Lanco Infratech

EPC

POWER

SOLAR

NATURAL RESOURCES

INFRASTRUCTURE

Investor Presentation

LANCO Group, Rights Reserved LANCO Group, AllAll Rights Reserved

Agenda
1 2 3 4 5 6 7 8 9 Company Overview Power Business EPC Business Solar Business Natural Resource Business Infrastructure Business Property Development Business Financials Experienced Management Team

2
LANCO Group, All Rights Reserved

1. Mission, Vision and Values

Mission: Development of Society through

Leadership, Entrepreneurship, Ownership

Vision: Values: Continuous Learning Teamwork Most Admired Integrated Infrastructure Enterprise

Integrity Humility & Respect

Organization before Self

Achievement Drive Positive Attitude
3

Accountability
LANCO Group, All Rights Reserved

1. Indias largest Integrated Power Developer

Lanco Division of LancoLimited (LITL) Infratech Infratech
Divisions: EPC Construction Listed Holdco of the group Promoters Holding ~ 72.31% Adj. Net Worth US $1,540 mm (including Minority)

Subsidiaries / Affiliates

Power

Solar

Natural Resources

Infrastructure

Property Development

All businesses of the group are under LITL Total Employee Strength of 8,400+ out of which 520 are based abroad Power projects in 12 states in India
4
LANCO Group, All Rights Reserved

2. Steady Growth
Revenue*
2,500 2,000 USD Mn 1,500 1,000 500 322 691 1,389 1,891

EBITDA
2,253
2,214

400 350 300 250 200 150 100 50 -

378 305 261 177 140 44

FY 07

FY 08

FY 09

FY 10

FY 11

* Revenue : Before intersegment revenue elimination

Nine Months

USD Mn

FY 07

FY 08

FY 09

FY 10

FY 11

Nine Months

Till Dec11, with the Forex adjustment EBITDA , Adj PAT and Cash Profit will increase by USD 46 mn

Adj. PAT
200 150 USD Mn 100 50 FY 07 FY 08 FY 09 FY 10 FY 11 Nine Months
38 76 82 126 189

Cash Profit
300 250 USD Mn
105 260

200 150 100 50 FY 07 FY 08 FY 09

92 51 103

195

185

FY 10

FY 11

Nine Months

Adj. PAT= Reported PAT + Profit Eliminated

Note: 1. Assumed US$ / INR = 50 2. Mm /bn indicate million and billion

Cash Profit: PAT + Depreciation + Profit Eliminated (For FY 11 cash profit is before adjustment for depreciation written back)

LANCO Group, All Rights Reserved

3. Strong Push to Drive Infrastructure Growth

160 120 157

Expenditure on Infrastructure is required to keep growth momentum of Indian economy

(US$bn)

Total - US$437bn
79 68 65 55 51 19 9

80 40 0

12th Five Year Plan ~ expected target 76 GW.

6 5

Te le co m R ai lw ay s Irr ig W at at io er n /s an i ta tio n

ri d ge s

Po rts

St or ag e

Po w

or ts

oa ds

an d

Infrastructure spending (2007-2012)

Central Govt. State Govt. Private sector
Source: CEA Planning commission (XIth five year plan)

Source:

Ai rp

as

er

Power Capacity Growth (GW)

In BRIC countries, Indias per capita consumption lowest. Chinas per capita consumption of power is 4.4x of India.

In order to achieve 9% growth, India should attain 8.1% growth in total power sector.

Source:

World Bank Data 2009, (http://data.worldbank.org/indicator/EG.USE.ELEC.KH.PC)

Per capita consumption of electricity LANCO Group, All Rights Reserved

3. Power Scenario in India

Per capita consumption of electricity ~ growing at a faster rate
90 80 70 60 50 40 30 20 10 0

Growing share of Private players

30.6 13.7 19.5 53.0 43.4 25.4 State Central Power Capacities (GW)
Source: CEA

2012 2010* 779 735

1,000

2009
2008

717
672 632 613 591

Other Thermal

2007 2006 2005 2004

Pvt

Per Capita Consumption Growth (Units)

* Provisional
Source: CEA

Recent Policy Initiatives:

Power Deficit (2011)

1. Initiative by Prime Ministers Office to Solve issues in Power Sector - Signing coal supply with 80% trigger 2. Modification Preparation. to Case I bidding Under

Peak Deficit (%)

States

Energy Deficit (%)

