Project

Strictly Private and Confidential

Madhucon Infra Limited

1

A Unique Investment Business Proposition

August 2014

Madhucon Group Overview

MIL – Road Vertical- Madhucon Toll Highways Limited

Power Vertical- Simhapuri Energy Limited – Biz Proposition

Madhucon Infra Limited – Mezz/Structured Finance Proposition

Annexures

Madhucon Group History Madhucon Group’ 2020 - Business Architecture Madhucon Group: Corporate Structure of Domestic Business Corporate Structure of Madhucon’s Infrastructure Portfolio – Domestic Madhucon Infra Ltd- Business Verticals - Domestic

1983 Madhucon Projects Limited – the flagship company of Madhucon Group was established. It has significant operational infrastructure assets with interests in road BOTs, thermal power projects, mixed real estate development and coal exploration & mining with a revenue of Rs 1,618Cr in FY 2014. MPL is listed on NSE and BSE

Madhucon Granite Limited was established as a subsidiary of MPL and is in the business of quarrying dimensional granite blocks and production of polished slabs catering to the needs of international markets all over the world.

Simhapuri Energy Limited (“SEL”) was established to develop, construct, operate and distribute power from coal based power projects in India. SEL is implementing 600MW imported coal based thermal power plant. Phase I of 300MW is operational since May 2012. 150MW of Phase II is also operational and remaining 150MW is in the final stages of synchronization.

1988

2005

Madhucon Infrastructure Limited (MIL), established in 2006 is a subsidiary of MPL and is the holding company for infrastructure assets such as BOT Roads, Power and coal mines.

2006

MIL's wholly-owned subsidiary Madhucon Toll Highways Ltd ("MTHL"), formed in 2008 is the Group's road Infra assets company, having executed 1,459 lane km (across four toll-based assets) and 1,953 lane km (two toll roads, three annuity roads) under construction and implementation

2008

PT Madhucon Indonesia (PTMI) was set up in 2005. The Company owns coal mines and engages in mine development, exploration and trading of coal.

PT Madhucon Sriwijaya Power (PTMSP), set up in 2012,is a Madhucon group company and engaged in thermal power generation. It is currently implementing a mine mouth of 300MW (2X150MW) power project. PTMSP plant is located in Dawas, South Sumatra, Indonesia

2012

International Domestic

Madhucon Group History

Madhucon Group’ 2020 - Business Architecture

C

onstruction

M

anagement

Project Management & Execution

Project D

evelopmen

t &

Engineering

Power

Infrastructure Mining

EPC

Thermal Power Co –gen Power

Railways Projects

Irrigation Dams ,

Spillways And Tunnel

Industrial & Real Estate

Projects

Mine Mouth Project Indonesia

Dawas Mine Muara Dua

Power Project AP India

Bridges & Flyovers

Highways and Toll Gates

Road projects BOT & Annuity

Coal Mine

Project Indonesia

Granite Mine & processing

India

Coal Mine project

South Africa

MadhuconGroup

Ports, Airport Logistic

W a s t e

W a t e r

M a n a g e m e nt

Oli & Gas, Pipe Line

I n d u s t r i a l

&

T e c h p a r k

Design & Engineering

Transportation

Madhucon Group: Corporate Structure of Domestic Business

100% 100%

74.86% 24.48% 39.79% 48.86% 48.75%

51.00% 50.97% 51.05%

4 Operational toll road assets 3 Under construction road assets 2 Under implementation road assets

Roads [MTHL]

Madhucon Projects Ltd

Phase I – 300 MW – Operational Phase II – 150 MW – Operational Phase II – 150 MW – COD Oct 2014

Power [SEL]

50.3%

94.89%

Roads Power

Infrastructure [Madhucon Infra Ltd.]

91.95%

Madhucon Agra Jaipur Exprwy.

Toll

TN Exprwy.

Toll

Trichy Thanjavur Exprwy.

Toll

Madurai Tuticorin Exprwy.

Toll

Vijayawada Machilipatnam

Toll

Rajauli Bakhtiyarpur

Toll

Chhapra Hajipur Exprwy.

Annuity

Barasat Krishnagar

Exprwy.

Annuity

Ranchi Exprwy.

Annuity

99.97%

54.12%

45.58% MPL shareholding

MIL shareholding

MTHL shareholding

17.14%

MIL effective shareholding

91% 100% 100% 92%

100%

78.67%


Roads [MTHL]

Madhucon Projects Ltd

Phase I – 300 MW – Operational Phase II – 150 MW – Operational Phase II – 150 MW – COD Oct 2014

Power [SEL]

50.3%

Roads Power


Corporate Structure of Madhucon’s Infrastructure Portfolio - Domestic

MineMouth300Mwproject inconstruction phase

Power PT Power Indonesia

NamaHolding PtyLtd Singapore

Mine- Concession area Dawas Province of South Sumatara with 550 mntonnes reserve as per JORC Report

Exploration andMining atinitial level of operation

Mine PT Mine Indonesia

Energy Vertical

Mining Vertical

Nama Energy Pty Nama MinePty

Corporate Structure of Madhucon’s Power & Mine Portfolio – Global

Madhucon Infra Ltd- Business Verticals - Domestic

Roads -Madhucon Toll Highways Ltd.

