#1DELTA CORP LIMITED DELTIN ROYALE ===== Investor Presentation TH#2Table of Contents DELTA 01 Introduction 02 Investment Highlights 03 Financial Summary 04 Appendix C#3Section 1: Introduction DELTA#4Delta Corp Limited The only listed gaming and hospitality company in India Who are we? Business strategy Key business segments Key investment highlights • • The leading gaming and hospitality company in India Listed on both the National Stock Exchange and Bombay Stock Exchange with a market capitalization of US$ 1BN Led by Chairman, Mr. Jaydev Mody, a first-generation entrepreneur and leading Indian real estate visionary Transforming into a gaming and leisure company of international standards Expanding gaming related businesses throughout India with a focus on Goa and the Indian online market Three offshore gaming boats situated in the Mandovi River, Goa All-suite hotel and onshore casino in North Goa A Boutique hotel located in Goa Integrated resort in Daman Land-based casino in Sikkim Online platform for games of skill Exposure to the high growth potential Indian gaming/leisure market Largest and only listed operator in the organised gaming market in India First-mover advantage across the under-penetrated industry High quality management team with significant operating expertise Platform to act as the consolidator in the nascent online gaming market 1000 DELTA 22 18 29 1000 4#5DELTA Historic milestones in the company's development 2015-2017 • 2014-2015 • . 2013 - 2014 . 2010-2013 • • • 2008 - 2010 • Acquired Adda52.com, India's leading online poker site Launched land-based casino in Sikkim Completed 550 crores/ US$84m QIP equity raise Acquired an additional 36% stake in Daman Hospitality; increasing our stake to 87% Launched land-based casino in Goa Commenced operations of Daman Hotel Made a profitable exit from the Real Estate business Launched Asia's largest offshore casino in Goa Acquired third offshore casino, Casino Caravela Acquired land in Sri Lanka Raised 285 crores/US$43m through preferential allotment to Rakesh Jhunjhunwala & Group Acquired 51% stake in Daman Hospitality Private Limited (owner of 5-star hotel The Deltin) Demerged Textiles business Commenced operation of 2 offshore casinos, Casino Royale and King's Casino Raised 82.5 crores/ US$12.6m through the Qualified Institutional Placement (QIP) route, a first for Delta Corp • Entered the Real Estate business in Nairobi, East Africa 2007 - 2008 • 2006 - 2007 1990-1991 ICICI Ventures invested *82 crores/ US$12.5m, a major private equity deal for Delta Corp Entered the Gaming and Hospitality business Starts as a Textiles and Real Estate consultancy company 5#6INR 260 Strong recent share price performance 2017 YTD Share Price Performance Ticker Stock Information DELTA IN Delta Corp Share Price Market Capitalization 240 US$ 1.02 BN Shares Outstanding 267.1m 220 Free Float 64.7% 200 180 160 140 120 чт Чичить C мик Average Daily Trading Volume (1M) US$16.7m (3M) US$12.5m Current Share Price (27-Oct-2017) INR252.55 52-week high on (27-Oct-2017) INR 259.90 52-week low on (27-Dec-2016) INR 95.00 1-month performance 25.5% 3-month performance 44.6% 6-month performance 45.0% 100 YTD performance 112.7% Jan-17 Jan-17 Feb-17 Mar-17 Source: Bloomberg Mar-17 Apr-17 May-17 May-17 Jun-17 Jul-17 Jul-17 Aug-17 Sep-17 Oct-17 Oct-17 6 DELTA#7A well diversified ownership structure Institutions (DII + FII) 19.0% Corporates 12.3% (1)Source: Bloomberg NRIS 0.8% Promoters 35.3% Individuals 32.6% DELTA • . • Delta's promoters, Jaydev Mody and family, hold 35.3% of the company's shares through multiple investment vehicles Renowned Indian