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EPC
POWER
SOLAR
RESOURCES
INFRASTRUCTURE
InvestorPresentation
Agenda
1 2 3 4 5 6 7 8 9 Company Overview EPC and C d Construction B i i Business Power Business Solar B i S l Business Resource Business Infrastructure Business I f B i Property Development Business Financials l Experienced Management Team
Agenda
1 2 3 4 5 6 7 8 9 Company Overview EPC and C d Construction B i t ti Business Power Business Solar B i S l Business Resource Business Infrastructure Business Property Development Business Financials Fi i l Experienced Management Team
Mission,VisionandValues
Mission: Development of Society through Leadership, Entrepreneurship, Ownership p, p p, p Vision: Values: Continuous C Learning Teamwork Most Admired Integrated Infrastructure Enterprise
Accountability
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ALeadingIntegratedInfrastructurePlayer
Division of Lanco Infratech
Power
Installed Capacity c. 3,287 MW Capacity under construction c. 6,024 MW One of the largest player in power trading business
Solar
Manufacturing Facility: Poly-silicon Wafer Module Line PV Thermal 1250 MT 80 MW 50 MW 41 MW 100 MW 5MW
Resources
Currently developing a couple of coal blocks one blocks, in India and the other in Australia
Infrastructure
Developing c. 440 km of National Highways in Karnataka and UP Developing Ennore Port
Property Development
4mm sq ft development Hyderabad, India under in
Farm Development:
Installed capacity
Note: 1 This presentation assumes an exchange rate of US$ / INR =45 2 Financial year ending March 31 3 mm / bn indicates million/ billion
LancoFoundation
At Lanco, we pride ourselves on being an organization that cares for the world we live in in.
A member of the UN Global Compact and led by Lanco Foundation, 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
PanIndiaPresence
Coal Based Plants under operation Plants under construction Hydro Plants under operation Plants under construction
Gurgaon Vamshi Vamshi Industrial Lanco Uttaranchal Teesta Lanco Green
Gas Plants under operation Plants under construction Plants under development Wind Plants under operation Property development Road development Coal mine Registered office Corporate Office
81 km Bangalore Hoskote Mudbagal 82 km Neelamangla Devihalli Tamil Nadu Wind Aban power Chitradurga g Udupi I Udupi II Amarkantak I & II Amarkantak III & IV Vidarbha Babandh Anpara
StrongPushtoDriveInfrastructureGrowth
Government is targeting investment of >US$400 billion during 2007-2012
Infrastructure spending (2007-2012)
140000
157
Total - US$437bn
79
68
65
55 51 19 9
60000 40000
20000 0
Te le co m R ai lw ay s Irr ig W at at io er n /s an i ta tio n
ri d ge s
Po rts
St or ag e
Po w
or ts
as
er
an d
Ai rp
FY07
FY08
Demand(MW)
FY09
Met(MW)
FY10
Deficit(%)
FY11*
R oa ds
Central Govt.
Source:
State Govt.
Private sector
Commentary
Current government is putting lot of emphasis on infrastructure spending and growth Positive regulatory reforms remain a key driver of growth Power is likely to be the fastest growth sector in the foreseeable future in Infrastructure
Source:
In the XIth five year plan (2007-2012), the Government targets to add 78,700 MW of generating capacity
8 LANCO Group, All Rights Reserved
Agenda
1 2 3 4 5 6 7 8 9 Company Overview EPC and C d Construction B i t ti Business Power Business Solar B i S l Business Resource Business Infrastructure Business Property Development Business Financials Fi i l Experienced Management Team
EPC&Construction
EPC
ISO 9001: 2000 certified EPC & Construction have an order book of over USD 6.7 bn as of March11 Specialist in Conventional and Renewable power plants Received Award for Outstanding Contribution in Power & Energy Sector
Construction
ISO 9001:2008 certified The focus is on:
Energy and Industrial Construction Infrastructure Construction
Awarded as the Largest & Most Profitable construction Company by Construction World consecutively for 3 years Ranked No.4 in Indias Top 10 Infrastructure Companies by Construction Week
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InhouseEPCReducesExecutionRisk/EnhancesMargins
The order book stands at USD 6.7 billion as on 31st March 2011. Major EPC order executed Amarkantak (I & II) Kondapalli Aban Udupi (I & II) Anpara (I) New E ternal Ne External orders recei ed received 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
OrderBook(USDMm)
8,000 7,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000
Mar'07 Mar'08 Mar'09 Mar'10 Mar'11
6,703 5,714
2,893 1,156
2,310
Construction Executing a wide range of projects spanning Thermal Power Plants, Hydro Power Plants, Highways, Airports, Industrial Structures, Transmission and Distribution, Chimneys and Cooling Towers, Water Infrastructure and Heavy Civil Structures.