SPV Type State Length (Lane km)

Status

Madhucon Agra Jaipur Expressways (MAJEL)

Toll UP -RAJ 251 Operational

TNDK Expressways (TNDK)

Toll TN 352 Operational

Trichy Thanjavur Expressway(TTEL)


Madurai Tuticorin Expressways (MTEL)


Chhapra Hajipur Expressways (CHEL)

Annuity

Bihar 272 Under Construction

Barasat Krishnagar Expressways (BKEL)

Annuity

West Bengal

340 Under Construction

Ranchi Expressways (REL) Annuit

y JHARK 654 Under Construction

Vijayawada Machilipatnam Expressways (VMEL)

Toll AP 258 Under Development

Rajauli Bakhtiyarpur Expressways (RBEL)

West Bengal

Bihar 429 Under Development

Power - Simhapuri Energy Ltd.

SEL -Phasing

Type State Capaci

ty( MW)

Status

Phase 1 CFBC– Sub

critical

Coastal AP- seem Andhra

300 Operational

Phase -2 CFBC– Sub

critical

Coastal AP-

seemandhra

300 Operational

Phase -3 Super

Critical

Coastal AP-

seemandhra

660 Planned

Phase 4l Super

Critical

Coastal AP-

seemandhra

660 Planned


MIL – Road Vertical- Madhucon Toll Highways Limited (MTHL)



Annexures

MTHL: Portfolio of 9 road assets MTHL -Roads Projects Snapshot MTHL-Operational Assets - Financial Dashboard MTHL-Under Construction Assets - Financial Dashboard MTHL-Under Development Assets -Financial Dashboard

74.86% 24.48% 39.79% 48.86% 48.75%


Roads [MTHL]

Madhucon Agra Jaipur Exprwy.

Toll

TN Exprwy.

Toll

Trichy Thanjavur Exprwy.

Toll

Madurai Tuticorin Exprwy.

Toll

Vijayawada Machilipatnam

Toll

Rajauli Bakhtiyarpur

Toll

Chhapra Hajipur Exprwy.

Annuity

Barasat Krishnagar

Exprwy.

Annuity

Ranchi Exprwy.

Annuity

MTHL shareholding

72.00%

45.58% 100%

50.3%

Roads Power


MIL effective shareholding

100% 100% 100%

100% 100% 91% 92% 24.5% 92%

100%

MTHL: Portfolio of 9 road assets

MTHL -Roads Projects Snapshot

Company Type MIL

share*

Length (Lane km)

Total Project Cost

(Rs Cr)

Debt (Rs Cr)

Equity (Rs Cr)

Grant (Rs Cr)

Concession (years)

COD / Exp

COD Risk Matrix

Operational Road Assets

Madhucon Agra Jaipur Expressways (MAJEL)

Toll 91% 251 387.9 230 99 38 25 May 09 Low

TNDK Expressways (TNDK)

Toll 100% 352 376 224 77 75 20 Nov 09 Low

Trichy Thanjavur Expressway(TTEL)

Toll 100% 288 423 261 98 64 20 May 11 Low

Madurai Tuticorin Expressways (MTEL)

Toll 24.5% 568 982 598 240 144 20 Jun 11 Low

Under Construction Road Assets

Chhapra Hajipur Expressways (CHEL)

Annuity

100% 272 870 585 285 - 15 Aug 14 Medium

Barasat Krishnagar Expressways (BKEL)

Annuity

100% 340 980 706 274 - 17 Dec 15 Medium

Ranchi Expressways (REL) Annui

ty 100% 654 1,655 1,192 463 - 15 Dec 15 Medium

Under Development Road Assets

Vijayawada Machilipatnam Expressways (VMEL)

Toll 92% 258 740 387 144 209 20 March 2016-

Medium

Rajauli Bakhtiyarpur Expressways (RBEL)

Toll 79% 429 1,360 952 408 - 30 March 2017-

Medium

MTHL-OPERATIONAL ASSETS - FINANCIAL DASHBOARD

Particulars (Rs Cr) FY12A FY 13A FY 14A FY 15P FY 16P FY 17P FY 18P FY 19P

Sales 48 54 56 63 71 71 81 92

EBITDA 41 43 11 53 57 57 66 75 Depreciation 15 18 (35) 7 8 9 10 12

Interest 27 29 29 27 25 23 22 19

PAT (37) (4) (5) 15 19 19 27 35 Debt 229 226 220 206 189 177 161 138

MAJEL

TNDK

TTEL

MTEL

Policy paralysis Regime Policy push Regime


Sales 31 37 37 42 48 54 61 69 EBITDA 26 31 31 35 43 46 52 60 Depreciation 23 22 (30) 11 13 15 17 19

Interest 26 25 27 24 24 22 20 17

PAT (29) (23) (9) (0) 5 9 13 19 Debt 175 186 186 186 175 160 140 114


Sales 21 25 28 48 41 47 54 61 EBITDA 17 21 22 43 35 42 47 54 Depreciation 21 23 23 28 28 28 28 28

Interest 23 27 26 29 29 29 29 27

PAT (30) (34) (32) (15) (22) (50) (9) (1) Debt 229 242 242 231 228 226 219 204


Sales 42 63 69 79 103 118 135 154 EBITDA 35 53 59 68 91 109 126 140 Depreciation 47 63 63 63 63 63 63 63

Interest 51 68 69 66 68 67 68 66

PAT (70) (88) (84) (62) (40) (47) (60) 8 Debt 551 581 580 578 577 563 549 526

(TollBased)

(TollBased)

(TollBased)

(TollBased)

MTHL-UNDER CONSTRUCTION ASSETS - FINANCIAL DASHBOARD

REL

BKEL

CHEL

Particulars (Rs Cr) FY 16P FY 17P FY 18P FY 19P FY 20P Sales 131 131 131 131 131

EBITDA 125 125 124 124 127

Depreciation 78 78 78 78 78

Interest 68 62 56 50 43

PAT (21) (16) (10) (5) (17)