9 10 11

Har Chatt TN Pun Aruna Maha Bihar J&K 2

7 6 15 17 13

16
16 18

3. Policy push towards regular tariff increase by DISCOMs ~ spurt in the number of DISCOMs hiking tariffs
LANCO Group, All Rights Reserved

23 34

25

7
Source: CEA

3. Capacity Ramp up
One of the largest Private Power Developers

FY14 Babandh Amarkantak III & IV Vidarbha Solar FY12 Kondapalli III Uttranchal

FY15
Teesta

Green
Current Udupi Anpara Kondapalli I , II & III Amakrantak I & II Tanjore Other Renewable

9,378 MW 8,878 MW 4,732 MW

4,410 MW

Projected capacity addition

LANCO Group, All Rights Reserved

3. Project Status Update

Power Projects under Operation
Plant Udupi* Anpara Kondapalli I Kondapalli II Kondapalli III* Amarkantak I Amarkantak II Tanjore Other Renewable Total Fuel Imported Coal Coal Gas Gas Gas Coal Coal Gas Wind, Solar, Hydro Capacity (MW) 1,200 1,200 368 366 480 300 300 120 76 4,410 Offtake PPA Part PPA PPA Merchant Part PPA Merchant PPA PPA PPA

Fuel Diversification

Gas 17%

Coal 74%

Renewables 9%

* Udupi Unit I (600 MW) and kondapalli III (480 MW) are ready for operations.

Power Projects under Construction

Plant Lanco Green Kondapalli - III Lanco Uttaranchal Teesta Amarkantak III & IV Vidarbha Babandh Solar Total Hydro Gas Hydro Hydro Coal Coal Coal (Partly Owned) Solar Fuel Financial closure Y Y Y Y Y Y Y Y Capacity (MW) 70 252 76 500 1,320 1,320 1,320 110 4,968 offtake PPA Part PPA Merchant PPA Part PPA Part PPA Part PPA PPA Estimated completion FY 12 FY 12 FY 14 FY 15 FY 14 FY 14 FY 14 FY 12-14 Current status Wet spinning of machine completed GT foundation work completed. HRSG erecting started. 50% work completed 40% work completed Boiler structure completed Main plant concreting work in progress Boiler structure erecting started Various Stages

9
LANCO Group, All Rights Reserved

4. Presence Across Value Chain De-risking the Business

Integrated presence across value chain capturing value addition across the businesses
Transmission and Distribution
Strategy includes possible expansion into transmission and distribution

Fuel (Coal mining)

Griffin coal, Collie region in Western Australia, currently produces 4 MTPA with resources of 1.2 bn Rampia and Dip side of Rampia, captive coal mine allocated by Govt. of India to Lanco and five others with reserve base of 112 MT (our portion) Mahatamil, an integrated project with power plant , has reserves of 768 MT

EPC
Completed projects with capacity of 4,410 MW 4,968 MW projects under construction Strong capability engineering 1,250

Generation and O&M

Operating capacity of 4,410 MW* Type Thermal MW 4,334

Trading
One of largest private sector player in Indian power trading market Traded 6,043mm units in year ended March 31, 2011 Holding 5% stake in the Indian Energy Exchange floated by Financial Technologies Ltd and Power Trading Corporation

EPC Team of employees

Renewable (Hydro, Solar, Wind)

TOTAL

76

Over 10 years of experience in design and development of Power Projects

Handles global suppliers selection and sourcing of diverse materials like high-pressure fabricated equipment, skids, instrumentation & electrical systems

4,410

* Udupi Unit I (600 MW) and Kondapalli III (480 MW) are ready for operations.

4,968 MW projects under implementation

10
LANCO Group, All Rights Reserved

4. In-house EPC Enhances Margins

EPC EPC Employee strength 1250
7,000 6,000 5,143

Order Book (USD Mm)

6,032

EPC order book of USD 5.3 billion as on Dec 11

Major EPC / Construction order executed Kondapalli 1,214 MW Udupi 1,200 MW Anpara 1,200 MW Amarkantak (I & II) 600 MW Tanjore Power 120 MW New External orders received EPC of Moser Baer Thermal Power Plant (600 MW x 2) BoP of Koradi Thermal Power (3 x 660 MW) EPC of 250 MW Gas based Power plant in Iraq Construction

5,307

5,000
4,000

3,000
2,000 1,000 FY 07

2,603 1,040

2,079

FY 08

FY 09

FY 10

FY 11

Dec'11

Revenue
1,600.0 1,400.0 1,200.0 1,000.0 800.0 600.0 400.0 200.0 1,407

Construction
Employee strength 2,600 Executing a wide range of projects spanning Thermal Power Plants, Hydro Power Plants, Highways, Airports, Industrial Structures, Transmission and Distribution, Chimneys and Cooling Towers, Water Infrastructure and Heavy Civil Structures.

