2

GLOBAL SCENARIO

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Global sugar demand will increase to 198 mn tones in 2021 and 257 mn tones by 2030 compared with 168 mn tones in 2014

Asia will remain the biggest consumer of sugar, increasing its share of total consumption from around 45% in 2014, to 50% in 2021

By 2030, it forecast that India and China will respectively constitute 17.60% and 14.70% of the total global consumption

Total consumption in Europe is expected to remain stable over next 20 years

Africa will begin to emerge as a major consumer, increasing its contribution in global consumption from 9% to 13% in 2030

45%

13%

19%

12% 9%

1%

Asia S. America Europe N.America Africa Oceania

Global Sugar Consumption 2012-13-165 mn Global Sugar Consumption 2020-21-198 mn

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World (Figures in million tonnes)

Sugar Year (SY)/ Marketing Year (MY) Aug-July (MY)

Major Sugar producing states Brazil, India, EU, China

2010-11 2013-14

Area under Sugarcane

Sugar Opening Stocks 26.15 43.16

Sugar Production 161.89 174.82

Sugar Imports 49.15 52.55

Total Supplies 237.19 270.53

Consumption 158.92 168.48

Exports 51.81 58.68

Total Demand 210.74 227.16

End Stocks 26.45 43.37

Supply Mismatch • Over last 20 years sugar production has risen by

44% to 176 mn tones • Global consumption expected to rise to 260 mn

tones by 2030 • Production gap to additional 84 mn tones

requires to be met over the next 15 years Concentrated Industry

• Industry is mature and increasing production is difficult given the demand on acreage

Brazil Key to fill Demand • World still dependent on Brazil, which currently

accounts for 45% of global exports, to meet the remaining 45 mn tones requirements

Weather – A key Determinant • World sugar production still heavily dependent

on weather and continued cyclical production patterns

Sugar Diversion to Ethanol • Oil prices is another external risk to contend

with as it makes sugarcane for fuel ethanol more lucrative

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INDIAN SCENARIO

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Around 664 sugar factories in India widely dispersed over UP, Maharashtra and other States

Ownership of sugar sector – 55% private sector and 45% in co-operative & Govt. Sector

Uttar Pradesh [in North] and Maharashtra [in West] produce 60% of sugar in India

Cultivation of cane largely monsoon depended

Sugar industry has potential to play a major role in development of rural India.

About 2.4% of cultivable land is under sugar cane

` 80,000 crore industry, cane payment of ` 69,000 crore

Located in rural heartland, directly contributes to rural economic development & employment

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Area under Sugarcane : 5.10 million hectares

Sugarcane Production : 345 million tones

Number of Sugar Mills : 664

Average Capacity of Sugar Mills : 3800 TCD

Production of Sugar : 24.2 million tones [2013-14]

Average per capita consumption : 21.2 kgs of sugar and 6 kgs of other sweeteners

Refinery : 4.50 million tones

Payment to farmers towards : ` 690 billion cane price

Provides direct employment : 0.60 million workers to around

Annual contribution to national : ` 2700 crores by way of excise duty exchequer

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(Million Tones) 2009 2010 2011 2012 2013 2014 [E]

Opening Stock 10.8 4.6 6.1 7.1 7.6 8.2

Production 14.5 18.9 24.4 26.3 25.1 24.3

Increase in Production

-45.1% 30.3% 29.1% 7.8% -4.6% -3.2%

Internal Consumption

22.9 21.3 20.8 22.4 23.0 24.0

Growth Y-O-Y 4.6% -7.0% -2.3% 7.7% 2.7% 4.3%

Exports 0.2 0.2 2.6 3.4 1.5 2.0

Imports 2.4 4.1 - - - -

Closing Stock 4.6 6.1 7.1 7.6 8.2 7.5

Months of Consumption

2.3 3.3 4.0 4.0 4.2 3.8

RECENT DEVELOPMENTS IN

INDIAN SUGAR INDUSTRY

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Partial decontrol of the industry wherein abolition of long standing levy quota and removal of sugar release mechanism