investor Rakesh Jhunjhunwala, "the pied piper of Indian bourses" - The Economic Times, holds 10.25% of the company through various entities and sits on the board Notable institutional holders include (1): Birla Sun Life Asset Management BLACKROCK® GHDFC MUTUAL FUND Birla Sun Life Insurance Fidelity INVESTMENTSI RELIANCE Mutual Fund SBI 7#8DELTA Section 2: Investment Highlights#9Key Investment Highlights DELTA Largest and only listed operator in the organised gaming market in India Exposure to the high growth potential of the Indian gaming/leisure market I DELTINCASINO First-mover advantage across the under-penetrated industry Platform to act as the consolidator in the nascent online gaming market High quality management team with significant operating expertise 6#10Strong India macro backdrop ... Growing but volatile GDP Normalizing inflation rate DELTA 2,000 8.6% 1,500 1,000 500 0 8.3% 0.10 14.0% 11.9% 0.08 6.0% 12.0% 0.06 10.0% 10.9% 9.3% 8.6% 2.5% 0.04 0.5% 8.0% 0.02 1.2% 6.0% 6.7% 4.9% 4.9% 0.00 -0.02 4.0% 2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016 GDP per Capita Source: World Bank GDP per Capita Growth Stabilizing currency Source: World Bank 34000 22222 68 66 64 62 31000 28000 25000 60 22000 58 19000 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 INR Spot Currency Source: Bloomberg Thriving equity market Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Source: Bloomberg BSE Sensex Index 10 10#11Depreciation Source: Bloomberg Appreciation Source: IMF -4.0% -8.0% Global world 8.0% Real GDP Growth (2016) 6.7% 6.8% 4.0% 3.1% 1.6% 1.7% 1.8% 1.0% T 0.0% ՏՈ Euro with relative performance also stacking up well India is one of the fastest growing economies in the India is well placed on growth and interest rate dynamics Japan UK China INR is one of the best performing EM currencies Performance since Jan-14 till date India Brazil -3.6% Russia 40.0 0% -1.4% -20% -5.1% -6.8% -7.9% -9.6%-11.3% 30.0 -29.1% 20.0 -40% -30.9% -36.0% 10.0 -60% -80% 0.0 -75.5% -10.0 USD/THB USD/INR USD/KRW USDSGD USD/CNY USD/IDR USD/MYR USD/ZAR USD/BRL USD/RUB -20.0 8.0% 6.0% 4.0% 1.07 1.12 1.50 0.25 0.00-0.06 2.0% 0.0% -0.2% USA Singapore UK Australia 6.00 6.50 8.00 4.25 6.00 3.00 1.25 1.50 1.38 4.00 2.00 0.00 -2.00 Source: IMF 2016 GDP growth (y/y, %) ◆ Policy Rates (RHS) Euro Japan India China Indonesia Malaysia Korea Thailand Taiwan Just three years of net outflows since 1993 FII flows (USD bn) 0.8 2.2 1.2 3.1 1.6 -0.2 1.7 1.5 2.7 0.7 CY03 6.7 8.6 Source: Motilal Oswal -12.2 10.8 8.1 17.8 17.6 29.3 -0.5 24.5 20.0 16.2 3.3 3.2 11 DELTA#12DELTA India gaming market overview The gaming industry in India is estimated at US$60 bn per year (¹) and is expected to rise with the growth of online gaming Though there is strong appetite for gaming in India, restrictive laws have curbed the growth of the industry - 12 states offer lottery - 6 states allow horse racing - 2 states (Goa and Sikkim) allow casino gaming and one union territory (Daman) is pending approval 1872 67 81 776 18 0 Other gaming avenues in India have been able to garner a huge market while the casino industry has lagged behind - Lottery: US$12-14 bn estimated annual turnover (2) Horse racing: US$250-400m estimated annual turnover (2) - Casino: US$100-125m estimated annual turnover (2) - A commercial casino can take the form of a land-based facility/ on-shore casino, or a riverboat facility/ off-shore casino, or an online casino depending on the jurisdiction - Land-based casinos are housed within hotels and offer electronic games and slot machines Off-shore casinos are parked in vessels anchored in a river and can