#1Investor Presentation June 2017 Stock Codes: BSE: 504973 NSE: TUBEINVEST Bloomberg: TI IN / TI IB Reuters: TUBE.NS / TUBE.BO CIN: L35921TN1949 PLC002905 Tube Investments of India Limited murugappa#2Index Table of Contents Corporate Profile Manufacturing Businesses Engineering . Cycles and Accessories Metal formed products Gears and Gear Products - Shanthi Gears Limited murugappa Page No 3 20 31 44 62 200 Financial Service Businesses Cholamandalam Investment and Finance Company Limited Cholamandalam MS General Insurance Company Limited 72 73 2#3Murugappa Group and Philosophy Gross Sales Share Other Company Name Market Capitalisation Description murugappa Cholamandalam Investment and Finance Company Limited is a Chola INR 1,50,722 Mn. Non Banking Finance Company and one of the leading financial (USD 2,325 mn) provider for vehicle finance, business finance, home equity loans, stock broking & distribution of financial products 2% CUMI EID Enter a better life 7% 15% TII 15% Chola MS 11% INDIA CIFCL Coroma 16% ndel Coromandel 34% CUMI FY 2016-17 PARRYS EBITDA Share Other 3% EID CUMI 9% 15% TII 12% Chola MS 8% Tube Investments of India Limited offers wide range of INR 1,17,652 Mn. engineering products such as Steel Tubes, Chains, Car door (USD 1,815 mn) frames, Fitness equipment and Cycles Coromandel International Limited is the second largest INR 91,234 Mn. phosphatic fertilizer company in India (USD 1,407 mn) INR 49,839 Mn. (USD 769 mn) INR 54,900 Mn. (USD 847 mn) Chola ◆MS Unlisted GENERAL INSURANCE EID Parry (India) Limited, one of the largest player in the market, offering wide range of agro products such as sugar, microalgal health supplements and bio products Carborandum Universal Limited is a pioneer in coated and bonded abrasives, super refractories, electro mineral and industrial ceramics. The Company currently has presence in Australia, South Africa, Russia, Canada and Middle East Cholamandalam MS General Insurance Company Limited is a JV of Murugappa Group with Mitsui Sumitomo Insurance Group of Japan, (5th largest insurance group across the globe) Note: Market data as on 31st March 2017. Source: BSE Sensex and Conversion Rate of 1USD = Rs.64.8386 as on 31st March 2017 Source: RBI Coroman del 25% CIFCL 28% PARRY AGRO FY 2016-17 Parryinfra PARRY Morgan ThermalCeramics POIA KADAMANE COROMANOR ENGINEERING Ambadi sedis Shanthi Gears Tyndario Worldwide The fundamental principle of economic activity is that no man you transact with will lose; then you shall not. - Arthashastra 3#4TII Milestones 1949 1955 1960 murugappa • TI Cycles setup with BSA and Hercules Brands TCYCLES OF INDIA • Entered Precision tubes with incorporation of Tube Products of India • Entered Chains business with incorporation of TI Diamond Chains Limited 1965 • TI Metal Forming setup 1978 1985 • Promoted Cholamandalam Investment and Finance Company Ltd • Indigenously manufactured 100 CC bike chain Chola Enter a better life 4#5TII Milestones 2001 • Promoted Cholamandalam MS General Insurance along with JV Partner Mitsui Sumitomo Insurance, Japan murugappa Chola GENERAL INSURANC MS 2010 • Acquired SEDIS, France Shao 2012 • Acquired Shanthi Gears Ltd, a listed Company sedis • Entered into Large Dia Tube manufacturing 2014 2016 • Promoted TI Tsubamex Pvt Ltd along with JV Partner Tsubamex Company, Japan • TI sold 14% stake in Cholamandalam MS General Insurance Company to JV Partner, Mitsui Sumitomo Insurance • Investment in TI Absolute Concepts Pvt Ltd with Ciclo Café brand, a bicycle theme based restaurant and retail • Board approves Demerger proposal to segregate manufacturing and financial services businesses Adely CICLO CAFÉ 5#6List of Subsidiaries and Joint Ventures murugappa figures in INR Mn. 7 FY 2016-17 Company Nature of Business % Shareholding Total Income PAT Financiere C10 SAS (FC 10) Manufacturing of Chains 100% 2,323 12 Shanthi Gears Limited (SGL) Manufacturing of Gears 70.1% 2,146 225 TI Tsubamex Private Limited (TTPL) Design and Manufacturing of Dies 75% 52 (63) TI Absolute Concepts Private Limited (TIACPL) Bicycle Theme Based 50% 27 (54) Restaurant & Retail Cholamandalam MS Risk Services Limited (CMSRSL) Risk services 49.5% 366 17 Cholamandalam Investment and Finance Company Limited (CIFCL) Financial Services 46.2% 46,922 7,980 Cholamandalam MS General Insurance Company Limited (CMSGICL) General Insurance 60% 27,624 2,084 Business TI Financial Holdings Limited (TIFHL) 100% 6#7Corporate Overview Manufacturing Businesses • Engineering Segment (Tubes, Value Added Cold Rolled Strips, & Tubular Components) • Cycles and Accessories (Bicycles & Fitness Products) • • . Metal Formed Products (Chains for Automobile sector & Industrial applications, Doorframe & Channels for Passenger Cars) Gears and Gears Products (Investment in Shanthi Gears Limited - Industrial Gears) • Others (Investment in TI Tsubamex Private Limited - Designing & Manufacturing of Dies) • 25 Manufacturing Locations and Suppliers to all major automotive OEM's or Tier 2/3 Suppliers • TI Absolute Concepts is formed as a 50:50 Joint Venture in the business line of Bicycle Theme based Restaurant and Retail Investments in Financial Services • Cholamandalam Finance (46.2%) Cholamandalam MS Insurance (60%) murugappȧ INR Mn. Revenue from Operations EBITDA PBIT Key Financials (TII Consolidated) – IND AS 2016-17 2015-16 115,206 103,241 12% 19,606 17,767 11% 16,203 10% % Gr 17,838 PBT (Before Exceptional Items) 17,033 14,809 15% Exceptional Items 0 (358) PBT (After Exceptional Items) 17,033 14,451 18% Net Profit 11,751 7,887 49% TII Standalone - As per IND AS INR Mn. 2016-17 2015-16 % Gr Revenue EBITDA 42,078 40,414 4% 3,601 3,503 3% PBIT (Before Exceptional Items) 3,099 2,757 12% Exceptional Items 0 7,850 PBIT (After Exceptional 3,099 10,607 -71% Items) Net Profit 1,962 7309 -73% • Cholamandalam MS Risk Services (49.5%) 7#8TII (Standalone) Businesses Engineering Cycles and Accessories TESTED TRU RESPECTED murugappa Metal Formed Products PRECISION VALUE ADDED SHEET METAL FORMED COMPONENTS www.book.com BSA SA 0 HERCULES BSA&Hercules bicycles are proud to be your chosen Superbrands www.bsahercules.com CAES BSAT SAYONG BSA LADYBIRD ASA MACH ROADSTERS JUROPOSTERS ROOSTERS ROSTERS RYDERS ROAD POWER TRANSMISSION CHAINS AND FINE BLANKED COMPONENTS ERW & CDW Tubes, Value Added Cold Rolled Strips & Tubular Components Bicycles, fitness products and accessories Largest Supplier of Precision Steel Tubes (CDW) Chains for Automobile sector & Industrial applications, Doorframe & Channels for Passenger Cars Second largest bicycle producer in India Leader in Chains and Fine blanked components Preferred supplier for roll-formed door frames 8#9800 700 600 500 400 300 200 100 0 31-Mar-12 30-Jun-12 30-Sep-12 31-Dec-12 31-Mar-13 30-Jun-13 30-Sep-13 31-Dec-13 31-Mar-14 30-Jun-14 30-Sep-14 Uninterrupted dividend history since 1954 Dividend payout policy ~25-30% of profits 31-Dec-14 31-Mar-15 30-Jun-15 30-Sep-15 31-Dec-15 6 31-Mar-16 30-Jun-16 30-Sep-16 31-Dec-16 31-Mar-17 Share Price and Shareholding Pattern Shareholding Pattern 100% 26.20% 25.90% 25.70% 25.40% 23.90% 80% 12.30% 9.60% 12.20% 11.10% 14.40% 60% 13.20% 16.30% 13.20% 14.70% 12.90% 40% 48.30% 20% 48.20% 48.90% 48.80% 48.80% 0% Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Promoter FII DII Others Share Price Movement 31st Mar 2017: INR 627.65 murugappȧ#10Key Standalone Financials 2016-17 murugappa figures in INR Mn. 7 FY Particulars % Growth 2016-17 2015-16 Gross Sales / Income from Operations 42,078 40,414 4% Total Income from Operations 44,159 42,120 5% EBITDA 3,601 3,503 3% % to Gross Sales 9% 9% PBIT (before exceptional items) 3,099 2,757 12% % to Gross Sales 7% 7% Exceptional Items 0 7,850 PBIT (after exceptional items) 3,099 10,607 -71% % to Gross Sales 7% 26% Profit Before Tax (before exceptional items) 2,379 1,403 70% % to Gross Sales 6% 3% Profit Before Tax (after exceptional items) 2,379 9,253 -74% % to Gross Sales 6% 23% 10 0#11Performance Trends 44,000 42,000 40,000 38,000 36,423 36,094 36,000 34,000 32,000 2012-13 Gross Sales CAGR: 3.7% 40,414 39,162 2013-14 2014-15 2015-16 42,078 murugappa T figures in INR Mn. 2016-17 Note: Gross Sales include Excise Duty to comply with IND AS and figures has been suitably adjusted EBITDA and EBITDA% 4,000 3,503 3,601 14.0% 3,500 3,193 2,983 3,015 12.0% 3,000 8.6% 8.7% 8.2% 10.0% 2,500 8.2% 8.4% 8.0% 2,000 1,500 6.0% 1,000 4.0% 500 2.0% 0.0% 2012-13 2013-14 2014-15 2015-16 2016-17 11#12Performance Trends PBIT and PBIT% (Before Exceptional Items) murugappa T figures in INR Mn. 3500 3000 2552 2500 2000 1500 1000 500 7.6% 3099 2644.3% 2595 7.0% 2757 7.4% 7.4% 7.2% 7.0% 6.8% 6.6% 6.8% 6.6% 6.4% 6.2% 2012-13 2013-14 2014-15 2015-16 2016-17 ROCE% 20% 16% 16% 14% 14% 13% 13% 12% 8% 4% 0% 2012-13 2013-14 2014-15 2015-16 2016-17 Based on Average Capital Employed excluding investments in Financial Services Businesses 12#13Performance Trends 10000 PAT 7,309 1,209 6327 1000 367 1962 1040 941 842 982 100 2012-13 2013-14 2014-15 2015-16 2016-17 6 ■PAT (Before Exceptional Items) * Exceptional Item Dividend Per Share - in INR 5* 543 4 2 2 2 2 1 0 murugappa figures in INR Mn. Face Value Per Share - INR2 1.25^ 2012-13 2013-14 2014-15 2015-16 2016-17 *Includes Special Dividend of INR3.50 per Share ^ Interim Dividend Dec'16 of INR 1.25 per Share 13#14Performance Trends Earnings Per Share (Basic)- In INR 50.00 40.00 30.00 20.00 10.00 5.58 6.46 5.04 0.00 2012-13 2013-14 2014-15 * 39.04 2015-16 murugappa Face Value Per Share - INR2 10.47 2016-17 *Higher due to exceptional income (Net). Earnings per Share on Normal profits would be INR 5.24 (2014-15 INR 4.50) Face Value Per Share - INR2 120.00 Book Value Per Share - INR 112.75 108.13 100.00 80.00 70.57 63.28 66.29 60.00 40.00 20.00 ☐ ☐ 0.00 2012-13 2013-14 2014-15 2015-16 2016-17 14#15Performance Trends Capex in INR Mn murugappȧ G 2,500 2,172 2,000 1,689 1520 1,500 1,358 1240 1,000 500 0 2012-13 2013-14 2014-15 2015-16 2016-17 Total Debt/Equity 1.20 1.10 1.10 1.08 1.00 0.80 0.68 0.60 0.37 0.40 0.20 0.00 2012-13 2013-14 2014-15 2015-16 2016-17 Strong Credit Rating CRISIL AA for long term and CRISIL A1+ for short term 15#16Scheme of Arrangement - Demerger Scheme of Arrangement • murugappȧ Segregating the Manufacturing Businesses under the Scheme of Demerger to a separate Company • Board Approved the Scheme on 3rd November 2016 •Appointed date is 1st April 2016 The Scheme