Kriya…

Vidya…

Ghyan…

Suba…

SAKTHI SUGARS

LTD.

Analyst Meet

Mumbai, April 12, 2006

Structure • Sakthi Sugars – At a Glance• Sugar & Allied Business

– Sakthinagar Unit– Sivaganga Unit– Dhenkanal Unit

• Sakthi Soya• Sakthi Auto Component Ltd.• Operational Highlights• Financial Highlights• Social Commitments• New Developments• Crystal Ball Gazing

Sakthi Sugars – At a Glance

Vision• To be one of the top 5 producers of Sugar in India• To be one of the top Auto component manufacturers in

India• To be a leading producer of Alcohol and allied energy

products• To have the best possible alternative power producers in

the country• To maximize the trade in Raw sugar so as to maximize

the earnings of the company

Business OverviewSnapshot• Fourth largest sugar company in India in terms of sugar produced• The largest distillery in Tamilnadu• One of the few fully integrated sugar complexes in the country• Among the first to handle raw sugar processing in the country• One of the lowest cost power projects in the country• Soya unit, one of the first to produce edible Protein• Auto component unit, sole supplier to Indian market

Business OverviewInfrastructure• 3 Sugar Units (Sakthinagar – Tamil Nadu, Sivaganga – Tamil

Nadu, Dhenkanal – Orissa): Total crushing capacity 13,500 TCD• 2 Distillery Units (Sakthinagar, Dhenkanal): Total capacity of

120,000 litres per day• 2 Co-generation Units (Sakthinagar, Sivaganga): Total capacity 35

MW• 1 Soya Unit (Pollachi – Tamil Nadu): Total capacity 90,000 MT per

annum• Auto Component Subsidiary – manufactures critical parts for the

Auto industry

Sugar – The Pecking Order

* includes sales from other businesses & does not include Shree Ambika Sugars

Company Name Sugar Rank Sales RankProduction (INR Crores)

(in Lakh Mts)

Sakthi Sugars Limited 3.27 4 617 5 Bajaj Hindustan 4.34 1 837 2 Balrampur Chini 3.71 2 814 3 Bannariamman 1.34 12 489 8 DCM Shriram Ind * 1.43 9 532 7 Dhampur Sugar 1.35 11 466 9 Dharani Sugars 0.47 18 160 16 Dwarikesh Sugar 0.84 16 155 17 EID Parry * 2.95 5 717 4 Mawana Sugar 1.60 6 554 6 Oudh Sugar Mill 1.00 15 355 11 Rajshree Sugars 1.34 12 179 15 Rana Sugars 0.48 17 134 18 Simbhaoli Sugar 1.43 8 391 10 Shree Renuka Sugars 1.11 14 226 14 Thiru Arooran 1.57 7 298 12 Triveni Engg. * 3.63 3 963 1 Upper Ganges Sugar 1.42 10 265 13

Sugar & Allied Businesses

Sakthinagar

Sugar Division• Capacity of 7,500 TCD• Situated in most favourable climatic zone in the country• Highest quantum of sugarcane crushing in a single unit in the country• Current year crushing target - 22 lakh MT• Capable of operating 365 days in a year• Revenue generation in FY06 to be about Rs. 390 crore

SakthinagarDistillery Division• Capacity of 90,000 litres per day• Operates 365 days per annum• Capable of producing 50,000 litres of Ethanol per day• Production expected to be at 3 crore litres in FY06• Revenues expected to be around Rs. 62.4 crore

SakthinagarCo-generation Division• 32 MW generation capacity• Project cost of Rs. 2.1 crore per MW – lowest in the industry• Commissioned in November 2003• Total power production per annum will be about 2,650 lakh units and

the evacuation to the state grid per annum will be about 170 lakh units

• Revenue generation of Rs. 53.7 crore expected

SivagangaSugar Division• Capacity of 4,000 TCD; Capable of 360 days operation• Current year crushing will be about 6.5 lakh MT, in addition to

30,000 MT of raw sugar refining• Crushing will reach 10 lakh MT during the next year• Situated near the Tuticorin port, resulting in huge benefits on

transport costs on imports and exports• Annual revenues from this unit is expected to be about Rs. 160

crore in FY06

SivagangaCo-generation Division• Incidental co-generation; Capacity 5.5 MW• Evacuation to the State Grid shall be 18 lakh units in FY06• Revenue shall be Rs. 0.57 crore

