Vascon Engineers Limited — Investor Presentation 2019

May 28, 2019

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Date: May 28, 2019

To, To, National Stock Exchange of India Limited, BSE Limited, Listing Department, The Department of Corporate Services Exchange Plaza, Phiroze Jeejeebhoy Towers, Dalal Street, Bandra (E), Mumbai – 400 051 Fort, Mumbai 400 001 Ref Symbol: VASCONEQ Ref: Scrip Code: 533156

Subject: Presentation Update

Dear Sir/ Madam,

Please find enclosed Presentation by the Company Post Board meeting.

This is for your information and records.

Thanking you,

For Vascon Engineers Limited,

DANI Digitally signed by DANI VIBHUTI D Vibhuti Dani VIBHUTI D Date: 2019.05.28 17:03:46 +05'30' Company Secretary and Compliance Officer

Enclosures: as above

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This document is signed electronically

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INVESTOR PRESENTATION | May 2019

DISCLAIMER

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• This presentation and the accompanying slides (the “Presentation”), which have been prepared by Vascon Engineers Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company.

• This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded.

• Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the real estate & infrastructure industry in India and world-wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections.

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DELIVERING CONSISTENT PERFORMANCE

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Revenue EBITDA PAT
15
54
392
355 359
44
43 11
284 38
8
6
FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19
STANDALONE NUMBERS (IN RS. CRS )
DESPITE CHALLENGING INDUSTRY ENVIRONMENT, COMPANY HAS MAINTAINED CONSISTENT REVENUE GROWTH
AND FOCUSED ON BUILDING PROFITABILITY
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KEY HIGHLIGHTS

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EPC Business

Real Estate Business

Rs 1,044 Cr Rs 907 Cr Rs 137 Cr Total Order Book External Orders Internal Orders

New Sales booking of 4,20,998 sqft for a total sales value of Rs 272 Cr in FY19

Rs 482 Cr Order Intake since Q1FY19 (includes Rs 172 Cr of order from Tycoon Avanti Projects in May 2019)

Windermere - Sold 51,900 sqft for a sales value of 82 Cr in FY19, also received completion certificate for both the towers

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ANNUAL P&L HIGHLIGHTS

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Particulars (Rs. Cr)	Standalone	Consolidated
	FY19 FY18	FY19 FY18
Revenue Other Income Total Income	363.45 335.35 28.80 24.06 392.25 359.41	524.11 540.58 36.90 37.93 561.01 578.51
Construction Expenses / Material Consumed Employee Cost# Other Expenses	270.71 249.45 43.65 46.45 33.36 25.22	383.29 383.21 72.26 76.87 61.47 73.83
EBITDA EBIDTA Margin(%)	44.53 38.29 11% 11%	43.99 44.60 8% 8%
Depreciation Finance Costs Profit Before Tax	7.99 7.52 22.35 19.36 14.19 11.41	13.42 14.32 26.32 25.28 4.25 5.00
Tax Profit After Tax	-1.02 0.02 15.21 11.39	-1.02 0.35 5.27 4.65
Other Comprehensive Income Total Comprehensive Income	-0.32 0.24 14.89 11.63	-0.54 0.58 4.73 5.23

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SEGMENTAL PROFIT & LOSS - AFTER ALLOCATION

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Particulars (Rs. Cr)	RE (without effect for Ind AS 115	RE#	EPC##	GMP	Inventorised	Total	Total (without effect for Ind AS 115)
Revenue	101.65 86.06 323.55 158.79 568.40 583.99 79.58 69.29 242.16 112.78 1.85 426.08 435.36 22.07 16.77 81.39 46.01 142.32 148.63 22% 19% 25% 29% 25% 25%
Cost of Sales
Gross Profit
Gross Profit Margin %
Other Income	5.72 5.72 22.46 11.18 39.36 39.36
Employee Cost	19.20 19.20 24.46 28.60 72.26 72.26
Other Expenses	19.60 18.68 17.81 28.60 65.09 65.47
EBITDA	(11.01) (15.39) 61.58 (0.01) 44.33 50.26
EBIDTA Margin (%)	- - 19% - 8% 9%
Depreciation	1.23 1.23 7.11 5.25 13.59 13.59
EBIT	(12.24) (16.62) 54.47 (5.26) 30.74 36.67
EBIT Margin (%)	- 17% -3% 5% 6%
Finance Costs	26.39 26.39 4.35 10.28 (0.92) 0.55
Profit Before Tax
Tax
Profit After Tax	- - - 5.27 9.73

