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1TECHNO ELECTRIC & ENGINEERING COMPANY LIMITED

AN INVESTOR PRESENTATIONQuarter ended March 31, 2018

TECHNO ELECTRIC & ENGINEERING COMPANY LIMITED 2

SNAPSHOT

TEECL is 3.5 decade old primarily power sector EPC company headquartered in Kolkata (India), listed on NSE, BSE

Completed and delivered 350+ projects in existence (up to 31 March 2018)

Employs 500+ professionals (engineering, commercial, graduates and post-graduates)

Core engineering team possesses average experience of 25+ years

Credit Rating by CRISIL & ICRA

Long Term: AA

Short term: A1+

Enjoyed a market capitalization of INR 45270 mn (as on 31st March, 2018)


TECHNO’S OPERATING STRUCTURE

129.90

Techno Electric &Engineering Company

Limited

Generation

Transmission &Distribution

Industrial

Simran Wind

Projects Limited

Jhajjar KT

Transco PrivateLimited

Patran Transmission

Company LimitedKohima Mariani

Transmission Limited

129.90 MWWind Energy

Generation

Design, Build, Finance, Operateand Transfer a 400kV/1500MVA

Transmission Network in Haryana

capable of transferring 2,430 MW

Build a transmission network atPatran, Punjab on Build, Own,Operate and Maintain (BOOM)

basis for 35 years

Build & Transmission network at Kohima, Nagaland on Build, Own,

Operate and Maintain (BOOM)

basis for 35 years

Green Power

Linkages

100% 49% 49% 26%

EPC

4TECHNO ELECTRIC & ENGINEERING COMPANY LIMITED

OVERVIEWTEECL, one of the most attractive proxies of India’s power sector

One of the largest in the power-infrastructure space in India

Engaged in three business types – EPC/Asset Ownership/Operations and Maintenance

Covers three power sector segments - generation, transmission and distribution

Lifecycle engagement - design to commissioning to handover to maintenance

CPSUs, State-run utilities and private sector customers (captive power plant and power distribution system for power intensive industries)

Addresses complete solutions for conventional and renewable sectors

Once a customer, always a customer

1980Launched EPC

services

2009Entered renewableenergy generation

2010Entered transmission

segment


RICH PROMOTER PROFILE & EXPERIENCETEECL led by Mr P. P. Gupta, Key promoter & Managing Director

Honours Graduate in Industrial Engineering; post-graduate in Management (IIM, Ahmedabad); working experience with BHEL; merchant banker with National Grindlays Bank

Partnered in Techno Electric and Engineering Company Ltd in 1980

Grew TEECL into prominent Indian EPC company engaged in power generation and transmission PPP linkages

Engaged with industry associations (IEEMA, Confederation of Indian Industry, IIPW and IIW; Vice President of Indian Electricals and Electronics Manufacturers Association)

Recognized as top 100 Indian CEO’s by Business Today – PWC 2016-17


ONE-STOP SOLUTIONS PROVIDER

BOOT and BOOM projects (providing annuity income)

EPC (T&D + rural electrification + captive waste heat recovery + solutions for power-intensive industries (88% of revenues, 63% of EBIT, FY18)

Green power generation (10% of revenues, 25% of EBIDTA, FY18)

PPP transmission: capital-intensive, modest ROE, stable multi-year income/cash flow, in-house EPC business, annuity O&M revenues

EPC: Less capital-intensive, high risk-reward ratio

Wind energy: Capital-intensive, modest IRR, multi-year stable income/cash flows


GROWING RESPECT AND RECOGNITION

Mr. P. P. Gupta receiving the best performance award, 2013

IEI Industry Excellence Award, 2016

National award for meritorious performancein the power sector from the

Ministry of Power, 2014

Best performance & Safety award 2016, 2015, 2014 & 2013 from Power Grid Corporation

Meritorious Performance in Power Sector in 2011-12 by Ministry of Power

Certificate of appreciation from North Bihar Power Distribution Co. Ltd. & Bihar State Power

(Holding) Company Limited

IEI Industry Excellence Award 2016 from The Institution of Engineers (India) for demonstrating

