Sarthi Capital Advisors Private LimitedBridging the Gaps

August, 2018Privileged and Confidential

Five Core Electronics Limited

Investor Presentation

Content Page

Corporate Overview 4 - 13

Operational Overview 15 - 21

Business Outlook & Strategy 23 - 25

Financials 27 - 29

IPO Valuation 31 - 32

Index

2

Corporate Overview

3

In House Manufacturing

Global Clientele

Business

Corporate Overview

1. The company was incorporated in the year 2002, as Five Core Electronics Ltd (FCEL).

2. FCEL is into manufacturing and exporting of Public Address Systems (PAS).

3. Company has a line of over 1100 products and each of the products is developed through extensiveR&D and customer feedback. Exports accounts for approximately 90% of the total sales.

Five core is exporting its PAS to 56 countries covering almost all of the America, Europe, Africa, Asia andMiddle east.

ISO certified company equipped with 3 modern manufacturing/assembling units, 1 in Delhi and 2 inBhiwandi (Rajasthan) to produce world-class P.A. Equipment equipped with state of art technology todevelop and create, reliable and value-oriented audio solutions to varied range of customers.

Product InnovationThe company houses highly-qualified R&D team of B-TECH’s and Electrical & Electronics Engineers, whichkeep on creating new products and searches the possibilities of extension in the products to maintain theleadership in the industry.

PresenceFCEL products are installed at Concert Hall, Petrol Pumps, Airport, Auditorium, Railway Stations, MusicBands, Outdoor Gathering, Stadiums, Malls, Stage Show, Hotels, Restaurants and many more.

4

Brief

FCEL and its Subsidiaries

• FECL is parent company and has five subsidiaries namely, 5 Core Acoustics Pvt

Ltd, Pan Arabian Venture FZE, Ems & Exports pvt ltd, Kaneer Industries Pvt Ltd and

South Asia Exim Pte Ltd.

• 5 Core Acoustics Pvt Ltd: Company was incorporated in the year 1995, with

manufacturing facility at Rajasthan, 5 Core is engaged in manufacturing and selling

of Public Address Systems

• Pan Arabian Venture FZE: Founded in 2017, company is engaged in selling of PAS in

Middle East.

• South Asia Exim Pte Ltd: Incorporated in the year 2016, It’s a Singapore based

subsidiary engaged in selling of PAS.

• Ems & Exports pvt ltd: Founded in the year 2017.

• Kaneer Industries Pvt Ltd: Incorporated in the year 20175

Key ProjectsAchievements

Key Achievements and Projects

Developed and installed 24 carat goldmicrophones and stand in Golden TempleAmritsar.

First to develop DJ columns in plastic and launchthem in India.

It has successfully installed and executed the P.A.System at the Kumbh Mela, Ujjain. This evententitled to be listed in Limca Book of Records forthe largest audio wiring in the world.

Has successfully supplied megaphones to Delhipolice and traffic police.

The only ones to develop speakers from 1” upto35” in size.

5 core is the largest manufacture of loudspeakersin India.

Company has successfully launched products one-commerce websites likeAmazon, Flipkart, Snapdeal, etc.

Nairobi Airport, Kenya

Golden Temple, Amritsar

Mosques in Mecca/Medina, Saudi Arabia

Bangladesh Garment Factories

SAARC Conference Center, Kathmandu – Nepal

Mashhad Mosque, Iran

South African Churches

Columbia Discotheques and Clubs

Sri Lankan Army

The United Nations Organisation Centre,

Ethiopia

And many More Prominent Places

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Products – Public Address Systems

Amplifiers Mixing Console Microphones & Stands

7

Products – Public Address Systems

Speakers & Columns Outdoor PA PA Spare Parts

8

Man Power in FCEL

Sales & Marketing

59

R & D 6

Quality Control

6

Purchase17

Inventory6

Advertising 4

Import3

Export5

I T3

HR 4

Accounts16

Admin15

Banking17

Total Work Force

294

Production132

9

Top 10 Electronics ESC Member Exporters 2016-17

Five Core is among Top 10 Electronic Item Exporters

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No. Company Exports Rs cr

1 Videocon Industries Ltd 372.2

2 Samsung India Electronics Pvt Ltd 220.9

3 Moser-Bear India Ltd 198.3

4 Five Core Electronics Ltd 114.4

5 Happy Acoustics Pvt Ltd 86.9

Certificates and Recognitions – 5 Core

ISO Certification NSIC Certificate for Purchase Enlistment

Export House Recognition

Export House Recognition to EMS & Exports

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Other Business lines of the Group

Group also manufactures ConsumerElectronics Products and Car AudioProducts which includes: Computer Speakers Bluetooth Speakers Home Theatre Head Phones

Speakers

Car Bass Tubes

12

Operational Overview

13

Board of Directors

Amarjit Singh KalraHe is the Promoter and Managing Director of our Company. He holds a Diploma in Engineering. He has anexperience of around 30 years in production and marketing of electronic goods. He was appointed assecretary of All India Radio and Electronics Associations for several years. He was also appointed as anexecutive committee member in Federation of United Nations. He has been selected by the executivecommittee of Electronics Hardware & Software Export Promotion Council (ESC).

