National Highways Infra Trust Directors Report

As per its Mission statement, NHIT strives for continuous improvement with emphasis on Sustainability, Safety and Communities well-being.

Our objectives encompass minimizing our carbon footprint, ensuring the well-being of our employees and stakeholders with the aim of achieving Zero Harm, and reducing road accidents through effective safety measures and awareness programs. We integrate EHS and Sustainability considerations into all processes and provide comprehensive training to foster awareness among employees, workers, and contractors.

Through the integration of sustainability, health, and safety practices into our operations, we aim to create a safer, healthier, and more sustainable environment for all.

1. Strategy and Implementation

1.1 Sustainability Integration:

As part of our strategic plan, NHIT is dedicated to responsible and sustainable operations. Our key areas of focus include reducing carbon emissions, conserving natural resources, promoting the usage of renewable energy sources, easier accessibility, water conservation and superior hygiene standards.

These initiatives align with our overarching goal of minimizing our environmental footprint while ensuring long-term viability and resilience. Through targeted actions and continuous evaluation, NHIT aims to lead in environmental stewardship, contributing positively to the well-being of our planet and communities for generations to come.

1.2 Occupational Health and Safety:

Implementing comprehensive health and safety protocols is our top priority. We continuously evaluate and enhance measures to ensure the well-being of our workforce and stakeholders. The key focus areas of our operations include Work on Live roads, Toll Operations, and Incident Management & Route Patrolling.

As part of our continuous improvement efforts, we continuously track and monitor the health and safety performance of our operations through several Leading and Lagging indicators. This proactive approach enables us to identify risks and track performance for ongoing enhancements in health and safety.

I. Work on Live roads - Working on live roads presents significant safety challenges. We have a comprehensive safety management strategy to minimize risks and achieve ALARP (As Low As Reasonably Practicable) levels. Our traffic management plan adheres to IRC standards and is tailored to each roads unique characteristics to ensure robust mitigation measures.

II. Toll Operations - Safety in toll operations is critical for both employees and commuters. NHIT prioritizes safety through rigorous training, strict protocol adherence, and regular inspections. We invest in advanced safety equipment and technology, including surveillance systems and protective gear, to create a secure environment.

III. Incident Management & Route Patrolling - NHITs Route Patrolling and Incident Management ensure operational safety and efficiency. Trained professionals conduct regular patrols to address hazards and maintain road conditions. In case of incidents, our team, equipped with ambulances, cranes, and protocols, responds promptly to ensure safety and minimize traffic disruptions. We analyze data from patrols and incidents to implement proactive safety measures.

1.3 Road Users Safety

At NHIT, Road Users Safety is at the heart of everything we do. We are committed to ensuring the highest level of safety for all road users across our assets. As part of our strategy, we proactively monitor accident- prone areas, conduct comprehensive analysis of accident data, and track identified black and emerging spots in real-time to promptly implement risk mitigation measures. Additionally, we are committed to increasing awareness about road safety among communities adjacent to our roads by organizing

awareness campaigns and leveraging digital communications, such as informative videos, to promote responsible road behaviour.

2. Metrics and Performance Oversight 2.1 Sustainability:

We are regularly monitoring the following parameters to define our carbon footprint abatement plan:

I. GHG Emissions in Main and Ancillary Functions

II. Water Consumption

A substantial part of our Scope 1 and Scope 2 GHG emissions arise from fuel consumption for both main and ancillary functions, as well as electricity consumption for powering facilities such as toll plazas, site offices, and highway lighting.

The GHG Emissions for all assets (Apr23 to Mar24 - tCO2e)

2.2 Occupational Health and Safety -

We measure OHS performance using several leading and lagging indicators to comprehensively assess and monitor our safety performance.

