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VA TECH WABAG INVESTOR PRESENTATION MAY 2015 Safe Harbour

. This presentation and the accompanying slides (the “Presentation”), which have been prepared by VA TECH WABAG 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.

. This presentation contains certain forward looking statements concerning the Company’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India and abroad, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, our ability to manage our international operations, government policies and actions regulations, interest and other fiscal costs generally prevailing in the economy. The company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the company.

2 Business Overview

BATNA Waste Water Treatment Plant, ALGERIA

3 Complete Water Treatment Solution Provider…

 Provides a complete range of Water and Waste Water Treatment solutions

 Offering spanning across Municipal Drinking Water, Municipal Sewage, Industrial Water, Industrial Effluents, Desalination and Recycle

 Technology focused company - Owns more than 100 patents

 R&D centers located in India, Austria and Switzerland

 Indian Multinational player in the water treatment industry

 Strong execution track record - More than 2300 projects in last 3 decades

 Professionally managed Company with Promoters having an average of 30 years work experience in the industry

4 Offering a complete range of solutions across project lifecycle

 Pureplay water company

Design  Catering to both Municipal & O&M Procure- Industrial customers ment

 Offerings span across segments of water treatment

Commiss- Construction ioning  Range of services from concept / design stage to Installation implementation to operations of plant

5 Led by ambitious professionals

Rajiv Mittal (Promoter) – Managing Director Erik P. Gothlin –CEO, Wabag Austria  30 years of work experience in the Water Industry  22 years of Work Experience in the Industry  Previously worked with Wabag Water Engineering Limited, UK as a  Previously held various management positions in Westermo Deputy Director - International sales Teleindustri, Sweden, ABB, and Chromalox Group as Managing Director – International for United Kingdom, France and China

Shiv Narayan Saraf (Promoter)- Head of Operations Gerhard Ryhiner – CEO, Wabag Wassertechnik, Switzerland  42 years of experience in the water industry; worked previously with  23 years of work experience; worked previously with Sulzer Brothers Ion Exchange India Limited as Head of the wastewater department  Responsible for construction management of all projects of all SBUs  Responsible for Sales, finance and administration including human resources, quality management and health safety and environment

Amit Sengupta (Promoter)–Head of Corporate Strategy & Marketing Arnold Gmuender – COO, Wabag Wassertechnik, Switzerland  37 years of experience; worked previously with Kirloskar AAF

 Responsible for devising & implementing corporate strategies for  34 years of work experience; worked previously with Sulzer Brothers growth, technology acquisitions & licensing & synergizing strengths as Head of water sales. within Wabag Group  Responsible for project execution and research and development.

S. Varadarajan (Promoter) – CFO Lubomir Nemec – CEO , Wabag Czech  28 years of work experience; worked previously with PL Agro Technologies Limited as Finance Manager and Company Secretary  25 years of work experience in the Energy & Industry Sector; worked  In charge for finance, commercial, legal, secretarial, information previously with Siemens as Branch Office Director, Brno technology, income tax and general administration functions  Responsible for overall business activities in WABAG Czech

6 Management Buyout followed by Acquisition of erstwhile Parent…

Austrian Group Siemens VA Tech Wabag (India) VA Tech acquired VA listed on NSE & BSE acquired Tech Group “Wabag” part of 2010 Business from (Oct) DB in 1999 VA Tech Wabag Held by (Austria) 2007 Deutsche Babcock (DB) 2005 Group VA Tech Wabag (Sept) Name changed (India) VA Tech Wabag (India) to VA Tech acquires its erstwhile parent – Wabag (India) in VA Tech Wabag (Austria) from Management 2000 Siemens Buyout of the Water 2005 India Business Treatment backed by ICICI business (Jul) Venture VA Tech represented by Emergence Wabag “Wabag” of Global 1999 - 2000 (India) Water Player with focus on the VA Tech Wabag VA Tech (India) emerging 1924 ------1996 Wabag (Austria) markets

