Cube Highways Trust Management Discussions

Organization and Business Overview

Cube InvIT, a prominent player in Indias infrastructure sector, specializes in the management and maintenance of toll roads and highways across the nation. Our diverse and growing portfolio of 27 assets spans across various models, including Toll-Operate-Transfer (TOT), Build- Operate-Transfer (BOT) - Toll and Annuity, and Hybrid Annuity Model (HAM) projects, showcasing our comprehensive expertise in infrastructure management.

In FY2025, we acquired full ownership of 6

HAM assets and one BOT asset, reinforcing our commitment to long-term, value-driven growth.

Additionally, we also signed Share Purchase Agreements (SPAs) for the acquisition of two annuity assets from NIIF, further expanding our footprint in the Union Territory of Jammu & Kashmir. These strategic acquisitions are designed to strengthen and diversify our asset base, ensuring a balanced portfolio that is aligned with long-term growth objectives.

Our success lies in our strategic asset selection process, which prioritizes assets with high traffic volumes, and a derisked profile. This careful curation ensures a resilient portfolio capable of withstanding market fluctuations and economic uncertainties.

Furthermore, our asset appraisal framework is focused on identifying high-growth and resilient corridors. This framework not only facilitates the identification of promising investment opportunities but also enables us to explore avenues for cluster-based expansion, thereby amplifying synergies within our portfolio and enhancing overall asset performance.

At Cube InvIT, we prioritize sustainable infrastructure by designing and operating roads with a focus on minimizing environmental impact. Our approach leverages advanced technology solutions that not only enhance safety but also improve travel efficiency across our nationwide portfolio. Our operations are driven by innovation, ensuring that our roads meet high safety standards while maintaining operational excellence for a more sustainable future.

We take immense pride in our management team, comprising industry veterans with diverse expertise across the sector. Their profound understanding of traffic trends empowers us to make proactive decisions and implement effective risk mitigation strategies. By swiftly identifying potential red flags and carefully evaluating go/no- go areas.

Our projects contribute to the broader growth and development of cities, supporting economic vitality and improving quality of life for communities.

The revenue performance of Cube InvITs toll road portfolio is influenced by multiple factors, most notably traffic volumes and toll rate escalations governed under the regulatory framework of the National Highways Fee (Determination of Rates and Collection) Rules, 2008, as amended from time to time. These rules prescribe a minimum annual escalation of 3%, with an additional adjustment linked to 40% of the Wholesale

Price Index (WPI) increase over the preceding year. For certain legacy concession agreements, toll revisions follow different formulas, often fully indexed to WPI.

Importantly, any toll rate revision requires explicit approval from the Government of India, introducing a regulatory step that can affect timing.

In FY2025, our toll assets exhibited robust traffic performance, with a ~6.2% increase in weighted average traffic volumes.

At the operational level, the Cube portfolio recorded an Average Annual Daily Traffic (tollable only) approximately 34,629 PCUs, and an Average Daily Revenue (ADR) of around INR 84.3 million/ day.

From a revenue mix standpoint, toll income comprised 80% of our total operating income, while annuity income accounted for 20%. This balanced mix supports both short-term earnings visibility and long-term financial sustainability. A snapshot of traffic and revenue of performance for the portfolio is provided in the figure below.

A summary of the Average Annual Daily Traffic (in PCUs) for theespective SPVs is given below: r

*The traffic figures are weighted average figures of respective SPVs by considering the weights as the respective tollable lengths of their toll plazas.

Notes:

[1] Traffic data is from respective assets COD, except for 9 TOT assets wherein data starts from Cubes date of acquisition (Oct 2020) (prior data isnt available). For TOT assets, FY21 data is based on 6 month average (Oct- Mar period) [2] Portfolio CAGR is calculated as a weighted average of individual SPV AUMs

Cube InvIT reported a strong financial performance in FY2025, reflecting the resilience and maturity of its operational portfolio. Total consolidated income for the year stood at INR 34,531.52 million, registering a year-on-year growth of 12.3% over FY2024. This growth was supported by consistent traffic trends across key corridors, inflation-linked toll escalations, and contributions from new assets integrated during the year.

Cube InvIT achieved a consolidated EBITDA of INR 23,797.00 million during FY2025, translating into an EBITDA margin of 68.91%. This reflects the platforms focus on operational efficiency, lean cost structures, and optimized maintenance practices. The steady margins are indicative of the predictable nature of cash flows inherent in the InvIT model, particularly for a diversified and well-managed road portfolio such as Cubes.

The total distribution per unit (DPU) for FY2025 aggregated to INR 11. Quarterly payouts were made consistently throughout the year, with declared DPUs of INR 2 in Q1, INR 2 in Q2, INR 3.25 in Q3, and INR 3.75 in Q4 of FY2025, reinforcing Cubes commitment to stable and predictable returns for its investors.

Cube InvITs total annual distribution for FY2025 to unitholders stood at INR 14,68.92 million, funded predominantly through operational surplus. This performance underscores Cubes disciplined financial management and asset-level cash generation capacity.

Looking ahead, Cube InvIT remains focused on optimizing asset performance, enhancing tolling efficiencies, and identifying value-accretive opportunities within its operating framework. The consistency of financial delivery in FY2025 positions Cube InvIT to continue offering attractive and predictable returns to its unitholders.

Cube InvIT maintained a strong financial footing in FY2025, supported by prudent capital structuring and innovative debt solutions. As of March 31, 2025, total debt stood at INR 151.33 billion, with net debt at INR 136.32 billion, resulting in a net debt-to-enterprise value ratio of 44.65%-well within sector norms and regulatory thresholds. Key acquisitions during the year including full ownership of six HAM assets and the strategic acquisition of one BOT asset, were funded through a calibrated mix of long-term loans, Non-Convertible Debentures (NCDs), and Indias first Sustainability-Linked Bond (SLB) in the road sector.

