#1GESL Ganesha Ecosphere Limited Investor Presentation July 2016 Responsibility + Opportunity = Sustainability#2Disclaimer GESL This presentation has been prepared by Ganesha Ecosphere Limited (the "Company") solely for information purposes and does not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment what so ever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company. This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded. Certain matters discussed in this Presentation may contain statements regarding the Company's market opportunity and business prospects that are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the industry in India and world-wide, competition, the company's ability to successfully implement its strategy, the Company's future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company's market preferences and its exposure to market risks, as well as other risks. The Company's actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections. 2#3Company Overview GESL#4Amongst leading waste management companies in India Largest recycling Company of PET waste material in India • Pioneer in manufacturing of recycled staple fibre (RSPF) and yarn State of art manufacturing facilities • Located in Kanpur, Bilaspur & Rudrapur (Uttarakhand), Total capacity of 97,800 TPA Robust Collection Network • Pan India of 20+ collection centres, tie ups with beverages companies & network of scrap dealers Wide array of customized products catering to diverse industry applications • More than 100 RPSF varieties customised around customer needs GESL#5Journey so far GESL 2013-14 Enhanced RPSF capacity to 27,000 TPA from 18,000 TPA at Kanpur unit 1989-95 Established by Mr. Shyam Sunder Sharma ( Chairman & MD) Started RPSF production with installed capacity of 6,000 TPA 2006-08 Set up plant in Rudrapur (Uttarakhand) with a capacity of 7,200 TPA in 2007 & 14400 TPA in 2008 • Set up yarn spinning capacity of 25,920 spindles . at Bilaspur (Uttarakhand) 2014-15 Set up RPSF Capacity of 21,000 TPA at Bilaspur (Uttaranchal) Increased RPSF production to 87,600 TPA 2015-16 3 state of art manufacturing plants 87,600 TPA processing capacity for RPSF 3,000 TPA for Twisted Filament Yarn 7,200 TPA for Recycled Spun Yarn 20+ collection centres across India for PET waste 5#6Management team Shyam Sunder Sharmma Chairman & Managing Director Sharad Sharma Joint Managing Director V.D. Khandelwal Executive Vice Chairman Rajesh Sharma Executive Director G.S. Shekhavat Director Administration • • • • . • • • • GESL Founder/ 1st generation entrepreneur and textile technocrat with management experience of over 52 years including 25 years at senior positions in Birla group companies Looks into overall management, strategic planning & development More than 29 years experience in marketing & plant operations Responsible for operational management Rich experience of over 42 years in textile yarn trading and expertise of marketing & financial management Responsible for marketing and business development Over 26 years of rich experience in plant administration and operations Responsible for administration and operations at Rudrapur & Bilaspur. Over 43 years of Textile experience. Responsible for Administration & Human Resource Gopal Agarwal Chief Financial Officer • More than 25 years experience in financial, accounting & taxation matters Heads Finance and responsible for financial & taxation matters#7State of Art Manufacturing facilities Rudrapur (Uttarkhand) Bilaspur (Uttarkhand) Kanpur (Uttar Pradesh) Capacity (MTPA) Total capacity 2016 2015 97,800 83,800 Kanpur (Uttar Pradesh) 30,000 30,000 Twisted Filament Yarn RPSF 3,000 3,000 27,000 27,000 Rudrapur (Uttarakhand) 39,600 39,600 RPSF 39,600 39,600 Bilaspur (Uttarakhand) 28,200 14,200 RPSF 21,000 7,200 Recycled Spun Yarn 7,200 7,200 Average Capacity Utilisation 87% 83% GESL 7#8Strategic advantage Largest capacity Pioneered & Largest manufacturer of RSPF with combined capacity of 87,600 TPA Operational Efficiency Higher capacity leading to reduction in manufacturing costs and better inventory management Research & Development Focus on value added and high margin products - leading to increase in product offering GESL GESL Sourcing Collection network across the country helps mobilise nearly 250 tonnes of PET waste per day, translating into adequate raw material availability to feed production lines Rich Product basket Versatile product range caters to specific needs of user industry leading to higher bonding with customers. Forward Integration Having state of the art Recycled Spun yarn facilities - leading to better product acceptability and new products developments 8#9Industry Overview GESL#10PET Industry opportunity - Global • Global PET Packaging