Titagarh Wagons Limited

1. Titagarh Wagons Limited

2. Agenda Industry Overview TWL Overview Financials

3. Overview of the Indian Railway The Indian Railways (�IR�) has largest rail network in Asia and the world�s second largest railway system under a single management IR traverses through the length and breadth of the country, covering 63,465 route kms IR owns a fleet of 7,910 locomotives, 48,263 coaching vehicles, 222,379 freight wagons, running around 16,201 trains everyday Freight and passenger traffic on IR has been growing at average rate of 9.4% p.a. and 7.4% p.a. respectively during the last two years in sharp contrast to the historical trend rates of growth at 3-4% p.a. Freight traffic has been a lifeline for the IR with the segment showing a steady growth in the late nineties and touched 667 MT in 2004-05 from 473.5 MT in 2000-01 registering a growth of approx.25% IR are targeting to invest a staggering average of Rs. 60 billion in each of the five years leading to 2012, a majority in its freight segment and the wagons manufacturing industry This scorching pace of growth in recent years makes it one of the most exciting periods in the history of IR

4. Reforms Undertaken by the Government Roads and railways are the two major modes of surface transportation in India. As per National Highway Authority of India, road transport accounts for about 85% of passenger traffic and 70% of freight traffic IR has been losing its share of freight traffic to road consistently over the past 20-30 years, mainly due to lack of policy reforms Having realized this, Government has conceived a massive investment plan in the past two years by setting up the: Special Railway Safety Fund with a corpus of Rs. 170 bn to implement safety programs from the year 2002-07 Setting up Rail Vikas Nigam Ltd. which focuses on implementing projects related to strengthening the Golden Quadrilateral and port connectivity. RVNL is likely to spend Rs. 120 bn by 2008 Approving Rs. 240 bn for the Integrated Railway Modernization Plan for modernizing existing rail infrastructure over five years starting 2006 IR has also changed its strategy from being �tariff focused� to reducing unit costs and improving volume throughput, as a result of which it expects to reduce its unit costs by 50% in the next three years thereby increasing its share in the total freight traffic

5. Turnaround of the Indian Railways

6. Growth Drivers for the Freight Sector Fortunes of the logistics industry is inextricably linked to industrial and economic growth. With Indian economy growing at 8%, logistics sector is at an inflexion point. Traditionally, the logistic sector in India has grown at 1.2X the GDP growth Growing external trade, particularly textile, automotive, auto ancillary, engineering, and capital goods have boosted containerization in India with India�s container traffic increasing at CAGR of 14% and is growing faster than the global container traffic during the past 6-7 years

7. Railways-Bulk Freight Growth Coal traffic poised to grow 8-9% yoy due to renewed thrust on power generation Construction sector driver of growth for cement dispatches- projected to increase 9% yoy for next 5 years Iron & Steel traffic will likewise expand with commissioning of several mega steel plants under consideration Recent Supreme Court judgement prohibiting overloading of trucks likely to shift more traffic towards rail

8. Annual Demand of Wagons & Share of Private Sector

9. Recent Developments of the IR in the Freight Segment IR has drawn up a five-year freight development plan wherein dedicated freight corridors will be developed over the next 10 years to link key ports and facilities covering a distance of 9,000 k.m and to be built over the next 10 years First phase of corridor to be built over a distance of 2,900 kms linking Delhi-Mumbai and Kolkata-Ludhiana and is expected to become operational by 2011 Estimated cost of upgrading the infrastructure on these routes for rail freight operation up to 100km/h is Rs. 220 Bn Open up the container terminal transport sector to other players apart from CONCOR Wagon Investment Scheme introduced � assuring guaranteed supply of wagons to customers investing in railway wagons. Scheme also envisages certain freight rebates and higher priority for such customers Scraping of minimum weight condition concept. For all commodities, freight now being charged on the basis of carrying capacity of wagons Goods tariff made simple, rational and transparent � goods tariff to contain only 80 group of commodities instead of over 4000 commodities at present First double stack container train in Indian sub-continent to be launched shortly to make rail-based container transportation more economical & competitive Wagon Leasing Policy may be announced shortly

