Vascon Engineers Limited — Investor Presentation 2020

Nov 5, 2020

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Date: November 05, 2020

To, To, National Stock Exchange of India Limited, Listing Department, Exchange Plaza, Bandra (E), Mumbai – 400 051

BSE Limited,

The Department of Corporate Services Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai 400 001

Ref Symbol: VASCONEQ

Ref: Scrip Code: 533156

Dear Sir/ Madam,

Subject: Presentation Update

Please find enclosed Presentation by the Company post board meeting.

This is for your information and records.

Thanking you.

For Vascon Engineers Limited

Digitally signed by VIBHUTI DARSHIN DANI DN: c=IN, o=Personal, pseudonym=8710de31bce3e98fed9a1214e904c6394d123fb9 703896687b3d130b34b8d1c7, 2.5.4.20=2139eec6e8f859df249878e752c07a304abb01f4b2a2 5eb72fa964d09b2d7919, postalCode=380004, st=GUJARAT, serialNumber=5ffb5233027b6a065fdafd4bd57df381e1b2a601 76f5d2a643ce63e261d7c0a3, cn=VIBHUTI DARSHIN DANI Date: 2020.11.05 18:08:27 +05'30'

DN: c=IN, o=Personal, pseudonym=8710de31bce3e98fed9a1214e904c6394d123fb9 VIBHUTI 703896687b3d130b34b8d1c7, 2.5.4.20=2139eec6e8f859df249878e752c07a304abb01f4b2a2 5eb72fa964d09b2d7919, postalCode=380004, st=GUJARAT, serialNumber=5ffb5233027b6a065fdafd4bd57df381e1b2a601 DARSHIN DANI Vibhuti Dani 76f5d2a643ce63e261d7c0a3, cn=VIBHUTI DARSHIN DANI Date: 2020.11.05 18:08:27 +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 | November 2020

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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2

KEY BUSINESS HIGHLIGHTS

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Total Order Book

1,972 Crs. Forming healthy Order Book of 7.3x FY20 EPC revenues

Order Intake in Q2FY21

32 Crs. Order received from M/s Epicons Consultants Pvt. Ltd.

External EPC Order Book

1,871 Crs. Higher contribution by Government projects

Government Project (%)

~75% Providing visibility of faster execution and uninterrupted Cash Flows

Current Execution Run-rate Real Estate ~60% 42,142 sqft Expect normalcy to return New Sales Booking in H1FY21 in H2FY21

• Priority to reach the execution at pre-covid levels; Healthy Order Book to support Revenue uptick

• Adapted prudent measures towards cost control and maintaining sufficient liquidity

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P&L HIGHLIGHTS- Q1 & H1 FY21

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Particulars (Rs. Crs)	Standalone	Standalone	Standalone	Standalone	Consolidated	Consolidated	Consolidated	Consolidated
	Q2 FY21	Q2 FY20	H1 FY21	H1 FY20	Q2 FY21	Q2 FY20	H1 FY21	H1 FY20
Revenue Other Income	89.36	76.96 2.23	121.70	172.59 12.14	118.94	121.34 2.69	161.71	252.02 13.49
	3.66		6.85		4.50		7.07
Total Income	93.02	79.19	128.55	184.73	123.44	124.03	168.78	265.51
Construction Expenses / Material Consumed Employee Cost Other Expenses EBITDA EBIDTA Margin (%)		53.89 8.40 5.05 11.85 15%		130.23 19.14 10.92 24.44 13%		80.02 16.85 10.61 16.55 13%		177.06 35.06 21.53 31.86 12%
	81.94		110.98		99.97		135.37
	6.84		15.92		13.16		28.28
	6.26		23.95		11.00		32.50
	(2.02)		(22.30)		(0.69)		(27.37)
	-2%		-17%		-1%		-16%
Depreciation Finance Costs Profit Before Tax Tax		2.18 7.16 2.51 -		4.22 12.38 7.84 -		3.77 8.12 4.66 -		7.31 14.23 10.32 -
	1.89		3.70		2.99		6.00
	5.74		12.59		6.53		14.18
	(9.65)		(38.59)		(10.21)		(47.55)
	-		-		0.58		0.58
Profit After Tax	(9.65)	2.51	(38.59)	7.84	(10.79)	4.66	(48.13)	10.32
Other Comprehensive Income Total Comprehensive Income	(0.74)	(0.06) 2.45	(1.11)	0.03 7.87	(0.73)	(0.06) 4.60	(1.10)	0.03 10.35
	(10.39)		(39.70)		(11.52)		(49.23)

