SKNL. Management Presentation - PDF Free Download

SKNL Management Presentation August 2009

Disclaimer The information in this presentation has been prepared by S. Kumars Nationwide Limited (the Company ) By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: The information communicated in this document contains certain statements that are or may be forward looking. These statements typically contain words such as "will", "expects" and "anticipates" and words of similar import including those relating to general business plans and strategy of the Company. By their nature forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There may be additional material risks that are currently not considered to be material or of which the Company and its advisors or representatives are unaware. The Company assumes no responsibility to update forward-looking statements or to adapt them to future events or developments. Actual results may differ materially from these forward-looking statements due to a number of factors, including future changes or developments in the Company s business, its competitive environment, its ability to implement its strategies and initiatives and respond to technological changes and political, economic, regulatory and social conditions in India. This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer, or a solicitation of any offer, to purchase or sell, any shares and should not be considered as a recommendation that any investor should subscribe for or purchase any of Company s shares. No representation or warranty, express or implied, is made as to, and does not accept any liability or responsibility and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information, or opinions contained herein. Neither the Company nor any of the Company's advisors or representatives shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially. This presentation is based on the economic, regulatory, market and other conditions as in effect on the date hereof. It should be understood that subsequent developments may affect the information contained in this document, which neither the Company nor its advisors are under an obligation to update, revise or affirm. THIS DOCUMENT AND THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OR SOLICITATION OF ANY OFFER TO PURCHASE OR SELL ANY SECURITIES OF THE COMPANY. The securities of the Company have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered, sold or delivered within the United States or to US persons absent from registration under or an applicable exemption from the registration requirements of the United States securities laws. Neither these slides nor any copy of them may be taken or transmitted into or distributed in Canada, Australia, Japan or any other jurisdiction which prohibits the same except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of the United States or other national securities laws. 1

Management Team Name Nitin Kasliwal Vice Chairman and MD Experience 32 years of experience in the textile industry Member of managing committee of Indian Cotton Mills Federation, Indian Woolen Mills Federation, World Trade Centre, India MBA in International Management from Switzerland Anil Channa Dy. Managing Director & COO Over 35 years of senior level textile industry management experience Over 20 years as business head of large textile operations MBA from Delhi University, FMS and Engineer from IIT Delhi Anees Fazalbhoy Business Strategy, M&A and Investor Relations Managed own business with activities in India, Canada & Middle East for over 25 years MBA in International Management from Switzerland Jagadeesh Shetty CFO Over 20 years of senior level experience in finance and accounting primarily in the textile industry Associate member of the Institute of Cost and Works Accountants of India 2

1 SKNL Overview 2 4 Pillars Brands, Professional Management, Distribution, Manufacturing 3 Future Growth Building Scale Organically and Inorganically 4 Proven Financials 5 India A Large Growing Market Opportunity 6 Appendix 3

SKNL Group Structure Promoters 49.83% 55.73% SKNL 76.97% Reid & Taylor (India) Limited Brandhouse Retail Limited Domestic Future SBUs Ready-towear garments Home Textiles HVFC Consumer Textiles Luxury Textiles Premium Ready-towear garments EBO JV Value SKNL / RTIL Brands Foreign Brands International Leggiuno SKNL International Operations Hartmarx 5

SKNL Shareholding Pattern Indian Institutions, Banks, Mutual Funds and Retail 23.99% Promoter and Promoter Group 49.83% Foreign Institutional Investors 26.18% Source: National Stock Exchange of India as of 30 June 2009 6