is subject to necessary regulatory approvals Manufacturing Businesses . • Comprises of manufacturing of tubes, strips, tubular components, bicycles and fitness products, chains, roll-formed sections, other metal formed products and Investments in Shanthi Gears Limited (Industrial gears), TI Tsubamex Private Limited (designing and manufacturing of dies) and Sedis (Industrial Chains) Financial Service Businesses (As Investments) • Cholamandalam Investment and Finance Company Limited (46.2%) • Cholamandalam MS General Insurance Company Limited (60%) • Cholamandalam MS Risk Services Limited (49.5%) Post Demerger • Two Companies - Manufacturing Company and Financial Services Company • Both Companies will have mirror image shareholding Resulting Company issues 1 fully paid up Equity Share of INR1 each for every 1 fully paid up equity share of INR2 each held in the Demerged Company • Reduction of face value of Demerged Company from INR2 each fully paid to INR1 each fully paid 16#17Rationale for Demerger murugappa Both manufacturing and financial services can focus on their line of businesses Operational rationalisation, organisation efficiency and optimum utilisation of various resources G Ability to leverage financial and operational resources of each business Each business would be able to address pursue efficient capital allocation and attract different sets of investors, strategic partners, lenders and other stakeholders Likely to be value accretive for the shareholders - would enable them to select investments best suited to their investment strategies Possible lower holding company discounts 17#18Demerger - Resultant Structure Previous Structure Promoters 49% 51% Tube investments Financial Services Business Resultant Structure murugappa Public Promoters Public Promoters Public Manufacturing Business 49% 51% 49% 51% TI Financial Services Company TI Manufacturing Company Financial Services Business Manufacturing Business Financial Services Business Cholamandalam MS General Insurance Company Limited Cholamandalam MS Risk Services Limited Cholamandalam Investment and Finance Company Limited Manufacturing Business Engineering (Tubes and Strips) Cycles and Accessories Metal Formed Products Investments in • Shanthi Gears Limited TI Tsubamex Private Limited Financiere C10 . TI Absolute Concepts Private Ltd 18#19Manufacturing Businesses Engineering Cycles and Accessories murugappu TESTED TRUSTED RESPECTED You Tube www.youtube.com/sahercules www.facebook.com BSA SELECTED Superbrand HERCULES murugappa BSA & Hercules bicycles are proud to be your chosen Superbrands. BSA NERCULES www.bsahercules.com HERCULES BSATUR BSANOM BSA LADYBIRD BSA MACH ROADSTERS ROADSTERS AND ROADSTERS ROADSTERS RYDERS ADEO Metal Formed Products PRECISION VALUE ADDED SHEET METAL FORMED COMPONENTS Gears and Gear Products POWER TRANSMISSION CHAINS AND FINE BLANKED COMPONENTS 19#20Engineering (Tubes and Strips) murugappȧ Leader in CDW tubes for the Automotive industry 20 20#21Engineering - Two Wheeler Application Shock Absorber Tube Seat Assembly Swing Arm Handle Bar Tube Main Frame murugappa Front Fork Tube Two-Wheeler sales in India has grown at 7% in FY 16-17 (3 year CAGR of 6%) G 21#22Engineering - Four Wheeler Application Anti-roll bar Gas-filled strut Cross-member Drive shaft Side impact protection Camshaft Balancing shaft Axle shaft Engine murugappa Belt tensioner Instrument panel frame Steering column Power steering Corrugated tube (steering column) system Shock absorber Passenger Car Sales in India has grown at 4% in FY 16-17 (3 year CAGR of 2%) 39999 Transverse control arm Engine mount Vibration damper (rubberised metal) 22#23Engineering - Business Drivers murugappa ☐ Precision Steel Tubes (CDW) largely used in Automobile applications of Two Wheelers/ Passenger Cars and Commercial Vehicles for applications like Front Forks, Side impact beams, steering columns etc CDW tubes also used in Hydraulic Cylinders and Off-Road Vehicles Range and adherence to tolerance are the key factors Variety of products due to new models introduced by all auto makers Customer preference to Value added products Cost competitiveness through internal efficiencies Business Mix FY 2016-17 Non Auto 23% Auto 77% Gear Shift Lever Rear Axle for Commercial Vehicle Steering shafts 23#24Engineering - Key Success Factors CDW Tube Market leader in High Quality & Safety critical CDW Tubes for 2W and 4W applications Leadership position with 56% market share Mohall Multi Location Only manufacturer with plants at 4 different locations closer to customers New Manesar Delhi Gearing for Non- Auto CRSS Large-dia plant setup in October 2014 providing tubes for hydraulic cylinders, Off- Road applications, import substitution Special grades contribute to 71 % of total sales of the CRSS division •Import substitution program is continuously on Value Added Products • Tubular components including Steering column, side impact beam etc • Value added products form 12% of tube sales Pune Shirwal murugappa Indore Kolkata Hosur Tiruttani Bengalooru Avadi Chennai Plants Warehouses Regional Offices • CF Agents 24#25Engineering - Major OEM's Serviced MS MARUTI SUZUKI HYUNDAI TATA JOHN DEERE F Mahindra 