SATIA

An ISO 9001,14001 & OHSAS 18001company Manufacturer of Quallt W't n ' mg, Printing & Speciality Y I-': ,.~ If•. Paper with ECO MARK ~ 4 sHies Date: 15.02.2020 The Manager The Manager, Listing Department Listing Department, National Stock Exchange of India Ltd BSELimited, en, Phiroze Jeejeebhoy Towers Exchange Plaza, Plot no. G Block, Bandra-Kurla Complex, Bandra (E) Dalal Street Mumbai - 400 051. Mumbai-400001 Scrip Code: 539201 Symbol: SATIA Dear Sir/Madam, Sub: Submission of Analyst; Investor Presentation Pursuant to Regulation 300f the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.Please find enclosed Investor Presentation. Thanking you, Yours sincerely, For Satia Industries Ltd I'c)l~ (Rakesh Kumar Dhuria) Company Secretary RegisteredOffice& Mill'VillageR SiM ' , upana, t uktsarSahlb-152032,Punjab,India,Ph.:262001,262215,263585 Fax: 01633·263499email:satiapaper@gmall.com Branch: 613-615NaurangHouse 21 KG M ' ' Br h: , , , . arg,Connaught Place,NewDelhl·110001 Ph.:23710351/52153 Fax: 23718191 e-mall :satlapaper@redlHmall.com Br:~ "S~·:a:':· 92,Sector8· C,MadhyaMarg,C~andigarh -160018 Ph.: 0172·2780022f23,46183n Fax: 0172-4648600, satiaindustrlesltd@gmail,com . , I vanComplex,29,Station Road,Jalpur-302006, Rajasthan Ph.:2371055,2379554 Fax: 0141·2374433e-mail: satlapaper.jpr@gmail,com ell _nnE.tl1'\ Scanned by CamScanner SATIA INDUSTRIES LIMITED INVESTOR PRESENTATION February 2020 1 Executive Summary CompanyOverview Key Clientele •Incorporated in 1980, Satia •SIL has long standing IndustriesLimited(SIL),isoneof relationship with State the biggest and completely Text book Corporations integrated Wood and Agro and around 40% of basedpapermanufacturers. revenue comes from •SIL’s products are extensively theseorganisations. used in the printing of books, •The remaining revenue directories, envelopes, diaries, attributes to the Public calendars, computer stationery, and Private Sector copy manufacture annual Companies. reports,etc. ManufacturingandDistributionNetwork: FY19FinancialSnapshot •Manufacturing plant based out of Muktsar Operational with capacity to manufacture 1,05,000 MT EBITDA EBITDA Margin Revenue perannum. INR 1,641 Mn 22.22% INR 7,384 Mn •Completely integrated manufacturing operations with 3 paper machines, 100% in- house power generation and effluent PAT PAT Margin ROE ROCE treatment. INR 878 Mn 11.89% 29% 26% •Strong Distribution Network: 70 dealers and3branchoffices. 2 About The Company Operational Revenue (INR Mn) & EBITDA Margin (%) 7,384 6,421 5,708 4,336 22% 22% 6,296 19% •Incorporated in 1980 by Dr.Ajay Satia,Satia IndustriesLimited (SIL) started its commercial 16% 12% productionofprintingandwritingpaperatMuktsar,Punjabin1984. •SIL is one of the biggest Wood and Agro based paper plants in India manufacturing paper FY16 FY17 FY18 FY19 9M-FY20 usingwoodchips,veneerwaste,wheatstraw,sarkanda,etc. Revenue (INR Mn) EBITDA Margins % •TheCompanyhasafullyintegratedmanufacturingfacility,whichincludespapermachines, pulpingmachinery,chemicalrecoveryplantandpowergenerationplant. Raw Materials Used of Total Volumes •Fullyintegratedproductionfacilitygivessuperioradvantageintermsof cost efficiencyand Waste Paper Based environmental compliance, ultimately leading to superior margin profile compared to 5% peers. •With a view to improve the quality of pulp and also to save on cooking chemicals, a ContinuousDigesterhasbeeninstalledbytheCompany. Wood Based 30% •The product profile includes Super Snow White, Snow White, Photocopier paper, Map Agro Based litho, Colored paper, Ledger paper, Cartridge paper, Duplicating, bond paper - with and 65% withoutwatermarksandChromo(Art)paperfromGSMrange42to200GSM. •Satia Industries Limited market its product through dealer network located all over India andthroughBranchesatJaipur,Delhi&Chandigarh. 