Company Overview Strength through Diversity Operate across all three segments of the textile industry in India Fabrics - Apparels - Home Textiles Branded presence in all socio-economic segments Operates in all fibre segments 2008 2009 ($=Rs 48.69) Sales US$464m (Rs 22,604mm) PBIDT US$97m (Rs 4,730mm) Luxury Textiles Consumer Textiles HVFC Home Textiles (THE) Ready to Wear (TWS) Reid & Taylor Luxury Suitings Reid & Taylor Premium Natural Fibre Suitings S.Kumars Work Wear Belmonte Daily Wear Uniformity Uniform fabrics 100% Natural Fibre Shirtings Benetton Super Premium Carmichael House Premium New Brand* Mid-Premium *To be launched Stephens Brothers Super Premium Reid & Taylor Premium Balmoral* Casual Premium Belmonte Mid-Premium *Being launched in 2009 Overseas Businesses Leggiuno Hartmarx Sales: $109m (Rs 5,297m) PBIDT: $41m (Rs 1,978m) PBIDT Margin: 37.3% Contribution Sales: 23.4% Sales: $223m (Rs 10,846m) PBIDT: $37m (Rs 1,776m) PBIDT Margin: 16.4% Contribution Sales: 48.0% Partly commissioned Sales: $70m (Rs 3,392m) PBIDT: $12m (Rs 580m) PBIDT Margin: 17.1% Contribution Sales: 15.0% Sales: $51m (Rs 2,494m) PBIDT: $8m (Rs 406m) PBIDT Margin: 16.3% Contribution Sales: 11.0% 2 Sales: $12m (Rs 581m) PBIDT: $-0.4m (Rs -18m) PBIDT Margin: -3.0% Contribution Sales: 2.6% Note: 1 Sales and PBIDT do not include other income; PBDIT = Revenue from operations material cost manufacturing expenses personnel cost administrative cost selling expenses 2 Sales for only one quarter (ending 31 December 2008) of Leggiuno is included in the above consolidated financial statements 3 Sales of Hartmarx are not included in FY09 financials 7

Presence in different Socio-Economic Segments 1 Present across diverse categories and in different socio-economic segments PREMIUM Reid & Taylor MID-PRICE Belmonte ECONOMY S.Kumars LUXURY (To be launched) SUPER PREMIUM Stephens Brothers PREMIUM Reid & Taylor CASUAL PREMIUM Balmoral (to be launched) MID-PRICE Belmonte Not Catered to by SKNL Un-branded Not Catered to by SKNL Un-branded READY TO WEAR FABRIC LUXURY Benetton MID-PRICE Carmichael House ECONOMY New Brand (to be launched) Not Catered to by SKNL Un-branded Note: 1 Excluding Unbranded segment HOME TEXTILES 8

SKNL is One of the Dominant Players in the Indian Textile Market Description SKNL Product Segments SKNL has a wide reaching and established distribution network of over 400 wholesale dealers and 30,000 retail outlets Operates in Luxury Textiles, Consumer Textiles, HVFC, Home Textiles, Ready to Wear (TWS) SUPER PREMIUM PREMIUM MID PREMIUM ECONOMY LUXURY APPAREL & SUITINGS SUITING, APPAREL & HOME TEXTILES SUITINGS, APPAREL & HOME TEXTILES SUITINGS, APPAREL & HOME TEXTILES Un-branded Present in All Fibre and Product categories SKNL Sales split (FY09) Ready-to-Wear 11% Home Textiles 15% Overseas Businesses 3% Natural Fibers Blended Fibers Man Made Fibers Wool Poly-Wool Polyester Cotton Poly-Viscose Viscose Linen Wool-Linen Nylon Market Position One of the leading player in uniforms One of the leading player in Worsted Suitings One of the largest institutional supplier of textiles Luxury Textiles 23% Consumer Textiles 48% Source: Company estimates & has become a Clothier to the Nation 9

On the way to becoming clothier to the World Acquisition of Leggiuno, Italy One of the leading shirt fabric manufacturers in the world Produces dyed yarn, piece dyed and digitally printed linen fabrics for high end shirt brands Producer of shirting fabric addressing the high value market Acquisition of Hartmarx Assets, USA One of the largest US premier tailored clothing manufacturers Portfolio of 32 brands (21 owned and 11 licensed) Manufactures and wholesales some of the most highly recognized brands in the men s tailored clothing market including Hickey Freeman and Hart Schaffner Marx Over 100 years of legacy with high brand loyalty and recall 10