offer both live and electronic games A change in policy with regards to Casino likely to be announced soon. This is envisaging the moving of off-shore casinos on to land in a prescribed time frame (1) KPMG (2) ICRA Report DELTINROYALE 334 335 443 445 44 554/556 005 12#13India gaming regulatory overview DELTA Overview Casino formats • • • Under the Indian constitution, state legislatures have been entrusted with the power to frame specific laws Vast differences in the regulations of gaming in India with high entry barriers, strict regulations and a cap on the number of licenses Casinos are currently allowed in Goa, Sikkim and Daman (for Daman - license yet to be issued by government) Certain states have recognized "games of skill" and such games are not regulated by gaming laws Casino can be land based/on shore, riverboat/offshore or online - Land-based casinos are permitted in Goa, Daman and Sikkim - Offshore casinos are permitted only in Goa - Online casinos are permitted in Sikkim and Nagaland Goa gaming regulations • Daman and Sikkim gaming regulations Foreign direct investment Source: ICRA Research • Land based casinos are housed within hotels and offer electronic games and slot games Off shore casinos offer live games (e.g. games manned by dealers) in addition to electronic games The Goa, Daman and Diu Public Gambling Act, 1976 allows on-shore casinos to be set up only at 5-star hotels or off-shore vessels with prior permission from the government The State Government of Goa has the authority under law to issue licenses and rules to regulate casinos Casino licenses are typically awarded for a term of 5 years with fees payable annually and there are currently six offshore casinos and 10 on shore casinos Gaming tax has been now subsumed under GST and the applicable rate is 28% Daman: Currently no casinos in operation with one casino waiting for final approval Sikkim: Currently there are three land based casinos operating in Sikkim The Consolidated FDI Policy Circular 2016 prohibits FDI in gambling and betting including casinos. Furthermore, technology collaboration in any form including licensing, trademark, brand name, management contract is also prohibited for lottery, gambling and betting activities 13#14Goa Accessibility Delta Locations Well located to tap into the large population centres Delta currently has operations in three distinct Indian locations Goa Sikkim State in the Southwest of Indian on the Arabian Sea Visited by a large number of international and domestic tourists for its beaches, places of worship, and world heritage architecture Picturesque, mountainous state located in the North East of the country Territory nestled between Maharashtra and Gujarat Leisure location for the state of Gujarat Daman Connectivity C Ahmedabad Daman Population Distance from City Daman (m) Daman (km) Mumbai 21.5 180 Surat 4.5 120 Vadodara 1.8 250 Ahmedabad 7.0 350 DELTA Delta locations Major metropolis Sikkim New Delhi Kolkata Hyderabad Mumbai Goa 1 hour flight radius from Goal Bangalore Chennai Within a 3 hour flight radius from Goa 14 14#15DELTA Goa The heart of gaming in India benefiting from increased tourism Goa is widely touted as the gaming capital of India Trend in tourist visits to Goa No. of tourists 8,000,000 • It is a popular tourist destination, famous for its beaches and long stretch of coastline (131 km) Goa is located close to major Indian cities 6,000,000 4,000,000 4.6% -9.5% 5.5% - Mumbai, Bangalore, Chennai: one hour flight 2,000,000 - Hyderabad: 1.5 hour flight 40.0% 30.0% 30.5% 30.0% 10.7% 20.0% 19.5% 4.2% 5.6% 10.0% 1.0% 0.0% -10.0% 0 -20.0% - Delhi: 