july 6, 2007

July 6, 2007

Welcome

Lalbhai Group

Commenced manufacturing activities in 1908

Textiles, Chemicals, Engineering, Finance

Group sales US$800 million

Health, Education, Culture

The Arvind Mills Ltd

Indian Institute of Management, Ahmedabad

Atul Ltd

Founded in 1947 by Kasturbhai Lalbhai

Manufacturing and marketing of chemicals

Create wealth, generate employment, be self reliant

A moment of historic significance

An aerial view of Atul site

Manufacturing sites 2

Land 1300 acres

Effluent treatment plant 30000 cubic metres׀day

Secured solid waste disposal facility 50000 MT

Captive power plant 40 MW

Water storage (2 weirs) 2 million cubic metres

1150 houses

2 schools

Medical centre

Recreational facilities

JVs

Partner Duration Area

American Cyanamid 1947-2000 Agro׀Pharma

American Home Products

2000… Pharma

ICI 1955-1995 Dyestuffs

Ciba 1960-1999Polymers׀Pharma Intermediates

Customers World-wide

200

400

600

800

1000

03-04 04-05 05-06 06-07

Sales Rs cr

566

895

814

681

0

20

40

60

80

03-04 04-05 05-06 06-07

Profitfrom operations

PBDT* PBT*

Rs cr

33

62

7

3443

Excluding VRS

15

31

62

05-06 06-07 Growth over PY % of Budget

A A B

Net Sales 814 895 915 10% 98%

Contribution 240 234 265 (3)% 88%

Contribution % 29 26 29

PBIDT 91 90 109 (1)% 83%

PBDT 62 62 76 0% 82%

PBT 33 31 43 (6)% 72%

Financial Highlights 06-07Rs cr

Profit Reconciliation: CY vs PY

Operating PBT 2005-06 33

Reduction in profit due to:

Higher sales to production ratio over PY

Higher repairs & maintenance

Increase in raw material prices (net), etc

Higher depreciation

Total reduction

(11)

(4)

(30)

(2)

(47)

Increase in profit due to:

Dollar appreciation

(Rs1.01|$ on $106 m exports)

Contribution on incremental sales

Lower employee cost

Exchange difference on FCL

Total increase

11

24

4

6

45

Operating PBT 2006-07 31

Rs cr

Cash Flow from OperationsRs cr

06-07 05-06 Inc|(Dec)

Operating profit before capital changes 80 87 (6)

Inventories 37 (38) 75

Debtors (37) (14) (22)

Other receivables (7) (12) 4

Creditors & other payables 23 18 5

Cash generation from operations 96 40 56

Tax payments (17) (2) (15)

VRS payments (5) (21) 16

Net cash flow from activities 74 17 57

Cash Flow from Operations (continued)Rs cr

06-07 05-06 Inc|(Dec)

Net cash flow from operations 74 17 57

Uses:

Capex (46) (54) 8

Proceeds (repayments)

from borrowings

22 (14) 36

Interest payments (28) (29) 1

Dividend payments (10) (7) (3)

Dividend receipts 5 4 1

Other inflows 7 83 (76)

Net increase in cash|equivalents 24 0 24

06-07 05-06 Inc|(Dec)

Secured Loans 319 308 11

Unsecured Loans 49 41 8

Total 368 349 19

Position of Borrowings 2006-07Rs cr

Note: One loan of US$5.5 m availed end of March has been parked partly as short term FDR amounting to Rs16 cr carrying 11.25% p.a. interest rate.