1,177
817

1,174

US$mm

315 108

FY 07

FY 08

FY 09

FY 10

FY 11

Dec'11

EBITDA Margin of 14% Nine Months

11
LANCO Group, All Rights Reserved

5. Solar Scenario
Addition of capacities: 2009 7.2 GW 2010 16.6 GW Price decreases that have brought PV close to grid parity in several countries have encouraged new investors Expected Growth in the market 3.34.8x of current capacity by 2015
Source: EPIA Global Market Outlook for PV Until 2015

Global Scenario

Indian Perspective

Under the MNRE policy: New grid projects through NVVN Small grid projects through IREDA Off-grid solar MNRE - Phase I Batch I Batch II Gujarat Rajasthan
Source: MNRE - Renewable Energy in India: Progress, Vision and Strategy

620 MW 350 MW 365 MW 200 MW

RPO requirement
12

LANCO Group, All Rights Reserved

5. Fully Integrated Strategy enables lowest Rs/kWh

Target in 4 Yrs
Target in 3 Yrs
EPC
Project Development Integrated Manufacturing

500 MW/PA

400 MW/PA

250 MW/PA

Aim to be a Global player, as a developer and a third party EPC player. Current Solar

EPC Order Book USD $ 905 mn (included in EPC order book)

Foray into manufacturing to support internal requirements and reduce margin volatility, through the cycle

Current Solar farm development portfolio 153 MW (Operating 43 MW and Under Construction 110 MW)
Policy Solar PV Farm Gujarat Policy JNNSM RPSSGP Solar Thermal Farm JNNSM 35 5 1 100 Rs 15 for 12 yrs, Rs 5 for next 13 Yrs 11.5 16.5 10.5 125 18 4 400 25 25 25 25 Capacity (MW) Tariff- Rs/Unit Project Cost (USD mm) PPA Duration (Yrs)

Manufacturing- Phase I Capex Debt: Equity $ 305 Mm 70:30

Capacity- Phase I
Polysilicon Wafer Module Line 1250 MT 80 MW 50 MW

13
LANCO Group, All Rights Reserved

6. Coal Outlook
Coal Demand Domestic supply flatters to deceive

Source: Ministry of Coal Annual Report 2010-11

Securing coal: a need; an opportunity

Around 70% of demand from Power Sector Uncertainty in domestic supply
USD 200 150 100 50 0

International Coal Price

Expected Import of coal by 2017 > 180 MT Increasing competition for overseas assets

Limited operational assets

Uptrend in prices

Feb 00

Source: Bloomberg, McCloskey Newcastle 6700 kc GAD fob steam coal spot

14
LANCO Group, All Rights Reserved

Feb 11

Feb 01

Feb 02

Feb 03

Feb 04

Feb 05

Feb 06

Feb 07

Feb 08

Feb 09

Feb 10

6. Resources (Coal)
Providing integration and increased fuel security
Integration across the value chain Providing increased fuel security (both volume and price) for current power generation assets and future power portfolio expansions. Presents an opportunity to participate in the burgeoning natural resources trading market. Looking out for further opportunities in mineral rich countries of Australia, Indonesia, South Africa and India. Mahatamil Griffin Coal Largest operational thermal coal mines in Western Australia, with Resource base of 1.2 bn Tonne Strategic location Bunbury port <100 km from mine Estimated Coal Reserves 768 MT and spread over 24.95 sq km Integrated Project with coal extraction and power generation. 23% of coal produced Maharashtra state Remaining coal (77%) to be converted to Power Home state share - 37.5% of power Remaining power shared between Tamil Nadu state and Lanco at 50:50 ratio. Coal mining fees of 112 Rs/ Ton to be paid by Lanco. Capacity that can be built : coal mine capacity around 15 MTPA Power Generation of about 2000 MW
15
LANCO Group, All Rights Reserved

Rampia and DIP side of Rampia Allocated to Lanco along with five other IPPs Lancos share in the coal blocks would cater to the development of approx. 1,000 MW power plant.

Good connectivity of rail and port.

