Presentation

to
Analysts

May 7, 2013

No of main slides: 85 Time: 30 minutes

Contents

General Overview

1-21

Financial Overview

22-

Business Overview

57-104

Lalbhai Group

Commenced manufacturing activities in 1908

Textiles, Chemicals, Engineering

Group sales US$1.5 billion

Health, Education, Culture

1|85

2|85

Shri Kasturbhai Lalbhai

3|85

Founder Director, Reserve Bank of India

4|85

Founder Chairman, Indian Institute of Technology, Mumbai

Founder Board Member Indian Institute of Management, Ahmedabad 5|85

6|85

Founder Director, ICICI

Atul Ltd

Founded in 1947 by Kasturbhai Lalbhai

Manufacturing and marketing of chemicals

Create wealth, generate employment, be self reliant

7|85

A moment of historic significance

8|85

Purpose
We are a conglomerate committed to significantly enhance value for all our stakeholders by fostering a spirit of continuous learning and innovation

using science and technology in a responsible way

providing high quality products and services and becoming the most preferred supplier seeking sustained and dynamic growth and securing long-term success having people who practice values and high standards of behaviour taking care of the surrounding environment and improving the quality of life in the communities we operate in 9|85

Eventful 2012-13
Transforming economy and ecology of arid region

Inauguration of ARDP facility by Honble Chief Minister of Rajasthan, Shri Ashok Gehlot

10|85

Eventful 2012-13
Protecting environment

11|85

Inauguration of AR p-C plant by Honble Chief Minister of Gujarat, Shri Narendra Modi

Eventful 2012-13
Building partnership

12|85

Inauguration of Rudolf Atul Chemicals Ltd by Padma Vibhushan Dr M.M. Sharma

Eventful 2012-13
Fostering innovation

Inauguration of PI R&D by Padma Vibhushan Dr M.M. Sharma

13|85

Eventful 2012-13
Commissioning of Anisole plant phase 1 Commissioning of 2,4-DCP plant Commissioning of 3,3-DDS plant Commissioning of BLR plant Jun 12 Jun 12 Sep 12 Sep 12

Completion of labour settlement-Valsad site (4.5 years) Completion of labour settlement-Ankleshwar site (6 years) 14|85

Sep 12 Oct 12

Eventful 2012-13
Enhancing capability

Information Week Silver EDGE

15|85

IDG CIO 100

Eventful 2012-13

Institutionalising processes

Shram Ratna Award Government of Gujarat

16|85

HR Leadership Award World HR Congress

Eventful 2012-13
` cr KIs Yield RMC Solvent Reduction Quality No 32 49 36 13 Impact 8 7 2 0

Utilities
Products from EEW Effluent Reduction Time cycle Batch size Productivity Total 17|85

46
2 19 26 14 11 248

4
1 1 6 1 1 31

Revenues
Period 1997-2002 CAGR 9% 12% 15%

` cr 1964

2000

2002-2007 2007-2012

1746
1508

1250 998

1159

1168

500 2007-08 18|85 2008-09 2009-10 2010-11 2011-12 2012-13

Profit before tax

(from operations)
Period 1997-2002 CAGR 15% 0% 40%

` cr

200 165
130 95 60 51

2002-2007 2007-2012

187

129

116

80

35
25 2007-08 19|85 2008-09 2009-10 2010-11 2011-12 2012-13

Share price movement

` 500
CAGR 33%

` 10,000 invested in 2000 has given ` 3,06,351 in 2012

250

0
2000-01 2002-03 2004-05 2006-07 2008-09 2010-11 2012-13

Source : Capitaline 20|85

Industries Served

Aerospace

Agriculture

Automobile

Construction

Flavour & Fragrance

Paint & Coatings

Personal Care

Pharmaceutical

Textile

21|85

Financial Performance

Financials 2012-13
` cr
12-13 A Sales Operating & other income Total revenue Material consumed Employee benefit expenses 1964 56 2020 1143 128 11-12 A 1746 46 1792 1060 117 Inc | (dec) %

CY vs PY
12 22 13 8 9

Other expenses
Exchange (gain) | loss EBIDTA EBIDTA % Interest Interest AS-16 PBDT Depreciation PBT before exceptional income Exceptional income PBT PAT RoCE %

