Vascon Engineers Limited — Investor Presentation 2021

Nov 1, 2021

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November 1, 2021

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

Dear Sir/ Madam,

Subject: Presentation Update

Please find enclosed Investor Presentation by the Company post board meeting.

This is for your information and records.

For Vascon Engineers Limited

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Vibhuti Dani

Company Secretary and Compliance Officer

Encl: As above

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INVESTOR PRESENTATION | November 2021

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.

2

KEY BUSINESS HIGHLIGHTS – Q2 FY22

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1,915 Crs. 1,838 Crs.
Total Order Book External EPC Order Book
Forming healthy Order Book of Higher contribution by Government
6.3x FY21 EPC revenues projects
~80% 13,373 Sqft
Govt. Project (%) Real Estate
Providing visibility of faster
New Sales Booking in H1FY22 for a
execution and uninterrupted Cash Total Sales value of Rs 13 Crs
Flows
135 Crs. 70 Crs.
Net Debt Raised via. Preferential
As on 30 [th] Sep 2021 Issue
Fund to be utilized for Debt Repayment
Total debt repayment of Rs. 9 Crs in
last six months and Working Capital Requirement
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3

Other Key Developments

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Building-up the Order Book

• Received Letter of Award (LOA) from Government of Goa Goa for the development of ‘Development of International Convention Centre at Dona Paula, Goa’ on a Design, Build, Finance, Operate, Transfer (DBFOT) basis

• LOA is received in consortium with ‘DCS Solar Energy Limited’ where DCS is the Lead Member and Vascon is the Construction Partner in the project

• Scope of work - Construction of a 5,000 persons capacity convention centre along with allied construction to support the convention centre on a parcel of land that is around 28 acres

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Liquidating Non-core Assets

• Signed MOU for the sale of stake held in Hotels at Goa

• Sale of 43.34% stake held by Vascon Engineers in Cosmos Premises Private Limited, (an associate company), for a consideration of Rs. 45.50 Crs. along with concurrent sale of 6.66% shares held in Cosmos Premises Private Limited by certain promoter related persons/ entities to Royal Orchid Hotels Limited

• Against the sale of Cosmos Premises Private Limited, Company shall be acquiring shares in River Shore Developers Private Limited from the promoters of Royal Orchid Hotels Limited; River Shore Developers Private Limited has a land parcel in Powai Mumbai.

4

Execution Momentum pacing up…

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REVENUE FROM OPERATIONS (RS CRS)
135
119
In Q2FY22, business started to
105 resume normalcy as Covid-19 took a
back seat
93
78
All projects are operating at an
optimum level, which enabled faster
project execution and resulted in
better revenue generation
Execution to further gather
momentum in coming quarters
aided by the healthy Order Book
Q2FY21# Q3FY21 Q4FY21 Q1FY22^ Q2FY22
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UNLOCKING MEASURES STARTED UNFOLDING IN PHASED MANNER ^IMPACT OF LOCALIZED LOCKDOWN DURING SECOND WAVE OF COVID-19

5

Strengthening the Balance Sheet

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	Particular (Rs in Crs)	Sep-21	Mar-21	Mar-20
	Vascon Engineers
	SBI / UBI / CSB	75.35	58.76	66.48
	Kotak RE Fund	54.89	70.69	103.83
	JM Finance	24.19	24.74	17.62
	ICICI HFC	8	8.54	9.51
	Zero Coupon-NCD	-	13.64	13.64
	Others	21.48	21.14	25.26
	Total	183.91	197.5	236.33
	GMP	21.1	16.58	18.99
	Total Debt	205.01	214.08	255.32
	Cash & Bank Bal	5.28	22.66	22.29
	FD	64.54	57.37	46.51
	Total Cash & Bank Balance	69.82	80.03	68.8
	Net Debt	135.19	134.06	186.53

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Successfully Raised Rs. 70 Crs. via Preferential Issue

Amount Raised

Key Investors

• Rs. 70 crores

• Strategic Group of Investors

• Repayment of High Cost bearing Debt

Utilization of Funds

• Financing of Incremental Working Capital Requirements

THE COMPANY SUCCESSFULLY RAISED RS. 70 CRORES THROUGH PREFERENTIAL ISSUE FOR DEBT REPAYMENT AND WORKING CAPITAL REQUIREMENT

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Charting towards higher Growth Trajectory