7 … Strengthen the Positioning in Water Treatment Sector

Wabag Austria acquisition brought along… …. facilitated to Achieve

Technical Know-how – Access to over 100 Patents & Experienced Manpower Growth in India Business

Revenue grew around 4 times From Rs. 332 Crs to Rs. 1,220 Crs Perennial Rights to “WABAG” brand - Established in 1924 Acceptance of WABAG INDIA in Overseas market

Project References in more than 19 countries helps P/Q

Opportunity to leverage Low Cost Economic Advantage in Access to Global geographies Global market

8 Current Business Structure VA Tech WABAG

WABAG INDIA WABAG Austria

Domestic Business International Business International Business

Exports European Countries Austria Czech Republic Desalination Sri Lanka Indonesia Switzerland Romania Tanzania Municipal Turkey

Subsidiaries Sub Saharan / North African Industrial China Oman Countries / Others Philippines Spain Tunisia Libya Iran O&M Nepal Qatar Namibia Algeria Macao Bahrain Thailand

Saudi Arabia, Egypt, Latin America

9 Our Key Strengths

100 MLD Desalination Plant, Chennai, INDIA

10 Use of Advanced Technology & R&D…

High quality treated water – Advanced Technology & Patented Products/Processes Technology is the deciding factor

Biological Sludge Anaerobic Coagulation Flocculation Aerobic Treatment Digestion Treatment

Alternate

Demine- Reverse Source of Complex Filtration Sedimentation realization Disinfection Osmosis Water - and Large Reuse & Projects Desalination

Ozone UV Thermal Screening Ion Exchange Desalination treatment Treatment Key Differentiator - Technology & Cost Activated Membrane Bio Fluidized Bed Bio-filtration De-nitrification Efficiency Sludge Reactor Technology BIOPUR® BIOIDEN® FLUOPUR® HYBRID™ MARAPUR®

Biological Membrane Oxidation Anaerobic Sludge Filtration Process Treatment Digestion CERAMOPUR® ADOX® EkJ Process™ BIOZONE® ADVANCED EUROPEAN TECHNOLOGY Customized solutions employing in-house tech @ LOCAL COST Patents owned for select products/ processes 11 Asset Light Business Model

Design Civil Operation & Technology Construction & Engineering (Outsourced) Maintenance

. Critical for cost . In-house to ensure . Mostly outsourced to . In-house to ensure optimization compliance with designs dedicated Contractors quality performance ― Combination of ― High Plant Operation . Approvals to match Proprietary & Bought . Ensures low asset base Efficiency customer out Technology ― Least Downtime . Allows to focus on core requirements ― Testing, Quality . High EBIDTA segment Control competencies

Our Strengths

. Ability to handle large and complex projects . Execution skill for high value projects & in emerging geographies . Strong Balance Sheet . Asset light & Cash generating business

Focus on ‘Value-Added & High Margin’ work processes; Limits investment in Asset Base

12 FINANCIAL HIGHLIGHTS

Waste Water Treatment Plant, Turkey

13 Yearly Order Intake

3,354 2,977  Focused approach leads to securing good orders in 2,155 Challenging market 1,802 1,774  Diversified presence helped in mitigating geo-political risks

 Euro depreciation has led to lower Order intake number than guidance FY 11 FY 12 FY 13 FY 14 FY 15

Rs. Crs.

14 Robust Revenue Growth

2,428 2,239  Achieved Forecasted revenue on local currency terms 1,619 1,447  Euro depreciation 1,224 has led to lower revenue in INR terms due to translation

 Postponement of Order Intake led to reduction in Book & Bill revenue FY 11 FY 12 FY 13 FY 14 FY 15

Rs. Crs.

15 Working Capital Cycle

• Why are the Receivables & Clients 5 1 Payables higher on

Balance Sheet date?

