Corporate profile

Meghmani Organics Limited

At a glance Established in 1986, Meghmani Organics is a leading pigments and agrochemicals manufacturer in India

• Specializes in the manufacture of green & blue pigment products and a broad spectrum of commonly used generic pesticides

• Cost advantage due to India location – manufacturing base in Gujarat • Extensive global presence with markets in the US, Europe, Latin

America, Africa and the Asia Pacific - approximately 75% revenue from exports

• Established brand names • 22 agrochemicals products registrations under Meghmani Organics

Limited name and 109 with Co-partners worldwide. • Six Integrated manufacturing facilities and strong focus on R&D • 222 CIB registrations (Technical & Formulation ) & 27 Registered Trade

marks. • Pesticides offered for crop protection, public health, veterinary and

wood protection application. • Listing:

– 2004: First Indian company to be listed on SGX Main board – 2007: Obtained dual listing on Indian bourses, NSE and BSE

Our Evolution

Converted into

a Public Ltd.

Co. & 1st

agrochemicals

plant setup at

Chharodi

Private Equity investment in MOL

New Pigment plant

setup at Panoli

Commercial production of

blue pigment started at

Panoli plant

Expansion of agrochemical production by acquiring

assets from Rallis

Singapore listing

1995 1996 1998 1999 2003 2004 2008

Commenced operations as a partnership firm by manufacturing

Pigment green

1986

India listing

2007 2009

MFL – Subsidiary Company

with IFC Participation to

Manufacture Caustic Soda

Commercial production

of MFL, two new

manufacturing sites for

Agrochemicals

New Pigment Plant

at Dahej SEZ

2013

Pigments & additives – Offering & growth drivers

End-to-end pigment solutions

Phthalocyanine green and blue pigments

CPC Blue

Pigment Green

Pigment Blue

Upstream product: Sold to other pigment manufacturers

End-products: Sold to industrial users viz. inks, paint, plastic manufacturers

• Backward Integration at both Panoli / Dahej Site. • Scale of Economy. Amongst top 3 players in the World. • 6-7% Global Market share. Ready to achieve double digit growth in 2-3 Years.

Pesticide Intermediates

Technical Grade Pesticides

Pesticide Formulations

Sold to technical grade pesticides manufacturers

Sold to pesticides formulators

Brand Business

Bulk Packing Sold to institutional customers

Sold to retailers, dealers or directly to farmers

Agrochemicals – Offering & Growth Drivers Agrochemicals product offering encompasses the entire value chain

Integrated manufacturing facilities

Key plant attributes

• Close proximity to raw materials at low costs

• Easy accessibility to road networks, railways and key ports

• Located in one of the Chemical belts of India

• ISO 9001:2008 and 14001:2004 & OHSAS 18001 certified

• Environment friendly

• Ability to change product mix to suit market conditions

Meghmani is well placed to capitalize on the outsourcing opportunity

Pigments

Agrochemicals

•Panoli Plant •Vatva plant

•Ankleshwar plant

•Panoli Plant •Dahej Plant

• Dahej SEZ plant

Strong international presence

• Approximately 75% export sales, servicing 400+ customers in 75 countries worldwide including China

• Extensive network of 60 overseas distributors

• Pan India presence through Stockists, Agents, Distributors & Dealers in Branded Agro products in 3 years.

• Subsidiaries in the US, Europe, Indonesia and Dubai and Representative Office in China.

• Warehouses in Belgium, Turkey, Russia, USA and Uruguay

Our competitive edge Entry barriers strengthening competitive advantages in both segments

Pig

me

nts

Entry barriers Strengths

• Pigment manufacturing process requires high degree of customization

• Rigorous and time consuming procedure of obtaining approvals from MNCs.

• Achieving attributes such as shade, strength, etc require considerable expenditure

• Large Scale Manufacturing with Backward integration.

• Fully equipped lab with Highly Qualified Professionals.

• Product compliance with all Major International Regulations and also REACH Registered.

• Established Brand in 75 Countries around the Globe with strong Agent distribution channel .

Agr

och

em

ical

s Entry barriers Strengths

• Agrochemicals markets are regulated, thus require registrations.

• High cost of new registrations

• Takes about 1-3 years for obtaining international & domestic registrations.

• 22 agrochemicals products registrations under Meghmani Organics Limited name and 109 with Co-partners worldwide.

• Capacity to handle complex chemical processes

• Increasing focus on CRAM business due to change in focus of MNCs.