4 Key Management Personnel R.K.Bhandari(MBA)-JointManagingDirector Looksaftermarketingandotheradministrativeresponsibilitiessincethelast32years ChiragSatia-ExecutiveDirector Chiraghasbeendrivingforcebehindnewinititativessincehejoinedin2015andlooksafterFinance,Accountsand Dr.Ajay Satia CommercialOperations.Hisenterprisingspiritandforwardlookingvisionhasaddednewenergytotheworkforce. Chairman & M.D A.C.Ahuja–Director Ex.ExecutiveDirectorIFCI,Delhi HardevSingh-Director(Technical) • Dr. Satia set up the integrated paper Hasawideexperienceininstallationofprojects millin1984. ArunKumarGupta- Director(Independent) SeniorCharteredAccountant • His vision to adopt technological changes and economies of scale along AshokKumarGupta- Director (Independent) withtimelycapitalinfusionhasbrought ACAIIBandhas35yearsofexperienceinBanking theunitamongthebestintheindustry Dr.PritiLalShivhare(MSC,Ph.D.Chemistry)- Director(Independent) in terms of pulping strength, power AscientistinCentralPulpandPaperResearchInstitute,Saharanpur,(U.P) self-sufficiency, effluent treatment and meetingtheenvironmentalnorms. InderDevSingh–Director(Independent) AretiredpersonnelofPNBandhasstudiedB.Com.andLLBandisaCAIIB • Dr. Satia has a passion for work and possesses unparalleled enterprising Dinesh Sharma –Director (Independent) spiritforexpansionandmodernisation. Masters in Chemical Engineering • His greatest strength lies in building S. K. Arora–Director (Independent) andretainingastrongandtrustedteam Senior Chartered Accountant which has turned his dreams into reality. AshokKhurana(C.A.)-VP-Finance R.K.Dhuria–CompanySecretary L.L.B. 5 Key Milestones Started production using a Power Increased Additional Power generation single paper machine with Production cogeneration capacity of the capacity of 10.45 MW and Achieved a the capacity of 4,950 crossed plant (5MW) power plant to New Solar plant with capacity significant MTPA 10,000 MTPA was installed 23.30 MW 2.29 MW were installed production 1984 1993 2003 2011-12 2016-17 2018-19 1980 1989 1998 2006 2014-15 2017-18 Incorporation Second paper Third paper A Chemical The Capacity of Chemical Added Solar of the machine was machine and 200 Recovery Plant Recovery Plant was Capacity of 3.25 Company installed MTD pulp mill and power plant enhanced and also MW were installed. (5MW) were installed a Pulp Bleaching installed Plant 6 Geographical Presence Region-wise sales for FY19 Region-wise sales for FY19 Jammu & Kashmir Delhi 1.3% 12.8% Punjab Uttar Pradesh 8.4% 18.1% Haryana Assam 3.7% 5.8% Rajasthan West Bengal 9.1% 2.3% Gujarat Bihar 1.4% 0.8% Maharashtra Madhya Pradesh 13.7% 2.1% Telangana Distributors (70) Chhattisgarh 0.9% 5.4% Branch Offices (3) Export and Others Manufacturing Plant Odisha 10.4% (Muktsar) 3.8% 7 Manufacturing Facilities Pulping Facilities Paper Machines Chemical Recovery Plant Power Generation Segment • Continuous Digester for • Capacity of paper machines • Installed two Chemical • Installed three turbine cooking pulp, oxygen varies with operating speed Recovery boilers with a capex generating sets at a total delignification and chlorine andGSMofpaper. ofINR850Mntoprocessblack capex of INR 871.6 Mn and a dioxide bleaching has been • Proposed: 300 TPD, already liquor for reconversion into solar power plant at capex of installed. applied for Environment causticsoda. INR224.2Mn. Clearances • Project target for • It also helps in environment Description commissioning is two and a compliance. half years subject to all Govt. permissions. 8 Capex Plan Agro –Residue Updates: • Additional land has been purchased. • New European Paper Wood chips Manufacturing Machine has beenordered. Capacity • Foundation work going on in Current Capacity Expansion of fullswingforthenewBlock. 1,05,000 MT of Capex of Waste Paper 1,00,000 MT of Paper INR 500 Cr • Final Environmental Clearance Paper already received from the Ministry of Environment & Forests,Delhi. CRP • Financial closure has already Funding being achieved for the first phase. Internal Accrual In-house power generation 35% Plant to be commissioned by Debt the end of Q4-FY21 65% A similar greenfield capacity expansion of 300 TPD would cost around INR 1,000 Cr and would take a timeline of around 40 months to be operational. 