Highest Order of Business Excellence

‘Best Under a Billion’ (according to Forbes) –Top 200 small and mid-cap companies

Received award from PGCIL in 2018 as “Best player in 765 KV AIS Substation Construction in

India”

“Best player in 765 KV AIS Substation Construction in India in 2018” by PGCIL

TEECL BUSINESSES


Engineering, Procurement and Construction Services

Transmission projects under PPP model (BOOT and BOOM)

Renewable Energy Generation


OPTIMISTIC OUTLOOK: POWER SECTORThirteenth Plan Highlights (2017 – 2022) :

Total Generation capacity target: 450 GW

Total capacity in demand till 2022: 280 GW, Fresh Capacity addition: 85 GW (35% in pvt. Sector)

Increase in inter-regional capacity from 63 GW (FY17) to 118GW (FY22). Total Transmission investments: INR 2,600 Bn, of which 1,600 Bn in 400 KV +, and 1,000 Bn in 220 KV

Rising private sector participation through TBCB and VGF scheme

Road map to award project worth Rs 1000 Bn, additional projects work Rs 74 Bn are identified.

Target Substation Capacity – 5,00,000 MVA, Additional Capacity target: 1,30,000 MVA

Distribution sector will see surge in investment. Central government sponsored scheme such as IPDS and DDUGY, investment of Rs 72 Bn from FY18-22. State DISCOMS and TRANSCOS expected to strengthen T&D infrastructure as part of UDAY scheme.

Techno is attractively poised & geared up to address the sizeable opportunity in forthcoming 13th Plan and bid for the projects that come in years ahead.


OUR BOOT AND BOOM BUSINESS

Leveraging EPC knowledge as transmission complements EPC

Long-term annuity incomes; annuity model enhances valuation and profitable encashment opportunity

Generates operations & maintenance revenues

Asset ownership; enhances scale and stability

Growing government preference for private sector role

Reduces requirement to bid aggressively and therefore decrease participation in unhealthy competition

Why transmission?

1


Techno’s transmission competitiveness

Extension of EPC capability - leveraged knowledge; extended from one segment to another

Competitiveness has translated into a higher strike rate in bagging projects

Active solutions orientation

• 400 kVA to 765 kVA substations (AIS & GIS technology)

• Extensive vendor ecosystem - timely project delivery/excellent negotiation ability/quality control

500 professionals with diverse skills (EPC and support)

Low gearing; high credit rating; low-cost debt

Delivered most EPC and BOOT/BOOM projects on or before schedule

Increased global interest in our business model


PROJECT ONE: JHAJJAR KT – HARYANA Implementing agency Jhajjar KT Transco Pvt. Ltd. 51:49 JV of Kalpataru Power Transmission Ltd. and Techno Electric JV commissioned 400 kV project (March 2012)

Project commissioned in record 15 months

First transmission project to receive viability gap funding support from Central Government

INR 4440 mn project (debt and equity)

INR 2760 mn debt (current debt INR 1600 mn) and combined equity (INR 760 mn) from JV partners

INR 920 mn grant by Central Government

DBFOT arrangement for 25 years (extendable by 10 years)

Terminal value 60 months of revenue (after 25 years of concession period)

INR 45 mn income/month without considering inflation

400 kV transmission system comprises Double Circuit Quad Moose Line

Extending from Jharli to Kabulpur, Rohtak (35 KM)

Extending from Kabulpur to Dipalpur, Sonepat (64 KM)

Two substations of 400/220 kV of 24 bays each at Rohtak and Sonepat

Transmission network designed to evacuate 2,400 MW

Will initially transmit 1,320 MW (2X660 MW) from Jhajjar Power Plant


PROJECT TWO: PATRAN, PUNJAB

400 kV transmission system commissioned in June 2016

Comprises LILO of both circuits

1,000 MVA evacuation capacity

INR 2000 mn project with Debt Equity ratio of 3

Build, Own, Operate and Maintain (BOOM) transmission network

Implementing company acquired by TEECL from PFC Consulting under PoC

mechanism of CERC

Designing, constructing, erecting, completing and commissioning responsibility

INR 1750 mn to TEECL EPC arm and expected revenue to O&M agency (TEECL) of

INR 20 mn annually

Annual revenue of INR 300 mn.

