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1 IL&FS Transportation Networks Limited Analyst Presentation February 2012 February 07, 2012

2 Disclaimer This presentation has been prepared solely by IL&FS Transportation Networks Limited ( ITNL ) and does not constitute a prospectus or placement memorandum or an offer to acquire any securities. This presentation or any other documentation or information (or any part thereof) delivered or supplied does not and should not be deemed to constitute an offer. No representation or warranty,express or impliedis made as to, andno reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The information contained in this presentation is only current as of its date. Certain statements made in this presentation may not be based on actual historical information or facts, and may be forward looking statements, including without limitation those relating to the general business plans and strategy of ITNL, its future financial condition and growth prospects, future developments in its industryandits competitive and regulatory environment, and any other statements which contain words or phrases such as will, expected to, horizons of growth, strong growth prospects, etc., or similar expressions or variations of such expressions. These forward looking statements involve a number of risks, uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially from those suggested by the forward looking statements. These risks and uncertainties include, but are not limited to risks with respect to ITNL s growth, business and the industry that it operates within. ITNL reserves the right to alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. This presentation cannot be copied and disseminated in any manner. With references to projects and project companies, short names and brief descriptions are used which may not be representative of the actual description of the project or the name of the project company. These are used for brevity in the presentation and any person accessing such information may get further detailsof such project or project companies from other data available on the website of the company or other publiclyavailable l il data No person is authorized to give any information or to make any representation not contained in and not consistent with this presentation and, if given or made, such information or representation must not be relied upon as having been authorized by or on behalf of ITNL 1

3 In this presentation Company Overview Key Differentiators The ITNL Group Project Portfolio Recent Project Awards and Financial Closures Project Pipeline Road Sector Opportunity Financial Performance Parameters Key Quarterly Financial Parameters of Q3FY12 Capital Works Remaining to be Executed Toll and Annuity Collection on Operational Projects Board of Directors and Key Managerial Personnel Road Projects 2

4 An Introduction IL&FS Transportation Networks Limited (ITNL) has the largest BoT road asset portfolio (in terms of lane kilometer) in India Jammu & Kashmir ITNL has a pan India presence with projects in 15 states in India Promoted by Infrastructure Leasing and Financial Services LimitedGurgaon Metro (IL&FS) in the year 2000 Himachal Pradesh PAN India presence with BoT projects in 15 States ITNL has ~ 10,000 lane km under its road assets portfolio Haryana Has presence in other sub sectors viz viz. metro rail, bus transportation and border entry points Uttar Pradesh Rajasthan Assam Meghalaya A Thought Leader.., IL&FS Transportation plays varied roles such as Sponsor, Project Developer cum Manager, Manager Operations & Maintenance Manager, Manager GRICL: 333 km Design & Value Engineer and Policy Advisor Gujarat Madhya Pradesh Jharkhand Jharkhand Chhattisgarh Chhattisgarh WGEL: 386 km Maharashtra Maharashtra Standard Chartered IL&FS Fund 3.15% Shareholding Pattern Bessemer Capital Holdings II Limited 2.13% Public Holding 18.23% Andhra AP Pradesh Karnataka Karnataka GS Strategic Investments Limited 4.03% IL&FS EWT 1.71% NKEL: 472 km IL&FS Group 70.75% Kerala TRDCL: 168 km Map p not to scale Does not depict political boundaries 3

5 Key Differentiators Market Leadership in the Transportation Infrastructure Sector With around 10,000 lane km comprised in 21 projects in its road assets portfolio Forays into other surface transportation sub sectors like metro, bus & border check post Track Record of Successful Project Implementation Operational p portfolio p 5377 lane kms of highways, g y, operating p g one bus transportation p project p j Projects substantially completed to budget and within time Strong Parentage of IL&FS IL&FS Brand and expertise in finance & other infrastructure areas Experience in working with various Government and other Authorities Partnerships p and Bilateral contracts with State Governments State Highway Concessions in joint venture with the States of Kerala, Chhattisgarh, Gujarat, Rajasthan & Jharkhand Diversified and de risked de risked portfolio Pan India presence with a fair mix of annuity and toll concessions Presence in Europe, Latin America & Mexico through Elsamex SA q Operational p road project p j in China. Recentlyy Acquired 4