– Q4 generally accounts for

term 40-45% of annual turnover

invoice as contracted as contracted

Raise Invoice Raise Invoice

Places Places Order an based vendor on 4 Payment Receives – Invoice raised & recognized as Revenue that appear in Receivables, are not due for payment as per contract 2 6

– The above applies to

Payables to major Vendors

too Invoice

Vendors 3 Raise & Supply

onsimilar terms – Receives and makes

majorcomponents Makes Payment to to Payment Makes Order PlacementOrder of payment as per contracted terms in due course of Major Vendors time

16 Annual Guidance

FY 2014 [INR Bn.] FY 2015 [INR Bn.]

33.5 32.0 29.8

26.0 26.0 22.3 24.0 Guidance 19.0 Achievement

Revenue Order Intake Revenue Order Intake

Guidance for FY 16 Revenue : INR 28 – 30 Bn. & Order Intake : INR 35 – 37 Bn.

17 Adjusted for Share Split in FY 2011 Dividend Pay-out Adjusted for Bonus Issue of 1:1 in FY 2015

EPS DPS

21 20 17 14 11

3.5 4 4 2 3 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Earning Per Share 11 14 17 21 20 (Rs.) Dividend Per Share 2 3 3.5 4 4 (Rs.)

Dividend Payout 19 % 21 % 21 % 19% 20%

18 Annexure: Financial Highlights FY 15

19 RESULTS OVERVIEW – Consolidated Profit and Loss

 Delay in finalization of Target Projects and Significant depreciation INR Millions Q4 FY15 Q4 FY14 YoY % FY15 FY14 YoY % of Euro led to lower revenue growth Income 9,057 8,966 1.0% 24,284 22,302 8.9%

Other Operating Income 20 10 97.1% 68 85 -19.9%  Increase in TCO is mainly due to increase in site employee cost for Cost of Sales 6,744 7,044 -4.3% 18,328 16,979 7.9% Istanbul O&M Project in Turkey.

Total Cost of Operations (TCO) 1,179 860 37.1% 3,912 3,317 18.0%  Provision of about INR 250 Mn in FY EBITDA 1,155 1,073.0 7.7% 2,112 2,090 1.0% 15 towards LD in Oman Desal project as conservative and prudent EBITDA margin 12.8% 12.0% 8.7% 9.4% accounting practice led to lower EBITDA margin Net (Gain) / Loss on Forex 40 42 -4.7% 17 205 -91.7% Interest & Finance Charges 134 51 161.3% 315 124 154.7% (Net)  Increase in Interest Charges largely on account of borrowing cost of Depreciation & Amortization -34 35 -197.7% 109 150 -27.2% Ujams BOOT Project in Namibia and Istanbul Project in Turkey. Increase Exceptional Items 0 51 -100.0% 0 51 -100.0% in Finance Charges largely due to increase in performance guarantees Tax 302 277 9.1% 566 526 7.7% issued to new projects. Profit After Tax 713 719 -0.8% 1105 1136 -2.8% PAT margin 7.9% 8.0% 4.5% 5.1%  Reduction in depreciation due to change in methodology of Share of Profit from Associates -8 -5 -4 -3 depreciation from WDV to SLM / MI apart from globally aligning life of Net PAT 705.0 713.9 -1.2% 1101 1134 -2.9% assets in line with Companies Act 2013.

20 RESULTS OVERVIEW – Standalone Profit and Loss

INR Millions Q4 FY15 Q4FY 14 YoY % FY15 FY14 YoY %

Income 5,678 5,185 9.5% 12,201 11,400 7.0%

Other Operating Income 40 70 -42.4% 132 123 8.0%  Delay in new order intake led to lower Book and Bill Cost of Sales 4,523 4,068 11.2% 9,423 8,686 8.5% revenue

Total Cost of Operations (TCO) 364 390 -6.7% 1,375 1,313 4.7%

EBITDA 831 797 4.3% 1,537 1,523 0.9%  Decrease in TCO in Q4 due to reduction in Variable Pay of EBITDA margin 14.6% 15.4% 12.6% 13.4% employees

