10th CLSA India Forum 2007

1

• 10th CLSA India Forum 2007
• Asahi India Glass Ltd.
• Corporate Presentation
• 16th November, 2007

2
Index

• Corporate Profile
• India Story
• AIS Core Markets
• Business Operations
• - Auto Glass
• - Float Glass
• - Glass Solutions
• Opportunities Plans
• Strategy Key Focus Areas
• Financial Results

3
Corporate Profile

• Largest integrated glass company in India,
  manufacturing wide range of international quality
  automotive safety glass, float glass, value added
  glass like reflective glass, mirror,
  architectural processed glass and glass products.
  
• Jointly promoted by Labroo family (Sanjay Labroo
  and his parents, Brij Kanta Labroo), Asahi
  Glass Co., Ltd., Japan and Maruti-Suzuki.
• Commenced operations and made initial public
  offer of USD 468,000 in 1987, which largely
  remains undiluted. Shares are listed at BSE and
  NSE.
• Promoters hold 55.6 of paid up equity capital
  of AIS, and the remaining 44.4 equity is held
  by public.
• AIS has three operating business units
• - AIS Auto Glass
• - AIS Float Glass
• - AIS Glass Solutions
• AIS recorded gross sales operating profits of
  USD 224.87 million USD 41.21 million in FY 07.

4
Corporate Profile
5
Corporate Profile
These figures contain, in brief, the story of
AISs growth from a supplier of automotive
tempered glass to Maruti Udyog (Suzuki) when we
began, to the current situation of Indias
largest glass company, with profitable growth
flowing from all the actions taken since the
birth of the organization.
6
Corporate Profile Key Initiatives
Expanded capacities for automotive safety glass,
float glass and architectural processed glass at
Chennai, Taloja (Mumbai), Rewari and Roorkee
during FY 2004-07, spanning the entire glass
value chain.
7
AIS Operations Plant Locations

• Roorkee
• Float
• Glass Solutions
• Mirror
• Reflective Glass
• Auto Glass

• Rewari
• Auto Glass
• 2. Glass Solutions

• Taloja
• Float
• Glass Solutions

• Chennai
• Auto
• 2. Glass Solutions

8
India Story
4th Highest GDP in PPP terms
2nd Highest GDP growth 2003-2006
among the top 5 economies
one of the fastest growing economies
9
India Consumption Driven Growth

• Rising Income
• level

Increasing Consumer spend

• Increasing
• consumerism

• Largest youth population
• Growing literacy rate
• Large pool of professionals
• and technocrats

• Growing
• availability of
• retail credit

AIS Core Markets - Automotive and Real Estate /
Construction Sectors among the key beneficiaries
10
Indian Automotive Industry
Government of India SIAM ACMA
Automotive Mission Plan 2016
On 29.01.07, the Prime Minister released
Automobile Plan 2006 -2016 to give a road map to
Indian Automobile Industry
Increase export revenue to 35 billion by 2016
from 4.1 billion at present
Increase turnover to 145 billion by 2016 from
35 billion at present
Provide employment to additional 25 million
people by 2016
By 2016, the Automotive sector is expected to
contribute 10 of the countrys GDP and 3035
of the Industry
11
Automotive Components Industry
Automotive Mission Plan 2016
ACMA VISION 20201
Achieve 20 billion in Domestic Sales
20
20201
Achieve 20 billion in Exports Sales
20
VISION
20201
Create 1 million additional Jobs
1
12
Indian Automotive Industry - Growth Drivers
Higher GDP growth
Indias huge geographic spread
Increasing Road Development, Golden Quadrilateral
Increasing disposable income with the service
sector
Easier finance schemes
Replacement of aging four wheelers
Graduating from Two wheeler to Four wheeler
Increasing dispensable income of rural agri sector
Growing Concept of Second Vehicle in Urban Areas
Two wheeler story could be repeated in the car
segment
13
INDIA A Base for Compact Cars

• Maruti Suzuki
• New car plant to make 250,000 cars per annum
  (total 800,000 cars/annum)
• 10 new Component JVs to support new Diesel
  Engine Plant.
• Hyundai
• Increase capacity to 400,000 cars per annum over
  next 1 year.
• Nissan
• Team up with Mahindra Mahindra and Renault to
  invest in a 905 million car project in India,
  capacity to produce 400,000 units in seven years.