2 Wheelers murugappa 7 Ashok Leyland NISSAN GM LEYLAND DEERE ΤΟΥΟΤΑ H HONDA P PIAGGIO PIAGGIO VEHICLES PVT. LTD. ROYAL ENFIELD D RENAULT NISSAN Sona JOINT VENTURE COMPANY TVS Mahindra SWARAJ mazda TAFE CNH קר THERMAX EASTERN Case New Holland Sabros W Drivin TamTING GM Lucas-TVS Limited BOSCH BorgWarner श्रीs Cummins COMSTAR SODECIA THE FREE ENERGY COMPANY PARRYS KING CRAFT DEWAS HYDROQUIP PVT. LTD. VISOKA SS Rane Thermal Energy systems TIM Forming Salcidha Sunar E and Cng Co. Pvt L INDIA VIRTEX ENGINEERS IN THAI SUMMIT HEEL RECL Rajshree Sugars & Chemicals Limited endurance IFB EE AAB LUK Valeo LUK India Amalgamations Group AQUA GROUP 25#26Engineering - Awards and Recognitions SHOWA Global Business Partner Meeting 2017 (Thailand) "Motorcycle and Hydraulic Components Opertions" 29 Suvarna th March 2017 mi Grand room Novote arnabhumi A t Hotel Global Strategic Supplier Award from Showa, Japan, 29th Mar 2017 QUALIT CLE M OF INDIA ENNAL ZEN CO ent Complex, Chennai-600012 ETITIO To murugappa G Pal Sponsors EEPINDIA Awards C.R.I. PUMPS MIC Cerun ENGINEERING THE FUTURE EQUTHERN REGION 399 EXPORT A VARI EPC EPH EEP Star Performer Award for Exports from EEPC SCA SHA NG THFU RE Sona Koyo Steering Systems Ltd. Supplier Performance Award is the Gelegery Long Basises Association TUBE INVESTMENTS OF INDIA LTD for their condnuous Support as Long term business part for the year 2015-2016 WIPRO WINNER Alay marg Khan M. Dastesi Outstanding Kaizen Award from QCFI Supplier Performance Award from Sona Koyo QCC Award from Wipro 26 46#27G Engineering - Awards and Recognitions WIPRO Applying Thought WIPRO INFRASTRUCTURE ENGINEERING HONOURS INDIA LIMITED THE CONSISTE MENT TOWARDS SHOWA 2015 Global Strategic Co-operation Award to TUBE INVESTMENTS OF INDIA LTD. In recognition of the valuable global co-operation Contribution Global Business Partner Meeting 2016(Thailand) "Motorcycle and Hydraulic Components Operations 30th March 2016 Best Supplier 2015 murugappȧ Award Make In India (Localization) Tube Investment Of India Limited SPICER Drivetrain Products 10th AUGUST 2015 WIN CHENNAI - Award from WIPRO for consistent improvement in Quality Akira Kadoya Executive Vice President and Chief Operating Officer Motorcycle and Hydraulic Components Operations SHOWA CORPORATION Congratulations From SHOWA "Global Strategic Co-operation Award" from Showa Corporation DANA ANAND≫ Best supplier Award for Make in India (Localization) from M/s Spicer for Tiruttani Tubes Plant HEALTH OHSAS CCUP 18001 SAFETY ◉ OSHSAS 18001 Certification for TPI Mohali IMS: EMS + OHSAS certification received from M/s BVC for Avadi Complex 27#28Engineering - Business Highlights 2016-17 Volume Growth across the segments over PY Strips grew by 7% Tubes Exports grew by 85% Growth in PBIT by 54% Large Diameter plant stabilized Sales mix from New Products higher than plan IS513 Certification obtained for CRSS 2 teams won awards in National Level Quality Circle Competition conducted by QCFI held at Raipur. 9 teams won awards in ABK - AOTS Dosokai - Regional Poka Yoke competition murugappȧ G 28#29Engineering - Key Financial Trends figures in INR Mn. murugappȧ Sales ROCE % 30% CAGR: 4.2% 26% 19,324 24% 17,912 25% 16,380 16,848 17,097 IIIII 2012-13 2013-14 2014-15 2015-16 2016-17 Note: Gross Sales include Excise Duty to comply with IND AS and figures has been suitably adjusted 5% 0% 20% 15% 10% ון! 15% 14% 24% 2012-13 2013-14 2014-15 2015-16 2016-17 Based on Average Capital Employed Capital Employed in INR Mn. Particulars 2012-13 2013-14 2014-15 2015-16 2016-17 NFA 3,331 4,161 4,654 4,383 4,412 NWC 1,670 1,931 1,541 1,522 1,880 Total 5,001 6,092 6,195 5,905 6,293 Capital Expenditure 822 1,246 870 440 486 29 29#30Engineering - Key Financials 2016-17 murugappȧ figures in INR Mn. Particulars 2016-17 2015-16 % Growth Strips: (Volumes Tonnes) (Incl. Group) 82,273 77,535 6% Tubes: (Volumes Tonnes) 168,689 154,208 9% Domestic 149,110 143,605 4% Exports 19,579 10,603 85% Large Dia Tubes: (Volumes Tonnes) 21,733 15,303 42% Gross Sales (incl. Inter Unit) 19,324 17,097 13% EBITDA 2,050 1,548 32% 11% 9% PBIT (Before Exceptional Item) 1,458 945 54% 8% 6% APPLICATION OF FUNDS Net Fixed Assets (Incl. CWIP) 4,412 4,383 Net Working Capital 1,880 1,522 Total Capital Employed 6,293 5,905 Sales/NWC- Avg 11.1 10.0 ROCE%Based on Avg Capital Employed 24% 15% 30 30#31Cycles and Accessories murugop You Tube www.youtube.com/sahercules BSA TESTED TRUSTED & RESPECTED BSA montra SELECTED Superbrand HERCULES murugappȧ G www.facebook.com/bahercules BSA & Hercules bicycles are proud to be your chosen Superbrands. BSA BSA BSATDEUR BSAY ON BSA LADYBIRD BSA MACH ROADSTERS ROADSTERS www.bsahercules.com HERCULES DE ROADSTERS ROADSTERS RYDERS ODEO Pioneers in Promoting Cycling... not just cycles 31#32- Cycles Industry Standard Bicycles In trade sales, the share of standard bicycles is coming down over the years Government orders for standard cycles has increased with more and more rural welfare schemes Trade Sales - FY 16-17 54% murugappa 66% 46% 34% Industry ■Standards TII ■Specials Speciality Bicycles In the speciality market, growth is seen in kids, premium and performance cycle segments Overall Indian bicycles market