Leading and Lagging indicators dashboard - FY 23-24

2.3 Road Users Safety

Our unwavering dedication to road safety underscores our commitment to safeguarding lives and ensuring safe travel experiences on our roads. Through our collective efforts and interventions, we

have successfully reduced Road User Fatal accidents by 27% year-over-year across Round 1 projects including Chhitorgarh-Kota, Belgaum-Kagal, Kothakota - Kurnool, and Palanpur-Aburoad-Swaropganj, demonstrating the substantial impact of our commitment to Road Safety.

3. Strategic Actions and Outcomes during the year

3.1 Replacement of HPSV (High-Pressure Sodium Vapor) lights by LED lights

Highway lightening/streetlights constitutes a significant portion of electrical energy consumption in highway assets, which forms part of our Scope 2 GHG emissions. To address this, we have replaced conventional 1557 HPSV, 214 high mast lights, and 124 canopy lights with more efficient LED light fixtures within project highways which are under NHITs O&M obligation. This has led to reduction of 388 TCO2e emissions.

3.2 Roof-Mounted Solar Panels

As an alternative energy resource, we have installed 125 kW capacity solar power plants at some of our toll plazas on the rooftops of administrative buildings, within administrative building premises, or atop canopies with an estimated production of 200,000 KWh units per year.

A net metering facility is available at all these sites, allowing them to consume electricity produced by the captive solar plants at any given point. Further, we are exploring opportunities to increase the installed capacities.

3.3 Fuel Efficiency Programs:

NHIT has implemented fuel efficiency programs to reduce the consumption of petrol and diesel across our operations. This includes adopting fuel-efficient vehicles and machinery, optimizing routing and scheduling to minimize fuel usage, and implementing maintenance protocols to ensure peak engine performance.

4. Awareness and Capacity Building programs 4.1 Collaboration with IIT Madras

In collaboration with the Centre of Excellence for Road Safety (coERS) at IIT Madras, we conduct the "Design Thinking for Operational Excellence in Road User Safety" program for our EHS personnel and Project Managers. This program leverages IIT Madras expertise and innovative methodologies, equipping our team with the skills to proactively address safety concerns and cultivate a lasting safety culture. The benefits of this program extend beyond current projects, influencing NHITs approach to safety and excellence in future endeavours.

4.2 Road Safety Week campaign

We conducted Road Safety Campaign across all sites from 15th January to 14^th February 2024, following guidelines from The Ministry of Road Transport & Highways, making a positive impact on local communities. The campaign reached over 20,000 people through awareness programs, street plays, and road rallies, and included activities such as eye check-up camps and first aid kit distributions. Over 250 road safety awareness sessions were conducted for students and heavy vehicle drivers.

4.3 National Safety Week campaign

We observed the 52^nd National Safety Week from 4^th to 10^th March, 2024 across the company to strengthen our safety culture and enhance EHS Awareness.

4.4 World Environment Day

We observed World Environment Day on 5^th June, 2023, with week-long campaigns across all project sites. Activities included pledges to avoid single-use plastic, tree plantation drives around toll plazas, reusable cotton bag distribution, and clean-up drives to promote sustainability and environmental preservation.

EXECUTIVE SUMMARY ON VALUATION OF NATIONAL HIGHWAYS INFRA PROJECTS PRIVATE LIMITED AND NHIT WESTERN PROJECTS PRIVATE LIMITED, WHOLLY OWNED SUBSIDIARIES OF NATIONAL HIGHWAYS INFRA TRUST, AS OF 31^ST MARCH 2024

Pr?vate and Confidential

Date: 27^th May, 2024

National Highways Infra Investment Managers Pr?vate Limited G-5 & 6, Sector-10, Dwarka, Delhi - 110075

Sub: Executive Summary on Valuation of Specified SPVs (as defined below) of National Highways Infra Trust, pursuant to SEBI (Infrastructure Investment Trusts) Regulations, 2014, as amended ("the SEBI InvIT Regulations")

Dear Sir,

We refer to our appointment letter dated 17^th May, 2023 wherein RBSA Valuation Advisors LLP ("RBSA") was appointed by National Highways Infra Investment Managers Private Limited ("NHIIMPL"/ the "Investment Manager") for valuation of Specified SPVs (as defined below), as an independent valuer, as per Regulation 2(zzf) of the SEBI (Infrastructure Investment Trust) Regulations, 2014 ("SEBI InvIT Regulations") as at 31^st March, 2024 ("Valuation Date").