• Tata Motors
• New plant to manufacture 100K car in West
  Bengal with an investment of US 0.24 Billion.
• Toyota
• Target of 200,000 units capacity by 2008.
• General Motors
• New Capacity to manufacture GM Spark small car
  by 2007.
• Nissan
• Compact SUV

14
Real Estate Industry Dynamics Potential

• Market expected to grow at 33 thru 2005-10 from
  12 bn to 50 bn
• Housing current shortage seen at 19.8 million
  housing units
• 5x increase in office space over next 3-5 years
• Over 200 mn sq ft for organized retail by 2010
• Over 50,000 new hotel rooms in the next 5 years

Indian Realty Intact Opportunity

• Rising disposable income
• Shift from rented to owned house
• Easy access to financing
• Nuclear families
• Retail / IT / ITES / BPO
• Improving regulatory framework

15
Real Estate Boom Glass Demand

• Indian Realty Plans, even assuming a 50 success
  rate, likely to radically alter business for
  construction companies and others like cement,
  steel, glass and increase the historical 11 p.a.
  growth rate to much higher levels in glass.
• Architectural design for all the upcoming
  buildings being highly glass-oriented, a massive
  pipe line for glass demand is building up which
  will be visible shortly.
• Growing keenness to shrink construction time by
  using new products will further create huge
  business potential for glass products like window
  systems.
• Drive towards energy conservation and
  environmental consciousness, through energy
  conservation building code, green building code
  and other safety norms, as being planned
  currently, will push glass and especially
  processed glass consumption rapidly.
• Enormous potential for glass is clearly visible,
  considering a very low per capita glass
  consumption in the country, with processed glass
  constituting only around 7 - 8 of the total
  glass consumption, unlike in other countries.

16
AIS Operations Auto Glass SBU

• Largest manufacturer of world class automotive
  safety glass
• Total production capacity of approx. 3 million
  car sets, with state-of-the-art manufacturing
  facilities at Rewari and Chennai and Roorkee.
• Sole supplier to almost the entire Indian
  passenger car industry, with current market share
  of over 80 .
• Significant presence in the after market, with a
  market share of approx. 50 in terms of value.
• Offering full range of automotive safety glass
  including Laminated Safety Glass, Tempered Glass
  for side and back lites, Value-added Glass,
  Defogger Glass, Encapsulated Glass.
• Sales made directly to OE customers and through
  two nation-wide distributors, with 27 depots, to
  the direct after market, covering the length and
  breadth of the country.
• Customers include Maruti-Suzuki, Hyundai Motors,
  Tata Motors, Toyota, Honda, Mahindra Mahindra,
  Ford, General Motors, Hindustan Motors, Fiat
  India, Volvo, Eicher, Piaggio, Swaraj Mazda.

• Retaining
• leadership position
• Current market
• share of over 80
• Sole supplier to
• almost all the OEs in
• India
• Best positioned
• to meet growing
• demand in domestic
• and export markets

Auto Glass SBU awarded the Deming Application
Prize for 2007 in October, 07
17
Vehicle Production
18
Share of business in car segment
19
Segmentwise Net Sales
20
AIS Operations Float Glass SBU

• AIS Float Glass, the erstwhile Floatglass India
  Ltd. (FGI), is the leading manufacturer of
  international quality float glass.
• State-of-the-art manufacturing Plant at Taloja,
  near Mumbai. Second plant at Roorkee has become
  operational from January, 2007, increasing
  capacity from the existing level of 500 TPD to
  1200 TPD.
• Roorkee Plant has manufacturing facilities for
  world-class heat reflective glass and mirrors
  also.
• Current market share of approximately 29 of the
  Indian float glass market, like to increase to
  over 35 , with commissioning of the Roorkee
  Plant.
• Product range includes of float glass of
  thickness of 2mm 12mm, with products like clear
  float glass, tinted (heat-absorbing) float glass,
  heat reflective glass, mirrors and Glaverbels
  product range.
• Country-wide sales marketing network,
  comprising over 450 authorized stockists, field
  sales personnel, zonal offices and area
  representatives.