% Margin
14.8 14.6 14.4 14.2 14.0 14.0 13.8 13.6 13.4 FY09
13.9
14.7
14.7
FY10
FY11
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Agenda
1 2 3 4 5 6 7 8 9 Company Overview EPC and C d Construction B i t ti Business Power Business Solar B i S l Business Resource Business Infrastructure Business Property Development Business Financials Fi i l Experienced Management Team
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PowerDeficitScenario
Planned Vs. Installed Capacity Xth Plan (MW)
30,000
1,000 631 582 408 238 131 84 35 18 58% growth in XIth Plan
2004 2001
1,300 Nuclear
(Planned)
1,180 Nuclear
(Installed)
1950
No. No of Units
Thermal
(Installed)
Central sector
State sector
Private sector
Source: CEA
Source: CEA
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PresenceAcrossValueChainDeriskingtheBusiness
Integrated presence across value chain capturing value addition across the businesses
Fuel(Coalmining)
Griffin coal, based out of Collie in Western Australia, owns the largest operational thermal coal mines in the region, producing over 4 mtpa of coal which can be ramped up to over 20 mpta in the near term, post infrastructure development. Captive coal mine allocated by Govt. of India to Lanco and five others Coal to be used for portion of needs of the Orissa based 1,320 MW Babandh power plant
ConstructionandEPC
Completed projects with capacity of 3,292 MW and 5,948 MW projects under construction Strong g engineering g g capability and resources spanning feasibility studies, front-end design and complete detail design with over 10 years of experience in design and development of Power Projects Handles global suppliers selection and sourcing of diverse materials like high highpressure fabricated equipment, skids, elect rical and instrumentation systems
GenerationandO&M
Installed projects with capacity of 3,287 MW and 6,024 MW projects under implementation Generation activities include conventional and non-conventional sources of energy like coal, gas, hydro and wind
Trading
One of private player in power market largest sector Indian trading
Transmissionand Distribution
Strategy includes possible expansion into transmission and distribution
Traded 6,043mm , units in year ended March 31, 2011 Holding 5% stake in the Indian Energy Exchange floated by Financial Technologies Ltd and Power Trading Corporation
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CapacityRampup
On track to achieve operating capacity of 15,000 MW capacity by 2015
Projected capacity addition j p y
FY14 Babandh Amarkantak III & IV Vidarbha FY13 Uttaranchal FY12 Current Udupi I & II Kondapalli I & II Amakrantak I & II Anpara I Aban Other Renewable
4,699 4 699 MW 15,000 MW
FY15
Teesta
9,311 MW
3,287 MW
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ProjectStatusUpdate
Projects under operation
Plant Udupi Anpara Kondapalli I Kondapalli II Amarkantak I Amarkantak II Aban Chitradurga Tamil Nadu Wind Vamshi Hydro Vamshi Industrial Total Fuel Imported Coal Coal Gas Gas Coal Coal Gas Wind Wind Hydro Hydro Capacity (MW) 1,200 6002 368 366 300 300 120 3 10 10 10 3,287 3 287 Total cost (US$mm) 1,245 1,0223 252 264 287 298 98 3 11 13 13 3,506 3 506 Offtake PPA Part PPA PPA Merchant Merchant PPA PPA PPA PPA PPA PPA
FuelDiversification
Coal 74%
Others 0%
Hydro 8%
Gas 18%
Projects under Construction Plant Anpara Lanco Green Kondapalli - III Lanco Uttaranchal I & II Teesta Amarkantak III & IV Vidarbha Babandh TOTAL
Note: 1 For 76 MW Financial Closure is done 2 100 MW is available for Third party sale 3 Project cost is for full project.