NHIT Western Projects Private Limited ("NWPPL") (Formerly known as National Highways Infra Projects Private Limited ("NHIPPL") and NHIT Eastern Projects Private Limited ("NEPPL") are wholly owned subsidiaries of National Highways Infra Trust ("NHIT" or the "Trust" or "InvIT") and have been incorporated as special purpose vehicles to operate and maintain the road projects. NHIT Western Projects Private Limited, formerly known as National Highways Infra Projects Private Limited, was renamed on 13^th May, 2024. NWPPL and NEPPL are together referred as the "Specified SPVs".

NWPPL has entered into concession agreements with National Highway Authority of India ("NHAI" or "Sponsor") to operate, maintain and transfer 8 Toll Road projects, under the Toll, Operate and Transfer ("TOT") model (together referred to as "NWPPL Projects" and individually referred to as the "Project"). NHIT Eastern Projects Private Limited, have entered into concession agreement with NHAI to operate, maintain and transfer 7 Toll Road projects, under the TOT model (together referred to as "NEPPL Projects" and individually referred to as the "Project"). NHIPPL Projects and NEPPL Projects are together referred to as the "Specified Projects".

The details NWPPL Projects are as under:

Sr. No Name of Section	NH	Total Length (Kms)	Toll Plaza	Start Kms	End Kms
1 Abu Road - Swaroopganj	NH-27	31.000	Undavariya	646.000	677.000
2 Chittorgarh - Kota & Chittorgarh Bypass	NH-27	160.500	Bassi, Aroli and Dhaneshwar	891.929	1052.429

Sr. No Name of Section	NH	Total Length (Kms)	Toll Plaza	Start Kms	End Kms
3 Palanpur/ Khemana - Abu Road	NH-27	45.000	Khemana	601.000	646.000
4 Kothakota Bypass - Kurnool Highway	NH-44	74.622	Pullur	135.469	211.000
5 Maharashtra / Karnataka Border (Kagal) Highway	NH-48	77.705	Hattargi and Kognoli	515.000	592.705
6 Agra Bypass	NH-2 - NH-3	32.800	Raibha	176.800 KM of NH-2	13.030 KM of NH-3
7 Shivpuri to Jhansi	NH-27	75.300	Raksha	1305.000 KM of NH-27	1380.387 KM of NH-27
8 Borkhedi-Wadner-Deodhari- Kelapur	NH-44	138.150	Daroda and Kelapur	36.600 KM of NH-44	175.600 KM of NH-44

Sr. No Name of Section	NH	Total Length (Kms)	Toll Plaza	Start Kms	End Kms
1 Assam Package (AS- Patgaon & Dahalapara)	NH-27	114	Dahalapara	961.500 KM of NH-27	1013.000 KM of NH-27
			Patgaon	30.000 KM of NH-27	92.671 KM of NH-27
2 Orai-Bara	NH-27	63	Usaka	1515.713 KM of NH-27 (LHS) and 1578.360 KM of NH-27 (RHS)	1578.872 KM of NH-27 (LHS) and 1515.713 KM of NH-27 (RHS)
3 Assam (Galia)	NH-27	27	Galia	1013+000 KM of NH-27	1040.300+000 KM of NH-27
4 Chichra-Kharagpur	NH-49	56	Balibhasha	185.150 KM of NH-49	129.000 KM of NH-49
5 Rewa-Katni-Jabalpur- Lakhnadon	NH-30 & NH- 34	287*	Odhaki Paipkhar	656.000 KM of NH- 30	725.185 KM of NH-30
			Kherwasani	725.185 KM of NH-30	813.257 KM of NH-30
			Mohtara	813.257 KM of NH-30	880.600 KM of NH-30
			Boharipar	880.600 KM of NH- 30	1428.557 KM of NH-34
6 Lakhnadon- Khawasa	NH-44	107	Madai	546.420 KM of NH-44	653.770 KM of NH-44
			Khawasa
7 Hubbali- Haveri-Chitradurga	NH-48	214	Chitradurga Bypass	0.000 KM of NH- 48	20.700 KM of NH- 48
			Chitradurga Davanagere	208.000 KM of NH- 48	260.000 KM of NH- 48
			Davangere Haveri	260.000 KM of NH- 48	338.923 KM of NH- 48
			Haveri Hubli	340.000 KM of NH- 48	403.000 KM of NH- 48