Well Established Brands Diversified portfolio of well recognized brands Strength through celebrity endorsements Advertising campaign across India using different media in several languages Brand Products Achievements - Worsted fabrics -Ready-to-wear - Blended fabrics -Workwear -Ready-to-wear - School Uniform - Bed Linen & Bath Linen - Table & Kitchen Linen - Ready-to-wear for men and women One of the leading players in Luxury Suitings One of the leading player in uniforms Development of home textiles as strategic business unit A brand with British heritage for India 12

Brand Visibility Contemporary in design and customer friendly stores 13

Professional Management Board of Directors Nitin Kasliwal Vice Chairman & Managing Director CORPORATE FUNCTIONS Anil Channa Dy. Managing Director & COO STRATEGIC BUSINESS UNITS (SBUs) D.D. Avari Corp. Affairs Luxury Suitings Consumer Textiles HIGH VALUE FINE COTTONS Home Textiles Ready-to- Wear (TWS) Exports Business Leggiuno Anees Fazalbhoy Business Strategy Arvind Gupta COO Rajan K. Garg COO Anupam Dikshit COO Dinesh Sharma CEO Janak Dave COO Vijay Bakshi President Paolo Ingegnoli CEO Col. S. K. Raje Group Admin & HRD Predeep Mukim COO - Belmonte J. S.Shetty President- Finance & CFO Johnny John COO Mass brand Nimesh Shah Company Secretary Each SBU is headed by an experienced personnel 14

Distribution Strategy Luxury Textiles Consumer Textiles HVFC Home Textiles Ready to Wear (TWS) Reid & Taylor Luxury Suitings Reid & Taylor Premium Natural Fibre Suitings S.Kumars Work Wear Belmonte Daily Wear Uniformity Uniform fabrics 100% Natural Fibre Shirtings Benetton Super Premium Carmichael House Premium New Brand (To be launched) Mid-Premium Stephens Brothers Super Premium Reid & Taylor Premium Balmoral (to be launched) Casual Premium Belmonte Mid-Premium Multi Brand Outlets Large Format Stores Institutional Sales Export Sales Exclusive Brand Outlets 60 1 Agents 400 1 Wholesale Dealers Company owned stores for SKNL / RTIL Brands Company Operated Franchisee Model 30,000 1 Retailers Retail activities for SKNL / RTIL Brands BRANDHOUSE RETAILS LTD. Note: approximate numbers India Franchisee for International Brands 15

State of the Art Manufacturing Facilities State-of-the-art plants manufacturing products to the highest quality standards Plant Location Products Manufactured Reid & Taylor Worsted Suiting Unit Mysore, India Worsted Suiting, Premium P/V blended suiting S.Kumars suiting Unit Dewas, India Uniforms, Work Wear Fabrics Polyester & Polyester Viscose Blended suitings Home Textile Chamunda Standard Mills Dewas, India Polyester Blended Yarn, Grey Fabrics, (PV, PC, 100% Cotton), MVCF Total Wardrobe Solutions Bengaluru, India Shirts, Trousers, Blazers, Suits & Other Accessories Home Textiles (under implementation) Jhagadia, India Home Textiles HVFC (to commence production in Q3FY10) Jhagadia, India High Value Fine Cotton Leggiuno Milano, Italy High Value Fine Cotton Hartmarx Des Plaines, Illinois Tailored Clothing Hartmarx New York Tailored Clothing 16

Strategic Guidelines Improve group growth & profitability profile Emphasis on organic growth, development of international operations & free cash flow generation Capture significant market share in the Luxury Textiles & Consumer segments and seize opportunities Develop brands and businesses driven by distinctive distribution models Expand opportunistically in India & abroad Build outsourcing strategy Increase production capacity to cater to growing demand Form licensing agreements with leading luxury textile brands 18