Turned around performance of the erstwhile
Floatglass India Ltd. (FGI) after its take over
in FY 2001-02 and successfully integrated it into
AIS.
21
Indian Flat Glass Industry Demand / Supply (MT
/ D)
22
Share of Business Float Sheet Glass (Flat
Glass)
23
AIS Float Glass SBU - Sales Production Quantity
24
AIS Float Glass SBU - Sales Distribution
25
AIS Float Glass SBU - Market Breakup
26
Sales Realization
27
AIS Operations Glass Solutions SBU

• AIS Glass Solutions, set up as a subsidiary of
  AIS in 2004-05, has emerged as the largest
  processor in the country, within first year of
  its operations.
• Architectural processing plants located at Taloja
  (Mumbai), Rewari and Chennai. The 4th plant at
  Roorkee has become functional from September,
  2007.
• Product range includes high quality architectural
  processed glass like AIS Stronglas (tempered
  glass), AIS Securityglas, AIS Acousticglas
  (laminated glass) and insulated glass units.
• Introducing innovative products like windows,
  tabletops, partitions, shelves, shower cubicles,
  etc.
• National sales force, comprising 32 sales
  personnel and over 65 channel partners, is among
  the most knowledgeable sale force in the country
  on glass.

• Glass Solutions
• An innovation
• in value addition,
• offering end-to-end
• glass solutions
• Solving customer
• problems about glass
• Enabling customers
• to do more with glass
• Knowledge leader in
• glass

28
AIS Glass Solutions - Sales Trend by Zone
29
AIS Glass Solutions - Sales Trend by Product
30
AIS Opportunities and Plans

• AISs core markets - automobiles and housing /
  construction - poised to grow at a CAGR of 10-15
  .
• Auto Glass SBU to maintain leadership status in
  the Indian passenger car industry and grow at a
  CAGR of 20 , with projected reduction in SOB
  from 80 to 72 in next few year dictated
  primarily by OEs policy of developing two
  vendors. Growth target to be achieved through
  higher OE sales, increased penetration in the
  after market with target market share of over 50
  , and a significant increase in export sales.
• AISs share in the Indian float glass market to
  increase significantly to nearly 35 , with
  commissioning of the Roorkee plant.
• AIS Glass Solutions to further consolidate its
  leadership position by significantly boosting
  sales and improving margins through higher value
  addition and new offerings for products and
  services.
• AIS to grow faster than market, with higher sales
  growth in value-added products and focus on long
  term margin improvement and cash generations.

31
AIS Strategy Key Focus Areas

• Follow Integrated Glass Strategy and
• - Captively consume nearly 50 - 60 of AISs
  total float glass production for value-added
  auto glass and architectural glass products
• - De-commoditize the glass business
• - Improve profitability by capturing end markets
  and delivering value-added products and services
  
• Improve product mix in domestic markets with a
  high proportion of innovative, high value-added
  products and solutions.
• Export value added glass to insulate AIS from
  demand-supply imbalance
• Improve operational efficiencies through TQM, TPM
  and Lean Manufacturing practices across all
  plants
• Build self-sufficiency in process and product
  development through in-house development to
  reduce costs and improving development cycle.
• Explore and exploit alternative energy sources to
  reduce energy cost

32
AIS Goals

• AIS Mid Term Plan, spanning through the five year
  period from FY 2007 to FY 2011, has set out the
  following goals
• - Top line growth at a CAGR of 20
• - Operating profit of over 25
• - Quality of Japan at Cost of China
• This Plan will give us Scale, Decommoditization,
  Customer Intimacy and Operational Excellence.
• It will result in an orbital change for us
  wherein AIS will transform itself into a
  multi-location, totally integrated value added
  glass company with leadership in technology and
  product range at the lowest cost.

33
VISION - SEE MORE
MISSION - JIKKO
AUTOMOTIVE GLASS VALUE CHAIN
Automotive glass manufacture (AIS Auto Glass)
Allied Products distribution (AIS Adhesives)
Auto Glass Fitment Services (WE)
Automotive Glass distribution (AIS Map Auto)
(Light grey cells indicate our existing spread of
activities)
Float Glass manufacture (AIS Float)
Value Added Products Reflective Mirror
Processing Laminated Tempered Insulated
Glass Products
Installation
Fabrication
AIS Glass Solutions Ltd.
- Projects - Distributed Markets
VALUE ADDED GLASS SOLUTIONS CHAIN
34
AIS Results Q2 FY 08 - Consolidated

• Performance impacted, particularly in the float
  business, due to rising cost of key inputs like
  fuel, soda ash, packing, etc.
• VRS payment of Rs. 7.5 crores to contract
  workers considered in the results.
• Rising input cost marginally offset by higher
  prices of float glass in Q2.
• Profit includes gain on foreign exchange
  fluctuations.

35
AIS Results H1 FY 08 - Consolidated
36
AIS RESULTS Q2 H1 FY 08 - Details