The acquisition of the remaining 49% stake in six operational HAM projects was completed in December 2024, following an initial 51% acquisition in June.

In February 2025, Cube InvIT acquired NAMEL, a mature BOT toll road asset connecting Chennai and Hyderabad, through a multi-source financing structure.

Cubes debt strategy remains conservative yet growth-oriented, with a Net Debt to Enterprise Value ratio of 44.65%, ensuring ample headroom for future acquisitions. Interest cost optimization continues to be a priority. Cube InvIT maintains strong DSCR levels and a well-staggered debt portfolio reinforcing its financial resilience.

Cube InvIT continued to strengthen its operational backbone through targeted technology upgrades and efficiency-led reforms. The successful rollout of the in-house Toll Management System across most SPVs marked a critical shift, enhancing data integrity, reducing deployment turnaround times, and enabling better control over tolling operations.

Operational excellence remained a cornerstone of Cubes strategy, with continued investments in advanced tolling infrastructure such as Automatic Number Plate Recognition (ANPR) and Automatic

Vehicle Classification and Counting (AVCC) to enhance revenue assurance and reduce leakages. Weekly performance reviews and analytics-driven oversight enabled timely interventions, while the in-house RoadAID app streamlined incident reporting and maintenance.

Cubes focus on innovation and accountability yielded tangible results such as multi-fold improvement in debit adjustment recoveries, a sharp reduction in chargeback losses, and expanded use of real-time digital platforms for vendor and fleet management. Efficient execution of routine and major maintenance activities kept assets compliant with concession agreements and regulatory standards, while cost optimization initiatives supported improved uptime and long-term operational resilience.

With an average residual concession life of over

19 years and staggered asset maturities, Cube InvITs portfolio offers exceptional long-term visibility, enabling robust planning and the delivery of risk-adjusted returns. The Trust maintains a proactive risk management framework, continuously monitoring potential threats such as alternative route development, regulatory changes, and inflationary pressures on maintenance costs.

The portfolio is well-diversified across geography, asset type, and traffic mix, effectively reducing exposure to region-specific risks and traffic volatility.

Recent acquisitions, including six Hybrid Annuity Model (HAM) assets, have further increased the share of annuity-based revenue to 20%, enhancing cash improving near-term yields. flowstability and

The implementation of cash flow pooling across Special Purpose Vehicles (SPVs) further strengthens liquidity management, ensuring timely debt servicing and consistent investor distributions. The Trust maintains a proactive risk management framework, with continuous monitoring of potential threats such as alternative route development, regulatory changes, and inflationary pressures on maintenance costs.

Collectively, these measures ensure that Cube InvITs portfolio remains resilient, sustainable, and well-positioned to navigate the evolving infrastructure and . regulatory landscape.

During the year, Cube Highways Trust undertook several strategic initiatives aimed at strengthening its long-term value proposition, enhancing operational resilience, and positioning itself for sustainable growth. Key focus areas included refinancing of existing debt to optimize the capital structure, transitioning to fixed-rate borrowings to mitigate interest rate risks, and deepening access to capital markets through well-timed bond issuances.

The issuance of Indias first Sustainability Linked Bond (SLB) in the road sector, anchored by IFC, showcases Cubes commitment to ESG principles but also attracted a diverse group of institutional investors, reinforcing market confidence in Cube InvITs financial strength and sustainability agenda.

On the operational front, Cube Highways Trust demonstrated its commitment to innovation and sustainability. Cube InvIT hosted the Global Convention on Cold Central Plant Recycling (CCPR), promoting sustainable road construction practices and showcasing its record-setting achievements in recycling and carbon emission reduction.

Cube InvIT advanced towards a smarter, standardized, andrevenue-efficient through significant network technological upgrades and process optimization. The successful migration to an in-house Toll Management

System across nearly all SPVs reduced third-party dependency and enabled unified, accurate traffic and revenue data, faster system enhancements, and improved operational efficiency. strengthened by focused handling of debit adjustments and chargebacks, resulting in a substantial increase in revenue recovery and a notable reduction in losses. The deployment of Automatic Number Plate Recognition

(ANPR) at 23 toll plazas streamlined vehicle identification and improved toll classification accuracy, while the expansion of the Advanced Traffic Management System (ATMS) enhanced safety and incident management across the network.

Additional initiatives, such as centralized real-time vehicle monitoring further optimized resource utilization and ensured compliance with concession agreements. Cube InvITs achievements, including industry recognition such as the National Highways Excellence Award for its NKTPL asset, highlight its dedication to quality, best practices, and environmental stewardship.

Looking ahead, Cube Highways Trust remains focused on disciplined growth, further portfolio expansion, and maintaining high standards of operational and financial management. Cube Highways Trust is well-positioned to capture emerging opportunities in Indias infrastructure sector and deliver sustained value to its stakeholders.

Cube InvIT has appropriate and sufficient internal control systems in place commensurate with the size and the industry it operates in. Cube InvIT has a well-laid framework of systems, processes, procedures and policies to ensure compliance to statutes and laws, as well as to ensure optimum and sufficient use of resources. All rules, policies, statutes and legislations are strictly followed and adhered to by Cube InvIT. Regular internal audits are undertaken to ensure that responsibilities are executed effectively through an external agency (M/s. KPMG Assurance

Consulting Services LLP, internal auditors of the SPVs) for its SPVs, to test the adequacy and effectiveness of project SPVs internal control processes and to suggest improvements/ upgrades to the management. The Audit Committee of the Board of Directors periodically reviews the adequacy and effectiveness of internal control systems and suggests improvements to further strengthen them.