Growth Initiatives Organic Growth Initiatives Across Different Segments Luxury Textiles Segment Initiative Status Weaving and spinning capacity expansion to cater to the domestic and international markets Completed Hartmarx assets acquisition US premier tailored clothing manufacturer Acquired in August 2009 High Value Fine Cotton (HVFC) Setting up capacity to cater to the international as well as domestic markets - Partly commissioned Home Textiles Consumer Textiles Capacity expansion under (TUF) technology upgradation to cater to high demand in the post quota regime Creating value addition in existing business by introducing premium blended suiting and adding capacity for spinning, weaving and processing of blended fabrics Under installation Under implementation Ready-to-Wear (TWS) HVFC spinning unit Introducing new brands to increase market share in the segment Casual premium brand Mass brand Luxury brand Setting up a suits factory at Bangalore Setting up a stitching unit at Jhagadia Setting up cotton spinning capacity Under implementation Under implementation Note: Assuming exchange rate of INR 48.69 per US$ 19

Luxury Textiles INRmm Sales CAGR: 37.3% 5,297 5,000 4,022 4,000 3,000 2,811 2,000 1,000 - FY07 FY08 FY09 US$mm 58 83 109 Growth Strategy Domestic: Expanding market reach by offering a lower price range and introducing a range of fabrics Increase retail reach by opening exclusive stores and shopin-shop programs and multi-brand outlets Plans to increase exclusive brand outlets and multi-brand outlets International Increase exports to North America, Japan, West Asia, Europe and the Middle East Leverage global strength of R&T to access leading brands and latest technologies PBDIT Margin Investment Plan 2500 2000 38.7% 39.6% 37.3% 1,977 1,592 40% Contemplating expansion in the capacity Funded for growth through investment from GIC INRmm 1500 1000 1,089 30% 500 0 FY07 FY08 FY09 PBDIT PBDIT Margin US$mm 22 33 41 20% Note: Assuming exchange rate of INR 48.69 per US$ Excluding Other Income 20

Ready to Wear (Total Wardrobe solutions) Adding manufacturing facilities to complement distribution as well as adding new brands Sales Growth Strategy INRmm 3,000 2,400 1,800 1,200 600-1,191 CAGR: 44.7% 1,677 2,494 Expanding Reid & Taylor garments to multi-brand outlets Expand distribution of Stephen Brothers Introducing International brands in Luxury & Super Premium segments Introducing Reid & Taylor products for Women Plans to enter in new manufacturing contracts with international brands FY07 FY08 FY09 US$mm 24 34 51 Adding capacity in the suits and stitching unit Introducing Casual Premium Brand (Balmoral to be launched) PBDIT Margin INRmm 500 20.7% 400 16.0% 347 406 300 16.3% 190 200 100 0 FY07 FY08 FY09 PBDIT PBDIT Margin US$mm 3.9 7.1 8.3 21% 14% 7% 0% LUXURY (To be launched) SUPER PREMIUM Stephens Brothers PREMIUM Reid & Taylor CASUAL PREMIUM Balmoral (to be launched) MID-PRICE Belmonte Note: Assuming exchange rate of INR 48.69 per US$ Financials exclude other income 21

Consumer Textiles Creating value addition in existing business by adding capacity for weaving and processing of high value fabrics Sales Growth Growth Strategy 12,000 CAGR: 31.2% 10,846 Adding following capacities 8,892 Weaving unit capacity expansion INRmm 8,000 4,000 6,305 A processing house A PV spinning unit - FY07 FY08 FY09 US$mm 129 183 223 PBDIT Margin INRmm 2000 1500 1000 500 872 13.8% 16.2% 1,440 1,776 16.4% 18% 12% 6% 0 PBDIT FY07 FY08 FY09 PBDIT Margin 0% US$mm 18 30 36 Note: Assuming exchange rate of INR 48.69 per US$ Financials exclude other income 22

Home Textiles Modernization and technology upgradation to cater to high demand in the post quota regime Sales Growth Growth Initiatives 4,000 3,200 CAGR: 30.6% 2,895 3,392 State-of-the-art manufacturing facility at Jhagadia - under installation Planning to export home textiles output to EU and US INRmm 2,400 1,600 800 1,987 Expanding market reach in India by launching products in the economy segment Benetton was launched recently - FY07 FY08 FY09 US$mm 41 59 70 PBDIT Margin INRmm 600 450 300 12.6% 250 554 19.1% 580 17.1% 25% 20% 15% 10% 150 5% 0 0% FY07 FY08 FY09 PBDIT PBDIT Margin US$mm 5 11 12 Note: Assuming exchange rate of INR 48.69 per US$ Financials exclude other income 23