9 Paper Cutlery Segment • Prime Minister Sh. Narendra Modi gave an ambitious call to eliminate all single-use plastic products in the country by 2022 and SIL plans to make most of this opportunity in the national movement to replace plastic and styro foam from food deliverypackagingwithsustainablepackagedproducts • The company has already entered into Virgin fibre based Cup stock segment and plans to venture into the paper cutlery segment with an initial capital outlay of INR 15-18Cr • TargetforcommencementofproductionisinFY21 Initial To be Production enhanced to Capacity of 32 TPD 8 TPD Onlinefooddeliveryisfuellingsubstantialaccelerationinfoodpackagingdemand.WeexpectthissegmenttogaintractionbyFY21. 10 Paper Making Process Stage 1 Continuous Cooking Cooked Elemental Pulp & Unbleached with caustic Chlorine Stage 2 Cleaned Black Pulp Agro Wet Raw soda which Liquor Washing, Brown Free Stock Preparation passes Bleaching Stage 3 Residue Washing Material through (Sodium Refining, Pulp (Environ- Lignate) Screening & Paper Making Stage 4 steam at ment 65% 165 Degree Cleaning Friendly) Sheet Forming-> Converting Celsius Wet Sheet and Finishing Wastewater Black Liquor W Clarifier & Biogas Caustic Soda P e ti h P D u if l f p e r (A en gr t o t , y w pe o s o o d f , thr D o e u - g w h a 3 te s r t i a n g g e s: Sheeting Plant Recovery Section pl u i m m i p x o ed rt e in d d w if o fe o r d e ) n i t s Vacu P u re m s s S in u g ct , ion, proportions as per Evaporation the required quality (Drying) Rewinding additives like AKD, Wood Requires higher amount of PAC, whitening Agent, Wet End Calendaring for Chips Caustic Soda Additives and Fillers smoothness and (Sodium Hydroxide) evenness 30% Cutting Roll Forming Hydra Refined & Imported pulper stored in a Wood Pulp (disintegrat chest ion) 5% 11 Effluent Treatment Recovery Boiler Calcium Carbonate Inorganic Organic matter burns and (Limestone) matter acts as fuel Treated with Sold in markets Black Liquor becomes Calcium Sodium (Sodium Hydroxide Lignate) Carbonate Sodium Hydroxide (Caustic Soda) Reused after 90 -95% recovery rate Wheat straw Waste water from Final effluents are first wet washing paper machine is Maximum circulation treated at the Effluent waste water is clarified and reused in of bleaching plant Treatment Plant & used to produce washing of pulp in filtrate then passed to the Biogas bleaching stages Eucalyptus Plantations 12 Top Clients Assam State Text Book Production & Bal Bharti Odisha State Bureau of Textbook Publication Corporation Ltd. Chhattisgarh PathyaPustakNigam Rajasthan RajyaPathyapustakMandal BurdaDruckIndia Private Limited Himachal Pradesh Board of School West Bengal Text Book Corporation Ltd Education IndianRailways 13 Myths Vs Realities of the Paper Industry Myth Reality Paper industry in India is also agro and rural based. Industry led agro/farm forestry in collaboration Denuding forests withfarmershavebroughtover125,000hectaresunderpulpwoodplantations. It iswood positive.The industrygrowsmore treesthrough itsagro-forestryinitiative than it harvests. Disturbs ecological Moreover, pulp and paper industry consumes only 3% of the national requirement of wood while balance majorconsumptionisasfuelwood(89.5%)andtimber(7.5%). Overall paper consumption is projected to increase to 24 million ton in 2024-25 from 15 million ton The sun has set on currently. Every one kg incrementper capita consumption results in additional demand of more than India’s paper industry 1MTPA. Technologically An investment of more than USD 5 Bn. has been made by the industry during the last five years in outdated capacityenhancement,technologyupgradationandvariousacquisitions. Unsustainable industry Paperisbiodegradable,recyclableandsustainable. Puts undue strain on Earlier, paper mills used to consume 200 cubic meters of water to produce a ton of paper. Now, the water and energy integratedmillshavereducedtheusageto50cubicmeterswitheffortsonfor40cubicmeters. resources Out of the total degraded forest land of 29 Mn hectares, the paper industry is asking for only 10%. Lobbies for access to Growing pulpwood trees on degraded land will lead to a fillip in rural employment and add to the forests repeatedly greencoverofIndia. 