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4

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H1FY21- SEGMENTAL PROFIT & LOSS - AFTER ALLOCATION

Particulars (Rs. Cr)	RE#	EPC##	GMP	Inventorised	Total
Revenue	30.99 31.62 (0.63) -2%	93.52 80.99 12.53 13%	40.43 24.72 15.71 39%	0.12	164.94 137.45 27.49 17%
Cost of Sales
Gross Profit
Gross Profit Margin %
Other Income	1.40 6.71 7.98	3.14 9.21 20.64	2.34 12.36 4.84		6.88 28.28 33.46
Employee Cost
Other Expenses
EBITDA	(13.92)	(14.18)	0.85		(27.37)
EBIDTA Margin (%)	-45%	-15%	2%		-17%
Depreciation	0.61	3.19	2.20		6.00
EBIT	(14.53)	(17.37)	(1.35)		(33.37)
EBIT Margin (%)	-47%	-19%	-3%		-20%
Finance Costs					14.18 (47.55) 0.58
Profit Before Tax
Tax
Profit After Tax	-	-	-		(48.13)

# 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	Sep– 20	Mar– 20		Rs. Cr	Sep– 20	Mar– 20
Non-current assets	326.68	340.53		Shareholder’s Fund	695.93	743.67
Fixed assets	103.20	107.62		Share capital	178.14	178.14
Financial Assets	188.56	189.78		Other Equity	508.95	556.16
Other Non Current assets, Income Tax & Deferred Tax	34.92	43.13		Non Controlling Interest	8.84	9.37
				Non-current liabilities	84.97	116.64
Current assets	990.57	1,015.13
				Long term borrowings	71.55	98.33
Inventories	465.90	480.86
				Other Financial liabilities	13.42	18.31
Investments	3.21	18.03
				Current liabilities	536.35	495.35
Trade receivables	149.04	180.97
				Short term borrowings	105.91	101.65
Cash and bank balances	65.10	68.80
				Trade Payables	216.12	201.59
Loans & Other Financial assets	274.95	236.69		Other Financial liabilities	85.34	65.49
Other current assets	32.37	29.78		Other current liabilities & Provisions	128.98	126.62
Total Assets	1,317.25	1,355.66		Total Liabilities	1,317.25	1,355.66

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6

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BUSINESS OVERVIEW

VASCON – AT A GLACE

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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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EPC BUSINESS- OVERVIEW

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

 Generate positive cash flows from all the projects and reinvest to drive growth

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MARQUEE CLIENTS

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MAINTAINING CONSISTENT QUALITY STANDARDS ENSURING REPEAT ORDERS
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ORDER BOOK BUILD-UP & KEY ORDERS

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(In	Rs.	Cr)					2,060						1,972											Project External Order book	Location	Amt(Rs. Cr)
							107							101										Maharashtra StatePoliceHousing PWD, Raipur	Mumbai Raipur	412 380
																								Tycoon	Mumbai	163
																								MetroRail Depot	Bangalore	146
																								MMRC Mumbai Metro	Mumbai	131
	1,066				1,044																			Goa Airport Adhiraj	Goa Mumbai	128 105
	190					137	1,953						1,871											PMC-Affordable Housing Adampur Airport	Pune Adampur	97 65
	515																							Kailash Enclave	Lucknow	46
						907																		Other Projects Total		198 1,871
																								Internal Order book
																								Windermere-Bunglows	Pune	17
	FY18					FY19	FY20				Current Order Book													ForestEdge Katvi-Affordable Housing	Pune Talegaon, Pune	18 66
																								Total		101
			Internal Order Book				External			Order					Book									Total EPC Business Order book		1,972

EXECUTION OF NEW ORDERS TO IMPROVE REVENUE VISIBILITY & CAPACITY UTILISATION

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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 Vascon Share Dev. Area (msft) Launch Status Forest Edge (JV) A 50% 0.08 18-Jan Fully Sold Forest Edge (JV) B 50% 0.08 19-Sep 70% sold Windermere (JV)# 45% 0.38 18-Mar 63% sold Vascon Goodlife – Value Home (Own) 100% 0.3 18-May 63% sold Forest County 50% 0.18 18-Dec 93% sold Xotech C (JV) 50% 0.04 18-Oct Fully Sold	REAL ESTATE SALES (RS CR)
	272 116 39
	FY19 FY20 H1FY21