High Value Fine Cotton Set to enter High Value Fine Cotton in the International as well as domestic markets Growth Strategy State-of-the-art manufacturing facility at Jhagadia partly commissioned Set up weaving & processing facilities Front-end back-end synergy with Leggiuno Domestic target market Manufacturers making shirts for international brands Indian brands offering premium shirts to Indian customers International target market Global market for HVFC shirting Primarily European manufacturers SKNL to offer quality & cost benefits using European know-how & expertise and advantage of manufacturing facility in India Access customers outside India through Leggiuno, Reid & Taylor (Scotland) and International labels coming to India through SKNL Investment Plan Backward integration by adding cotton spinning capacity 24

Acquired Leggiuno in October 2008 Transaction Overview Business Overview SKNL acquired 100% shareholding of Leggiuno SpA in October 2008 One of the leading shirt fabric manufacturers in the world Produces dyed yarn, piece dyed and digitally printed linen fabrics for high end shirt brands Producer of shirting fabric addressing the high value market Operations headed by Mr. Paolo Ingegnoli Synergy Strengths SKNL gets access to leading international brands, addressing the high end market High Design Value - Enjoys reputation for its fabric designs for its relevance to the fashion trends Half of Leggiuno s fabric are processed at other plants in Italy. The new HVFC Plant at Jhaghadia, Gujarat is expected to cater to some of the requirements of Leggiuno Quality finished products - Fabric quality and finished products are comparable with the best of the shirting fabrics out of Italy Move up the value chain providing access to international brands leading to comparatively better sales price resulting in higher margins Enjoys High Brand Equity - With its long history of supplying quality fabrics, Leggiuno has a good brand equity in the market today High End Worldwide Customer Base - Leggiuno has an premium customer base across the world 25

Acquired Hartmarx Assets in August 2009 Business Overview One of the leading US premier tailored clothing manufacturer Portfolio of 32 brands (21 owned and 11 licensed) Manufactures and wholesales some of the most highly recognized brands in the men s tailored clothing market including Hickey Freeman and Hart Schaffner Marx Supplier to the department and specialty stores in the U.S. including Dillards, Kohls, Macy s, Barneys Over 100 years of legacy with high brand loyalty and recall Higher price point men s clothing is produced at six company facilities in North America Key brands of Hartmarx Category / Brands Product Categories Primary Customer Channel Luxury Hickey Freeman and Hart Schaffner Marx Men s tailored clothing, furnishings and Sportswear Upscale department and specialty stores Bobby Jones Sportswear and golfwear Upscale department, specialty stores and greengrass golf shops Womenswear Christopher Blue Denim and sportswear Upscale department, specialty stores and boutiques JAG Jeans Denim and sportswear Upscale department and specialty stores Austin Reed Career apparel and sportswear Department stores Exclusively Misook Knitwear Upscale department and specialty stores Tailored Claiborne Men s mainstream tailored clothing Moderate retailers Austin Reed Tailored clothing, sport coats and slacks Department stores Sportswear Monarchy Men s denim and sportswear Upscale department stores, specialty stores and boutiques Ted Baker Men s sportswear Department stores and specialty stores Golden Bear Men s sportswear and golfwear Popular retailers International Coppley Men s tailored clothing and furnishings Upscale department and specialty stores 26