has seen a drop of 11% in FY 2016-17 over FY 2015-16 Trade Market Share - FY 16-17 14% 17% 27% 31% 10% ATLAS AVON HERO TICI Others Based on volumes of 8 players (Source: AICMA Data) 32#33Cycles - Business Drivers Value Cost SALE) murugappa Cost competitiveness in Standard bicycles and mass specialty bicycles Product differentiation, Branding and Service are key to success in premium end of bicycles SALE Rapid increase in internet penetration throwing up new channels and opportunities BRAND Rising aspiration towards cycling in Urban India Retail presence enhances customer connect and market share Brand positioning key for pricing G 33#34Cycles - Our Brands BSA CHAMP HERCULES MTB TURBODRIVE HHERCULES TOPGEAR HERCULES MIB Geored BSA LADYBIRD MACH CITY HERCULES JR. ROADSTERS montra HERCULES ROADEO murugappa HERCULES ROADSTERS G MACH CITY TRACK & TRAIL GYCLES AND MORE cannondale Bianchi SCHWINN mongoose® 34#35Cycles Key Success Factors - murugappȧ Brand equity BSA Hercules brands command a premium and is know for good finish and features Premium Cycle Group (PCG) Roadeo and Montra are premium brands well received and seen exceptional growth •Representing International brands like Cannondale, Bianchi, Ridley PCG registered a growth of 30% vis-à-vis Previous Year BSA HERCULES ROADEO montra cannondale Bianchi SCHWINN Pioneer in Retail Formats •Large dealer network across India with 10,000 touch points TI Cycles hold retail leadership through its exclusive formats of - •BSA Hercules Rural Exclusive: 455, Track & Trail Urban: 170, Track & Trail Sport: 20 • Omni-channel presence through Track & Trail online portal and in-store BICYCLES mongoose BRIDLEY BSA HERCULES LADYBIRD ROADED MACH CITY TRACK & TRAIL CYCLES AND MORE montra 35#36Cycles - Key Success Factors Promoting •Organised 2000+ events all over the country with participation of more than 10 Lakhs individuals in Cycling not FY 16-17 Just Cycles •Some well known events are Gran Fondo, Cyclothon, etc Multi Location Servicing •TI Cycles is the only company with 4 manufacturing plants and 5 Warehouses spread across the country New Rajpura Plant with Capacity of 3 Mn Cycles p.a. at a Capital Expenditure of INR 958 Mn. •This puts us in better position to serve the markets Pioneer in New Product Developme nt •68 new Products and 40 product refreshes delivered in FY 16-17 • City Bike launched as a new segment for Urban mobility Rajpura Noida murugappa 93) 7 New Delhi Jaipur Patna 0 Guwahat Durgapur O Nashik Cuttack Kolkata 0 Mumbai BSA PUNCTU Chennai PROOF The ride never stops. The ends. fun never e Inter ALLOY micro BSA HERCULES LADYBIRD ROADEO MACH CITY montra 36#37Renewed Retail Experience - Track and Trail TRACK TRAIL BIKING AND BEYOND cannondale mongoose GT. SCHWINN Bianchi SHACK&TRAIL murugappa Continuously expanding Track and Trail retail experience with 85 new stores during the FY 16-17 37#38India's first Cycling Theme Café - Ciclo Café CICLO CAFE HOM CICLO CAFÉ murugappa G Ciclo Café spun off as a new Joint Venture and 2 more opened in Gurgaon and Hyderabad in prime locations during the year FY 16-17 38#39Online Bicycle Brand- Brooks B BICYCLES ACCESSORIES BRAND BROOKS WORLD BROOKS < 3 murugappa IN (E) Search... Ride to Glide Now available in Chennai, Bengaluru & Hyderaud free delivery & free personalized asse Buy Now Now live at brooksbicycle.com and Flipkart Offered with complete Assembly and After sale service Broc 39#40Cycles - Awards and Recognitions GLOBAL MARKETING EXCELLENCE AWARDS AND REVITALIZATION AWARD BSA LADYBIRD TI Cycles Of India HDWETING EXCELLENCE TALIZATION AWARD COUNCIL BSA LADYBIRD 11 Cycles Of India CU CII , DESIGN EXCELLENCE AWARDS 2015 ROOPER & HERCULES Awarded to TI CYCLES for winning the Cll Design Excellence Award 2015 in the category Mobility Design for Two Wheelers dannyp Chandra Banerjee Director General Confederation of Indian Industry murugappa G BSA Lady Bird wins the Brand Revitalization Award from CMO Asia BSA Lady Bird Vogue won the CII Design Excellence Award Hercules Trooper won the India Design Mark awarded by the India Design Council 60008- EMERGING GRAND AWARD TI Cycles of India MACH Mach City won the Best Emerging Brand Award @ the National Awards for Marketing Excellence by CMO Asia 40 40#41- Cycles Business Highlights 2016-17 30% growth in Premium Cycles Group (Premium Geared, Super Premium and International brands) Exceptional Growth delivered by Mach City. and Montra brands Robust Growth in Exports with healthy order book Institution orders received from Governments in Karnataka, Andhra Pradesh, MP, West Bengal and Tamil Nadu are under fulfilment Newly inaugurated Rajpura plant is ramping up on volumes E-Commerce site www.trackandtrail.in went live in Sep'16 and had good reception from visitors Marketing Events Organized Sales Melas, Service Camps, Mechanic trainings, College Sales & displays all over India God where the Conne an murugappa 41#42Cycles - Key Financial Trends figures in INR Mn. murugappȧ G Gross Sales ROCE % CAGR: 1.4% 70% 12,732 13,241 13,475 64% 11,959 IIIII 14,826 60% 57% 56% 50% 40% 34% 30% 20% 12% 10% 0% 2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17 Note: Gross Sales include Excise Duty