RPG Enterprises

1. RPG Enterprises Respond, Perform, Grow 7 Business Sectors, 20+ companies, 60,000+ employees, 4,00,000 + shareholders

2. RPG Enterprises – Business Sectors Companies Business Sectors Revenue FY 2009 Rs. 14,500 crs 2

3. RPG Enterprises - Financials ( Rs. Crs ) * As on 29th July, 2009 3

4. HARRISONS MALAYALAM LIMITED Investor Presentation August 2009 http://www.harrisonsmalayalam.com/

5. CONTENTS • PROFILE • PRODUCTS • TEA & RUBBER PLANTATIONS • TEA & RUBBER SCENARIO • OTHERS • FINANCIALS • ADVANTAGE HML & OTHER INITIATIVES

6. Business Profile • History • Oldest company in South India established in 1844. • Company’s Indian Operation from Quilon in 1907. • Acquired by RPG in 1988. • Largest Employer in Kerala. • Business Overview • Manufacture of Tea & Rubber spread over 58,000 acres. • Managing Plantations - 13 Tea & 11 Rubber. • Pineapple, Banana, Pepper, Cardamom Etc. • Engineering Division, Tissue Culture, Consumer Marketing, Clearing & Shipping. • Products, Markets • Tea - Orthodox, CTC, Organic, Packet, Flavored Tea bags. • Rubber - Centrifuged, TSR, Sole Crepe, Latex Crepe. • Markets - Domestic & Export to Russia, Ukraine, Europe, Egypt, Sri Lanka, Pakistan, Turkey & Middle East.

7. Business Excellence Rubber plantation company in India Tea producer in South India. Producer of pineapple in India. Corporate nursery with over 4.50 lac plants Employer in Kerala after the State Government besides providing indirect employment to an equal number LARGEST

8. Business Excellence Harrisons Malayalam Limited is the Winner of 7 Awards in the The Golden Leaf International Award 2009 organized by the Indian Tea Board and judged by an International Jury of Tea Tasters.

9. Products TEA Premium Tea Bags Premium CTC & Orthodox Teas Premium Single Estate Teas Organic Tea Popular Tea RUBBER Pale Latex Crepes ISNR Cenex OTHER CROPS Pineapple Banana Pepper Cardamom Coffee

10. Plantations

11. Tea Scenario

12. Tea Producers

13. TEA : INDIAN SCENARIO The Indian tea consumption demand is chugging along at about 2.5 – 3% CAGR , which is a demand growth of about 20-25 million kg of tea. Consumption is increasing more than production

14. TEA : INDIAN SCENARIO • India’s Tea auction is switching to Digital Trading to achieve higher volumes , ensure fairer prices and lower transaction costs. • Demand is coming from countries like Pakistan, Iran, Iraq and Egypt. • Area under production is likely to remain Stagnant as major tea producers are of the view that the increased production should come from -Higher yield per hectare -Improved techniques of production Tea prices would firm up more since domestic consumption was buoyant.

15. Tea : Price Rise Tea prices have increased in all the auction centers across the world in Jan-Jun 2009 over the same period last year. Indian teas fetched the world’s third largest price average (after Srilanka & Kenya) .

16. HML Production vs Avg. Realisation Low production due to unfavourable Climatic Condition . The average price of tea increased by 48.29% to Rs 94.79 per kg in Q1 FY10

17. Tea : Infilling/Replanting The existing tea bushes are about 80-90 years old. Originally about 6700 bushes were planted per hectare which was considered optimum at that time. Over the years the bushes have come down substantially which has resulted in decreased productivity. In the process of infilling new high yielding clones are being planted in the existing fields thereby increasing the population (to approx 9000 bushes per hectare) which will contribute to increasing the productivity by more than 50%. The benefits arise only after 4 years which is the optimal stage from when commercial harvest is possible. The projected expenditure for infilling is Rs. 1 Crs per annum for the next 3 years. Replanting being planned to increase Yield per hectare

18. Rubber

19. Rubber : Global Supply Crunch Global consumption of natural rubber is projected to increase at 3 to 5 % per year up to 2015, largely because of rising demand by China, Europe, Russia and India. (mln tonnes) Consumption of natural rubber has surpassed production , globally as well as in India

20. Rubber : Price Ribbed Smoked Sheet (RSS- 4) Indian Prices have managed to surpass International Prices which augurs well for the Domestic Rubber Industry.

21. HML Production vs Avg.realisation The average price of rubber was Rs. 117.28 per kg against RSS IV average of about Rs. 97.49 per kg in Q1 FY10. .

