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POWER EPC INFRASTRUCTURE SOLAR NATURAL RESOURCES
Investor Presentation Sept’2015
© LANCO Group, All Rights Reserved
Agenda
P|2
1 Company Overview
2 Financials
3 Industry Overview
4 Business Ver?cals
5 Corporate Social Responsibility & Rewards / Recogni?on
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Mission, Vision and Values
Mission: Development of Society through Leadership, Entrepreneurship, Ownership
Vision: Most Admired Integrated Infrastructure Enterprise
Values: Integrity
Humility & Respect
Achievement Drive Accountability
Continuous Learning
Teamwork Organization before Self
Positive Attitude P|3
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India’s largest Integrated Power Developer
Infrastructure Property Development
Subsidiaries / Affiliates
Lanco Power Natural Resources Solar
Lanco Infratech Limited (LITL) (EPC & Construc?on)
• All businesses of the group are under LITL, the listed Holdco of the group, with Promoters’ Holding ~ 71% • Adj. Net Worth (including Minority) ~ US $ 493 Mn as against a peak of US $ 1.25 Bn as on 31.03.2012 • Power projects of 8,096 MW in 12 states of India (3,460 MW under opera\on & 4,636 MW under construc\on)
Thermal Hydro Roads Lanco Hills EPC
Genera?on
Manufacturing
All Coal and Gas based SPVs
All Hydro based SPVs
Assumed US$ / INR = 60
• Devihalli • Hoskote
• Griffin • Tasra
Coal
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Pan India Presence
Chitradurga (3MW)
Tanjore power (120 MW)
Amarkantak – I & II( 600 MW) Amarkantak – III & IV (1320 MW)
Kondapalli I & II(734 MW) & IIIA (371 MW) Kondapalli IIIB (371 MW)
Teesta(500 MW)
Mandakini(76 MW)
Anpara(1200 MW)
Babandh ( 1320 MW)
Lanco Hills
Plants under construc\on
Plants under opera\on
Plants under construc\on
Plants under opera\on
Plants under construc\on
Plants under opera\on
Property development
Road development
LHPL (10 MW)
LTPL(10 MW)
81 km Bangalore – Hoskote – Mudbagal 82 km Neelamangla – Devihalli
Coal Based
Hydro
Gas
Wind
Registered office
Corporate Office
Hyderabad
Gurgaon
Coal mine
Vidarbha (1320 MW)
Plants under opera\on
Solar
Solar Power Plants
Manufacturing at Rajnandgaon‐ Chhadsgarh Gujarat Solar (35 MW)
Rajasthan Solar(6 MW)
Tasra mine
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Experienced Management Team
L Madhusudhan Rao Execu\ve Chairman
G Bhaskara Rao Execu&ve Vice Chairman
L Sridhar Vice Chairman
G Venkatesh Babu Managing Director
Key Execu?ves
Finance Power
Lanco Group Senior Management Team
T Adi Babu T N Subramanian
Sumeet Kumar
Sanjay Varghese
P Panduranga Rao K Raja Gopal
Construc?on & EPC
S C Manocha Ravi Kapoor
Solar
Rajkumar Roy
S C Manocha Deputy Managing Director
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Agenda
P|7
1 Company Overview
2 Financials
3 Industry Overview
4 Business Ver?cals
5 Corporate Social Responsibility & Rewards / Recogni?on
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Financials – P&L
Note: 1. Assumed US$ / INR =60 2. Mn indicate million
* Revenue : Before intersegment revenue elimina\on
US$ Mn
P|8
60 58 89
157 114
‐178
‐381 ‐344
‐19
77 72
154 203 230
39
‐124 ‐84
83
‐500
‐400
‐300
‐200
‐100
0
100
200
300
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 H1FY16
Adj PAT ‐ Reported PAT+ Profit Eliminated Cash Profit ‐ PAT + Deprecia\on + Forex Loss / (Gain) + Profit Eliminated
552
1,021
1,5981,884
2,566 2,549
1,8131,614
855
24%
15%
18%19%
12%
17%15% 19%
26%
‐
500
1,000
1,500
2,000
2,500
3,000
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 H1FY1610%
15%
20%
25%
30%
Revenue EBIDTA %
* * H1 FY 16 Revenue does not include UPCL
Adjusted Profit & Cash Profit
Revenue & EBIDTA
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Financials – Balance Sheet
* Fixed Assets : Gross Block + CWIP
Note: 1. Assumed US$ / INR = 60 2. As per AS‐21 / AS‐23
US$ Mn
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726 1,065 1,348
2,935
5,901 6,470 6,813 7,202
7,774
‐
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 H1FY16
Fixed Assets
145
190
366
277 268
109 101
144 108
‐
50
100
150
200
250
300
350
400
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 H1FY16
Cash & Cash Equivalents
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Agenda
P|10
1 Company Overview
2 Financials
3 Industry Overview
4 Business Ver?cals
5 Corporate Social Responsibility & Rewards / Recogni?on
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113 118 124 132 143 148 159 174 200
223 245
288
100
150
200
250
300
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2017e
Strong Infrastructure Push to drive GDP Growth XII Plan (FY13‐FY17) spending on Infrastructure – US $ 939 Bn
(of which Construc?on Opportunity ~ US $ 445 Bn)
Source: World Bank Data
Per capita consump?on of electricity (2012)
Installed Power Capacity Growth (GW) – Excluding Renewables
Source: Planning commission (XIIth five year plan), CEA
744
3475
0
1000
2000
3000
4000
India China
Among BRIC countries, India’s per capita consump?on of electricity is the lowest. China’s per capita consump?on of power is 4.67x of India.
