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Vascon Engineers Limited
Investor Presentation
1
Safe Harbor
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 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
Contents
A Corporate Overview 4
B EPC Business 9
C Real Estate Business 13
D Hospitality Business 18
E Key Competitive Strength & Growth Strategies 20
F Financial Highlights 23
3
CORPORATE OVERVIEW
Ruby Mills: The Tallest Commercial Building in Mumbai
4
Business Segments
• Over 25 years of diverse experience
• Track record for high quality and timely delivery
EPC
EPC Picture • Cumulative construction over 32 msft
• Current EPC Order book of 51 msft of Rs. 51,645 mn
• Current execution capabilities built for 10msf per annum
• Real Estate leverages our EPC expertise
Real Estate
Real Estate • Cost-efficient development model through JVs & JDAs
Picture • Real Estate Project Portfolio aggregates 740 acres with
developable area of 66 msft
• Entry in Hospitality – Synergetic to EPC and RE Business
Hospitality
Hospitality • Partnered with experienced Hospitality Brands to operate the
Picture hotel properties
• Five properties in Pune, Goa and Coimbatore
5
Corporate Structure
Vascon Engineers Limited
EPC Business
Complete Solution
Real Estate Projects Hospitality Projects
Engineering
13 JVs 3 JVs GMP Technical
09 Subsidiaries 1 Subsidiary Solutions
02 Associates 1 Associate
EPC acts as a backbone to foray in Real Estate & Hospitality
6
Management Team
R Vasudevan, Managing Director
• Founded EPC business in 1986 and diversified into Real Estate and Hospitality
• Responsible for the overall management of the company
• A Civil Engineer with over 35 years of experience
• Recipient of various prestigious awards for excellence in EPC and Real Estate
Chandresh V Shah, Executive Director M Krishnamurthi, Chief Corporate Affairs
• Heads technical operations, business strategy & • Heads Corporate Affairs, Strategy and Project
market intelligence divisions Finance
• A Civil Engineer with over 25 years experience in • CA,CS, CMA & BGL with experience of over 26 years
the construction industry in construction and hospitality sectors
D Santhanam, Kumar Krishnan, Santosh Sundararajan,
Chief Financial Officer President President
• Head the Finance Function • Heads Project Planning, • Heads Technical operations,
Budgeting , Costing and Project Project feasibility and Project
• A Chartered Accountant with
Implementation Implementation
over 25 years of experience in
construction industry • A Civil Engineer with over 31 • Doctorate in structural design
years experience in the from Singapore with over 12
construction industry years of experience in the
construction industry
7
Building Pan India Project Portfolio
EPC : ~ Rs. 51 bn Expanding footprints outside Maharashtra
Real Estate : ~ 71 msf
- Real estate
- EPC
Map not as per scale
8
EPC BUSINESS
Delhi Airport Multi level Car Park: Biggest Car Park in India
9
EPC Business – Driving Growth
Construction experience across various verticals
• Residential Complexes, Commercial Buildings, IT Parks, Hospitality Properties,
Hospitals, Shopping Malls, Multiplexes and other buildings
• Executed more than 190 projects with construction area over 32 msf
• Forays in Government Contracts
Established Brand name
• Known for quality, transparency, reliability, ethics and value
• Consistent high quality standards and timely execution of Projects
• Repeat orders from clients testimony of standards delivered
Capability to provide Turnkey and Customized services