14 Key Strengths $ Wheat Straw is cheap and easily available locally Low cost raw materials 27.95 MW capacity run on Biomass and process intermediate-Black Liquor Co-power generation to reduce cost No other paper mill in a 100 Km radius Secure access to raw materials 3 Branch Offices and 70 Distributors Long standing relationships with State Pan India distribution Text Book Boards Chemical Recovery Plant to treat Black network Liquor, oxygen plant for Tremendous cost savings Delignification, production of Chlorine through in-house effluent Dioxide for Bleaching & Pulping treatments/intermediates In-house treatment of pollutants and 540 Acres of Eucalyptus Plantations and Environment compliant Carbon Credit Surplus manufacturing facilities 16 Writing and Printing paper : Products Snow White Super Snow White Ultra White Ultra Shine Ultra Print Features: Features: Features: Features: Features: Brightness: 85% Brightness: 89% Brightness: 85% Brightness: 88% Brightness: 90% Whiteness: 133% Whiteness: 142% Whiteness:133 % Whiteness: 142 % Whiteness: 145 % Opacity: 85-96% Opacity: 85-96% Opacity: 85-96% Opacity: 85-96% Opacity: 78-96% Variants: Variants: Variants: Variants: Variants: Copy Segment:52-64 GSM Copy Segment: 52-64 GSM Copy Segment: 52-64 GSM Copy Segment: 52-64 GSM 58-100 GSM Printing Segment: 52-90 GSM Printing Segment: 52-90 Printing Segment: 52-90 Printing Segment: 52-90 GSM GSM GSM Pricing: Pricing: Pricing: Pricing: Pricing: INR 60,500 to 64,000 PMT INR 61,500 to 65,000 PMT INR 62,500-65,800 PMT INR 62,000 to 65,500 PMT INR 63,000 to 66,500 PMT RM Composition: RM Composition: RM Composition: RM Composition: RM Composition: Agro Pulp: 75% Agro Pulp: 70% Agro Pulp: 75% Agro Pulp: 70% Agro Pulp: 65% Hard Wood Pulp: 25% Hard Wood Pulp: 30% Hard Wood Pulp: 25% Hard Wood Pulp: 30% Hard Wood Pulp: 25% Imported Hard/Soft Wood Pulp: 10% 18 Writing and Printing paper : Products Coloured Paper Cover Paper Natural Shade Photo Copier Ledger Features: Features: Features: Features: Features: Brightness-NA Brightness-85% Brightness-82% Brightness-90% Brightness-58% Whiteness-NA Whiteness-133% Whiteness-70% Whiteness-142% Whiteness-11% Opacity –78-96% Opacity –94-96% Opacity –92-95% Opacity –92% Opacity –88-90% Variants: Variants: Variants: Variants: Variants: 48-180 GSM 100-170 GSM 80-120 GSM 70-80 GSM 58-90 GSM Pricing: Pricing: Pricing: Pricing: Pricing: INR 67,000 to 71,000 PMT INR 62,000 PMT INR 62,000 PMT INR 69,500-70,000 INR 65,000 to 66,000 PMT RM Composition: RM Composition: RM Composition: RM Composition: Agro Pulp-70% Agro Pulp-75% Agro Pulp-70% Agro Pulp-65% RM Composition: Hard Wood Pulp -30% Hard Wood Pulp -25% Hard Wood Pulp -30% Hard Wood Pulp -20% Agro Pulp-75% Imported Hard/Soft Wood Hard Wood Pulp-25% Pulp-15% 19 Operating Efficiency Production, Revenue and Profit Trend 2,50,000 2,12,858 8,000 2,06,400 7,384 7,000 1,94,204 2,00,000 6,421 6,000 1,60,631 5,708 1,43,440 1,44,429 5,000 1,50,000 3,978 3,931 4,336 4,000 1,00,000 3,000 2,000 50,000 1,578 1,284 875 1,000 372 531 449 - - FY14 FY15 FY16 FY17 FY18 FY19 Raw Material Consumed (MT) Column1 Total Revenue (INR Mn.) Cash Profit (PBDT) (INR Mn.) Operating Cost Bridge 76.01% 1.35% 80.00% 0.76% 2.00% 70.00% 0.05% 65.26% 0.00% 60.00% -0.37% -2.00% 50.00% 40.00% -4.00% 30.00% -4.59% -6.00% 20.00% -8.00% 10.00% -7.95% 0.00% -10.00% FY16-Operating costs Raw Materials Chemicals Power & Fuel Store & Spare Packing Material Salary & Wages FY19-Operating