#1C9 16 May 2016 Sangam India Ltd. Fangam Value through values Investor presentation FY2016#2Safe Harbor Sangam Value through values The Corporate Presentation (the "Presentation") is based on management estimates and is being provided to you (herein referred to as the "Recipient") only for information purposes. The sole purpose of this Presentation is to provide preliminary information on the business activities of the company, in order to assist the recipient in understanding the Company. This Presentation does not purport to be all inclusive or necessarily include all information that a prospective investor may desire in evaluating the company. The company expressly disclaim any and all liability for any errors and/or omissions, representations or warranties, expressed or implied as contained in this document. By receiving this Presentation, the Recipient agrees to keep confidential the information contained herein or made available in connection with any further evaluation of the company. This Presentation has been prepared for information purposes relating to this company only and upon the express understanding that it will be used only for the purposes set forth above. This Presentation may not be photocopied, reproduced or distributed to others at any time without prior consent of the company. Upon request, the Recipient will promptly return all material received from the company without retaining any copies thereof. In furnishing this Presentation, the company do not make any obligation to provide the Recipient with access to any additional information on the company or its subsidiaries. This Presentation should not be deemed an indication of the state of affairs of the company nor shall it constitute an indication that there has been no change in the business or state of affairs of the company since the date of publication of this Presentation. Any clarifications / queries on the proposal as well as any future communication regarding the company should be addressed to Sangam India Limited / the company. 16 May 2016#3Contents ■ Key Business Highlights ■ Q4 FY16 Financial Update ■ Corporate Overview ■New Product Launch Annual Financial Highlights ■ Business Outlook 16 May 2016 Fangam Value through values#4Key Business Highlights Sangam Value through values Company launched superior value added products under the brand name "C9" during the year With this, Company enters lucrative margin accretive women active life style apparels. Company has installed fully imported machinery with capacity to produce 3.6 million pieces per annum. The project is housed at existing facility at Village Atun. 16 May 2016#5Expansion Highlights Company consolidated its denim fabrics offering by Fangam Value through values commissioning addition capacity of 8 million meters per annum during 2015-16. ■ Installation of 26,736 spindles for mfg PV Dyed Yarn at new site, village Soniyana, Chittorgarh, Rajasthan. Installation of 74 new weaving machines at existing unit (Atun) Project Cost: Rs. 198 crores Year of Execution: Sep. 2016 16 May 2016#6Q4 FY16 Financial Update Rs. In Crores Q4 FY16 Q4 FY15 YoY % FY16 FY15 Fangam Value through values YoY % Total Revenue 387 362 7.0 1511 1477 2.3 Raw Materials & change in stocks 217 197 821 848 Employee Cost 36 31 140 119 Other Expenses 80 74 317 293 EBIDTA 54 60 -10.0 233 217 7.3 EBIDTA margin (%) 14.0 16.5 15.4 14.7 Depreciation 18 23 76 80 Finance Cost 15 18 64 67 Profit Before Tax 34 20 110 73 Income Tax 8 5 33 21 Profit After Tax 26 15 73.3 77 52 49.0 Earning Per Share (Rs.) 6.5 3.7 19.5 13.1 16 May 2016#7Company Overview Sangam Value through values Commenced operations in 1984 Presence across the value chain: Dyed Yarn Fabric Garments Market leader in PV yarn: ~25% market share ISO 9001:2008 certified ■Company is the largest producer