Projected INR 10,000 mn income over the complete concession period of 35 years

Financial closure achieved at competitive rates; Commissioned in June, 2016

Entered a definite agreement with India Grid Trust to sale 46% of shares of Patran

at Enterprise Value of Rs 250 crores

Patiala-Kaithal 400 kV double circuit triple snow bird line at Patran

400/220kV substation with 14 bays in Patran


PROJECT THREE: KOHIMA – NAGALAND Build, Own, Operate and Maintain (BOOM) transmission network.

INR 13000 mn project with Debt Equity ratio of 3

Implementing agency REC Ltd. 74:26 Kalpataru Power Transmission Ltd. and Techno Electric

Designing, constructing, erecting, completing and commissioning responsibilityINR 2800 mn to TEECL EPC arm and expected revenue to O&M agency (TEECL) of INR 60 mn annuallyAnnual revenue of expected INR 2000 mn.Projected INR 70,000 mn income over the complete concession period of 35 years.Financial closure has been achieved; Expected date of Commissioning in July, 2020

400 kV transmission system

Extending from Imphel to New Kohima, (134 KM)

Extending from New Kohima to Mariani (119 KM)

Substations of 400/220 kV at New Kohima


Projected portfolio of4 projects by 2020

Execute 1-2 projectannually

From 20% of EPC orders from PPP projects in 2012 to 10% in

2015 to 20% (est.) by 2020

Generate increasing insourcing of EPC contracts

Increased competitiveness is translating into project selectivity

(high IRR)

Increasing expertise and focus in setting up substations

Diversified incomes; annuity and upfront fees

Building efficient evacuation facilities for the nation

ROAD FORWARD


Transmission and distribution

Power generation

Industrial sector (including power intensive industries, aluminum smelter, refineries)

Turnkey solutions to captive power plants

Balance of Plant

EHV substations

•EHV substations up to 765 kV (AIS / GIS)

•STATCOM installation up to 250 MVaR

Distribution

•Distribution systems management (APDRP)

•Rajiv Gandhi Gramin Vidyutikaran Yojna

(RGGVY)

• Power distribution systems to power intensive industries

• Offsite piping systems

• Oil handling plant process industries

OUR ENGINEERING, PROCUREMENT AND CONSTRUCTION (EPC) SERVICES BUSINESS2


Techno’s EPC competitiveness

Promoter-driven for 35 years

Three-decade experience (including BOP packages)

Respected for project management, timeliness, completion and cost-effectiveness

Partnership with large International manufacturers

Management of customer expectations and contractual obligations

Respected for graduating to next technology and embracing challenges

Robust vendor eco-system

Pioneered power distribution solutions for aluminum smelters (360 kA busbar

systems, 2013)

Quicker project completion than industry standard

40% share of 765 KV EHV substation segment

Efficient working capital management


Techno’s operating philosophy

Focus on PAT/retained cash (not size of order book)

Cash rich; high liquidity; low gearing; income mix (lumpy and annuity)

Project execution synced with project cash cycle; zero penalty record; realized retention money within 12 months of project completion

Marginal working capital outlay

De-risked: bid with own cash; work for CPSUs or bilaterally/multi-laterally funded SEB projects

Conservative accounting policy

Quality assets for national benefit


Core business (EPC)

88% of overall FY18

revenues

67% ROCE of EPC

as on 31 March, 2018

Order book

INR 20,500mn

(as on March 31, 2018)

Revenue visibility of

24months

Annual cash surplus of more than

INR 2500 mn

CAGR of

23%for EPC Revenues over

last 4 year

Selective project bidding

Brightoutlook fornext 5 years

Prestigious Clients Power Grid, BHEL, Indian Oil, NTPC, Reliance, Vedanta, NTPC, Hindalco, GE among others

Well-planned projects executed in sync with cash flow and contractual obligations