10. Wagon Investment Scheme-Policy Scheme Public-Private Partnership model to promote investment in rolling stock, introduced in Rail Budget 2005-06 Users can own any number of wagons (in unit of rakes)-no ceiling, subject to minimum of 1 rake -piecemeal procurement of wagons not permitted. Wagons to merge and operate in general pool of Railway wagons Leading players in sectors like mining, cement, fertilizers being encouraged to participate in WIS in return for assured rake supply (in proportion to investment) over a period of 10 years Benefit to Railways Private sector invests in its fleet capacity Gives away only a miniscule proportion of overall freight traffic, on prioritization basis, at 6% discount Benefit to Private Parties Guaranteed availability of rakes Better cost positioning compared to their competitors Investment IRR

11. Container Freight Policy Under the policy, all the registered companies or firms or persons who have annual turnover or net worth of Rs100 cr or more would be allowed to do the container business Indian subsidiaries of foreign entities have been permitted to bid for freight routes. However, foreign companies have not been allowed to participate in the container sector Two categories of licenses: national and regional with license fee of Rs. 50 cr and Rs. 10 cr respectively. Licenses valid for 20 years National license allows the operators to offer services across the country for both Exim and domestic traffic. A license fees of Rs.10 cr would allow the operators to move domestic containerized traffic across the country. However, Exim containerized traffic can be moved from specified ports only Licenses were issued in March 20006 to 14 players including 10 National and 4 Regional licenses. Another round of licenses to be issued in the year 2008 While the registration fee has been kept relatively low, earnings for the Railways would be through haulage charges that the parties would have to pay on a per-container basis Line saturation may become a major cause of worry for potential private investors and this is being addressed through a separate Rs. 220 bn dedicated freight corridor project

12. Agenda Industry Overview TWL Overview Financials

13. Overview of TWL One of the leading freight manufacturer in India engaged in manufacturing of railway wagons, special purpose wagons, bailey bridges, mining & construction equipment Market share in the freight car manufacturing market of approx. 18% in fiscal 2006 Pioneered segment-specific wagons to suit the varying needs of our customers, such as the �Wheels-on-Wheels� wagons, a design patented by us Only private sector company in India registered with the Ministry of Defence, Government of India for the manufacture of bailey bridges Have an MOU with M/s Kawada, Inc, one of Japans largest bridge manufacturers for development of double lane modular bridges, called Kawada System Truss Bridge, based on the bailey bridge technology Our in-house research and development facilities have received an accreditation from the Ministry of Science and Technology, Government of India As an �Industry Partner� to the DRDO for manufacturing specialized equipments, we are associated with various DRDO development programmes in the area of wagons and bridges An approved source for an Integrated Field Shelter for protection against nuclear biological and chemical warfare by the DRDO Product-specific ISO:9001-2000 certification for design and manufacture of modular steel bridges and other products

14. Overview of TWL Executed an order from DRDO, Ministry of Defense for special purpose freight cars for the Indian Defense In July 2005 the �Mining and Construction Equipment Division Division� of Hyderabad Industries Limited was acquired which manufactures a comprehensive range of heavy earth moving mining machinery and crawler cranes used in the construction industry, under the brand name �Hind� The unit has a steel foundry with an installed capacity of 500 MT of finished casting per month, access to a rail siding and a fabrication facility The steel foundry has been certified as a grade �A� foundry, by the RDSO, qualifying to be an approved supplier of hi-value components, manufactured at our foundry Have recently forayed into the EMU and Metro Coach Business by participating in the recently EMU tender floated by the Indian Railways Have an order book of Rs. 8,160 mn as of September 30, 2006 Some of our esteemed clients include the Indian Railways, CONCOR, NTPC, Coal Corporation of India and Bothra Shipping

15. STRENGTHS Promoters have more than 5 decades of experience in the field of industrial engineering Preferred access to components through backward integration Strategic sourcing arrangements for components Strong management team with long standing industry experience Technical agreement with one of the leaders in the international market in the field of Bridges Strong focus on innovation in strategy & products Strategic investments by prominent equity investors like Chrys Capital & 2i Capital Strong Corporate Governance

16. Agenda Industry Overview TWL Overview Financials

17. Financial Overview