CY PY Inc|(Dec)

Gross block 715 688 27

Gross BlockRs cr

Division Project Amount

AG Indoxacarb 40 TPA 6.50

AR p-Cresol 10,000 to 12,000 TPA 2.00

AR p-Anisic acid 150 TPA recovery 1.70

CO Benzathrone Toluene extraction 1.20

CO Vat Green 1 120 TPA 1.10

COR Wyeth assets 8.00

OthersOthers 6.506.50

TotalTotal 27.0027.00

AG

3rd largest producer of 2,4D in the world

Increasing domestic distribution network

Increasing input prices

Reducing formulation margins

Shrinking demand in Indian market

Strategic actions planned | under implementation

Increase brand business

Reduce variable cost of production

Introduce value added products

Enter high price markets

Salient features

AR

Salient features

Global leader in 3 major products

Increasing input prices

Margins under pressure for commodity business

Strategic actions planned | under implementation

Increase capacity of existing value added products

Enter high price markets

Introduce more value added products

BI

Volatile selling prices

Margins under pressure being commodity business

Strategic actions planned | under implementation

Introduce value added down stream products of

Increase capacity of Resorcinol

Achieve cost reduction through improved technology

Salient features

CO Salient features

Established player in VAT dyes

Increasing input prices

Increasing domestic consumption

Strategic actions planned | under implementation

Acquire synergistic vat finishing capacity

Reorganise marketing setup

Introduce new value added products

Increase sourcing activity

Introduce high performance pigments

PI

Global leader in one major product

High contribution margin

Strategic actions planned | under implementation

Increase capacity of 2 major products

Introduce new phosgene based products

Introduce several other intermediates pharma inters and APIs

Salient features

PO

Increasing input prices

Margins under pressure for commodity business

Strategic actions planned | under implementation

Reorganise marketing set-up

Expand capacity of BLR

Introduce brands

Salient features

Capex

Div|

UnitBrief description

Project Cost

PBT

2007-08

PBT

Full Cap

Payback Period

(Years)

ARPAAL capacity increase from 1000 to 2000 tpa

3 1 2 2

BIResorcinol capacity increase from 1300 to 2000 tpa

14 7 2

BINew ACPD system with multiframe cell cover for CE improvement from 92% to 96%

3 1 1 2

BIRefurbishment of existing Mercury plant

3To run the existing Mercury plant till

2010

PI PTSI manufacture in PHIN 4 1 5 2

Various jobs (Div|Unit) 13 2 7 2

Grand Total 40 5 22 3

Rs cr

Major Initiatives(Consideration|Implementation)

Div Initiative C|I Sales

AG Catalytic chlorination|Chlorophenol C 50

2,4 D capacity enhancement C 30

AR PAA expansion I 54

PAAL expansion I 6

Multipurpose plant C 36

Sulfonics C 22

BI Resorcinol expansion (3000 MT) C 34

Resorcinol derivatives I 3

CO New products I 25

Textile auxiliaries I 7

PI PTSI C 14

New PHIN products C 6

PO Epoxy expansion I 96

Total 383

Rs cr

AG Brands, Introduction of new products

AR F&F chemicals, Antioxidants

BI Resorcinol downstream, SO2׀SO3׀Cl2 downstream

CO Specialty dyes & organic high performance pigments

FL Essential oils

PI Phosgene based intermediates, other pharma inters and APIs

PO Consumer marketing of resins

Direction, value added products

Value Added Products

AG

Clodinafop Imidacloprid Indoxacarb Metsulphuron methyl Sulphosulphuron Triazoles

AR

p-Anisic aldehyde p-Anisyl alcohol

BI

Resorcinol

CO

Vat Red 10

PI

1,1’-Carbonyl diimidazole 1-Chloroethyl chloroformate 1-Chloro-2-methylpropyl chloroformate DDS 4-Nitrophenyl chloroformate Vilsmeier reagentPO

DDM

(Launched)

Value Added Products

AG

Fipronil Imazethapyr Mecoprop-p Quizalop-p

AR

p-Anisyl acetone p-Anisyl phenylacetate p-Anisyl propanol p–Cresyl acetate

BI

1,3-CHD 4-Chlororesorcinol 4-n-Hexylresorcinol R F resins RDME

CO

Auxiliaries High performance pigments

PI

Azepine 1-CECC 1-CECF 1-CEIC HEGC Lauryl chloroformate 4-MPCF PTSI L–Valine

PO Small consumer packs

(Pipeline)

Brands AG

Brands PO

◄

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