Debt 532 486 439 386 326

Particulars (Rs Cr) FY 17P FY 18P FY 19P FY 20P FY 21P Sales 148 148 148 148 148

EBITDA 140 139 139 140 143 Depreciation 77 77 77 77 77

Interest 82 78 74 69 64

PAT (19) (16) (12) (21) (43) Debt

674 641 604 562 516

Particulars (Rs Cr) FY 17P FY 18P FY 19P FY 20P FY 21P

Sales 266 266 266 266 266


Interest 141 134 126 117 106

PAT (28) (21) (14) (32) (74) Debt

1,142 1,083 1,012 932 842

(Annuity based)

(Annuity based)

(Annuity based)

MTHL-UNDER DEVELOPMENT ASSETS -FINANCIAL DASHBOARD

RBEL

VMEL

Particulars (Rs Cr) FY 17P FY 18P FY 19P FY 20P FY 21P

Sales 63 72 82 93 105


Interest 48 48 48 47 45

PAT (20) (12) (2) 8 1 Debt 385 383 381 370 350

Particulars (Rs Cr) FY 18P FY 19P FY 20P

FY 21P

FY 22P

Sales 159 179 202 229 260

EBITDA 145 165 187 213 242

Depreciation 66 66 66 66 71

Interest 128 126 123 118 112

PAT (50) (28) (3) 22 46

Debt 943 924 895 857 800

(TollBased)

(TollBased)





Annexures

Project Snapshot – Operational Power Project Project Update Power off take Snapshot Key Project Parameters and Capex Scale up SEL – Operational Project -Financial Dashboard

Project Snapshot – Operational Power Project

Particulars Project Details

Planned Capacity Ph-I&II: 600 MW (4x150 MW)

Plant type Sub Critical

FSA Linkage /Plan

Captive Mine (Overseas): Sponsor owns coal mines in Indonesia which assures coal supply over long term

Imported coal supply agreement for 15 years.

Imported coal Agreement for supply of 3.0 MTPA for 15 years with Group company which owns the mines

Procurement from open market to take price advantage and as a stand by arrangement

Plant Commercial Operations

Phase-I (300MW) and Phase -II (3000MW)

450 MW Operational and 150 MW is under synchronization

Off take Agreement

PPA with PTC India 200 MW (Gross) for 25 years

Balance 100 MW (Gross) on Merchant Basis

Power Tolling Arrangement(PTA) with PTC India 150 MW (Gross) for 25 years. This PTA(Unit-IV) is under process for conversion to PPA

Balance 150 MW(Unit-III) to be traded on Merchant Basis

Project Structure

PhaseI & II

Capacity 600MW (Phased development)

Project Cost INR 3510 Cr/ 585mn USD

Project Leverage 2.4:1

Project Time Line for Ph-II Oct’14

Project Update

Particulars Status

Land & Water • Entire land of 537 acres is acquired

• Water intake from Kadaleru creek located adjacent to plant

EPC & Equipment

• EPC: Madhucon Projects Ltd. for Phase-I&II

• BTG: Boiler-WUXI Huaguang Boiler, Turbine-HTC, Generator-Jinan Power Eqp Factory

• BoP: CHP-Tecpro, AHP-Macawerbeekay, Switch Yard-ABB, CT-Hamon Shriram

Fuel Supply

• Captive Mine (Overseas): Sponsor owns coal mines in Indonesia which assures coal supply over long term. Long term Imported coal supply agreement for 15 years.

• Imported coal supply agreement signed with Mine owner for 3 MTPA for tenure of 15 years

• Procurement from spot market based on competitive rates and requirement

Fuel Transportation

• Fuel is being transported by road from port to plant location

• Direct transport from Wharfage to plant coal stock yard.

• Conveyer belt for direct transportation from South port to plant coal stock yard is under development.

Power Evacuation • BPTA signed with Powergrid Corporation (PGCIL) for 546 MW

• Connected to Powergrid Manabolu 765/400kV substation through dedicated 14kms 400 kV D/c (Quad)

O&M • In-house O&M managed by a dedicated team

Power off take Snapshot

APCPDCL

Merchant (PPA)

200 MW gross

PTC India

25 years

Trader

PPA Merchant basis

100 MW gross

Simhapuri Energy

Short term/Medium

90 MW gross

Rs 5.40/ kWh

Until 29.May.15

› Phase-I

› Phase-II

**Power Tolling agreement (Under conversion to PPA)

150 MW gross

PTC India

25 years

Trader

Term

PPA Merchant basis with KSEB

130 MW Net

Simhapuri Energy

Rs 5.56/kWh Rs 1.50/kWh (To be offered under PPA) Tariff

Term

Payment security by PTC for contract term

APCPDCL

174.5 MW Net

Rs 5.40/ kWh

Until 29.May.15

Discom

Tariff

Term

Traded through PTC

PPA

Off-take

PPA

Key Project Parameters and Capex Scale up

› Capacity 600 MW

› Capital Cost Rs 3,510 Cr

› Capex/MW Rs5.85 Cr/ MW

› DE Ratio 72.27%:27.73%

› PLF (%) 85%

› Aux Consumption 9.0%

› Station Heat Rate 2,385

› Interest rates

› Ph-I 12.29%

› Ph-II 13.75%

› O&M Cost/MW Rs 0.09 cr

› O&M Escalation 3.00%

› Coal supply mix 100% Imported

› Landed cost (Coal) Rs 3,533/MT

› Coal GCV 4,200 Kcal/ Kg

› Coal escalation 2.0%

› 80-IA Considered

Particulars Ph-I Ph-II Total Land 27.5 25.3 52.8 Civil Works 188.0 189.6 377.6 EPC Works 1,096.5 1,267.0 2,363.5 Pre-Operative Expenses 53.2 58.4 111.6 Contingency 0.0 0.0 0.0 Interest During Construction 250.5 306.8 557.3 Working Capital Margin 23.0 24.3 47.3 Total 1,638.7 1,871.4 3,510.1