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Robust Order Improved Capacity Higher Cashflow Strengthening the Book Utilization Generation Balance Sheet The Order Book has Execution of Current Leading to improved Repayment of debt by grown 2x from FY19, Order Book to enhance Profitability thereby, incremental Cashflow with an improving Capacity Utilization & improving Cash Generation and funds contribution from the Revenue Growth flows raised from Government Sector Preferential issue

WITH ROBUST ORDER BOOK AND INCREASED CAPACITY UTILIZATION, PROFITABILITY TO IMPROVE.. RESULTING IN BALANCE SHEET STRENGTHENING

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P&L Highlights- Q2 FY22

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Particulars (Rs. Crs)	Standalone	Standalone	Standalone	Standalone	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated
	Q2 FY22	Q2 FY21	H1 FY22	H1 FY21	Q2 FY22	Q2 FY21	H1 FY22	H1 FY21
Revenue Other Income	117.82	89.36 3.66	192.88	121.7 6.85	159.42	118.94 4.5	270.29	161.71 7.07
	1.22		4.38		1.71		5.11
Total Income	119.04	93.02	197.26	128.55	161.13	123.44	275.4	168.78
Construction Expenses / Material Consumed Employee Cost Other Expenses EBITDA EBIDTA Margin (%)		81.94 6.84 6.26 (2.02) (2%)		110.98 15.92 23.95 (22.3) (17%)		99.97 13.16 11 (0.69) (1%)		135.37 28.28 32.5 -27.37 -16%
	94.22		156.39		122.68		208.14
	9.66		22.94		17.33		38.35
	4.13		7.07		7.8		13.62
	11.03		10.86		13.32		15.29
	9%		6%		8%		6%
Depreciation Finance Costs Profit Before Tax Tax		1.89 5.74 (9.65) -		3.7 12.59 (38.59) -		2.99 6.53 (10.21) 0.58		6 14.18 (47.55) 0.58
	1.32		2.48		2.67		5.15
	5.68		11.53		6.44		12.8
	4.03		(3.15)		4.21		(2.66)
	0.61		0.61		0.79		0.95
Profit After Tax	3.42	(9.65)	(3.76)	(38.59)	3.42	(10.79)	(3.61)	(48.13)
Other Comprehensive Income Total Comprehensive Income	(0.14)	(0.74) (10.39)	0.51	(1.11) (39.70)	(0.14)	(0.73) (11.52)	0.51	(1.10) (49.23)
	3.28		(3.25)		3.28		(3.10)
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H1FY22- Segmental Profit & Loss - after allocation

Particulars (Rs. Cr)	RE#	EPC##	GMP	Inventorised	Total
Revenue	36.63 24.78 11.85 32%	196.01 163.31 32.7 17%	77.81 51.86 25.95 33%	3.34	310.45 243.29 67.16 22%
Cost of Sales
Gross Profit
Gross Profit Margin %
Other Income	0.67 6.82 3.16	3.07 16.11 4.84	1.17 15.41 6.86		4.91 38.34 14.86
Employee Cost
Other Expenses
EBITDA	2.54	14.82	4.85		18.87
EBIDTA Margin (%)	7%	8%	6%		6%
Depreciation	0.24	2.33	2.58		5.15
EBIT	2.3	12.49	2.27		13.72
EBIT Margin (%)	6%	6%	3%		4%
Finance Costs					12.8 0.92 4.53
Profit Before Tax
Tax
Profit After Tax	-	-	-		(3.61)

# 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– 21	Mar– 21		Rs. Cr	Sep– 21	Mar– 21
	Non-current assets	328.54	316.93		Shareholder’s Fund	712.13	709.16
	Fixed assets	104.72	98.72		Share capital	186.14	182.14
	Financial Assets	180.77	182.19		Other Equity	515.89	517.02
	Other Non Current assets, Income Tax & Deferred Tax	43.05	36.02		Non Controlling Interest Non-current liabilities	10.1 77.19	10 60.49
	Current assets	1,055.82	1,003.04		Long term borrowings	46.81	42.67
	Inventories	469.67	459.25		Other Financial liabilities & Lease Liability	30.38	17.82
	Investments	3.54	3.13		Current liabilities	595.04	550.32
	Trade receivables	161.39	164.17		Short term borrowings	110.37	89.86
	Cash and bank balances	69.82	80.04		Trade Payables	274.08	241.11
	Loans & Other Financial assets	312.63	266.91		Other Financial liabilities & Lease Liability	58.61	89.86
	Other current assets	38.77	29.54		Other current liabilities & Provisions	151.98	129.49
	Total Assets	1,384.36	1,319.97		Total Liabilities	1,384.36	1,319.97

