Hindusthan National Glass & Industries Ltd. (HNG)

CORPORATEPRESENTATION

June, 20101

HNG Background◊ About HNG◊ Turnaround specialist◊ Board of Directors◊ Group synergies

Product offerings

Expansion plans

Improving efficiencies

Industry outlook

Financial Highlights

PRESENTATION OUTLINEPresentation Outline

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About

The tradition of manufacturing quality glass

Constantly improving quality

Using best in class technology

Strong financials

Fullest strategic support from promoters

Accumulated business knowledge of last 60 years

Commitment to 360° quality

Vast managerial pool

Widening global footprint for both Imports & Exports.

Industry leadership

Long profitable relationship with customers and suppliers

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Pioneering Vision

“To create a world-class glass

manufacturing plant that pursues

Quality, Cost Reduction, and

Productivity Improvement measures in

a truly holistic manner, leading to

Customers’, Shareholders’,

Employees’ and Suppliers’

Satisfaction; this integrated effort will

result in the Company becoming an

Industry Benchmark and a role model

for systems, processes and results.”

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Largest Player (about 65% market share) in the Indian Glass Container Market

Manufactures Glass bottles for multiple segments and in multiple sizes

Installed Capacity of about 10 Lac MT/annum

Has consistently invested in Technology (Gross Fixed Asset stands at Rs. 1661 Crores as at 31st Mar, 2010)

Gross Sales Revenues of Rs.1439 Crs. in FY09, Rs 1449 in FY10

Number of people working in the Company: around 7000

Phenomenal Growth in Revenue & Margins over the years (FY 2007 to 2010) - Sales CAGR at 25% and PAT CAGR at 280%.

FY 2010 Exports at Rs. 77 Crores, with higher continued exploration

The latest long term credit rating of the Company is AA and it is PR1(+) for short term, both from CARE.

HNG – A “Glass” Apart

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HNG has successfully turned the albatross around the necks of the old managements, into cash cows with its management expertise

◊ Ace Glass Containers was acquired in the year 2002 from Owens Brockway, in order to own Pondicherry and Rishikesh Plants, which were sick units. The acquired Pune Plant, unviable, was closed with fullest assets-recovery.

◊ Subsequently, the L&T plant in Nashik, another loss making unit, was acquired in the year 2005

◊ Acquired the Assets of Haryana Sheet Glass’s Neemrana Unit in Oct. 2007, revamped and attained Commercial Production in a record short time – by March 2008

◊ After proving its metal on Indian soil, HNG is exploring similar opportunities to be repeated on foreign soil, through its core competencies, either through acquisition or greenfield (under studies).

Today all these acquired units contribute to wealth creation for the Company and its stakeholders

“Turnaround” Specialist

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Growth – Organic & Inorganic

1952 2000-01 2001-02 2004-05 2006-07

Present

Gro

wth

InstalledCapacity of

30 TPD

ExpandedCapacity to

1100 TPD

Acquisition of Assets of Neemrana

Plant – Capacity

2540 TPD

Capacity at

1800 TPD post Owens’acquisition

L&T plantacquisition –Capacity at

2150 TPD

Capacity at

2435 TPD

Together constituted Ace Glass Containers

2007-08

Expanded

2760 TPD

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Pan – India presence

LocationCapacity

(TPD)Furnaces

Rishra 760 3

Bahadurgarh

690 3

Neemrana 180 1

Rishikesh 410 2

Nashik 360 1

Pondicherry

360 1

Total 2760 11

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Kolkata

Mumbai

Delhi

Hyderabad

Bengaluru

Marketing OfficesChennai

Mr. Chandra Kumar Somany, Chairman

Mr. Sanjay Somany, Managing Director Mr. Mukul Somany, Joint Managing Director

Board of Directors

▪ Mr. Kishore Bhimani ▪ Mr. Sujit Bhattacharya ▪ Mr. Ratna Kumar

Daga ▪ Mr. Dipankar Chatterji ▪ Mr. Shree Kumar Bangur ▪ Dr. Indrajit

Kr. Saha ▪ Mr. Ram Raj Soni

DIRECTORS

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HNG - Accreditations

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In-House Group Synergies (existing) Glass Equipments (India) Ltd.

◊ Glass Plant Machinery and spares manufacturer. Produces Global standards of technology at much lower costs.

HNG Float Glass Ltd.

◊ Greenfield Float Glass plant set up at Halol, Gujarat at a cost of Rs. 600 Crores (Debt Rs. 350 Crores : Equity Rs. 250 Crores), having achieved the commercial production and products launched in the market. Also contemplating for second float line (800 tpd) in the same location.

HNGIL is considering to make HNG Float as its subsidiary.

◊ Would cater to the Realty, Automobile and domestic household sector.