6 1 ITNL Group IL&FS Transportation Networks Limited ROAD SPV Vs 83.61% 93.50%* 50.00%* %* GRICL NKEL RIDCOR APEL 25.35% %* 50.00% NTBCL WGEL TRDCL Other Subsidiaries 69.29% % IERS IIPL As at December 31, %* 74.00%* CHDCL 48.00% JARDCL 77.39% 22.61% 49% %* 74.00% 74.00% % 50.00% JSEL 50.00% JRPICL EHEL 26.00% RMRGL Elsamex SA Yu He % (Metro Rail SPV) Expressway IRIDCL In Gurgaon HREL 35.00% WCBTRL PSRDCL 51.00% MPBCDCL % (MP Border Check MBEL Post 24 checkposts) NAMEL % CNTL % 00% KNC** 90.00% 20 subsidiaries VNIL (Bus Transport SPV) In Nagpur City ** SPV yet to be formed for recently awarded project in HP * Includes indirect and beneficial interest too 5

7 Portfolio: Road Projects Diverse BOT portfolio of 21 road projects covering 10,019 lane km spread across various states of India Fair mix of Annuity / assured payments and Toll based projects in various stages of development Shillong Jorbat Jharkhand Road Development II Narketpally Addanki Chenani Nashri Kiratpur Ner Chowk in Lane km Length Vadodara Halol Noida Toll Bridge Ahmedabad Mehsana Road Jharkhand Road Commissioned Development I Rajasthan Mega Hyderabad Outer Highways II* Ring Road Ramky Elsamex Thiruvananthapuram Hyderabad City Roads II Ring Road Chongqing YuHe AP China^ Expressway A 4 Autovia, Beawar Spain Rajasthan Mega Gomti Highways Thiruvananthapuram City Roads I North Karnataka Expressway West Gujarat Expressway Ranchi Hazaribagh Moradabad Bareilly Pune Sholapur Chandrapur Warora Under Development/ Implementation Project Cost in ` Million Beyond d2014 Financial Years in which Commissioned /Expected to be Commissioned ITNL has the largest Private Sector BOT Road Asset Portfolio in India * Partly commissioned i with two out of five stretches commissioned i ^ The operational project was acquired in Dec, 2011 Cumulative Project tcost 6

8 Portfolio: Non Road Projects Metro Rail Metro Rail Project awarded by Haryana Urban Development Authority (HUDA) Metro link from Delhi metro Sikanderpur station to DLF Cyber City on NH 8 in Gurgaon Project Cost of ~ `1100 cr with a concession period of 99 years ITNL stake in the project ~54% Likely Commissioning in CY 2012 financially closed and construction commenced Bus System Nagpur Bus System Project awarded by Nagpur Municipal Corporation Mobilizing, running, operating and maintaining the Nagpur City Bus Services on an exclusive basis Concession period of 10 years ending on buses deployed Project Cost ~ ` mn, ` mn sanctioned by Pooled Municipal Debt Obligation Fund & Other ` mn sanctioned by UBI for JnNURM buses. Border Entry Point MP Border Check Post Project awarded by the Government of Madhya Pradesh In consortium with Spanco (ITNL stake 51%), 24 border check post in MP to be developed Revenue sources entry fee from commercial vehicles, parking fee, loading/unloading etc Concession period of ~12.5 years with ~2 year construction period. Project cost estimated at `13,500 mn 7

