Vardhman Investor Presentation March10

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    Vardhmn

    Rooted in Values, Creating World Class Textiles

    Vardhman Group

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    Vardhmn

    Overview of the Presentation

    Brief Snapshot of Vardhman Group

    Business-wise Analysis

    Financial Performance

    Strategic Direction

    Corporate Social Responsibility

    Market Performance

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    Vardhmn

    Vardhman Group Incorporated in 1965 under the leadership of Mr. S.P. Oswal

    One of the largest integrated textile houses in the country with a turnover of over $700

    million and a workforce of more than 23,000 employees

    One of the largest installed capacity in spinning in India at 800,000 spindles

    Amongst the largest Yarn producer in India

    Amongst the largest manufacturer & exporter of Cotton Yarn from India

    One of the largest consumers of raw cotton in the country

    Market Leader in Hand Knitting Yarn

    Second largest producer of Sewing Threads

    One of the leading integrated fabric producer

    Highest quality acrylic manufacturer of the country

    High economies of scale due to integrated operations and large cotton inventory holding

    capacity

    VALUE ADDITION THROUGH SUPPLY CHAIN

    The unique business model of the company having presence in entire value chain

    from Fibre (acrylic) to Fabric gives it flexibility in down turn and advantages over

    competitors to rise in upturn of the industry cycle

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    Vardhmn

    1965

    Investment & Financing

    93

    Listed on BSE, NSE

    ISIN Code: INE701A01023

    1973

    Yarn, Fabric, Steel

    24,954

    Listed on BSE, NSE

    ISIN Code: INE825A01012

    Vardhman Textiles

    Limited (VTEX)

    Vardhman Holdings

    Limited (VHL)

    Year of Commencement

    Business

    Revenue (Rs.Mln)

    Market Status

    Group Snapshot

    59%

    Acrylic Staple Fibre

    60,400 tpa

    Vardhman Acrylics

    Limited (VAL)

    2,539

    51%

    RMG / Industrial /

    Speciality Threads

    33 tpd Threads

    60k spindles (captive)

    Vardhman Yarns &

    Threads Ltd (VYTL)

    3,324

    73%

    100% Cotton Yarn

    45,872 spindles

    1,010

    VMT Spinning Co.

    Limited (VMT)

    Stake

    Business

    Capacity

    Collaborations

    Revenue (Rs.Mln)

    100%

    NBFC

    N.A

    VTL

    Investments Ltd

    37

    Stake 26.66%

    Listed on NSE

    ISIN : INE116G01013Unlisted UnlistedMarket Status Unlisted

    -J.V with A&E, USAJV with Marubeni &

    Toho Rayon, Japan-

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    Vardhmn

    Major Alliances...Partnering with Global Players

    2002NISSHINBO, JAPANCotton Yarns

    2007NISSHINBO, JAPANCotton Fabric

    2001AMERICAN & EFIRD (A&E) INC USASewing Threads

    1998TOKAI SENKO, JAPANFabric Dyeing & Finishing

    1996EXLAN AND MARUBENI CORP, JAPANAcrylic Fibre (ended in 2009)

    1995TOHO RAYON, JAPANCotton Yarns

    1994KYUNG BANG, SOUTH KOREAGassed Mercerized Yarns

    1992NIHON SANMO, JAPANFibre and Yarn Dyeing

    2009NISSHINBO, JAPANGarments

    USA, EU, Australia, Canada, China, Egypt, Mauritius, Hong Kong,

    Indonesia, Israel, Italy, Japan, Korea, Malaysia, Singapore, U.K.

    Major Export Destinations

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    Vardhmn

    Group Capacities

    Sewing Thread (Tons per day)

    1619 19

    25

    3033 33 33

    2000 2002 2006 2007 2008 2009 2010(E)1998

    Greige Fabric - Looms (No.)

    144 160208

    432460

    810

    900 900

    2000 2002 2006 2007 2008 2009 2010(E)19981998 2000

    2002 20062007 2008

    2009 2010

    (E)

    828282

    4230

    2015

    0

    Processed Fabric (Mln Mtrs pa)

    0.87

    0.79

    0.75

    0.59

    0.51

    0.50

    0.40

    0.39

    Yarn - Spindles (Mln)

    1998 2000 2002 2006 2007 2008 2009 2010 (E)

    1998 2000 2002 2006 2007 2008 2009 2010 (E)

    Dyeing-Tpd 25.50 34.50 52.00 55.00 55.00 55.00 55.00 55.00

    Mercerization-Tpd 1.70 5.00 6.75 6.75 8.00 8.50 10.00 10.00

    Acrylic Fibre-Tpa 16,500 16,500 16,500 16,500 18,000 18,000 18,000 18,000

    Steel-Mtpa 65,000 40,000 40,000 80,400 80,400 80,400 80,400 80,400

    OtherCapacities:

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    Vardhmn

    Business-wise Analysis

    Brief Snapshot of Vardhman Group

    Business-wise Analysis

    Financial Performance

    Strategic Direction

    Corporate Social Responsibility

    Market Performance

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    Vardhmn

    Business - Yarn

    Largest spinning capacity in the country with > 0.87 mln spindles

    12 production plants located in the states of Punjab, Himachal Pradesh and Madhya

    Pradesh

    Technical tie-ups with the world leaders from Switzerland, Germany, Japan and Korea

    Amongst the largest exporter of yarn from India. The total export of the group is about 5%of total export of cotton yarn from the country

    Virtually a Supermarket for Yarn with a wide range of specialized grey, dyed, & a variety

    of blended yarns

    Gas

    Mercerised

    Auto-ConedBranding of

    Carded Yarn

    Blends (Acrylic,

    P/C, A/C)Yarn Dyed

    Melange

    (Rangoli)Grey Carded

    Grey Combed

    Compact / Contamination

    ControlledLycra

    Organic

    Fair TradeVortex (MVS) > 0.87

    million spndls

    14,000

    spndls

    Yarn - The journey so far.

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    Vardhmn

    Yarn :De-risking the Revenue Model

    Cotton Lyocell Cotton Silk

    Cotton Bamboo Cotton Modal

    Cotton Tencel Cotton Viscose

    Specialized Products

    De-risking by Value Addition

    Compact Yarn Fibre Dyed

    Cotton Lycra Gas MercerisedMelange Yarn Fancy Yarns

    Cotton Dyed Slub Yarns

    PC Yarn Dyed Acrylic Yarns

    Yarn Dyed Hand Knitted Yarns

    Value Added Products

    GasMercerised

    MelangeCompact

    Slub Yarns

    Fancy YarnsHand Knitted yarns

    Cotton Lycra Yarn

    De-risking by Specialization

    Environment Friendly Yarns Organic Cotton Fair Trade Yarn

    Environment Friendly Products

    Contamination Free Yarn

    Cotton BambooCotton Silk

    Organic Cotton

    yarn

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    Vardhmn

    Changing Spreads in Cotton Yarns

    1.0

    1.2

    0.66

    0

    1

    1

    2

    2

    3

    3

    4

    Jun06 Dec06 Jun07 Dec07 Jun08 Dec08 Jun09 Dec09

    ($

    perkg)

    0

    0

    0

    1

    1

    1

    1

    1

    ($

    perkg)

    Avg Cott on Prices

    Avg Yarn Prices (30s CH)

    Spread

    53.0156.80

    34.77

    0

    20

    40

    60

    80

    100

    120

    140

    Jun06 Dec06 Jun07 Dec07 Jun08 Dec08 Jun09 Dec09

    (Rs.perkg)

    0

    10

    20

    30

    40

    50

    60

    (Rs.perkg)

    Avg Cott on P rices

    Avg Yarn Prices (30s CH)

    Spread

    Spread over Indian Cotton(Rs./kg)

    Spread over Cot-A Index

    ($/kg)

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    Vardhmn

    Business - Fabric

    Continuing its onward march on the value curve, the group entered

    Fabric business in 1992 with Greige (unprocessed) Fabric

    Entered the Processed Fabric market in 1999

    Current capacity 900 Looms & 82 million meters of processed fabric.

    One of the few fully integrated fabric suppliers in the country Dedicated to product innovation, world class quality, state-of-art

    technology and excellence in service

    Produces fabrics for both tops (shirting) & bottom weights

    (trousers/pants) for the apparel segment

    Making specialized fabrics like

    Yarn Dyed, Special White, Melanges, Nylon, Modal & Linen.

    Doing specialized finishes like

    Teflon / Nanocare (oil & water repellent), ETI etc.

    Supplier

    of Fabric toTop of the

    Line customers

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    Vardhmn

    Changing Proportion of Fabric Sales

    4%6%

    14%

    35%

    41%

    6%7%

    19%

    30%

    39%

    4%

    7%

    17%

    31%

    42%

    7%4%

    17%

    35%37%

    0%

    10%

    20%

    30%

    40%

    50%

    2006-07 2007-08 2008-09 2009-10 (Est.)

    Ot her Exp orts Brands RM G Exp ort s

    Distributors Buying Houses

    Segment-Wise Sales Process-Wise Sales

    Buying Houses: Associated with International Labels, engaged inthe sourcing & merchandising activity for them. Usually result in

    higher margins for fabric suppliers.

    Distributors: Works for a number of smaller brands / garmenters

    and places a collective larger order.

    RMG Exports: fabric can be sold directly to the vendor factory

    Brands: fabric supplied to prestigious Indian Brands like MaduraGarments (Indian Rayon), Color Plus, Raymonds, Zodiac etc

    Other Exports: To Customers & Buying houses operating

    overseas which source fabric for vendors factories that are outside

    India

    Full Bleach : Special whites

    Ready for Dyeing : For Prints &