Insecticides India Ltd

1. Insecticides India

2. Contents Sections 1 Indian agrochemicals sector 2 2 Company ovierview 5 3 Business description 9 4 Summary financials 15 5 Growth strategy 17 1

3. 1. Indian agrochemicals sector

4. 1.1  Overview India is the 4 th largest producer of agrochemicals by volume and 12 th largest by value Indian agrochemical industry (US$ bn) Domestic agrochemical consumption (by segment) Split of consumption by crop type Split of domestic market by region Source Broker notes, Company Total c.US$ 1.6bn Total c.US$ 1.6bn Total c.US$ 1.6bn Significantly lower agrochemical usage in India implies strong growth of c.10% p.a. expected in the near term Agrochemicals consumption in India skewed towards insecticides given the tropical climate and type of crop plantation Crop losses in India range from 20% to 30% owing to suboptimal and inadequate usage of agrochemicals and is estimated to be worth c.US$ 20bn per year 1. Indian agrochemicals sector 3

5. 1.2  Robust growth prospects Arable land stagnation Rise in MSP Low pesticide consumption Increased institutional credit flow Structural enablers in Indian agrochemicals sector to catalyze strong growth trajectory Rising pressure to increase food productivity given land shortage/stagnation and rise in population Increasing awareness of farmers Rising prices of crops on the back of Minimum Support Prices (MSP) Use of costlier hybrid seeds Current under penetration of agrochemicals in India Pesticide consumption amongst the lowest globally Labour shortage for agricultural activities on the back of NREGA Continued financial support from Government through subsidies and greater flow of institutional credit India is expected to emerge as a hub for the procurement of generic agrochemicals as well as new generation products Source Department of Agriculture, research reports 1. Indian agrochemicals sector 4

6. 2. Company ovierview

7. 2.1  Company snapshot Insecticides India (“IIL”) is an integrated agrochemicals company engaged in R&D, manufacturing, marketing and distribution of agrochemicals in India Shareholding pattern Outperforming the index Listed company, established in 2001 Amongst top 10 agrochemicals company in India with an estimated 5% market share Large and diversified product portfolio Track record of new product launches Judicious mix of in-house development, brand acquisitions and technical collaboration / marketing arrangements with global players Wide sales & distribution network across India Established manufacturing infrastructure for both technicals and formulations Recently commissioned new units with sufficient capacity to enable sustained long term growth New state-of-the-art technicals manufacturing facility and R&D facility is in pipeline R&D center recognized by DSIR and Ministry of Science & Technology Accredited with NABL (R&D facilities), ISO 9001:2000, ISO 14001 and OHSAS 18001 GLP accreditation expected soon Notes Figures have been rebased to 100 762 114 Notes Shareholding pattern as on 31 st Mar 2012 2. Company ovierview 6

8. 2.2  History & development Entered into 2 nd collaboration with AMVAC (for Nuvan) Finalized marketing arrangement with Nissan Insecticides India (P ) Ltd. incorporated Undertook establishment of manufacturing facility at Udhampur IPO & listing on NSE Commissioned technicals plant at Chopanki Converted to Insecticides ( I ndia) Ltd. Commissioned first manufacturing plant at Chopanki Acquired leading brands of Montari Industries (Ranbaxy group company) Commissioned 2 nd manufacturing plant at Sambha Received ISO 9001-2000 certification Set up R&D lab at Chopanki Acquired exclusive right to sell Thimet in India (collaboration with AMVAC, USA) New R&D unit set up after receiving Govt. accreditation Undertook establishment of multi-product manufacturing facility at Dahej 1996 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Acquired brand Monocil from Nocil Commisioned Dahej and Udhampur plants 2011 2012YTD 2. Company ovierview 7

9. 2.3  Management team Finance Pankaj Gupta CS P.C. Pabbi Vice President Production Sanjeev Aggarwal GM Rajesh Aggarwal (MD) Information Technology Sandeep Aggarwal CFO H.C. Sharma DGM H. C. Aggarwal (Chairman) Marketing Admin & HR K.V. Patel Unit Head R. S. Verma Sr. Manager M.K. Singhal GM V.K. Garg GM Sanjay Vats GM Purchase V.K. Singhal GM Abhai Shanker GM Anil Tyagi Project Head B.P.S. R ana DGM S.K. Choudhary Project Manager Sanjay Vats GM Venkat Rao GM R&D Dr. Mukesh DGM Ashok Bangde GM 2. Company ovierview 8

10. 3. Business description

11. 3.1  Diversified business model Diversified by segment Diversified by geography Strong presence across categories Strong in-house manufacturing Highly defensible, backward integrated and diversified business model Strong presence in insecticides and herbicides segments Segment focus and mix is strategically aligned to requirements of the Indian market Formidable pan India presence with footprint across major crop producing regions in India Catering to both Branded formulations (B2C) and Institutional sales (B2B) market Especially strong in Branded formulations Focus on in-house manufacturing and backward integration Diversified portfolio across segments, regions and customers; strong brand presence and recognition; in-house manufacturing and grassroots distribution infrastructure Notes FY12 figures are provisional; All charts above depict segmentation of FY12P gross sales     3. Business description 10