Surinder Kaur Kalrais the Promoter and Non-Executive Director of our Company. She is a graduate from TribhuvanUniversity, Nepal. She has a rich experience of more than 25 years in production and marketing of electronicgoods. She has planning and organization skills and is aware of the rapid technological changes as per thedemands of the international market which contributes in the overall development of the business. Themajor goal of her career is manufacturing and producing fewer more bespoke products with less emphasison high volume manufacturing.

Raj kumar Projapatiis the Non - Executive & Independent Director of our Company. He is a commerce graduate. He has morethan 32 years of experience in the field of accounts and taxation. He is also an independent director in FiveGroup Company, Five Core Exim Limited.

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Organisation Structure

Board of Directors

Managing Director

Production Factory Head

Sales & Marketing

International

Domestic

Online

Government Tender

System IntegrationHRDRecruitmentCompliances

Export & Import

Procedure & Documentation

Accounts & Finance

Company SecretaryBanking

Account/Finance/Tax Team

Admin

Inventory

Quality

Input Quality ControlProcess Quality ControlOutput Quality Control

Information Technology

Purchase

Import

Local

Commodities

Advertising

Print Media

Digital

Media

R & D New Product Development

Feature Enhancement

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Domestic Foot Print – Five Core Group

Domestic

Dealers & Distributers

Online

Institutional

System Integration

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Global Foot Print – Five Core Group

Over 55 Nation’s

North & South America

Africa

Australia

Europe

Asia

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Domestic and Export Contribution to Sales

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FY16

Domestic Sales

Export Sales

11%

89%

FY18

Domestic Sales

Export Sales

16%

84%

FY17

Domestic Sales

Export Sales

14%

86%

Digital Presence

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Manufacturing Facility

20

Business Outlook & Strategy

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Why Five Core

Cutting Edge

Wide Range of products for various uses like in office, outdoor, Largeand Small Establishment, Malls, Religious places, Home etc.

More than 1100 items sold under the Brand ‘ 5 Core ‘.

Competitive pricing compared to large MNC likeHarman, JBL, Shure, Peavey, Sennheiser etc.

Global reach in more than 55 countries.

Quality products, equipped and manufactured with latesttechnologies to suit different arena and requirement whether it ispublic domain or at the home.

USP’s

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SWOT Analysis

Promoters' extensive experienceled to strong relationships withcustomers and suppliers.

Established market position andbrand position with wide productportfolio.

Growing and stable business withimprovement in sales andoperating margins .

Strength

Strengthening the domesticfootprints

The group may expand its reach toother countries which will help itsbusiness to grow.

Opportunities

Working capital requirement.

Weakness

Industry in highly fragmented. Lower bargaining power compared

to large players

Threat

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Long Term Business Strategy

Scaling up the Business and

new Footprints

In the past the sales has grown over ~ 25% CAGR over the past years andFCEL would continue to accelerate it further in the years ahead.

At present FCEL has footprints in 56 countries, 6 continents and wouldfurther enter to the new geographies / countries adding new distributorsthat would top the volume growth and capture market share.

Company would also benefit from the existing dealer network who placerepeat and increased orders and by cross selling of products.

Company has laid out dealer network in India which will also contributeto growth.

Organic Growth

New Acquisitions/

Consolidation of unlisted entities

FCEL would step in to the strategic investment / acquisition of any smallcompany that suits the business segment.

Will lead to entry to new market and new clients. May also explore consolidating the current unlisted businesses under

the listed entity.

Inorganic Growth

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Financials

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Financial Snap Shot – Standalone Five Core Electronics

FY 18 reflects consolidated numbers including Subsidiaries.

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122.9170.7

335.9

0.0

100.0

200.0

300.0

400.0

FY16 FY17 FY18

Sales in Rs cr

0.9 1.4

14.1

0.0

5.0

10.0

15.0

FY16 FY17 FY18

PAT in Rs cr

4.6 7.0

27.5

0.05.0

10.015.020.025.030.0

FY16 FY17 FY18

EBITDA in Rs cr

3.8 5.7

25.2

0.0

10.0

20.0

30.0

FY16 FY17 FY18

EBIT in Rs cr

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Financial Statements in Rs cr

Balance Sheet FY16 FY17 FY18Equity Share capital 5.50 5.50 9.29Reserve & Surplus 16.38 17.69 58.10Shareholders Funds 21.89 23.19 67.39Minority - 0.01 -Pending Share Application Money - 12.34 -Long Term Loan 6.80 13.51 16.50Other long term liabilities - 0.12 0.10

Current LiabilitiesShort Term Borrowings 15.23 22.47 34.60Trade Payables 1.10 1.63 27.09Other Current Liabilities 3.32 3.26 3.80Short term provisions 0.19 0.44 2.30Total Current Liabilities 19.84 27.79 67.79Source of Funds 48.52 76.96 151.78

