MW

(51.5 MW for export)

• Improving farmers‟ prosperity - creating „Trusted farmer relationships‟

• One-stop shop for meeting farming and family

needs of the rural population

• Product offerings: – Retailing

• Agri-Inputs • FMCG/Consumer Durables • Lifestyle • Fuel • Milk

– Services • Agronomy • Financial • Warehousing

– Output Procurement & Trading – Seed Processing

• 264 outlets

• Geographical presence in 8 states (North , South, West India)

Hariyali Kisaan Bazaar-Rural Business Centres

Chemicals & Polymers

• Chemicals

• Chlor – Alkali

• Carbide

• SBP

• Polymers

• PVC Resin

• Power

• Cement – Waste utilization

• u PVC windows ( Fenesta)

• Design, extrusion, fabrication and installation

• PVC Compounds

Total Power Generation of 300 MW (~ 50 MW dedicated for sale)

(275,000 tonne/year)

(112,000 tonne/year)

(13,200 tonne/year)

(70,000 tonne/year)

(400,000 tonne/year)

Commodity Businesses • Be amongst lowest cost producers- latest technology, strong operations, integration and

scale.

• Manage volatility through multiple revenue streams with swing capability.

• Securing energy supplies through Lignite mines/Coal, Hydel Power.

• Long term associations with customers, dealers, suppliers.

• Strong Safety, Health and Environment(SHE) management.

• Focus on creating a trained and skilled cadre of employees

Non- Commodity Businesses • Fenesta- Customer excitement through excellence in design and execution

• Polytech- Developing required solutions and deliver it consistently.

Chemicals and Polymers: Key Drivers

Manufacturing facilities – Kota

• Highly integrated operations

• Key product capacities: – Chlor- Alkali: 1,13,750 TPA

– SBP: 13,200 TPA

– PVC Resin: 70,000 TPA

– Calcium carbide: 1,12,000 TPA

– Compounding: 29,700 TPA

• Own railway siding-Handling 1 mn tonnes of annual traffic

– Urea: 3,79,000 TPA

– Cement: 4,00,000 TPA

– Fenesta windows: extrusion plant

– Captive power – 133 MW

Value chain – Chlor-Vinyl at Kota Complex

Cement

Power Sale

PVC Comp.

PVC Plant

Carbide Plant

C/Soda Flakes

SBP

Chlorine Liq.

Caustic Soda Plant

Power Plant Coal

Lime Carbon

Material

Acetylene Gas

Salt

Vinyl

30% HCL Acid

Chlor- Alkali

Cl2 Gas

Lime Sludge

Integrated facilities with multiple revenue streams enable swing capabilities & cost efficiencies

•Power

•PVC Resins & Compounds

•Calcium Carbide

•Cement

•UPVC Doors & Windows

•Caustic Soda

•Chlorine

•SBP Finished

Products

Power

Manufacturing facilities – Bharuch

Chlor-Alkali –1,46,850 TPA Power – 55 MW (Coal Based)

Fenesta

• UPVC based windows and door systems

• End to end service- Design, extrusion,

fabrication and installation

• State of the art extrusion facility at Kota, and fabrication shops in 4 regions.

• Pan India Sales and Service presence

• 120 dealers in ~51 cities along with marketing offices in 12 cities.

• Catering to Institutional & Retail segment

Fenesta

Summing up

• Swing capabilities

• Operating synergies

• Cross-flow of resources

• Leveraging deep rural knowledge

Integrated operations

• Strong brand

• Trusted & long term customer relationships

• Extensive distribution network

Market positioning

• Cost competitiveness

• Robust agri portfolio

• Business risk hedge

Operating advantages

• Scale up/ Consolidate the new businesses.

• Stabilize the expanded capacities.

• Secure sources of energy and key raw materials

Plans Organization & processes

• Enabling SBU structure

• Best in class IT infrastructure

• Sound Corporate Governance

• Conservative accounting practices

• Robust EBIDTA margins

• LT Debt to equity < 1x

• All Capital Expenditure programs completed – will improve internal generations

Financials

FINANCIALS

Business mix – FY2011 (Consolidated)

Gross Revenue (Rs 4,328 crores) PBIT (Rs 215 crores)*

Q1FY12

FY 2010-11

Fertilizer10%

Farm Solutions16%

Bioseed13%

Sugar16%

Hariyali Kisaan Bazaar

16%

Chloro-Vinyl19%

Cement3%

Others7%

Fertilizer11%

Farm Solutions21%

Bioseed7%

Sugar14%

Hariyali Kisaan Bazaar

18%

Chloro-Vinyl19%

Cement3%

Others7%

Gross Revenue (Rs 1,309 crores)

Fertilizer14%

Farm Solutions19%

Bioseed17%

Chloro-Vinyl42%

Cement8%

Fertilizer9%

Farm Solutions

12%

Bioseed36%

Chloro-Vinyl37%

Cement6%

PBIT (Rs 107 crores)*

Particulars Amt Rs. Cr

PBIT 214.86

Less: PBIT of Hariyali 83.11

Less: PBIT of Sugar 7.12

Less: PBIT of Others 11.75

Less: Unallocated Expenditure 78.55

PBIT Reported 34.33

Particulars Amt Rs. Cr

PBIT 106.99

Less: PBIT of Hariyali 19.18

Less: PBIT of Sugar 8.07

Less: PBIT of Others 4.2

Less: Unallocated Expenditure 22.08

PBIT Reported 53.46

Revenue

360 405 437 502608 590 621

712673

9351056

1183

1379

1559

1980

2540

2940

2775

3534 3547

4152

0

400

800

1200

1600

2000

2400

2800

3200

3600

4000

4400

199119921993199419951996199719981999200020012002200320042005200620072008200920102011

(Rs C

rore

)

• Revenue growth 11x over 20 years at a CAGR of 13%

• Accelerated growth momentum over last few years

• Reduction in FY 08 is on account of decline in trading of Bulk Fertilizer

EBITDA

23 2642 48

6379

92 101112

130151 142

185202

235

295

240218

400

368

194

0

50

100

150

200

250

300

350

400

450

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

(Rs C

rore

)

• EBITDA growth over 20 years at a CAGR of 11.3%

• Big drop in Sugar prices led to reduction in EBITDA in FY07, FY08 & FY11.

• Big drop in Chloro-Vinyl in FY11

Networth

• Networth growth 48x in 20 years

• Networth doubled in FY 08, consequent to land sale.

Deferred tax adjustment

27 31 4175

120

208254 269 276 295

325

227273

333

443

526554

1149

126913301306

0

100

200

300

400

500

600

700

800

900

1000

1100

1200

1300

1400

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

(Rs

Cro

re)

Thank you

Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local political or economic developments, technological risks, and many other factors that could cause our actual results to differ materially from those contemplated by the relevant forward looking statements. DCM Shriram Consolidated Limited will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.