HNG FLOAT

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*Includes 16.77% held as treasury shares in the CompanyNote: Total shares 873.39 lacs of face value Rs. 2 each, fully paid up

Shareholding Pattern

Particular% Shareholding(as in June, 2010)

Promoters 70.20

Public Shareholding 29.80

Insurance Companies

1.20

Bodies Corporate 2.82

FIIs 7.30

Individuals 18.48*

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Product offerings

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Wide variety of products

Produces more than 15 mln. bottles per day

Ranging from 5 ml to 3200 ml

High quality – ISO 9001/2000

Multifarious industries:

◊ Liquor & Beer

◊ Pharmaceuticals

◊ Beverages

◊ Processed Foods

◊ Cosmetics etc.

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HNG’s Blue Chip Customer base

Beverages: Non- Alcoholic and Alcoholic

Pharmaceuticals

Cosmetics & Processed food

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Sector-wise supply

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Expansion plans

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Capacity – Tonnes per day

Production Capacity

Particulars FY08 FY09 FY10E FY11E FY12E FY13E FY14E FY15E

Rishra 720 720 760 760 825 825 825 825

Bahadurgarh

690 690 690 745 745 745 745 745

Neemrana 0 180 180 180 180 180 180 200

Rishikesh 410 410 410 410 410 410 430 430

Pondicherry

360 360 360 360 360 360 800 800

Nashik 360 360 360 360 460 460 460 460

New Facility (AP)

- - - - - 650 650 650

Total 2540 2720 2760 2815 2980 3630 4090 4110

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Ramp-up in capacity

HNG plans a capital expenditure of Rs. 905 Crores to further increase production capacity and rebuilds within next two years.

◊ Greenfield plant in AP : at 490 Crs. (650 TPD)

(Land has been already allotted to HNG , Project commencement date expected is June’10 and targetted project completion date is Mar’12)

◊ New Furnace in Nashik : 115 Crs. ( 100 TPD)◊ Maintenance Capex : 300 Crs. ( 120 TPD)

Margins expected to grow significantly with increase in capacity, better operating efficiencies and economies of scale and sharing of fruits of light weighting and NNPB initiatives. Large savings also to come from Plants switching to Gas – Neemrana w.e.f. June,2010 and Nashik w.e.f. April, 2011. Company is seriously exploring earliest gas connectivity in other 3 Plants. Company is also examining ramping up its captive power generation facility (present about 15MW in Bahadurgarh) through use of Natural gas in other plants.

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Improving efficiencies

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Key Reasons for Improving Margins

Installation of natural gas operated power generators and in manufacturing process, as well as the well planned capital expenditure

World class designing and mould manufacturing facility in the Company, with own Foundry

Economies of scale in procurement of Raw Materials/Consumables

Light weighting, while producing stronger bottles – Mutual benefit to customers and HNG

HNG introduced NNPB (Narrow neck press & blow technology) for the first time in India, HNG is exploring further strengthening of this technology.

Neemrana & Nashik Units converting to Gas, Net saving of Rs 20 Crs. (approx) p.a. Other plants are also exploring arranging gas connectivity to switch FO and LPG.

Sand Mining – Bankura, Sand benefication plant for Rishra unit, exploring opportunities for other plants as well.

Entered into JV with OMCO of Belgium for Moulds – Technology and manufacture

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Industry Outlook

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Packaging Industry

US $ 15 bln. market size in India – expected to grow at 14% in the medium term

The present share of about 6-7% of Glass Packaging in the total Indian Packaging industry offers huge opportunities on account of health, hygiene and environment

India constitutes a mere 3% of global packaging Industry, while population constitutes 16% of global.

Growth in allied industries: Food Processing, Retail, FMCG, Alcohol and Beverages, Perfumes & Cosmetics, Pharmaceuticals; is a major growth driver for glass bottles

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Down Stream Drivers

Liquor - Indians consume 200 mln cases of IMFL and 220 mln cases of country liquor. Increasing trend of social drinking, driving the sector growth at almost 13%.

Beer - Shipments in 2009- 174 mln cases against 137 mln cases in 2007. Consumption has been increasing by 15 to 20%.

Food Processing - USD 70 billion industry has grown at 13.7% in only 4 years and is expected to grow at a rate of 10% in next 5 years

Pharmaceuticals - India is the fastest growing market, where average spending has doubled over past decade. Increased consciousness for wellness leads to demand. Indian Pharmaceutical market is expected to see a CAGR of 12-15% over the next 3 years (as per IMS research).

Carbonated drinks - INR 6000 Cr. industry is expected to grow at 6-8% p.a.

Cosmetics - Domestic cosmetics and toiletries segment is growing at 15- 20% and current industry size is USD 950 million, which is expected to become USD 1.4 billion in 3 years time.