• Well known brands like Megastar, Megacyper, Megaban, Synergy, Courage

• Government recognized R&D unit

Experienced management team with a proven track record

Name /Title Pigments experience Agrochemicals experience

Qualification

Mr. Jayanti Patel, Executive Chairman and co-founder of Meghmani

> 37 years > 19 years Bachelors of Chemical Engineering degree

Mr. Ashish Soparkar, Managing Director and co-founder of Meghmani

37 years

> 19 years Bachelors of Chemical Engineering degree

Mr. Natwarlal Patel, Managing Director and co-founder of Meghmani

> 35 years > 27 years Masters of Science degree

Mr. Ramesh Patel, Executive Director and co-founder of Meghmani

> 34 years > 27 years Bachelor of Arts degree

Mr. Anand Patel, Executive Director and co-founder of Meghmani

> 30 years - Bachelor of Science degree

• Succession Planning already in place through qualified siblings.

• It has also won various National and International awards and recognization.

• Company won SIAS (Securities Investors’ Association of Singapore) Investors’ Choice Awards for the “Most Transparent Company” for 2 consecutive years

Other Highlights

Industry Overview

Pigments

Printing Ink

Paint

Plastics

Growth drivers and market outlook

• Organic pigments market size is approximately US$4.5B globally and growing at around 3% p.a.

• Increasing demand for India’s pigments

– Increasing direct supplies requirements from US, Europe, Central ,South America, and Japan

– Growing Indian ink market > Pigment requirement approx. Rs. 12.00B

– Pigment requirement to grow by 10 to 12%

• Select set of large corporate control the world market of Paints and Inks – such as Sun-DIC, Flint Group, Akzo Nobel, DuPont, PPG Industries, etc.

• India capitalizing on the outsourcing play

– Production is getting outsourced from the US, Europe, Japan, etc

Major markets for pigment use

Leather, Textiles etc

Outsourcing trend to India providing impetus to Indian Phthalocyanine pigment manufacturers

Printing ink and coatings account for approx.

90% of

consumption

The Pigments industry

Indian scenario- Growth drivers and market outlook

Country Consumption of pesticides (Kg/Hectare)

Taiwan 17.00

China 13.00

Japan 12.00

Korea 6.60

Europe 3.00

USA 7.00

India 0.60

• Indian domestic pesticide market – 5th largest in the world, but accounts for a low consumption 0.60 Kg/Hectare as compared to other developed countries

• Indian pesticide market ~ US$ 2.5 billion growing at 12-13%

• Per hectare consumption one of lowest in the world

• Given positive demographics and availability of cultivable land, significant potential for increase in use of pesticides

• 65% of the market is for Insecticides matching with our portfolio

Global scenario - Growth drivers and market outlook

• Global market size in 2013 approx USD 60.68 Billion which grew at CAGR of 4.5% in last 5 Yrs. Market expected to reach USD 69.60 Billion in 2019 at a CAGR of 5.5%

• Global market size of Non crop protection applications – USD 6.5 B.

• High entry barriers - Agrochemicals products need registrations which involves significant time and cost

The Agrochemicals industry India has significant potential for higher use of agrochemical products