Current production :- capacity of 4 mtpa of coal. Current exports of 0.7 MTPA Expansion : Plans to ramp up production to a max of 18 MTPA and To 11 MTPA by FY 17

7. Leveraging Construction Expertise to Build Infrastructure Business

Lanco has moved into selective infrastructure projects to leverage its EPC experience Awarded two National highway projects in Karnataka c. 81 km stretch connecting Bangalore Hoskote Mudbagal c. 82 km stretch connecting Neelamangla Devihalli Concession periods of 20 years and 25 years respectively during which toll will be collected Expected Capex of USD $ 270 mn Grant from NHAI USD $ 73 mn Construction under progress and expected to be completed soon

Awarded one National highway projects in Uttar Pradesh C. 280 Km stretch connecting Aligarh to Kanpur Project investment of around USD $ 200 mm Grant to be received USD $ 57 mm Financial Closure achieved

Also built jetty at Manglore port for Udupi Power Plant

16
LANCO Group, All Rights Reserved

8. Property Development
Lanco Hills is the groups foray into property development, located in Hyderabad, spread over 100 acres and comprises residential space, office space and IT SEZ
Lanco Hills Towers under Phase I are ready for occupation In addition to high rise towers, 54 Villas will also be constructed

Residential

Office space

IT tower - 0.59 mn sqft ready for occupation SEZ : 0.06 mn sqft incubation space leased out to IT companies Property Development is restricted to Hyderabad only

17
LANCO Group, All Rights Reserved

9. Experienced Management Team

LANCO Board
L. Madhusudhan Rao Executive Chairman

L Sridhar
Vice Chairman

S. C. Manocha Director

P. Kotaiah Director

Dr. U.K. Kohli Director

G. Bhaskara Rao Executive Vice Chairman

G. Venkatesh Babu Managing Director

P. Abraham Director

B. Vasanthan Director

P. Narasimharamulu Director

Lanco Group Senior Management Team

Finance
T. Adi Babu T. N. Subramaniyan

Power
A. A Khan P. Panduranga Rao K. Raja Gopal K. Naga Prasad

Construction & EPC

S. C. Manocha S. M. Roy

Solar
V. Saibaba

CSR Property Development

S. Pochendar R S Sharat

18
LANCO Group, All Rights Reserved

Pan India Presence

Coal Based Plants under operation Plants under construction Hydro Plants under operation Plants under construction Gas Plants under operation Plants under construction
Anpara Rajasthan Solar Gurgaon Vamshi Vamshi Industrial Lanco Uttaranchal Teesta Lanco Green

Solar
Plants under operation Plants under construction Wind
Gujarat Solar Amarkantak I & II Amarkantak III & IV Vidarbha Babandh

Plants under operation

Property development Road development
Chitradurga Udupi I Udupi II 81 km Bangalore Hoskote Mudbagal 82 km Neelamangla Devihalli Tamil Nadu Wind Tanjore power Lanco Hills Hyderabad Kondapalli I & II Kondapalli III

Coal mine
Registered office Corporate Office

19
LANCO Group, All Rights Reserved

We care for the world we live in

Lanco Foundation Member of the UN Global Compact Operating in 11 Indian States at 13 locations Covering 140 villages & 200,000 population beneficiaries we have a number of initiatives in place that help us to make a difference
Focused work in the areas of:

Disability
Education Safe Drinking water Mobile Health Services Support of traditional arts & crafts
20
LANCO Group, All Rights Reserved

Recent Awards
EPC-World Awards 2010 for Outstanding contribution in Power & Energy sector (Generation).

8th Construction World- Annual Award for

Fastest Growing Construction Company Aban Power Company Ltd received TERI Corporate Award for Environmental Excellence and Corporate Social Responsibility

IKU II received IEEMA award for

Excellence in Fast Track Commissioning of Small Hydro Projects Lanco Infratech Ltd received PRSI Golden Jubilee Award for the Most Impressive Public Relations Initiatives

21
LANCO Group, All Rights Reserved

Disclaimer
No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. Certain statements made in this presentation may not be based on historical information or facts and may be "forward looking statements" based on the currently held beliefs and assumptions of the management of the Company, which are expressed in good faith and in their opinion reasonable, including those relating to the Company's general business plans and strategy, its future financial condition and growth prospects and future developments in its industry and its competitive and regulatory environment. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance or achievements of the Company or industry results to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements, including future changes or developments in the Company's business, its competitive environment and political, economic, legal and social conditions. Further, past performance is not necessarily indicative of future results. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forwardlooking statements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments. This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities of the Company by any person in any jurisdiction, including India and the United States. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. The Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such change or changes. This presentation may not be copied or disseminated in any manner.
22
LANCO Group, All Rights Reserved

Thank You

23
LANCO Group, All Rights Reserved