483
3 269 14 29 4 233 49 184 5 192 136 21

400
(12) 203 12 31 12 172 44 128 6 122 88 17

21
33 6 35 11 43 (29) 57 55 -

22|85

Quarterly sales
` cr 600 550 500 450 404 400 496 447 537 491

444
440

451

350 Q1
2011-12 23|85

Q2

Q3
2012-13

Q4

Return on capital employed

` cr
1200 25%

21%
1000 800

18% 13%

17%

20%

15% 1,044

600

11%
822 810 840

400
200

939

10%

5%

0
2008-09 2009-10 2010-11 2011-12 2012-13 Average capital employed #
# Excluding capital work-in-progress

0%
Return on average capital employed % # *
* Excluding exceptional income| expenses

24|85

Turnover per employee

2,800 2,746 2,737 1.20 2,703 1.00 2,563 2,534

2,600

Headcount

` cr

0.73 2,400 0.60 0.64

0.80

0.60

2,200

0.42

0.46 0.40

2,000
2008-09 2009-10 Employees 2010-11 2011-12 2012-13

0.20

Turnover per employee

25|85

Revenues
` cr 2000 1746 Last 10 years CAGR: 13% 1508 1964

1250 817 578 568 500 682 895 998

1168 1159

Last 5 years CAGR: 15%

26|85

Profit Before Tax

(from operations) ` cr

195 Last 10 years CAGR: 18% 129 116

187

100
36 5 7 35 51

80 26 Last 5 years CAGR: 40%

19

20

27|85

Comparative Profitability
` cr
Particulars
Sales EBIDTA from operations before exchange diff 09-10 A 1168 152 10-11 A 1508 203 11-12 A 1746 215 12-13 A 1964 266

EBIDTA from operations before exchange diff

Exchange difference EBIDTA after exchange diff EBIDTA from operations before exchange diff Non recurring income | (expense) PBT PAT RoCE %

13%
(9) 142 12% 80 53 13

13%
(9) 194 13% 10 139 96 18

12%
(12) 203 12% 6 122 88 17

14%
3 269 14% 5 192 136 21

28|85

Ratios
Particulars Debt|equity 2012-13 0.47 2011-12 0.60

Interest coverage DSC Current

8.13 2.92 1.4%

4.70 1.94 1.3%

EPS

`45.69

`29.70

29|85

Working Capital Management

Working Capital
NoDs

Particulars
Inventories Debtors Other current assets Gross Working Capital Current liabilities Net Working Capital

Mar 13
56 62 23 141 67 74

Mar 12
58 68 20 146 74 72

Inc | (dec)
(2) (6) 3 (5) (7) 2

30|85

Working Capital
` cr

Particulars
Inventories Debtors Other current assets Gross Working Capital Current liabilities Net Working Capital

Mar 13
308 361 123 792 363 429

Mar 12
295 368 104 767 375 392

Inc|(Dec)
13 (7) 19 25 (12) 37

31|85

Cash Flow and Borrowings

Cash Flow from Operations

` cr 2012-13 Operating profit * Inventories Trade & other receivables Creditors and other payables Cash generation from operations Tax payments 262 (13) (22) (6) 221 53 2011-12 194 (31) (80) 76 159 38

Net cash flow from operating activities

* before WC changes and exchange difference on FCL

168

121

32|85

Fund Flow
` cr

Sources EBIDTA
Increase | (decrease) in borrowing Exchange rate difference Exceptional income Total

2012-13 266
(25) 3 5 249

2011-12 215
60 (12) 7 270

33|85

Fund Flow
` cr Uses 2012-13 A 2011-12 A

Interest and finance charges (net)

Purchase of fixed assets and capital advances Working capital increase Dividend payments Direct taxes

33
104 37 16 56

43
107 18 16 34

Investment in group companies

Changes in non-current assets Total 34|85

4
(1) 249

42
19 270

Position of borrowings
` cr
Mar 11 Mar 12 Mar 13 400 350 Rupee 202 233 262 300 Foreign Currency 113 142 88 250
317 375 350

Total

315

375

350
250

Mar-11

Mar-12

Mar-13

Long-term

156

183

196

200 159 150 100 Mar-11 Long-term

192 183 196 154 Mar-12 Mar-13

Short-term

159

192

154

156

Total

315

375

350

Short-term

35|85

Borrowings
600 4.00 3.50 428 2.92 368 295 315 1.94 1.50 1.00 0.56 0.60 0.47 0.50 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 375 350 3.00 2.50

500 369 349

400

` cr
300

2.00
1.28 1.85 1.23 0.99 0.93 0.60 0.80 1.35 0.61

200

100

0.74

0.86

Debt

Debt to equity

DSCR

36|85

Interest to Sales
10.0

10 8 6

8.0 6.4

37|85

%
4 2 0

4.2
3.4

3.7

3.3

3.3

3.5 2.2 2.4

1.7

1.7

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13

Performance and Other Chemicals Aromatics

Purpose

AR Division will be a world-class business, offering its customers in Personal Care and other chosen industries high quality products and

services in a cost effective manner.