9 Recent Project Awards & Financial Closures ITNL Secured projects worth around ` 80 billion each year in the last 2 financial years Debt Tiedup Project Authority BOT Length Estimated Cost Debt tied up Type (lane km) ( ` Million) Project ( ` Million) Road Sector Ranchi to Hazaribagh 7,382 Ranchi to Hazaribagh NHAI Annuity 319 8,692 Pune to Sholapur 9,577 Pune to Sholapur NHAI Toll ,027 Moradabad to Bareilly 13,187 Moradabad to Bareilley NHAI Toll ,836 Three stretches under JARDP* 12,386 Three stretches under JARDP* GoJ Annuity ,078 Thiruvanthapuram City Roads 1,436 Mega Highways II GoR Toll 698 8,126 Chandrapur Warora 3,360 Chandrapur Warora GoM Toll 275 7,000 Mega Highways II 6,098 Chennai to Nashri in J&K NHAI Annuity 38 37,200 Chenani Nashri Tunnelway 33,480 Jorabat to Shillong in North East NHAI Annuity 262 8,240 Jorabat to Shillong 7,400 Narkatpally to Addanki in AP GoAP Toll ,605 Narkatpally to Addanki 10,600 Mdh Madhya Pradesh hentry Point GoM Fee 13,500 Gurgaon Metro Rail 7,616 Gurgaon Metro Rail HUDA Fee 4.8 km 11,000 Nagpur City Bus Transportation 556 Two stretches under JARDP* GoJ Annuity 198 6,732 MP Border Check Post 11,475 Kiratpur to Ner Chowk in HP NHAI Toll ,185 Additional two stretches under JARDP 5,545 Total 1,84,221 Total Debt tied up 1,30,098 ITNL had 9% and 7% market share of NHAI projects awarded in FY10 and FY11 respectively plus State projects too *Under Jharkhand Accelerated Development Program concession agreements were signed for Ranchi Ring Road; Ranchi to Patratu road; and Patratu to Ramgarh road. Subsequently, Government of Jharkhand signed concessions for Chaibasa Kandra Chowka & Adityapur Kandra roads. 8

10 Project Pipeline for FY12 As of January 31, 2011 BID PIPELINE RFP Stage (Post Qualification) RFQ Stage (Pre Qualification) Projects Length (km) Cost (` Mn) Projects Length (km) Cost (` Mn) NHAI , , ,64,495 MORTH STATE PROJECTS , ,044 1,17,755 Total 12 1,531 86, ,118 4,82,250 9

11 NHAI has targeted award of around 7,300 km in FY12 Program Road Sector Opportunity ~23,000 km of award pending under NHDP to be substantially executed under PPP Current rollout plan (in Km) NHDP III 1,274 NHDP IV 7,235 NHDP V 2,561 SARDP NE 81 Total 11,151 Approved Financing Plan of NHDP (public/private spend) Total spend envisaged ~ USD 65bn 10

12 Financial Parameters (Consolidated) (` mn) (` mn) 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10, ,000 1,981 4,375 Revenue EBITDA (1) 13,320 24,873 41,274 36,169 FY07 FY08 FY09 FY10 FY11 9M FY12 Profit After Tax (2) 14,000 12,335 12,000 10,000 8,000 6,000 4,000 2, ,489 2,900 8,785 Average Capital Employed (3) 10,870 FY07 FY08 FY09 FY10 FY11 9M FY12 (` mn) RoE (%) (` mn) RoCE (%) 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, % 278 7% 3,444 26% 4,329 21% 1. Includes other income and excludes gain from Foreign exchange fluctuation 2. RoE based on average equity; for H1 FY12 it is annualised 3. RoCE based on average capital employed; for H1 FY12 it is annualised 3% 3,196 FY07 FY08 FY09 FY10 FY11 9M FY12 50% 40% 30% 20% 13% 10% 0% 1,40,000 1,20,000 1,00, ,000 60,000 40,000 20,000 18,127 21,886 3% 4% 26,699 1% 21% 39,003 64,227 18% 1,21,071 14% FY07 FY08 FY09 FY10 FY11 9M FY12 40% 30% 20% 10% 0% 11

13 Financial Parameters (Standalone) Revenue EBITDA (1) (` mn) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 17,010 17,361 9,415 1,649 2,499 2,277 FY07 FY08 FY09 FY10 FY11 9M FY12 (` mn) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 6,440 6,171 4, ,358 1,323 FY07 FY08 FY09 FY10 FY11 9M FY12 Profit After Tax (2) Average Capital Employed (3) RoE (%) (` mn) (` mn) RoCE (%) 3,500 3,000 2,500 2,000 1,500 1, % % 421 6% 3,247 28% 2,880 17% 1,667 FY07 FY08 FY09 FY10 FY11 9M FY12 1. Includes other income and including gain from Foreign exchange fluctuation 2. RoE based on average equity; for Q1 FY12 it is annualised 3. RoCE based on average capital employed; for Q1 FY12 it is annualised 50% 40% 30% 20% 12% 10% 0% 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10, ,000 4,265 9,207 11% 5% 13,050 9% 28% 22,931 34,293 18% 44,624 15% FY07 FY08 FY09 FY10 FY11 9M FY12 50% 40% 30% 20% 10% 0% 12