• Activities such as Project Management, Engineering and design of the entire project
or part of project, procurement of material, construction activities and
commissioning / start-up of project
10
Strong Order Execution Capabilities
EPC Revenue Growth in last 4 years Remarkable Growth attributable to…
Rs. mn Presence across segments of Real
7,057 Estate
6,292
Qualified and proven project team and
4,480
experienced Management
3,020
Superior quality and strength of
execution
Established brand name
FY08 FY09 FY10 FY11
Orders built over a period – Third Party Strong Order backlog*
Rs. mn 12,222 (as on 30.06.11) Order Book Backlog
9,869
9,120 # Rs. mn Rs. mn
3rd Party Contracts 63 39,330 28,244
4,085
Own Contracts 18 12,314 10,225
Total EPC Business 81 51,645 38,469
FY08 FY09 FY10 FY11
* Orders to be executed 11
Order Backlog of Rs. 38 bn
Geographic Distribution Segment-wise Distribution
Diversifying Geographical Reach
12
REAL ESTATE BUSINESS
Weikfield IT – Citi Infopark : Bagged Well Built Structure Award for quality, speed
and Economy by Builders ‘ Association of India (BAI) in 2007
13
Real Estate Business – Scalability Driver
Leveraging our EPC experience
• Strong EPC base will give cutting edge to rise above industry standard in terms of
execution capabilities
• Synergies of operating diverse businesses
Unique Business model focused to lower land acquisition costs
• Real Estate development through Joint Ventures (JVs) and Joint Development
Agreements (JDAs)
• Partnerships augurs well for local market dynamics
• Focus on Tier II and Tier III cities
Presence across the entire universe of projects
• Residential and Office Complexes, IT parks, Shopping malls, Multiplexes,
Hospitality properties and other buildings
Entire spectrum of Real Estate Development Activities
• Identification and acquisition of land, providing EPC services and sales and
marketing of projects to operations of completed projects
14
Real Estate Development of 66 msf
Segmental Distribution Economic Interest wise Distribution
Development Attributable to
Land Reserves Potential Vascon
msf msf %
3.0 2.9 7%
Land Owned by the
34.9 22.6 59%
Company
27.3 12.6 33%
Development through JDA
0.6 0.3 1%
Joint Ventures
66.0 38.3 100%
JDA with JV
15
Real Estate Project Portfolio
Attributable to Avg. Selling Price
No. Location Ongoing Projects Project Area
Vascon estimates
# msf msf Rs. / sft
Residential
1 Thane 1 19 8.4 4500
2 Pune 15 15 9.1 3950
3 Chennai 1 11.7 8.9 3500
4 Coimbatore 1 2.8 1.5 2900
5 Nashik 2 0.7 0.7 2000
6 Madurai 1 1.0 0.7 3000
7 Goa 1 0.5 0.5 2500
8 Hyderabad 1 0.6 0.4 3200
Commercial
1 Pune 15 7.0 4.1 3,950
2 Ahmedabad 1 2.7 1.2 3,500
3 Aurangabad 1 1.4 0.7 3,000
4 Nashik 2 1.0 0.8 2,650
5 Madurai 2 0.7 0.5 3,100
6 Coimbatore 2 0.6 0.3 3,450
7 Chandigarh 1 0.3 0.1 5,000
8 Belgaum 1 0.2 0.1 3,500
16
HOSPITALITY BUSINESS
Hyatt Hotel : Nagar Road, Pune
17
Hospitality Business
Own and Operate portfolio of projects in Hospitality segment
• To tap the demand in and around of Real Estate developments
Leading Hospitality Operators to operate and manage properties
• Hyatt, Holiday Inn and Royal Orchid
Current Hospitality Portfolio
Hotel Galaxy Resorts Golden Suits Hyatt Holiday Inn Coimbatore
Location Goa Pune Pune Pune Coimbatore
Holding 43.83% 50% 26% 27.50% 70%
Category 3 Star 3 Star 5 Star 5 Star 4 Star
No. of Keys 65 71 306 187 107
Total Area (Sft) 70,000 55,000 4,50,000 1,09,769 1,06,500
Operator Royal Orchids Royal Orchids Hyatt Holiday Inn To be tied up
Operational Jan 2005 June 2007 Nov 2010 April 2011 FY 2013
18
KEY COMPETITIVE STRENGTHS &
GROWTH STRATEGIES