to comply with IND AS and figures has been suitably adjusted Based on Average Capital Employed Capital Employed in INR Mn. Particulars 2012-13 2013-14 2014-15 2015-16 2016-17 NFA 470 461 587 1,099 1,518 NWC 382 158 1,113 1,537 1,381 Total 852 619 1,700 2,636 2,899 Capital Expenditure 105 75 204 511 540 42#43Cycles - Key Financials 2016-17 Particulars Volumes murugappȧ 7 figures in INR Mn. 2016-17 2015-16 % Growth Cycles (Million nos) 4.0 4.6 -14% Gross Sales (incl. Inter Unit) EBITDA 13,475 14,826 -9% 445 859 -48% 3% 6% PBIT (Before Exceptional Item) 357 788 -55% 3% 5% APPLICATION OF FUNDS Net Fixed Assets (Incl. CWIP) 1,518 1,099 Net Working Capital 1,381 1,537 Total Capital Employed 2,899 2,636 Sales/NWC 8.6 9.8 ROCE% - Based on Avg Capital Employed 12% 34% 43#44Metal Formed Products (Chains, Doorframes and Fine Blanking) PRECISION VALUE ADDED SHEET METAL FORMED COMPONENTS POWER TRANSMISSION CHAINS AND FINE BLANKED COMPONENTS Precision Value added Components murugappȧ 44#45Metal formed - Product Profile ■ Metal formed products division cater to both automotive and non-automotive segments as below: murugappȧ G ■ Automotive: ■ Two Wheeler drive chains, timing chains and Sprockets for Auto-OEMs and After Market ■ Fine Blanked parts and door frames for Passenger cars TI Metal formed Products Business Mix 2016-17 19% 11% 70% ■ Non-Automotive: Industrial Chains for the domestic market and exports Railway sections for Passenger Coaches and Goods Carry Wagons Auto ■ Non-Auto ■ Railways 45#46Metal formed Products - Industry Automotive Sector: ■ Two-Wheeler sales has seen a 3 Year CAGR of 6% ■ Scooters 3 Yr CAGR: 20% ■ Motor Cycles 3 Yr CAGR: 2% ■ Passenger Vehicles has seen a 3 Year CAGR of 2% while Commercial Vehicles seen a decline of 2% Non-Automotive Sector: ■ Non-Automotive segment is driven by GDP growth and Industrial Production trend ■ New Product development, Application Engineering and Import Substitution drive growth murugappȧ India GDP Growth Rate 6.3% 5.4% 7.1% G 7.2% 2012-13 2013-14 2014-15 2015-16 46#47Metal formed Products - Business Drivers Auto OEM, Fine Blanked Products, Industrial Chains and Roll Formed Products ● Adequate Capacity • Good push in the service • Quality, Consistency and reliability • Cost Competitiveness • Factories located closer to customer locations • New Product Development and Application Engineering and Import Substitution Capability Auto Aftermarket Leveraging brand presence • Reach and Availability Exports • Distributors for Standard Roller Chains • Price Competitiveness • Business Development with OEMs for specific programs • Growth is flat due to global recession murugappȧ G 47#48Auto Chains- Industry and Customers Industry Segments Two Wheeler Manufacturers (OEMs) Key Customers: Spare Parts Market - Auto Chains and Sprockets for Motor Cycles Hero BAJAJ Distinctly Ahead HONDA TVS TVS MOTOR COMPANY murugappȧ YAMAHA SUZUKI T 48#49Drive Chain KIT Auto Chain- Products murugappa CAM Chain After market brand 00 G DIAMOND DIAMOND LEGEND DIAMOND NEW IMPROVED BULLET KIT DIAMOND day 50 S 49 49#50Fine Blanking Industry and Customers - Industry Segments murugappa Two Wheeler - Motor Cycles and Scooters OEMs Four Wheeler - Passenger and Commercial Vehicle OEMs and Tier-I Companies Industrial Applications Hero 4W OEMs MARUTI SUZUKI Count on US NISSAN 4W Tier - I brose L LEAR CORPORATION Technik für Automobile PH F FORCE MOTORS BEHR Autoliv A Customers Valeo Best 2W OEMS BAJAJ AUTO LIMITED HOND TVS SUZUKI YAMAHA Industrial BOSCH A AREVA I LMW® 50 50#51Fine Blanking - Products Engine Parts Motor Cycle Scooter murugappȧ Transmission Parts Engine and Transmission Parts Seat Parts Braking System Parts Seat Belt and Door Parts Steering Parts Transmission Parts Engine Parts Hood Parts 51#52IC/ECC - Industry and Customers Industry Segments Construction Equipment Manufacturers Material Handling (Fork Lifts ) Agricultural Equipment Manufacturers Cement and Power Conveyer Manufacturers Textile and Packing Primary Metals (Steel) Key Customers (((K))) KNORR BREMSE iwis wir bewegen die welt IWIS Germany MCF MITSUBISHI CATERPILLAR FORKLIFT AMERICA INC. Mitsubish- Caterpillar murugappȧ बी एच ई एल BHEL bea TECHNOLOGIES BEA Italy Atlas Copco Godry sedist G Sedis France 52#53Industrial Chains - Products ODD -te murugappa G 88 Picc Power Transmission and Conveying Chains Agricultural Chains I DD Engineering Class Chains 53#54Roll Formed - Industry and Customers Industry Segments Four Wheelers- Passenger Car and Commercial Vehicle OEMs and Tier-I Companies Two Wheelers- OEMs and Tier-I Companies Indian Railways - Coach and Wagon Factories murugappa HYUNDAI ISUZU COMSTAR COMSTAR AUTOMOTIVE TECHNOLOGIES PRIVATE LTD. TOYOTA MARUTI SUZUKI NISSAN YAMAHA Revs Your Heart TATA MOTORS RENAULT ROYAL ENFIELD D Mahindra GM Lucas-TVS Limited Cummins PIAGGIO ASHOK LEYLAND NISSAN BOSCH 54 חד#55Roll Formed - Products Four Wheelers Car Door Frames Two Wheelers 2W - Mudguard murugappa Divisional Channels Side Impact Beams Cowl Cross Beam Motor Casings Railways 55#56Metal formed - Key Success Factors Market leader in Drive and Cam chains in Auto OEM segment Segment Leader • Leadership position in Domestic Industrial Chains • Preferred supplier for Roll formed Door Frames • Significant player in Fine Blanking Components Multi Location •Strategically located plants close by to leading OEMS for JIT supplies • Total of 10 Manufacturing Plants (3 Chain Plants + 7 Metal Forming Plants) and 14 Warehouses to service Auto After Market and IC requirements Brand Equity Strong brand equity - "Diamond and Rombo" brands murugappȧ G 56 99#57Metal formed - Key Success Factors Quality PPM maintained lesser than customer target Quality Commitment (Zero Defect) Award from Autoliv • TPM Excellence Award from Bajaj Auto for Hyderabad TIDC Plant Gold Award from Bajaj Auto for Fine Blanking Quality Performance Customers Catering to major 2W OEMs and Tier 1 Auto customers Industrial Chain OEMs in Domestic & Exports Large dealership network in Auto and Industrial Chains Technology • World Class High Speed Presses and Tools for Fine blanking, Chains and Motor casings murugappȧ G 57 49#58Metal formed – Awards and Recognition M QUALITY AWARD SILVER Pred TOC NOU Scaling Excellen Through IPM BAVA WALUJ CLUSTER CONVENTION 2016 ALLENG & STAIN I Boja Mato Vicidir BAJAJ Distimally Ahead Ave murugappȧ Awards received from Bajaj Auto Ltd for Fine Blanking Quality and TPM Excellence Quality Commitment (Zero Defect) Award from Autoliv "Excellence in part develop Quality Award from Maruti Suzuki India Ltd for Fine Blanking Excellence in Part Development" award from Lear Corporation for seat recliner localization development 58#59Metal formed - Business Highlights 2016-17 ◉ ☐ Market Leadership in Chains and Doorframes Revenue Growth across Segments over PY Auto After Market Kits grew by 9% Domestic Industrial Chains grew by 9% Fine Blanking grew by 12% Doorframes grew by 6% Significant Growth in Motor casings and Railway Business Digital catalogue App for Diamond Two Wheeler Chains and Industrial Chains- Now for download on Android and iOS Bagged New Project from Hyundai for 2018 and 2019 Ramp up in Royal Enfield Mudguard supplies as business grows Sales up by 10% and PBIT by 7% DIAMOND Railability built over 50 years murugappa 59#60Metal formed - Key Financial Trends figures in INR Mn. murugappa 14,000 12,000 Sales CAGR: 5.7% ROCE % 25% 21% 10,911 10,000 8,735 8,829 8,000 6,000 4,000 2,000 IIIII 9,618 9,947 20% 19% 16% 17% 14% 15% 10% 5% 0% 2012-13 2013-14 2014-15 2015-16 2016-17 Note: Gross Sales include Excise Duty to comply with IND AS and figures has been suitably adjusted 2012-13 2013-14 2014-15 2015-16 2016-17 Based on Average Capital Employed Capital Employed in INR Mn. Particulars 2012-13 2013-14 2014-15 2015-16 2016-17 NFA 3,338 3,252 3,154 2,575 2,709 Investments 601 612 612 612 612 NWC 940 916 1,005 944 996 Total 4,879 4,780 4,771 4,131 4,317 Capital Expenditure 488 326 263 256 456 60 60#61Metal formed - Key Financials 2016-17 murugappa figures in INR Mn. Particulars 2016-17 2015-16 % Growth Doorframes ('000 Sets) 675 637 6% Sections for railway wagons (Sets) 1764 1156 53% Coach-side/End wall (Sets) 159 112 42% Chains: Domestic (Million ESS feet) 84.7 84.3 0% Exports (Million ESS feet) 7.4 7.2 4% Gross Sales (incl. Inter Unit) 10,911 9,947 10% EBITDA 1,274 1,232 3% 12% 13% PBIT (Before Exceptional Item) 923 863 7% 8% 9% APPLICATION OF FUNDS Net Fixed Assets (Incl. CWIP) 2,709 2,575 Investments 612 612 Net Working Capital 996 944 Total Capital Employed 4,317 4,131 Sales/NWC-Avg 10.7 9.8 ROCE%Based on Avg Capital Employed 21% 19% 61#62G Gears & Gear Products murugappȧ Shanthi Gears (SGL) - Strong Brand in Industrial Gears 62 62#63murugappa Shanthi Gears - Business Overview Shareholding Pattern G • Began operations in 1969 at Coimbatore 100% 24.5% 25.6% 22.9% 24.2% 24.8% Acquired by TII in 2012 High EBITDA Margin Business 80% 5.3% 4.3% 7.0% 5.7% 5.1% 60% Leader in custom-made gears & loose gears 40% 70.1% 70.1% 70.1% 70.1% 70.1% 20% ~70% of revenues come from customized products 0% Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 • • Fully integrated operations with in-house R&D team Design and engineering capabilities Foundry, Fabrication and forging unit Comprehensive facilities Heat treatment Tool room for manufacturing hobs, cutters Promoter ■DII/FII Others TII holds 70.12% stake in the company Key Products • Gears & Pinions • Gear boxes • Gear assemblies •Worm Spares • Geared motors •Service & Repair 63 63#64Integrated Gear Box Manufacturing Facility murugappȧ In-House Heat Treatment Shop (Case carburising & Gas Nitriding) State-of-the-Art Gear Manufacturing facility In-House Foundry (CI & SG Iron) for Casing In-House Forging facility to take care of Urgent jobs Shanthi Gears G In-house Fabricated Shop with CNC Gas cutting along with Stress Relieving Furnace In house Non- Ferrous Casting facility for PB & Al- Br 64#65Shanthi Gears - Gears and Gearboxes Spur/ Helical Pinion Shaft Internal Gear Gear murugappa Worm and Wheel Straight Bevel Spiral Bevel Worm Gearboxes- Adaptable Worm Gearboxes- Standard Worm Gearboxes- Special Helical Gearboxes Bevel Helical Gearboxes 65#66Shanthi Gears - Key Customers murugappa 7 बी एच ई एल DAVID BROWN DB BHARAT FORGE KALYANI GE BOMBARDIER BHEL VOITH KONECRANES CATERPILLARⓇ Lifting Businesses™ TEREX DEMAG PSG PackSys Global