38|85

User Industries
Personal Care Pharmaceutical Flavors & Fragrance (F&F) Dyestuff Paper

No of Customers 39|85

~350

Key Products
Product Group Market Share (2012-13) p-Cresol 24% China (6) Competition

p-AA

51%

Europe (1), India (1)

p-AAl

65%

India (2)

p-Cd

39%

China (1)

40|85

Financials
` cr

Particulars

2010-11 A

2011-12 A

2012-13 A

Sales

349

469

658

No of people

197

226

234

41|85

Sales
` cr 670 658

485

469

349 300 10-11 11-12 12-13

40% growth over previous year

42|85

Way forward - Key Actions

Maintain cost and volume leadership in existing products

Enter into value added downstream products

Explore related opportunities in Personal Care and F&F

43|85

Risks

Chinese competition mainly in p-C and p-AA

Non compliance to REACH regulations

44|85

Performance and Other Chemicals Bulk Intermediates

Purpose

BI Division will supply bulk chemicals to other Divisions in a cost effective manner and grow in speciality chemicals and intermediates.

45|85

User Industries
Tyre and Rubber Dyestuff Paper Pharmaceutical

No of Customers

264

46|85

Key Products
Product Group Market Share (2012-13) Competition

Resorcinol

32% domestic

Japan (2), USA (1), China (8)

2% global

CSA

14% domestic

India (6)

Oleum 65%, SO3, Caustic Soda

Captive consumption

47|85

Financials
` cr

Particulars

2010-11 A

2011-12 A

2012-13 A

Sales

98

108

123

No of people

258

254

241

48|85

Sales
` cr 150

123
100 98 108

50

0 10-11 11-12 12-13

15% growth over previous year 49|85

Way forward - Key Actions

Expand Resorcinol capacity

Enter into new intermediates 3 Introduce products based on Hydrogen

50|85

Risks

60% of the Divisions business is commodity based and driven by highly uncertain trends Too many new players making business unviable

Increasing Chinese imports

51|85

Performance and Other Chemicals Colors

Purpose
CO Division aims to be a reliable global supplier of colorants required for different facets of human life. Its products will find applications in industries such as textile, pharmaceutical, personal care, paper, paint and coatings, packaging, foods and electronics.

It will manufacture in a responsible way and compete in the market place on the basis of service, quality and cost and continuously improve processes so as to deliver better value.

52|85

User Industries

Product Group Textile dyes Paper dyes HP pigments

User Industries Textile Paper Paint and Coatings

No of Products

550

No of Customers 1350 2/5

53|85

Key Products

Product Group Vat dyes

Market Share (2012-13) 12%

Competition Europe (1), China (4), India (1)

Reactive dyes
Sulphur Black

1.2%
8%

Europe (2), India (8-10)

Europe(1), China (3)

HP pigments

2.4%

Europe (3)

54|85

Financials
` cr

Particulars

2010-11 A

2011-12 A

2012-13 A

Sales

325

342

330

No of people

950

941

885

55|85

Sales
` cr

350
325

342 330

300

250 10-11 11-12 12-13

56|85

Way forward - Key Actions

Increase Vat dyes global market share through M Dohmen - Atul group Capacity expansion of key Vat dyes Increase Reactive dyes market share with specialities Business growth through new High Performance Pigments and Digital

Printing Inks
Multiply business in Sulphur Black and grow in Denim segment

Expand synergistic business Textile Chemicals through Rudolf Atul

Reduce fixed cost through restructuring

57|85

Risks

Reduced demand for niche products Increased presence of SMEs in specialties on a global level Limited product portfolio in High Performance Pigments