Particulars Ph-I Ph-II Total

Equity 516 519 1,035.3 Debt 1122.4 1352.4 2,474.8 Total 1638.7 1871.4 3,510.1

In Rs Crore

Power Sale Mix

Short Term

Long Term 60%

100% 40%

Year 1 (FY15) Year 25

Year 5 (FY 19)

Particulars (Rs. Cr) FY13A FY14A

Total Income 372 1103 EBITDA 209 397 EBITDA Margins 56% 36% PAT 29 141 PAT Margins 10% 13% Debt/Equity 3.2 2.4

Net Worth 804 974

SEL – Operational Project -FINANCIAL DASHBOARD

Particulars (Rs. Cr) FY 15P FY 16P FY 17P FY 18P FY 19P FY 20P

Total Income 2,209 2,250 2,280 2,317 2,357 2,246

EBITDA 1,147 1,133 1,121 1,112 1,102 1,035 EBITDA Margins 52% 50% 49% 48% 47% 46%

PAT 512 482 494 508 523 493 PAT Margins 23% 21% 22% 22% 22% 22%

Debt/Equity 1.55 1.08 0.79 0.59 0.44 0.33

Net Worth 1,548 2,030 2,524 3,032 3,555 4,048

POLICY PUSH REGIME

POLICY PARALYSIS REGIME





Annexures

Indicative Structured finance proposal Transaction Structure Transaction Structure and Benefits Details

Indicative Structured finance proposal

Particulars Amount (INR Crore)

Sources of Funds

Loan from Investor

NCDs issued by MIL to Investor 440

Revolving Credit Facility availed by Coal Trading Company from Investor 110

Total Cash Inflow 550

Use of Funds

Capital Infusion in Road SPV's

CHEL 80

REL 100

VMEL 70

BKEL 75

RBEL 75

400

Outstandings – MIL

ICICI 100

Tata Capital 34

IFCI 16

150

Total Cash outflow 550

22 Strictly Private & Confidential

Transaction Structure

Transaction Structure Transaction Structure (after repayment of first revolving credit)

4 Operational toll road assets

3 Under construction road assets

2 Under implementation road assets

Roads [MTHL]

Phase I – 300 MW – Operational

Phase II – 150 MW – Operational

Phase II – 150 MW – COD Oct 2014

Revolving credit INR 110

crores

Credit Facility of INR 440

crores

Promoted by Promoter Family

Repayments

Nomura Coal Trading Co. (Dubai/Singapore)

Madhucon Infra Ltd. (India)

Power [SEL]

ICICI, TATA

Capital, IFCI Outstanding

loan repayment of INR 150

crores

Revolving credit INR 110

crores

Promoted by Promoter Family

Repayments

Nomura Coal Trading Co. (Dubai/Singapore)

Madhucon Infra Ltd. (India)

Payments for coal supplied to SEL

Funds infused into road assets – INR 400 crores

Interest Payment

Annual Procurement – 3.0 MTPA

Supply coal to SEL at

Coal Price Index

4 Operational toll road assets

3 Under construction road assets

2 Under implementation road assets

Roads [MTHL]

Phase I – 300 MW – Operational

Phase II – 150 MW – Operational

Phase II – 150 MW – COD Oct 2014

Power [SEL]

Annual Procurement – 3.0 MTPA

Supply coal to SEL at

Coal Price Index

Payments for coal supplied to SEL

Debt Repayment of INR 110 Cr INR 110 crores infused

as equity into MIL


Transaction Structure and Benefits Details

Benefits of Structure

► Precedence in Payment - The above structure shall result in repayment of loan and interest to Nomura from operating expenses of SEL – that shall have precedence in the waterfall mechanism over the other payments such as senior lenders payments. Thereby, the structure is more beneficial when compared to structure where payments are made through dividends by SEL

► Tax Benefit to SEL - As per the provisions of the Income Tax Act, coal payments are be tax deductible at SEL level resulting in tax benefit to SEL. Further this structure results in saving of DDT of 17.5% , which would have been payable had the repayment been done through dividends

► Tax Benefit to Coal Trading Company – Coal Trading Company will be formed in a tax haven, thus providing income tax benefits to the company

► Foreign Exchange Risk – Coal Trading Company shall not be exposed to the foreign exchange risk as the purchase and sale of coal will be in dollar terms

► Lower Interest Rate – The revolving credit facility of INR 110 crores will have lesser interest rate than working capital interest rates in India

Structure

► Coal Trading Company to be incorporated in Dubai /Singapore based on evaluation of the tax benefits

► Coal Trading Company will be promoted by the Promoter family and will be thinly capitalized

► Nomura will provide revolving credit facility of INR 110 crores to the Coal Trading Company

► Nomura will also provide credit facility (NCDs) of INR 440 crores to Madhucon Infra Limited (MIL).