Consumption Expected @ 5% CAGR over next 3 years; driven by increasing demand from emerging economies like Asia Pacific, South America, Central and Eastern Europe PET Packaging Market • Expected to reach 21.1 mn tonnes by 2021, growth of 4% • p.a during 2016-21 17.5 million tonnes Growth anticipated at 4.8% - Improvement in Realization • Raw Material - MEG & PTA expected to decline with yields at 22% and 12% respectively will have - positive impact on PET resin realization • Healthy Consumer Durables Sector revenue reached US$ 9.7 bn in 2015, expected to reach US$ 12.5 bn in 2016 Expected to grow @13% CAGR growth- 2005-2020 GESL 10#11PET Industry opportunity - India GESL PET resins - witnessed robust growth over last five years - increasing usage in various end user industries such as packaging & bottling, automobile and electrical and electronics Increased demand for PET resins - driven by replacement of traditional packaging materials like glass, aluminium, paper, metal and growth in FMCG sector Fast growing FMCG & Packaging Industry . Rapidly expanding population of 1.25 billion Indians driving Indian FMCG market growth to approx US$49 billion in 2016 Growth of the packaging industry rides growth of the FMCG sector Preferred media for packaging Growing demand for consumer goods and government's various initiatives such as Make in India, etc. to encourage domestic manufacturing expected to give a boost to growth in PET Strong consumer demand Cost- effective & Hygienic Increasingly preferred media for packaging in India light, durable and prevents loss from transit damage and breakage • Provides high resistance to attacks from microorganisms, easy to clean, break resistant and preferred over glass & aluminium 11#12Textile Industry opportunity - India mports EXPORTS Indian Textiles Industry Expected to reach US$ 223 bn by 2021 ~ Contributes 5% to India's GDP 2nd largest employment provider after agriculture (over 45 mn directly and 60 mn indirectly) Policy • Government's New Textile Policy . Rs. 6,000-cr new textile policy will foresee significant flexibility in labour laws Sector expected to boost exports and generate employment Industry to reach US$ 500 bn Domestic and Exports Markets • • Domestic sales - to reach US$ 315 bn from US$ 68 bn - Exports expected to reach US$ 185 bn from US$ 41 bn Organised Apparel Segment • Expected to grow at 13% CAGR Industry looks promising - strong domestic consumption and increasing export demand Expected to become 5th largest consumer durables market globally by 2025 GESL 12#13Business Overview GESL#14Recycling process of PET Waste.... The Process Sorting & Conversion End Products GESL • Collection of PET Waste through wide collection network PET Waste • Waste sorted for colour, Non-PET removed, Cleaned, Chipped to small flakes, Converted into RPSF through high speed extruders in a non-chemical process | High end drawing and crimping machines ensures top quality fibre Top Quality Fibre Spun Yarn ⚫ Twisted Filament & Recycled Spun Yarn 14#15... Creating customized products catering to diverse sector applications GESL Apparels Sportswear Home furnishing Automotive Industrial textiles 15#16Our focus... • Recycled a record 4.43 billion PET bottles Saved nearly 5.9 lac cubic yards space from turning into landfill GESL • Collected nearly 79,703 tonnes of PET wastes Eliminated 1.19 lac tonnes of CO2 GESL ...To create a Better World 16#17Way Ahead GESL#18Growth drivers.... Smart Cities • • • • Govt announced 1st list of 20 cities to be developed into smart cities Each city to receive funding upto Rs 1,000 crore over 5 years 13 of 20 cities in WHO list of 20 most polluted cities, globally Any smart city would need core infrastructure elements, including proper waste management, - creating opportunity for GESL Extended Producers Responsibility • • Governments' recently notified new rules for plastic waste management across country Plastic manufacturers and brands using plastic to be responsible for recycling .... GESL Man Made Fibre . Over past few years, man made fibre made from recycled PET bottles and other waste material has been gaining strength Opportunity for RPSF driven by durability, versatility of end usage and lower price as compared to cotton and other substitute fibres, natural or man-made Growing Per Capita Consumption Significant domestic market potential, with per capita consumption of all fibres at approx 50% of global per capita consumption Governments' push to substantially increase size of textile industry output to pave way for larger man- made fibre consumption due to limited availability of cotton, benefiting the polyester industry Creating significant opportunity 18#19Increased Demand + Operational efficiencies... GESL Branding