Fuel Coal Hydro Gas Hydro Hydro Coal Coal Coal (Partly Owned)
Capacity (MW) 6002 70 742 152 500 1,320 1,320 1,320 6,024
Budgeted cost (US$mm) 1,0223 93 581 231 666 1,531 1,555 1,555 7,234
offtake Part PPA PPA Part PPA Merchant PPA Part PPA Part PPA Part PPA
Current status Unit II Boiler chemical cleaning completed Tunnel Lining works completed GT foundation work completed. HRSG erecting started. Dam / HRT / Power House under progress Unit erecting started Boiler structure completed Mail plant concreting work in progress Boiler structure erecting started
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Agenda
1 2 3 4 5 6 7 8 9 Company Overview EPC and C d Construction B i t ti Business Power Business Solar Business S l B i Resource Business Infrastructure Business Property Development Business Fi Financials i l Experienced Management Team
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GlobalSolarPVMarket Demandestimates
8000 7000 6000 5000 4000 3000 2000 2000 1000 0 650 1500 1060 700 1300 1000 1500 1200 600 105 200 280 2500 2400 1560 1000 500 7000 5500 2010 2011 2012 2013 2014
GLOBALDEMAND(MW)
6000
6935
Germany
Spain
Italy
France
US
China
India
Japan
Belgium
Czech
Restofthe World
LongTermInstalledCapacityProjection(GW)
2010 1380 957 447 17 118 Residential 99 3 22 404 243 5 49 Utility 908 551 223 2 21 463 267 103 2020 2030 2040 2050
Total Global demand expected to grow to 30 GW in 2014 under policy driven scenario, from ~17GW in 2011 Newer markets like France, US, India, Czech and many d h d more opening up According to IEA estimates, Global Installed Capacity expected to reach 210 GW by 2020, from just 40 GW in 2010
Commercial
OffGrid
RPOspushingthefrontierfurther 2022
Electricity Consumption (Billion Units ) 2021-22E Equivalent Solar Installation capacity (MW) RPO 3%
The solar power purchase obligation for the States start with 0.25% in phase 1 p (FY2011-2013) and go up to 3% by 2022 Installed solar capacity by 2022 at 38 GW. This implies cumulative poly market of ~175,000 MT, over next 10 Yrs Electricity demand expected to double by 2020, and 400 mn people has no access to electricity this segment is addressable by solar power
175.6 45.1 156.8 73.8 51.7 51 7 107.5 99.0 219.9 63.1 104.3 96.4 182.8 182 8 150.2 84.5
20,000 MW under JNNSM India (2021-22) 1914.5 38,290 MW 18,290 MW outside NSM
FullyIntegratedStrategyenableslowestRs/kWh
Targetin4Yrs
Project Development
Targetin3Yrs
Integrated Manufacturing
EPC
500MW/PA
400MW/PA
250MW/PA
Aim to be a Global player, as a developer and a third party EPC player Foray into manufacturing to support internal requirements and reduce margin volatility, through the cycle
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ManufacturingPhaseI
Manufacturing- Phase I Capex Debt: Equity Capacity- Phase I Polysilicon Wafer COD Module Line COD $ 305 Mm 70:30 1250 MT 80 MW H2 FY13 50 MW H1 FY 12 Other Benefits 20% Capital Subsidy, under SIPS Exemption of CST/Service Tax Exemption of State taxes and levies No Duties on Imported Equipment and Raw Materials VAT exemption
Manufacturing Plan Poly Production Internal Consumption External Sales Wafer Production Given for Tolling- Cells External Sales Module Production External Sales 1250 MT 440 MT 810 MT 80 MW 52 MW 28 MW 50 MW 50 MW
Due to very promising domestic demand and mandatory local content requirement Module requirement, line plans have been pre poned In successive years of NSM, policy envisages increasing local content requirement, which will cover complete upstream manufacturing Apart from increasing polysilicon demand globally, we expect domestic polysilicon market (Indian) demand to cross 7500 MT over the coming three to four years
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SolarFarms
Policy Solar PV Farm
Gujarat Policy 35 Rs 15 for 12 yrs, Rs 5 for next 13 Yrs 11.5 16.5 16 5 125 25 Accelerated depreciation allowed under state policy. Developing these projects on LITL Balance sheet- Extremely attractive IRR Over sizing of Solar Field allowed, which leads to ~20% incremental generation. IRRs are attractive. Very attractive IRR, in spite of y , p smaller size. Use Salt Storage to increase Capacity Utilization Factor to ~34.5%