In order to achieve 8% growth, India should anain at least 7% growth in power sector.
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USD / INR = Rs. 60
303
161 157
87
20
84 42 33
14 24 9 0
50
100
150
200
250
300
350
Spending in 12th Plan
EPC Opportunity
Source: Planning Commission , EY – EPC ‐ Making India Brick by Brick
18.0 20.6
18.4 17.8 17.8
22.6
8.9 7.9
0
5
10
15
20
25
Target
Ache
ivem
ent
Target
Ache
ivem
ent
Target
Ache
ivem
ent
Target
Ache
ivem
ent
2012‐13 2013‐14 2014‐15 2015‐16 (Till Oct'15)
Thermal Hydro Nuclear
Power Scenario in India
Source: CEA
12th Plan Capacity Addi?on ~ majorly due to Private IPPs
Recent Policy Ini-a-ves:
1. UDAY (Ujwal Discom Assurance Yojana) – For revival of Distribu\on Sector to enable 24 X 7 Power for All
2. Alloca\on of Imported LNG for stranded gas based plants.
3. Green Energy Corridors for evacua\on
Type FY14 FY15 FY 16 (Till Oct’15)
Thermal 792 878 539
Hydro 135 129 89
Nuclear 34 36 22
Bhutan Import 6 5 5
All India 967 1,048 655 Source: CEA
Electricity Genera?on (BUs) ~ Growing @ 8% p.a
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Per Capita Consump?on Growth (Units) Source: CEA
Per capita consump?on of electricity ~ growing at brisk pace
672 717 734 779 819
884 914 957
2007 2008 2009 2010 2011 2012 2013 2014
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Natural Resources (Coal)
Coal will con\nue to have a dominant share in India’s energy mix
Imports of coal are expected to almost triple between 2011‐12 and 2021‐22
Demand from power sector is expected to form 75% of the total coal demand of 980 million tons
projected in 2016‐17
Percentage Share of each fuel in India’s commercial energy produc?on from natural resources
Securing coal: a need; an opportunity
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000‐01 (Actual)
2005‐06 (Actual)
2006‐07 (Actual)
2007‐08 (Actual)
2008‐09 (Actual)
2009‐10 (Actual)
2010‐11 (Actual)
2011‐12 (Actual)
2012‐13 (Actual)
2013‐14 (Provisional)
2016‐17 (Projected)
2021‐12 (Projected)
Renewable Energy
Hydro & Nuclear Power
Natural Gas
Crude Oil
Coal & Lignite
Source: Planning commission Ministry of Sta\s\cs and program implementa\on
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Solar Scenario
Addi\on of capaci\es: 2012 – 30 GW 2013 – 38.4 GW 2014 ‐ 38.7 GW (approx.)
Europe lost its leadership to Asia in terms of new installa\ons.
Top installer countries were China, Japan followed by USA.
PV Price decreases and rising electricity price have brought PV close to grid parity in several countries have encouraged new investors
Expected Growth in the market could range from 60 – 250 GW by 2020.
Glob
al Scena
rio (G
W)
Indian
Perspec?v
e
Source: MNRE
JNNSM was launched in January 2010. The target is to add 100 GW solar capacity by 2022. It is split between 60 GW of u\lity scale projects and 40 GW of roorop projects.
JNNSM to be implemented in three phases divided into batches and then trenches.
Phase‐I, (Batch I and Batch II) – 1 GW – Bundling Mechanism. Already over.
Phase‐II: Batch I – 0.75 GW (equally divided into DCR
and Open) – through VGF mechanism. Already Over.