12. 3.2  Large product portfolio Large portfolio across multiple segments Exceptional track record of new product launches and portfolio augmentation aided by In-house product development through Backward integration Enhanced focus on R&D Acquisitions of ‘high recall, but off-shelf’ brands and their successful re-launch into leading brands Lethal and Monocil are recent success stories Technical collaborations with leading global agrochemical players Plan to repeat success of Thimet with Nuvan Marketing arrangements with principal partners IIL’s product portfolio comprising of over 120 branded products, over 10 technicals and over 750 SKUs     Track record of launch of new branded formulations 3. Business description 11

13. Marketing initiatives Dedicated awareness initiatives provide information to farmers on various aspects of agriculture and use of agrochemicals Participation in national and international conferences, exhibitions and fairs 3.3  Sales & marketing IIL enjoys market leading positions in several of its major products - a testimony to its strong branding and marketing initiatives and the extensive distribution reach Best-in-class pan-India distribution network 230 + sales personnel, 3,100 + distributors and c.50,000 retail outlets 26 depots across 24 locations Unparalleled reach to India’s fragmented and dispersed end consumer base Sales personnel split Branding activities Farmer awareness initiatives Strong focus on Brand strategy Portfolio of over 120 branded products Top selling brands such as Thimet , Lethal, Monocil and Victor enjoy leading positions in the market Aggressive focus on branding helped IIL gain market share Successful employment of “Umbrella strategy” to introduce products for new applications and crops Pioneer in using electronic media advertisement 3. Business description 12

14. 3.4  Manufacturing capabilities Strong manufacturing infrastructure In-house manufactured products account for 90%+ revenues One of the best asset turnover amongst Indian peers Significant expansion in manufacturing capacity currently underway Expansion in technicals capacity to provide a significant boost for the institutional segment Ramp up in formulations capacity to provide sufficient capacity to enable sustained long term growth Significant opportunity for CRAMS arising out of new facilities Significant area available for expansion of facilities in Government approved industrial belt for agrochemical production Udhampur, J&K Liquid capacity – 3.0m L Powder capacity – 0.6m Kg Granules capacity – 0.6m Kg Sambha, J&K Liquid capacity – 5.5m L Powder capacity – 2.1m Kg Granules capacity – 6.1m Kg Dahej (Baruch), Gujarat Liquid capacity – 4.0m L Powder capacity – 2.5m Kg Granules capacity – 12.0m Kg Chopanki, Rajasthan Liquid capacity – 7.8m L Powder capacity – 3 .5m Kg Granules capacity – 7.5m Kg Technicals capacity – 2 .0m Kg 25% capacity expansion overall to be completed by H1FY13 Technicals capacity expansion of 10.0m kg to be commissioned by H1FY13 Granules capacity expansion of 7.5m kg planned in the new (third) pant ; to be commissioned by H1FY13 Notes Displayed capacity figures correspond to installed capacity as of 31 st March 2012 3. Business description 13 Granules capacity expansion to be completed by H1FY13

15. International Collaborations & Tie ups Technical Collaboration with American Vanguard Corporation (AMVAC) for manufacturing and marketing of THIMET and NUVAN Tie up with Japanese giant Nissan Chemicals Industries Limited for Thiafluzamide and Quizalofop JV with Oatsuka Agritechno Japan for R&D Centre in India, focusing invention of new agro chemical molecules for international requirements

16. 4. Summary financials

17. 4.1  Summary financials Net sales and margins Exceptional annual growth in revenues over last 4 years Notes FY12 figures are provisional 4. Summary financials 15

18. 4.2  Competitive benchmarking Revenue CAGR (FY08 –FY11) EBITDA margin (FY11) Asset turnover (FY11) ROCE (FY11) Notes FY12 figures are provisional 4. Summary financials 16

19. 5. Growth strategy

20. 5.1  Growth strategy IIL intends to leverage its expertise in successful brand launches, enhanced R&D focus and recently expanded manufacturing capacity to fuel its future growth Marketing Research & development Manufacturing Continued focus on establishing strong brands Employ IIL’s well-tested “Umbrella strategy” to introduce product extensions Continued focus on R&D to reduce costs and manufacturing time Capitalize on prior experience to achieve maximum number of technicals registration Leverage R&D capabilities for CRAMS Enhanced backward integration with increase in technicals manufacturing capacity Enhance margins Enable targeting institutional segment Leverage on location advantage of manufacturing facilities Exploit gains from upgraded and newly commissioned manufacturing facilities 5. Growth strategy 18