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

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2 2 GLOBAL SCENARIO

3 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 Global Sugar Consumption mn 9% 12% 1% 45% Global Sugar Consumption mn 19% 13% Asia S. America Europe N.America Africa Oceania 3

4 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 4 World (Figures in million tonnes) Sugar Year (SY)/ Marketing Year (MY) Aug-July (MY) Major Sugar producing states Brazil, India, EU, China Area under Sugarcane Sugar Opening Stocks Sugar Production Sugar Imports Total Supplies Consumption Exports Total Demand End Stocks

5 5 INDIAN SCENARIO

6 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 6

7 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 [ ] 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 7

8 (Million Tones) [E] Opening Stock Production Increase in Production Internal Consumption -45.1% 30.3% 29.1% 7.8% -4.6% -3.2% Growth Y-O-Y 4.6% -7.0% -2.3% 7.7% 2.7% 4.3% Exports Imports Closing Stock Months of Consumption

9 RECENT DEVELOPMENTS IN INDIAN SUGAR INDUSTRY 9

10 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 Advantage to Farmers: Better cash flow for millers would ensure prompt sugarcane payment Freedom to sell sugar without any quantitative and time restriction Can plan storage capacity 10 Sell sugar on a forward basis

11 OMC s had invited 1 st bid of tender for 1.40 billion liter and 2 nd bid for 1.33 billion liter of Ethanol Out of the 1 st bid OMC s have ordered to supply 0.40 billion against which 0.30 billion has already been delivered Out of the 2 nd bid OMC s have ordered to supply 0.25 billion against which 0.04 billion has already been delivered Current price range stands at ` 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] 11

12 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 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 1 st 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 12 We, at Balrampur, are well placed ahead of peers to take advantage of the same based on our fully integrated model

13 13 BCML Business Model

14 Large Capacities Sugarcane crushing capacity at 79,000 TCD, Distillery and Co-generation operations of 320 KLPD and MW (Saleable) respectively UNITS SUGAR COGEN POWER COGEN POWER ORGANIC CAPACITY DISTILLERY [MW] INSTALLED [MW] SALEABLE MANURE [TCD] [KLPD] CAPACITY CAPACITY [TONS] BALRAMPUR BABHNAN TULSIPUR HAIDERGARH AKBARPUR MANKAPUR RAUZAGAON * - KUMBHI GULARIA MAIZAPUR KHALILABAD TOTAL * During season saleable cogeneration capacity is 16 MW 14

15 Shareholding Pattern AS on 31 st March, 2014 Promoters Financial Institutions 5.85 Foreign Institutional Investor Private Corporate 8.66 Non-resident Indians 0.50 Public Total Board of Directors 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 15

16 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 Excellent relationship with farmers Access to power during off-season through dual-fuel power generation facility Ability to refine sugar during offseason due to refining capacity and off-season power Access to market with high sugar demand and relatively higher sugar realization Elaborate sugarcane collection network 16

17 17 (` million) Q4 FY14 Q4 FY13 Statement of Profit & Loss % Y-o-Y Growth FY14 FY13 % Y-o-Y Growth Net Operating Revenue 6, , % 26, , % EBITDA 2, , % 2, , % EBITDA Margin (%) 34.05% 16.60% % 12.82% - Depreciation % 1, , % Interest % 1, , % Profit Before Tax 1, % , % Profit After Tax 1, % , % Profit After Tax Margin (%) 27.13% 9.53% % 4.95% - Diluted EPS (`)

18 (` million) Sugar Cogen Distillery Others Total Q4 FY , , ,654.2 Q4 FY , , ,918.9 % Shift -6.31% 17.10% % % -3.07% FY , , , ,471.4 FY , , , ,168.4 % Shift % 8.92% 22.14% 17.39% % 18

19 (` million) Sugar Cogen Distillery Others Total Q4 FY , ,249.5 Q4 FY ,345.6 % Shift % -1.11% % % 67.17% FY 2014 (1,084.9) 1, , ,603.8 FY , , ,795.0 % Shift % 20.02% % % 19

20 Long Term Debt of ` crores as on 31 st March 2014 Debt / Equity ratio stands at 0.55 Market capitalization of ` crores as on 31 st March 2014 No visible high capex expansion 20

21 THANK YOU For more information on the Company, please log on to For further information contact: Registered Office: Corporate Identification Number: Mr Kishor Shah / Mr Pramod Patwari Balrampur Chini Mills Limited FMC Fortuna, 2 nd Floor. 234/3A, A. J. C. Bose Road. Kolkata L15421WB1975PLC Telephone Number: Fax Number: ID: kishor.shah@bcml.in pramod.patwari@bcml.in