# IT INCLUDES REVENUE & EXPENSES RELATED TO AJANTA ENTERPRISE & PHOENIX VENTURES, IN FINANCIALS SHARE OF PROFIT IS TAKEN (AS PER IND AS ) ## IT INCLUDES INTERNAL EPC ORDER REVENUE AND CONSTRUCTION EXPENSES

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BALANCE SHEET- CONSOLIDATED

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Rs. Cr	Mar– 19	Mar– 18		Rs. Cr	Mar– 19	Mar– 18
Non-current assets	345.39	386.66		Shareholder’s Fund	699.59	679.00
Fixed assets	114.26	119.86		Share capital	178.14	174.14
Financial Assets	187.19	195.62		Other Equity	512.10	493.93
				Non Controlling Interest	9.35	10.93
Other Non Current assets, Income Tax & Deferred Tax	43.94	71.18		Non-current liabilities	159.30	115.17
				Long term borrowings	140.22	90.95
Current assets	985.34	935.16
				Other Financial liabilities	19.08	24.22
Inventories	500.23	471.53
				Current liabilities	471.84	527.65
Investments	4.33	7.79
				Short term borrowings	92.76	111.58
Trade receivables	201.67	205.58
				Trade Payables	201.67	192.81
Cash and bank balances	72.12	55.83		Other Financial liabilities	31.32	88.58
Loans & Other Financial assets	188.96	169.12
Other current assets	18.03	25.31		Other current liabilities & Provisions	146.09	134.68
Total Assets	1,330.73	1,321.82		Total Liabilities	1,330.73	1,321.82

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VASCON – AT PRESENT

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ENGINEERING PROCUREMENT & CONSTRUCTION

One of the leading EPC Company in India

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REAL ESTATE DEVELOPMENT

Focus on Affordable Housing

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ENGINEERING PROCUREMENT & CONSTRUCTION

EPC BUSINESS

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 Construction Experience across various verticals

• Executed over 200 projects with construction area of over 50 msft

 Ability to execute around 8 msft per annum

• Currently executing around 3 msft p.a . – operating at 40% utilization

• Number of Personnel in Project / Engineering team - 489

 Higher margins Because of Turnkey Capabilities

• In-house Design and Engineering team

• Ability to demand premium over other construction companies

 New Orders Target

• Focus on Affordable Housing

• Focus on large and high value civil contracts by Government Agencies and reputed Private Companies

 Generate positive cash flows from all the projects and re-invest to drive growth

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MARQUEE CLIENTS

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MAINTAINING CONSISTENT QUALITY STANDARDS ENSURING REPEAT ORDERS

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CONSISTENT ORDER INTAKE

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External
Opening
Order
External
STRONG ORDER INTAKE OF ~RS 482 CR Book
Order
(INCL. RS 172 CR ORDER WON IN MAY 2019)
Book
907
686
226
172
84
FY18 H1FY19 H2FY19 Q1FY20 Current Order Book
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EXECUTION OF NEW ORDERS TO IMPROVE REVENUE & CAPACITY UTILISATION… LEADING TO BETTER OPERATING MARGINS

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EXISTING ORDER BOOK

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Project	Location	Amt(Rs. Cr)
External Order book
Tycoon	Mumbai	172
Adhiraj	Mumbai	134
Kailash Enclave	Lucknow	90
Adampur Airport	Adampur	83
Ayyalur	Ayyalur,Andhra Pradesh	78
GodrejGreens	Pune	66
Sheth Creators – Malad(I&II)	Mumbai	70
Adoni	Adoni,Andhra Pradesh	52
Sriram Educational Trust	Chennai	31
GodrejLaguna	Chennai	34
Everest Enclave	Lucknow	29
TNMC	Chennai	17
Other Projects		51
Total		907
Internal Order book
Windermere-Bunglows	Pune	33
Hadapsar School	Pune	15
Forest Edge	Pune	14
Katvi-Affordable Housing	Talegaon,Pune	75
Total		137
Total EPC Business Order book		1,044