Relaunch

“FOREST EDGE” – VASCON GOODLIFE - KHARADI, PUNE KATVI, TALEGAON

RE-LAUNCH OF WINDERMERE#

FOREST COUNTY - XOTECH- PUNE KHARADI

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CURRENT REAL ESTATE PROJECTS UNDER DEVELOPMENT

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Total Vascon Share
Project Name Location Vascon Share
Project Area Rev.
Sale Value Collection Sale Value Collection
Area Sold Recognized
Type Share msft msft Rs. Cr Rs. Cr Rs. Cr Rs. Cr Rs. Cr
-
Forest Edge (A&B) Pune JV 50% 0.16 0.13 92 51 46 25
Forest County Pune JV 50% 0.18 0.16 121 33 60 16 -
Windmere Residential Pune JDA 45% 0.38 0.24 280 225 126 101 143
Platinum Square (I&II) Pune JV 70% 0.14 0.14 140 130 98 91 98
-
Vascon GoodLife Talegaon Own 100% 0.46 0.18 65 26 65 26
Xotech (I&II) Hinjewadi JV 50% 0.08 0.08 36 34 18 17 18
Total 1.40 0.93 734 499 413 276 259
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REAL ESTATE PROJECTS – PIPELINE (LAUNCHES IN NEAR-TERM)

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Sr. No. Projects Type Segment Total Vascon Share
Saleable Expected Saleable Expected
Area Sales Value Area Sales Value
msft (Rs. in Cr) msft (Rs. in Cr)
1 Coimbatore JDA Residential 0.3 195 0.21 136
2 Madurai JDA Residential 0.49 220 0.37 165
3 4 Acre HDH - Phase I JV Residential 0.26 195 0.13 97
4 4 Acre HDH - Phase II JV Residential 0.25 180 0.11 90
Total 1.3 790 0.82 488
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REAL ESTATE PROJECTS – PIPELINE (OTHER PROJECTS)

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Sr. No. Projects Type Segment Total
Saleable Expected
Area Sales Value
msft (Rs. in Cr)
1 Bavdhan - Comm JDA Commercial 0.23 158
2 Willows - Comm JV Commercial 0.23 191
3 Kalyani Nagar - Comm JDA Commercial 0.3 330
4 Kalyani Nagar JDA Residential 0.5 550
Total 1.26 1,229
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CONTINUOUS FOCUS ON CASH GENERATION

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**LAND **	MONETIZATION OF RS. 170 CR		IDENTIFIED NON-CORE ASSETS
Seller	Ms Ajanta Enterprise, 50% JV of Vascon
Acquirer	Pune BP Development Pvt. Ltd. (SPV of Mapletree Investments Pte Ltd )		• 44% EQUITY STAKE IN HOTELS AT GOA
Location	Kharadi Village, Pune		• **COMMERCIAL PROPERTY AT KALEDONIA, **
Land Parcel Area	30,955 sq. mt.		ANDHERI (E)
Gross Consideration	Rs. 170 Cr ( Entire c_onsideration received by Ms_ Ajanta Enterprise)		• 9 ACRE LAND PARCEL IN AURANGABAD
Net Cashflow to Vascon	Rs. 52.5 Cr		• GMP TECHNICAL SOLUTIONS (85%
Cashflow Utilisation	Reducing High Cost Debt & financing incremental Working Capital		SUBSIDIARY OF VASCON

• After this Land Sale transaction, Ajanta Enterprise has following : Total development of ~ 800,000 sft CONTINUE FOCUS ON GENERATING CASH a) Under Development : 160,000 Forest Edge & 180,000 sft Forest BY MONETIZING IDENTIFIED NON County, CORE ASSETS

b) To be launched : ~ 400,000 sft

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18

THANK YOU!

Mr. Punit Bhayani punit@vascon.com

Vascon Weikfield Chambers, Pune - 411014

Mr. Gaurang Vasani/ Ms. Hina Agarwal vgaurang@stellar-ir.com hina@stellar-ir.com Kanakia Wall Street, Andheri (East), Mumbai 400 093