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Transcript of corporate presentation - April 2010 - BF Utilities Ltdbfutilities.com/pdfs/Corporate...
Disclaimer
The presentation has been prepared for information purpose, it is not a solicitation of any offer to buy or sell
any security or instruments.
This presentation contains forward-looking statements. Forward-looking statements in this presentation are
subject to number of risks and uncertainties, some of which are beyond our control. Our actual
results, performance, prospectus or opportunities could differ materially from those expressed in or implied
by the forward looking statements.
BF Utilities Limited
by the forward looking statements.
These forward looking statements are made as of the date of this presentation. We undertake no obligation
to publicly update or revise any forward looking statements whether as a result of new information, future
events or otherwise, except as required by law.
“BF Utilities” refers to BF Utilities Limited and its subsidiaries and affiliates.
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BF Utilities :
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BF Utilities : Overview
Overview of the Kalyani Group
Kalyani Group is one of the leading industrial houses in India, focusing on the following
sectors:
Engineering Steel
Automotive & Non-Automotive Components
Renewable Energy & Infrastructure and
Specialty Chemicals
Bharat Forge Limited, the flagship company of the group, is one of the leading commercial
forging companies globally, specializing in highly value-added and critical products (market
BF Utilities Limited
capitalization: $1.3 billion(1); Revenues: $1.1 billion)
A global forging conglomerate with a capacity of over 750,000 TPA spread across 12
locations and 6 countries
Listed on the Bombay Stock Exchange and National Stock Exchange in India
Foray into capital goods for the power sector to capture the India infrastructure growth
opportunity; has set up joint ventures with Alstom, Areva and National Thermal Power
Corporation
Mr. B N Kalyani (Promoter and Chairman), with over 27 years of experience, is the principal
driving force behind the growth and success of the Kalyani Group of Companies
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Notes:1. As of march 15,2010
BF Utilities: Snapshot of Key Projects
BF Utilities Limited
Bangalore Mysore Infrastructure Corridor (BMIC) Project Hubli - Dharwad Road Project
Sole manager to execute the BMIC project
One of the largest integrated infrastructure development
project in India
30km bypass road connecting the twin cities of Hubli and
Dharwad in North Karnataka
Operational since last 9 years with current toll collection of
BF Utilities Limited5
164 km tolled expressway connecting Bangalore and
Mysore including 3 Kms of Elevated road at Bangalore
Side
Development of infrastructure and amenities including
townships, with state-of-the-art connectivity
Nandi Economic Corridor Enterprise (“NECE”) is an SPV
promoted by NICE to execute a part of Section - A of the
BMIC project
62 km long toll road in Bangalore side
Interchanges and its Developments
Part of Township – 1 (1732 Acres out of 2775 Acres)
around Rs.220 million per annum
Notified as part of the NH4 (Pune-Bangalore), also part of
the Golden Quadrilateral Road Project of India
������������ �
Wind power plants set up at Thoseghar in Satara District
Maharashtra with a total capacity of 18.33MW
Set-up to satiate the power requirements of the Kalyani
Group companies
Corporate Structure
BF Utilities*(Market Cap - $768MM)**
NICENHDL
(Hubli-DharwadBypass)
Wind Mill(18.33MW)
100% 74.5% 69.53%
64.8% 100% 100%
BF Utilities Limited6
Part of Section A,Section B & C
NECE(Part of Section A)
Various Utilities
Road & Interchange
Development (62 km Toll Road)
Part of Township 1 Development
Expressway & Interchange
Development (99 km Toll Road)
Five Townships Development
(Incl. Part of Township 1)
Power
Water
Telecom
Bundled Utilities
(e.g. Bus / Truck
Terminals, Hospitals, etc.)
Notes:* Post de-merger of BF Investment Limited pursuant to a Scheme of Arrangement recently approved by the High Court** As of March 15, 2010
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BMIC Overview
World Class Infrastructure Project
Nandi Infrastructure Corridor Enterprise Ltd. (NICE) is implementing the Bangalore Mysore Infrastructure Corridor (BMIC) Project, a
world class integrated infrastructure development project, which consists of :
A 164 km tolled expressway connecting Bangalore and Mysore with following road components :
o a 9.1 km Link road connecting Centre of Bangalore with the Peripheral Road
o a 41 km Peripheral Road around the City of Bangalore linking Hosur Road - NH-7 to Tumkur Road – NH-4
o a 111 km Expressway between Bangalore & Mysore
o a 3 km Elevated Road at Bangalore Side
5 New Township Developments along the Expressway between Bangalore and Mysore
Concomitant development at the interchanges along the Peripheral Road and Link Road
Rights to supply power, water, telecommunication services, sewage and waste water management etc.