ΤΑΤΑ ELGI Clean Energy® हि एलि HAL A TATA STEEL AREVA Propel your dreams IR भारतीय Atlas Copco SIEMENS BALDOR A MEMBER OF THE ABD GROUP RIETR Holcimmins + INDIAN RAILWAYS uniGear une société du groupe DAVID BROWN a DAVID BROWN Company 66#67Shanthi Gears - Business Highlights 2016-17 ☐ ☐ New Products launched at First All India Dealer Meet organized in Nov 2016: Elite (Std Helical), Worm Plus (Std Worm) and Power Plus (Gear Coupling) Achieved highest order booking and production Growth of 12% in Sales and 27% in PAT over PY Opex initiatives driving in efficiencies Significant growth registered in Service Business with new leads EW DUCT NCH! Channel Partners Meet Shanthi Gears Becatee this Nation deserves the best. murugappa CONNECT 2016 Shanth CONNECT NEW PRODUCT LAUNCH! NEW PRODUCT LAUNCH! murugappa Channel Partners M CONNECT 67 662#68Shanthi Gears - Business Highlights 2016-17 CONNECT Shanthi eStore launched for Textile Product Customers to buy online. Customer Connect Meets to discuss the latest trends in the industry Dedicated Gearbox Service Centre launched at Coimbatore Some of the prestigious deliveries done in the year to NALCO, SEMBCORP, Ramco Cements, SAIL etc Silver Award in QCC Competition at ABK AOTS murugappȧ G Shanthi eStore CONNECT 2016 68 88#69Shanthi Gears - Key Financial Trends Sales CAGR: 6% figures in INR Mn. 2,500 12% 1,999 10% 2,000 10% 1,793 1,590 1,667 8% 1,650 8% 1,500 1,000 500 ROCE % murugappȧ IIIII 2012-13 2013-14 2014-15 2015-16 2016-17 Note: Gross Sales include Excise Duty to comply with IND AS and figures has been suitably adjusted 6% 4% 2% ili 5% 9% 8% 0% 2012-13 2013-14 2014-15 2015-16 2016-17 Based on Average Capital Employed Capital Employed in INR Mn. Particulars 2012-13 2013-14 2014-15 2015-16 2016-17 NFA 1,194 986 853 736 661 Investments 876 1,047 1,011 1,119 1,314 NWC 575 656 853 984 1,088 Total 2,645 2,689 2,717 2,839 3,063 Capital 64 50 36 83 103 Expenditure 69#70Shanthi Gears - Key Financials 2016-17 Particulars Gross Sales EBITDA PBIT PBT PAT murugappa figures in INR Mn. 2016-17 2015-16 % Growth 1,999 1,793 11% 356 306 16% 18% 17% 285 232 23% 14% 13% 285 232 22% 14% 13% 225 177 27% 11% 10% APPLICATION OF FUNDS Net Fixed Assets (Incl. CWIP) 661 736 Investments 1,314 1,119 Net Working Capital 1,088 984 Total Capital Employed 3,063 2,839 Sales/NWC - Avg 1.8 2.0 ROCE% - Based on Average Capital 9% 8% Employed 70 0#71Financial Service Businesses Cholamandalam Investment and Finance Company Ltd. (CIFCL) 34 years of Existence Enter a better life VEHICLE FINANCE HOME EQUITY LOANS CORPORATE FINANCE DISTRIBUTION & ADVISORY SERVICES SECURITIES murugappȧ G Cholamandalam MS General Insurance Company Ltd., (CMSGICL) ACCELERATED GROWTH. CONTINUOUS PROFITABILITY. 71#72Cholamandalam Investment and Finance Particulars 2016-17 2015-16 % Growth Disbursements 185,913 163,803 13% Total Income from Operations 46,603 41,937 11% % of Disbursements 25% 26% PBT 11,056 8,708 27% % of Total Income 24% 21% PAT 7,187 5,685 26% % of Total Income 15% 14% ROTA% (PBT) Capital Adequacy Ratio (%) 3.9% 3.6% 18.64% 19.68% murugappȧ figures in INR Mn. ■ Established in 1978, one of India's leading NBFC's, focused in the rural and semi-urban sector with a market capitalization of INR 151 bn^ ■ Total Assets under Management of INR 370 Bn as of Mar 2017 with Net NPA of *3.2% and a healthy ROA of 3.9% ■ Presence across vehicle finance, business finance, home equity loans, stock broking and distribution of financial products Operates from 703 branches across 25 states and 90% presence across Tier III, IV, V and VI towns One of the leading NBFCs in rural / semi urban areas ^ Market Data as on 31st March 2017, BSE, * 90 days 72#73Cholamandalam MS General Insurance murugappa Particulars 2016-17 2015-16 %Growth figures in INR Mn. Gross Written Premium (Incl. RI 31,425 24,658 27% Accept) Net Written Premium 25,701 20,575 25% PBT 3,007 2,163 39% PAT 2,081 1,480 41% Total Investment 49,048 38,607 27% Combined Ratio (CoR%) - Excl 104.5% 104.9% IMTPIP Investment Yield % 10.08% 9.58% Return on Equity 19.36% 17.07% ■ Among the fastest growing general insurance companies in India ■ 105 branches and over 9000 agents across the country ■ 7th largest private general insurance company in India ■ Product basket comprises accident, engineering, health, liability, marine, motor, property, travel and rural insurance for individuals, SMEs and corporates ☐ Leading insurer for Japanese / Korean business interests in India Solvency Ratio on 31st March 2017 - 1.64 73#74Corporate Office: Tube Investments of India Ltd. "Dare House", 234 N S C Bose Road, Chennai-600 001, India. +91 44 4217 7770 +91 44 4211 0404 [email protected] murugappa 7 -Disclaimer-- This presentation contains forward-looking statements which may be identified by their use of words like "plans," "expects," "will," "anticipates," "believes," "intends," "projects," "estimates" or other words of similar meaning. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The companies referred to in this presentation cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements. These companies assume no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events, or otherwise. 74