14 Profit & Loss Accounts Highlights (All figures in ` million) Consolidated Standalone Key Parameters Q3 FY12 Q3 FY11 Change Q3 FY12 Q3 FY11 Change Revenue 12,684 7,309 74% 5,663 2, % Other Income % EBITDA 3,504 2,381 47% 1,418 1,419 0% EBITDA Margin 28% 32% 25% 56% Interest* 1,855 1,153 61% % Depreciation % % Profit Before Tax 1,480 1,070 38% 708 1,016 30% PAT after minority interest % % * In consolidated results, as per the relevant accounting policy, annuity projects are treated as financial assets and shown as receivable in the balance a sheet. Hence interest est during construction o on annuity projects is charged to P&L unlike for toll projects where e it is capitalized 13

15 Standalone Revenue & Expenses Revenue (in ` million) (in ` million) 14,000 4,115 14, ,000 23% 12, ,000 10, ,000 8, ,159 12,812 6,000 45% 24% 6, % 1,474 4,000 4, ,000 4,075 44% 4,046 67% 2, MFY11 9MFY12 Q3FY12 Expenses 12,447 3,768 4,171 9MFY11 9MFY12 Q3FY12 Constr Income Fee Income O&M Income Other Construction activity, as a proportion of total revenue, has remained constant t during this financiali year in accordance with schedule progress except in a few instances because of regulatory hurdles FeeincomeinQ3ismainlycomprises of a milestone linked O&M upfront fee from the Jharkhand projects (which are nearing completion), some advisory income from a group company and regular supervision fee from projects under construction Operating Expenses Employees cost Admin & General Exp The increase in operating expenses has been slightly higher on account of the fact that in last quarter there were a few projects which crossed threshold construction (typically 10%) progress therefore contributing greater margins and lesser costs 14

16 Consolidated Revenue & Expenses Revenue Expenses (in ` million) 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 2,603 7,241 13,596 11% 30% 56% 3,696 5,022 25,450 10% 14% 69% 1,485 1,574 9,049 9MFY11 9MFY12 Q3FY12 11% 12% 70% Constr Income Elsamex Toll/Annuity Other (in ` million) 40, , , , , , , ,344 21,540 5, ,152 9MFY11 9MFY12 Q3FY12 Operating Expenses Employees cost Admin & General Exp Total Income during this quarter increased, as compared to In the consolidated expenses for Q3 quarter, there were a few relevant quarter of last year, mainly on account of increased exceptional one time expenses/provisions under the head other construction activity and increase in toll & annuity revenues expenses which brought down the margins The difference between standalone and consolidated construction revenues is a) due to projects in which ITNL does have the EPC contract e.g. Jharkhand Road Projects and b) on account of IDC and margin recognized at the consolidated level in accordance with applicable accounting policies 15

17 Debt Equity Analysis Standalone 2.50 Consolidated (in ` million) (in ` million) 1,00, ,00,000 93,864 90, , ,000 80, ,183 70,000 70, ,763 60,000 60,000 54, ,000 50, ,000 30,000 20,000 10,000 18,941 20,104 21,476 24,739 17,848 18,469 19,078 19, FY11 Q1 FY12 Q2 FY12 Q3 FY12 Networth Debt DebtEquity , ,000 20,000 10, ,742 23,982 25,806 26,857 FY11 Q1 FY12 Q2 FY12 Q3 FY12 Networth Debt DebtEquity The Debt Equity at the standalone level has increased on The increase in debt at consolidated level is mainly on account account of money provided to IIPL (promoter funding) for the of drawdown happening from sanctioned debt in accordance Chongqing YuHe acquisition and for infusing subdebt into SPVs with construction progression The standalone debt is mostly unsecured debt for onlending to In Q3 quarter the higher increase in debt was on account of the SPVs as subdebt or for equity infusion into projects against cash proportionate p consolidation of debt from YuHe project and debt accruals expected from them taken for acquisition by IIPL to the extent not knocked off Incremental Equity Commitment for existing projects is around ` 1,000 million Total Investments made till 31 Dec (including advance against equity) is approximately ` 27,000 million 16