of PV dyed yarn in Asia, at a single location Company manufactures ready to stitch PV fabric with the annual capacity to produce 24 million meters of fabric and 40 million meters of denim ■Company has introduced seamless garment manufacturing facility with 36 seamless knitting machine with capacity to produce 3.6 million pieces per annum Net Sales Rs. 1511 Crores EBIDTA Rs. 233 Crores Net Profit Rs. 77 Crores EPS Rs. 19.54 16 May 2016 YE March 2016#8Corporate Overview Capacities Spindles 211296 Open End Rotors 3908 Weaving Machines 437 Knitting Machine 18 Seamless Garment Knitting Machines Texturising Machines 3 36 Denim Line 4 Process House 4 Solar Power Wind Power 5 MW Plant 1 MW 16 May 2016 Manufacturing Units SANGAM (INDIA) LIMITED Weaving, Processing & Seamless Garment Plant (Atun, Bhilwara) Denim Plant (Biliya Kalan, Bhilwara) Captive Power Coal 31 MW Spinning Plant Unit - I (Biliya Kalan, Bhilwara) Spinning Plant Unit - II (Sareri, Bhilwara) Spinning Plant Unit III Soniyana, Chittorgarh Fangam Value through values#9Corporate Overview Products Export Markets Fangam Value through values PV Blended Dyed/ Grey Yarn Cotton Spun Yarn Cotton Open End Yarn USA UK China Egypt Poland Brazil Belgium Chile Texturised Yarn Synthetic Blended Fabric Seamless Garments Italy Spain Australia Japan Denim Fabric Cotton Knitted Fabrics Generation of South UAE Captive Power Turkey Portugal Africa 16 May 2016#10Revenue Model - FY2016 PV 79% Yarn Sales Rs.1511 crs Others Fabrics 55% 4% 41% Cotton Fangam Value through values PV Denim Garments 21% 45% 52% 3% Dom -77% Exp -23% Dom -72% Exp -28% 16 May 2016#11Manufacturing Capacities Palan Sapola Murrds Gulabpurs Lambe Motras, -Antall горувла Jalampura Badnori Shambhugarh Phalamada Agucha Parasoll Barsani, Tonkarwad Asind Ambesar Rupabes Phillyan Taswariya Kothian BHILWARA DISTRICT Nal Arwar Sarigariya Santokpun Sodar Aplias Kanvallyas Khamor Konechhah Kalan Motipur Moria Kurarlys -Motipurs Sare Dabile Gharte Bachhahera Tokar Koer Atun Narg Gyangarh fithors Kalias Baldarkhe -Pai Luhari Daulatgarh Karjallys Dhanola Nimbahera Kisahna Ponder Raghunathpurs Sarari Gordhanpurs Lachura, foll Nimbahers Lambia Kalan Shahpura Sewni Jahazpurunge Amil PV Fabrics - Danter, Bishniya Karangarh Gorkhiya Nimbahera Haripura Bhagwanpura Beran Rupe Dhekola Arnlys • Devpura Barsiya Piplod, Sardarnagar Danta, Paroll 24 mln mtrs. P.A Karera Surgat Rampurlys B-Barl H Ladiwas Borana Nathidiyas Chandras Dhunw Banera Amalda, "Loharlys Ekingpure Raser W Mahuwa Khurd R Birdhol Sakna A Ulels Khajoor Sakargarh Kabri Bhadu Mandal Maj Rama Ralpur Bagar agreo Jogrins Khemana Lasarlya Peithas Pansal BHILWARA A Kaisans Saganer Suwan Kotri Kachola Kishangarh Processed Fabrics - 53 Asahol Kochriya Mokhanda Koshithal Tiloll Bholl- -Devlys Jharol Upal Aturi Banka Kher's Dinthal Racwas Sawsip Nandra Nandsa mln mtrs P.A Delana Salera Gangapur- Sahara Mahendragarh Karol Bar Manoplys Karda Akola -Gurls Gadarmale Mangrop Bhunas Lakhols Barrod Hamirgarh Ophers Khakla Shampurs Mahwa Jalindr Bigod 12 sianpurs Khatwara Mohanpura Mandalgarh Barlyas Rupura Bhopatpura. Barundni Singol Bijolia Deviye Ladpura -Polan Seamless Garments - 3.6 mln mtrs. P.A 16 May 2016 Saniyana Biliya Kalan Denim Fabric - 32 mln meters 96,864 spindles 16MW CPP Tasma Motipura Fangam Value through values Biliya Kalan & Sareri PV Dyed Yarn, PV Yarn & Cotton Yarn 1,14,432 spindles (Sareri) 15 MW CPP#12Segmental Analysis Key Statistics • Yarn Production 44,894 MTPA Yarn Sales 36,463 MTPA Net Revenues Rs. 668.56 Crores PV Yarn 16 May 2016 Demand Drivers Fangam Value through values Increased applications Earlier used predominantly for bottom wear Now also used in Summer suits Carpets Socks, Knitted fabrics Proposed Strategy Increase in-house consumption (Up from ~15% currently, to 30% in the year) ✓ Conversion