We have analyzed the information provided by/ on behalf of the Investment Manager through broad inquiry, analysis and review but have not carried out a due diligence or audit of such information. We have relied on the explanations and information provided by/ on behalf of the Investment Manager. We have no present or planned future interest in the Sponsor, the Specified SPVs or the Investment Manager except to the extent of our appointment as an independent valuer. Our professional fees for the valuation are not contingent upon the values reported herein. Our valuation analysis should not be construed as investment advice specifically, we do not express any opinion on the suitability or otherwise of entering into any financial or other transaction with the Trust, the Specified SPVs or the Investment Manager.

Our valuation analysis must be considered as a whole. Selecting portions of our analysis or the factors we considered, without considering all factors and analysis together could create a misleading view of the process underlying the valuation conclusions. Valuation is a complex process and is not necessarily susceptible to partial analysis or summary description. Any attempt to do so could lead to undue emphasis on any particular factor or analysis.

Valuation Analysis

The Discounted Cash Flow ("DCF") method under the Income Approach has been adopted for the Enterprise Valuation of the Specified SPVs. Free Cash Flow to Firm method under DCF has been applied based on the projected financial statements of the Specified SPVs provided by the Management of NHIIMPL (the "Management"). The Enterprise Value has been computed by discounting the projected free cash flows to the firm beginning from 1^st April, 2024 until the end of the respective concession periods of the Specified Projects, using a Weighted Average Cost of Capital ("WACC") of 10.50% for NHIPPL and 10.40% for NWPPL computed as of the Valuation Date.

The Enterprise Valuation of the Specified SPVs as of 31^st March, 2024 has been carried out considering inter-alia Traffic Study Reports and Technical Due Diligence Reports of independent consultants, Business plan/ Projected financial statements of the Specified SPVs and other information provided by/ on behalf of the Management, industry analysis and other relevant factors.

The Valuation summary of the Specified SPVs as of 31^st March, 2024 is as follows:

Particulars	NHIPPL	NWPPL
Enterprise Value	12,202.0	15,512.2
Less: Debt	(9,945.3)	(13,327.5)
Less: Debt like items	(0.1)	-
Add: Cash and cash equivalent	149.1*	7.7
Equity Value	2,405.6	2,192.4

*Cash and cash equivalent as at 31^st March, 2024 excludes fixed deposits aggregating ~ 5.1 Cr which was earmarked by the Bank of Maharashtra ("BoM") for issue of Performance Guarantee to NHAI. Management represented that this FD is expected to be released once non-fund limit by BoM is sanctioned. Considering the aforementioned, working capital as at 31^st March, 2024 includes the aforementioned FD and the same is projected to be released in the subsequent period.

This letter should be read in conjunction with our detailed Report for the valuation of the Specified SPVs, including the Assumptions and Limiting Conditions stated therein.

Thank you

For RBSA Valuation Advisors LLP,

(RVE No.: IBBI/RV-e/05/2019/110)

Name: Ravishu Vinod Shah

Designation: Partner

Asset Class: Securities or Financial Assets (RV No.: IBBI/rv/06/2020/12728)