Net (Gain) / Loss on Forex 13 21 -40.4% 44 112 -60.7%  Increase in Finance charges Interest & Finance Charges mainly due to increase in 4 18 -75.1% 58 7 694.5% (Net) working capital and increase in performance guarantees of Depreciation & Amortization 33 27 22.7% 75 81 -7.9% new contracts

Tax 262 241 8.9% 456 437 4.4%

Profit After Tax 519 491 5.8% 904 886 2.1%

PAT margin 9.1% 9.5% 7.4% 7.8%

21 RESULTS OVERVIEW – Balance Sheet

Rs. Millions Mar’15 Mar ’14 Mar’15 Mar ’14 . Non Current Liabilities on Consol Consolidated Standalone Balance Sheet increased on account of Long Term Borrowing for BOOT Net Worth 9,026 8,410 6,862 6,028 project in Namibia.

Minority Interest 49 28 - - . Non-current Liabilities is higher in Non-Current Liabilities 3,117 2,276 2,216 1,625 the Standalone Financials on account of Increase in Customer Trade Payables 8,653 8,620 5,575 5,444 Advances which gets compensated by reduction in Customer Advances Other Current Liabilities 4,832 5,024 2,412 2,925 in Other Current Liabilities Total Liabilities 25,678 24,357 17,065 16,023 . Increase in other Non-Current Fixed Assets 1,919 1,884 990 1,019 Assets is due to investments in new Other Non-Current Assets 2,619 2,121 2,639 2,269 geographies and increase in customer retention as per contract. Trade Receivables 14,807 13,875 9,833 9,237 . Consol Gross Cash in Balance Sheet Cash & Bank Balances 3,112 3,702 1,283 1,564 is INR 422 Crores. Standalone short Other Current Assets 3,222 2,776 2,321 1,934 term borrowings reduced to Rs. 63 Crores in FY 15 from 89 Crores in PY Total Assets 25,678 24,357 17,065 16,023

22 RESULTS OVERVIEW – Working Capital Highlights

Rs. Millions Mar’15 Mar ’14 Cash Balance [Rs. Mn.]

Current Investments 350 200 Mar’15 Mar ’14 Inventories 470 350 Cash & Bank Balance 3,112 3,702 Trade Receivables 14,807 13,875 Fixed Deposits & Current 1,104 974 Loans and Advances 1,063 995 Investments

Cash & Bank Balances 3,112 3,702 Gross Cash Balance 4,216 4,676

Other Current Assets 1,339 1,232 Borrowings (Short Term) 1,113 1,133

Total Current Assets (A) 21,140 20,353

Short-term borrowings 1,113 1,133 Net Cash 3,103 3,543

Trade Payables 8,653 8,620 Long Term Borrowings for investment in Other Current Liabilities and Provisions 3,719 3,891 Ujams BOOT Project is not included above Total Current Liabilities (B) 13,486 13,643

Net Working Capital without Cash (NWC) 4,543 3,008 Decrease in Net Cash because of Euro depreciation is about Rs. 30 Crores Net Working Capital without Cash (No. of Days) 68 49

Net Working Capital excluding Cash 68 Days

23 Revenue Breakup –FY15

EPC O&M INR Millions EPC O&M Total

20% Municipal Industrial Municipal Industrial

Wabag India 6,796 3,370 1,592 444 12,202

80% Wabag Overseas 6,165 3,164 2,014 739 12,082

Total 12,961 6,534 3,606 1,183 24,284 Municipal Industrial

32%

EPC [Rs. Bn.] O&M [Rs. Bn.] 68%

4.8 19.5 India Austria MDUs* IIUs # 4.4 18.0 15%

FY14 FY15 FY14 FY15 50%

35%

* Multi Domestic Units 24 # India International Units Key Projects contributing to Revenue –FY 15