of yarn to value added fabric ✓ Improve margins ✓ Increase realisations Increase PV yarn capacity Increase Focus on Institutional Supplies Cotton Yarn PV Fabric Denim Fabric#13Segmental Analysis Key Statistics • Yarn Production 19,179 MTPA Yarn Sales 9,899 MTPA Net Revenues Rs. 166.65 Crores Demand Drivers Buoyancy in domestic demand Increased usage in Readymade Garments Increased consumption of denim fabric Growing income level and urbanization Penetration of organized retail. Jangam Value through values Proposed Strategy Increase in-house consumption (Up from ~47% currently, to 100% in the year) Increase Cotton yarn capacity PV Yarn Cotton Yarn PV Fabric Denim Fabric 16 May 2016#14Segmental Analysis Key Statistics • • • • Fabric Production 22.485 MMPA Grey fabric Production 9.139 MMPA Fabric Sales 22.725 MMPA Grey Fabric Sales 9.134 MMPA Net Revenues PV Fabric Rs. 224.10 Crores Grey Fabric Rs. 64.52 Crores Demand Drivers Increasing use in summer suits Increasing use in women bottom wear Increase in use for knitted fabrics Proposed Strategy Increased exports Introducing value added products PV Yarn Cotton Yarn PV Fabric Denim Fabric 16 May 2016 Jangam Value through values#15Segmental Analysis Key Statistics Fabric Production 28,084 MMPA Fabric Sales 28,021 MMPA Net Revenues Rs. 328.47 Crores Demand Drivers Favorable demographics Increased fashion awareness Denim usage extended to regular wear Rapid urbanization Demand buoyant from rural India as well Proposed Strategy Increased production of fancy & value added denims ✓ Higher value add ✓ Better margins Increased exports In-house consumption (garmenting) PV Yarn Cotton Yarn PV Fabric Denim Fabric 16 May 2016 Fangam Value through values#16Strategy for Existing Business Sangam Value through values Yarn (PV + Cotton) Increase in- house consumption Increase capacity Fabric • Introduce value added products • Increase exports Leading to Increased realisations Better margins ■Capacity expansion to be undertaken to augment our integration capabilities ■Prudent Capex Funding: internal cash generation + assuming low cost debt ■The company aims to be debt free over the next couple of years 16 May 2016#17Prudent Financial Management PAT (Rs. Crs.) CFO (Rs. Crs.) CFO/PAT (X) -0.73 11.04 -6.89 3.72 1.32 12.24 3.03 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 24.78 27.02 5.37 -15.98 17.15 56.59 17.08 51.30 40.50 51.57 77.04 15.69 -19.83 59.30 110.16 63.73 74.85 209.04 155.29 162.60 136.02 153.23 0.63 Total 352.57 1120.1 4.01 2.63 1.99 3.18 Prudent cash flow management Aids in deleveraging FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Eq (Rs. Crs) 137.32 187.92 193.29 177.31 189.86 239.58 252.08 297.85 331.43 Debt (Rs. Crs.) 311.96 644.75 729.63 692.81 692.6 717.97 651.6 564.43 497.64 D/E Ratio (X) 2.27 3.43 3.77 3.91 3.65 3.00 2.58 1.90 1.50 FY15 FY16 371.70 439.25 534.71 582.84 1.43 1.32 Despite addition in gross block Gross Block (Rs. Crs.) FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 354 528 705 877 891 924 1059 1087 1114 FY15 FY16 1218 1316 16 May 2016 Fangam Value through values#18Brand Launch in FY2016 CO Next Big Step from B2B to B2C Sangam Value through values Intimate Wear Active Wear Casual Wear One piece garment free of side seams Light, Smooth and soft to touch fabrics Moisture regain capacity 9 times more than polyester Skin friendly and high durability fabrics 16 May 2016#19C9 Merchandise Mix Intimate Wear (50%) Active Wear (20%) Fashion wear (30%) Bra - 20% Sports bra - 4% Tops - 10% Panties -25% Tank Tops -3% T-shirts - 5% Shape wear - 5% T-shirt -3% 16 May 2016 Legging - 10% Leggings - 5% Capri's - 5% Capri's - 3% Camisole - 2% Fangam Value through values#20Omni Channel Strategy 20 Exclusive outlets targeted to be launched by March 2017. ✓ Asset light, franchisee model to be adopted In discussions for 5-6 tie ups. To target Pan Indian presence. 