Batch II ‐ 3 GW ‐ Bundling Mechanism. Batch III – 2 GW ‐ VGF
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Source: EPIA – Global Market Outlook for PV Un&l 2018
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Agenda
P|15
1 Company Overview
2 Financials
3 Industry Overview
4 Business Ver?cals
5 Corporate Social Responsibility & Rewards / Recogni?on
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Lanco Power Business ‐ Project Status Update
Plant Fuel Capacity (MW) Ooake Anpara Coal 1,200 PPA Kondapalli I Gas 368 PPA Kondapalli II Gas 366 Short Term Kondapalli III Gas 742 Short Term Amarkantak I Coal 300 PPA Amarkantak II Coal 300 PPA Tanjore Gas 120 PPA Other Renewable Wind, Solar, Hydro 64 PPA Total 3,460
Power Projects under Opera?on
Plant Fuel Financial closure Capacity (MW)
ooake Es?mated comple?on
Lanco Mandakini Hydro Y 76 Short Term FY 17
Teesta Hydro Y 500 Short Term FY 18
Amarkantak III & IV Coal Y 1,320 Part PPA FY 17
Vidarbha Coal Y 1,320 Part PPA FY 18
Babandh Coal Y 1,320 Part PPA FY 18
Solar Solar Y 100 PPA FY 17
Total 4,636
Power Projects under Construc?on
46% 52%
2% Fuel Diversification
Gas Coal Renewables including Hydro
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Presence Across Value Chain De‐risking the Power Business
Fuel (Coal mining) EPC Genera?on and O&M Trading
• Griffin coal, Collie region in Western Australia, currently produces 3 MTPA with resources of 1.04 bn
• Selected as MDO by SAIL for Tasra Open Cast mine with geological reserves of approximately 250 mn tons i n Jha rkhand . Includes development of a cap\ve power plant as well.
• Completed projects with capacity of 4,732 MW
• 4,636 MW projects under construc\on
• S t r o n g e n g i n e e r i n g capability
• O v e r 1 0 y e a r s o f experience in design and development of Power Projects
• Handles global suppliers selec\on and sourcing of diverse materials like high‐p r e s s u r e f a b r i c a t e d e q u i p m e n t , s k i d s , i n s t r u m e n t a \ o n & electrical systems
• Opera\ng capac i ty o f 3,460MW
• 4,636 MW projects under construc\on.
• One of largest private sector players in Indian power trading market
Transmission and Distribu?on
• S t r a t e g y i n c l u d e s possible expansion into t r a n s m i s s i o n a n d distribu\on
Integrated presence across value chain capturing value addi?on across the businesses
Type MW
Thermal & Gas 3,396
Renewable (Hydro, Solar, Wind)
64
TOTAL 3.460
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EPC Business: In‐house exper?se enhances margins
Construc?on
Execu\ng a wide range of projects spanning Thermal Power Plants, Hydro Power Plants, Highways, Airports, Industrial Structures, Transmission and Distribu\on, Chimneys and Cooling Towers, Water Infrastructure and Heavy Civil Structures.
EPC
EPC order book of USD 4.62 billion as on Sept’15 Major EPC / Construc?on order executed
Kondapalli 1,108 MW Udupi 1,200 MW Anpara 1,200 MW Amarkantak (I & II) 600 MW Tanjore Power 120 MW
Budhil 70 MW External orders under execu?on 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 EPC of Supercri\cal Ennore Thermal Power Project (1*660MW)
EPC
Construc\on
Order Book (USD Mn)
Revenue (USD Mn)
4,383 4,363
4,677 4,620
4,000
4,400
4,800
FY13 FY14 FY15 H1FY16
724
376
242 225
‐
400
800
FY13 FY14 FY15 H1FY16
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Solar Business: Fully Integrated Strategy enables lowest EPC Cost (Rs/kWh)
Target in 4 Yrs
EPC
250 MW/PA
Aim to be a Global EPC player.
Current Solar EPC Order Book USD $561 mn (included in EPC order book)
Policy Capacity (MW) Tariff- Rs/Unit Project Cost
(USD mm) PPA Duration
(Yrs) Solar PV
Gujarat Policy 35 Rs 15 for 12 yrs, Rs 5 for next 13 Yrs 89 25
JNNSM 5 11.5 14 25 RPSSGP 1 16.5 2.4 25
Solar Thermal (Under Construction) JNNSM 100 10.49 311 25
Foray into manufacturing to support internal requirements and reduce margin vola\lity, through the cycle
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Target in 3 Yrs
Integrated Manufacturing
150 MW/PA
Current Solar Farm Development Porvolio
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Natural Resources (Coal)
Tasra Open Cast Project (SAIL)
• Selected as Mine Developer and Operator (MDO) by Steel Authority of India (SAIL) for Tasra Open Cast Project and development of associated cap\ve power project.