Revenue Growth

Key Growth contributors

• High quality products

• Focus on sale of finished Pigments

• Significant overseas customer base

• Vertically integrated manufacturing facilities

• Cost advantage on manufacturing processes

Pigments

355326 337

395

217

0

100

200

300

400

500

2010-11 2011-12 2012-13 2013-14 H1 2014-15

Rs. in Cr

Revenue Growth

Key Growth contributors

• Vertically integrated manufacturing facilities

• Established retail brand names

• Multipurpose production facility at Dahej

• Existing registrations base

• Significant overseas customer base

Agro chemicals

441399

343

397

246

0

50

100

150

200

250

300

350

400

450

500

2010-11 2011-12 2012-13 2013-14 H1 2014-15

Rs. in Cr

Sustained Revenue Growth

Key Growth contributors

• State of the art latest membrane cell technology

• 2nd Largest Caustic Soda Flakes capacity in India

• Expanding product mix by putting up 60 TPD KOH plant

• 60 MW captive coal based power plant for constant power at economical rate

• 6,00,000 Sq. Mtr site to facilitate future down stream projects

• Supply of Products to nearby industries by pipeline

• Cluster of user chemical manufacturers in vicinity reduces logistic cost

Basic chemicals

174

250

305283

186

0

50

100

150

200

250

300

350

2010-11 2011-12 2012-13 2013-14 H1 2014-15

Rs. in Cr

Financial highlights

Financial Summary

3.71%

0.33%

1.65%

1.97%

4.81%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

0

5

10

15

20

25

30

35

40

2010-2011 2011-2012 2012-2013 2013-2014 H1 2014-2015

% m

arg

in

Rs

in C

r

Profit AfterTax

1025 1045 10401157

685

0

200

400

600

800

1000

1200

1400

2010-11 2011-12 2012-13 2013-14 H1 2014-15

Rs

in C

rRevenue

16% 15%

18%17%

16%

14%

14%

15%

15%

16%

16%

17%

17%

18%

18%

0

50

100

150

200

250

2010-20112011-20122012-20132013-2014 H1 2014-2015

% ma

rgin

Rs in

Cr

EBITDA

ROCE

All values in %

0

2

4

6

8

10

12

2010-11 2011-12 2012-13 2013-14 H12014-15

8.217.73 8.61

7.75

11.10

RONW

All values in %

0

2

4

6

8

10

12

14

2010-11 2011-12 2012-13 2013-14 H1 2014-15

7.69

0.73

3.434.40

12.13

Financial Summary Balance Sheet Rs. in Cr

*: Not annualized

Year 2010-2011 2011-2012 2012-2013 2013-2014 H12014-2015

Gross Block 957 1,050 1,171 1,275 1,310

Net Block 723 741 788 815 817

Total Current

Assets

696 724 734 847 855

Total Liabilities & Provisions

913 951 945 1,016 1,018

Share Capital 25.43 25.43 25.43 25.43 25.43

Reserves & Surplus

469 451 477 493 517

Net Worth 494 476 502 518 543

Return on Capital Employed (%)

8.21% 7.73% 8.61% 7.75% 11.10%

Outlook & business strategies

Strategies Driving Future Growth

2. Expand

product portfolio

3. Outsourcing/CRAM

opportunities

4. Consolidation

through minimal Capex

1. Ramping up

capacity Utilization at established Plants

Strategic investment: Meghmani Finechem Limited

• What: A large-scale, integrated complex used for the production of Caustic Soda Lye/Flakes, Chlorine Gas and Hydrogen Gas.

• Investment: Rs 650 crores comprising Rs 438 crores by Debt and balance 212

crores by Equity • Operations:

– Commenced commercial production from 1st July, 2009 – 40% enhanced capacity operationalised in July 2014 – Operating at 90% capacity utilization

• Annual manufacturing capacity : – Caustic Soda: 158,000 Ton per Annum (TPA) – Chlorine Gas: 140,000 TPA – 60 MW Power Plant

Dahej Chlor-Alkali Complex to drive long-term sustainable growth

• Achieve inorganic growth and vertical integration in a diversified yet chemistry-related business

• A ready and captive source of some basic chemicals for core Pigments and Agrochemicals operations

• Dahej – a strategic location for chemical and related industries

EHS E.H.S : Environmental • All Govt. approvals are in place : ( 1 ) E.C. ( 2 ) C.T.E. and ( 3 ) C.C.A.

• Primary / Secondary / Tertiary / M.E.E / R.O / Cu.Sulphate / Amm.Sulphate / Al.Hydroxide fully operational.

• Zero Discharge of CPC plant at Panoli and Dahej.

E.H.S : Occupational / Community Health • Routine daily visits by Medical Officer.

24 hrs. Medical assistance at ALL Industrial associations.

• On site ambulance.

• Medical Insurance / Group Accident / Natural Death / W.C.A. for self and family.

E.H.S : Safety • General safety policy at all sites. Takes care of In-Plant safety, W/H, Power Generation,

Internal Security.

• Active member of Disaster Prevention & Management Control in individual cluster.

• Created a new corporate position : Group EHS Head.

E.H.S : Safety Drills and Safety Day

C.S.R Initiatives

Sr.

No.Name of the Project Location

No. of

Beneficiarie

s 1 Agaria Kalyan Yojana Dahej Salt Works 3,000

2 "Umiya Mataji" Girl Education Sola 300

3 Blood Donation Camp Dahej 240

4 Kanya Kelwani Nidhi Dahej 1,000

5 Annachetra Bharuch 300

6 Vanvasi Kalyan Yojana Dediapada 500

CSR Activities carried out in 2013-14

Average spend of 1.5 - 2% of Group Net Profit

C.S.R Initiatives

Immediate Focus Areas

• Improving Financial Health

Pigment :

• Enhancing capacity utilization to the optimum level

Agrochemicals:

• CRAM Opportunity

Basic Chemicals:

• Expanding product mix by putting up 60 TPD KOH Project.

Thank you Q& A

Disclaimer This presentation has been prepared by Meghmani Organics Limited (""the Company") solely for providing Information about the Company. No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. None of the Company nor any of its respective affiliates, advisers or representatives, shall have liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. The information contained in this presentation is only current as of its date. Certain statements made in this presentation may not be based on historical information or facts and may be “forwarding-looking statements”, including those relating to the company’s general Business plans and strategy, financial condition and growth prospects, and future developments in its industry and its competitive and regulatory environment. Actual results may differ materially from these forward –looking statements due to a number of factors, including future changes or developments in the Company’s business, its competitive environment, information technology and political, economic, Legal and social conditions in India. This communication is for general information purpose only, without regard to specific objectives, financial situation and needs of any particular person. Please note that investments in securities are subject to risks including loss of principal amount. The company does not accept any liability whatsoever, direct or indirect, that may arise from the use of the information herein. This presentation does not constitute an offer or invitation to purchase or subscribe for any shares in the Company.