16 May 2016 EBO MBO LFS Sangam Value through values 600 multi brand outlets across 24 states 1000 stores targeted Tie up with Central In discussions with other large retailers E- Commerce Company portal Tie ups with Ecom majors like Flipkart, Amazon ebay, snapdeal, Paytm, fashionara, belletouch C9 business model#21Annual Financials - Income Fangam Value through values (Rs. Crs) Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 5yr CAGR Sales 1,171.52 1,417.22 1,478.84 1,432.61 1,476.94 1511.46 1.23% Expenses 970.60 1,269.36 1,270.47 1,244.18 1,259.55 1278.12 OP 200.92 147.86 208.37 188.43 217.39 233.34 10% Other Income 8.01 12.53 12.56 13.10 2.74 5.12 EBIDT 208.93 160.39 220.93 201.53 220.13 238.46 8.4% Depreciation 64.00 67.85 76.98 74.32 80.40 76.19 EBIT 144.93 92.54 143.95 127.21 139.38 162.27 Interest 56.50 66.53 68.67 66.06 67.22 63.96 PBT 88.42 26.01 75.28 61.15 72.16 110.43 Tax 26.70 8.93 23.53 20.65 20.59 33.39 PAT 16 May 2016 56.59 17.08 51.30 40.50 51.57 77.04 35%#22Annual Financials – Balance Sheet - Sangam Value through values (Rs. Crs) Mar-11 Mar-12 Mar-13 Mar-14 Mar -15 Mar-16 Equity Share Capital 39.42 39.42 39.42 39.42 39.42 39.42 Reserves 200.16 212.66 258.43 292.01 332.28 399.83 Secured Loans 672.97 576.64 564.43 497.64 534.71 582.84 Unsecured Loan 45.00 74.96 Total 957.55 903.68 862.28 829.07 906.41 1022.09 Debtors 159.38 125.10 175.46 200.85 251.71 271.10 Inventory 238.02 201.50 213.55 233.73 265.09 294.49 Debtor Days 49.66 32.22 43.31 51.17 62.21 65.76 Inventory Turnover 4.92 7.03 6.93 6.13 5.57 5.10 RoE 26% 7% 19% 13% 15% 18% ROCE 16% 10% 16% 15% 16% 21% 16 May 2016#23Shareholding Pattern As on 31st March 2016 16 May 2016 Promoter 47% Public 13% FII Insurance 10% 4% Body Corporate 26% Fangam Value through values#24Sangam India Ltd. 16 May 2016 Annexure Fangam Value through values#25Weaving & Processing plant - Atun Jangam Value through values Production began in 1985 ⚫ 253 Looms for Synthetic 30 Million Meters Fabric Weaving . 53.40 Million Meters Fabric Processing P.A. 36 Knitting Machine for Seamless Garment Manufacturing 1985 • 8 Looms for Synthetic Fabric Weaving. 2000 • 227 Looms for Synthetic Fabric Weaving. 2015 • 253 Looms for Synthetic Fabric Weaving • 36 Knitting Machine for Seamless Garment Manufacturing ⚫53.40 Million Meters. Fabric Processing P.A. 16 May 2016#26Spinning Plant – 1 (Biliya Kalan) - Fangam Value through values . • Production began in 1995 Biggest PV Dyed Yarn Plant at single location in Asia Spindles - 96864 Texturising - 3 Machines 16.0 MW Coal Based Captive Thermal Power Plant 1995 1999 2003 • 17280 Spindles ⚫27072 Spindles 16 May 2016 ⚫48384 Spindles 10.0 MW Coal Based Captive Thermal Power Plant 2009 ⚫96864 Spindles 16.0 MW Coal Based Captive Thermal Power Plant 2015 ⚫96864 Spindles • 3 Texturising Machines 16.0 MW Coal Based Captive Thermal Power Plant#27Spinning Plant - 2 (Sareri) Sangam Value through values . Production began in 2006 53856 Spindles - For Production of Cotton Yarn ⚫ 60576 Spindles - For Production of P/V Dyed/Grey • Yarn 18 nos. - Knitting Machines • 3908 - Open End Rotors • 15.0 MW Coal Based Captive Thermal Power Plant. 15.0 MW Coal Based Captive Thermal Power Plant at Spinning Plant - II (Sareri) 16 May 2016 Versity Laksh#28Denim Weaving & Processing Plant (Biliya Kalan Sangam Value through values • Production began in 2009 · · 184 Looms - For Denim Fabric Weaving with 4 Processing Lines. Production Capacity: 32 Million Meters P.A Wind power 5 MW plant - Jaisalmer 16 May 2016#29Distribution Network in India Fangam Value through values 16 May 2016 N Arabian Sea INDIA OUTLINE MAP IPOUTICAL! of Bengal Sse Boundary INDIAN OCLAN Ch2014 www.castle lipdead on 2nd June 2014#3016 May 2016 Thank You Fangam Value through values