Minimal exposure to new synergistic business segments

58|85

Life Science Chemicals Crop Protection

Purpose

We, Crop Protection Division, are in the business of servicing the growing needs of food and fiber We leverage our competency in chemistry and provide farm solutions to create lush yields

We strive for building relationship with farmers across the globe

59|85

User Industries
User Industry No of products No of customers Exports Brand Bulk Agriculture 59 1945 150 1700 95

CP brands are available across > 25000 retail outlets

60|85

Key Products
Market Share (2012-13)

Product Group

Competition

2,4 D group

12%

USA (1), Australia (1), South America (1), Europe (1), China (3), India (7)

Indoxacarb

7%

USA (1), India (1)

61|85

Financials
` cr

Particulars

2010-11 A

2011-12 A

2012-13 A

Sales

306

342

387

No of people

364

391

381

62|85

Sales
` cr 400
387

342

325
306

250 10-11 11-12 12-13

13% growth over previous year

63|85

Brands

64|85

Way forward - Key Actions

Introduce new products coming off patent

Expand herbicide capacity Expand brand business

65|85

Risks

Business is dependent on monsoon | weather and pest attack

Low price competitors from China Competition from new entrants and low priced suppliers in domestic

herbicide business
Patent and data protection India now is a signatory to IPR Entry of international generics companies in India Increased usage of GM crops

66|85

Life Science Chemicals Pharmaceuticals and Intermediates

Purpose

PI Division will contribute to the wellness of mankind by catering to the growing needs of Pharmaceutical Industry. It will supply pharma

intermediates and APIs in a cost effective manner using novel

technologies.

67|85

User Industries
Product Group Pharmaceutical Intermediate and APIs Phosgenated Chemicals User Industries

Pharma Pharma, Polymers, Crop Protection Pharma, Aerospace, Electronics, Polymers, Paper

Sulfones

No of Products No of Customers 68|85

40 100

Key Products
Product Group Market Share (2012-13) Competition

Pharmaceutical Intermediates and APIs

<1%

USA, Japan, Europe, India, China (several companies)

Phosgenated intermediates

<1%

China (5), Europe (4), Japan (3), USA (1), India (1)

Sulfones (DDS)

45%

China (5), India (3), Europe (1), Japan (2)

69|85

Financials
` cr

Particulars

2010-11 A

2011-12 A

2012-13 A

Sales

95

106

114

No of people

207

215

231

70|85

Sales
120
114 ` cr

106

95

90 10-11 11-12 12-13 10% growth over previous year 71|85

Way forward - Key Actions

Sustainable Development approach

Expand capacity- Sulfones, Phosgene, Phosgenated &

Pharmaceutical intermediates
Improve production- Debottlenecking & Process Intensification. Push sales in Japan & Europe Growth through custom synthesis and contract manufacturing Inorganic growth- acquisition

72|85

Risks

Forex fluctuation (70% exports)

New regulatory requirements in USA (GDUFA) and Europe

73|85

Performance and Other Chemicals Polymers

Purpose

PO Division will offer best in class products and services to Automotive,

Composites, Footwear, Furniture, Paint and Coatings and Civil industries across the world with bonding and coating solutions in a cost effective manner.

74|85

User Industries
Product Group Epoxy User Industries Paint & Coatings Civil Power Transmission Wind energy Defence Automotive Aerospace

No of Products No of Direct Customers 75|85

300
500

User Industries
Product Group Brands User Industries Footwear Handicrafts Civil Jewelry Automotives Furniture Engineering Art and Craft

No of Brands No of Distributors 76|85

24 565

Key Products

Product Group

Market Share (2012-13) Domestic

18%

Competition

Epoxy

USA (1), China (2), Fareast (3), India (1)

Brands

10%

India (7)

77|85

Financials
` cr

Particulars

2010-11 A

2011-12 A

2012-13 A

Sales

364

406

386

No of people

245

253

271

78|85

Sales
` cr 410 364 406 386

305

200 10-11 11-12 12-13

79|85

Brands

80|85

Polygrip

81|85

WD-40

82|85

Atul-Elkay

83|85

Way forward Key Actions

Increase sale of high margin products Diversify and expand product portfolio Add new business verticals of strategic importance

Expand brand business

Reduce cost and improve working capital cycle Grow through Inorganic and Organic route

84|85

Risks

Price and margin sensitive business

Growth depends on Infrastructure development

Limited ability to pass the price increases

85|85

Thank You