22. Rubber Talk • Rubber is a Product of synthesis and the yield per tree ranges from 4 to 5 kgs per year depending on the clones. • Immature Phase • 6 to 7 years • Special efforts are on to reduce this period • Mature Phase • Present – 28 years • Proposed – 24 years • Rubber Board recommendation – 20 to 24 years • Tapping Interval • Trees are tapped once in 3 days in the first 13 years and once in 2 days during the balance period • Tapping task • After 13 years of Downward tapping Tree is tapped for 11 years Upward • Downward tapping : 400 trees per tapper per day • Upward tapping : 350 trees per tapper per day • Tapping commences at 5.30 am and is comlpleted by 8.30 to 9.00 am • Latex is collected 3 hours after completion of tapping

23. HML’SRUBBER SALE • Rubber is largely sold in the domestic market via agents and dealers • HML publishes daily prices on its website and based on that price transactions takes place. • HML rubber sales at a premium to tyre grade rubber, generally the buyers are sacttered and are large in numbers. • However some of the big corporate buyers include Hindustan latex (for medical purpose), Radhu Product (for rubber thread), Indus Medicare (for medical purpose) , Harpex (for cycle tyre) etc. • The export of rubber is limited to only 4-6% of the produce. India is a net importer of Rubber.

24. Rubber : Replanting The life of a rubber plant is approximately 35 years. Why Replanting ???? Old rubber plants need to be phased out with new clones when their economic yield drops. We have Lower productivity because of old low-yielding plants and the current tapping cycle is 28 years. To boost up productivity, accelerated replanting with new generation clones has been planned, which will reduce the tapping cycle to an optimum 24 years thereby increasing the output per tree. The projected expenditure for replanting for the next 3 years is about Rs. 8 Crs per year.

25. Others

26. Tissue Culture Harrisons Malayalam, has its Plant Tissue Culture Unit at Hosur about 40 kms from Bangalore, India's Garden city. Largest corporate nursery with over 4.50 lac plants Largest corporate collection of Budwood germplasm of Rubber This state of the art tissue culture lab has its attention focused on quality and delivers a quantity of Four Million plants per annum to its customers. Harrisons has carved a niche for itself in this segment by its successful propagation of rare and superior plants and has been exporting to the world market since 1992. Products Syngonium Philodendron Banana Spathyphyllum Cordyline Ficus Yucca Calathea

27. Financials

28. Revenue Break-up FY 09 Total Income Rs. 291 Cr Previous year Rs. 205 Cr

29. Robust Growth since FY04 (in Rs. Crs) * As on March 31,2009 HML Revenue Growth is at a CAGR of 19 %

30. Q1 FY10 Performance (in Rs. Crs) During the quarter, there was an extended dry spell experienced in South India Steep increase in the wage rates also led to an increase in operating costs

31. ADVANTAGE & OTHER INITITIATIVES • ADVANTAGE HML • GROWTH INITIATIVES • TEA TOURISM • CORPORATE SOCIAL RESPONSIBILITIES

32. Land Assets worth above Rs.2000 crs Unparalleled Domain Knowledge. Largest Rubber Plantation in India ADVANTAGE HML Strong hold on South Indian Market Expertise to manage large work force

33. Growth Initiatives Expansion Plan Modernize all Tea & Rubber factories with State – of - the art technology. Convert CTC Factories to Dual manufacture. Implement ERP with real time connectivity to remote location for better operational efficiency. Set up distribution network in India & Abroad. Business Plan Top Line to grow by increasing manufacture of Tea & Rubber from bought Leaf & bought Latex operation. Increase profitability by improving productivity, Plant capacity utilization & proper commodity price discovery. Optimum Land utilization through scientific infilling & replanting in Tea & Rubber. Exploring possibilities for tea tourism.

34. TEA TOURISM Kerala has emerged as the most acclaimed tourist destination of the country in the recent Past with foreign tourists crossing 3.67 Lakhs mark in 2006. PLACES TO VISIT Mattupetty (13 km from Munnar) : Situated at a height of 1700 Mts famous for its highly specialized dairy farm..Over 100 varieties of high yielding cattle are reared here. The Mattupetty lake and dam , just a short distance from the farm,is a beautiful picnic spot. Pothamedu (6 km from Munnar) offers an excellent view of the tea, coffee and cardamom plantations in Munnar. ideal for trekking and long mountain walks. Nyayamakad (10 km from Munnar) Land of breathtaking Waterfalls cascading down a hill from a height of about 1600 meter Wallardie & Moongalaar Tea Garden Located just 18 km fromThekkady which is one of India's most fascinating natural wildlife sanctuaries, where you can watch wildlife at close range.

35. Corporate Social Responsibility An equal Opportunity employer with 7700 men and 8800 women workforce Winner of FICCI awards thrice for corporate initiatives in family welfare as a result of its Comprehensive Labour Welfare Scheme – aimed at improving the quality of life of the employees and their dependents. Pioneer in corporate social responsibility in Kerala with initiatives such as “Rakshita” a centre for development of children and adults with multiple disabilities Providing free medical aid for underprivileged in Rural Kerala. The only company in this sector to bag the Kerala State Pollution control award for its factory on more than one occasion emphasizing the responsibility and initiative taken by the company in preserving the natural resources for future generation.