costs as % of revenue as % of revenue 20 Strategic Advantage • SIL has the capability and flexibility to use all three kinds of pulp made from agro residue, wood and waste paper. • It procures raw materials like wheat straw, sarkandaand wood chips from the area adjacent to the manufacturing plant in Punjab. Raw • No other paper mill, in a 100 km, radius ensures easy and cheap availability. Material Security • Water is imperative at each stage of production and can lead to loss of machine days in case of shortage. • The fresh water requirement is 18,500 m3 /day for Agro & Wood-Based Pulp to produce writing Water Security & printing paper 390 TPD. • The Company has an approval from the state irrigation department for fresh water withdrawal of 7.5 cusec from ArniwalaCanal, which is at a distance of 1.8 km. Captive Power • With the high cost of power directly affecting profits of paper industries, the best option is to Generation install own captive power plants to manage production schedules without unplanned downtime and lower costs. • Against the huge requirement of steam at 10Kg/cm2 pressure for pulp making and steam at 4Kg/cm2 pressure for drying paper; SIL has installed 62Kg/cm2 steam pressure boilers and 27.95 MW power is co-generated from energy produced in pressure reduction which helps in huge cost savings. 21 Future Growth Strategy With a strong raw material base, doubled production capacity to over 2.0 lac 03 tons paper every year and with a flexibility to make high grade surface sized maplitho and copier paper along with our traditional stronghold in Government textbook paper market; we plan to expand our customer base and further strengthen our existing network by meeting varied needs of the customersinthefaceofstiffcompetitioninthemarket. SIL proposes to simultaneously enhance its agro, wood and recycling pulp making facilities to 02 meet increased level of paper machines capacity along with flexibility in raw material usage. We plan to upgrade our Chemical recovery plant and cogeneration division to meet environmental challenges and also maintain our independence in low cost power to maintain cost competitiveness. SIL plans to make best of the scenario by focusing on modernization of its existing plant and machinery; quality up 01 gradation by increasing wood pulp in its raw material mix and making surface sized paper for high speed multi colour printing and plans to double its production capacity by setting up a new paper machine in its existing premisesbytheendoftheyear2020.Theplantwillbeoperationalby2021/2022. 22 Environmental Compliance Environment Compliance though a legal necessity; SIL considers this as its moral responsibility and has undertaken many steps to ensure that no harm is done to the environment: • EucalyptusPlantation:SILusesthenaturalqualityofEucalyptusPlantfornaturalpumping and evaporation of ground water through its leaves into the atmosphere and has developed 540 acres of Eucalyptus Plantation for waste water handling. No water is dischargedintoanywaterbody. • SIL has adequate water and air pollution control devices to meet the prescribed norms of Water and Air pollution and has got the necessary Consent to operate from the PPCB, PunjabunderdifferentActs. • SIL has a fish tank with the treated waste water to check fish survival in the treated effluentandestablishesthatitisnotharmfulforaquaticlife. • Solidwasteisusedbycardboardmanufacturersandboilerashgoesintolandfilling. • SILisplanningtotieupwithcementcompaniestodisposelimesludge. • Methaneisusedforpowergenerationorasfuelintheboiler. 