Single planning authority – Bangalore Mysore Infrastructure Corridor Area Planning Authority (BMICAPA) – for the entire project
BF Utilities Limited8
Concession period for toll road is 40 years including 10 years of construction period
Section Section -- CC Section Section -- BB Section Section -- AA
• Expressway: 36Km to 111 Kms• Interchange Developments• Township: Eco Tourism Center• Elevated Section of the Link Road at Bangalore Side
• Expressway: 12Km to 36 Kms• Interchange Developments• Townships: Commercial
Center, Heritage Center and Industrial Center
• Link Road: 9.1 kms• Peripheral Road: 41 kms• Expressway: 0Km to 12 Kms• Interchange Developments• Township: Corporate Center
Close Proximity to Bangalore
With Bangalore’s population approaching 8.5 million, it is believed that implementation of the BMIC Project
holds the key to addressing the infrastructure problems of the city.
Growth Patterns in Bangalore Growth Patterns in Bangalore BMIC Project Location OverviewBMIC Project Location OverviewDevanahalli
Towards Devanahalli
Hebbal
Brookfields
BF Utilities Limited9
Mahadevapura
Whitefields
Sarjapura RoadProposed
Hi tech City
Hosur Road
Bannerghatta Road
Kanakapura Road
Mysore Road
CBD
Existing Development Corridors
Future Development Corridors
Section – A Infrastructure Development Nearly Complete
The project entails development of 62 km of Toll Road and one
Township near Bidadi
9.1km Link Road linking city centre to Outer Peripheral Road
41km Outer Peripheral Road linking Hosur Road to Tumkur
Road
12km Expressway up to Bidadi
Township – 1 (Corporate Center) near Bidadi with 2775 Acres
Project OverviewProject Overview
BF Utilities Limited10
Township – 1 (Corporate Center) near Bidadi with 2775 Acres
Total Land for Section – A is 7,290 acres (Out of this NECE
Land is 6,173 Acres and NICE Land is 1,117 Acres)
Integral part of Bangalore urbanization infrastructure
Project StatusProject Status Almost 88% of toll road work is completed
Total 4,188 acres out of 7,290 acres of total land has been
acquired by GoK and transferred to the NICE / NECE
Balance expected shortly pending few documentation
requirements
Significant Value in Section B and C
The project entails development of 99 km of Toll road, four self-
sustained townships and 3 kms of Elevated road at Bangalore
Side
Expressway from Bidadi to Mysore
Development of up to 400MW of power plants with exclusive
right to transmit and distribute power to the BMIC
Development and maintenance of water / waste water and
Project OverviewProject Overview
BF Utilities Limited11
sewage treatment facilities for BMIC
Exclusive right to use 155 million litres of water per day from the
Cauvery river for BMIC and the right to draw 85 million litres of
water per day from Bangalore Water Supply & Sewerage Board
Right to contract for telecommunication and broadcasting
services within the BMIC area
Project StatusProject Status Work on Section B and C expected to start in Oct / Dec 2010
Superior Toll Road Specifications and Planning
Superior specifications / planning with room for
revenue upside
Major expenses on the toll road already incurred
Stable income from toll linked with traffic growth
Current toll rates are at ~35% discount to
government sanctioned rates
Concession agreement permits further 10% rate
22.625.5 25.3 26.9 27.8 28.5
31.0 32.0
36.5
26.3
34.8
0
5
10
15
20
25
30
35
40
Ap
r-0
9
Ma
y-0
9
Ju
n-0
9
Ju
l-0
9
Au
g-0
9
Se
p-0
9
Oct-
09
No
v-0
9
De
c-0
9
Ja
n-1
0
Fe
b-1
0
Current Toll Collection (Rs. Million)Current Toll Collection (Rs. Million)
BF Utilities Limited12
escalation every year; implying significant
revenue upside
Significant ancillary revenue streams
“OOH” advertising, bus and truck terminals, etc.
Potential revenue upside once connectivity to
airport is established and Expressway from Bidadi
to Mysore is completed.