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Per Capita Consumption of Glass (kgs)

Low Per Capita Consumption of Glass in India - significant scope for growth

Glass Industry

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Growth through downstream Industries Per capita consumption of Glass in India is ~1.4 kgs, as against 27.5kgs in US and UK

and 5.9 kgs in China

The low per capita consumption of beer in India (0.8 ltrs. v/s 22 ltrs. in China) leaves substantial scope for increase in demand

Indian Pharmaceutical Industry is valued at Rs. 250 bn, growing at 10% annually.

Adoption of stricter government norms and rising industry standards in quality would further boost glass packaging in the pharmaceutical industry

Only 6% of all processed food in the country is packed in glass, which offers huge scope

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Glass – a preferred packaging medium

Environment friendly

Full recyclability

Lowest pollution (life cycle)

Totally inert to contents, heat and UV rays – Thus does not react with packed contents

Visibility of contents

Versatility of design

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Financial Highlights

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All values in Rs. million

Financial Performance

Particulars FY07 FY08 FY09 FY10

Net Revenue 7016 10213 13110 13599

EBITDA 1175 2147 2359 3163

EBITDA Margin 17% 21% 18% 23%

PAT 28 1603 1077 1552

PAT Margin 0.40% 16% 8% 11%

EPS (Rs.) 1.59 18.36 12.34 17.77

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Particulars FY07 FY08 FY09 FY10

Net Fixed Assets 8342 8923 9885 11437

Investments 713 1146 1046 1471

Net Working Capital 2341 2935 3912 3874

11396 13004 14843 16782

Met by :

Net Worth 7149 8636 9352 10428

Secured Loans 2546 2874 4152 5486

Unsecured Loans 1248 1313 921 171

Provisions 453 181 418 697

11396 13004 14843 16782

All values in Rs. million

Financial Performance

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All values in Rs. million

Financial Projections

Particulars FY11 FY12 FY13 FY14 FY15

EBITDA 4388 5315 8456 10851 12627

EPS (Rs.) 22.21 28.47 45.96 62.55 76.71

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HNGIL

Particulars FY11 FY12 FY13 FY14 FY15

EBITDA 832 1408 1689 1856 2012

All values in Rs. million

HNGFL ( Associate Company)

HNGFL = HNG Float Glass Limited, where Company owns Equity Stake

DISCLAIMER :“The projections disclosed above are merely indicative in nature and are purely based on management’s beliefs, opinions and estimates as of the date of this Presentation and no obligation is assumed to update such forward looking statements if these beliefs, opinions and estimates should change or to reflect other future developments. These projections are based on certain assumptions of future events over which the Company exercises no control. Hence this involves number of risks and uncertainties which could cause the actual results to differ materially from those that may be projected or implied.”

HNGIL’s Rating & Ranking

CRISIL Rating ( As on Feb ’10)

◊ On “Fundamental” side 4/5 means “Superior Fundamentals”

◊ On “Valuation” Side 5/5 means “Strong upside”

Business Standard Ranking ( Out of 1000 top listed corporates, as on Feb ’10)

◊ Ranking in terms of Revenue - 299

◊ On Operating Profit Quantum – 265

◊ On Net Profit Quantum – 253

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“HNG – A Conglomerate”

Largest Player, about 65%, in the Indian Glass Container Market through organic and inorganic growth measures in the last 8 years, more than doubling the capacity in this small period

Entered the Engineering business by acquiring AMCL Unit in Nagpur

Synergistic diversification by setting up of Rs.600 Crores Float glass project in the Gujarat at Halol near Baroda

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Disclaimer

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 disclaims any and all liability for any errors and/or omissions, representations or warranties, expressed or implied as contained in this document. 

This Presentation contains certain forward looking statements which are based on certain assumptions of future events over which the Company exercises no control. Hence this involves number of risks and uncertainties which could cause the actual results to differ materially from those that may be projected or implied by these forward looking statements. Such risks and uncertainties include, but are not limited to: our ability to manage growth, competition, attracting and retaining skilled professionals, time and cost overruns, regulatory approvals, market risks, domestic and international economic conditions, changes in laws governing the Company including the tax regimes and exchange control regulations.

  The Company does not undertake to update any forward looking statements that may be made from time to time by

or on behalf of the Company. 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 as well as any future communication regarding the Company should be addressed to the

Company. “This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer, invitation, or a solicitation of any offer, to purchase or sell or subscribe, any shares of the Company and should not be considered or construed in any manner whatsoever as a recommendation that any person should subscribe for or purchase any of the Company’s shares.” 34

Hindusthan National Glass & Industries Ltd. (HNG)

THANKYOU

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For any queries/to obtain more info, please write at investor.relations@hngil.com