23 Karnal Technology Process Low Cost • Theexpenditureofadoptingthistechnologyinvolves • The Karnal Technology involves growing costofmakingridges,plantationandtheircare. trees on ridges 1m wide and 50cm high • The implementation does not involve skilled labour wanddisposingoftheuntreatedsewage and relatively unfertile wastelands can be used for infurrows. thispurpose. • The effluent is consumed within 12-18 hoursanditispossibletodisposeoff0.3 to1.0MLofeffluentperdayperhectare throughthistechnique. Zero Effective Discharge • This technique utilizes the entire biomass as living filterforsupplyingnutrientstosoilandplant. • Further, as forest plants are to be used for fuel wood, timber or pulp, there is no chance of pathogens, heavy metals and organic compounds to enterintothehumanfoodchainsystem. Plantation Eucalyptus plant is widely used for Karnal Technology duetothecapacitytotranspire large amounts of water and ability to Revenue Generation remainactivethroughouttheyear. Thissystemgeneratesgrossreturnsfromthesaleoffuel wood and thesludgeaccumulating in thefurrowsalong withthedecayingforestlitter. 24 Corporate Social Responsibility SIL believes that the corporate sector are economic organs of the society and therefore endeavors to make a positive difference to the society by trying to build a better tomorrow. • Total amount spent in FY19: INR 11.2 Mn • Total amount spent during FY18: INR 4.9 Mn • The management has approved INR 25 Mnfor CSR program in surrounding villages. The activities mentioned therein shall be carried out within a time frame of 5 years (2017-18 to 2021-22) The sectors identified under the scope of CSR activities are as follows: Community Health Improvement: Periodical medical checkups, blood donation camps to be organized near the project site, eye check-up camps, healthawareness camps for mother and child and health and hygiene practices Community Education Facilities: Augmentation of furniture, blackboard, etc. in village schools, award scholarships to meritorious students, distribution of educational books, stationary, uniforms, aids, etc. Community Welfare activities: Development of worship places as well as beautification, distribution of seeds & saplings, promotion & support to various Govt. schemes Community Water Conservation: Rain water harvesting, ground water recharge pits and water conservation awareness programs Community Capacity Building: Development of vocational training for technical skills, self employment trainings for women, such as, stitching, embroidery,tailoring, and handicrafts, etc. Infrastructural Development: Village pond retrieval and R.O installation A forestation Programs: Plantation of trees in village road sides 25 Paper Industry Overview • Globally, India is the fastest growing paper market – 5-year (FY11 - FY16) with a CAGR of 5 Year CAGR % FY11 to FY16 consumptionis8%incomparisonto1%globally. 10% • Paper demands grow intandem (gainmomentum) withthe GDP growthrate ina country. 8% 8% Over the last 10-yr period (2006-2016), India’s paper demand grew 8.1%, whereas GDP CAGRwas7.3%.Thus,theCompanybelievesthatIndia’shighGDPgrowthrateensuresthat 6% basedemandgrowthforpaperishigh. 4% • Moreover, paper usage per capita in India lags in comparison to most other major economies-13kgp.a.vs150-250kgp.a.formoredevelopedcountries. 2% 1% 1% • Combinedwithrapidlyimprovingliteracyratesandincreasingofficedocumentationneeds, 0% 0% we expect demand growthin writing and printing paper in India to continue [Literacy rate India China Indonesia USA UK Germany improvedto75%in2016from63%in2001]. -2% -1% • The Indianpaperindustryishighlyfragmentedwith morethan1000mills,ofwhichabout -4% -3% 750millsareoperationalandtop3playersaccountforonly9%ofthemarket. India (total 17m tons) China (total 109m tons) USA (total 70m tons) Indonesia (total 7m tons) 9% 21% 32% 28% 68% 79% 72% 91% Share of Top 3 Others 27 Paper Industry Overview • Indiaisthefastestgrowingmajorpapermarketintheworld. • AnappreciatingrupeemadeimportsattractiveinFY17. • Anti-dumping duties were imposed by the US in 2016 and 2017, which ledtodiversionofsupplyfromUStoIndianmarkets. • Free Trade Agreements with ASEAN and South Korea led to an increase inexportsat10YrCAGRof15%and8%,respectively. • Even though this dynamic may change as the rupee depreciates\anti- dumping duty is effected, open imports have already forced companies toincreasecostefficiency\consolidate. 