► Out of the total proceeds of INR 550 crores, around 150 crores will be utilized for repayment of loans at MIL and balance will be infused into road SPVs

► Coal Trading Company shall procure coal at a discount to the coal index and supply coal at coal index price to SEL, thereby retaining the necessary margins to repay the revolving credit facility of INR 110 crores

► After the repayment of first revolving facility of INR 110 crores, Nomura will reinstate the revolving credit limit of INR 110 crores to coal trading company which shall be utilized for infusion of equity into MIL. MIL will utilize this amount for part repayment of the NCD facility of Nomura





Annexures

Infrastructure Landscape in India MTHL – Road Assets Power Market Dynamics in India Madhucon Business Model - Diagnostics Valuation Drivers MPL--EPC Vertical--financial Snapshot

Infrastructure Landscape in India

MTHL – Road Assets

Power Market Dynamics in India

Madhucon Business Model - Diagnostics

Annexures

Infrastructure Landscape and Opportunities Infrastructure Business Premise Infra Financing An Economic Development Platform Key GOI development initiatives – Roads Sector

Valuation Drivers

MPL--EPC Vertical--financial Snapshot

Infrastructure Landscape and Opportunities

Source: Planning Commission,

32.70%

16.40% 16.90%

11.50%

9%

4.60%

3.50% 1.60%

2.70%

1% 0

XII Five Year Plan: Infrastructure investment (USD 1.072 tn)

Power

Roads and Bridges

Telecom

Railways

Irrigation

Water supply and sanitation

Ports

Airports

Storage

Infrastructure Landscape and Opportunities

Parameter NHAI NHDP Non-NHDP

Lane 2,4 .6 & Expressway 2 4 6 Expressways

2 4 Express ways

Kms 20,000 Kmnext 3 years@6,000 Km per year

12,200 2600 3000 1000 10,000 200 200

Business Opportunity

Rs 12000 Cr ($ 2Bn) Ra 1400 Bn ($233 Bn) Over next 3 years

Rs 360 Bn ($6bn)

Rs 32 Bn ($0.6Bn)

Rs 153 Bn ($ 26 Bn)

• 5,000 kms of NHs to be taken up for improvement in riding quality, 2,000 kms for strengthening of pavements, construction of bridges of INR92 bn investment.

• Development of NHs under Border Road Organization estimated at INR30 bn

• 1,610 kms in North Eastern region to be taken up (estimated opportunity size of INR120 bn)

Total of ~ Rs 800 Bn

• DMICProject –Estimated INR 32000 Cr investmentby 2020 -1500 kms rail network. • CBICProject–Estimated INR 10000 Crinvestment – Roadand Rail network • Growth momentum around- Mumbai, Bangalore, Chennai, Kolkata, Hyderabad & Ahmedabad

Special Infra Corridor Projects

• Under the EPC mode, the government funds the road projects

and a private developer undertakes the project.

• Under the PPP mode, the private developer develops the road project and collects his return through toll or annuity.

• Project Developers had bid aggressively during 2010-2012 when the government awarded a record 147 road projects worth Rs 1.47 lakh crore ( Rs 1.47 trillion).

• The high expectation while bidding was attributed to India's high economic growth, which has slowed considerably over the past few years.

• Road projects worth Rs 83,000 crore ( Rs 830 billion) are pending completion.

• The National Transport Development Policy Committee, had earlier pegged private investment needs in the road sector at Rs 6.65-lakh crore ( Rs 6.65 trillion) over the next 20 years , which translates into Rs 33,250 crore ( Rs 332.50 billion) a year.

• Government doesn’t have room to develop infrastructure. • Private investment will lead access to long term funds. • Banks are not in position to fund infrastructure because of Asset

Liability mismatch.

Infrastructure Business Premise

Business Case Vs Challenges

Infra Financing An Economic Development Platform

Growth Drivers Enabling Framework

Highways on new Government agenda Single Window Clearance, Fast Track clearances and exemptions (Environmental ,Land Acquisition, state level clearance, Responsive Bureaucracy etc)

Planning to lay 10km per day Quick Right of way (RoW) Approval

Investment Planned -$ 6.9 bn by 2020 Converting BOT Projects into Government funded

Road Development results into multifold advantages in terms of Rural, Agriculture & Industry Development.

Increase in Banking Exposure in Road Sector from 11% -15%. Long tenure & low cost bankingfinance.

Key GOI development initiatives – Roads Sector





Annexures

MTHL – Operational Road Assets MTHL – Under Construction Assets MTHL – Under Development Assets

Valuation Drivers


MTHL – Operational Road Assets


Location Bharatpur- Mahwa section ofNH-11 in Rajasthan

Length 251 Kms

Project Type Toll Based

COD Date May ’09

Concession Period Apr’06 to Apr’31 (25 years)

Total Project Cost 387.90 Cr

Equity 99.36 Cr

NHAI Grant 38.40 Cr

Debt 230.00 Cr


Project Status Operational

Toll collected FY 2014 48.15 Cr

Grant in 2014 8 Cr

MAJEL - Rajasthan


Location Karur – Dindigal Section ofNH 7 in Tamilnadu

Length 352 Kms. Project Type Toll Based COD Date Nov ‘09 Concession Period Oct ‘06 to Oct ‘26 (20 years) Total Project Cost 376 Cr Equity 76.86 Cr NHAI Grant 74.66 Cr Debt 224.00 Cr Project Leverage 1.48:1 Project Status Operational Toll collected FY 2014 37.25 Cr

TNDK – Tamil Nadu


Location Maduraito Tuticorn Tamil Nadu Length 568 Kms. Project Type Toll Based COD Date June ’11 Concession Period Jan ‘07 to Jan ‘ 27 (20 years) Total Project Cost 982.4 Cr Equity 240.4 Cr NHAI Grant 144.0 Cr Debt 598.0 Cr Project Leverage 1.5:1 Project Status Operational Toll collected FY 2014 68.9 Cr

MTEL – Tamil Nadu


Location Tanjavur – Trichy Section ofNH67 in Tamilnadu

Length 288 Kms Project Type Toll COD Date May ’11 Concession Period Dec ‘06 to Dec ‘26 (20 years)

Total Project Cost 422.60 Cr

Equity 97.25 Cr NHAI Grant 64.35 Cr Debt 261.00 Cr


Project Status Operational Toll collected FY 2014 27.57 Cr

►The project achieved Partial Tolling and is Operational since 2011. Right of Way for 8 kms was recently awarded by NHAI and full tolling for the entire stretch is expected to start from Sep 2014.