Connectivity at IC 2/7 (Bannerghatta)
Restoration of Original Toll Rates
Commencement of Operations on Expressway
Triggers For Enhancing Toll CollectionTriggers For Enhancing Toll Collection
Ap
r
Ma
y
Ju
n
Ju
l
Au
g
Se
p
Oct
No
v
De
c
Ja
n
Fe
b
Townships: Significant Value Creation Potential
Large contiguous and well connected land bank available in a Tier 1 city in India
Township to serve demographic needs of the area, provide decongested living experience
Infrastructure first, development later model
Unlike SEZs where the land is leased and not owned, land in this case is free hold with clear
and absolute title, free of all encumbrances
Planned multifaceted development
BF Utilities Limited13
Quality and reliability of infrastructure
Vastly improved connectivity
Expansion of Bangalore on the peripheries
Zoning in place with Single Area Planning Authority (BMICAPA)
Plans to develop 200-300 million sq ft of land in the next 5 – 7 years
Eligible for a 10 year tax holiday under section 80I(A) (subject to MAT)
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Other Key Assets
Hubli-Dharwad Bypass Road
Project Project
OverviewOverview
KeyKey
FeaturesFeatures
30km bypass road connecting the twin cities of
Hubli and Dharwad in North Karnataka to
avoid city traffic and congestion
Located right in the middle of the Pune-
Bangalore stretch (835km) of the NH4
Already completed and operational since last 9
years with current toll collection of around
Rs.220 million per annum
Traffic growth at 11.5% CAGR, toll collection 4
3
2
1
Dharwad End Toll PlazaDharwad Goa
Crossing End Toll Plaza
Tarihal CrossingToll Plaza
Kalghatgi Crossing
BF Utilities Limited15
26 years of concession period including 1 year construction for Phase I and 2.5 years for
Phase II
Date of Signing of BOT Concession Agreement: 05-Feb-1998
Date of Commencement: 06-May-1998
End of Concession Period: 05-May-2024
ConcessionConcession
AgreementAgreement
Traffic growth at 11.5% CAGR, toll collection
growth at 14.2% CAGR for past 5 years
Notified as part of the NH4 (Pune-Bangalore)
which is part of Golden Quadrilateral Road
Project of India
Toll rate escalation at 10% p.a. as compared to
current projects at inflation rate
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5
Kalghatgi CrossingToll Plaza
AyodhyanagarCrossing Toll Plaza
Hubli EndToll Plaza
Wind Energy Farm
18.33 MW wind farm spread over an expanse of 300
acres at Thosegar in Satara district, Maharashtra
Power generated utilized by Bharat Forge Ltd. at
its Pune plant
Consists of 51 wind energy generators (WEGs) of
230KW and 11 WEGs of 600KW
Out of the total capacity, 14.65MW of eligible
BF Utilities Limited16
Out of the total capacity, 14.65MW of eligible
capacity has availed
carbon credits benefits
Wind farm has been generating power at a plant load
factor of ~25% which is one of the highest in the
state
Has received several industry awards and
accreditations
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Appendix
BF Utilities: Overview of Toll Road Assets
Toll Road AssetsToll Road Assets
Section Kms Current Status Company
Link Road 9.1 Completed NECE
Peripheral Road 41.0 Nearly completed NECE
Expressway till Bidadi 12.0 Under construction NECE
BF Utilities Limited18
Expressway till Bidadi 12.0 Under construction NECE
Expressway from Bidadi to Mysore(incl. elevated road)
102.1 To start in Oct / Dec 2010 NICE
Hubli Dharwad Bypass Road 30.0 Operational NHDL
Total 194.2
NECE Overview
BF Utilities Limited19
NECE Location Map
BF Utilities Limited20
NECE Toll Road Specifications and Planning
Cost/Km is high compared to a typical highway project due to
International quality standards followed for the road construction; and
Total length of the road Total length of the road –– 62km; total project cost 62km; total project cost –– Rs 20.4 billion.Rs 20.4 billion.
BF Utilities Limited21
The Resettlement & Rehabilitation (R&R) package costs to build quality infrastructure
Old House New House Ruined Old Temple New Temple
NECE Toll Rates Summary
Government Sanctioned Rates (As per Toll Agreement, for the Year 2010)Government Sanctioned Rates (As per Toll Agreement, for the Year 2010)
Section km Car Bus Truck LCV MAV 2W
Hosur Road-Bannerghata Road 7.9 25 67 44 26 47 10
Bannerghata Road-Kanakapura Road 6.8 21 58 37 22 40 9
Kanakapura Road - Mysore Road 8.2 26 70 45 27 49 10
Mysore Road-Magadi Road 9.5 30 81 52 31 57 12
Magadi Road-Tumkur Road 7.5 23 63 41 25 45 9
Mysore Road -Tumkur Road 17.0 53 144 93 56 102 21
BF Utilities Limited22
Section km Car Bus Truck LCV MAV 2W
Hosur Road-Bannerghata Road 7.9 15 44 29 17 31 6
Bannerghata Road-Kanakapura Road 6.8 13 38 25 15 27 5
Kanakapura Road - Mysore Road 8.2 16 46 31 18 33 6
Mysore Road-Magadi Road 9.5 19 53 35 21 38 7
Magadi Road-Tumkur Road 7.5 15 42 28 16 30 6
Mysore Road -Tumkur Road 17.0 33 95 63 37 67 13
NECE Current ChargesNECE Current Charges
Actual Photos of BMIC Project
BF Utilities Limited23
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Thank You