CCEA clears ` 6,600 crores loans for sugar industry

SAP for the current season, in state of UP, kept same at ` 280/qtl

UP Govt. announced relaxation in Society Commission and Purchase Tax & Entry Tax

Further, Govt. has also agreed to market-linked prices of Ethanol through tender process

Advantage to Millers:

• No loss on account of levy sugar burden

• Freedom to sell sugar without any quantitative and time restriction

• Can plan storage capacity

• Sell sugar on a forward basis

Advantage to Farmers:

• Better cash flow for millers would ensure prompt sugarcane payment

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OMC’s had invited 1st bid of tender for 1.40 billion liter and 2nd bid for 1.33 billion liter of Ethanol

Out of the 1st bid OMC’s have ordered to supply 0.40 billion against which 0.30 billion has already been delivered

Out of the 2nd bid OMC’s have ordered to supply 0.25 billion against which 0.04 billion has already been delivered

Current price range stands at ` 34-35 per liter

Ethanol Blending Programme: • Save substantial Forex • Eco-friendly product: answer of

time • Will lower emission of green

house gases • To increase demand for alcohol

and thereby molasses

This is also expected to firm up the prices of Rectified Spirit (RS) and Extra Neutral Alcohol (ENA) going forward which will boost the prospects of the industry

Value of fuel Ethanol ` 1600 crores – likely to go up to ` 3000 crore [1500 million litres]

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Revenue Sharing Model

• Maharashtra along with Karnataka is deliberating two revenue-sharing models: the first with a 75:25 ratio (suggested by the Rangarajan Committee) where only sugar is considered, and the second with a 70:30 ratio where sugar, molasses and bagasse are also included. This revenue sharing is consistent with international practices.

• Taking Maharashtra’s average sugarcane price of ` 230 per quintal in 2012-13 under the proposed configuration, an upfront 75 per cent payment would have to be made to farmers (` 173 per quintal) and the remainder following the determination of mill profitability.

Revision in Tariff of Cogen

• Rate of supply of power under provisions of CNCE Regulations are due to increase. This increase will be effective from 1st April 2014

Expected increase in price of Ethanol

• We expect the Ethanol prices to increase to align with the current market prices

All these measures / policy changes put together once effective will be a huge boost for the industry

We, at Balrampur, are well placed ahead of peers to take advantage of the same based on our fully integrated model

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BCML Business Model

Large Capacities Sugarcane crushing capacity at 79,000 TCD, Distillery and Co-generation operations of 320 KLPD and 148.20 MW (Saleable) respectively

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SUGAR COGEN POWER COGEN POWER ORGANIC

CAPACITY DISTILLERY [MW] INSTALLED [MW] SALEABLE MANURE

[TCD] [KLPD] CAPACITY CAPACITY [TONS]

BALRAMPUR 12000 160 43.55 22.25 30000

BABHNAN 10000 60 14.50 3.00 18000

TULSIPUR 7000 - 9.50 - -

HAIDERGARH 5000 - 23.25 20.95 -

AKBARPUR 7500 - 18.00 11.00 -

MANKAPUR 8000 100 37.00 25.00 10000

RAUZAGAON 8000 - 30.75 23.00* -

KUMBHI 8000 - 32.70 23.00 -

GULARIA 8000 - 31.30 20.00

MAIZAPUR 3000 - 6.00 - -

KHALILABAD 2500 - 4.50 - -

TOTAL 79000 320 251.05 148.20 58000

* During season saleable cogeneration capacity is 16 MW

UNITS

Shareholding Pattern

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Board of Directors

AS on 31st March , 2014

Promoters 40.84

Financial Institutions 5.85

Foreign Institutional Investor

17.47

Private Corporate 8.66

Non-resident Indians 0.50

Public 26.68

Total 100.00

Chairman Emeritus : SRI . KAMAL NAYAN SARAOGI, Chairman Emeritus, Board of Directors : SRI. NARESH CHANDRA [ Retd. IAS], Chairman SRI . VIVEK SARAOGI, Managing Director, SMT. MEENAKSHI SARAOGI, Joint Managing Director