DhenkanalSugar Division• Capacity of 2,000 TCD; Operation throughout the year – 180 days of

Sugarcane and 180 days based on raw sugar• Positioned in sugar deficient North-East region; Capable of

processing 300 tons of Raw sugar daily• Proximity to Paradeep port gives tremendous advantage in terms of

transports costs on Imports• Cane crushed during 2006 will be 2.0 lakh MT, Raw sugar refining

will be 25,000 MT; Total revenues shall be Rs. 82 crore

DhenkanalDistillery Division• 30,000 litres per day capacity; Total production for FY06 will be 35

lakh litres• Revenue shall be Rs. 10 crore

Raw Sugar – The Success Story• First company in India to process imported raw

sugar• First company in the world to take-up refining of raw

sugar in a plantation white sugar factory• All the units are capable of processing imported raw

sugar • Better positioning of the units near port locations to

take advantage on the arbitrage on the world sugar market

Raw Sugar Processing Data

Particulars FY04 FY05FY06

9 Months

Raw Sugar Processed (MT) 79,100 205,507 65,784

Average landed Cost US$ / MT 240.3 263.5 301.0

Export of Whites Sugar (MT) 1,000 75,000 67,558

Average Export Price US$ / MT 206.6 286.8 350.0

Sakthi Soya

Factfile• Started as an independent company – now a division• State-of-the-art plant located at Pollachi with a capacity of

300 TPD and 100 TPD edible oil refinery• Has Flash De-solventising System to manufacture high-

protein soya flour and a Texturised Vegetable Protein (TVP) capacity of 20 TPD; also produces TVP or soya chunks for the retail market

• Shortlisted for supply of food grade edible flour for World Food Programme of UN

• Revenues of Rs. 35 crore expected in FY06

Sakthi Auto Component Ltd.

Snapshot• Established in 1983 (as a division of Sakthi Sugars)• Capacity of 2,000 tons of castings per month• Equipped with Flaskless vertical DISA moulding line and

Special purpose dedicated Machining Lines• Has sophisticated facilities for R&D• CNC Machine Division has imported equipments for

machining rough castings to exacting standards of dimensional castings

• Single source supply for critical components to Maruti Udyog (17 years) and Hyundai

OEM Vendor• Has proven track record in providing high value safety

critical auto components to leading domestic and global OEMs

• First vendor in Asia Pacific to obtain orders from Delphi North America

• Further orders obtained from ACI (Renault), GM India, GM Korea and GM Thailand

• 30% of turnover from exports, which is likely to grow by 50% per annum

Steering KnucklesSteering Knuckles Brake Drums & DiscsBrake Drums & Discs

Exhaust ManifoldsExhaust Manifolds

Brake CalipersBrake Calipers

Differential CaseDifferential Case

Product Line

Revenue Mix

CustomerMonthly Sales –

FY06

(Rs. Crore)

Maruti Udyog 6.0Ilgin Automotive (Hyundai) 1.7IPI – USA 1.0Delphi – Mexico 0.9Delphi – USA 1.0Others 1.9

Total 12.5

Operational Highlights

Operations – Cane Crushed, Sugar Produced & Recovery

0

5

10

15

20

25

30

FY97 FY98 FY9915

mnths

FY00 FY01 FY02 FY03 FY04 FY05 FY069mnths

Cane Crush(Lakh Mts) Sugar Produced (Lakh Qtls) Recovery (%)

Financial Highlights

Performance For Mar 06 Particulars Mar 06

(3 months)Mar 05

(3 months)Mar 06

(9 months)Mar 05

(9 months)