Initiatives taken to make the use of Recycled Fibre as premium and branded product rather than as commodity product ... Collection at source Working with beverages companies for creating network for collection of pet bottle scrap from source. Initiative will significantly reduce sourcing cost as well as increase the yield from waste Capacity Expansion Plans to increase recycling capacity to tap the increasing demand • Leased Model Leased spindles for value addition and increase capacity to produce end product i.e. Recycled Spun Yarn. This will increase production with better margins without any capex to drive better realisations and improved operating margins 19#20Financials GESL#21Strong Operational performance PET Bottles Processes (in Bn) 4.4 Revenue (Rs. Crore) 3.8 3.4 2.4 FY13 FY14 FY15 FY16 EBITDA (Rs. Crore) / Margin (%) 621.9 646.5 498.8 435.1 FY13 FY14 FY15 FY16 PAT (Rs. Crore) / Margin (%) 30 5.5% 6.00% 11.7% 80 11.1% 311.2% 12.0% 4.9% 3.8% 10.4% 25 3.7% 5.00% 70 10.0% 60 20 4.00% 8.0% 50 15 3.00% 40 6.0% 75.3 24.1 24.5 30 64.7 23.1 24.9 56.3 10 2.00% 4.0% 48.2 20 2.0% 5 1.00% 10 0 0.0% 0 0.00% FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 Slight growth in revenue, despite strong growth in volumes - on account of decline in price realizations PAT level maintained despite higher tax outgo and inventory losses in FY16 (until FY15, Company availed tax benefits arising from Uttaranchal plant, which lasted after tax holiday period) GESL 21#22Strengthening Balance Sheet 110.4 I Total Debt (Rs. Crore) 201.6 95.5 166.5 81.1 160.7 66.5 118.2 Book Value (Rs. Crore) FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 Debt/Equity ROCE (%) 1.6 1.6 1.1 0.6 17.0% 14.0% 13.3% 13.0% FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 *ROCE = EBIT/Capital Employed GESL 22 22#23Annual Profitability Highlights Rs. in Crore FY16 FY15 YoY % Production (MT) 86,493 71,841 20.4% Total Income from Operations 648.75 624.95 3.8% Raw Materials 409.27 415.76 -1.6% Employee Cost 39.32 33.67 16.8% Other Cost 124.86 110.84 12.6% Total Expenditure 573.45 560.27 2.4% EBITDA 75.30 64.68 16.4% EBIDTA margin (%) 11.7% 10.4% 130 bps Interest 19.67 19.86 1% Depreciation 18.87 21.05 11.6% Profit Before Tax 34.39 26.14 31.5% Tax 9.53 3.07 210.4% Profit After Tax 24.86 23.07 7.8% PAT Margin (%) 3.84% 3.71% 13 bps GESL 23#24Balance Sheet Highlights GESL Rs. in Crore Mar-16 Mar-15 Rs. in Crore Shareholder's Funds 200.18 177.92 Non-current Assets Share capital 19.18 47.28 Fixed assets Mar-16 Mar-15 259.32 270.78 256.50 267.70 Reserves & Surplus 181.00 129.93 Money received against warrants 0.71 Long-term loans & advances 2.51 2.73 Non-current liabilities 87.92 100.02 Other non-current assets 0.31 0.35 Long term borrowings 71.75 86.92 Current Assets 153.01 171.21 Defer Tax liabilities 12.16 9.63 Other Long-Term liabilities 0.80 0.83 Inventories 69.27 82.34 Long-Term Provisions 3.21 2.64 Trade receivables 49.73 40.74 Current liabilities 124.23 164.05 Short Term Borrowings 46.47 79.63 Cash & Cash equivalents 3.78 15.95 Trade Payables 21.73 33.01 Short-term loans & Advances 27.88 27.98 Other Current liabilities 51.76 45.89 Other Current Assets 2.35 4.20 Short-term provisions 4.27 5.52 Total Equities & Liabilities 412.33 441.99 Total Assets 412.33 441.99 24#25Quarterly Performance GESL#26Q1 FY17 Highlights • 165.81 Revenue 152.85 Q1 FY16 Q1 FY17 PBT 9.01 8.46 Q1 FY16 Q1 FY17 EBITDA and EBITDA Margin % In Rs. Crores 10.93% 11.75% 18.12 17.94 Q1 FY16 Q1 FY17 PAT and PAT Margin % 3.81% 3.49% 5.79 5.82 Q1 FY16 Q1 FY17 Decline in Revenue, on account of sales realization - decreasing crude oil and cotton prices Improvement in Margins due to decline in raw material prices GESL 26#27Q1 FY17 Performance GESL Rs. in Crore Q1 FY17 Q1 FY16 YoY % Q4 FY 16 QoQ% Total Income from Operations 152.85 165.81 -7.8% 158.01 -3.3% Raw Materials 92.13 106.75 -13.7% 99.65 -7.5% Employee Cost 8.98 10.26 14.3% 10.26 0% Other Cost 32.51 31.96 1.7% 29.61 9.8% Total Expenditure 134.90 147.69 -8.7% 139.52 -3.3% EBITDA 17.94 18.12 -1.0% 18.49 -3.0% EBIDTA margin (%) 11.75% 10.93% 82 bps 11.73% 2 bps Interest 5.11 4.17 -18.4% 3.57 16.8% Depreciation 4.99 5.02 0.6% 5.33 -5.8% Other Income 0.42 0.30 -28.6% 0.31 -3.2% Profit Before Tax 9.05 8.45 7.1% 9.90 -8.6% Tax 3.23 2.66 21.4% 2.96 9.1% Profit After Tax 5.82 5.79 0.5% 6.94 -16.1% PAT Margin (%) 3.81% 3.49% 32 bps 4.39% -58 bps 27#28For further information, please contact: Company: Investor Relations Advisors : Ganesha Ecosphere Ltd. CIN: L51109UP1987PLC009090 Mr. Gopal Agarwal [email protected] Bridge Investor Relations Pvt. Ltd. CIN: U74900MH2016PTC273679 Ms. Savli Mangle [email protected] Mr. Dheeraj Manwani [email protected] www.ganeshaecosphere.com GANESHA ECOSPHERE LTD. www.bridge-ir.com GESL