Fixed Assets 4.07 11.65 24.57Loans & Advances 6.04 0.01 0.09Other Assets 0.17 0.30 0.32

Current Assets:Inventories 24.87 36.24 61.38Debtors 0.41 8.30 19.90Cash & Equivalents 6.21 12.48 23.37Loans & Advances 6.75 7.98 22.15Total Current Assets 38.24 65.00 126.78Application of Funds 48.52 76.96 151.78

Income Statement FY16 FY17 FY18

Sales 122.94 170.65 335.90

Expenditure:

Operating Expenses 107.49 148.91 284.98

Employee Expenses 5.73 7.51 10.40

Other Expenses 5.12 7.28 13.05

Total Expenditure 118.34 163.70 308.43

EBITDA 4.60 6.95 27.47

Depreciation 0.81 1.22 2.27

EBIT 3.79 5.73 25.20

Finance Cost 2.33 3.70 7.60

EBT 1.46 2.03 17.60

Taxes 0.51 0.67 3.49

PAT Before Minority 0.95 1.36 14.11

Less Minority 0.00 0.00 0.00

PAT After Minority 0.95 1.36 14.11

FY 18 reflects consolidated numbers including Subsidiaries.

Ratio Matrix

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Ratio Analysis FY16 FY17 FY18

EBITDA Margin 3.7% 4.1% 8.2%

EBIT Margin 3.1% 3.4% 7.5%

EBT Margin 1.2% 1.2% 5.2%

PAT Margin 0.8% 0.8% 4.2%

RoCE 17.3% 24.6% 37.3%

RoNW 4.3% 5.9% 20.9%

Total Debt/Equity 1.01 1.55 0.76

FY 18 reflects consolidated numbers including Subsidiaries.

Quarterly Data

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Income Statement 31-Mar-18 30-Jun-18 Growth %

Sales 90.33 109.01 21%

Expenditure:

Operating Expenses 76.06 93.21

Employee Expenses 2.37 3.05

Other Expenses 4.49 3.83

Total Expenditure 82.91 100.09

EBITDA 7.42 8.91 20%

Depreciation 0.50 0.53

EBIT 6.93 8.39 21%

Finance Cost 2.68 2.04

EBT 4.25 6.35 49%

Taxes 0.42 0.67

PAT 3.83 5.68 48%

Ratio Analysis 31-Mar-18 30-Jun-18

EBITDA Margin 8.2% 8.2%

EBT Margin 4.7% 5.8%

PAT Margin 4.2% 5.2%

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Price Data as on 31st July, 2018 INR

Face Value 10

Equity Shares Outstanding (Cr) 1.26

EPS as per FY 18 15.2

Market Price 140.10

Market Cap (INR Cr) 176.81

Trailing PE 9.4

Promoters70%

Others30%

Shareholding Pattern as on June, 2018

Capital Market Data

Disclaimer

All data and information is provided for informational purposes only and is not intended for any factual use. Itshould not be considered as an offer of sale of services mentioned in this information memorandum. NeitherSarthi Capital Advisors Pvt. Ltd. (SCAPL) nor any of its group companies, directors, or employees shall be liable forany of the data or content provided for any actions taken in reliance thereon. Sarthi Capital Advisors Pvt. Ltd. isSEBI registered Category-1 Merchant Banker.

This document has been prepared by Sarthi Capital Advisors Pvt. Ltd. as a part of research only. In rendering thisinformation, we assume and relied upon without independent verification, the accuracy and completeness of allinformation that was publicly available, the information has been obtained from the sources we believe to bereliable as to the accuracy or completeness. This information is given in good faith and we make norepresentations or warranties, express or implied as to the accuracy or completeness of the information and shallhave no liability to you or your representatives resulting from use of this information.

This document contains certain “forward-looking statements”. These forward-looking statements can generally beidentified by words or phrases such as“aim”, “anticipate”, “believe”, “expect”, “estimate”, “intend”, “objective”, “plan”, “project”, “shall”, “will”, “willcontinue”, “will pursue” or other words or phrases of similar meaning. Similarly, statements that describestrategies, objectives, plans or goals are also forward-looking statements. Sarthi Capital Advisors Pvt. Ltd. cannotassure investors that the expectation reflected in these forward-looking statements will prove to be correct. Giventhese uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements andnot to regard such statements as a guarantee of future performance.

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For Private Circulation Only 32

Corporate Headquarters:Mumbai159/11, Amar Brass Compound, Vidya Nagari Marg,Kalina, Santacruz(E), Mumbai-400098Landline: (022) 26528671-72, Fax: (022) 26528673

Regional Office:New Delhi

411, Pratap Bhawan, 5 Bahadurshah Zafar Marg,New Delhi - 110002

Landline: (011) 23739426 – 27, Fax: (011) 23739424

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