Capacity (MW)
TariffRs/Unit
Comments
JNNSM RPSSGP
5 1
18 4
25 25
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Agenda
1 2 3 4 5 6 7 8 9 Company Overview EPC and C d Construction B i t ti Business Power Business Solar B i S l Business Resource Business Infrastructure Business Property Development Business Financials Fi i l Experienced Management Team
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CoalOutlook
Global export market to remain tight
1,400 1,200 1,000 800 600 400 200 0 2009 2010 2011 2012 2013 2014 2015 1000 MillionTones 800 600 400 200 0
200809BE 200910BE 200910RE 201011 Assessed 201112 Original 201112 Revised
Coal Demand
151
173
156
177
191
394
455
441
477
540
ImportsDemand(MT)
ExportsSupply(MT)
Securing coal: a need; an opportunity Uncertainty in domestic supply Increasing competition for overseas assets Limited operational assets Secular uptrend in prices
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520
Resources
Providing integration and increased fuel security
Integration across the value chain Providing increased fuel security (both volume and price) for current power generation assets and future power portfolio expansions expansions. Presents an opportunity to participate in the burgeoning natural resources trading market. Looking out for further opportunities in mineral rich countries of Australia, Indonesia, South Africa and India.
Griffin Coal Largest operational thermal coal mines in Western Australia, currently producing over 4 mtpa of coal Plans to ramp up production to over 20 mpta, post development of evacuation infrastructure. Good coal quality suitable for power plants Strategic location Rampia and DIP side of Rampia Allocated to Lanco along with five other IPPs Lanco s Lancos share in the coal blocks would cater to the development of approx. 1,000 MW power plant.
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LANCO Group, All Rights Reserved
Agenda
1 2 3 4 5 6 7 8 9 Company Overview EPC and C d Construction B i t ti Business Power Business Solar B i S l Business Resource Business Infrastructure Business Property Development Business Financials Fi i l Experienced Management Team
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LeveragingConstructionExpertisetoBuildInfrastructureBusiness
Lanco has moved into selective infrastructure projects to leverage its EPC experience
Awarded two National highway projects in Karnataka c. 81 km stretch connecting Bangalore Hoskote Mudbagal c. 82 km stretch connecting Neelamangla Devihalli Concession periods of 20 years and 25 years respectively during which toll will be collected Construction under progress and expected to be completed soon
Awarded one National highway projects in Uttar Pradesh C. 280 Km stretch connecting Aligarh to Kanpur Project investment of around USD 213 mm P j ti t t f d Grant to be received USD 62 mm
Awarded Ennore Port Along-with three other consortium partners Holding 26% in the project Concession period of 30 years Expected capex for the project is USD $ 300 mm
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Agenda
1 2 3 4 5 6 7 8 9 Company Overview EPC and C d Construction B i t ti Business Power Business Solar B i S l Business Resource Business Infrastructure Business Property Development Business Financials Fi i l Experienced Management Team
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PropertyDevelopment AnOpportunisticPlay
Lanco Hills is the groups foray into property development, located in Hyderabad, spread over 100 acres and comprises residential space, office space, IT SEZ, shopping mall and two hotels Lanco Hills
Residential Construction in progress on 6 residential towers Construction in progress with possession of apartments to commence shortly
Office space
Office complex with built-up area of 0.5 mm sq ft Constructing office space with completion target of 2011 Constructing SEZ space with completion target of 2012 g p p g
Shopping mall
Hotels
Tied up with Grand Hyatt for a 400 room, 5 star deluxe hotel
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Agenda