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READY TO CAPITALIZE ON THE GROWTH OPPORTUNITIES

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Housing for all 2022

1. Opportunity under PMAY(U), Smart Cities, AMRUT, HIRDAY.

2. Housing shortage of 19 million in Urban Areas

3. Government investment of Rs. 2 trillion for Housing for all 2022

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Education & Hospitality

1. Government focus on developing Educational Institutions and Hospitals

2. Higher Education funding agency (HEFA) outlaid funding of Rs. 53 billion for development of IITs, IIMs, IISERs, IISc, NIT and 44 new KVs

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Airports

1. Government aims to spend Rs. 250 billion for development of 20 plus airports over the next 5 years

Growing demand for Commercial and Retail Space

1. Organised Retail to grow by 25-30% annually

2. Huge Demand for Commercial Space in Metros due to rapid growth in service Sector

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REAL-ESTATE DEVELOPMENT

REAL ESTATE BUSINESS

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BRAND EQUITY

Landmark developments (Windermere, Forest County and Willows) have established the Brand Vascon in Pune Market

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- END TO-END CAPABILITIES

In-house Design and Construction team gives us a unique advantage over other Real Estate Developers

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LOW OPERATING COST

Flat organization structure with agile decision reduces operating cost

ASSET LIGHT MODEL

JV and JDA with land owners with low upfront deposit

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SUCCESSFULLY LAUNCHED REAL ESTATE PROJECTS

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PROJECTS DEV. AREA LAUNCH STATUS REAL ESTATE SALES (RS CR)
(MSFT)
Forest Edge (JV) 0.08 Jan 2018 Fully sold 272
Windermere (JV)# 0.38 Mar 2018 50% sold 197
Vascon Goodlife –
0.30 May 2018 60% sold 60
Value Home (Own)
Forest County 0.18 Dec 2018 60% sold
FY17 FY18 FY 19
Xotech 0.04 Oct 2018 Fully Sold
“FOREST EDGE” – VASCON GOODLIFE - RE-LAUNCH OF FOREST COUNTY -
XOTECH- PUNE
KHARADI, PUNE KATVI, TALEGAON WINDERMERE# KHARADI
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NEW SALE BOOKING OF ~4,20,998 SQFT FOR A TOTAL SALES VALUE OF ~RS. 272 CR IN FY19 AGAINST SALE BOOKING OF 2,46,867 SQFT FOR A TOTAL SALES VALUE OF ~RS. 197 CR IN FY18

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CURRENT REAL ESTATE PROJECTS UNDER DEVELOPMENT

Project Name	Location	Vascon Share	Vascon Share	Total	Total	Total	Total	Vascon Share	Vascon Share	Vascon Share
				Project Area	Area Sold	**Sale Value **	**Collection **	**Sale Value **	Collection	Rev. Recognized
		Type	Share	msft	msft	Rs. Cr	Rs. Cr	Rs. Cr	Rs. Cr	Rs. Cr
Forest Edge	Pune	JV	50%	0.08	0.08	54	27	27	24	-
Forest County	Pune	JV	50%	0.18	0.11	76	6	38	3	-
Windmere Residential	Pune	JDA	45%	0.38	0.19	223	164	100	74	95
Platinum Square	Pune	JV	70%	0.13	0.13	133	106	93	74	93
Vascon GoodLife	Talegaon	Own	100%	0.30	0.18	64	6	64	6	-
Xotech	Hinjewadi	JV	50%	0.08	0.08	36	25	18	13	20
Total				1.15	0.77	586	333	340	192	208

COLLECTION & AREAS SOLD DO NOT INCLUDE SALE OF 99,693 SQFT SOLD UNDER DMA PROJECTS

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THANK YOU!

Mr. M. Krishnamurthi / Mr. Punit Bhayani mk_murthi@vascon.com punit@vascon.com

Mr. Vikash Verma / Ms. Hina Agarwal vikash.verma@stellar-ir.com hina@stellar-ir.com

Vascon Weikfield Chambers, Pune - 411014

Kanakia Wall Street, Andheri (East), Mumbai 400 093