Shri R.K.CHOUHDURY, Independent Director

SRI. R. N. Das (Retd. IAS) , Independent Director

SRI R VASUDEVAN (Retd. IAS), Independent Director

SRI DINESH K. MITTAL (Retd. IAS), Independent Director

SRI KRISHNAVA DUTT, Independent Director

SRI KISHOR SHAH, Director-cum-Chief Financial Officer

DR. ARVIND KRISHNA, Whole-time Director

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Level I

Business Unit Level

Level II

Technological Level

Level III

Operational Level

Fully integrated company Second largest sugar crushing capacity

Located in India’s second highest sugarcane producing state

Superior utilization of fixed assets Latest technology and machinery and infrastructure

High operational efficiency

Diversified customer mix Access to power during off-season through dual-fuel power generation facility

Access to market with high sugar demand and relatively higher sugar realization

Excellent relationship with farmers Ability to refine sugar during off-season due to refining capacity and off-season power

Elaborate sugarcane collection network

Statement of Profit & Loss

(` million) Q4 FY14 Q4 FY13 % Y-o-Y Growth FY14 FY13

% Y-o-Y Growth

Net Operating Revenue

6,999.8 7,447.4 -6.01% 26,649.4 32,748.4 -18.62%

EBITDA 2,383.3 1,236.6 92.73% 2,140.2 4,198.9 -49.03%

EBITDA Margin (%) 34.05% 16.60% - 8.03% 12.82% -

Depreciation 270.0 261.8 3.13% 1,094.5 1,082.6 1.10%

Interest 228.6 266.5 -14.22% 1,178.4 1,438.7 -18.09%

Profit Before Tax 1,969.8 967.3 103.64% 126.7 2,105.6 -93.98%

Profit After Tax 1,899.0 709.8 167.54% 36.4 1,620.3 -97.75%

Profit After Tax Margin (%)

27.13% 9.53% - 0.14% 4.95% -

Diluted EPS (`) 7.75 2.90 - 0.15 6.63 -

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(` million) Sugar Cogen Distillery Others Total

Q4 FY 2014 6,339.9 1,573.4 713.5 24.4 8,654.2

Q4 FY 2013 6,760.5 1,343.6 803.6 11.2 8,918.9

% Shift -6.31% 17.10% -11.21% 117.86% -3.07%

FY 2014 23,599.4 3,294.5 2,518.1 59.4 29,471.4

FY 2013 30,031.5 3,024.7 2,061.6 50.6 35,168.4

% Shift -21.42% 8.92% 22.14% 17.39% -16.20%

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(` million) Sugar Cogen Distillery Others Total

Q4 FY 2014 1,106.0 765.8 375.3 2.4 2,249.5

Q4 FY 2013 110.2 774.6 456.2 4.8 1,345.6

% Shift 903.63% -1.11% -17.73% -50.00% 67.17%

FY 2014 (1,084.9) 1,519.6 1,162.2 6.9 1,603.8

FY 2013 1,266.1 1,584.4 968.3 12.2 3,795.0

% Shift - -1.86% 20.02% -43.44% -57.74%

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Long Term Debt of ` 667.09 crores as on 31st March 2014

Debt / Equity ratio stands at 0.55

Market capitalization of ` 1065.21 crores as on 31st March 2014

No visible high capex expansion

For more information on the Company, please log on to www.chini.com.

For further information contact: Mr Kishor Shah / Mr Pramod Patwari Registered Office: Balrampur Chini Mills Limited FMC Fortuna, 2nd Floor. 234/3A, A. J. C. Bose Road. Kolkata – 700020 Corporate Identification Number: L15421WB1975PLC030118 Telephone Number: +91 33 2287 4749 Fax Number: +91 33 2289 2633 Email ID: kishor.shah@bcml.in pramod.patwari@bcml.in

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