Hartmarx Future Strategy Fabric Outsourcing and Gross Margin Improvement Back end-front end strategy allowing SKNL to supply fabric and garments from India generating telescopic margins across the owned supply chain from India to the US Hartmarx is currently sourcing fabrics predominantly from Europe at high cost basis Potential to source Hartmarx branded products from Leggiunio/HVFC Will enable SKNL to develop relationships with major US wholesales and retailers Operating Expense Reduction Right Sizing business to meet current requirements Headcount reductions in selling, distribution and administration Synergies derived from supply chain and logistics improvements Shut down of unprofitable brands and licenses Renegotiations and terminations of leases Overall cost curtailment measures across Hartmarx Wholesale & Retail Development in EU, China & India Develop a wholesale and retail channel in Europe Already identified over 100 points of sale in the EU Retail development and product introduction in India, China Opportunity to leverage legacy brands and licenses and product extensions Multiple Brands Hartmarx has multiple owned and licensed brands in its portfolio at various price points and market segments Right brand management, development and promotion of relevant product champions for each brand Retail-led product merchandising and category expansion 27

Proven Financials Revenues 1 PBDIT 1 24,000 CAGR: 35.6% 22,604 5,500 CAGR: 40.4% 4,730 18,000 17,487 4,400 3,938 INRmm 12,000 12,295 INRmm 3,300 2,200 2,399 6,000 1,100 - - FY07A FY08A FY09A FY07A FY08A FY09A US$mm 253 359 464 US$mm 49 81 97 Net Income after minority interest Gross COGS / Revenue 1 INRmm 3,500 2,800 2,100 1,400 700 - CAGR: 19.6% 1,235 FY07A FY08A FY09A US$mm 25 42 36 Note: Assuming exchange rate of INR 48.69 per US$ 1 Excluding other income and extraordinary Income 2,056 1,766 100% 80% 60% 40% 20% 0% 69.1% 67.5% 68.1% FY07A FY08A FY09A 29

India A Growing Market Significant Growth in Purchasing Power (Number of People) Favorable Demographic mm 500 400 300 200 100 - Source: CAGR: 9.4% 433 449 343 370 2005 2006 2007 2008 Euromonitor Indian Consumption Pattern mm population Source: Working Age Population as % of Total Population (Age 15 64) 1,000 800 600 400 200 - Eeromonitor 644 687 61.0% 62.0% 761 64.0% Growing Middle Class 833 65.6% 2002 2005 2010 2015 Working age population 68% 66% 64% 62% 60% 58% 56% % of total population mm 1,600 1,400 1,200 1,000 800 600 400 200 0 29 13 129 11 13 11 243 44 457 8-19 167 454 45-550 514 702 742 598 447 314 1985 1995 2005 2015E 2025E A Growing middle class whose size exceeds the population of the USA or the European Union Income class 2005 2015 2025 (US$) households households households 1,969-4,376 91.3 106.0 93.1 CAGR >21,882 1.2 3.3 9.5 10.9% 10,941-21,882 2.4 5.5 33.1 14.0% 4,376-10,941 10.9 55.1 94.9 11.4% 0.1% <US$1,969 US$1,969-US$4,376 US$4,376-US$10,941 US$10,941-US$21,882 >US$21,882 <1,969 101.1 74.1 49.9-3.5% Source: Note: McKinsey Global Institute Figures are rounded to the nearest integer and may not add up exactly to column totals Source: McKinsey, NCAER Middle class 31

Indian Textile Market Domestic and Export Share in Indian Textile Industry Market Segmentation Exports, 35.0% Source: : Confederation of Indian Textile Industry Domestic, 65.0% The overall market can be divided into 3 segments Fabric is retailed over the counter as for Customized tailoring Garment industry Garments: Growth due to : Growth in organized retailing (spreading beyond metro cities) Enhanced propensity towards fashion (international exposure) Home Textiles Growth due to Rapid growth in disposable incomes indulgence at home Increased exposure enhanced home décor etiquette Few players in the organized segment opportunity for growth Industry Growth Drivers One of India s most important sectors accounting for 4% of the country s GDP Total exports of textiles and apparels has increased from US$17.8 bn in 2005-06 to US$22.4bn in 2007-08 EU the largest exports market for India (31.6% share in 2007-08) Growth drivers of India s Textile Industry Availability of raw materials: Domestic cotton production has grown at a 9% CAGR over the past four financial years and has reached 31.5 mm bales in 2007 08 Growing young population: 2/3rd of India s population is under 35 years of age, the median age being 24 years Rising household incomes: number of households with annual income more than US$4,376 will grow with a 2005-2025E CAGR of 11.9% Boom in organized retail: Organized retail in India is on a high growth trajectory and is expected to grow at around 27% per annum over the next five years Source: E&Y, Mckinsey 32