TTEL – Tamil Nadu

MTHL – Under Construction Assets


Location Bihar

Length 272 Km Project Type Annuity COD Date Aug 2014 Concession Period

Jan-2011 toJan-2026 (15 Years)

Total Project Cost

870 Cr

Equity 285 Cr Debt 585 Cr Annuity 130.86 Cr Project Leverage

2.1:1

Project Status

Under Construction

CHEL - Bihar


Location West Bengal Length 340 Km Project Type Annuity COD Date Dec 2015 Concession Period Aug-2012 toNov-2029 (17 Years) Total Project Cost 980 Cr Equity 274 Cr Debt 706 Cr Annuity 148 Cr Project Leverage 2.6:1 Project Status Under Construction

BKEL – West Bengal


Location Jharkhand Length 654 Km Project Type Annuity COD Date Dec’ 2015 Concession Period Jan-2013 toJan-2028 (15 Years) Total Project Cost 1655.00 Cr Equity 463.40 Cr Debt 1191.60 Cr Annuity 266.40 Cr Project Leverage 2.6:1 Project Status Under Construction

REL - Jharkhand

MTHL – Under Development Assets


Location Andhra Pradesh Length 258 Km Project Type Toll COD Date March 2016 Concession Period Aug’ 12 – Aug ‘32 (20 years) Total Project Cost 740 Cr Equity 353 Cr Debt 387 Cr Project Leverage 1.1:1 Project Status Under Development

VMEL- Andhra Pradesh

RBEL - Bihar


Location Bihar Length 428 Km. Project Type Toll COD Date March 2017 Concession Period Jun ‘14 to Jun ‘44 (30 years) Total Project Cost 1360 Cr Equity 408 Cr Debt 952 Cr Project Leverage 2.3:1 Project Status Under Development





Annexures

Project Rationale - India: Power Scenario Investment Opportunities in Indian Power Sector Project Rationale: Southern Region Power Scenario Andhra Pradesh Demand Supply Projection Andhra Pradesh Upcoming Projects Project Rationale : Andhra Pradesh Power Scenario Market Driven: Short Term Market Long Term Market (Proposed new Bidding norms) Long Term Market: Capex Dynamics

Valuation Drivers


Project Rationale - India: Power Scenario

10.1%

8.5% 8.5%

8.7%

7.0%

8.0%

9.0%

10.0%

11.0%

0

500

1000

1500

2009-10 2010-11 2011-12 2012-13

'000

MU

s

Energy Demand

Requirement Availability Deficit

12.7%

9.8%

10.6% 9.0%

0.0%

5.0%

10.0%

15.0%

0

50

100

150

2009-10 2010-11 2011-12 2012-13

'000

MW

Peak Demand


› As of FY’13 India has total installed capacity of 223GW out of which 130GW is coal fired

› Overall peak deficit of over 12,000 MW in FY ’13

› The cost of power deficit in form of additional cost of diesel back-up is US$ 7.3 billion a year

› PLF of operational thermal capacities is less than 60% due to non-availability of domestic fuel

› Out of 179 new projects with aggregated capacity of 236GW only 79GW is commissioned/ advanced stages of construction

› 33GW of capacity at various stages of development and expected to be operational by 2017

› Majority of the capacity dependent on Domestic fuel and may turn stranded due to non-availability of fuel, approvals and clearances

Investment Opportunities in Indian Power Sector

Characterized by shortage of supply vis-à-vis demand

Last 5 yr CAGR of 5.2% in electricity generation, while demand projected to grow at a CAGR of 7.2% from 2012-13 to

2016-17

Installed capacity of 183 GW, comprising 65% Thermal, 21% Hydro, 3% Nuclear and 11% Renewable

Capacity addition during 11th five year plan likely to be 50 GW. Planned capacity for 12th Five Year Plan is 75 GW

and 13th Five Year Plan is 93 GW (excluding Renewable)

Energy Deficit in India All India Installed Capacity (245.39 GW)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Energy Deficit (%) Peak Deficit (%)Source: CEA

Thermal

Hydro

Nuclear

Renewable

Project Rationale: Southern Region Power Scenario

› Southern region’s %deficit is higher than All India average › Increase in deficit due to high demand from Industrial

category › Decline in Natural gas output from KG D6 fields resulted

in idling 2600 MW of gas based capacity › Only 1500 MW additional capacity available from FY’14

onwards for Southern region with new Central Grid interconnection

6.4% 5.2% 8.8%

15.5%

0.0%

5.0%

10.0%

15.0%

20.0%

0

50

100

150

200

250

300

2009-10 2010-11 2011-12 2012-13

'000

MU

s

Energy Demand


9.7% 6.4% 14.4%

18.5%

0.0%

5.0%

10.0%

15.0%

20.0%

0

10

20

30

40

50

2009-10 2010-11 2011-12 2012-13

'000

MW

Peak Demand


State AP TN KL KA

Domestic 22% 24% 47% 40%

Commercial 7% 12% 18% 12%

Agricultural 31% 21% 2% 34%

Industrial 32% 40% 28% 27%

Others 8% 3% 5% 7%

Capacity Flow- Central grid to Southern Region

2013-14 1903 MW

2014-15 3403MW

2015-16 3903MW

2016-17 Occasional congestion

Andhra Pradesh Demand Supply Projection

Demand - Supply projection of AP - Base Case (MU) considering tie-up from Upcoming projects