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BUSINESS OVERVIEW

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VASCON – At a Glace

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• ENGINEERING PROCUREMENT & CONSTRUCTION

One of the leading EPC Company in India

• REAL ESTATE DEVELOPMENT

Focus on Mid-Range Housing Project

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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 - 490

• 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 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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Order Book Build-Up & Key Orders

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1,953 2,019 1,838 137 107 90 77 FY19 FY20 FY21 Current Order Book Internal Order Book External Order Book (In Rs. Cr) 907 2060 1,915 1,044 2,109	1,953 2,019 1,838 137 107 90 77 FY19 FY20 FY21 Current Order Book Internal Order Book External Order Book (In Rs. Cr) 907 2060 1,915 1,044 2,109	1,838 77 1,915		Project	Location	Amt (Rs. Cr)
(In Rs. Cr)				External Order book
				Maharashtra State Police Housing	Mumbai	350
				PWD, Raipur	Raipur	260
				Hospital-Kaushambi	Kasuhambi, UP	237
				Hospital-Bijnor	Bijnor, UP	216
				Metro Rail Depot	Bangalore	121
				MMRC Mumbai Metro	Mumbai	120
				Goa Airport	Goa	119
				Adhiraj	Mumbai	95
				PMC-Affordable Housing	Pune	63
				Transcon	Mumbai	47
				Adampur Airport	Adampur	46
				Other Projects		164
				Total		1,838
				Internal Order book
				Windermere-Bunglows	Pune	14
	FY19 FY20 FY21 Current Order Book Internal Order Book External Order Book
				Forest Edge	Pune	8
				Katvi-Affordable Housing	Talegaon, Pune	55
				Total		77
				Total EPC Business Order book		1,915

EXECUTION OF NEW ORDERS TO IMPROVE REVENUE VISIBILITY & CAPACITY UTILISATION

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REAL ESTATE DEVELOPMENT

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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

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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 95% sold Windermere (JV)# 45% 0.38 18-Mar 74% sold Vascon Goodlife – Value Home (Own) 100% 0.3 18-May 63% sold Forest County 50% 0.18 18-Dec 99% sold Xotech C (JV) 50% 0.04 18-Oct Fully Sold	REAL ESTATE SALES (RS CR)
	116 120 13
	FY20 FY21 H1FY22

Relaunch

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

RE-LAUNCH OF WINDERMERE#

XOTECH- PUNE

FOREST COUNTY - KHARADI

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Current Real Estate Projects Under Development

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Total Vascon Share
Project Name Location Vascon Share Rev.
Project Area Sale Collectio Sale
Collection Recognize
Area Sold Value n Value
d
Type Share msft msft Rs. Cr Rs. Cr Rs. Cr Rs. Cr Rs. Cr
Forest Edge (A&B) Pune JV 50% 0.16 0.15 108 76 54 38 26
Forest County Pune JV 50% 0.18 0.17 131 56 65 28 -
Windmere Residential Pune JDA 45% 0.38 0.29 340 302 168 136 168
Vascon GoodLife Talegaon Own 100% 0.46 0.18 65 38 65 38 -
Xotech (I&II) Hinjewadi JV 50% 0.08 0.08 37 37 19 19 19
Total 1.26 0.87 681 509 371 259 213
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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 JV Residential 0.6 460 0.3 230
Total 1.39 875 0.88 531
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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 Willows – Residential JV Residential 0.33 250
2 Kalyani Nagar - Comm JDA Commercial 0.3 330
3 Kalyani Nagar JDA Residential 0.5 550
Total 1.13 1,130
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Continuous focus on Liquidity Management

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• RAISED RS 70 CR THROUGH PREFERENTIAL ISSUE

• SIGNED MOU FOR THE SALE OF STAKE HELD IN HOTELS AT GOA FOR CONSIDERATION OF RS. 45.50 CRS

REMAINING NON-CORE ASSETS IDENTIFIED FOR SALE

• COMMERCIAL PROPERTY AT KALEDONIA, ANDHERI (E)

• 9 ACRE LAND PARCEL IN AURANGABAD

• GMP TECHNICAL SOLUTIONS (85% SUBSIDIARY OF VASCON)

CONTINUE FOCUS ON GENERATING CASH BY MONETIZING IDENTIFIED NON CORE ASSETS

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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