1 2 3 4 5 6 7 8 9 Company Overview EPC and C d Construction B i t ti Business Power Business Solar B i S l Business Resource Business Infrastructure Business Property Development Business Financials Fi i l Experienced Management Team
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SteadyGrowth
Revenue*
3,000
2,503
EBITDA
450 400 350 300 250 200 150 100 50 50 420 339 339 197 155 49
2,500 ,
US$mm
2,102 1,543
US$mm
2,000
FY07
FY08
FY09
FY10
FY11
CashProfit
350
210
300 250
US$m mm
217
289
139
FY10
FY11
FY07 FY 07
FY08 FY 08
FY09 FY 09
FY10 FY 10
FY11 FY 11
Cash Profit: PAT + Depreciation + Profit Eliminated (For FY 11 cash profit is before adjustment for depreciation written back)
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Agenda
1 2 3 4 5 6 7 8 9 Company Overview EPC and C d Construction B i t ti Business Power Business Solar B i S l Business Resource Business Infrastructure Business Property Development Business Financials Fi i l Experienced Management Team
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ExperiencedManagementTeam
LANCOBoard
Dr. U.K. Kohli D U K K hli Director L. Madhusudhan Rao Executive Chairman L Sridhar Vice Chairman S. C. Manocha Director P. Kotaiah Director
P. Abraham Director
B. Vasanthan Director
P. Narasimharamulu Director
LancoGroupSeniorManagementTeam
Finance
J.Suresh Kumar T. Adi Babu T. N. Subramaniyan
Power
A. A Khan P. Panduranga Rao K. Raja Gopal K. Naga Prasad
Construction&EPC
S. C. Manocha S. M. Roy
Solar
V. Saibaba
CSR PropertyDevelopment
S. Pochendar R S Sharat
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RecentAwards
EPC-World Awards 2010 for Outstanding contribution in Power & Energy sector (Generation). 8th Construction World- Annual Award for Fastest Growing Construction Company Aban P Ab Power C Company Ltd received TERI Corporate Award for i d C t A df Environmental Excellence and Corporate Social Responsibility IKU II received IEEMA award for Excellence in Fast Track Commissioning of Small Hydro Projects Lanco Infratech Ltd received PRSI Golden Jubilee Award for the Most Initiatives Most Impressive Public Relations Initiatives
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Disclaimer
No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. Certain statements made in this presentation may not be based on historical information or facts and may be "forward looking statements" based on the currently held beliefs and assumptions of the management of the Company, which are expressed in good faith and in their opinion reasonable, including those relating to the Company's general business plans and strategy, its future financial condition and growth prospects and future developments in its industry and its competitive and regulatory environment. Forward-looking statements involve known and unknown risks uncertainties and other factors which may risks, factors, cause the actual results, financial condition, performance or achievements of the Company or industry results to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements, including future changes or developments in the Company's business, its competitive environment and political, economic, legal and social conditions. Further, past performance is not necessarily indicative of future results. Given these risks, uncertainties and other factors, factors viewers of this presentation are cautioned not to place undue reliance on these forward looking forward-looking statements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments. This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. This presentation does not j , y p p p constitute an offer or invitation to purchase or subscribe for any securities of the Company by any person in any jurisdiction, including India and the United States. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. The Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such change or changes. This presentation may not be copied or disseminated in any manner manner.
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Thank You
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