Unit FY 14-15 FY 15-16 FY16-17 FY17-18 FY18-19

Sales MU 44,318 48,052 52,112 56,598 61,350

Approved Losses % 13.29% 13.18% 12.83% 12.55% 12.28%

Energy Requirement MU 51,109 55,345 59,780 64,724 49,940

Energy Availability-Long term sources MU 45,450 50,030 54,661 58,702 59,723

Energy Deficit MU 5,659 5,315 5,119 6,022 10,217

Energy Deficit % 11.07% 9.60% 8.56% 9.30% 14.61%

Peak Deficit % 14% 12% 11% 12% 17%

# Energy availability in FY 14-15 includes - 6000 MU tied up with Short term sources •AP would face energy deficit in the range 8.5-15% over the next five year period even to maintain the existing power supply

scenario (7 hours Avg supply, power cuts to Domestic consumers etc.) •Power capacity addition projection is not commensurate with the increase in energy demand.

Andhra Pradesh Upcoming Projects

Demand - Supply projection for Andhra Pradesh - Base Case (MU)

Under Construction Capacity Comm. During

2014-15

Govt.

SDS (Krishnapatnam) TPP-I (2x800 MW) 1600 MW 800 MW

Rayalaseema TPP Stage IV U6 (1x600 MW) 600 MW -

Nagarjunasagar Tail Pond Dam (2x25 MW) 50 MW 50 MW

Pvt.

Thermal PowerTech (2x660MW) 1320 MW 660 MW

NCC Power (2x660MW) 1320 MW -

Meenakshi Energy Ph-II (2x350MW) 700 MW -

Hinduja Power (2x520MW) 1040 MW 520 MW

Under Adv. Stages

DrNTTPS Stage-V (1x800MW) 800 MW

SDS (Krishnapatnam) TPP-II (1x800 MW) 800 MW

Polavaram HEP (12x80MW) 960 MW

Project Rationale : Andhra Pradesh Power Scenario

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

Rs/

kW

h

MU

s

Power Purchase Portfolio FY’13

AP state Power purchase from all sources is 103535 MU in FY’13

13.5% is purchased through short term sources (Bi-lateral and Exchanges)

Rs10/ kWh

Rs 6/ kWh

Supply deficit due to Interstate Grid constraints

Declining domestic gas production, doubled gas price and expensive RLNG

Planned Coal based capacity addition far from completion

Increasing deficit met through costlier Short term sources

Market Driven: Short Term Market

Months FY14 FY15 FY16

Apr 8.00 8.43 5.92

May 8.00 8.43 7.13

June 7.00 4.87 5.17

July 7.00 6.93 7.71

Aug 7.00 6.49 7.27

Sep 7.00 4.83 5.19

Oct 6.80 4.78 5.14

Nov 5.63 3.98 4.28

Dec 6.08 4.86 5.20

Jan 6.55 6.25 7.14

Feb 5.16 4.52 6.40

Mar 3.97 3.63 4.10

Avg Prices 6.52 5.67 5.89

< 1 year

Short Term (Bi-lateral)

Bi-lateral Trade/ Contestable customers

< 2 weeks Intra-day Day, week, term ahead

Short Term (Exchange)

Exchange (IEX/ PXIL)

4% market share 2% market share

Tenure

Contract type

Market share

Southern Region 2013-14 2014-15 2015-16

‘Demand (‘000 MU) 304 327 351

Supply (‘000 MU) 230 267 290

Shortfall (‘000 MU) 24.5% 18.3% 17.4%

Increase in demand (%) 7.3% 7.3%

Increase in Demand met (%) 16.2% 8.5%

* Tariffs are subject to higher new capacity addition and better PLF case. However, the tariff would move upward due lower PLFs and delay in commissioning of new projects.

› *Short Term Trends: Southern Region

Rs/ kWh

Item

Long Term Market (Proposed new Bidding norms)

Fixed Charge

Fuel Charge

Transportation Charges

Transmission Charges & Losses

Rs/kWh "Pass Through"

Rs/kWh [not exceed/ less than Utility specified ceiling/ floor charge]

US$/kWh [reflects between 80%-90% price of an Intl index determined by Utility and shall not exceed/ less than ceiling/ floor charge]

Rs/ kWh

Rs/ kWh

Rs/kWh [revised annually to reflect 30% of the variation in wholesale price index (WPI)]

Tariff Bid Power generation source Linkage coal from CIL

Power generation source with Captive coal block

Power generation source with imported coal

Power generation source with captive mine outside India

Rs/ kWh

Rs/ kWh




Note: Foreign exchange risk borne by Utility

Freight and Transporta tion charges payable as per PSA

Rs/kWh "Pass Through" [Utility specified indicative cost (Rs/kWh) based on approx market prices]

Note: Foreign exchange risk borne by Utility

Rs/ kWh

Rs/ kWh Rs/ kWh

Long Term Market: Capex Dynamics

Indicative Project Cost

Land Cost 2.3%

Civil Works (incl Piling Cost, FGD cost, Jetty Cost)

17.4%

EPC costs other than Civil Works 59.0%

Pre-Operative Expenses / Overheads 3.5%

Contingencies 2.5%

Financing Charges 0.5%

Margin Money for WC 2.4%

Interest During Construction 12.5%

Total Project Cost 100.0%

Cost/ MW (approximate) Rs 7.33 Cr

› Increase in Project Costs of upcoming projects due to change in macro level economics

