SpinWell Corp.

Ltd Plates and Coil Division OPERATION GROWTH

7/11/2012

Contents

1 2 3 4 5 6 7

Global Scenario Impact on SpinWell Corp Way Forward to Growth Options Suggested Recommendation Score Card

Addressing Challenges

Global Scenario

US Loan Defaults Increasing Cost of Raw Material Europe Economic Crises

Middle East Crises

Global Issues VAT specialism

Asia Demand Plunging

Volatile Foreign Exchange

China Capacity Idling

India Growth Rate Going South

Impact on Spinwell

Anjar Facility operating on 26% Capacity

Reducing Margins

Rising Cost of Raw Material

Low Cost Pipes In India dumped by China

Demand from Shipping Going Down

Strong Domestic Competition

SpinWell Financials

7000 6500 6000 5500 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 2008-09

6906 6532 6110 5753

Projected

Sales PBT

809 356
2009-10

525

410
Dec-13

2010-11

Growth Way Forward

Innovation

Vertical Integration

Strategic & Operational Objectives

Consultant Advise

Three Options

Option 1 : T3 Profiling Technology

Innovation in Carbon Steel Flat Product Demands on product properties and Cost Pressure

Process of Tailored Tubes T3 Profiling Technology

Light weight steel tubes

Option 1 : T3 Profiling Technology

BENEFITS

CO2 Safety

Lower Emission

Increased Safety

Technology Enhancement

Hybrid Cars in Europe shall be benifitted as Automobile Components can be manufactured from SCL product

Automobiles can be lighter and 20% cheaper using this technology

Lighter and 20% Cheaper

Option 1 : T3 Profiling Technology

S
Dependence on growth of Shipping industry reducing Weak Indian Hybrid Market

W
Operating Margin higher %
Exapansion of Product Portfolio as per Strategic Objective Steel Mann Corp working on similar technology Continuous price pressure in Auto High Capital Investment

Recession in Auto Ind

Long time to enter in Auto Majors

Strong European Market for Hybrids German Auto major tie-up Emission Reduction Technology

Option 1 : T3 Profiling Technology

Cost Price

Rs 6000 / MT Rs 7200 / MT

Gross Margin up from current 12% to 20%

Expected additional 33% Sales Expected additional operating profit of 18 Cr Capital Investment Required is 250 Cr (Refitment)

Option 2 : Construction (Sustainable Steel Technology)

Strategic Objective of Diversification in Construction of Building using Sustainable Steel Technology Low Wastage, Hight Flexibility, Off-site Mfd, High Speed, Aesthetic Appeal Zero Carbon Building A Reality

Target 0

34% of Govt Spending instead of 17%

Higher share of Govt Spending

Sustainable Social, Environmental and Economic Benifits Triple the Bottom Line

People, Planet and Profit

Option 2 : Construction (Sustainable Steel Technology)

S
No competition for next 2-3 years
Diversification Zero Carbon Strategy

W
Margins not expected to improve

Stake acquisition can take time

Application in All mix of buildings Higher share in spending from Govt

Option 2 : Construction (Sustainable Steel Technology)

Additional Projected Sales: Rs. 93.5 Cr (Gov Contracts) Cost Price Rs 7,800 / MT Rs 12,000 / MT

Gross Margin down from current 65% to 60% Sales expected to double

Capital Investment Required is 225 Cr (Expansion)

Option 3 : Vertical Integration Stake in PetroTech

Acquire 50% stake in PetroTech PetroTech CMS (Construction Management Software)

Value to asset owners, operators & contractors

Status of pipeline using Geo-referencing Managing complex projects to quality, safety, schedule and environment

Option 3 : Vertical Integration Stake in PetroTech

S
R&D on tracking solution

W
Integration with spinwell R&D software for pipe laying
End to end solution - EPC More business for Piping Division

Entry into non core business

Competitors can buy the CMS software Its a startup company

Manage more no. of projects Usage in Indo-Pak-Iran gas pipeline

Option 3 : Vertical Integration Stake in PetroTech

Lease fee per annum per project Cost of design per project Projected Revenue Projected Margin Topline addition to Piping Business

75 Lacs 50 Lacs 18.49 Cr (9 .2 Cr) 28% 89.6 Cr

Bottomline addition to Piping business

Cost of 50% Stake ROI

9.8 Cr
23 Cr 1.5 Years

Recommendation

Select Option - 3 Acquiring 50 % stake in PetroTech

End to End Piping Solution Company Plates, Pipes, Laying

Broaden the clientele of Oil and Gas through sales of software

Entry to non Oil and Gas Sector Expand operations to pipe laying Acquire Turnkey

Management Expertise
Alignment with strategic objective of pipe laying leveraging on software operations

Use access to government and end to end solution capability to

bag India-Pakistan-Iran gas pipeline project as turn key contractor.

Recommendation

Select Option - 3 Acquiring 50 % stake in PetroTech

Become market leader in Piping Turnkey Project Market

Expand turnkey contractor portfolio to other infrastructure sector

Further expand operations into Power, Steel and Other similar sectors requiring Turnkey Services.

Accomplish the strategic objective of generating Rs. 12000 by

year 2020.

Increase in capacity utilisation of Anjar pipe manufacturing

facility by 17% (total 80%) which will help the facility sustain.
Payback period of 1.5 years

Top 3 Criteria

Getting into Turn key / EPC Business and achieve strategic objective of Rs. 12000 Cr turnover

Tap Australian and Middle East pipe laying business by

offering one stop solution after having experience in domestic projects.

Higher returns on capital investment.

Score Card

Option-1

Option-2

Option-3

EPC Business

Internationalizati on

ROI

10

Addressing Challenges

Build strong team with focus on EPC competency Build particularly cost, time and performance risk

management capability through processes

Provide only Petrotechs software to competitors and retain the tracking software portion developed by Spinwell R&D Get experienced business leaders from sister divisions to manage this company

Questions

Questions