28 Challenges of Environmental Compliance • The pulp and paper industry is among the world’s largest generators of air and water pollutants, waste products and gases that cause climate change. Thus, heavy investment is required by companies to be environmentally compliant. Multiple norms have been introducedovertheyears,whichhavecoveredpapermanufacturingcompanies. CWRPP, 2015 (Ganga National Charter (In the CREP, 2003 CWRPP, 2012 Basin States) pipeline) • Corporate Responsibility for Environment Protection (CREP) had some key action points - utilization of treated effluent wherever possible,reducewastewaterdischargetolessthan140m3/tonneofpaperby2005,etc. • Charter for Water Recycling & Pollution Prevention in Pulp & Paper Industries (CWRPP), not only highlighted the Best Available Techniques (BAT) basedon European Union’s BREF document,but also laiddown stringent waterconsumption, effluent generation and effluent characteristicsnorms forthe industrytobe achieved intwo phases, i.e.,short-term goals(byMarch 2016)and long-term goals (byMarch2017).Waterconsumptionnormof50m3/tonneofpaperproducedhasalreadybeenachievedbytheIndustry. • National Charter is in the pipeline. Large mills have already incurred capex to adopt environmental friendly technologies and thus, wouldnothaveahugeimpact. • Central Pollution Control Board (CPCB) advises the Central government on matters concerning air and water pollution. It has classified pulpandpaperintheRedcategory,whichmeansenvironmentalclearancefornewfactorieswouldbestrict. • Recently, 12environmentallynon-compliantpapermillswereissuedclosurenoticesbyCPCB. 29 Indian Paper Industry is Ripe for Consolidation High Capital Intensity -Investment in land and machinery, repairs and maintenance of mills, technology, cost of environmental compliance, growing wood plantations and establishing a distribution network all make manufacturing paper a capital intensive task. Economies of scale -The average capacity of an Indian Paper Mill is about 21,373 TPA, which is less than 1/5th of the average capacity of European mills, and about 1/9th the size of the average US mill. Imports will pressure inefficient players further. It is expensive to be environmentally compliant -The pulp and paper industry is among the world’s largest producers of water pollutants and waste products. CPCB has classified Pulp and Paper industry into the Red category, which means environmental clearance for new factories would be strict. Advent of GST -GST has been introduced at 12-18% for most paper categories which implies that the margin cushion available to small companies (likely tax avoiding) may be pressured. Industry Stress -Multiple inorganic opportunities are available in India, which can help large players with strong balance sheets consolidate. 30 Income Statement PARTICULARS (INR Mn) FY16 FY17* FY18* FY19* 9M-FY20* Operational Revenue 4,336 5,708 6,421 7,384 6,296 Total Expenses 3,801 4,799 5,203 5,743 4,919 EBITDA 535 909 1,218 1,641 1,377 EBITDA Margin 12.34% 15.93% 18.97% 22.22% 21.87% Other Income 165 211 303 145 140 Depreciation 332 400 451 477 394 Finance Cost 251 245 237 208 158 Extraordinary Items (16) - - - - PBT 101 475 833 1,101 965 Tax (30) 20 146 223 207 Profit After Tax 131 455 687 878 758 PAT Margin 3.02% 7.98% 10.70% 11.89% 12.04% Other Comprehensive Income - (2) (8) 2 2 Total Comprehensive Income 131 453 679 880 760 EPS (INR per share) 1.31 4.55 6.86 8.77 7.58 *As per IND-AS 32 Balance Sheet (IND-AS) PARTICULARS (INR Mn) FY18 FY19 H1-FY20 PARTICULARS (INR Mn) FY18 FY19 H1-FY20 Equity 2,226 3,076 3574 Non-Current Assets 3,540 4,505 5012 Equity Share Capital 100 100 100 a) Property, Plant and Equipment 3,119 3,827 3624 Other Equity 2,126 2,976 3474 b) Capital Work In Progress 295 561 1301 c) Financial Assets Non-Current Liabilities 