18 In the Works Capital Works remaining to be executed (ITNL proportionate share) (In ` million as on 31 December 11) Of projects awarded till last quarter* 81,600 Of projects awarded after last quarter 19,000 Total of Capital Works remaining to be executed 100,600 Project capital works remaining to be executed Non NHAI Roads 18.19% Non Road Projects 11.00% NHAI 70.81% Uttar Pradesh 10.90% Rajasthan 2.31% Meghalaya 3.01% Madhya Pradesh 5.05% Maharashtra 10.88% Kerala 2.12% Jharkhand 9.25% Andhra Pradesh 5.66% State wise spread of capital works remaining to be completed Himachal Pradesh 18.89% 89% J&K 27.62% Haryana 4.31% 17

19 Toll Projects under Operation Revenue Collection on Operational Road Projects Not adjusted for ITNL s stake Average Daily Toll Collection (All figures in ` million) In FY11 In Q2FY12 In Q3FY12 Ahmedabad Mehsana Road (Gujarat) Vadodra Halol Road (Gujarat) NoidaToll Bridge (UP) Mega Highways Rajasthan Rajkot to Jetpur Gondal (Gujarat) Beawer Gomti (Rajasthan) Operational Annuity Projects Annuity receivable Per Annum Accrued in Q3FY12 Maharashtra Border to Belgaum (Karnataka) 1, Thirvananthapuram City Roads (PhI) (Kerala) Kotakatta to Kurnool (Andhra Pradesh) East Hyderabad Expressway Limited Total Average Daily Collection from toll and annuity in Q3FY12 has been around ` million Average annualised toll/annuity revenue in Q3 per billion of project cost (net of grant) is ~`` 115 million 18

20 BOT Toll Revenue Growth Rs in million Sr.No Name of the Project Toll Revenue start date Ahmedabad Mehsana Road (Gujarat) Feb 03 2 Vadodra Halol Road (Gujarat) Oct NoidaToll Bridge (UP) Feb Mega Highways Rajasthan (Ph I) Mar Rajkot to Jetpur Gondal (Gujarat) May Beawer Gomti (Rajasthan) Aug Total

21 Value for Shareholders Have consistently created wealth for our shareholders. Trinity Capital ` 1542 Cr* (Dec, 2006) Goldman Sachs ` 1624 Cr* (Mar, 2007) Stanchart IL&FS Fund ` 2280 Cr* (Mar, 2008) Bessemer ` 4184 Cr* (Oct, 2009) Public Issue ` 5012 Cr* (Mar, 2010) * Post money valuation 20

22 Experienced Board of Directors Independent Directors Non Independent Directors Name Designation Name Designation Mr Deepak Dasgupta Mr RC Sinha Chairman; Former Chairman, NHAI Former Vice Chairman & MD, Maharashtra Airport Development Mr Ravi Parthasarthy Mr Hari Sankaran Mr Arun K Saha Chairman, IL&FS Managing Director, IL&FS Joint Managing Director, IL&FS Company Limited Mr Vibhav Kapoor Group Chief Investment Officer, IL&FS Mr HP Jamdar Former Principal Secretary, Mr Pradeep Puri Managing Director, NTBCL Government of Gujarat Mr R C Chandra Partner, Bessemer Venture Partners Mr Deepak Satwalekar Former Managing Director, HDFC Mr K Ramchand Managing Director Mr Mukund Sapre Executive Director 21

23 Key Managerial Personnel K. Ramchand Managing Director He has over 30 years of experience in urban and transport infrastructure development sector Mukund Sapre Executive Director He has over 27 years of experience in the industry. Harish Mathur Chief Executive Has over 33 years of experience in various road construction projects. Cherian George Chief Financial Officer He has over 35 years of experience in accounting and finance. Responsible for Financial and Accounting matters, Statutory Compliances and Financial Planning VKRaina V. K. He has over 40 years of experience in the industry and is our in house expert on structures including bridges and RoBs. He has been associated with many projects & has authored books on the subject too Technical Director S C Mittal Senior Vice President Krishna Ghag AVP & Company Secretary He has over 28 years of experience in the industry. He heads our in house design unit He has over 28 years of experience in the industry. He is the compliance officer, legal adviser and Company Secretary 22

24 Thank You IL&FS Transportation Networks Limited The IL&FS Financial Centre C22, G Block, Bandra Kurla Complex Bandra (East), Mumbai Board: Fax: itnlinvestor@ilfsindia.com