Revenue recognized Project Details [INR Mn]

Al Ghubrah 191MLD SWRO , Oman 1,929

DAWASA, Tanzania - 130 MLD WTP 1,490

BWSSB, Belandur - 90 MLD WTP 1,348

APGENCO – BOP with Water Management 1,246

Izmir, Turkey - 360 MLD WTP 834

Nemmeli 100 MLD Desal – O&M, Chennai 734

RIL,ETP, C2 COMPLEX 546

GECOL, Libya - Demi & ECL 448

Beni Messous WWTP, Algeria 375

Aiud & Ocna Mures WWTP, Romania 365

25 Order Book Analysis –FY15

26 Order Intake Breakup – FY15

EPC O&M INR Millions EPC O&M Total

32% Municipal Industrial Municipal Industrial

Wabag India 6,235 8,029 2,013 184 16,461 68%

Wabag Overseas 3,353 2,574 5,994 1,385 13,306 Municipal Industrial

Total 9,588 10,603 8,007 1,570 29,767 41%

59%

Key Orders Received in Q4 Order Value

APGENCO, BOP with Water Management Rs. 7,318 Mn India Austria MDUs* IIUs # Habra, West Bengal – 147 MLD WTP Rs. 1,980 Mn

Vienna, Austria – Sludge Treatment for WWTP Euro 13.28 Mn 13%

Ferganska Refinery, Uzbekistan – ETP Euro 12.34 Mn 45% Istanbul O&M Europe Package 2 Euro 10.30 Mn

42%

* Multi Domestic Units 27 # India International Units Current Order Book Composition

EPC O&M Rs. Millions EPC O&M Total

32% Municipal Industrial Municipal Industrial

Wabag India 12,072 10,197 12,676 345 35,290 68%

Wabag Overseas 13,669 1,104 3,184 1,139 19,096 Municipal Industrial Framework 14,056 Contracts 24%

Total 25,741 11,301 15,860 1,484 68,442 76% with Euro Depreciation

O&M, O&M, India Austria MDUs* IIUs# 15.3 17.3 10%

EPC, 38.3 EPC, 37.0

31% 59%

FY14 FY15

* Multi Domestic Units 28 # India International Units Order Book of Rs. 54.4 Bn & Framework Contracts of Rs. 14.1 Bn

Key Contracts in Orderbook Key Framework Contracts *

Project Details Amt [Rs. Mn] . Libya STP of Rs. 6,114 mn • APGENCO – BOP with Water Management 6,072 . Tobruk, Libya Desal of Rs. 1,181 mn • Nemmeli, Chennai - 100 MLD Desalination O&M 4,502 Framework Contracts • Ulhasnagar, Mumbai - 195 MLD WTP with O&M 3,300 won in FY15 • Istanbul, Turkey O&M 2,801 . Polghawella, Sri Lanka, WTP of Rs. 6,761 • OWSSB, Orissa - 100 MLD STP 2,296 • UP Jal Nigam - 140 MLD STP with O&M 2,190 • Habra, West Bengal – 147 MLD WTP 1,980 • Valenzuela, Philippines - 60 MLD STP 1,434 * Contracts wherein Advance Monies/ LC awaited, hence • not taken in Order Book Illugin, Phillipines - 100 MLD STP 1,111 • Suplac, Romania – PWTP 1,092 • BWSSB, Belandur - 90 MLD WWTP 920

29 For further information, please contact

Company : Investor Relations Advisors :

VA Tech Wabag Ltd. Stellar IR Advisors Pvt. Ltd. CIN - L45205TN1995PLC030231 CIN - U74900MH2014PTC259212 Mr. S. Varadarajan, Chief Financial Officer / Mr. Rajiv Balakrishnan, DGM IR Mr. Gaurang Vasani, Managing Director [email protected] [email protected] www.wabag.com www.stellar-ir.com

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