1,819 1,957 2072 (i) Investments 29 31 31 a)Financial Liabilities (ii) Loans 35 17 18 (i) Borrowings 910 1,054 1109 (iii) Other financial assets 10 10 10 (ii) Other Financial liabilities 837 823 876 d) Deferred Tax Asset (Net) 48 59 29 b) Other Non-Current Liabilities 3 3 3 e) Other Non-Current Assets 4 - - c) Provisions 69 77 84 Current Assets 2,278 2,099 2890 a) Inventories 526 599 586 b) Biological Assets other than Current Liabilities 1,773 1,571 2256 295 303 329 bearer plants a) Financial Liabilities c) Financial Assets (i) Borrowings 676 537 783 (i) Trade Receivables 1,179 1,057 1762 (ii) Trade Payables 447 454 630 (ii) Cash and Cash Equivalents 13 5 10 (iii) Bank balances other than (iii) Other Financial Liabilities 468 516 662 64 35 35 above b) Current tax liabilities (net) - 13 58 (iv) Other financial assets 23 26 52 c) Other Current Liabilities 164 44 116 d) Current Tax Assets (Net) 21 - - d) Provisions 18 7 7 e) Other Current Assets 157 74 115 GRAND TOTAL -EQUITIES & LIABILITES 5,818 6,604 7902 GRAND TOTAL –ASSETS 5,818 6,604 7902 33 Financial Highlights Operational Revenue (INR Mn) EBITDA (INR Mn) & EBITDA Margin (%) PAT (INR Mn) & PAT Margin (%) 7,384 6,421 11.89% 5,708 10.70% 22.22% 7.98% 4,336 18.97% 15.93% 12.34% 3.02% 535 909 1,218 1,641 131 455 687 878 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 ROE (%) and ROCE (%) Debt to Equity Net Worth (INR Mn) 1.67 3,076 31% 29% 29% 2,226 1.00 1,583 0.68 26% 26% 1,130 12% 0.50 21% 12% FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 ROE (%) ROCE (%) 34 Disclaimer Norepresentationor warranty, expressor implied, ismade asto, and noreliance should beplacedon, the fairness, accuracy, completeness or correctnessofthe informationor opinions containedinthis presentation.Suchinformationandopinionsareinalleventsnotcurrentafterthedateofthispresentation.Certainstatementsmadeinthispresentationmaynotbebasedonhistoricalinformationorfactsand maybe"forwardlookingstatements"basedonthecurrentlyheldbeliefsandassumptionsofthemanagementSatiaIndustriesLimited(“Company”or“SIL”or“SatiaIndustriesLtd.”),whichareexpressedingood faithandintheiropinionreasonable,includingthoserelatingtotheCompany’sgeneralbusinessplansandstrategy,itsfuturefinancialconditionandgrowthprospectsandfuturedevelopmentsinitsindustryand itscompetitiveandregulatoryenvironment. Forward-lookingstatementsinvolveknownandunknownrisks,uncertaintiesandotherfactors,whichmaycausetheactualresults,financialcondition,performanceorachievementsoftheCompanyorindustry resultstodiffermateriallyfromtheresults,financialcondition,performanceorachievementsexpressedorimpliedbysuchforward-lookingstatements,includingfuturechangesordevelopmentsintheCompany’s business,itscompetitiveenvironmentandpolitical,economic,legalandsocialconditions.Further,pastperformanceisnotnecessarilyindicativeoffutureresults.Giventheserisks,uncertaintiesandotherfactors, viewersofthispresentationarecautionednottoplaceunduerelianceontheseforward-lookingstatements.TheCompanydisclaimsanyobligationtoupdatetheseforward-lookingstatementstoreflectfuture eventsordevelopments. Thispresentationisforgeneralinformationpurposesonly,withoutregardtoanyspecificobjectives,financialsituationsorinformationalneedsofanyparticularperson.Thispresentationdoesnotconstitutean offerorinvitationtopurchaseorsubscribeforanysecuritiesinanyjurisdiction,includingtheUnitedStates.Nopartofitshouldformthebasisoforberelieduponinconnectionwithanyinvestmentdecisionorany contractorcommitmenttopurchaseorsubscribeforanysecurities.NoneofoursecuritiesmaybeofferedorsoldintheUnitedStates,withoutregistrationundertheU.S.SecuritiesActof1933,asamended,or pursuanttoanexemptionfromregistrationtherefrom. Thispresentationisconfidentialandmaynotbecopiedordisseminated,inwholeorinpart,andinanymanner. ForfurtherinformationpleasecontactourInvestorRelationsRepresentatives: Mr.InderjeetMonga AGM–AccountsandFinance Tel:+919855716521 Email:agm.finance@satiagroup.com 35