• Located in Jharia coalfield of Dhanbad (Jharkhand) having geological reserves of approximately 250 million tons
• Sedng up of coal washery and opera\on of power plant of 200‐300 MW capacity based on the secondary products arising from the proposed Tasra Washery.
Griffin Coal
Largest opera\onal thermal coal mines in Western Australia, with Resource base of 1.2 bn Tonne Strategic loca\on – Bunbury port <100 km from mine
Good connec\vity of rail and port.
Current produc?on :‐ capacity of 4 mtpa of coal.
Expansion : Plans to ramp up produc\on to a max of 15 MTPA by FY 18
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Infrastructure Business – Leveraging Construc?on Exper?se to Build Infrastructure
Lanco has moved into selec?ve infrastructure projects to leverage its EPC experience
Awarded two Na?onal highway projects in Karnataka
i. 81 km stretch connec\ng Bangalore – Hoskote – Mudbagal
ii. 82 km stretch connec\ng Neelamangla – Devihalli
Concession periods of 20 years and 25 years respec\vely during which toll will be collected
Capex of USD $ 308 mn
Grant from NHAI USD $ 60 mn
COD of Devihalli anained on June 25th 2012 and toll collec\on started
COD of Hoskote anained on December 20th 2013 and toll collec\on started
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Property Development Business
Lanco Hills is the group’s foray into property development, located in Hyderabad, spread over 100 acres and comprises residen?al space, office space and IT SEZ
Lanco Hills
Residen?al • Consists of High Rise Apartments and Condominiums • In addi\on to high rise towers, 56 Villas are also under construc\on
Office space
Property Development is restricted to Hyderabad only
• The Lanco Offices zone offers 7.85 million square feet of built‐up area, which includes premium workspace with both SEZ and non‐SEZ zones
• Offices at Lanco Hills can accommodate over 75000 working professionals and has a spacious 12,000 car park facility
P|22
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Agenda
P|23
1 Company Overview
2 Financials
3 Industry Overview
4 Business Ver?cals
5 Corporate Social Responsibility & Rewards / Recogni?on
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We care for the world we live in
Lanco Foundation
• Member of the UN Global Compact
• Operating in 10 Indian States at 12 locations
• Covering 155 villages & 240,000 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
P|24
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Recent Awards
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8th Construction World- Annual Award for “Fastest Growing Construction Company”
Lanco Infratech Ltd received PRSI Golden Jubilee Award for the “Most Impressive Public Relations Initiatives”
Lanco Tanjore Power received British Sword of Honour Award for “HSE and 5 Star Rating” by British Council
Lanco Amarkantak wins “Greentech Safety Award 2013” in Gold category in Thermal Power sector
Lanco Anpara wins “Power Line Award” for the Best Thermal Project
Lanco Amarkantak wins “Golden Peacock Occupational Health & Safety Award” for the Year 2013
Lanco Solar Wins “IESA Award For Most Innovative Product” for 2012
Lanco Kondapalli Wins “Energy Conservation Award at both state and national level by NREDCAP ” in December 2013
Lanco Tanjore Power 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”
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Disclaimer
No representa\on or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the informa\on or opinions contained in this presenta\on. Such informa\on and opinions are in all events not current arer the date of this presenta\on. Certain statements made in this presenta\on may not be based on historical informa\on or facts and may be "forward looking statements" based on the currently held beliefs and assump\ons of the management of the Company, which are expressed in good faith and in their opinion reasonable, including those rela\ng to the Company's general business plans and strategy, its future financial condi\on and growth prospects and future developments in its industry and its compe\\ve and regulatory environment.
Forward‐looking statements involve known and unknown risks, uncertain\es and other factors, which may cause the actual
results, financial condi\on, performance or achievements of the Company or industry results to differ materially from the results, financial condi\on, performance or achievements expressed or implied by such forward‐looking statements, including future changes or developments in the Company's business, its compe\\ve environment and poli\cal, economic, legal and social condi\ons. Further, past performance is not necessarily indica\ve of future results. Given these risks, uncertain\es and other factors, viewers of this presenta\on are cau\oned not to place undue reliance on these forward‐looking statements. The Company disclaims any obliga\on to update these forward‐looking statements to reflect future events or developments.
This presenta\on is for general informa\on purposes only, without regard to any specific objec\ves, financial situa\ons or
informa\onal needs of any par\cular person. This presenta\on does not cons\tute an offer or invita\on to purchase or subscribe for any securi\es of the Company by any person in any jurisdic\on, including India and the United States. No part of it should form the basis of or be relied upon in connec\on with any investment decision or any contract or commitment to purchase or subscribe for any securi\es. The Company may alter, modify or otherwise change in any manner the content of this presenta\on, without obliga\on to no\fy any person of such change or changes. This presenta\on may not be copied or disseminated in any manner.
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