International Market International Market Overview International Market Growth Opportunities Americas 25% ROW 10% Europe 33% Quota restrictions & tariff barriers phased out Significant production capacity shift to India due to High quality manpower, raw material and lower costs Inherent strengths in textile production India, second largest producer of apparel and textiles after China Only country with ability to compete with China in the textile and apparel industry (USITC report) Asia Pacific 32% Total Revenues 2008: US$1,972bn The global apparel and textiles industry generated total revenues of $1,972.2bn in 2008, representing a compound annual growth rate (CAGR) of 2.9% for the period spanning 2004-2008 Major initiatives by Government of India (recognized as a high-growth area) De-reservation of substantial portion of the industry Fiscal reforms in the synthetic textiles business underway Increase in investment ceilings FDI freely allowed in the sector Developed markets looking at India as the alternative to China for textiles & apparel imports India s share in the US s apparel imports have increased 4-fold from 4% pre-quota to 15% post-quota Source: E&Y, Datamonitor 33

GIC investment in Reid & Taylor (India) Limited GIC invested INR 7,900mm in the form of shares and warrants for 23.03% stake Company emerges stronger financially and has greater operating flexibility Structure Key Transaction Details SKNL Pre Transaction 100% subsidiary Transfer of assets at book value as a going concern with effect from January 1, 2008 Transfer of Assets/ Liabilities Reid & Taylor fabric & garments business spun-off as 100% subsidiary Funds to repay lenders Working capital facilities of INR1,000mm apportioned to RTIL Debts amounting to INR.2,500mm relative to transferred assets moved to RTIL for settlement Post Transaction INR 4,400mm loaned to SKNL for repayment of debt R&T Post transaction, SKNL owns 76.97% in RTIL INR 7,900 mm 23.03% GIC 35

Reid & Taylor (India) Limited - Overview Fabrics Ready-to-Wear garment Products Facilities Pure wool, poly wool, poly viscose, pure linen, pure silk, and superfine polyester Wide collection of designs Manufactured at the state-of-art facility at Mysore, Karnataka Ready to Wear Formals Suits (Pure wool, wool blended) blazers, tweed jackets, shirts in pure cotton and CVC, trousers in Wool, Wool blended and cotton Ready to Wear Casuals T-Shirts, smart casual shirts, polos, chinos and denims Accessories Ties, belts, trousers, cufflinks and other accessories Distribution Retailed through distribution channels including wholesale dealers, retailers and Reid & Taylor exclusive stores Retailed through multi-brand outlets, Reid & Taylor exclusive stores, several large format stores and retail chains Market Position One of the leading players in worsted fabrics in India 36

Reid & Taylor (India) Limited - Organization Chart CEO & MD RTIL COO COO Textiles Ready To Wear PRESIDENT Mktg. & Sales PRESIDENT Operations PRESIDENT Intl. Business Sr. VP Finance & Accounts VP Sales Head Supply Chain & Logistics Artistic Director Head Finance GM Production 37

Reid & Taylor (India) Limited- Product Profile Have high wearability, ease of maintenance, and superior shape retention Pure wool, pure linen and pure silk, the blended fabrics made from fine merino fleece in high counts such as 90s, 100s and 130s and superfine polyester Plains and designs such as stripes, checks, bird s eye, drills, herringbones, dobbies, jacquards Premium image at affordable prices Wide collection of designs and shades 38

Reid & Taylor (India) Limited - Product Profile Ready to Wear Formals Suits (pure wool, wool blended) blazers, tweed jackets, shirts in pure cotton and CVC, trousers in wool, wool blended and cotton Ready to Wear - Casuals T-Shirts, smart casual shirts, polos, chinos and denims Accessories Ties, belts, trousers, cufflinks and other accessories 39

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