Symbiosis College : Bagged Architects, Engineers and Surveyor’s Association
Award (ASEA) 2008 19
Key Competitive Strengths
Qualified and proven project team and experienced management
• Ability to accurately estimate costs
• Design, construct and deliver the project in cost effective and timely manner
• Diversity of experience gives flexibility to adapt to the needs of customers
Differentiated Real Estate Business Model
• Asset light model using joint development agreements and/or joint ventures
• Strong business model with mix of development and rental earnings
Synergy between Real Estate and EPC Business
• Ability to develop turnkey Real Estate projects
• Control on quality and execution timeline
• EPC facilitates market intelligence for Real Estate entry in new regions
Emphasis on innovative Technology & theme based developments
• Innovative developments to maximize the use of land and minimize use of power and other natural
resources
• Innovative theme-based Real Estate developments
Backward Integration through GMP acquisition
• To participate in complete solution engineering in modular clean room, office partitions, HVAC,
electrical and building management systems
• Ability to bid for full service contracts
20
Growth Strategies
Expanding geographical presence
• Entry in new geographies with EPC business and
• RE development once gained significant know-how about the region
Expanding business verticals
• High growth potential in Education, Pharmaceuticals and Health-care segments
• Making in-roads in Government projects
Mature as a General Contractor
• Acquiring more of General Contracts and
• Participate in bidding of full service contracts
Increased Mechanization
• To facilitate reduction in cost and
• To adhere to project timeline
Evaluation of Infrastructure Projects
• Exploring entry into infrastructure sector in India like bridges, small airports
• Focus on infrastructure related EPC contracts
21
FINANCIAL HIGHLIGHTS
Suzlon One Earth (Corporate Office): Received LEED Platinum Certification
22
Consolidated Profitability Statement
Rs. mn Q1 FY12 Q1FY11 FY 2011
Revenue 1,840 2,063 10,315
EPC # 1,252 # 1947 # 7057
Real Estate 251 # 91 # 2099
Hospitality 20 13 87
GMP # 284 - 986
Other Revenue 32 12 85
Exceptional Item 22 - 213
Raw Material 1,348 1,579 8,127
Employee Expenses 179 123 624
Other Expenses 115 94 497
EBITDA 220 267 1,280
EBITDA Margin 11.96% 12.94% 12.41%
Interest 119 41 257
Depreciation 40 20 139
PBT 61 207 885
Tax 38 68 226
PAT 23 138 659
PAT Margin 1.26% 6.71% 6.38%
# After elimination of inter segment revenue of :
1. Rs. 133 mn in EPC and 5.5 mn in GMP in Q1 FY12
23
2. Rs. 33 mn in EPC and Rs. 90 mn in Real Estate in Q1 FY11
3. Rs. 293 mn in EPC and 90 mn in Real estate in FY11
Consolidated Balance Sheet
Rs. mn 31-Mar-11 31-Mar-10
Net Worth 7,175 6,611
Total Debt 3,704 2,168
Minority Interest 76 74
Deferred Tax Liabilities 1.6 2.0
Total Liabilities 10,957 8,855
Net Assets 2,253 1,770
Investment 1,016 1,674
Deferred Tax Asset 20 9
Current Assets
Inventory 2,911 3,230
Receivables 3,435 1,887
Cash & Bank Balance 1,124 490
Loans & Advances 3,726 2,857
Current Liabilities 3,054 2,778
Provisions 475 284
Net Current Assets 7,668 5,402
Total Assets 10,957 8,855
Net Debt 2,579 1,678
Net Debt : Equity 0.36 0.25
24
For further information, please contact:
Company :
Vascon Engineers Ltd.
Mr. M Krishnamurthi , Chief Corporate Affairs
mk_murthi@vascon.com
Mr. Vivek Sakharkar, Manager Investor Relations
viveksakharkar@vascon.com
www.vascon.com
25
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