Conservative & prudent management approach to EPC business

Timely projects closure and retention money inflow


TECHNO’ S EPC ORDER BOOK

Segment - wise order book as on 31 March, 2018

GenerationINR 539 million

TransmissionINR 16031 million

DistributionINR 3926 million

ORDER BOOK as on 31st March, 2018

Name of the client Amount %

Power Grid Corporation of India Ltd. 9,175 45.43

Jharkhand Bijli Vitran Nigam Ltd 3,581 17.73

NERSS, Nagaland (BOOT Project) 2,800 12.38

DBS 2,200 10.89

TS Transco Ltd. 630 3.12

NTPC Ltd 539 2.67

Rajasthan Rajya Vidyut Prasaran Nigam Ltd 459 2.27

Others 1112 5.50

Total 20,496 100.00

TECHNO ELECTRIC & ENGINEERING COMPANY LIMITED 21TECHNO ELECTRIC & ENGINEERING COMPANY LIMITED 21

TECHNO’S IMPRESSIVE CLIENTELEHelped build 50% of India’s National power grid

Historically engaged with more than 50% NTPC projects (various capacities)

Multi-year engagements with Power Grid Corporation, BHEL, Indian Oil, NTPC and Hindalco

Associated with power distribution solutions for major oil refineries (Bina, Paradip, Bhatinda, Panipat among others) and aluminium smelters (Hindalco, Nalco among others)

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EPC FINANCIALS2013-14 2014-15 2015-16 2016-17 2017-18

Revenue 5,705.10 6,680.90 10,142.75 12,109.45 11,733.70

EBIDTA 601.60 938.30 1,449.40 1,812.37 1,832.87

PAT 500.50 662.60 946.29 1,111.31 1,161.19

Cash surplus 509.60 675.40 1,000.00 1,150.00 1,200.00

ROCE (%) 62.40 80.50 108.00 90.00 67.00

(INR in mn.)

Note –FY 2017 and FY18 Financials are not comparable due to impact of GST.1. Earlier the Revenues was accounted inclusive of taxes which now is exclusive of taxes hence the revenues is impacted byaround 10-11% lower for FY18.2. Some of the contracts have not been amended by our clients post GST. Therefore, the contracted value is yet to be amended,and billing to that extent is yet to be completed. This is being done during the current quarter. However, we have accounted thebills with GST effect from our sub-contractors as expenses and bills against these expenses are yet to be raised by us to ourcustomers. This has lowered the EBIDTA in FY18 to the tune of Rs 20 crores, which will be accounted for in Q1FY19.


EPC – ROAD FORWARD

Overseas Market

Won 2 Overseas Project:

Uganda: Design, Supply & Erection of 160 km 132 Kv double circuit Mbarara -Nkendao transmission line and associated substations worth Rs 95 Crores

Afghanistan: The Afghanistan Breshna Sherkat (DABS), Kabul, Afghanistan fordesign, supply and construction of 500 KV Substation worth US$ 35 Mn. Ourportion is US $26 Mn, that is likely to be enhanced to US$ 40 Mn.

Potential

Kenya: We are in exploring opportunities in countries like kenya, wherein weexpect an order of around US$ 100 Mn.


INDUSTRIAL

IOC, BP, HP plan to spend more than INR 12,00,000 mn on refinery expansions in the next 5 years.

Vedanta and NALCO plan to invest around INR 4,00,000 mn on expansion of its capacities in the next 3-5 years.

Expertise in certain niche areas in handling complex projects, which includes high precision fabrication and machining skills in power guzzling industrial units.

TEECL’s specialization extends to installation of high end (360KA) aluminum bus bar system for aluminum smelters.

Its capability extends to plant’s electrical and illumination, cabling project, water & allied system, installation of fire protection system.




Emission Control

Pursuant to Govt. of India, Gazette notification of 7th December, 2015 allThermal Power Plants need to limit the Sulphur emission.

Techno is expected to take 1-2 orders with an order size of INR 2000-5000 mn.

Requirement of global technology tie-ups by EPC players. Total investment of Rs1200 Bn estimated.

Tied up with Global Major K C Cottrell, South Korea for emission controltechnology

Waste-to-Energy

NTPC to invite players to set up 100 waste-to-energy pollution-free plants. As perMNRE, it has a potential to generate power of 2780 MW by 2050.