2.5 hour flight Three major demand drivers: - Leisure: beaches, heritage sites, temples, and wildlife sanctuaries - MICE/weddings: vast availability of conferencing infrastructure - Business: 16 Special Economic zones (SEZS) in Goa Delta positioned to benefit from the increased growth of domestic tourists as it caters almost exclusively to the Indian market CY2006 CY2007 CY2008 CY2009 CY2010 CY2011 CY2012 CY2013 CY2014 CY2015 CY2016 Foreign tourists Source: Department of Tourism (Government of Goa) Domestic tourists Tourist visits to Goa have taken off starting CY2013, driven by domestic tourists In CY2016, Goa hosted 6.33 million tourists (5.65 million domestic and 0.68 million foreign) This is a growth of 102.8% in four years The duration of stay for domestic tourists is nearly five days 15#16Goa gaming and competitive landscape Delta Corp holds 3 of the 6 offshore gaming licenses in Goa Competitive landscape in Goa Ownership Casino Pride Pride Group Casino Pride 2 Pride Group Started operations in 2008 Gaming Positions Gaming Area 500 40,000 sq.ft. (1) (1) Total area for Casino Pride, gaming area not disclosed *Each of the casinos provides free F&B and in-house brand alcoholic drinks Source: ICRA research Casino Rio MDLR Group Deltin JAQK Delta Corp Group Deltin Royale Delta Corp Group 2008 To re-start operations soon; license had earlier lapsed in August 2012 2008; rebranded in 2013 2013 NA NA Goa land-based casinos Casino Casino Las Vegas Casino Palms Casino Paradise Casino Strike Chances Casino • Crown Casino . Deltin Casino Duanes Casino Goa Nugget Hotel Leela Kempinsky Pride Hotel La Calypso Hotel neo Majestic Hyatt Bambolim The Vainguinim Valley The Crown Hotel Deltin Suites The Zuri White Sands Ramada Caravela Beach Resort • Grand 7 Casino • O Resort & Spa Source: ICRA research DELTA Deltin Caravela Delta Corp Group 2000, then decommissioned in May 2013; re- commissioned in 2016 107 379 815 11,161 sq.ft. 24,100 sq.ft. 2,905 sq.ft. Owner N/A Pride Group Pride Group • N/A N/A • N/A Delta Corp Group • N/A Advani Resorts • N/A 16#17Deltin Royale - The flagship destination DELTA Vessel, formerly known as M.V. Horseshoe Casino, was purchased from Caesar's Entertainment and refurbished in India Asia's largest offshore casino vessel Positioned as a premium casino to attract the most affluent segment of players in the market - Comparable to the premium mass type offerings seen throughout the rest of Asia 815 live gaming positions across 116 live gaming tables, 250 slot machines, and dedicated rooms for local games such as flush. It is also home to India's largest poker room Over 24,000 sq.ft. of gaming area across four levels 10,000 sq.ft. solely dedicated to dining and entertainment 1DELTMROYALE 17#18Additional vessels to cater to a broader customer base DELTA Deltin Jaqk (mass focused) Deltin Caravela (VIP focused) DELTINJAQK DELTIN CARAVELA Mass focused asset catering to each segment of the market, particularly the value oriented Gaming area spread across 11,000 sq.ft. Nearly 400 live gaming positions across table games and slot machines Dedicated dining and entertainment floor • High-end product focused exclusively on the nascent VIP market 107 gaming positions Luxury suites, as well as spa facilities Top-end food and beverage offerings 18#19DELTA Hotels - The Deltin brand to compliment the gaming operations Deltin Suites 106 room All-suite hotel and casino Houses Casino with approximately 2,500 sq.ft. gaming area Deltin Palms 27 room boutique hotel 19#20Daman - The Deltin: The next frontier DELTA Daman is a Union Territory situated between Gujarat and Maharashtra - 