› Project costs of upcoming/ planned coal based projects effected due to exchange rates and higher escalations due to delays

› Commissioned projects are highly competitive with New bidding norms

› Project Cost: Upcoming power plants by FY 18

Fixed Charge

Fuel Charge Rs/ kWh "Pass Through"

Rs 2.25/ kWh

Projects under construction/ planning

Projects commissioned (SEL)

Rs/ kWh "Pass Through"

Total Tariff

Competitive Analysis

Fuel Charge + Rs/ 2.25 kWh






Annexures

Valuation Drivers


Madhucon Business Model Diagnostics

Road Vertical Energy Vertical

• 25yrs project life to be funded through 7yrs loan tenure

• Strain on project developer resulting him to charge higher user charges for quicker payback

• Asset liability mismatch for lenders

• Sub Standard asset for Bank and sub-optimal performance for project developer

• Land Clearances • Right of way

• Reduce dependence on imported coal • Push to Stalled Projects • Coal India Ltd Capacity ramp up to meet

demand of coal starved power projects to de stress balance sheet

Long term Patient capital financing with competitive pricing and longer tenure to eliminate ALM mismatch for lenders & Cash flow mismatch for project developer

• Fuel Securing for life of project • Fuel Starved Plant • Higher Dependence on imported coal • Energy security issue • Power deficit Scenario • Environmental Clearances road block for

mining • Mining license allocation

Challenges

Solutions





Annexures

Valuation Drivers


Valuation Drivers

Project Infra

Experienced Management

Proven Execution

Ability in Road and Power

FSA linkage

O&M

Road Vertical Operational

efficiency

Off Take Agreement with PTC

› Experienced management team with proven expertise in developing & operating large projects.

Operational Asset Strategically placed in power deficit state

Market Driven PPA with a blend of Short term and Sustainable long term revenue stream

FSA Linkage de-risking through CaptiveCoal Mine in Indonesia

Operational Efficiency involvingexperienced Project Management Team

› Captive Mine (Overseas): Sponsor owns coal mines in Indonesia which assures coal supply over long term. Signed Long Term Imported coal supply agreement for3.0 MTPA for 15 years.

› High imported coal price is taken care by better than average sale tariff of Rs5.83/kWh

› Operated by in-house O&M division managed by highly experienced Industry experts

Power Vertical

Road Vertical Four operational projects in UP, Rajasthan,Tamil Nadu with a high traffic growth potential

Experience teamwith a successful implementation of 1500 Kms Road lane capability.

Proven execution ability for road tunnel and highway projects across the country.






Annexures

Valuation Drivers


Particulars (Rs. Cr) FY12A FY13A FY14A

Total Income 1,803 1,045 865 EBITDA 189 180 218 %EBITDA/Total Income

10% 17% 25%

PAT 34 33 31 PAT/Total Income 2% 3% 3% Debt/Equity 2 2.1 2.3 EPS(INR) 4.7 4.6 4.3

Net Worth 642 675 706

MPL--EPC VERTICAL--FINANCIAL SNAPSHOT

Particulars (Rs. Cr) FY15P FY16P FY 17P FY 18P FY 19P

Total Income 1,325 1,875 2,275 3,000 3,500 EBITDA 257 29,8 33,87 41,5 47,6

%EBITDA/Total Income

19% 16% 15% 14% 14% PAT 77 128 163 226 269

PAT/Total Income 6% 7% 7% 8% 8% Debt/Equity 1.20 1.12 1.04 0.94 0.84

EPS(INR) 13.86 21.80 29.27 40.39 48.56 Net Worth 784 847 961 1,118 1,307

For any queries please contact:

Capital Fortunes Private Limited

Mr. D. V. Chalam

Director and CEO

[email protected]

+91 99499 19869

Mr. G Thomas

Associate Director

[email protected]

+91 80089 33373

Mr. Karan Bandivadekar

AVP

[email protected]

+91 95734 44722

Madhucon Group: Key team

Mr. Vaikuntanathan

[email protected]

Mr. Umesh Kumar Chhabra

Head Strategic Finance

[email protected]

Mr. Valsan Menon

Chief General Manager

[email protected]

Mr. Y. V. Rao

General Manager

[email protected]

THANK YOU

mailto:[email protected]





















Disclaimer

65

Neither the Promoters, the Capital Fortune & Madhucon Group, nor any of its Directors, employees or advisors make any expressed or implied representation or warranty and no responsibility or liability is accepted by any of them with respect to the accuracy, completeness or reasonableness of the facts, opinions, estimates, forecasts, projections, or other information set forth in this Presentation, or the underlying assumptions on which they are based or the accuracy of any computer model used and nothing contained herein is, or shall be relied upon as a promise or representation regarding the historic or current position or performance of the Company, or any future events or performance of the Company. The information set forth in this Presentation is furnished on a strictly confidential basis and is for the sole use of the person to whom it is addressed and the recipients must undertake such investigations as they deem fit before making any commitment or entering into a contract or Investment.

Neither this Presentation, nor the information contained herein, may be reproduced or passed to any person or used for any purpose other than stated above. By accepting a copy of this Presentation, the recipient accepts to the above terms and conditions. This Presentation shall remain at all times the property of Madhucon Group & its appointed Advisors. It must be returned immediately along with any other informative material received in this connection, without retaining any copies thereof upon request or forthwith, for any reason whatsoever, if the transaction is not concluded or the recipient has no further interest in the transaction.

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