Establishing relationship with Global Major from Norway for waste-to-energytechnology.


Solar Power / Power Storage SolutionTargeted Solar Capacity in India by 2022 of 100 GW with investment of Rs 6000 Bn.

25 GW of installation expected through from EPC route of Rs 1500 Bn NTPC toexecute 10 GW installation in next 5 years.

Well placed to execute 3-5% of installations by CPSU’s in EPC route over next 5years.

We have tied up with Global Major STEAG, Germany for power storage technology.

Electric Vehicle Charging Station

We are working exclusively with Delta Group, Taiwan to bid for a NTPC project forestablishing a major electric vehicle charging station at Jabalpur

EPC – EMERGING OPPORTUNITIES


CURRENT RENEWABLE ENERGY ASSET OVERVIEW

Sold 44.45 MW of wind power assets at an effective valuation of INR 2150 mn during the Q1 FY 2016.

Sold 33 MW of wind energy assets at an effective valuation of INR 1650 mn in Jan 2017.

Exited the assets at the same price at which investment was made.

12 MW of wind energy asset sold to subsidiary.

Intend to divest balance portfolio of 129.9 MW wind assets to improve strength for bidding more PPP projects in transmission sector, improve ROCE & focus on core EPC vertical.


CURRENT ASSET OVERVIEWSimran Wind Project Limited

Capacity 18 MW 111.90 MW

Date of Acquisition

/Commissioning

During 2009-10 March 31, 2011 - February 24, 2012

Location Karnataka Tamil Nadu (111.90 MW)

Capacity 12 turbines * 1.5 MW each 48 turbines * 1.5 MW each; 19 turbines * 2.1 MW each

PLF 18% - 26% 19% - 26%

Tariff INR 3.40 (Karnataka) APPC tariff – INR 3.12** (TN) for 111.90 MW

Project cost – INR 6650 mn*

O&M Free for first 5 years; 5%

escalation from INR 1

mn/MW

Free for first 4.5 years; 5% escalation from INR 0.80

mn/MW started from May 2016 for 72MW and INR 0.95

mn/MW starting Aug 2018

GBI benefit - 111.9 MW registered with IREDA

*IFC had originally invested 3.38% in Simran Wind Project Ltd. for $5 million at INR 40/share in lieu of 5,625,000 equity shares(buyback done by Techno in FY 2016); Project debt of $85 mn (INR 4165 mn) raised at average 6.5% from IFC, DBS and StandardChartered Bank. One of the longest (10.5 years) non-recourse project financing undertaken for a wind energy project in India(without credit guarantees or credit insurance).

.


Note –FY 2016, FY 2017 and FY18 Financials are not comparable with that of previous year as the Company had divested 44.45 MW of wind assets during FY 2016 & 33MW in FY 2017.1. FY17 revenues includes revenue of Rs 19.06 crores for the wind asset sold, which was not there in FY18. Due to this the EBIDTA was also lower by effective amount.2. There was a capital gain in FY17 due to the sale of wind asset to the tune of Rs 23.34 crores, which should be excluded whilelooking at the bottom-line of the company.3. There was a capital gain in FY16 of Rs 25.4 crores on account of sale of 44.45 MW of wind assets included in other income, which should be excluded while looking at the bottom-line of the company.

2014-15 2015-16 2016-17 2017-18

Revenue 1258.10 829.30 1,457.73 1,241.85

EBIDTA 1143.20 764.43 1,312.99 1,108.20

Other Income 98.79 598.51 424.57 135.94

PAT 283.30 393.2 777.31 682.05

Cash generated 873.70 870.00 1181.96 1,078.39

Units generated (in mn) 300.44 188.13 324.02 247.94

Realization / unit (INR) 4.19 4.41 4.50 4.80

(INR in mn.)GREEN ENERGY FINANCIALS


Standalone Consolidated

Mar-18 Mar-17 Change (%) Mar-18 Mar-17 Change (%)