2.5 hours drive from Mumbai; 1.5 - 4 hours drive from major cities of Gujarat - Drive-in destination for a large catchment of over 35 million people - Large visitation numbers from Gujarat due to its status as a dry state The Deltin is the first and the only 5-star hotel in Daman - 176 all-suite hotel rooms - 3 bars and 4 restaurants - 27,000 sq.ft. of MICE space - 8,000 sq.ft. of high-end retail First proposed land-based casino in Daman with approximately 60,000 sq.ft. of gaming space 20 20#21Sikkim - The only approved casino gaming outside Goa DELTA Sikkim is a picturesque, mountainous state in Northeastern India bordering China, Nepal, and Bhutan It is the only Indian state, in addition to Goa, to permit casino gaming In 2016 Delta partnered with Hotel WelcomHeritage Denzong Regency for a casino in Sikkim Delta leases the casino space from the hotel and is responsible for its day-today operations and management The casino opened in January 2017 and comprises 173 gaming positions CASING DELTINDENZO 21#22Online Platform - Key growth driver DELTA Online gaming in India is at a nascent stage, with the size of the industry estimated at US$100-125m (1) India's online gaming market growth is driven primarily by the growth of its middle class as well as increasing internet penetration, both of which remain relatively small as compared to the standards of developed nations, but are growing rapidly • In India, card games are considered "games of skill", and can be played legally even with money and profits involved - Poker, rummy - Supreme Court and high court judgments to this effect In September 2016 Delta acquired through merger Gauss Network Private Limited, which owns the online portal "Adda52.com" Revenue of INR 626m in FY 2017, INR 400m in FY 2016, and INR 274m in 2015 Over 95% of revenue from poker, remainder from rummy millions 1500 1000 Trend in total Indian wireless subscribers 500 -5.6% 11.5% 15.0% 7.2% 6.6% 10.0% 4.2% 5.0% 0.0% -5.0% 0 -10.0% Mar-13 Mar-14 Mar-15 Mar-16 Dec-16 Mobile subscribers YoY growth (RHS) Source: Telecom Regulatory Authority of India Quarterly trend in Indian internet subscribers millions 500 6.50% 8.00% 400 4.90% 6.00% 300 3.30% 4.00% 200 1.70% 2.10% 2.30% 2.00% 100 0 0.00% Sep-15 Dec-15 Mar-16 Jun-16 Total internet subscribers Sep-16 Dec-16 - QoQ growth (RHS) Source: Telecom Regulatory Authority of India (1) Source: ICRA report 22 22#23Strong and experienced management team Jaydev Mody Chairman DELTA • Mr. Mody is an entrepreneur with interests in multiple business sectors, including gaming and hospitality ⚫ He has over 35 years experience in the field of real estate development and more than 36 years practice in creating, developing, and managing businesses • He is accredited for building Crossroads, India's first global mall and has also played a leading role in the development of several large residential, commercial, and retail projects in Mumbai Ashish Kapadia Chief Executive Officer Hardik Dhebar Chief Financial Officer Anil Malani President Operations • Mr. Kapadia has been a member of Delta Corp's Board since 2008, and has been a Director of Highstreet Cruises and Entertainment Private Limited since 2009 • An entrepreneur, he has experience in various industries including paints, textiles, financial services, and civil aviation • Mr. Kapadia holds a bachelor's degree in commerce • Mr. Dhebar has a post graduate diploma in finance from Welingkar Institute of Management, and has over 20 years of experience in finance and treasury operations • Prior to Delta Corp, Mr. Dhebar has worked with the Piramal group of companies, including