Cane Crushed (Lakh Mts) 9.14 3.42 18.97 5.21

Raw Sugar Processed (Lakh Mts) 0.13 0.72 0.79 1.54

Sugar Production (lakh Mts) 1.05 0.97 2.53 1.78

Total Income (Rs. in Crores ) 239.14 212.42 619.75 429.86

EBIDTA 79.55 39.96 151.92 63.62

Interest 18.93 8.60 56.19 28.83

Depreciation 2.98 2.85 8.90 8.63

Profit for the period 57.64 28.51 86.83 26.16

Prior year adjustments 23.48 23.78 0.06

Net Profit 34.16 28.51 63.05 26.10

EPS (in Rupees) 10.9 9.08 20.1 8.3

Performance (Contnd)• The cane crushing has more than tripled for the 9

months• The margins from Cogen plant has gone up many folds

due to absence of fuel cost • The sugar realisation has steeply increased from 16350

per Mt for qtr Mar 05 to 17600 per mt for the Mar 06 qtr• The company had exported 26558 Mts during the qtr on

a total sale of 103676 Mts• The realisation on exports was higher by Rs.1000 per

Mts and the company will continue to export about 50% of its production in the next one year

Segment-wise TurnoverSegment FY02 Fy03 FY04 FY05

Sugar 441.33 248.10 224.82 439.35

Alcohol 38.37 38.74 55.79 84.43

Power 83.46

Soya 32.96 34.85 29.31 17.51

Auto Component 68.71 75.40 91.18 113.46

( Rs Crores)

Segment-wise EBIDTASegment FY02 Fy03 FY04 FY05

Sugar 59.13 -13.36 -8.40 21.14

Alcohol 12.02 12.54 16.51 43.25

Power 16.49

Soya 2.85 2.45 -4.14 -3.23

Auto Component 16.50 18.59 17.63 22.19

( Rs Crores)

Shareholding Pattern

Promoters39%

Banks & FI's4%FII's

18%

Mutual Funds

5%

Public34%

New Opportunities

Raw Sugar Processing

• The sugar industry is in the process of decontrol• Sakthi is the first company to start raw sugar processing in

India• Location of factories across ports at different sugar price

zones gives edge to gain on sugar arbitrage

Ethanol Blending• 5% Ethanol blending with petrol has been made compulsory

with effect from 1st October 2003 in nine sugar producing States

• Government exploring admixture with diesel• Will save substantial forex • Eco-friendly product : answer of the times • Will lower emission of green house gases – will take to Euro

IV faster• To replace use of MTBE as an oxygenate in fuel• To increase demand for alcohol and thereby molasses

Attractive Co-generation Incentives• Electricity Bill 2003 passed to open up power sector• Sugar industry can generate 4,000 MW surplus power by

using bagasse as by-product• 10% power in India to come from renewable energy source• Power generation from bagasse comes under clean power• Soft loans to be provided from Sugar Development Fund to

encourage co-generation at 4% interest• Power distributors in India have to buy a certain percentage

of power from renewable energy source

Social Commitment

Responsibility to Society• The group has established and runs many colleges,

polytechnics and schools.• The total number of students in such institutes are around

20,000• Rural Hospitals are being maintained • The number of patients is around 700 per day• A leprosy eradication programme is run by the group

Responsibility to Society• Many other institutes to deal with physically challenged and

elders are being maintained.• The colleges run by the group are ranked amongst the best

in the country• A de-addiction center is maintained

Crystal Ball Gazing

Expansion – Elixir for Growth• Rapid expansion on the anvil• Total Capital Expenditure of Rs. 240 crore is planned over

the next 18 months• Expansion in sugar business – greenfield (3500 TCD)• Expansion of co-generation capacity by 85 MW

Sugar

• New plant with a capacity of 3,500 TCD planned• New unit to have a 25 MW co-generation plant• Capex estimated to be around Rs. 120 crore• Plant expected to be commissioned by March 2007• Revenue generation in full year of production expected to

be in the region of Rs. 200 crore

Co-generationSakthinagar• The company plans to increase the co-generation capacity by 25

MW taking the total capacity to about 60 MW • The investment expected is about Rs. 60 crore• The expected date of commissioning is June 2007• The incremental revenues shall be about Rs. 40 croreSivaganga• Propose to replace existing 5.5 MW incidental capacity with a full

fledged 35 MW capacity co-generation unit• Capex expected about Rs. 80 crore• New co-generation unit expected to be commissioned by March

2007• Additional revenue generation of around Rs. 40 crore expected

Future Guidance

• Cane crushing levels are likely to go up to 43 lakh MT by FY08

• Sugar revenues likely to grow by 20% by FY2008• Power revenues likely to increase by 300% by FY08will

triple by FY08• Auto revenues are likely to grow by 200% by FY08 with

the existing order book position

THANK YOU

Sarvam Sakthi Mayam