Revenues 3,282 3,579 -8% 3,296 3,619 -9%

Operating expenses 2,835 3,069 -8% 2,874 3,075 -6%

EBITDA 447 504 -11% 421 544 -23%

EBITDA % 13.6% 14.1% -11% 12.8% 15.0% -16%

Other income 11 28 -59% 129 304 -57%

Depreciation 7 9 -21% 106 110 -3%

Interest 35 35 -1% 51 76 -32%

PBT 519 737 -29% 394 662 -41%

PBT % 15.81% 20.64% -23% 11.95% 18.31% -35%

Taxes 133 310 -57% 125 367 -66%

Profit after tax 386 427 -10% 269 295 -9%

QUARTERLY FINANCIALS(INR mn)

Note – 1. Q42017 and Q4FY18 Financials are not comparable. Earlier the Revenues was accounted inclusive of taxes (Salestax/VAT/GST) which now is exclusive of taxes.2. Some of the contracts have not been amended by our clients post GST. Therefore, the contracted value is yet to be amended,and billing to that extent is yet to be completed. However, we have accounted the bills with GST effect from our sub-contractorsas expenses and bills against these expenses are yet to be raised by us to our customers. This has lowered the EBIDTA in FY18 tothe tune of Rs 20 crores, which will be accounted for in Q1FY19.There was a capital gain in FY17 due to the sale of wind asset to the tune of Rs 23.34 crores, which should be excluded whilelooking at the bottom-line of the company.


Consolidated Income Statement

2016-17 2017-18

Revenues 13,825.37 13,345.21

EPC 12,109.54 11733.71

Energy 1,267.13 (+190.60)

1241.85

Corporate 136.54 (+233.00) 258.09

EBIT

EPC 1,773.42 1,805.60

Energy 918.54 (+158.80)

711.86

Corporate 136.54 (+233.00) 258.09

Interest 373.43 235.48

PBT 2,735.25 2,615.15

PBT % 19.78 19.60

Taxes 933.70 (-97.0) 647.11

PAT 1,801.00 (+97.6) 2,004.40

PAT % 13.73 15.02

EPS (Rs) 16.90 18.17

CONSOLIDATED FINANCIALS(INR mn)

Note – on the subsequent page


Consolidated Balance Sheet

2017 2018SOURCES OF FUNDS

Shareholders’funds 11,070 * 12,520

Minority interest --- ---

Loan funds 2,099 224

Deferred tax liabilities 975 879

Other liabilities and provisions 213 359

Total 14,358 13,982

APPLICATION OF FUNDS

Net fixed assets 6,468 6,047

Investments 789 839

Loans and advances 85 141

Cash and Bank Balance (including short term Investment) (a) 4,871 4,083

Current assets (b: Less a) 7,197 8,274

Current liabilities (c) 5,053 5,402

Net current assets (b – c) 2,144 2,872

Total 14,358 13,982

CONSOLIDATED FINANCIALS(INR mn)


Note – 1. FY2017 and FY2018 Financials are not comparable. Earlier the Revenues was accounted inclusive of taxes (Salestax/VAT/GST) which now is exclusive of taxes hence the revenues is impacted by around 10-11% lower for FY18.

2. Some of the contracts have not been amended by our clients post GST. Therefore, the contracted value is yet to be amended,and billing to that extent is yet to be completed. This is being done during the current quarter. However, we have accounted thebills with GST effect from our sub-contractors as expenses and bills against these expenses are yet to be raised by us to ourcustomers. This has lowered the EBIDTA in FY18 to the tune of Rs 20 crores, which will be accounted for in Q1FY19.

3. The Company had divested wind assets of 33MW in FY 2017. FY17 revenues includes revenue of Rs 19.06 crores for the wind asset sold, which was not there in FY18. Due to this the EBIDTA and PAT was also lower by effective amount.

4 FY17 other income includes extra ordinary income of INR 233 mn on account of sale of 33 MW of wind assets and a tax of INR330 mn was given, which is reflected separately in the numbers.

5. PAT numbers shows the effective comparable number plus (in brackets) the impact of one time/other income adjested.

6. * Techno have concluded a buyback of 15 lakh equity shares from non-promoter category, at a price of INR 400 per shareunder tender method mechanism having a total outflow of INR 60 crores in FY17. Impact of buyback is reflected on the Networth of FY18 financial ratios.

Notes to Accounts


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