holding positions of responsibility in Nicholas Piramal Limited, Morarjee Textiles Limited, and Peninsula Land Ltd • Mr. Malani serves as President of Operations of Highstreet Cruises and Entertainment Pvt. Ltd at Delta Corp • With a bachelor's degree from Mumbai University, he has over 30 years of experience in a range of businesses including hospitality, entertainment, IT, electronics, and office automation • Mr. Malani has previously worked with Esquire group of companies, Aims International Ltd., Amazon Food & Beverages Pvt. Ltd., and Clover Solar Pvt. Ltd. 23#24Section 3: Financial Summary DELTA#25Capitalization Structure Particulars* ** Short term borrowings (A): Long term borrowings (B): Current maturities of long term borrowings (C): Total Long Term Debt (D = B + C) Total borrowings (E = A + B + C) As at September 30, 2017 ((INR lakhs/ US$) INR18.60/ US$0.03m INR131.02/US$0.20m INR92.30/ US$0.14m INR223.32/ US$0.34m INR241.92/ US$0.37m Shareholders' funds: Share capital Securities premium INR2,671.08/ US$4.1m INR1,06,574.40/ US$164.0m Reserves and surplus INR51,170.89/ US$78.8m Total Shareholders Funds (excluding loan funds) (F) INR1,60,416.37/ US$246.9m Total Capitalization (G = E + F) **All numbers are at a consolidated level #FX rate fixed at INR/USD 64.97 for purposes of showing amounts in USD INR1,60,658.29/ US$247.3m DELTA 25 25#26Financial Performance Summary DELTA Particulars** (INR in lakhs/ US$) Total income (including other income) EBITDA Six months ended September 30, 2017 Fiscal 2017 INR32,951.75/ US$50.7m INR12,312.61/ INR45,960.14/ US$70.7m Fiscal 2016 INR38,365.80/ US$59.1m Fiscal 2015 INR30,739.61/ US$47.3m US$18.95m INR16,890.89/ US$26.0m INR12,871.63/ US$19.8m INR7,395.47/ US$11.4m EBITDA Margin 37.36% 36.75% 33.55% 24.06% PAT INR6,556.44/ US$10.0m INR7,374.89/ US$11.4m INR(2,277.14)/ INR4,258.29/US$6.6m US$(3.5m) PAT Margin 19.90% 16.04% 11.10% -7.41% **On a consolidated basis #FX rate fixed at INR/USD 64.97 for purposes of showing amounts in USD ж 26#27Appendix DELTA#28Goa gaming regulations Gaming regulations in Goa DELTA Frequency FY2015 FY2016 FY2017 FY2018 Application/ renewal fee Once in 5 years Nil Rs. 20 lakh/ US$30,500 Rs. 20 lakh/ US$30,500 Rs. 30 lakh/ US$45,700 Security Deposit One time Nil Rs. 20 lakh/ US$30,500 during application; Rs. 10 lakh/US$15,200 during renewal Entertainment tax / Monthly 15% of Revenues GST Entry tax Rs. 700// US$11 Rs. 700/ US$11 Rs. 1,000/ US$15 . Prior to GST, Entertainment tax plus Entry tax aggregated to 26.5-27.0% • Both are now embedded under GST at an applicable rate of 28% Source: Goa Annual Budgets 28% of Revenues 28#29India industry dynamics relative to the rest of Asia DELTA Country India Vietnam Cambodia South Korea Philippines Malaysia Singapore Macau Estimated 2018 gross gaming US$100- 125m(b) ~ US$300m US$500m+ US2.6bn US$2.8bn US1.5bn US$4.1bn US$28.0bn revenue (a) Locals gaming allowed Yes, but restrictions Provisional pilot licenses to Goa residents for locals gaming No Only at one designated location Yes Only at one designated Yes (with an entry fee) Yes location being considered under consideration Gaming tax rate / GST 28% 35% 5-7% 20% 15-25% 25% 12-22% 39% Developing Source: DICJ, broker reports (a) Cambodia, Malaysia, South Korea and Vietnam GGR figures are estimated based on broker reports (b) Source: ICRA research Developed 29#30THANK YOU DELTINROYALE DELTINJAQK CASINO PANJIM GOA CASINO PANJIM GOA THE DELTIN HOTEL DAMAN DELTINCARAVELA CASINO FLOTEL GOA CASINO DELTINDENZONG GANGTOK SIKKIM DELTINSUITES DELTINPALMS adda 52 с CASINO HOTEL GOA HOTEL BRITTONA GOA India's largest Poker site